Arata v. Bank of America

This is an appeal from a judgment, based on a directed verdict, in an action brought by two minors to enforce against the estate of Silve G. Arata two contracts for their support and maintenance.

The plaintiffs are the illegitimate children of decedent, and the contracts sued upon were alleged to have been made with the mother of the infants for their benefit.

The allegations of the complaint with respect to the contracts are as follows: While the mother of the minors, Helene Keith, was pregnant with the older of the two plaintiffs, having conceived the child as a result of acts of sexual intercourse with Arata, the two, Arata and Helene, entered into an oral contract, as follows: That Helene would vacate her residence in Stockton and move to the City of Lodi or to any other locality in which Arata would provide a home for her and the expected child should the child be born living; that from birth the mother would personally maintain physical custody and control of the child until it reached the age of 21 years; that the child would be given the surname of Arata and would be reared as Arata’s child in every manner and respect; that Helene would continue to reside with the child in Lodi, or in any other locality in which Arata would pro

Over the objections of respondent, based upon section 1880, subdivision 3, of the Code of Civil Procedure, Helene was permitted to testify as to the making and terms of the two contracts, and her testimony affords the only proof in that respect. It was as follows: After a considerable period of intimacy, Helene suspected pregnancy and informed Arata of her suspicions. Arata took her to his personal physician, telling her that she was not to worry, that he hoped she was pregnant, and that he would take- care of the baby. When the physician assured them of the pregnancy, Arata reaffirmed his intention to take care of the child. When Helene began to show, she told him she wanted to leave Stockton and go to live in the Bay Area. He then promised that if she would get off welfare, -name the child “Arata” and, for her confinement, move to Lodi, California, instead of the Bay Area, he would pay her $500 per month to raise the child to age 21 and would provide for the child and a home for the two. Helene thereupon moved to Lodi to a place of Arata’s selection, was in due time delivered of the child, named the child Yvonne Marie Arata, and since that time has continuously .kept and eared for her. The child was born October 15, 1959. Mother and child were constantly - visited by Arata in the home he was renting for them and Arata paid to Helene the monthly sum of $500. Their intimacies continued and in November 1960 Helene again became pregnant by Arata. She told Arata of her pregnancy and stated to him that she did not want to have another baby, but he replied that they loved each other, that they then had the little girl and that no.w, perhaps, they could have a boy. He reminded her that he had lived up to what he had promised to do, to give her $500 per month for the daughter; that all he had asked of her in

Since the proof of the contracts rested wholly in the testimony of the mother, since it was received over repeated and continued objection by respondent based on the statute, since the court denied a motion to strike at the end of the trial and based its order granting a motion for directed verdict upon other grounds, respondent asks us, pursuant to section 956, Code of Civil Procedure, to review the rulings admitting the testimony and denying respondent’s motion to strike and if we find the evidence inadmissible to affirm the judgment appealed from for want of evidence on the vital issue of contract or none. Admittedly, if this evidence had not been received, a motion for directed verdict would have lain and a judgment based upon the want of testimony to prove the contracts would have been unassailable.

When the action was begun, Helene was not a party. The allegations were that the contracts were made expressly for the benefit of the children, although made by Arata with her. Therefore, she did not join in the action. Respondent executor moved in the trial court for an order bringing her in as an indispensable party plaintiff. She was ordered into the cause as a plaintiff, not as an indispensable party to the action, but as a necessary party thereto, and the order provided that if she refused to come in as a party plaintiff she should be joined as a defendant. She did refuse and was joined as a defendant and in that capacity filed an answer admitting material allegations of the complaint of the children. The history of section 1880, subdivision 3, Code of Civil Procedure and the constructions placed thereon by our courts in the past are fully discussed in Trabin v. Title Ins. & Trust Co., 52 Cal.2d 149 [ 339 P.2d 136 ], There, Trabin as plaintiff brought an action against a Mr. and Mrs. Kauffman, husband and wife, and sought at the trial to examine Mrs. Kauffman under section 2055 of the Code of Civil Procedure. The executors of the estate of Mr. Kauffman, who had died, objected to her giving any testimony, claiming her disqualification as a witness. The objection was overruled and her testimony was

We think this decision is determinative of the issue we are discussing and supports the trial court’s ruling admitting the testimony of Helene. It appeared without dispute that she had at no time made a claim against the Estate of Arata based upon the contracts for the support of the minors, that the time for presenting such a claim had passed before she was made a party, and that in her answer she had disclaimed any right to recover against the estate. She was, therefore, a competent witness.

The stated grounds for the order directing a verdict were two: (1) that Helene and the two infants were joint obligees under the contracts as pleaded and proved, that the consideration was indivisible, that the rights were joint rights and could only be enforced jointly and that Helene’s renunciation of any claim arising under the contracts as joint obligee was fatal to the enforcement of the agreements by her coobligees; (2) that the consideration, in part, moving from Arata was the continuation of the meretricious relations between Helene and Arata rendering the contracts unenforceable.

We think it cannot be said, as a matter of law, that Helene and the two children were joint obligees.

The pleadings on behalf of the minors charged that the contracts were made for their benefit and the evidence received sufficiently supports that allegation, Without repeat'

“A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” (Civ. Code, § 1559.) “The test for determining whether a contract was made for the benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract. (Le Ballister v. Redwood Theatres, Inc., 1 Cal.App.2d 447 , 449 [ 36 P.2d 827 ].)” (Johnson v. Holmes Tuttle Lincoln-Mercury, Inc., 160 Cal.App.2d 290 , 297 [ 325 P.2d 193 ].) The intent to make the obligation inure to the benefit of a third party must be clearly manifested by the contracting parties in order for the beneficiary to maintain an action. (Shutes v. Cheney, 123 Cal.App.2d 256 , 262 [ 266 P.2d 902 ]; Fruitvale Canning Co. v. Cotton, 115 Cal.App.2d 622 , 625 [ 252 P.2d 953 ].) The contract does not have to be for the exclusive benefit of a third party to be enforceable by him; both contracting parties can receive benefits under an enforceable third party beneficiary contract. (Stanton v. Santa Ana Sugar Co., 84 Cal.App. 206 , 209 [ 257 P. 907 ]; Miles v. Miles, 77 Cal.App. 219 , 228 [ 246 P. 143 ]; Le Ballister v. Redwood

We think both the pleading and the proof meet the tests imposed by the foregoing authorities and that therefrom the jury could have concluded that appellants were entitled to enforce the oral contracts as having been expressly for their benefit. Arata, as the natural father of appellants, had a moral and legal duty to support them and could have been compelled to do so. (Civ. Code, § 196a.) The evidence shows him to have been completely willing to perform his obligations. It was shown that he looked forward with pleasure to the birth'of each and that after Yvonne was born his love for and his interest in her was that which a father would have. Although he promised to pay money to Helene each month, it is clear that it was to be used for housing, raising and educating the children. This is shown by his statements that all he asked in return as to either child was that Helene give the children his family name, that she keep them and care for them and live with them nearby where he could have ready access to them. The jury could have found that although she would incidentally benefit, for instance as by receiving housing, shelter and food out of the money she received, such benefits were incidental and perhaps necessarily received in order that she could perform her obligations to raise the children. The evidence supports a conclusion that Arata was financially able to perform the obligations he undertook. After the birth of Yvonne, and up to his death, which occurred before the birth of the younger child, the evidence was that he kept in constant touch with Yvonne and Helene, visited them with great frequency, and faithfully performed his agreement to furnish the money necessary for Yvonne’s care.

That payments were made to Helene directly does not prevent the existence of third party beneficiary contracts.

".. It is true that under a contract for the benefit of the third person performance is usually to be rendered directly to the beneficiary, but this is not necessarily the case. (See Rest. Contracts, § 133, comment d; 2 Williston on Contracts (3d Ed. 1959) 829.) ” (Lucas v. Hamm, 56 Cal.2d 583 , 590 [ 15 Cal.Rptr. 821 , 364P.2d 685].)

In this case performance could not have been satisfactorily made directly to Yvonne because of her age. Payment to Helene was reasonable and natural and not inconsistent with the existence of third party beneficiary contracts.

Respondent seeks to sustain the directed verdict upon the ground that as a matter of law the contracts were tainted with illegality in that part of the consideration therefor was the continuation of meretricious relations between Arata and Helene. The trouble with this argument is that it does not appear as a matter of law that such was the case. From the evidence the jury could have found that the continuation of meretricious relations formed no part of the consideration for the agreement of Arata to support his children. It is true that the evidence showed that such relations were continued up to the time of his death, but there is nothing in the testimony which expressly supports the proposition that the continuation of such relationships was a part of the consideration for the agreements to support. Although this might have been found by the jury to have been a part of the consideration for the support payments, the matter could not be decided without submission to the jury upon proper instructions. The possibility that the contracts were so tainted that a court should refuse to enforce them was for the jury to determine.

The judgment is reversed.

Pierce, P. J., and Schottky, J., concurred.

A petition for a rehearing was denied January 6, 1964, and respondent’s petition for a hearing by the Supreme Court was denied February 5, 1964.