HUTH v. KATZ (1946)

Plaintiff sued to quiet title to real property and appeals from a judgment in favor of defendant administrator.

George Wagner, a widower aged 60 to 65 years, died intestate in San Francisco on October 7, 1943, as a result of a fall from his bed. The decedent had owned the cottage in which he resided at 1228 York Street and whatever balance remained on a $2900 note secured by a deed of trust on a similar house. When the decedent's safe deposit box was opened, the defendant administrator found a gift deed from Wagner to plaintiff of the York Street property which was dated June 29, 1943, but which had not been recorded, and an assignment to plaintiff of the note and deed of trust. Plaintiff thereupon commenced this action to quiet her title to the property.

The evidence adduced before the trial court showed the following facts: Plaintiff, Callie Huth, was reared in the home of Wagner's brother and was regarded by the decedent as his niece. Though born a Gray she was customarily called Callie Wagner, and she called decedent ‘nucle.’ Subsequent to her marriage to Huth she visited Wagner twice a week to perform general household duties for him. The decedent, who gathered and sold junk for a living, stated to the plaintiff on many occasions that it was his desire to place all his property in her name. According to Frank R. Webb, a real estate operator and former notary public who had known Wagner for a period of twenty years, the decedent called at his office just prior to June 29, 1943, and left a former deed for purpose of description and a note and deed of trust. He requested Mr. Webb to draw a gift deed to the York Street property and an assignment of the note and deed of trust in favor of the plaintiff. At that time Wagner was in his usual health and, according to the testimony, not contemplating death. Webb advised the decedent of the legal necessity of a delivery of instruments to the donee and a member of his office staff then prepared the documents. A day or two later Wagner executed the instruments before a notary public and delivered them to Mr. Webb telling him that he would bring his ‘niece’ to the realtor's office to accept delivery. When plaintiff and the decedent later came to Webb's office he was again informed of the necessity of a delivery to complete the transfer and Wagner took the instruments, handed them to plaintiff, and stated: ‘Now it is all yours.’ Mrs. Huth put the documents in her purse and left the office with Wagner. She subsequently placed the papers in a tin box in her home but because of a fire which occurred about three weeks later Mrs. Huth requested Wagner's permission to place them in his safe deposit box. The two went to the bank where decedent had his safe deposit box opened and plaintiff put the documents in it. Wagner had the sole means of access to the box, but told Mrs. Huth that she could have the papers at any time she desired. Subsequent to the purported transfer the decedent continued to receive the income from the property and payments on the promissory note. At the time of the trial the full amount owed under the note had been paid. Some payments were made after Wagner's death. The amount is not shown and this should be determined before judgment is entered.

The trial court found:

‘At to time during his lifetime did the said George Wagner ever make, execute or deliver, either orally or in writing, any deed or assignment of any of his property to the plaintiff.

‘The documents which purport to bear the signature of the said decedent and which were found in his safe deposit box, to which plaintiff had no access or control, following the death of said George Wagner, were never delivered to or for plaintiff and at all times remained in the exclusive and sole possession and custody of the decedent without any intention on his part that any title or interest in the property therein referred to should pass to plaintiff during the lifetime of said decedent.’ (Emphasis ours).

The testimony of Mr. Webb, which stands uncontradicted in any particular, should be given in further detail:

‘Q. Did Mr. Wagner at that time or about that time sign those instruments? A. He left the papers there, the young lady prepared them, he came in shortly after, might have been the next day, I don't know, but I went with him up to the notary and he signed the papers, then he came down and he said, ‘I want delivery.’ He left the papers at the office, and he brought his niece in a few days afterwards, and we witnessed the delivery and signed it, and he gave the papers to her and said, ‘Now it is all yours.’ He had had other papers that he had signed, and we had told him that there must be delivery.

‘Q. Yes. A. He gave them to his niece.

‘Q. That is, to Callie Wagner? A. Yes. She put them in her purse and went away with them.

‘Q. Both left together? A. Yes.

‘Q. At the time these were handed to her, according to your statement he says, ‘Now it is all yours,’ or some words to that effect? A. Yes, he says, I remember him saying, ‘Now it is all yours,’ because he wanted a witness to a delivery.

‘Q. What had been his condition of health, did he say anything about his condition of health? A. No, his usual condition, he was just about as usual. (Emphasis ours).

‘The Court: Q. How old was he at the time, would you say? A. He was 60 or 65, something like that.

‘Q. When he first came in there did he have any conversation with you in reference to transferring the property to her? What conversation did he have? A. Any more than he said he was going to give his property to his niece, that is all.

‘Q. And he gave you then these papers and told you to make up the transfers, he was giving the property to his niece? A. Yes.

‘Q. You had told him about the delivery of instruments? A. Yes, because we had had other papers, I think another piece of property that he received from his brother, I think that was a deed of gift we had made out, and we told him it must be a delivery.’

This evidence on the part of appellant stands uncontradicted and unimpeached by cross-examination. There is no presumption or inference known to the law which justifies a trial court in rejecting it. It is proof of the fact of delivery and intention and hence the finding of the trial court that there was no delivery and no intention to transfer has not an iota of support in the evidence. If the court could reasonably reject all the sworn testimony of appellant because of her interest in the litigation the testimony of Mr. Webb could not have been rejected on that ground.

The case presents the question of the power of a trial court to reject the sworn testimony of a witness and rest its judgment on findings contrary to the only evidence found in the record.

On this point confusion has arisen in the decisions, not because of any divergent view on the function of the trier of facts, but because of some unsettled theories as to the status of inferences and presumptions when employed to offset positive testimony of the probative fact. Many of the cases are concerned with the question of the imputed negligence of the owner of a motor vehicle where injury occurred while some other party was operating the vehicle. Some of the cases state the rule in the negative: ‘Provided the trier of the facts does not act arbitrarily, he may reject in toto the testimony of a witness * * *.’ Hicks v. Reis, 21 Cal.2d 654, 659, 134 P.2d 788, 790. We prefer our own statement in the earlier case of Michaels v. Pacific Soft Water Laundry, 104 Cal.App. 349, 368, 286 P. 165, 173, 1071, reading: ‘The general rule is that the testimony of a witness cannot be wholly disregarded, but that unless it is impeached or contradicted by other testimony, by some presumption, or by an inference deducible from the facts proved, or unless it is inherently improbable, the trial court must accept it as true. 10 Cal.Jur. 1143; Stewart v. Silva, 192 Cal. 405, 410, concurring opinion, 221 P. 191; Sun-Maid Raisin Growers [of California] v. Papazian, 74 Cal.App. 231, 239, 240 P. 47. This rule is particularly applicable to a case such as we have here where the issue is fraud or good faith. The presumption against fraud, which approximates the presumption against crime (Truett v. Onderdonk, 120 Cal. 581, 588, 53 P. 26), the presumption that private transactions have been fair and regular, and the presumption that the ordinary course of business has been followed (section 1963, subds. 1, 19 and 20, Code Civ.Proc.), are all evidence of good faith of the bank in this particular, and a contrary finding cannot stand without some evidence rebutting them.’

This statement of the rule was quoted with approval in Pene v. Mauk, 5 Cal.App.2d 428, 434, 42 P.2d 697, and Hedden v. Waldeck, 9 Cal.2d 631, 636, 72 P.2d 114, and cited in Gomez v. Cecena, 15 Cal.2d 363, 366, 101 P.2d 477, 478, where the Supreme Court said: ‘While no universal and immutable formula can be prescribed for determining the weight to be accorded testimonial evidence, it has frequently been said that testimony which is not inherently improbable and is not impeached or contradicted by other evidence should be accepted as true by the trier of fact.’

Leading the recent cases on this subject is Blank v. Coffin, 20 Cal.2d 457, 126 P.2d 868, a case involving the issue of imputed negligence of a vehicle owner. On the specific question of the function of the trier of facts the court said (20 Cal.2d at page 461, 126 P.2d at page 870): ‘Usually, the opposing party introduces evidence as to the nonexistence of the fact in issue, and the jury must then determine the existence or nonexistence of the fact from all the evidence before it. If the evidence contrary to the existence of the fact is clear, positive, uncontradicted, and of such a nature that it can not rationally be disbelieved, the court must instruct the jury that the nonexistence of the fact has been established as a matter of law. Engstrom v. Auburn Auto Sales Corporation, 11 Cal.2d 64, 77 P.2d 1059; Crouch v. Gilmore Oil Co., 5 Cal.2d 330, 54 P.2d 709; Maupin v. Solomon, 41 Cal.App. 323, 183 P. 198. The jury, however, is the sole judge of the credibility of the witnesses (Cal.Code Civ.Proc., § 1847; see cases cited in 27 Cal.Jur. 182, § 156) and is free to disbelieve them even though they are uncontradicted if there is any rational ground for doing so. Hinkle v. Southern Pacific Co., 12 Cal.2d 691, 87 P.2d 349; Barsha v. Metro-Goldwyn-Mayer, 32 Cal.App.2d 556, 90 P.2d 371; Burke v. Bank of America etc. Ass'n, 34 Cal.App.2d 594, 94 P.2d 58; People v. La Fleur, 42 Cal.App.2d 50, 108 P.2d 99. See cases collected in 27 Cal.Jur. 184, sec. 156; Kelly v. Jones, 290 Ill. 375, 125 N.E. 334, 8 A.L.R. 796. In most cases, therefore, the jury is free to disbelieve the evidence as to the nonexistence of the fact and to find that it does exist on the basis of the inference. Bushnell v. Yoshika Tashiro, supra [115 Cal.App. 563, 2 P.2d 550]; Market Street R. Co. v. George, 116 Cal.App. 572, 576, 3 P.2d 41; Day v. General Petroleum Corporation, 32 Cal.App.2d 220, 89 P.2d 718.’ (Emphasis ours.)

There was some difference of opinion on this statement of the rule and also on the question whether an inference was to be treated as evidence for the purpose of off-setting direct evidence. It is sufficient for us to indicate the conflict. These divergent views are ably discussed in Vol. 31, page 110, Cal.Law Review, from which we quote:

‘The majority opinion also decides that though ordinarily the jury is the sole judge of the credibility of the witnesses they may only disbelieve them when there is ‘rational grounds for doing so’; that a jury is not at libery to disbelieve witnesses whose testimony is positive, probable and uncontradicted who are not impeached. The minority concludes that the jury is the sole judge of the credibility of the witnesses and may disbelieve them although the testimony they give is probable, positive, and uncontradicted and they are not impeached; that the demeanor of the witness and his manner of testifying may always justify rejection of oral testimony.

‘Both propositions asserted by the minority are unsound. One runs counter to fundamental principles of logic, the other, although not illogical, lacks the support of the great weight of judicial authority. A jury is not free in Anglo-American law to disbelieve all oral testimony, nor is an inference evidence. In California as in most jurisdictions the courts clearly hold that a verdict may be directed for the plaintiff who had the burden of proof where the oral evidence is clear, positive and uncontradicted and the witnesses are unimpeached. These decisions refute, completely, the proposition that a jury may disbelieve all oral testimony of witnesses because they are not impressed by their demeanor or manner of testifying. Our trial by a judge and a jury is not and never has been one which sanctions arbitrary action by the fact finding lay group which forms a part of the tribunal. They may disbelieve witnesses for good reason but are not at liberty to act capriciously. To permit a jury to disbelieve witnesses under any circumstances would eventually bring trial by jury into disrepute.’

We do not need to continue the legalistic discussion as to the probative effect of an inference further than to cite the language of the dissenting opinion in Hicks v. Reis, 21 Cal.2d 654, 665, 134 P.2d 788, 793, reading: “Whether a particular inference can be drawn from certain evidence is a question of law, but whether the inference shall be drawn, in any given case, is a question of fact for the jury. See cases cited in 10 Cal.Jur. 738, 739, § 60.' This language makes it clear that an inference from the facts proved must be a reasonable one. The essence of an inference is its reasonableness, as this court recognized when it denied a hearing in Maupin v. Solomon, 41 Cal.App. 323, 326, 183 P. 198, 199, declaring: ‘When we say that a certain inference is warranted by certain facts proved, we mean no more than that the jury is reasonably warranted in making that deduction from those facts.’ See, also, Crouch v. Gilmore Oil Co., 5 Cal.2d 330, 54 P.2d 709; Grand Lodge A. O. U. W. [of Washington] v. Miller, 8 Cal.App. 25, 96 P. 22.'

Here there is no presumption that the witness Webb testified falsely. The presumption is to the contrary. There is no basis for an inference that the documents were not executed and delivered in the manner stated. Though the rule that the testimony of a party interested in the outcome of litigation may be viewed with suspicion might apply to the testimony of the appellant if the trial court entertained any suspicion as to her honesty, no such rule is applicable to the testimony of Mr. Webb. The only attack upon his testimony made by the respondent herein is that his transactions amounted to the practice of law for which he was not legally qualified, though it was shown that he received no compensation for his services. Suspicion was thereby cast upon his testimony that because he had done wrong in one instance he must have committed perjury when he was called as a witness in this proceeding. If the law recognizes any such inference, no authorities have been cited in support of it and we have found none. We may assume that the attack is made to add color where reason and logic fail. It is significant that his testimony regarding the delivery of the documents to appellant was corroborated by the physical fact that, after the documents had been delivered to her, certain writings were added to the back of the assignment on the request of Mr. Wagner. These notations were in the handwriting of appellant. It is not necessary to cite authorities to the point that a delivery once completed is not destroyed solely by a subsequent return of the document to the grantor.

It is possible that the court entertained the belief that the fact that the grantor remained in possession of the home and collected rent for one of the rooms was sufficient to overcome positive evidence of the intent of immediate transfer and of the delivery of the instrument. That this theory is unsound see Stewart v. Silva, 192 Cal. 405, 410, 221 P. 191; Shaver v. Canfield, 21 Cal.App.2d 734, 738, 70 P.2d 507, and cases there cited. The fact that after the delivery of the deeds they were placed in the grantor's safe deposit box for safe-keeping does not affect the legality of the delivery, Shaver v. Canfield, supra; Longley v. Brooks, 13 Cal.2d 754, 761, 92 P.2d 394. Of course if there had been no evidence of delivery at the time of the execution of the documents their presence in the safe deposit box of the grantor would create a presumption of ownership in him through possession. But with the direct and positive evidence of delivery standing undisputed, the presumptions that private transactions have been fair and regular, and that the ordinary course of business has been followed, fully corroborate the testimony of the appellant that these documents had been placed in her uncle's safe deposit box at her request for safe-keeping. No inferences arise from these transactions tending to dispute the positive evidence of delivery.

The judgment is reversed with directions to amend the findings as indicated, to determine the amount due appellant under the deed of trust, and to enter judgment for the appellant.

NOURSE, Presiding Justice.

GOODELL and DOOLING, JJ., concur.