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


Decided: September 01, 1938

Hester W. Webb and William H. Mackay, both of San Francisco, for appellants. Earl Warren, Dist. Atty., Ralph E. Hoyt, Chief Asst. Dist. Atty., and James H. Oakley, Deputy Dist. Atty., all of Oakland, for respondent.

Appellants appeal from a judgment in respondent's favor in an action brought to recover a balance alleged to be due under the terms of a contract entered into by them with defendant.

By the terms of said contract, which was entered into on March 30, 1922, plaintiffs were to investigate and report on all real property in the County of Alameda, on which the taxes were first delinquent in the fiscal year 1916–17 or prior thereto, which had not been sold by the state for tax delinquency, which had not been redeemed by the owners thereof, and against which there were uncancelled taxes disclosed by the records. Appellants were to be paid an amount equal to 50 per cent of all money received by said county for redemption or sales of property covered by the authorization, but in no event were appellants to be paid in excess of $12,000. Twenty-five per cent of the amount due appellants was to be withheld until appellants furnished an affidavit of full performance by them under the contract. The affidavit so certifying was filed October 26, 1927. Up to this time certain payments had been made to appellants, and after the affidavit was filed, and on November 3, 1927, a resolution was passed by the board of supervisors accepting appellants' services “as full and complete performance of the things required to be done and performed by them under such contract” and directing the auditor to issue a warrant in plaintiffs' favor “for the final payment due said persons under and by virtue of the terms of said contract”. On November 8, 1927, a warrant was issued appellants for $860.97 (25 per cent of the amount theretofore paid appellants). Thereafter during the next four years six further payments were made totaling $291.77, the last being made September 4, 1931. On May 11, 1932, appellants filed their claim for $8,264.77, the difference between the amount already paid by the county under the contract, and the maximum provided therein. The claim was rejected and this action was brought.

The complaint is in four counts. The first is an action for fifty per cent of the moneys received by the county from sales and redemptions. The second is based upon the refusal of the county to sell certain parcels of property, the theory being that the contract contemplated the county would sell, and that it breached its contract by its failure and refusal to sell; that had such sales been made, plaintiffs' share would have been the maximum specified in the contract, and plaintiffs' demand the same, less what they already have received. The third and fourth causes of action were expressly waived at the oral argument and will not be considered here.

As to the first cause of action, the main controversy lies over the effect of the board of supervisors' resolution and the acceptance of the payment made by the auditor pursuant thereto. Respondent contends this constituted a final payment and a termination of all obligations under the contract, and that cashing the warrant constituted an accord and satisfaction. Appellants answer this contention by claiming, first, that the resolution had no such effect, and secondly, that the theory of final payment is untenable in view of the six payments later made.

It is clear that appellants' theory of the effect of the resolution and payment must be upheld. It was not intended as a termination of the relations between the parties. The contract provided that the appellants were to render certain services. These, of course, would be soon completed, but it was known that the moneys to be received by the county of Alameda, as a result of appellants' services, from redemptions or sales would not come in for some time. In fact, it must have been contemplated that these redemptions and sales might cover, as they actually did, a period of years. Appellants would not have any money coming until the county first received it, and hence the purpose of the resolution was to find that, under the terms of the contract, appellants had fully performed their services and were entitled to the twenty-five per cent theretofore withheld by the county, and thereafter would be entitled to receive from sales and redemptions their full fees without any portion being withheld. Its purpose was to clear the way for the withheld moneys and to allow full compensation thereafter without any withholding. That this was the intention and the effect is shown by the fact that thereafter, as redemptions or sales were made, the county made six additional payments to appellants. While they were only small amounts, nevertheless they indicated the understanding of the parties and were properly paid under the contract. There was no accord and satisfaction as there was no dispute. Rued v. Cooper, 119 Cal. 463, 467, 51 P. 704; Whepley Oil Co. v. Associated Oil Co., 6 Cal.App.2d 94, 44 P.2d 670. Moreover, the term “final payment” merely referred to the final payment of compensation already accrued, twenty-five per cent of which had been withheld. There was nothing to indicate to either party that this payment was to be a final adjudication of the relations between the parties.

Appellants' claim, upon which they base their first cause of action, was filed with the board of supervisors on May 11, 1932. It was rejected by the board. Respondent contends that the action of the board is not subject to review by the courts. However, section 4078 of the Political Code expressly provides that suit may be brought upon such rejected claim.

The next question, as regards the first cause of action, is the effect of section 4075 of the Political Code, which provides that the board of supervisors must not hear or consider any claim which is not filed within one year after the last item of the account or claim accrued. The bulk of the redemptions and sales for which appellants are asking compensation took place more than one year before appellants filed their claim. To evade the effect of section 4075 of the Political Code, appellants contend they are suing on a contract which provided for a running or open account between the parties and that they are entitled to include items older than one year preceding the filing of appellants' claim so long as no gap of a year separated the items of their claim, and inasmuch as the last item was within the year.

Here appellants' services were fully performed and completed in 1927. Nothing remained for appellants to do to earn their money. They only had to wait for the money to come into the county from sales or redemptions. The accrual of the right to receive money from the county in no way depended upon any action of either themselves or the county. Each time there was a sale or a redemption, the appellants were entitled to their money and could have immediately brought suit therefor, after first having filed a claim with the county. There was nothing which required or permitted them to wait until all the sales and redemptions that might occur over the years had been made. The amount to be received by appellants from each sale or redemption became due separately. Lee v. De Forest, 22 Cal.App.2d 351, 71 P.2d 285. As said in appellants' brief “the right to compensation arose, not on completion of services, but upon receipt by the county of money from redemptions and sales”. Each sale or redemption constituted an item by itself and from which the appellants were immediately entitled to their share. They could have and should have demanded it then. It appears in evidence that the total redemptions made within the period of one year prior to the filing of the claim with the board of supervisors amounted to $690.19. Appellants' share of this was 50% or $345.10. For this sum alone appellants are entitled to a judgment.

As to the second cause of action, the judgment below should be affirmed. The entire contract between the parties is contained in the resolution of the board of supervisors adopted in 1922. There is nothing in the resolution which obligates the county to sell the property concerning the delinquent taxes upon which appellants have reported. Appellants contend that the county is obligated to sell all properties as to which they reported until such time as appellants have received from such sales the maximum compensation agreed upon. But the resolution in no wise requires the county to make sales, and it is very doubtful if the board of supervisors would have the power to agree to such a requirement had they attempted to do so. 15 Cor.Jur. 465; Egan v. City and County of San Francisco, 165 Cal. 576, 133 P. 294, Ann.Cas.1915A, 754. Of course, the county never received anything from these properties, so, under the wording of the resolution, nothing ever became due appellants. The most the contract provides is that the appellants should make recommendations as to the disposition of these properties, but at no time did the board obligate itself to follow such recommendations.

Moreover, if any obligation to sell was created by the resolution, the breach of such obligation occurred when the county refused to sell upon demand in the spring of 1929. Any action for such breach would be barred by both section 4075 of the Political Code and the four-year statute of limitations, Code Civ.Proc. § 337.

The judgment is reversed and the lower court is instructed to enter judgment in favor of appellants and against respondent for the sum of $345.10, appellants to recover costs of appeal.

BRAY, Justice pro tem.

We concur: KNIGHT, Acting P.J.; CASHIN, J.