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District Court of Appeal, Third District, California.


Civ. 5474.

Decided: January 08, 1937

Louis Ferrari, of San Francisco, Rich, Weis & Carlin, of Marysville, Butler, Van Dyke & Harris, of Sacramento, and Keyes & Erskine, of San Francisco, for appellant. De Lancey C. Smith, of San Francisco, J. Oscar Goldstein, of Chico, and Ray Manwell, of Marysville (Francis C. Brown and Murray Draper, both of San Francisco, of counsel), for respondents.

Appellant feels that this court has misinterpreted the record in a material matter, thereby prejudicing it should it be necessary to present the issues before the Supreme Court. Lest such should be the effect, we deem it but fair to amplify our statement in the particulars complained of. The principal complaint has to do with the instructions of the court in regard to the right of the Hunts to recover damages for the alleged breach of contract by the bank in failing to make certain advances. In this connection the court instructed the jury:

“It is an admitted fact in this case that the cross–complainants (Hunts) and cross–defendant (Bank) entered into a written, contract on April 14, 1924; and this action has been brought by cross–complainants to determine whether or not they are entitled to damages upon the ground that the cross–defendant breached such contract.

“It has been conclusively established as a matter of law that the cross–defendant breached the contract by failing to supply to cross–complainants sufficient money with which to raise a crop on Parcel 2, or the Home Place, described in the contract during the year 1924. Cross–complainants have received complete satisfaction for the damage they suffered by reason of their inability to raise a crop on the Home Place in 1924.

“In this action cross–complainants allege that they have sustained further damages than those which they have heretofore received by reason of the same breach of the contract above mentioned, and also by reason of other breaches of the same contract.

“The other breaches for which cross–complainants seek damages in this action are respectively:

“First, the failure of the cross–defendant Bank to Lease Parcel 1, known as the Adobe Ranch to one Bayless; and

“Second, the foreclosure by cross–defendant Bank of the interest of cross–complainants in the three parcels of real property described in the contract of April 14, 1924, being parcel number 1, known as the Adobe Ranch, parcel number 2 known as the Home Place, and parcel number 3 known as the Upper Place; and

“Third, conversion or improper taking by the cross–defendant Bank of the personal property which had been included in a chattel mortgage given by cross–complainants to cross–defendant Bank under the contract of April 14, 1924.

“The cross–defendant Bank denies each and all of these claims of cross–complainants, and further denies that it is indebted to cross–complainants for damages or in any other manner.”

“I instruct you that if you find as a fact that cross–complainants suffered any damages from the breach already established of the contract of April 14, 1924, by cross–defendant bank (the failure to advance the $1,000.00 and the $2,500.00), or from any of the other breaches claimed by cross–complainants to have been committed by cross–defendant bank, that then and if you so find, cross–complainants are entitled to recover any such damages they may have sustained, except that they are not entitled to recover in this action any damages caused to them by loss of the crop on Parcel number 2, or the Home Place, during the year 1924.”

Appellant claims these instructions were erroneous because the Hunts having recovered for the loss of the crop on the Home Place in the Butte county action cannot now recover in this action for additional damages for the breach of the same contract for losses other than loss of crop. As a general proposition of law, appellant is correct in stating that when a breach of contract occurs a litigant may not recover part of his damages for such breach in one action and part in another action, but must obtain all of the relief he intends to seek in one proceeding. But it must be recalled that in this litigation the Supreme Court has already found that the Hunts in the Butte county action attempted to enlarge the issues to include all claims for damages they had against the bank, but this was successfully resisted by the bank. The Supreme Court, in considering the Butte county case [Hunt v. United Bank & Trust Co., 210 Cal. 108, 291 P. 184], also held the issues there presented were limited to the single issue of damages sustained by the Hunts for the loss of the rice crop, and that the course there pursued was tantamount to an express determination on the part of the court with the consent of opposing counsel to a reservation of other issues for future litigation.

It was determined in the Butte county case that the bank had breached its contract, and in this case, with that judgment roll in evidence, the court had the right to so instruct the jury. The Hunts were entitled to all damages they could establish which were not considered in the Butte county case, regardless of what breach they might flow from, and the court so properly instructed the jury.

The bank also complains that this court failed to consider the point urged by it that the counterclaim of the Hunts failed to state a cause of action against the bank respecting what is known as the Bayless lease. The bank claims that the contract between itself and the Hunts did not impose any contractual obligation upon it to negotiate a lease with Bayless, but if such obligation were imposed it performed that obligation.

The contract provides briefly that the Hunts would consent to a lease of the Adobe Ranch to Bayless and would execute a lease in whatever form might be prepared and preferred by the bank, but with a proviso that the crop share of the Hunts would be 35 per cent. The testimony discloses that the bank sent Mr. Jarvis to the Hunts representing the bank. A form of lease to Bayless was presented to the Hunts and signed. It was then taken to Bayless, who testified he asked for an agreement from the bank not to foreclose during the cropping season, as otherwise he would have no protection, but the bank refused and no lease was executed. Within a day or two he wrote the bank asking if his interests would be protected in case of legal entanglements between the Hunts and the bank. No reply was made to this letter and three days later one Roberts entered into possession under a purported lease from the Hunts. The bank in their agreement with Roberts agreed to protect him against foreclosure. Roberts continued to operate the ranch with Hindus on the place and Jarvis attempted to get the Hunts to sign a lease to Roberts, but they refused on the ground that Roberts was representing Hindu operators. A lease was offered in evidence from the Hunts to Roberts, purported to have been acknowledged in Sacramento, also containing an alteration of the 35 per cent crop interest to 33 1/3 per cent. The Hunts claimed they never executed this lease nor acknowledged the same and Jarvis admitted that he made the alterations and substitutions without the authorization of the Hunts. Upon this and similar testimony the Hunts claimed that the bank not only did not carry out either its express or implied obligation to make a lease to Bayless, but actually discouraged him from entering into a lease. The jury upon sufficient evidence so found.

Another point urged is that this court failed to discuss in sufficient detail an item of damages for the improper taking by the bank of the personal property pledged by the Hunts under a chattel mortgage to the bank in April, 1924. While an action in claim and delivery was pending the property was taken by the bank and sold. The property having been sold by the bank while technically in the custody of the law rendered the bank liable for conversion.

We do note two errors in the opinion as filed. In the fourth paragraph of the opinion we say, “The Bank further claims that the record on this appeal is different from the further appeal from Butte County * * *,” whereas we should have said, “Yuba County.” Also, for the sake of clarity in the same paragraph the phrase “in attempting to limit the issues to damages only” should be changed to read, “in attempting to limit the issues to one item of damage only.”

With these additions and amendments to the opinion as filed, the petition for a rehearing is denied.