Forbes v. City of Los Angeles

The plaintiffs brought this action to cancel a deed purporting to convey to the defendant city the canal, water rights and other property of the McNally Ditch Company, a mutual water company. The interveners alleged the same facts and prayed for the same relief as the plaintiffs. The defendant city, which will be referred to as the defendant and respondent, entered into a compromise agreement with the plaintiffs and all of the interveners, except Katherine Francisco, by which it acquired their lands and water stock. The defendant filed answers to . the complaint and the complaint in intervention, and also filed a cross-complaint against Mrs. Francisco. The cross-complaint contains two counts. The first count stated or attempted to state a cause of action for specific performance. The second stated a cause of action in eminent domain. The court found that the deed sought to be canceled is invalid. The second cause of action stated in the cross-complaint seems not to have been tried and need not be further noticed. Judgment was entered in favor of the cross-complainant city requiring Mrs. Francisco to convey to it the lands described in the cross-complaint and 61 shares of the capital stock of the McNally Ditch Company. She has appealed from the judgment. The court found the allegations of the cross-complaint to be true. Such allegations are in substance as follows:

The cross-defendant owns the lands described in the cross-complaint and 61 shares of the capital stock of the company. The lands are entitled to receive water from the company for the irrigation thereof. On and prior to August 4, 1924, all of the plaintiffs and interveners owned land within the service area of the ditch and shares of the capital stock of the company and such “lands and shares of stock . . . constituted all of the farm lands served by the said McNally Ditch and all of the shares of stock of the said McNally Ditch Company, owned and held in connection with farm lands, which had not then been acquired by the said defendant, ... or in trust for it.” Prior to the time mentioned all of the interveners “had authorized and empowered W. W. Watterson and M. Q. Waiter son, . . . and each of them, to act as their agents or agent in negotiating for the sale to said defendant ... of their several lands and shares of stock, . . . and said intervener, Katherine Francisco, had

The court further found that Mrs. Francisco “never, at any time, authorized or empowered either W. W. Watterson or M. Q. Watterson by any instrument in writing, to act as her agent, or agents for the sale of her property to the defendant, ... or any other person or corporation whatsoever, and that said Watterson, in negotiating and contracting for the sale of the intervener’s land and water stock” to the defendant was “acting upon her verbal authorization only”; and that the defendant “never at any time, in reliance upon the contract of purchase, ... or at all, entered into the possession of the lands of the intervener (Mrs. Francisco) or any part thereof, or into the possession, use or enjoyment of the water represented by her said 61 shares of stock, . . . and never at any time made any improvements or expended any money upon said lands or any part thereof.” From the facts found the court drew the conclusions of law that Mrs. Francisco “is estopped to assert the invalidity” of the agreement of August 4, 1924, and that such agreement “was and is a valid, binding and enforceable agreement, and should be specifically performed by the said intervener.”

The agreement reads as follows:

“Bishop, Cal., August 4, 1924.

“To the Board of Public Service Commissioners

“City of Los Angeles,

“Los Angeles, Calif.

‘1 Gentlemen:

“The price of land of

McAvoy & Porter.... .160 Acres 28 McNally 28 Farmers

C. A. Peak........... .160 1/32 Fish

Slough

M. M. Schaffer....... 160 35

W. W. Yandell.......

Dell Yandell & Sidney

Seymour............. 480 280

J. L. Gish............ .181 205

F. B. Wayman....... , 50 30

Carrie Neill.......... . 20 15

Watterson Bros....... 80 1/8 Fish SI,

K. Francisco......... , 70 61

approximately 1361 acres, according to descriptions of documents in my possession, is $206,450.00, together with all water stock or water rights appurtenant to or used in connection with any of said lands.

“All or none of said options to be taken.

“Price subject to acceptance within ten days. Title to be clear with the usual certificates.

“Tours truly,

“M. Q. Watterson.

“We, the undersigned, hereby agree to recommend to the Board of Public Service Commissioners of the City of Los Angeles the purchase of the above described properties at the price mentioned above.

“W. B. Mathews “John T. Martin.”

Subsequently, in due time, the agreement was completed by its acceptance by the defendant, but on the condition that it was to take all of the property of the interveners or none. The defendant did not irrevocably bind itself to take the property of any of the interveners without all thereof until after it had notice that Mrs. Francisco refused to sell her property at the agreed price. The defendant, however, had paid the plaintiffs the full purchase price of their lands and water stock before it had notice of Mrs. Francisco’s refusal. Subsequently, with full knowledge of her refusal, the defendant took the lands and water stock of the other interveners at the agreed prices. The plaintiffs and the interveners constituted two separate groups, represented by dififerent persons. An attorney at law, who represented the defendant in the negotiations and who drafted the agreement of August 4, 1924, testified that he did not know “just what kind of authority” Watterson had “except he stated he was authorized” and that he did not know but assumed that Watterson was not the attorney-in-fact of the interveners. M. Q. Watterson, a witness for the defendant, testified that he did not state to any of the defendant’s representatives that he “had authority to bind any of these people in a binding agreement.” The appellant had no personal negotiations with the representatives of the defendant and made no statements to them concerning the sale of the property or Watterson’s authority to act for her. She declined Watterson’s request that she sign an option to

It may be conceded that the evidence supports the finding that appellant verbally authorized the Waiter sons to agree in her behalf to sell her property to the defendant. It cannot be held, however, that the appellant is estopped to deny that such authorization was in writing. The representatives of the respondent had convenient and ready means of ascertaining the extent and the nature of the authority which appellant had given the Wattersons and such representatives made no reasonable effort to ascertain the truth. (10 Cal. Jur. 637; Robbins v. Law, 48 Cal. App. 555 , 562 [ 192 Pac. 118 ].) The respondent therefore is in the same position as if it had actually known, before accepting Waiter son’s offer, that his authorization was verbal only.

One relying on equitable estoppel has the burden of showing that he will be injured if the truth be proved. (10 Cal. Jur. 638.) The respondent failed to make any such showing in this case. Considering first the appellant’s property alone, there was no injury, because it is alleged and found that the value of the property is less than the agreed price of $18,000. It is not to be inferred that one is injured by a refusal to sell him property for more than it is worth. Considering the properties of the interveners together, it is neither alleged nor found that the respondent paid more than the reasonable value therefor. Neither is it alleged or found that the properties of the plaintiffs are not of the reasonable value paid therefor. It clearly appears from the record in this case that the respondent desired to acquire all of the water rights involved in this action and it is a matter of current state history that the purchase of such property at a reasonable price would be of great benefit to the respondent. Since it does not appear, therefore, that the respondent paid for any of such property a greater sum than the reasonable value thereof, there is no showing of injury. It is true

Considering the case from a broader standpoint, it must be conceded that, even though the respondent actually knew that Watterson’s authorization was oral, yet in a proper ease judgment of specific performance would be proper. The legislature has not left the matter in doubt. Section 1741 of the Civil Code provides:

“No agreement for the sale of real property, or of an interest therein, is valid, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party to be charged, or his agent, thereunto authorized in writing; but this does not abridge the power of any court to compel the specific performance of any agreement for the sale of real property in case of part performance thereof.”

“The code section (1741) specifically excepts from the operation of the statute of frauds parol agreements, partly performed, that otherwise would be invalid under subdivision 5 of section 1624. If any other exception were intended, here- was the place to make it. The framers of our statute deliberately added one express exception, and we must assume that they intended to leave their work complete.” (Trout v. Ogilvie, 41 Cal. App. 167 , 174 [ 182 Pac. 333 , 335].)

“We are led to the general rule of law which has always prevailed, and become consecrated almost as a maxim in the interpretation of statutes, that where the enacting clause is general in its language and objects, and a proviso is afterwards introduced, that proviso is construed strictly, and takes no case out of the enacting clause which does not fall fairly within its terms. In short, a proviso carves special exceptions only out of the enacting clause; and those who set up any such exception, must establish it as being within the words as well as within the reason thereof.” (United States v. Dickson, 40 U. S. (15 Pet.) 141 [ 10 L. Ed. 689 ].)

“The contract being oral it was essential that appellant prove sufficient part performance to take it out of the statute of frauds within the meaning of section 1741, Civil Code. ” (Wood v. Anderson, 199 Cal. 440 , 444 [ 249 Pac. 862 , 864].) Such a contract “could only be taken out of the statute and enforced in equity by reason of part performance.” (Davis v. Judson, 159 Cal. 121 , 131 [ 113 Pac. 147 , 152].) “Treating the action as one for the specific performance of a contract relating to real property it was necessary to prove either that the contract was in writing or that it had been partially performed (sec. 1741, Civ. Code).” (Alman v. Rich, 76 Cal. App. 601 , 605 [ 245 Pac. 439 , 441], See, also, Sampson v. Draeger, 88 Cal. App. 105 [ 262 Pac. 781 ] ; Viau v. Viau, 57 Cal. App. 66 , 71 [ 207 Pac. 39 ]; Hines v. Copeland, 23 Cal. App. 36 , 42 [ 136 Pac. 728 ].) “The case is reduced by the findings to an action to enforce a parol contract to convey real estate. Such an action is maintainable only where there has been a part performance sufficient to take the agreement out of the statute of 'frauds.” (Woerner v. Woerner, supra.) The facts in that case were much stronger in favor of the party claiming an estoppel than in this.

The judgment is reversed.

Thompson (R. L.), J., and Plummer, J., concurred.

A petition for a rehearing of this cause was denied by the District Court of Appeal on December 14, 1929, and a petition by respondent to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on January 13, 1930.

All the Justices concurred.