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

MONTANYA et ux. v. BROWN et al.*

Civ. 10578

Decided: November 16, 1938

Bronson, Bronson & McKinnon, of San Francisco, for appellants. H.W. Call, of San Mateo, R.J. Dolwig, of South San Francisco, for respondents.

In this action arising out of personal injuries received in an automobile accident, a judgment was recovered against appellants in the sum of $35,000. The trial was had before a jury, and the appeal is from the judgment entered upon the verdict.

Relying upon the provisions of section 402 of the Vehicle Code, St.1935, p. 153, appellants contend that the judgment is erroneous in respect to the excess over $5000.

At the trial it was agreed that appellants were the owners of the automobile at the time of the accident, and it was admitted that the driver of the car was negligent and that such negligence was the proximate cause of the accident. The only issue was the inference of agency on the one hand, under the section above cited, and the testimony of defendants on the other. It is the contention of appellants that their evidence is clear, positive and uncontradicted to the effect that no agency between the driver and the owners existed, and that the inference of negligence was dispelled.

From the undisputed facts it appears that appellants are the partners of Towne Motor Company at Redwood City. On September 4, 1936, K.B. Towne left his home in Redwood City on a deer hunt. Before he left, his wife asked for the use of a car the next evening. The Townes had no car of their own, but they customarily used cars belonging to the partnership. Since Mrs. Towne did not drive, her husband asked her who would do so. She replied that either her sister, Grace Brown, or a Mrs. Thompson would drive. Towne said she could have the car, and that he would tell the manager to let her have the “green demonstrator”. Towne left on his trip. The next day Mrs. Towne and her sister took the car and went on some errands of their own. They drove to the home of friends in Belmont, dined at a cafe in San Mateo, stopped at a roadhouse in Millbrae, and another in South San Francisco. While they were returning to their home early Sunday morning, the car, driven by Grace Brown, struck and injured plaintiff Louise Montanya.

We have gone over the record with care and are satisfied that there is no direct evidence of any agency existing between the owners of the car and the negligent driver. On the contrary, the direct evidence shows that no such agency existed. Respondents rely upon the inference created by section 402 of the Vehicle Code, which reads as follows: “(a) Every owner of a motor vehicle is liable and responsible for the death of or injury to person or property resulting from negligence in the operation of such motor vehicle, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner. (b) The liability of an owner for imputed negligence imposed by this section and not arising through the relationship of principal and agent or master and servant is limited to the amount of five thousand dollars for the death of or injury to one person in any one accident and subject to said limit as to one person is limited to the amount of ten thousand dollars with respect to the death of or injury to more than one person in any one accident and is limited to the sum of one thousand dollars for damage to property of others in any one accident.”

It is the rule that proof of ownership under the Code section cited gives rise to an inference of agency, and not a presumption. McWhirter v. Fuller, 35 Cal.App. 288, 170 P. 417; opinion of Supreme Court in denying hearing, at page 292, 170 P. at page 419; Fahey v. Madden, 56 Cal.App. 593, 598, 206 P. 128; hearing by Supreme Court denied. Appellants contend that the inference of agency created by statute was wholly dispelled by the evidence and that the evidence will only sustain a verdict for $5000, which is authorized by the section quoted irrespective of proof of agency. Respondents contend that “the inference of agency, or master and servant relationship, is not dispelled by evidence to the contrary as a matter of law. This is particularly true when such evidence is elicited solely from interested parties.”

It would serve no useful purpose for us to discuss the many cases cited by appellants, for we are satisfied that the rule laid down recently in the case of Engstrom v. Auburn Automobile Sales Corp., Cal.Sup., 77 P.2d 1059, definitely disposes of the contention made on this appeal. In discussing the nature of the inference created by the statute cited, it is there said [page 1063]: “On the other hand, an inference is dispelled as a matter of law when it is rebutted by clear, positive, and uncontradicted evidence which is not open to doubt, even though such evidence is produced by the opposite side.” In our opinion the evidence opposed to the inference in the instant case comes squarely within the rule above stated. It is clear, positive and uncontradicted to the effect that no agency existed between appellants and the driver of the automobile.

As to the contention that the rule does not apply when the evidence rebutting the presumption comes from “interested witnesses”, the holding in the Engstrom Case makes no exceptions whatever in this respect, and it further expressly provides that such evidence may be produced from the “opposite side”. Obviously if this court were permitted to consider the interest of the witness, it would also be called upon to consider such matters as bias and prejudice and impeachment generally, and thus exercise the functions of a trial court and jury. As the rule states, it becomes a “matter of law” which removes from the consideration of an appellate court the power of passing upon the credibility of the witnesses produced on such rebuttal. Our inquiry is confined to the record itself, and if it contains testimony which shows the total absence of any agency or relationship of master and servant or employer and employee, and if such evidence is clear, positive and uncontradicted, the rule must be applied, and any judgment in such a case in excess of the statutory limitation must be reduced accordingly.

An exceedingly well considered case on the question of the credibility of interested witnesses which arose in connection with evidence justifying a directed verdict is that of Jerke v. Delmont State Bank, 54 S.D. 446, 223 N.W. 585, 72 A.L.R. 7. After reviewing numerous cases throughout the United States, the court says [page 591]: “A majority of the courts, however, have announced other views on this question, indicating in substance the view that it is not a reasonable thing to say, in general, that a witness has perjured himself or has testified falsely, either intentionally or unintentionally, merely because of an interest in the case, where his testimony is not contradicted, is not opposed to general human experience, is not inherently improbable, and is not put in question by other circumstances appearing in the case.” The case here comes clearly within the foregoing pronouncement, and when such requirements have been met, the question, as the Supreme Court has held, becomes one of law.

We also believe that the judgment in this case, in respect to the excess over $5000, cannot be supported for another reason. It clearly appears from subdivision (a) of the section quoted, that the utmost limit of recovery, where imputed negligence alone (arising out of ownership) is relied upon, is $5000. In the instant case the liability of appellants is sought to be established by proof of ownership in the motor vehicle, and that alone. To justify a larger recovery, the liability must arise “through the relationship of principal and agent or master and servant”. In other words, there must be further and additional proof of agency (beyond that of mere ownership) in order to sustain that portion of the judgment which is in excess of $5000. Under the terms of the statute and the facts proven here, that portion of the judgment in excess of $5000 cannot stand.

It is therefore ordered that the judgment be modified by changing the amount thereof from $35,000 to $5000, and as so modified the judgment is affirmed. Respondents will recover their costs on appeal.

TUTTLE, Justice pro tem.

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

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