TEITELBAUM FURS, INC., a California corporation, et al., Plaintiffs, Appellants and Cross-Respondents, v. The DOMINION INSURANCE COMPANY, Ltd., et al., Defendants, Respondents and Cross-Appellants.*
This is an action by plaintiff corporations to collect upon contracts of insurance for losses arising out of a robbery. Plaintiffs appeal from an order of the Superior Court granting the defendant insurance companies a new trial after plaintiffs had obtained a jury verdict. The new trial was granted on the ground that the evidence was insufficient to justify the verdict and upon the further ground that irregular proceedings occasioned by plaintiffs, through their attorney, prevented the defendants from having a fair trial.
The defendants have cross-appealed from the judgment entered on the jury verdict in favor of plaintiffs.
Plaintiffs are three corporations engaged in the manufacture and sale of furs, each doing business or storing inventory at 414 North Rodeo Drive, Beverly Hills, California. Plaintiffs allege that, on December 27, 1955, four unknown men entered plaintiffs' premises and robbed them of 225 furs of a value of $244,510.90. Testimony on behalf of plaintiffs indicated that one of the four unknown persons entered the store on the evening of December 27 just before 6:00 o'clock, the closing time. The stranger represented himself as a special agent for an insurance company and desired to speak with plaintiffs' president, Mr. Al Tetielbaum. Several employees and at least one customer were in the store at that time. After engaging Teitelbaum in conversation for approximately one-half hour, during which time the customer and all but one employee left the premises, the ‘insurance agent’ pulled a gun on Teitelbaum and caused him to summon the remaining employee, Mr. Al Stan. At gun point, Teitelbaum was forced to tie up Stan and put him in a closet. According to Teitelbaum's testimony he was also forced to open a rear door admitting three other men. He further testified these men tied his hands and feet to a post in a closet area and the four men together took the merchandise out of the store vault through a rear door. Shortly thereafter Teitelbaum and Stan released their bonds, immediately rang the burglar alarm, and within minutes the police and others arrived.
Before filing the proof of loss, plaintiffs supplied the police and defendants' agents with preliminary estimates of the quantity and description of merchandise thought to be missing. On February 14, 1956, plaintiffs' president, Teitelbaum, was arrested by Officer Borders of the Beverly Hills Police Department on charges growing out of the asserted robbery. On or about March 7, 1956, Teitelbaum was indicted by the Los Angeles County Grand Jury for conspiracy to commit grand theft, attempted grand theft, and the presentation and filing of false insurance claims.
In a trial upon the indictment Teitelbaum was convicted and that judgment was sustained on appeal. (People v. Teitelbaum, 163 Cal.App.2d 184, 329 P.2d 157, hear. den. October 24, 1958; cert. den. by the United States Supreme Court, 359 U.S. 206, 79 S.Ct. 738, 3 L.Ed. 759.)
The defendants denied that any robbery took place.1
The general rule in considering a motion for new trial is stated in Richardson v. Ham, 44 Cal.2d 772, p. 775, 285 P.2d 268, 270: “In passing upon a motion for a new trial based upon the insufficiency of the evidence, it is the exclusive province of the trial court to judge the credibility of the witnesses, determine the probative force of testimony, and weigh the evidence [citations]. In considering the sufficiency of the evidence upon such motion the court may draw inferences opposed to those drawn at the trial [citation], and where the only conflicts consist of inferences deduced from uncontradicted probative facts, the court may resolve such conflicts in determining whether the case should be retried [Citation.] It is only where it can be said as a matter of law that there is no substantial evidence to support a contrary judgment that an appellate court will reverse the order of the trial court.' Brooks v. Metropolitan Life Ins. Co., 27 Cal.2d 305, 307, 163 P.2d 689, 690.'
There is no definite, inflexible standard or test to guide the action of a trial judge in granting a new trial; but rather, the law contemplates that he will in every case exercise his sound discretion. And, “when the evidence is nearly balanced, or is such that different minds would naturally and fairly come to different conclusions thereon,' the trial judge will not disturb the verdict ‘although his own judgment might incline him the other way. In other words, the finding of a jury is to be upheld by him as against any mere doubts of its correctness.’ [Citations.] But when his judgment tells him that it is wrong, and that the jury has erred, whether from mistake, prejudice, bias, or other cause, in finding against the fair preponderance of the credible evidence or the basic interests of justice, then he will set the verdict aside. The reason for vesting this large discretion in the trial judge it seems to us is altogether apparent. The judge presiding at a jury trial not only has seen and heard the witnesses, as has the jury, but he comes to the task of weighing the evidence on a motion for a new trial with a specialized experience in separating the wheat of evidence from its chaff.
‘In reviewing the trial judge's decision an appellate court is not vested with a de novo right or power such as is possessed and exercised by a trial judge. This for the very good reason that the appellate court does not have before it the witnesses to enable it to judge of their demeanor and credibility. As a consequence it is a long established rule in this state that a trial judge will not be reversed in his ruling on a motion for a new trial, unless it is affirmatively shown or manifestly appears that he has abused the sound discretion confided to him.’ (Perry v. Fowler, 102 Cal.App.2d 808, 811–812, 229 P.2d 46, 48.)
Therefore, as was stated in Yarrow v. State of California, 53 Cal.2d 427, 434, 2 Cal.Rptr. 137, 140, 348 P.2d 687, 690; ‘It is only where it can be said as a matter of law that there is no substantial evidence to support a contrary judgment that an appellate court will reverse an order granting a new trial on this ground. [Citations.]’ (Cited in White v. Aetna Life Ins. Co., 198 A.C.A. 400, 405, 17 Cal.Rptr. 914.)
The basic question here therefore becomes: is there substantial evidence to support a contrary judgment? (Brooks v. Metropolitan Life Ins. Co., 27 Cal.2d 305, 163 P.2d 689.) While the record arguably supports the jury's verdict, it cannot be held in this case, as a matter of law, that there is no substantial evidence which would support a contrary conclusion.
According to the testimony of Teitelbaum and Stan, the earliest time that the robbery could have occurred was approximately 6:25 p. m., which was the time that Stan was called into the office and had his hands and feet bound by Teitelbaum. The latest possible time at which the robbery could have occurred was 6:46 p. m., the time the A.D.T. alarm button was pressed which recorded the time.
In order to consummate a burglary of 225 furs, a vehicle would be necessary. The approach for such vehicle would naturally be in the alley back of the Teitelbaum shop. By witnesses not connected with plaintiffs, defendants, or the police, it was clearly shown that during the time interval in question there was no truck nor any unusual activity in the alley.
There was a meat market which had its rear entrance on the same alley as the Teitelbaum shop. Two meat cutters employed at that market, Roy Barnett and A. J. Hess, both testified that they checked out at 6:21 p. m. as shown by the time clock of the establishment. Barnett testified that he left by the rear exit about three to four minutes after punching out. He passed the Teitelbaum shop as he drove out, but saw no motor vehicles other than those which were usually there, the station wagon and one other car; he observed no one in then alley. He further testified that he always parked in that area, including the evening in question, and that in leaving, it was necessary for him to drive by the back of the Teitelbaum shop. He estimated that four minutes elapsed from the time he left the market, entered his car and drove past the fur shop.
Hess, who accompanied Barnett, also testified that he saw no one in the alley and no trucks in the vicinity of the shop except the station wagon and a passenger car. The testimony of these two witnesses indicates that no robbery occurred during the period from approximately 6:25 p. m. to 6:29 p. m.
Robert Loudon, an employee of the System Auto Parks which abuts on the same alley, checked out at 6:28 p. m. that evening. It took him approximately one to two minutes ‘for locking up the booth, putting the stuff away.’ He then went to the service station to wash up and returned to the auto park using the route past the rear of the Teitelbaum store on each occasion. The time consumed by him in going down the alley, washing, and coming back was from six to eight minutes, and at that time he saw no truck or van type vehicle—only an Oldsmobile and a Ford station wagon. (Ann Brodkin, the Teitelbaum bookkeeper, testified that when she left the premises, there were, on the lot, Mr. Stan's car, Mr. Teitelbaum's car and the Teitelbaum station wagon.) Loudon further testified that during that time he saw no activity, saw no one carrying furs and heard no sounds. From his testimony the trier of fact would certainly be entitled to conclude that no furs were being stolen during the period of time mentioned by Louden, i. e. from 6:28 to 6:35 or 6:38 p. m.
Arthur Walge, a witness, arrived on the scene at approximately 6:41 p. m. At that time Walge was chauffeur for the singer, Mario Lanza. Walge testified that he approached the store through the alley and pulled into the parking lot. He could see into the shop because some light bulbs were on and knocked on the door but received no response. He then went to the front of the store, leaving Lanza and the nurse, Esther Collins, in the parking lot. Looking into the showcase window he could see the floor of the store and knocked on the glass but received no response and then walked back to the car. He further testified that when he returned to the back of the store he saw Lanza beating on the metal door with a plam frond. (This pounding might well have been the noise that Stan testified he heard which made him think that it was safe to come out.) Walge, Lanza and Miss Collins drove around to the front of the shop. Walge parked, went to the window and knocked to attract more attention. He saw Teitelbaum and Stan in the shop. Teitelbaum made a motion which could reasonably be interpreted as meaning ‘go away’. Walge was well known to Teitelbaum.
Since Teitelbaum testified to pushing the alarm button just prior to releasing Stan, the events which occurred prior to the plan frond incident must have occurred prior to the pushing of the alarm. Walge estimated the time between the parking of the car and the palm frond incident at about five minutes. Thus, the robbery did not occur between approximately 6:41 and 6:46 p. m. when the alarm was sounded.
Therefore, according to the testimony of Barnett, Hess, Louden and Walge, a period of only approximately three to six minutes was left in which the robbery could have taken place, i. e. between 6:35 or 6:38 and 6:41 p. m. Taking into account the brief period of time unaccounted for, the large number of furs assertedly involved and the surrounding circumstances, the trial court could reasonably draw the inference that no robbery took place. Inferences are indirect evidence (Code Civ.Proc. § 1957) and, if reasonable, are sufficient to support an order granting a new trial. ‘Actually, an inference is nothing more nor less than a pertinent deduction drawn from circumstantial evidence; i. e., from evidence which is circumstantial as to the fact deduced. And circumstantial evidence may outweigh, in convincing force, * * * the strongest * * * [citations] * * * direct evidence * * *.’ (Scott v. Burke, 39 Cal.2d 388, 398, 247 P.2d 313, 319.)
This conclusion that there was no robbery finds further support in the testimony of Officer Borders who was assigned by the Beverly Hills Police Department to investigate the claimed robbery along with his superior, a Captain Huff (who died prior to this trial). Borders testified that on February 14, 1956, in the Beverly Hills Police station one Clifford Vanderwyst (also referred to as Weiss) made certain statements in the presence of Teitelbaum, and further testified to the response given by Teitelbaum when asked whether the statements made by Weiss were true.
In response to questions by Borders, Weiss, in the presence of Teitelbaum, stated that he had met one Woody Wilson in the first part of November through a person known as Billy Layton. Layton had told him that he had a friend who wanted to pull a phoney robbery of a fur store. Wilson told him that he had a friend that ‘wanted to be taken for insurance * * * that it was a walk-in setup and that no one would get hurt.’ On November 30th he (Weiss) and Wilson had, pursuant to a pre-arranged plan made by Layton, gone to plaintiffs' fur store with the understanding that there would be but one employee present, but they were not successful because, when they arrived at the store, the janitor ran for the alarm button, whereupon upon Wilson and Weiss fled. Wilson contacted him after Christmas, stated that the date would be December 27th and that the janitor had been sent out of town on vacation. Wilson told him he (Weiss) should go to plaintiffs' store at ten minutes to six o'clock where he would be met by Teitelbaum in the front of the store and that Teitelbaum would carry the ball from there on. Weiss was instructed to represent himself as an insurance agent and to talk about insurance policies when he went into the store. He went to plaintiffs' store at ten minutes to six p. m. on December 27th and pretended to identify himself as an insurance agent. Teitelbaum talked about fur auctions. Teitelbaum left the office and came back with a large fur coat, whispering that the people up front were getting ready to go, and stating, ‘They wouldn't lock the vault until he got the coat back.’ Thereafter a woman employee stuck her head in the door and stated she was leaving for the day. Weiss pointed to his watch and told Teitelbaum that he didn't have time ‘to take it’ as he had been told the alarm went off at 6:30. Teitelbaum replied that it had been set up for seven o'clock. Immediately thereafter, Teitelbaum called to an employee by the name of Stan and asked if everybody had gone; Stan answered, ‘Yes.’ Teitelbaum then called him to come to the door. When Stan Arrived, Teitelbaum indicated it was a hold-up and ‘told him not to start anything as everything was insured and not to get hurt.’ Weiss directed Teitelbaum to tie Stan's wrists behind him and marched them to a closet where Stan was left on the floor. Weiss and Teitelbaum returned almost to the vault when Teitelbaum directed Weiss to go back and close the door to the closet where they had left Stan. After doing this, he proceeded to the fur vault where Teitelbaum was arranging furs, putting them in different places in the vault. He asked Teitelbaum if he could help but was told to go back and take a look out the back window; he did this and shortly thereafter Teitelbaum came to where he was standing and took him to the rear door and opened it, told him to go out that way when he left; they then proceeded to a closet and Teitelbaum gave him a wallet containing some money; he asked Teitelbaum how much it contained and he said: ‘2,500.00 in hundred dollar bills.’ Weiss asked ‘if he was supposed to get more later.’ Teitelbaum replied, ‘Yes, when he collected his insurance.’ Teitelbaum also gave him a watch and told him to put it in his pocket. He then tied up Teitelbaum and left the premises by the rear door.
Officer Borders testified that after this recitation:
‘I then directed a question to Mr. Teitelbaum. I said, Al, did you hear what this man said?’
‘He said, ‘Yes.’
‘I asked him if it was true or not and he said, ‘Yes, it was a stupid thing.’
‘I said, ‘Do you want to elaborate or tell your story?’
‘He said, ‘No, I will wait until my attorney gets here.’'
‘Q. Was that the substance of that conversation?
A. That is correct.'
This testimony, although hearsay, fully qualifies as an admission, thereby excepting it from the rule excluding hearsay evidence. This testimony, constituting an admission, fortifies the trial court conclusion that no robbery in fact took place.
At the trial plaintiffs were asserting the affirmative on the issue of whether a loss occurred and as to the amount of loss, assuming that a theft did occur, and thus, had the burden of proving both of said issues. As was stated in Griess v. State Investment & Ins. Co., 98 Cal. 241, 244, 33 P. 195, 196; ‘The policy being a contract of indemnity, it was incumbent upon the plaintiff to prove the amount of his loss.’
The trial court, in determining whether to grant a new trial, was not obliged to accept the testimony produced on behalf of plaintiffs. If the trial court did not believe the testimony of the witnesses for the plaintiffs, then their burden was not satisfied. As was stated in Yarrow v. State of California, 53 Cal.2d 427, p. 434, 2 Cal.Rptr. 137, 140, 348 P.2d 687, 690: ‘In considering the sufficiency of the evidence on the hearing of a motion for a new trial it is the exclusive province of the trial court to judge the credibility of the witnesses, * * *’ (Emphasis added.) In the instant case, there are numerous considerations which would justify the trial court in refusing to place credence in the witnesses for plaintiffs.
At the criminal trial, Weiss' testimony was substantially the same as that given by Borders with reference to the admission at the Beverly Hills Police station, i. e., that the robbery was faked and planned by Teitelbaum. This testimony was read into the record in the instant action for the purpose of impeachment only. This would tend to justify the trial court in doubting the credibility of plaintiffs' key witness, Teitelbaum. Furthermore, by reason of Teitelbaum's financial interest in plaintiff corporations,2 he was obviously interested in the outcome of the case. The trial court was entitled to take this in account in passing on his credibility and the weight to be given his testimony. (Huth v. Katz, 30 Cal.2d 605, 609, 184 P.2d 521; People v. Murrie, 168 Cal.App.2d 770, 774, 336 P.2d 559; Tidlund v. Seven Up Bottling Co., 154 Cal.App.2d 663, 666–667, 316 P.2d 656.) Teitelbaum was further impeached by showing that he had been convicted of a felony, the felony being an attempt to defraud defendants by presenting false claims respecting the very matter involved in this case.
This court must conclude therefore that the trial court in granting a new trial did not abuse its discretion, since the evidence would have supported a contrary verdict. (Brinkerhoff by Nelson v. Ferguson, 107 Cal.App.2d 175, 236 P.2d 588.)
There is before us a voluminous amount of additional evidence which the trial court could have taken into account in granting the motion for new trial and which would have tended to support a contrary verdict. However, in view of our conclusions, we do not deem it necessary or practical to enumerate or discuss such evidence.
‘The basic difficulty with defendant's argument is that he would have this court reweigh the evidence, and draw inferences contrary to those drawn by the trial court. Under firmly established principles we are not at liberty to do this. [Citations.]’ (People v. Gould, 111 Cal.App.2d 1, 8, 243 P.2d 809, 813.) ‘The trial judge was in a position to determine the credibility of the witnesses, to weigh the evidence, and to draw the inferences from such evidence as he saw it. It cannot be said that there was any abuse of his discretion under the circumstances.’ (White v. Aetna Life Ins. Co., 198 A.C.A. 400, 408, 17 Cal.Rptr. 914, 919.)
Since the evidence was sufficient to support the trial court's order granting defendants' motion for a new trial, it is unnecessary to decide whether the order might also be sustained on the ground that irregularity of the proceedings by the adverse party through their attorney prevented the defendants from having a fair trial. (See Richardson v. Ham, 44 Cal.2d 772, 777, 285 P.2d 269.)
The only point on defendants' cross-appeal from the judgment that merits discussion is that Teitelbaum's conviction in the criminal case is a bar to plaintiffs' recovery on the insurance policies. They rely heavily on the principle of res judicata as stated in Bernhard v. Bank of America, 19 Cal.2d 807, 122 P.2d 892. But the cases in this state do not indicate that a criminal conviction is res judicata in a subsequent civil action. (Risdon v. Yates, 145 Cal. 210, 78 P. 641; Vaughn v. Jonas, 31 Cal.2d 586, 191 P.2d 432; Burbank v. McIntyre, 135 Cal.App. 482, 27 P.2d 400; Balestreiri v. Arques, 49 Cal.App.2d 664, 122 P.2d 277; In re Anderson, 107 Cal.App.2d 670, 671, 237 P.2d 720; American Fire etc. Service v. Williams, 171 Cal.App.2d 397, 340 P.2d 644; People v. One 1950 Pontiac 2-Door Coupe, 193 Cal.App.2d 216, 13 Cal.Rptr. 916; 3 Witkin, Cal.Proc. sec. 58, p. 1943; 29 Cal.Jur.2d Judgments, sec. 288, pp. 183–184.) That the rule, generally, is the same throughout the United States, see 50 C.J.S. Judgments § 754b(1), p. 269.
In Risdon the court said (145 Cal. p. 213, 78 P. p. 642): ‘[T]he judgment in a criminal suit cannot be used in a civil action to establish the facts on which such judgment rests.’ Even where ‘a defendant has pleaded guilty in a criminal case, the plea and judgment are received in evidence as an admission, but not as conclusive.’ (Emphasis added.) If a judgment in a criminal case based upon a plea of guilty is ‘not conclusive’, a fortiori, a judgment based upon an opinion of a judge or jury, predicated on conflicting evidence, should not be conclusive. Defendants argue that the effect of Bernhard is to make a prior criminal conviction a bar to a subsequent civil action based on the same facts. But the Supreme Court in Vaughn v. Jonas, supra, 31 Cal.2d 586, 191 P.2d 432 (decided six years after Bernhard) again reiterated the Risdon principle, ponting out also (p. 595, 191 P.2d 432) that even a conviction based upon a plea of guilty (as was the fact in the Vaughn case) is not held by the courts ‘to be factually conclusive.’ In People v. One 1950 Pontiac, supra, the court quoted with approval from In re Anderson, supra, ‘that judgments in criminal prosecutions are neither bars to subsequent civil proceedings founded upon the same facts nor proof of anything in such civil proceedings * * *.’ In American Fire etc. Service v. Williams, supra, 171 Cal.App.2d 397, p. 401, 340 P.2d 644, at p. 646, the opinion pointed out that ‘the trial court proceeded on the theory that the record made on the contempt citation not only was inadmissible in this civil action for damages, but that it could not be treated as an estoppel, or collateral estoppel, or conclusive adjudication upon the issue whether or not the respondents had violated the injuction.’ The court then stated: ‘We agree with that view. The well-established rule which makes inadmissible a conviction of a criminal offense as proof of the facts upon which the conviction was based is the rule which must be applied here.’ However, in the instant case, Teitelbaum's conviction was admissible for the purpose of impeachment. (C.C.P., sec. 2051.)
While there are a few cases in the United States representing a minority view (McCormick, Evidence (1954), sec. 295, pp. 618–619; 50 C.J.S. Judgments § 754b(1), p. 269) to the effect that a prior conviction is a bar to a civil action based on the same facts, this is not the position of the California courts.
The other points raised in the cross-appeal need not be discussed since the affirmance of the order granting the motion for a new trial leaves no final judgment in effect. The cross-appeal from the judgment is only operative if the order granting the motion for a new trial is reversed. (See White v. Aetna Life Ins. Co., 198 A.C.A. 400, 408, 17 Cal.Rptr. 914; Freeman v. LaMorte, 148 Cal.App.2d 670, 675, 307 P.2d 704.) Upon affirmance of the order granting a new trial, the appeal from the judgment becomes moot and therefore should be dismissed.
The order granting the new trial is affirmed.
The cross-appeal from the judgment is dismissed.
I agree with that portion of the majority opinion which discusses the order granting a new trial. But I think defendants' cross-appeal requires different treatment and that the judgment should be reversed with instructions to the trial court to grant the motion for judgment notwithstanding the verdict and to enter such judgment in favor of defendants; this being done, the appeal from the order granting a new trial should be treated as moot and dismissed. (As to procedure see, Milton v. Hudson Sales Corp., 152 Cal.App.2d 418, 441, 313 P.2d 936.) Such is the relief asked by cross-appellants.
This difference of views turns upon the question of whether the conviction of Teitelbaum in the criminal case operates as res judicata in this civil action which is based upon the same fraud as the one of which he was convicted. In my opinion it is a conclusive adjudication of the basic facts involved in each proceeding, criminal and civil, and hence a bar to the present action. This point has been urged by cross-appellants at each stage of the case including their motion for directed verdict and their motion for judgment notwithstanding the verdict. The fact of the conviction was not proved for the limited purpose of impeachment of Teitelbaum but as affirmative and conclusive evidence of the controlling facts at bar.
Though there are a number of cases in this State which announce as a general rule the proposition that a criminal conviction cannot be used as proof of the same facts in a subsequent civil proceeding, they rest in the main upon want of mutuality or identity of parties. That supposed element of res judicata has been rejected in this State as a matter of public policy; this was done in Bernhard v. Bank of America, 19 Cal.2d 807, 811–813, 122 P.2d 892, decided March 6, 1942 (see discussion of this ruling in Nevarov v. Caldwell, 161 Cal.App.2d 762, 769, 774–775, 327 P.2d 111).
It seems well settled that the principles of res judicata familiarly applied in civil litigation also prevail on the criminal side (People v. Beltran, 94 Cal.App.2d 197, 203, 210 P.2d 238; People v. Majado, 22 Cal.App.2d 323, 326, 70 P.2d 1015; Meyer v. Board of Medical Examiners, 34 Cal.2d 62, 67, 206 P.2d 1085; People v. Joseph, 153 Cal.App.2d 548, 551, 314 P.2d 1004; United States v. Rangel-Perez, D.C., 179 F.Supp. 619, 625, 627; Sealfon v. United States, 332 U.S. 575, 578, 68 S.Ct. 237, 92 L.Ed. 180, 184; United States v. Oppenheimer, 242 U.S. 85, 88, 37 S.Ct. 68, 61 L.Ed. 161, 164; 50 C.J.S. Judgments § 754, p. 267). The authorities just cited deal with the application of res judicata to succeeding criminal proceedings but there is no logical inhibition upon using the conviction as conclusive evidence in a later civil case where the convicted person seeks to capitalize upon his own crime,—that is our case.
Lack of mutuality is the chief ground upon which exclusion of such proof is usually justified. That supposed essential of res judicata no longer exists in California in civil cases and I see no good reason why the Bernhard doctrine should not be extended to this situation, permitting the use of a conviction against the party who was in the criminal trial. As shown by Bernhard the question is one involving public policy and certainly there should be no such policy consideration which would permit a criminal to try de novo a question which has been ruled against him beyond a reasonable doubt and unanimously, as is the case in a criminal proceeding. Without advancing these exact reasons several high courts have reached the conclusion just suggested.
Eagle, Star and British Dominions Ins. Co. v. Heller, 149 Va. 82, 140 S.E. 314, 57 A.L.R. 490, seems to be the leading case in this narrow field of discussion. Heller had been convicted of burning a stock of goods with intent to defraud the insurer; later he sued to recover on the policy for the loss of the goods. Holding that the judgment of conviction was a bar to the maintenance of a civil action the court said, in part: ‘This is a case in which a rigid adherence to a general rule and to some judicial expressions would be a reproach to the administration of justice. * * * That there are numerous cases in which it has been unequivocally stated that records in criminal cases are not admissible evidence in civil cases involving substantially the same issues is undoubtedly true.’ (140 S.E. p. 315.) 2 Freeman on Judgments, § 653, is quoted as follows: “The chief reason for excluding the record of a criminal prosecution from evidence in a civil case is that the parties to the two proceedings are different. * * * While the difference in parties and lack of mutuality are a logical and sufficient reason in most cases for this general rule, other reasons given are the different rules of evidence and procedure which prevail in civil and criminal cases and the differing degrees of proof required.” (Pp. 315–316.) The court continues: ‘It is certainly clear in such cases that the plaintiff who is seeking redress in the civil case for the injury, not having been a party to the criminal prosecution, is not bound by its result. We confess our inability to perceive, however, why the accused person himself should not be held either as bound or affected by the result of the prosecution, if adverse to him. He has had his day in court, with the opportunity to produce his witnesses, to examine and cross-examine the witnesses for the prosecution, and to appeal from the judgment. So that the chief reason for holding that the plaintiff in the civil case is not bound by the prosecution fails as to the defendant, who has once litigated the identical question and had it adversely decided, under conditions most favorable to himself—that is, in a prosecution in which he could not have been convicted unless the decisive fact, his guilt, had been shown beyond a reasonable doubt. These views are not novel, even if contrary to the general trend of decision, because all of the precedents on the subject are not consistent with the general rule which Mr. Freeman has stated. There are, as he shows, exceptions, limitations, and contrary decisions.’ (P. 316.) ‘The vital question—that is, whether or not the plaintiff, Heller, fraudulently destroyed, or connived at the destruction of, his own property for the purpose of securing the insurance—is identical with that which was heard and determined in the criminal prosecution against Heller, and while not res judicata, as against the insurance company, no sound reason is perceived why the plaintiff, Heller, should be permitted to reopen it and to avoid the legal effect of that judgment by such a collateral attack upon it. It is clear that if he can succeed in this action, he thereby avoids the logical consequences of his conviction. Like other judgments a judgment in a criminal case cannot be attacked collaterally.’ (P. 319.) Here is the Bernhard philosophy applied to a situation exactly like the one before us.
Austin v. United States (7th C.C.A.), 125 F.2d 816. Beneficiary of pllicy of insurance sued to recover thereon but was confronted with plea that she had murdered insured and been convicted of the crime and hence was barred from maintaining an action on the policy. The court upheld this contention, saying at page 818: ‘The rigid rule of exclusion of judgments in criminal cases as evidence in civil cases involving the same facts has been relaxed in recent years by some courts in particular cases. Thus where a party to a civil case has previously been convicted in a criminal case of a crime relating to the same factual situation which is in issue in the civil case, it has sometimes been held that the record of his conviction is admissible against him, on the ground of estoppel.’ At page 819: ‘In our case the defendant's answer and the intervenor's petition set up the judgment which resulted in plaintiff's conviction of the murder of the insured. That judgment imported verity and could not be collaterally contradicted. Burt v. Union Central Life Ins. Co. [187 U.S. 362, 23 S.Ct. 139, 47 L.Ed. 216] and Diamond v. New York Life Ins. Co., supra [7 Cir., 50 F.2d 884]. We think no error was committed in holding the judgment was conclusive upon the plaintiff. * * * That there is a well established public policy against payment of insurance to the murderer of the insured is beyond question. Our laws will not reward one for the commission of crime, and whenever the effect of the enforcement of a right which one would otherwise have, would be to give her an advantage by reason of her felonious act, the courts will decline to entertain it because it is contrary to the good order of society, and an encouragement to crime to allow a beneficiary who murders the insured to receive the benefits of the insurance.’
Mineo v. Eureka Security Fire & Marine Ins. Co., 182 Pa.Super. 75, 125 A.2d 612. ‘We are faced here with the question of whether this Court should permit recovery from insurance companies for a fire loss, when this Court has already held that the insureds were properly convicted of procuring the burning of the property for which recovery is sought.’ (125 A.2d p. 613.) ‘The common law principle that a person will not be permitted to benefit by his own wrong, particularly by his own crime, prevents the insured from recovering on insurance policies for loss caused by his crime. [Citations.] This principle is generally accepted by the courts, but there is disagreement among the jurisdictions concerning the evidence necessary in a civil action to establish the fact of the insured's criminal responsibility for the damage, and whether the conviction is a bar to bringing the action.’ (P. 615.) ‘The tendency is to abandon any general rule of exclusion applicable to all criminal judgments, and to approach the problem from the point of view of the particular judgment of conviction, so that the rule as to the admissibility of a beneficiary's conviction for the murder of the insured in an action on an insurance policy may differ from that as to the conviction for a traffic violation in a negligence action, or the conviction of a defendant for assault and battery in a civil action. We think the lower court committed no error in admitting into evidence the criminal record of the insureds' conviction of setting the fire which caused the damage for which recovery is sought. We, however, are of the opinion that the conviction of the insureds is a bar to recovery, and that judgment non obstante veredicto should be granted.’ (P. 616.) ‘We recognize that our holding is contrary to the more generally accepted rule throughout the county. See 50 C.J.S. Judgments § 743. We believe, however, that reason can lead to no other conclusion and that we should not ignore it in order to follow a rule for which we can find no convincing logic.’ (Pp. 616–617.) ‘To now permit them to recover for the loss which they have been convicted of fraudulently causing would be against public policy. It would tend to destroy the confidence of the public in the efficiency of the courts; it would stir up litigation that would reopen tried issues; it would impress the public with the belief that the results of trials of the gravest nature were so uncertain that the innocent could not escape condemnation; and it would convince the public that the courts themselves have no confidence in the judicial processes. We are of the opinion that when one is convicted of a felony and subsequently attempts to benefit from the commission, the record of his guilt should be a bar to his recovery.’ (P. 618.)
The same result was reached by this division of this court in Meyer v. Johnson, 115 Cal.App. 646, 650, 2 P.2d 456.
Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 71 S.Ct. 408, 95 L.Ed. 534. This case was governed by § 5 of the Clayton Act, 15 U.S.C.A. § 16 which makes conviction of violation of the Anti-trust Law prima facie evidence in a later civil suit by an individual who has been injured thereby. That fact impairs its authority at bar but the opinion states the following general rules: ‘As this Court has observed, that ‘principle [estoppel] is as applicable to the decisions of criminal courts as to those of civil jurisdiction.’ Frank v. Mangum, 1915, 237 U.S. 309, 334, 35 S.Ct. 582, 590, 59 L.Ed. 969 ; Sealfon v. United States, 1948, 332 U.S. 575, 578, 68 S.Ct. 237, 239, 92 L.Ed. 180 . It is well established that a prior criminal conviction may work an estoppel in favor of the Government in a subsequent civil proceeding.' (340 U.S. p. 568, 71 S.Ct. p. 414, 95 L.Ed. 534.)
Among other cases cited in Emich Motors, supra, is Local 167, I. B. T. v. United States, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804. In that case, after conviction of conspiracy to violate the Sherman Act the defendants were sued by the government for an injunction against pursuing that same conspiracy; § 5 of the Clayton Act was not involved. The court held: ‘The judgment in the criminal case conclusively established in favor of the United States and against those who were found guilty that within the period covered by the indictment the latter were parties to the conspiracy charged. The complaint in this suit includes the allegations on which that prosecution was based. The defendants in this suit who had been there convicted could not require proof of what had been duly adjudged between the parties. And, to the extent that the answers attempted to deny participation of convicted defendants in the conspiracy of which they had been found guilty, they are false and sham and the District Court rightly so treated them.’ (Pp. 298–299, 54 S.Ct. p. 399.)
65 Harvard Law Review 879: ‘Where the criminal prosecution results in a conviction, that judgment has properly been held conclusive of the issues therein decided for the purposes of the civil action regardless of the remedial or penal nature of that action, since the issues have been determined once under a greater degree of proof.’
See also, Annotation entitled ‘Doctrine of Res Judicata in Criminal Cases' in 147 A.L.R. 991, at 996; also, ‘The Admissibility of Criminal Convictions in Subsequent Civil Proceedings', 40 Cal.L.Rev. 225.
The foregoing authorities establish, I think, that lack of mutuality is no impediment to using a conviction of crime as a bar to recovery of benefits growing out of that crime. The difference in quantum of proof required in criminal and civil cases is not persuasive to the contrary in a situation such as the one at bar; where a defendant has been unanimously convicted by evidence showing beyond a reasonable doubt that he committed a crime he cannot be heard to complain of proof of that judgment against him in a civil case because the rules of preponderance of evidence and of nine to three verdicts prevail there. ‘In the typical case collateral estoppel does not apply because the parties to the two actions are not identical, and because different degrees of proof are required in the two proceedings. These objections seem invalid, however, where a criminal conviction is introduced in a civil action, since a greater degree of proof has been overcome in determining the issue involved and the party bound has had an opportunity to litigate the issue.’ (65 Harv.L.Rev. 878.)
So far as different rules of evidence and procedure are concerned they are of little consequence. Penal Code, § 1102 provides: ‘The rules of evidence in civil actions are applicable also to criminal actions, except as otherwise provided in this Code.’ People v. Murphy, 45 Cal. 137, 144: ‘The general rules of evidence when observed, and the relaxations of those rules when permitted, are ordinarily the same, whether the particular case be civil or criminal in its character.’
It is recognized, of course, that a number of California cases have stated that a criminal conviction cannot be used as proof of anything in a civil case, but most such cases preceded the Bernhard case in point of time and those which came later do not consider Bernhard on connection with the exact problem before us. The cases cited in the majority opinion are deemed representative. Lack of mutuality was assigned as the basis for exclusion in the following cases: Risdon v. Yates, 145 Cal. 210, 78 P. 641; Balestreiri v. Arques, 49 Cal.App.2d 664, 122 P.2d 277; American Fire etc. Service v. Williams, 171 Cal.App.2d 397, 340 P.2d 644; Vaughn v. Jonas, 31 Cal.2d 586, 191 P.2d 432, deals with a plea of guilty, not a conviction based upon proof. Burbank v. McIntyre, 135 Cal.App. 482, 27 P.2d 400, does not assign any reasons for the rule. In re Anderson, 107 Cal.App.2d 670, 237 P.2d 720, involves an acquittal, as does People v. One 1950 Pontiac 2-Door Coupe, 193 Cal.App.2d 216, 13 Cal.Rptr. 916. To me it seems that none of these cases when read in light of the Bernhard doctrine is opposed to the views herein expressed. To state it another way, they are qualified by Bernhard and thus fall in line with the reasoning above set forth.
I would reverse the judgment and grant the other relief mentioned in the first paragraph of this opinion.
1. Defendants, in addition to their denial, alleged that plaintiffs' action was barred by reason of the violation by plaintiffs of the provisions of the insurance policies voiding them and precluding recovery in the case of concealment, misrepresentation, fraud or false swearing. Further, that the action was barred by the failure to commence it within twelve months after discovery of the occurrence giving rise to the claim as required by the policies. Finally, that the action was barred by the conviction of Teitelbaum on the charge heretofore mentioned which concerned the same purported theft and the same insurance claims as were sued upon by plaintiffs in this action.
2. Teitelbaum and his wife were the sole owners of plaintiff corporations.
FOX, Presiding Justice.
HERNDON, J., concurs.