Smallpage v. Winafred Orchards Co.

This is an appeal from a judgment declaring that respondent Smallpage is entitled to a refund of $25,000 paid by him pursuant to a compromise settlement made in an escheat proceeding brought under the Alien Land Law.

In 1942 the State of California commenced proceedings under the Alien Land Law to escheat the properties known as the Vaccaro and the West properties which together were known as Winafred Orchards. At the time of the escheat proceeding, the legal title to these properties was vested in Lafayette J. Smallpage. Both Smallpage and Sue Ishida, among others, were named as defendants. This escheat proceeding, however, was concluded by a compromise settlement by which the State of California received $25,000 from Small-page. After the settlement, the legal title to the properties in question continued in Smallpage.

In 1952, the Alien Land Law was declared unconstitutional. Subsequently, the Legislature enacted a remedial statute in which it was provided that any person named as a defendant in a prior escheat proceeding which terminated in a compromise settlement may file a petition with the superior court to obtain the amount which the state received by way of settlement. The statute provides that the court in deciding who shall be entitled to the refund “. . . shall make its de

It is the contention of Sue Ishida that she, together with Smallpage, had an interest in the properties known as Winafred Orchards; that Smallpage was also her attorney; that the agreement between Smallpage and Sue Ishida, whereby Sue Ishida is alleged to have transferred her interest in the properties to Smallpage is invalid because Smallpage, as her attorney, had violated his fiduciary duties owing to Sue Ishida by taking advantage of the Alien Land Law in concluding said agreement; that Smallpage had subsequently sold these properties to a third party making a profit from the sale; that Sue Ishida was rightfully entitled to a portion of the proceeds from the sale because the agreement under which she transferred her interest to Smallpage was voidable; that she is the party who has been injured by the Alien Land Law; that she was without remedy to assert her rights until the enactment of chapter 1816, Statutes of 1953; and that, therefore, she is now entitled to recover the money which the Legislature had decreed to be paid to the injured party.

The trial court found and the evidence shows that Sue Ishida is the widow of Henry Ishida who died on or about November 3, 1940; that Sue Ishida was the sole legatee under the will of Henry Ishida and she succeeded to all of his estate; that the Vaecaro property was purchased in 1926 and that the legal title to said property was acquired by Lafayette J. Smallpage and Carrie M. Smallpage, his mother; and that the West property was acquired in 1940 and the legal title thereto vested in Lafayette J. Smallpage. The trial court found, however, that 55 per cent of the beneficial interest in these properties was vested in Henry Ishida who had acquired such interest for the benefit of his daughter, Gladys Ishida, and that 45 per cent of the beneficial interest was acquired by Lafayette J. Smallpage. The record further reveals that in 1937 the legal title to the Vaecaro property was transferred to the Winafred Orchards Company which was incorporated in the same year; that 45 per cent of the stock of said corporation was issued to Lafayette J. Smallpage and 55 per cent to Carrie M. Smallpage; that the Winafred Orchards Company was dissolved on or about December 29, 1941, and Smallpage succeeded to all the property formerly owned by

Pursuant to the findings of fact and the evidence produced at the trial, the trial court concluded that Smallpage was entitled to the $25,000. Judgment was entered accordingly.

Appellant contends that the finding that Smallpage purchased the Ishida interest in an arm’s length transaction is not supported by the evidence. We have examined the entire record in the case and conclude that there is substantial evidence to support the court’s findings. Appellant’s principal argument concerns the weight of the evidence and inferences to be drawn therefrom. These were matters for the trial court to determine. A finding will not be disturbed if there is sufficient substantial evidence to support it (Treadwell v. Nickel, 194 Cal. 243 [ 228 P. 25 ]), and this is true, though there be no conflict in the evidence, if dif

The record shows that both Mrs. Ishida and Mr. Small-page desired to terminate the joint interest which they held in the properties. Each obtained an independent appraisal of the properties. Mrs. Ishida had the choice of either buying or selling or, if that was not agreeable to her, the properties could be sold and the proceeds divided. Mrs. Ishida finally agreed that she would sell her interest to Mr. Smallpage for $16,500. In all of these proceedings Gladys, Mrs. Ishida’s 18-year-old daughter, participated and knew of her status in connection with the ownership and the Ishida interest in the properties. Mrs. Ishida had separate counsel represent her in the transaction. Mr. Smallpage was also represented by separate counsel. The trial court in its written decision said: “She [Mrs. Ishida] also claims that as Mr. Smallpage was an attorney in the estate proceeding and because of his relations to the property and Mrs. Ishida and Gladys, she was entitled to have considered the relationship of attorney and client in Mr. Smallpage’s dealing with her. I am satisfied, however, that Mr. Smallpage did not take any advantage whatever of either her or Gladys, but acted with the utmost fairness.” There is substantial evidence to support this statement and it is not for this court to hold to the contrary. Any presumption of undue influence or insufficiency of consideration which could have arisen under the provisions of section 2235 of the Civil Code by reason of the attorney-client relationship has been overcome by the court’s findings.

Appellant next contends that the trial court erred in failing to decide the case based upon “the equitable merits of the various claims.” It is conceded that Mr. Smallpage paid the $25,000 to the state out of his own funds. It seems to us that the trial court, in holding that Mr. Smallpage was entitled to have refunded to him the money he had paid the state, was deciding the case upon equitable merits. It was Mr. Smallpage who had suffered the loss of the $25,000 and no one else. Further, it was by reason of the $25,000-payment that the property was saved from escheating to the State of California under what was then believed to be a valid escheat provision of the Alien Land Law.

The judgment is affirmed.

Van Dyke, P. J., and Schottky, J., concurred.

A petition for a rehearing was denied November 19, 1957, and appellant’s petition for a hearing by the Supreme Court was denied December 17,1957.