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


Civ. 15833.

Decided: November 21, 1947

W. W. Wallace, of Los Angeles, for appellants. H. M. Lineman, Mab Copland Lineman, and Benjamin Lewis, all of Los Angeles, for respondent.

This action has been before the Supreme Court of California on two different occasions, namely in Rice v. Schmid, 18 Cal.2d 382, 115 P.2d 498, 138 A.L.R. 589, and in Rice v. Schmid, 25 Cal.2d 259, 153 P.2d 313. From a judgment entered in the Superior Court in accordance with the directions of the Supreme Court, the defendants now appeal.

Briefly, the facts leading up to the present litigation are that on July 16, 1937, Robert L. Rice, now deceased, a wholesale flour merchant, entered into a written contract with John Schmid, also now dead, who was the proprietor of the Eagle Bakery, to sell Schmid 6,000 barrels of flour, namely, 2,000 ‘Ravalli’ brand wheat flour at $7.10 per barrel, 2,750 ‘Gold Cross' brand wheat flour at $7.65 per barrel, and 1,250 ‘Isis' brand wheat flour at $7.15 per barrel. Shipment was to be made upon the buyer's instructions within 90 days.

On December 2, 1938, according to the opinion in 25 Cal.2d 259, 260, 153 P.2d 313, ‘defendants having failed and refused to order the balance of the flour, plaintiff elected to terminate the contract, pursuant to its terms, and to hold defendants liable for the breach. * * * On the first trial, the court found that defendants had breached the contract and gave judgment for the plaintiff against all defendants (in the amount of $712.45). In arriving at the amount of damages, the court rejected plaintiff's claim for liquidated damages as specified in the contract, and computed plaintiff's damages on the basis of the difference between the price Schmid agreed to pay plaintiff and the price plaintiff agreed to pay the mill (in procuring the flour sold to defendant).’ In 18 Cal.2d 382, 388, 115 P.2d 498, 500, 138 A.L.R. 589, this judgment was reversed with directions to determine damages based upon ‘the difference between the contract price and the market price at the time when the goods should have been accepted.’

At the second trial, also heard by Judge Thurmond Clarke who had presided at the first trial, judgment was rendered for plaintiff in the sum of $190. Plaintiff then appealed for the second time, asserting that the trial court had failed to follow the directions of the Supreme Court in rendering such judgment. On this second appeal it was held, in 25 Cal.2d 259, 153 P.2d 313, that such judgment was erroneous since it only permitted recovery for 200 barrels of flour which was all that plaintiff had on hand on the 91st day after the contract was made, whereas plaintiff was entitled to recover for the entire balance of 2,755 barrels which defendants had refused to accept. In reversing this second judgment the court, at page 263, of 25 Cal.2d, at page 315 of 153 P.2d, said: ‘It appears, however, that there is a conflict in the evidence as to the market price of each of the brands of flour on December 2, 1938, and since no finding is made by the court resolving this conflict the case must be remanded a second time for the purpose of ascertaining that price. The trial court may, of course, take such additional evidence as may be necessary to determine this issue.’ (Italics added.) After ascertaining such market price, the trial court was directed ‘to enter judgment in favor of plaintiff and against all defendants for the amount of such damages.’

Thereafter, on plaintiff's motion, the matter was presented to Judge Harry R. Archbald, in the Superior Court, for the purpose of ascertaining the market price of the flour as directed by the Supreme Court, and the corresponding judgment to be entered in plaintiff's favor. At this hearing plaintiff offered no new evidence but placed in the trial court's hands a copy of the official reporter's transcript of the testimony taken at the previous trial before Judge Clarke. It was stipulated that the official record might go in evidence. The defendants, however, offered the testimony of two flour salesmen, namely Roy W. Fiske and E. V. Haley, as to market value. Plaintiff then maintained that the matter should be submitted solely upon the testimony found in the transcript of the previous trial, and after argument concerning this point, Judge Archbald permitted the defendants to take the testimony of the two witnesses subject to the plaintiff's later motion to strike. As set forth in appellant's brief, ‘the court spent the better part of two days taking the additional testimony,’ but after hearing the witnesses, ‘entered an order striking all the testimony taken on November 1st and 2nd, 1945. The findings of fact and conclusions of law were signed on May 20, 1946.’ After ascertaining the difference between the contract and market prices to be $4.00 as to the ‘Isis' brand flour, $3.70 as to the ‘Gold Cross' flour, and $3.95 as to the ‘Ravalli’ flour, the trial court rendered judgment against defendants in the amount of $10,905.95 with interest at 7% per annum from December 2, 1938. The defendants have now appealed from this judgment.

Appellants' brief presents the following points: ‘1. The trial court erred in awarding interest on the judgment. Such ruling is contrary to the decision of the Supreme Court. 2. The trial court erred in striking out all of the testimony of appellant's witnesses. 3. The findings of the trial court are not supported by the evidence, in that: a. The testimony on which the findings are based was improperly received and could not therefore, support the findings; and, b. The trial court erred in overruling the objections to the testimony offered by respondent as to market value on December 2, 1938.’

Appellants' contention that ‘the trial court erred in awarding interest on the judgment,’ is based on the argument that ‘The Supreme Court did not direct a judgment to be entered for any interest on the damages. Had the Supreme Court intended that interest should be added, the opinion would have so directed. The trial court had no authority whatsoever to change the decision of the Supreme Court or to enter judgment for anything but the amount of damage.’ However, as pointed out in the respondent's brief, the decision of the Supreme Court directed the trial court ‘to compute the amount of plaintiff's damages.’ The value of the loss of use of money is called ‘interest,’ and this item, important in its own right, has received statutory recognition in Section 3287 of the Civil Code, which provides that ‘Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor, from paying the debt.’ (Italics added.) This being a statutory matter, there was no reason for the Supreme Court to mention it, and certainly there is nothing in the decision to indicate that the plaintiff was to be deprived of this statutory right. The contention is clearly without merit.

The claim that ‘The trial court erred in striking out all of the testimony of appellant's witnesses,’ is likewise untenable. As noted in respondent's brief, ‘The Court did not strike any of the testimony of any witnesses of defendants appearing in the original transcript of the testimony,’ but merely struck out the testimony of the witnesses Haley and Fiske offered by the appellants at the hearing before Judge Archbald. In reference to this matter it has already been noted that the Supreme Court in 25 Cal.2d 259, 264, 153 P.2d 313, 315, did not direct the trial court to take further testimony but merely remarked that ‘The trial court may, of course, take such additional evidence as may be necessary to determine this issue (marked price of the flour).’ (Italics added.)

‘The stenographic record does not disclose that the trial judge deemed it necessary to hear additional evidence, and at page 35 of the Reporter's Transcript the following statement of the trial court is found: ‘I think probably the way to make this record is to go ahead as you have been doing and get that evidence that the Supreme Court had before it. Then we can take up the question of the additional evidence.’ Thereafter, defendants' attorney insisted on taking the testimony of the two witnesses as to market value, and the trial court said: ‘Well, suppose wo do this for the convenience of the witnesses. Suppose, over your objection, Mr. Lewis, (respondent's attorney), we let Mr. Wallace (appellants' attorney) put his testimony on. Then you can show me if you like if it isn't material, and I can sustain the objection.’ The testimony was then received subject to the plaintiff's motion to strike which was later sustained.

In a ‘Memo. of Decision on Question of Damages as Directed by the Supreme Court,’ Trial Judge Archbald said: ‘As I was not familiar with the two transcripts of evidence presented to me by the parties, I granted such permission (to take additional evidence) over the objection of plaintiff and subject to the right of plaintiff to move to strike such evidence. In view of the fact that the Supreme Court found a conflict in the evidence before them, which is the same evidence that I have before me in transcript form, as to the price of flour on the market on December 2, 1938, and the further fact that it seems to me that such conflict already existing makes it unnecessary that further evidence be taken. I hereby grant plaintiff's motion to strike such additional evidence so taken.’ The trial court thereafter determined the market price as hereinbefore mentioned and gave judgment accordingly.

In the above procedure there appears to have been nothing improper, and the judgment of the trial court has accomplished the purpose of the reversal. Moreover, additional testimony of the two witnesses is, as respondent's brief suggests, of an unsatisfactory nature even if not entirely irrelevant and immaterial. In any event, quoting from respondent's brief, ‘Even if Haley and Fiske had given competent testimony of the market price of the brands of flour here involved, the testimony would have merely raised a theoretical conflict, and that conflict would not under the law be disturbed by the appellate court.’ The Supreme Court had already found that there was such a conflict in the evidence. In this state of the record, no reversible error is presented.

The same may be said in response to appellants' argument that the findings of the trial court as to market value were not supported by the evidence. The record discloses substantial evidence in support of the trial court's finding, and although, as the Supreme Court found in 25 Cal.2d 259, 263, 153 P.2d 313, 315, ‘It appears, however, that there is a conflict in the evidence as to the market price of each of the brands of flour on December 2, 1938’; this fact, under the well established rule of appellate procedure, does not warrant a reversal. According to the findings of fact, Judge Archbald ‘took the matter under submission, after it was stipulated that this court could read all of the testimony pertaining to the issues here involved from all the official reporters' transcripts and clerks' transcripts in the above entitled action,’ and then and there resolved any conflict in the evidence as directed by the Supreme Court. Having carried out such mandate, the matter must now, for all time, be deemed at rest. Appellants' claim that the findings and judgment are based only upon evidence which was improperly received, is not supported by the record.

The judgment is therefore affirmed.

DORAN, Justice.

YORK, P. J., and WHITE, J., concur.