UMBSEN v. CROCKER FIRST NAT BANK OF SAN FRANCISCO

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District Court of Appeal, First District, Division 2, California.

UMBSEN v. CROCKER FIRST NAT. BANK OF SAN FRANCISCO et al.

Civ. 13657.

Decided: August 02, 1948

Heller, Ehrman, White & McAuliffe, Lawrence C. Baker, and Richard E. Guggenhime, all of San Francisco, for appellant. Fred N. Howser, Atty. Gen., and E. G. Benard and Wm. J. Power, Deputy Attys. Gen., for plaintiff in Intervention and respondent. Morrison, Hohfeld, Foerster, Shuman & Clark, of San Francisco, for respondent.

The facts of this case, while unusual, are simple and without dispute. G. H. Umbsen & Co. was a California corporation engaged in the real estate business. In November, 1905, this corporation drew a check for $6600 against its commercial account in the respondent bank and the check was on the same date certified by the bank. The name of the payee is unknown nor was it established at whose request the check was certified. The check was never presented for payment, its whereabouts are unknown and the fund of $6600 earmarked by the bank upon its certification remained unclaimed until the commencement of this action. The plaintiff and appellant has succeeded to all the assets of the corporation including the interest, if any, of the corporation in this $6600 fund.

On February 27, 1946, the respondent bank, pursuant to the Abandoned Property Act (Code Civ.Proc. sec. 1274.1 et seq.), reported the existence of this unclaimed fund to the State Controller, who thereafter published the fact of this unclaimed account as provided by Code Civ.Proc. sec. 1274.5. Appellant thereupon commenced this action claiming ownership of the fund and the State intervened denying plaintiff's ownership and seeking the payment to it of the amount in said fund as abandoned property. Upon the facts above stated the court gave judgment against the plaintiff and in favor of the State.

On this appeal appellant rests her claim for reversal chiefly upon the ground that ownership of the fund and check having been established in 1905 in her predecessor in title, G. H. Umbsen & Co., a disputable presumption that such ownership continued arose and that there is no substantial evidence in the record to rebut this presumption.

The presumption that ownership once established continues is a special application to the ownership of property of the more general rule codified in Code Civ.Proc. sec. 1963, subd. 32: ‘That a thing once proved to exist continues as long as is usual with things of that nature.’ 10 Cal.Jur. Evidence, sec. 77, p. 768; II Wigmore on Evidence, 3d Ed., sec. 382, p. 323; 31 C.J.S., Evidence, § 124, page 743. The qualification ‘as long as is usual with things of that nature’ is an important part of the rule. Scott v. Wood, 81 Cal. 398, 404, 405, 22 P. 871; Connolly v. Industrial Accident Commission, 173 Cal. 405, 409, 410, 160 P. 239. Thus the presumption of the continuance of the ownership of property is strongest in the case of real property, and is weaker and varies in strength with regard to different classes of personal property (Ralahan v. Ralahan, 98 Conn. 176, 119 A. 349; Brune v. Fraidin, 4 Cir., 149 F.2d 325; Bethel v. Linn, 63 Mich. 464, 30 N.W. 84; In re Elias, D.C., 240 F. 448; Sargent v. Waterbury, 83 Or. 159, 161 P. 443, 163 P. 416, 418) until it reaches the vanishing point (High v. Bank of Commerce, 103 Cal. 525, 37 P. 508). In the last cited case our supreme court said (103 Cal. at page 527, 37 P. at page 508) that ‘the presumption that ‘a thing once proven to exist continues as long as is usual with things of that nature’ is shown by human experience to be not applicable to a balance in one's favor in a bank.'

Several factors combine to weaken the presumption of continued ownership by the corporation of its certified check and with it the fund earmarked for its payment. A check is drawn for the very purpose of transferring it to the payee. Its certification is an additional indication of the fact that the maker intends to transfer it, or perhaps has already done so since the certification may be at the request of a holder in due course. A corporation engaged in the real estate business may reasonably be supposed to have had a bookkeeper and an adequate accounting system so that it would seem most likely that if the certified check had not been delivered to the payee it would have been returned to the bank by the corporation in the ordinary course of business and cancelled.

The trial court was entitled to weigh all of the evidence and draw any inference therefrom that the facts would reasonably support. ‘* * * even though all the facts are admitted or uncontradicted, nevertheless, if it appears that either one of two inferences may fairly and reasonably be deduced from those facts, there still remains in the case a question of fact to be determined by the jury * * * and * * * the verdict of the jury * * * cannot be set aside by this court on the ground that it is not sustained by the evidence.’ Mah See v. North American Accident Ins. Co., 190 Cal. 421, 426, 231 P. 42, 26 A.L.R. 123; Hamilton v. Pacific Electric R. Co., 12 Cal.2d 598, 602, 603, 86 P.2d 829; Juchert v. California Water Service Co., 16 Cal.2d 500, 506–508, 106 P.2d 886; Medico Dental etc. Co. v. Horton & Converse, 21 Cal.2d 411, 436, 437, 132 P.2d 457.

Appellant cites cases in which the presumption of continued ownership has been applied to negotiable instruments. In all of them the presumption was applied in favor of payees or holders. If there is any presumption that the maker of a negotiable instrument continues to be its owner it is patently a very weak one since negotiable instruments are not commonly held by their makers for any great length of time. The presumption that the usual course of business has been followed (Code Civ.Proc. sec. 1963, subd. 20) must at the very least be weighed against the presumption of continued ownership in such a case. On all the facts we cannot say that the trial court abused its discretion in finding against appellant.

We note the disputable presumption stated in Civil Code, sec. 3097 that ‘where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.’ Appellant claims that this presumption is only applicable where the instrument is shown to be in the hands of a third person. The presumption is more broadly stated but, in view of our conclusion that the evidence supports the finding of the trial court without the aid of this presumption, we need not decide that question.

Appellant argues that in any event the judgment in favor of the State cannot be supported if the owner of the fund is unknown since Code Civ.Proc. sec. 1274.4 requires the name of the owner and his last known address to be given in the report therein provided to be made to the Controller. Statutes are to be reasonably construed to effect their purpose and it would seem that if the owner of the property is in fact unknown a statement of that fact should satisfy the requirements of the statute; but at any rate since appellant has been adjudged to have no interest in the fund she is not injured by the judgment giving its custody to the State.

Judgment affirmed.

DOOLING, Justice.

NOURSE, P. J., and GOODELL, J., concur.