DEPARTMENT OF WATER AND POWER OF CITY OF LOS ANGELES v. INYO CHEMICAL CO

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District Court of Appeal, Third District, California.

DEPARTMENT OF WATER AND POWER OF CITY OF LOS ANGELES et al. v. INYO CHEMICAL CO. et al.

YOUNG v. SAME (STATE, Intervener).

Civ. 6347

Decided: March 27, 1940

Earl Warren, Atty. Gen., and Burdette J. Daniels, Deputy Atty. Gen., for appellant. E.L. Searle, of Los Angeles, for respondent. Catlin & Catlin, by William E. Woodroof, and O'Melveny, Tuller & Myers, by Jackson W. Chance, all of Los Angeles, amici curiae in support of respondent.

This is an appeal by the State of California from a judgment entered after the demurrer of the defendant and respondent to the complaint in intervention of said state had been sustained without leave to amend. For the purpose of this appeal, therefore, the facts must be taken to be as alleged in said complaint in intervention. In chronological order, the facts on which the alleged cause of action of the state is based are as follows:

For several years prior to, and during the month of November, 1926, the defendant, Inyo Chemical Company, a corporation, operated a manufacturing plant near the southerly end of Owens lake, in Inyo county, California, in which it produced calcined trona and a refined soda ash from lands leased from the State of California. The City of Los Angeles and Department of Water and Power of the City of Los Angeles maintained and operated the so-called Los Angeles aqueduct along a course which passed a short distance westerly of said plant. On or about November 27, 1926, a break occurred in said aqueduct near said plant and the waters from said aqueduct washed through and over a portion of said premises so leased by said Inyo Chemical Company, and damaged and destroyed large quantities of dry trona and of the trona deposit, and caused damage to certain roads, pipe lines and power lines of said company, and also subjected said company to additional costs of operation during the time certain repairs were made.

On or about November 25, 1927, said Inyo Chemical Company filed an action in the superior court of Fresno county against said City of Los Angeles and against the Board of Water & Power Commissioners of the City of Los Angeles, and said Department of Water and Power of the City of Los Angeles to recover for said damages sustained by reason of said break in said aqueduct, upon the ground that said defendants in said action were negligent in the maintenance, care and operation of said aqueduct.

Thereafter said action was tried and said court found that the defendants were negligent in the construction of said aqueduct and in the maintenance, care and operation thereof, and that by reason of the negligence and carelessness of the defendants, and their failure to exercise due or proper care in the construction, maintenance and operation of said aqueduct, plaintiff was damaged in the sum of $236,251.96, which the court found was directly and proximately caused by the negligence and carelessness of the defendants; and said court thereupon made its conclusions of law that the plaintiff was entitled to judgment against the defendants in the amount of $236,251.96, and such judgment was entered accordingly.

On or about April 21, 1932, judgment was duly given and made in favor of the intervener herein, State of California, and against the defendant, Inyo Chemical Company, in the amount of $17,722.15, plus $7 costs, in an action brought by the People of the State of California against said Inyo Chemical Company in the superior court of Inyo county.

On June 13, 1934, said District Court of Appeal of the Fourth Appellate District affirmed the finding of the trial court that the damages sustained by the Inyo Chemical Company were caused by the negligence of defendants, but reversed the judgment of the trial court and remanded the cause for a new trial solely upon the issue of the amount of damages, with instructions to the trial court to render judgment in favor of the respondent for the amount of damages so found upon a determination of that issue. Thereafter, the Supreme Court granted a hearing therein and on February 29, 1936, rendered its decision (Inyo Chemical Co. v. City of Los Angeles, 5 Cal.2d 525, 55 P.2d 850, 859), approving the findings and conclusions of the trial court that the damages sustained by the plaintiff were caused by the negligence of the defendants and that said defendants were liable therefor. In regard to the amount of said damages, the Supreme Court affirmed the determination of the trial court as to one of the items, viz., an item of $53,551.96 for damages to structures and for increased operating expenses pending repairs, except that, by the concession of the plaintiff and respondent therein, said item was reduced by the sum of $8,702.94, which had been duplicated in arriving at said figure of $53,551.96. Said item of damages was thereby fixed and approved by said Supreme Court in the amount of $44,849.02, for which amount the trial court was ordered to enter judgment. In regard to the remaining item for which said trial court had awarded damages, viz., for damage to the interest of the Inyo Chemical Company in the mineral deposits to which it was entitled under its aforesaid lease, the Supreme Court affirmed and approved the finding of the trial court that 90,000 tons of said mineral had been destroyed, and that the profit which ultimately would have been realized by the plaintiff from said minerals so destroyed was $182,700. The Supreme Court found and determined, however, that said total loss of profit in the amount of $182,700 would have been by reason of production over a period of thirty-six years, and said court therefore reversed the judgment of the trial court for the sole purpose of determining the “present value” of the sum found by the trial court as the profit which would have been realized from the sale of the destroyed trona, and directed said trial court to enter judgment upon such determination. The Supreme Court, in concluding its opinion, stated:

“The findings and conclusions of the court below on all issues, including all items of damage found, are approved in all respects except as follows: (1) The amount shall be reduced in the sum of $8,702.94, in accordance with the concession of plaintiff; and (2) the damage to plaintiff's leasehold shall be computed by determining the present value of the sum found by the court below as the profit which would have been realized from the sale of the destroyed trona, in accordance with the views hereinbefore expressed.

“The judgment is reversed for the sole purpose of determining this sum, and the trial court is directed to enter judgment for the plaintiff upon such determination, each party to pay its own costs on appeal.”

On or about March 31, 1936, the State of California paid to the controller of said City of Los Angeles, the sum of one dollar, and filed with said controller an abstract of the aforesaid judgment in favor of the State of California and against the Inyo Chemical Company together with an affidavit under section 710 of the Code of Civil Procedure of the State of California, which affidavit stated that the whole of said judgment, together with interest thereon, was then owing and unpaid and claimed the benefits of said section 710. Copies of such abstract and of the affidavit were attached to the complaint in intervention, it being further alleged that on March 31, 1936, the plaintiffs herein did not have any auditor, and the controller was the official whose duty corresponded to that of auditor.

On October 8, 1937, the parties to the action in the superior court of Fresno county stipulated that judgment might be entered in that action in favor of the plaintiff in the action and against the City of Los Angeles and the Department of Water and Power of the City of Los Angeles in the sum of $90,000 without costs to either party, and thereafter, on said day judgment was so rendered.

Immediately thereafter, on the same day, the Department of Water and Power of the city filed a complaint in interpleader in the superior court in Los Angeles county, by which it sought to have the court determine the rights of the respective claimants to said moneys owing to said Inyo Chemical Company. The state filed its complaint in intervention in said proceeding setting forth the foregoing facts, and further alleging that the city and the Department of Water and Power had not paid any of the moneys owing to said Inyo Chemical Company and praying that the court determine that the state, by its levy, had obtained a first and paramount lien thereon and right thereto and that the court order the controller of said city to pay same to the state, to the extent of the aforesaid levy by the state under section 710 of the Code of Civil Procedure. This appeal is from the judgment entered in favor of the defendant and against the State of California.

Appellant presents two issues to the court as being necessary to decide on this appeal: First, the question whether section 710 of the Code of Civil Procedure is applicable to cities operating under a freeholders' charter in so far as the moneys sought to be levied upon as “owing and unpaid” are owing on account of the exercise by said city of one of its municipal affairs; and, second, the question when for the purpose of a levy under said section 710, may it be said there are moneys “owing and unpaid” by the municipality?

We shall discuss the second point first, because if we should hold that there was no money “owing and unpaid” from the City of Los Angeles to the Inyo Chemical Company at the time of the filing of the transcript of judgment by appellant, it will be unnecessary to decide the first question.

The question there presented is whether or not, at the time appellant made its levy under section 710 of the Code of Civil Procedure, there was “money due and owing” to the Inyo Chemical Company within the meaning of said section. Appellant contends that there was, while respondent contends that the claim arising out of tort which was the subject of the action entitled “Inyo Chemical Company v. City of Los Angeles”, supra, was at all times unliquidated and incapable of ascertainment as to amount, so long as that action remained pending. Appellant argues that because the Supreme Court in its opinion determined that one item of $44,849.02 was found to have been properly proven by plaintiff as one of the items of its damage, that the Supreme Court, thereby, finally and conclusively fixed and determined that sum of money to be owing and unpaid from the City of Los Angeles to Inyo Chemical Company within the meaning of section 710 of the Code of Civil Procedure.

Section 710 reads in part as follows:

“(a) Whenever a judgment for the payment of money is rendered by any court of this State against a defendant to whom money is owing and unpaid by * any * city or municipality *, the judgment creditor may file a duly authenticated abstract or transcript of such judgment together with an affidavit stating the exact amount then due, owing and unpaid thereon and that he desires to avail himself of the provisions of this section in the manner as follows:

*

“2. If such money * is owing and unpaid to such judgment debtor by any * city or municipality * shall file said abstract or transcript and affidavit with the auditor of such * city or municipality *. Thereupon said auditor (or other official) to discharge such claim of such judgment debtor shall pay into the court which issued such abstract or transcript by his warrant or check payable to said court the whole or such portion of the amount due on such claim of such judgment debtor as will satisfy in full or to the greatest extent the amount unpaid on said judgment and the balance thereof, if any, to the judgment debtor.”

It is conceded by appellant that unless there was a definite sum owing and unpaid by the municipality to the judgment debtor, there can be nothing upon which levy can be made. It is respondent's contention that nothing short of a final judgment entered by the trial court following the appeal in the case of Inyo Chemical Company v. City of Los Angeles can finally and completely determine and liquidate the amount of money due and owing from the City of Los Angeles to Inyo Chemical Company, and that because such judgment had not been entered, and had not yet become final when the levy under section 710 of the Code of Civil Procedure was made by the State of California, there was no sum of money due and owing from the City of Los Angeles, and such levy was ineffectual for any purpose.

As was said in the case of Arp v. Blake, 63 Cal.App. 362, 218 P. 773, 777: “It is well settled that claims for damages in tort, being unliquidated, are not such debts or credits as are contemplated by the attachment laws to be subject to garnishment process. But after the claim has been reduced to a fixed sum by a final judgment it is then subject to such process. Until then the claim maintains its character as an unliquidated claim. Shinn on Attachment and Garnishment, vol. 2, §§ 482, 483; Waples–Platter Grocer Co. v. Texas & Pac. Ry. Co., 95 Tex. 486, 68 S.W. 265, 59 L.R.A. 353, and cases cited in the note. See, also, Hassie v. G.I.W.U. Congregation, 35 Cal. 378; Redondo Beach Co. v. Brewer, 101 Cal. 322, 35 P. 896.”

The law also seems to be well settled in this state that pending an appeal from a judgment rendered in a tort action, the debt represented by the judgment is not subject to garnishment or attachment. Pacific Gas & Electric Co. v. Nakano, 12 Cal.2d 711, 87 P.2d 700, 702, 121 A.L.R. 417; Arp v. Blake, supra. As was said in Pacific Gas & Electric Co. v. Nakano, supra: “The effect of the appeal ‘operated to keep alive the case as one of tort as it existed before the judgment was rendered’. Arp v. Blake, supra [63 Cal.App.] page 373, 218 P. page 778. Therefore, pending the appeal, the plaintiff in said action had only a claim for damages for injuries suffered by the acts of the defendant, or a chose in action arising on tort.” (Emphasis added.)

Appellant argues that by its decision in the case of Inyo Chemical Co. v. City of Los Angeles, the Supreme Court had determined finally that the city was liable to Inyo Chemical Co. on account of the damages involved in said action, and that it was settled by said decision that the amount of damage to the structures placed by the Inyo Chemical Co. upon the leased property in question, and for increased operating expenses pending repairs, for which the city was so held liable, was the sum of $44,849.02. Appellant argues further that at the time the levy was made by the state on March 31, 1936, there was a fixed liability in favor of the judgment debtor of the state and against the City of Los Angeles in the fixed amount of $44,849.02, plus an additional fixed liability, the amount of which had not been ascertained.

As we view the matter, the decision of the Supreme Court vacated the judgment of the court below and after said decision and before the entry of another judgment in the trial court, there was no judgment in said action. Therefore, the action being based upon a tort, and there being no judgment at the time appellant filed its transcript with the auditor, we must conclude that there was no money due and owing from the City of Los Angeles to the Inyo Chemical Co.

It is true that the Supreme Court in reversing the judgment did approve one of the items of damages awarded by the judgment, namely, the item of damage to the structures, and did state that the judgment was reversed for the sole purpose of determining the damage to the leasehold. But the fact is that the Supreme Court did reverse the judgment, and after the judgment was reversed there was no judgment in existence. On page 542 of its decision in 5 Cal.2d, on page 858 of 55 P.2d, the Supreme Court said: “We are accordingly satisfied with the general conclusion of the court below, together with the above concession by plaintiff; but in one important respect the judgment is erroneous and it must be reversed.”

As was said in the case of Cowdery v. London & San Francisco Bank, 139 Cal. 298, 73 P. 196, 197, 96 Am.St.Rep. 115:

“To reverse is ‘to overthrow; set aside; make void; annul; repeal; revoke: as, to reverse a judgment, sentence, or decree’ (Cent.Dic.); or, ‘to change to the contrary, or to a former condition’ (Standard Dic.). To the same effect, see Laithe v. McDonald, 7 Kan. 254; Abb.Law Dic.; Anderson, Law Dic.; Black, Law Dic.; Bouv.Law Dic. The distinction between a reversal of a judgment and an affirmance, with a modification, is too marked and radical to justify us in disregarding it. The decision of this court as to the form of its judgment or mandate, and as to what shall be the future proceedings in the court below, is a part of its duty generally, and particularly under section 957, Code Civ.Proc., and as such it is presumed to have received the same consideration as any other feature in the case. We are bound to assume that this court in this case acted advisedly and deliberately, and had good reason for ordering a reversal rather than a modification and affirmance. The part of the order directing the entry of a new judgment related solely to the proceedings after the reversal and the return of the case to the court below, and was not intended to, nor could it, change the reversal to a mere modification. Neither can the fact that it may now appear to us that the same result could have been reached by a modification justify this court in now changing the effect of the mandate.

“The effect of an order of reversal upon the judgment reversed is not left in doubt by the decisions in this state. In Reynolds v. Hosmer, 45 Cal. [616], 628, the court says: ‘When the Supreme Court reversed the judgment of the circuit court, * and its mandate was filed in the lower court, * the judgment was reversed, whether the lower court afterwards made any order conforming its judgment to that of the Supreme Court or not.’ In Estate of Mitchell, 126 Cal. [248], 250, 58 P. [549], 550, it is said: ‘When the order * was reversed, it no longer had any vitality or force, and the result was to leave the proceeding where it stood before that order was made.’ When a decree is reversed, it is vacated, and the matter stands ‘as though no decree had ever been made.’ Ashton v. Heydenfeldt, 124 Cal. 17, 56 P. 624. When a judgment is reversed, ‘it is as if never rendered.’ Raun v. Reynolds, 18 Cal. [275], 290. When the order of the Supreme Court in the case of London, etc., Bank v. Bandmann, 120 Cal. 220, 52 P. 583, 65 Am.St.Rep. 179, was made, reversing the judgment of the court below, that judgment was forthwith vacated, and until action was taken by the court below in pursuance of the mandate, to enter another judgment in accordance with the opinion of the Supreme Court, there was no judgment in existence in the case.”

Appellant argues that the cases of Arp v. Blake, supra, and Pacific Gas & Electric Co. v. Nakano, supra, are not controlling in this case, because said cases relate to the general garnishment and attachment provision of sections 542–545 of the Code of Civil Procedure. Appellant states on page 19 of its opening brief:

“In the principal case, then, the only question is, whether the levy by the State herein, under the provisions of section 710 of the Code of Civil Procedure, ‘caught’ anything. We are not concerned with whether the levy, if it had been made under the general garnishment provisions of said sections 542–545, would have ‘caught’ anything.

“Said sections 542–545 refer to ‘debts' and ‘credits'. It has therefore been held that mere claims for damages in tort ‘being unliquidated, are not such debts or credits as are contemplated by the attachment laws to be subject to garnishment process'. (Arp v. Blake, 63 Cal.App. 362, 372, 218 P. 773, 777.) But the section 710 provides a special form of garnishment for the benefit of any person who holds a judgment against a defendant ‘to whom money is owing and unpaid’ by the public bodies therein enumerated. (Irilarry v. City of San Diego, 186 Cal. 535, 199 P. 1041.) This provision, and none other, this court is here called upon to construe.”

We cannot agree with appellant's contention that there is any real distinction between the general garnishment and attachment provisions of the Code of Civil Procedure and section 710. There can be no question but that the procedure provided in section 710 is a true garnishment proceeding. It provides for a levy upon the city which is the debtor of the levying party's debtor. Such is the essence of a garnishment.

Appellant argues further on page 25 of its opening brief: “The material question is whether the existence and amount of the claimed liability have been liquidated. The manner in which the claim is liquidated is unimportant. It is probably true that liability under a tort claim usually is rendered certain, and the amount of the liability liquidated by way of a final judgment. It is not surprising, then, that we find language such as was used in Arp v. Blake, supra, in which the court very evidently was referring solely to said usual situation. Accurately speaking, it is the fact of liquidation of the uncertain claim, and not the manner of liquidation, which is the material factor in determining whether the liability is subject to garnishment.”

But, if, as we have already pointed out, a claim for damages in tort is unliquidated until reduced to final judgment, and there was at the time of the levy involved in this action, no final or any judgment, the judgment of the superior court having been reversed, we are unable to see how it can be reasonably contended that there was money “owing and unpaid” from the City of Los Angeles to Inyo Chemical Co. within the meaning of said section 710 of the Code of Civil Procedure. With no judgment in existence at the time of the levy, how could the city auditor of Los Angeles be authorized to “pay into the court which issued such abstract or transcript by his warrant or check payable to said court the * amount due on such claim * as will satisfy * said judgment and the balance thereof, if any, to the judgment debtor”, as provided in said section 710? At the time of the levy the judgment had been reversed, and there was no judgment; and the mere fact that certain directions were given by the Supreme Court for the guidance of the trial court in the event of a retrial could not have the effect of affirming the judgment of the court below in part. Until a new judgment was entered it could not in our opinion be fairly held that the claim of the Inyo Chemical Co. against the City of Los Angeles was liquidated, or that there was money owing and unpaid by the City of Los Angeles to the Inyo Chemical Co. within the meaning of said section 710. Certainly the Inyo Chemical Co. could not have levied an execution after the decision of the Supreme Court, and it is the generally accepted rule that a party seeking by way of garnishment to levy upon property of another in the hands of a third party has no better right in making the levy than has the creditor himself, and that he takes under such garnishment proceedings only such property as is clearly existent at the instant the garnishment is levied.

We conclude that there was no money due and owing from the City of Los Angeles to the Inyo Chemical Co. at the time appellant filed its transcript with the auditor. Having reached such conclusion, it is unnecessary to decide the question of whether or not a judgment creditor seeking to avail himself of the provisions of section 710 of the Code of Civil Procedure is required to follow the provisions of the freeholder's charter of the City of Los Angeles in addition to the provisions of said section 710.

The judgment of the court below sustaining the demurrer to appellant's complaint in intervention without leave to amend is affirmed.

SCHOTTKY, Justice pro tem., delivered the opinion of the court.

We concur: PULLEN, P.J.; TUTTLE, J.

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