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District Court of Appeal, Fourth District, California.


Civ. 3614.

Decided: July 30, 1946

Jennings & Belcher, of Los Angeles, and Monroe & McInnis, of San Diego, for appellant. Forrest A. Betts, of Los Angeles, and Wm. H. Macomber, of San Diego, for respondent.

This is an action for damages for personal injuries.

During his lifetime C. A. Gray owned and operated an automobile sales agency in the business district of San Diego. For several years prior to the death of Mr. Gray, and because of his illness, John Berger had been in complete chatge of the operation of the business as manager and superintendent. Mr. Gray died on September 14, 1939. His will named Ralph C. Long, a banker of Beverly Hills, and A. J. Verheyen, an attorney of Los Angeles, both close friends, as executors. The will provided for the continue operation of the business and for distribution of the estate to trustees, to be operated for the benefit of the wife and daughter of the testator. Letters testamentary were issued to Long and Verheyen on September 28, 1939, and both duly qualified. Pursuant to the terms of the will the court ordered the executors to operate the business until such time as it was distributed to the trustees. In accordance with a wish expressed by the testator, Berger continued to actually operate the business as manager, going to Verheyen for any needed advice or assistance. Long took no part in the actual management or operation of the business, other than to concur as one of the executors in permitting Berger to operate the business. He knew nothing of the accident here in question until this action was brought.

On the morning of December 12, 1940, before the premises had been opened for business, the plaintiff, who was employed as a tank truck driver by the Union Oil Company, came to this agency for the purpose of delivering gasoline. The door to the automobile entrance was closed. This door was of the type which lifted to a position flat against the ceiling, having a counter-weight which was attached to the door by a wire cable, the two ends of the cable being fastened to the door by clamps held by bolts. As the plaintiff was opening this door one end of the cable pulled from its clamp and the door, in falling shut, cut off the end of the plaintiff's nose. The Union Oil Company accepted its liability under the Workmen's Compensation laws and expended therein some $14,000, including the cost of plastic surgery operations for the purpose of rebuilding the end of plaintiff's nose. This element was included in the damages here sought.

On August 2, 1941, the property in the estate was distributed to one J. O. Miller as trustee, and the estate was closed and Long and Verheyen were discharged as executors.

This action was brought on December 9, 1941. There were named as defendants, Miller as trustee, Long and Verheyen, both as individuals and as executors of the Estate of Gray, and the San Diego Planing Mill Company, which had repaired the door in question a few days before the accident. Although Long and Verheyen were sued as executors of the estate no attempt was made, the estate having been closed and these executors discharged before the action was brought, to secure the appointment of a personal representative for the estate. A demurrer filed by Miller as trustee was sustained without leave to amend, and a judgment in his favor has become final. At the opening of the trial it appeared that Verheyen had died, and the action was dismissed as to him and as to certain fictitious defendants. An objection to the introduction of any testimony as against Long as an executor of the Estate of Gray was overruled and the case went to trial against Long as an individual, Long as an executor of the Gray estate, and the planing mill company as defendants. Many unsuccessful attempts were made throughout the trial, by objection and motion, to eliminate from the case either Long as an individual, or Long as an executor of the Gray estate. Later, motions for a judgment notwithstanding the verdict and for a new trial were made and denied.

It appeared at the trial that one of the employees in connection with the business thus being operated by the estate was a Filipino named Felix Budhi. Among other things, it was his duty to see that the building was kept in proper repair. A short time before the accident he noticed that the wire cable connecting this door with the counterweight had become worn. He reported this to Berger, who directed him to call the planing mill, which had installed the door several years before, and have the door repaired. The planing mill sent one Bostrom, who was experienced in that type of work, to make the repairs. Bostrom did so, putting on a new cable which he attached to the door by the same clamps which had been previously used for that purpose. While it seems rather clear that this accident was caused by the failure of Bostrom to properly tighten the bolts in these clamps, the jury specifically found there was no negligence on the part of the planing mill or its employee.

The claim of negligence on the part of any employee of the automobile agency is based on the failure of Budhi to weld a nut on the end of the wire cable, the theory being that this would have prevented the cable from slipping through the clamp even though the clamp was not sufficiently tightened. It appears that soon after the door was originally installed Budhi, as an added precaution, had welded such a nut on the end of the cable. This was not done again after these repairs were made. There was evidence that such welding was not recommended by the manufacturer of this door hardware, that it had never been done in installing other doors of this type, and that such welding would injure and weaken the cable itself. There was, of course, conflicting evidence in which Bostrom testified that when he completed his work he told Budhi to proceed to weld the nuts on the cable. Budhi testified that Bostrom told him that no such welding was necessary.

The court instructed the jury that no action could be maintained against the estate of the decedent, but gave another instruction which authorized the jury to find against all of the defendants. The jury returned a verdict for $87,575 in favor of the plaintiff and ‘against the defendant Ralph C. Long, an individual acting as executor of the estate of C. A. Gray, deceased.’ The quoted language was contained in a form submitted to the jury in accordance with the theory the plaintiff had developed during the trial. A question immediately arose as to the meaning of the verdict. At the request of counsel for the planing mill the jury, having indicated such a purpose and intent, was permitted to bring in another verdict against the plaintiff and in favor of the planing mill. A judgment was entered thereon which has become final. A request was made by counsel for Long, individually and as an executor, that the jury be requested to clarify its verdict by indicating whether it intended to find against Long as an individual or against him as an executor of the estate. The court refused to do this, saying: ‘I think the verdict fo the jury as returned is clear and is not confused.’ Thereupon counsel for Long remarked that he did not understand it; that he did not know whether it was a verdict against Long individually or against Long as executor; and that ‘I don't think the jury knows either.’ The foreman of the jury then replied: ‘It says right there, against Long as executor of the estate.’ Judgment was entered in the language of the verdict that the plaintiff ‘recover from said defendant Ralph C. Long, an individual acting as executor of the estate of C. A. Gray, deceased the sum of $87,575.00,’ with costs. From that judgment Long, both individually and as executor, has appealed.

The appellants contend, among other things, that an executor may not be sued in his representative capacity after he has been discharged and the estate closed; that the verdict is so indefinite and uncertain that it does not disclose whether the jury intended to find against Long as an individual or against him as executor; that the confused manner in which the issues were presented to the jury prevented a fair trial on the issue of Long's individual liability; that any negligence of an employee in a business being thus continued by an estate may not be imputed to an executor, who was personally without fault; and that an executor may not be held liable for any possible negligent act of his coexecutor.

The respondent concedes that Long was not personally negligent but argues that where an executor, as authorized by the court, operates a business in behalf of an estate he does so under the rules applicable to principal and agent or master and servant; that it was not possible here to sue the estate; that it was necessary to sue the executors personally; that since, in justice, the estate should ultimately pay any judgment it was necessary to sue the executors, both as such and personally, in order to show that their acts were done in carrying on the business of the estate; that after judgment is thus rendered against an executor personally it may then be determined whether or not, in justice, the executor should be reimbursed by the estate; that this must be done in another action and cannot be done in this action; and that the verdict and judgment were in the form made necessary by this peculiar situation, and correctly described the person against whom the judgment must stand until such time as the ultimate liability is determined. In practical effect, it is argued that because liability cannot be directly imposed upon the estate an executor, regardless of personal negligence on his part, may be held personally liable until such time as liability may be indirectly imposed on the estate.

Formerly, an executor was not permitted to bind the estate and if he elected to carry on the business of the decedent he did so at his own risk. In re Estate of Burke, 198 Cal. 163, 244 P. 340, 44 A.L.R. 1341. This was on the theory that in carrying on the business the executor was going beyond his duty and was doing something he was not authorized to do. An exception was sometimes made, however, when the continuance of the business was expressly authorized by the will. In re Estate of Ward, 127 Cal.App. 347, 15 P.2d 901. It was also usually held that an estate is not liable for torts committed by the executor. Rapaport v. Forer, 20 Cal.App.2d 271, 66 P.2d 1242. This was based on the sound principle that where an executor, acting outside of his authority and power under the law, commits a wrong, it is his own act and he is personally responsible to anyone injured thereby.

In 1929, an amendment was adopted, which now appears in section 572 of the Probate Code, permitting the court to authorize the executor to continue the operation of a decedent's business. In the instant case, the executors were authorized to continue this business both by such a court order and by the terms of the will. It clearly appears, therefore, that in operating this business they were not acting outside of their authoirty and power under the law. And in no sense can the operation of a decedent's business under order of the court be considered a part of the personal or private business of the executor. First Nat. Trust & Sav. Bank v. Industrial Acc. Comm., 213 Cal. 322, 2 P.2d 347, 78 A.L.R. 1324. Since the change in the law authorizing the continuance of the business operated by the deceased it is well established that the estate, and not the executor personally, is liable for the general obligations necessarily incurred in running the business. California Emp. etc., Comm. v. Hansen, 69 Cal.App.2d 767, 160 P.2d 173, 175. In that case, after stating that the purpose of section 572 of the Probate Code was to permit such a business to be continued under the direction of the court for the benefit of the estate, it was said: ‘The effect of that section is to make claims arising under such circumstances a charge against the estate rather than one against the administrator or executor personally.’

The confusion throughout the trial of this case, and continuing on the presentation of this appeal, arises from the fact that it has not yet been definitely determined, since the change in the law, whether or not such a claim as this is chargeable against the estate, rather than against the executor personally, where it arises as an incident to the continued operation of the business and without personal fault on the part of the executor. As a practical matter, the occurrence of such an accident is a risk which is inherent in the operation of any business under modern conditions where authority must be delegated to and duties carried out by various agents. Such a risk is necessarily involved in the operation of a business of any size, and is one which cannot be avoided by the executor, no matter how careful he himself may be. On principle, and in justice, such a risk should be borne by the estate and its beneficiaries, the real employers, for whose benefit and in whose interest the business is being continued. While technically an estate must be sued through the personal representative, the latter merely represents the state and he himself is but an agent of the estate. He has no direct personal interest in the continuance of the business and he should not be personally held liable because of a risk he is ordered to assume, when he is without personal fault.

When properly raised, the question of the liability of an estate and the beneficiaries thereof for damages under the circumstances here appearing should be considered and, if necessary, the rules of law applicable should be reexamined and restated in the light of actual conditions brought about by the change in the law to which we have referred. On this appeal the question suggested cannot be decided since the estate had been closed and the executor discharged before the action was brought, and no attempt was made to appoint a new personal representative for the estate and make it a party to the action. Nevertheless, the former executors were sued, both personally and as executors, and the issues were confused throughout the trial on the theory that, whether or not the executors had been personally negligent, the remaining executor was liable because he had acted as an executor of the estate for whose benefit the business was being run, and that in some vague way it was both possible and necessary to fix liability upon him personally, in order to protect the rights of the respondent, and in order that a just liability should eventually be imposed upon the estate. This theory was constantly presented to the jury throughout the trial, it was repeatedly argued in the trial court, and again here, and the form of the verdict was ambiguously worded for the express purpose of leading the jury to find in accordance with that theory.

It is here argued that the question of whether or not, in justice and good conscience, the amount for which Mr. Long is held liable should be paid by the estate must be decided in another forum and should not be considered here. It was argued in the trial court by respondent's counsel, and is argued here, that ‘Long is in this case for only one reason and that is that he was the executor whom the answer admits was running the business. The law says that we can't sue the estate, we must sue the executor and we must sue him as an individual but we do not sue him as Long. We sue him as Ralph C. Long, the individual, who is the executor’; that it was necessary to sue this individual ‘in order to get at the estate which was running the business of C. A. Gray Motor Company’; that Long was an agent of the estate and ‘The courts are never going to permit this estate to escape the responsibility’; that there can be no question ‘that he is not individually responsible, unless he was guilty of malfeasance or of frauding the estate, something of that sort’; that ‘We sued Mr. Long individually and we sued him in his individual capacity as the executor of the estate, and any position which Mr. Long has in this case is due entirely to his appointment as executor by the court under the will’; and that the plaintiff is entitled to recover from the estate but that you have to recover against the individual to establish the responsibility of the estate. It is further argued here that ‘in justice, since he was not himself personally negligent, the corpus of the estate, * * * should eventually bear the legal responsibility for this judgment’; that the form of the verdict is correct since the designation of Long as an executor of the estate helps to make the distinction ‘that the business which the defendant was managing at the time of the accident, and out of which the action arose, was not his ‘own personal business”; that the judgment is enforceable against Long personally but that he may ‘institute action seeking to have the burden of payment responsibility placed where it should be, on the corpus of the estate’; and that ‘It is perfectly apparent to all who heard the case, or who have read the transcript, that the ultimate responsibility * * * should fall upon, and should be paid from, the estate.’

This theory was repeatedly presented to the jury throughout the trial and was reflected in the instructions given. It was inevitable that it should confuse and mislead the jury and it affirmatively appears that this result occurred. While, technically, the words in the verdict and judgment describing Mr. Long as acting as the executor are merely descriptive and the judgment is in fact against him personally, it appears without question that the jury thought they were bringing in a verdict against ‘Long as executor of the estate.’ While this appeared before the jury was discharged the court refused to have the matter corrected or a verdict returned in accordance with the real intention of the jury.

Although the estate could not have been here held liable, not having been made a party to the action, Long was entitled to have the question as to his personal liability fairly determined without having that issue inseparably mingled and confused with another issue. It could not have been other than prejudicial to Long to not only thus confuse the issue but to lead the jury into the belief that a judgment was sought against Long only in order to hold the estate, and that any judgment rendered against Long would have to be paid by the estate. There is no difference in principle between the actual situation here and a case where the jury is improperly told that any judgment rendered against the defendant will be paid by an insurance company. Aside from any other consideration, the manner in which the case was tried and submitted, and the errors in connection with receiving the verdict, require a reversal of the judgment.

The respondent concedes, as he must, that Long was not personally guilty of any act of negligence. He had nothing personally to do with the operation of this business and any liability on his part must be based upon the fact that he was acting as an executor of the estate for which the business was being operated, and that the supposed negligence of Budhi, in failing to weld a nut on the end of this cable, is by law imputed to Long personally. What we have already said with respect to where the liability should rest is applicable here. The change in the law which permits an executor to continue the operation of a business, and makes this a part of his duty, necessarily affects his responsibility for any torts which may occur in connection with, and as a result, of, the operation of the business. For his personal negligence, committed in carrying on the business, he would be personally responsible, whether or not such negligence is also to be imputed to his employer, the estate. But there is a very real distinction between such personal negligence, and a negligent act committed by an employee in the business which the executor is required to operate. The latter can be attributed to the executor only when, in accordance with other rules of law, it can be imputed to him. The very fact that he is required to run such a business which belongs to others, for their benefit and not for his own, makes the rule of imputed negligence inapplicable to him, in such a case as this, since it does away with all the reasons for the rule. The operations being continued can in no sense be considered as the personal business of the executor. First Nat. Trust & Sav. Bank v. Industrial Acc. Comm., 213 Cal. 332, 2 P.2d 347, 78 A.L.R. 1324. He is homself but an agent of the estate, carrying out the orders of the court, and the real master and the real principal is the estate. Imputed negligence, of any kind which would be possible here, has always been based upon the relationship of master and servant or principal and agent. If imputed at all, the negligence of such an employee in a business being operated by an estate should be imputed to the real master or principal, and cannot be imputed to an intervening servant or agent who is himself without fault.

The precise question, under these circumstances, has not been passed upon in this state. Under similar circumstances, it was held in Fetting v. Winch, 54 Or. 600, 104 P. 722, 38 L.R.A.,N.S., 379, 21 Ann.Cas. 352, that a judgment for damages against an executor must rest upon the principle of respondeat superior or upon his personal negligence, and that where he had no personal interest as a devisee and had merely acted as an executor he could not be held personally liable for the negligence of an employee of the estate. Although the facts were different there is a tacit recognition of similar principles in Campbell v. Bradbury, 179 Cal. 364, 176 P. 685, where a building was being operated by the guardian of an incompetent, and a third person was injured by the fall of an elevator being operated by employees of the guardian. The court, after observing that the responsibility of the guardian who had actual charge of the building was based upon his duty to employ the elevator operator and to control the building, and after citing cases in support of the proposition that damages so arising should be treated as a part of the expense of maintaining the business, held that it was erroneous to impose liability on the guardian solely because, as such, he was in control and management of the property, and that liability for the negligent operation of the elevator, owned by and operated for the benefit of the incompetent, should be imposed on her.

Since there was no evidence of any personal negligence on the part of Long, it must be held that any negligence on the part of Budhi, which may here appear, could not be imputed to Long, and that the judgment against Long personally is without evidentiary support.

Under the views above expressed but little discussion is required on the other points which are raised. A number of the instructions are attacked. Some of these were misleading under the circumstances, several were conflicting, and at least two were erroneous per se. In the main, these errors were the natural result of the way in which the issues had been confused throughout the trial. The contention that the amount of the verdict is excessive must also be sustained. It is not only out of line with the financial value of any loss or pain suffered, but that it was the result of passion and prejudice is rather clearly indicated by the argument here made in support of it.

This is a strange case. The real owner of the business in which the accident occurred, the estate, was never brought in as a party to the action. The real negligent party, the planing mill, has been absolved. The executor who was in actual charge of operating the business has been released, while the former executor who actually had nothing to do with the matter in question, and who was admittedly not personally negligent, has been made solely responsible merely because he happened to be one of the executors.

Moreover, the case was so tried that the jury would inevitably be, and it clearly appears that it was, misled. And the verdict was entered without correction when it affirmatively appeared that something entirely different was intended. It seems obvious that the resulting judgment against Long personally cannot be permitted to stand.

The judgment is reversed.

BARNARD, Presiding Justice.

MARKS, J., concurs.

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