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District Court of Appeal, First District, Division 1, California.


Civ. 14701.

Decided: June 15, 1951

F. T. Leonetti, Glendale, for appellant. Frank J. Baumgarten, San Francisco, for respondent.

Defendant B. A. Tilton, individually and doing business under the name and style of Embe Gear Works, appeals from an order of the San Francisco Superior Court denying his motion for a change of venue to Los Angeles, the county of his residence.

The clerk's transcript discloses the following: Plaintiff, Richard Caffrey, filed, in San Francisco, a ‘Complaint for Declaratory Relief’ against defendant. It is therein alleged that plaintiff is a resident of San Francisco; that defendant's gear manufacturing business has its principal place of business in Los Angeles; that on March 1, 1948, plaintiff and defendant entered into a written agreement whereby defendant employed plaintiff to sell merchandise and to generally represent defendant in northern California; that for these purposes plaintiff was to maintain a place of business in San Francisco; that the written agreement is attached to and incorporated in the complaint as Exhibit ‘A’; that thereafter plaintiff entered upon performance of the agreement and represented defendant in northern California; that under the terms of the contract plaintiff was to receive a 10 per cent commission on work secured by defendant through the efforts of the plaintiff; that one of the consumers within plaintiff's territory was the Dalmo Victor Company of San Mateo; that plaintiff solicited business from that company and secured for defendant a contract for the sale of merchandise in excess of $50,000; that thereafter defendant in violation of the contract wrote a letter to plaintiff attempting to exclude Dalmo Victor Company from the original contract after plaintiff had already secured the business and become entitled to the commission; that such letter is attached to and incorporated in the complaint as Exhibit ‘B’; that in this fashion defendant seeks, without justification, to exclude Dalmo Victor Company from plaintiff's territory, and seeks to avoid the payment to plaintiff of the 10 per cent commission which was agreed upon and previously paid up to the date of filing the complaint; that plaintiff has performed all terms of the contract, but defendant seeks to modify or terminate it.

The prayer is for a declaration that plaintiff is entitled to the 10 per cent commission on business solicited and obtained from Dalmo Victor Company now accrued or to accrue in the future; that plaintiff be granted a declaratory judgment ordering that plaintiff have and recover the 10 per cent commission on accrued and future shipments to Dalmo Victor Company; and for a declaration of the rights and duties of the parties under the contract.

Exhibit ‘A’ is a letter on the letterhead of Embe Gear Works addressed to plaintiff in San Francisco and signed by B. A. Tilton. The letter first tells plaintiff to have some cards printed, at the expense of defendant, and then continues:

‘We would be pleased to have you represent us, and any work we receive through your solicitation we will pay you 10%.

‘The following are some of the companies that we have done work for.’ Then follows a list of seven companies in the bay area including two in San Francisco and also including ‘Dalmo Victor Company, San Mateo.’

Exhibit ‘B’ is also on the letterhead of the Embe Gear Works, is addressed to plaintiff in San Francisco, is signed by B. A. Tilton, and is dated November 1, 1949. By this letter defendant informed plaintiff ‘not to enter into negotiations for us with the Dalmo-Victor Co. This is because of the precarious nature of their financial setup.’ The letter continues that if plaintiff does not want to continue to represent defendant subject to the condition ‘you are to consider this letter as a revocation of our agreement.’

Defendant moved for a change of venue to Los Angeles, supporting the motion with an affidavit and an amended affidavit averring that he is a resident of Los Angeles; that the contract was entered into in Los Angeles, and that the contract was not to be performed by defendant in San Francisco. Plaintiff filed a counter-affidavit admitting that the contract was accepted in Los Angeles, but averring that the performance of the contract by plaintiff was in the San Francisco bay area and that the commissions due from the defendant to plaintiff were payable in San Francisco.

The trial court denied the motion and defendant appeals.

The propriety of the trial court's action must be determined by a proper interpretation of section 395 of the Code of Civil Procedure. That section, so far as is pertinent here, provides: ‘In all other cases, except as in this section otherwise provided, and subject to the power of the court to transfer actions or proceedings as provided in this title, the county in which the defendants, or some of them, reside at the commencement of the action, is the proper county for the trial of the action. * * * When a defendant has contracted to perform an obligation in a particular county, either the county where such obligation is to be performed, or in which the contract in fact was entered into, or the county in which the defendant, or any such defendant, resides at the commencement of the action, shall be a proper county for the trial of an action founded on such obligation, and the county in which such obligation is incurred shall be deemed to be the county in which it is to be performed unless there is a special contract in writing to the contrary.’

Here it is an admitted fact that this is a personal action, that defendant resides in Los Angeles, and that the contract was entered into in Los Angeles, the acceptance having been mailed from there. Bank of Yolo v. Sperry Flour Co., 141 Cal. 314, 74 P. 855, 65 L.R.A. 90. Therefore, defendant is entitled to have the action tried in Los Angeles unless the obligation was to be performed in San Francisco and in determining whether it was to be so performed we must conclusively presume that it was to be performed where entered into ‘unless there is a special contract in writing to the contrary.’ Thus, the case narrows down to the issue as to whether there was a ‘special contract in writing’ providing for defendant's performance in San Francisco.

This problem is by no means a simple one. One of the leading cases interpreting the ‘special contract’ exception of section 395 is Armstrong v. Smith, 49 Cal.App.2d 528, 122 P.2d 115. In that case plaintiff contracted to construct a dwelling for defendant in Alameda County. The contract was executed in San Francisco, and defendant resided in San Mateo County. The complaint alleged that plaintiff was prevented from performing by reason of the refusal of defendant to allow plaintiff to construct the building. The complaint was filed in Alameda County. Defendant's motion for a change of venue to the county of his residence—San Mateo—was denied. This was reversed on appeal. The court held that the breach being sued upon was of an implied obligation under the contract—i. e., the implied obligation of defendant not to interfere with performance by the plaintiff. The court carefully distinguished this implied obligation of defendant from the agreement of defendant to pay for the house—an express obligation. It was held that, when the obligation sued upon is implied, there can be no special contract in writing as to place of performance within the meaning of section 395. In this connection the court stated, 49 Cal.App.2d at page 536, 122 P.2d at page 119: ‘* * * if there is embodied in the agreement giving rise to the action an express stipulation with respect to the obligation in question, the requirements of the statute are met. It is our opinion that before an action may be brought under section 395, supra, in the county where the obligation forming the basis of the suit is performable, the contract must specifically state the place of performance of such obligation. If the contract so states, then the provision as to place of performance is both express and special.’

Thus, the ‘special contract in writing’ within the meaning of section 395, means that the obligation sued upon must be express and not implied.

We do not think that the Armstrong case is determinative of the question here presented. The present case is for declaratory relief to have it ascertained whether or not defendant has breached the contract in relation to commissions earned from business secured from Dalmo Victor Company. The complaint, while one for declaratory relief, is founded on a contract obligation. By it plaintiff is trying to collect, judicially, the commissions earned and to be earned on the Damo Victor Company business. In the Armstrong case the obligation sued upon was an implied obligation. There the contract did not expressly provide that the defendant would permit plaintiff to perform the contract. This promise was implied. The basis of the cause of action was that defendant had failed to live up to that promise. That obligation being implied, there was no ‘special contract in writing’ within the meaning of section 395. But in our case the obligation sued upon is in writing, and express. By the letter of March 1, 1948, which constitutes the contract of the parties, the plaintiff was appointed the representative of defendant and the defendant promised that ‘any work we receive through your solicitation we will pay you 10%.’ Then are listed various companies in Alameda, Santa Clara, San Mateo and San Francisco counties with which defendant has heretofore done business, including the Dalmo Victor Company. Thus, there is a written contract appointing plaintiff defendant's representative which lists companies located in the bay area, including San Francisco, and which states that defendant will pay plaintiff commissions on business secured by him. The obligation to pay commissions, the breach of which obligation forms the basis of the complaint, is express. The only thing that is implied is the place of payment. The law supplies that deficiency. Section 1489 of the Civil Code reads as follows:

‘In the absence of an express provision to the contrary, an offer of performance may be made, at the option of the debtor: * * *.

‘2. Wherever the person to whom the offer ought to be made can be found * * *.’ This section must be read into the contract. Under it, the place where plaintiff could be found and was performing was in San Francisco. Mary Len Mine v. Ind. Acc. Comm., 64 Cal.App.2d 153, 148 P.2d 106; Castleman v. Scudder, 81 Cal.App.2d 737, 185 P.2d 35; Bank of Yolo v. Sperry Flour Co., 141 Cal. 314, 74 P. 855, 65 L.R.A. 90; Hale v. Dolly Varden Lumber Co., —— Cal.App.2d ——, 230 P.2d 841.

Thus, it follows that there is a special express contract that the defendant will pay commissions to plaintiff, and the law requires that, on such a contract, the payments be at the residence of he creditor. Therefore, there was a special as well as an express contract that the defendant would pay the commissions in San Francisco. This being so, San Francisco is a proper county, under section 395 of the Code of Civil Procedure, to hear the action.

The order appealed from is affirmed.

PETERS, Presiding Justice.

BRAY and FRED B. WOOD, JJ., concur.

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