CROUCH v. GILMORE OIL CO (1935)

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

CROUCH v. GILMORE OIL CO., Limited, et al. (two cases).*

DORAN v. SAME.

DORAN et al. v. SAME.

Civ. 9380.

Decided: August 31, 1935

Meserve, Mumper, Hughes & Robertson, J. D. Taggart, and Baldwin Robertson, all of Los Angeles (Timon E. Owens, of Los Angeles, of counsel), for appellants. Salisbury, Robinson & Himrod, of Los Angeles, for respondent.

On the trial of the action, the trial court granted a motion for nonsuit as to the defendant Gilmore Oil Company, a corporation; and the issue presented by this appeal depends for its determination upon the authority of the trial court, in the premises, to order a nonsuit as to such party.

Under the provision of section 2055 of the Code of Civil Procedure, either on the direct or the cross examination of the individual defendants, or of the representatives of the defendant corporation, the facts were elicited from testimony given at the instance of plaintiff; and although not exhaustive as to all minor details, the essential facts, thus presented, were as follows: Early in the month of May, 1931, the defendant Gilmore Oil Company, as one party, and defendant Smith (the latter doing business under the name of Owens Valley Oil Company), as the other party, entered into an agreement by which the former was to sell to the latter gasoline and oils in bulk for the purpose of resale by him of such products in smaller quantities within a specified and restricted territory. In furtherance of that purpose, and for the distribution of such gasoline and oils, Smith purchased an oil truck which, at the expense of the said Gilmore Oil Company, was painted in its “colors” and “insignia”; that is to say, on each side of the tank on the truck the word “Gilmore”, and on the rear end of such truck, likewise in such “colors,” the “insignia” of the defendant corporation were painted. However, on the door on each side of the cab of the truck the words “Owens Valley Oil Company” were painted. For gasoline purchased by Smith from Gilmore Oil Company for the purpose of operating said truck, Smith paid therefor one cent per gallon less than the regular price thereof. Defendant Shaw, who theretofore had been a truck driver for defendant Smith in his operation of a general trucking business, was placed by Smith in charge of the gasoline truck for the purpose of reselling the gasoline and oils that might be purchased by Smith from Gilmore Oil Company, and during all the time here involved the salary of Shaw was paid by Smith. Before starting in the work of making such sales, Shaw procured from Gilmore Oil Company pads of sales tickets, contract and conditional sale forms for the sale of gasoline and oils, as well as pumps for the gasoline, which might thereafter be purchased by operators of gasoline service stations located within the territory specified in the agreement between Gilmore Oil Company and Smith. At the same time that such forms were procured, at the request of Shaw, he was informed and instructed by an officer of Gilmore Oil Company regarding the manner of filling in the blank spaces in such forms when occasion might require; but in that connection Shaw was instructed to “scratch out” the name of Gilmore Oil Company wherever it occurred in either of such forms, and in place thereof to insert “Owens Valley Oil Company.” However, thereafter, disregarding such latter instruction, on each of several occasions, either in the preparation of a sales slip, a contract for the sale of gasoline, or a conditional sale of a gasoline pump, Shaw failed to “scratch out” and to “insert,” respectively, as theretofore instructed. So that on their respective faces the various said sales slips or other papers purportedly were made or executed by Gilmore Oil Company, instead of by Owens Valley Oil Company. On two other matters Shaw consulted, and was advised by, Gilmore Oil Company, to wit: Firstly, as to the attitude of that company toward “price cutting”; and, secondly, because of an asserted violation by a service-station operator of the terms of a contract which theretofore had been entered into between Shaw, for the defendant Owens Valley Oil Company, and a gas service-station operator, as to the method that should be employed by Shaw in canceling such contract. Prior to the date when the contract between Smith and Gilmore Oil Company was executed, the latter had been supplying its products to a customer therefor whose place of business was located within the limits of the territory embraced or described in the contract between Gilmore Oil Company and Smith; but after such date, Gilmore Oil Company ceased to supply the wants of such customer and the same were thereupon and thereafter supplied by Smith. Gilmore Oil Company furnished to Smith for distribution certain advertising matter that included “gasoline sticks, song books,” etc. Gilmore Oil Company refused to sell gas in tank lots to an operator of a service station located in territory outside of that embraced within the territory supplied by Smith, unless the truck that transported such gasoline were owned by Gilmore Oil Company. In making sales of gasoline from a truckload thereof, if any gasoline were “left over,” Gilmore Oil Company “took it back”; and at night Smith's empty truck was sometimes stored on the premises of Gilmore Oil Company. In substance, one of the officers of Gilmore Oil Company testified that if Smith were to neglect “a substantial number of Gilmore-products customers he imagined that they would make arrangement to take the territory over themselves.” More than one year after the accident had occurred upon which the instant actions were predicated, Smith ceased the “arrangement” he theretofore had had with Gilmore Oil Company; and about one month thereafter the gasoline truck which had been used by Smith in transporting gasoline was acquired by Gilmore Oil Company. At all times prior thereto, the state license, etc., to operate the gasoline truck had been issued in Smith's name.

On the authority of the rule announced in the case of Smellie v. Southern Pacific Co., 212 Cal. 540, 299 P. 529, on the consideration of a motion for nonsuit the trial court is unauthorized to include within the case made by the plaintiff any derogatory evidence which, under the provision of section 2055 of the Code of Civil Procedure, may have been elicited either on the direct or the cross examination of a witness who is a defendant, or a representative of a defendant, in the action. With that ruling in view (and which necessarily is here accepted as controlling), it becomes apparent that, eliminating from consideration all that part of the testimony of the several defendants which constituted all the evidence of the ultimate fact that Gilmore Oil Company was neither the owner nor the operator of the truck, and that the driver of the truck was not in the employ of said company, the several inferences that might have been indulged respecting the remaining facts were sufficient to invoke, and to cause the application of, the rule that where any substantial evidence has been presented by the plaintiff that in effect establishes a prima facie case on the facts alleged in the complaint, a motion for a nonsuit may not be granted.

The judgment is reversed.

HOUSER, Justice.

We concur: CONREY, P. J.; YORK,