Espinola v. Provenzano

In this action plaintiff recovered from the appealing defendants the sum of $17,050 on a common count for monies advanced to defendants at their instance and request, no part of which has been paid.

The evidence shows that defendants Provenzano and Beltran were conducting a business as co-partners under the name and style of Provenzano Food Company. On June 5, 1953, respondent gave his check for $6,000 to Provenzano together with a label machine valued by agreement at $1,000. He received a receipt reading as follows:

R. B. Provenzano Food Company does hereby acknowledge receipt of advances to date from John Espinola of the total sum of $7,000 said sum to be credited to John Espinola toward his total contribution of $17,000 for an interest in the R. B. Provenzano Food Company, Felipe Avenue, San Jose; it being understood that the parties are considering the forming of a corporation or a limited partnership in which John Espinola shall have an interest as his total financial contribution bears to the total value of the R. B. Provenzano Food Company; said total value of the R. B. Provenzano Food Company being the value of the R. B. Provenzano Food Company, as set forth by a balance sheet as of May 31, 1953, to be submitted by the accountant for the company, plus the said total contribution of John Espinola of the said sum of $17,000. Dated June 5, 1953. Signed R. B. Provenzano Food Company, by R. B. Provenzano.

It is not disputed that thereafter respondent paid and defendants received pursuant to this agreement, including the label machine valued at $1,000, the total sum of $17,050 for which judgment was recovered. (No point is made in the briefs of this excess of $50 over the amount mentioned in the writing.)

A corporation under the name of Provenzano Food Products was incorporated by the parties in October, 1953, but no stock thereof was ever issued.

An answer was filed on July 1, 1955, denying the essential allegations of the complaint and specially alleging that for the sum of $17,000 plaintiff agreed to accept stock in a corporation to be formed, that said corporation had been formed on October 23, 1953, and that at all times since that date defendants had been willing to perform said agreement but that plaintiff refused and still refuses to accept the interest in said corporation in return for his investment.

On the date of trial, April 24, 1956, defendants asked leave to file an amended answer alleging that the sum of $17,000 was paid by plaintiff for the privilege of becoming a partner in the R. B. Provenzano Food Company and that he in fact became a partner. The trial court reserved action on this request to amend and at the close of the trial granted leave to file the amended answer.

The evidence most favorable to the respondent showed that while he worked at the plant of Provenzano Food Products for many months without compensation he constantly demanded a balance sheet as of May 31, 1953, but was never given one and the interest in the business to which he was entitled under the agreement was never determined. Finally he consulted an attorney and the present action was filed.


The trial court found that respondent never became a partner in the firm and gave the judgment appealed from.

The action was in essence one for money had and received where the consideration has entirely failed. The action was thoroughly tried on the theory of the affirmative defense of the amended answer and appellants suffered no prejudice by the court's failure to allow the filing of the amended answer until the close of the trial. Whether under the writing respondent was to become a general partner, a limited partner or a stockholder in a corporation to be later formed his interest was to be determined in relation to the value of the partnership assets as shown by a balance sheet as of May 31, 1953. It is not disputed that no such balance sheet was ever presented to him. His interest was never determined, owing to appellants' failure to furnish the data expressly required by the contract. The court was justified in its determination that the consideration for his payment had failed.

Appellants at the trial proved that a balance sheet as of October or November, 1954, was presented to respondent and offered testimony that he had agreed to accept the balance sheet of this date but respondent denied any such agreement and the trial court chose to believe respondent. No balance sheet of May, 1953, was produced even on the trial. Finally appellants asked for a continuance to produce such balance sheet which the trial court denied. This was not error. Appellants were on notice from the terms of the contract itself that a balance sheet of May, 1953, was called for and they should have been prepared to present it when the action came to trial.

The claim that there cannot be a recovery at law between partners is answered by the court's finding that respondent did not become a partner. Indeed, this is the very basis of his recovery.

Appellants criticize a finding that there was never a co-partnership consisting of Rosario Provenzano, Phil Beltran and John Espinola and/or either of them. This finding may be ambiguous, as claimed, but the essential finding follows: that said plaintiff John Espinola, never was and is not now a co-partner in the co-partnership known as the R. B. Provenzano Food Company, and that he did not become a partner of the defendants, Rosario Provenzano and Phil Beltran, and/or either of them. The latter finding is explicit and disposes clearly of the only affirmative defense pleaded in the amended answer. Any ambiguity in the portion of the finding criticized therefore becomes unimportant.

The failure to prove a demand is not fatal to the cause of action. The interest in the business which respondent was entitled to receive is to this day because of appellants' conduct still undetermined and it is clear that the evidence amply supports the finding that respondent never became a partner. Appellants' arguments directed to the claim that the action is one for money loaned and the findings are defective in the respect that they do not, and under the evidence could not, find that the money was loaned proceed on a false premise. As pointed out the recovery is for money had and received for a promised consideration which has wholly failed and the findings support the judgment and the evidence supports the findings in this respect.

An examination of the record shows no prejudicial error in the trial of the action and no misconduct of the trial judge.

Appellant Beltran cannot complain that Phil is not his correct first name. He was sued and filed his answer as Phil Beltran.

Judgment affirmed.

Espinola v. Provenzano, 156 Cal.App.2d 760, 320 P.2d 149 (Cal.App. 1 Dist. 1958).

See also Statute of Frauds; Lake Bluff Orphanage v. Magill's ex'Rs.

Court Rules on What Constitutes "Normal Use" of Passenger Car

This evidence supports the trial court's findings in Raymond's favor. We are not prepared to say that taking a friend or relative from Oakland to her home in Grass Valley is not a 'normal use' of a passenger car when it is in good working condition. Nor can we say as a matter of law that that term changes its meaning when the car gets into such a state of disrepair that it becomes imprudent for the owner to use it on such a trip, especially an owner who exerted the efforts this owner did to restore his car to normal capacity.

Nor can we say as a matter of law that the Mercury was not 'withdrawn' from normal use because of its 'breakdown.' There it stood in the driveway, locked and unused during the period of the use of the 'substitute' Ford and until taken to a garage for further repair.

We concur in the views expressed in an opinion filed by Honorable Richard H. Chamberlain who presided at the trial of this case: 'Was the Ford car being 'temporarily used' as a substitute for the Mercury car specified in the policy and was the Mercury 'withdrawn from normal service because of its breakdown'?

AS - Plaintiffs Share in the Proceeds

The last controverted item is the interest charged against this trustee. In the settlement of a trustee's account in a court of equity he is or is not charged with interest according to the circumstances. There is no statute or arbitrary rule on the subject. When a court of equity charges the trustee with interest, it is when, and only when, the circumstances of the case render it right and just to do so. In this case the various sales of real estate ran through a period from March, 1888, to February, 1902, and the trustee is charged with interest on each item at 6 per cent. per annum from the date of the sale to date of decree, January 14, 1904.

We do not think the circumstances of this case justify the charging of the trustee with interest. The evidence shows that he did not receive any interest on it, and, whilst it shows that he spent it for his own purposes and it is now all gone, yet he did so openly, believing it to be his own and under circumstances which show that the plaintiffs had notice of it. If the plaintiffs thought that they were entitled to a share in the proceeds of these sales, they ought to have said so earlier. But they allowed a period of about 18 years to pass after the final settlement in the probate court, and 10 years or more after defendant began selling this land, before they gave any intimation to him that they claimed any interest under their grandfather's will.

During all that time they seemed to acquiesce in that interpretation of the will on which defendant acted. They now say that these controverted items of credit claimed by the trustee are afterthoughts of his trumped up to meet the exigencies of this case, and very likely that is so, but the plaintiffs' case also bears evidence of being an afterthought. It would have appeared in a more favorable light if it had been brought to the attention of the court 10 years or more ago, or when defendant first began selling the land. The judgment of $140.29 on final settlement in the probate court would bear interest under the statute from the date of its rendition, but the record shows that since that date, and before the filing of this suit, the trustee paid out sums to the beneficiaries more than the amount of that balance; therefore the interest on that sum should not run in this account.

Taking all the other items of the account as stated by the court about which there is no controversy, eliminating the items of interest on both sides, giving the defendant credit for $1,575 in addition to the $900 allowed him by the court for the maintenance of the widow of the testator, and $500 as a fee for his attorneys, leaves as total amount of debits against defendant $10,118 and credits in his favor $4,904.71, leaving as a basis for distribution a balance of $5,313.29, but, as against the respective shares of some of the distributees, defendant is entitled to credit for amounts already paid them, as will be shown in the figures following.

The judgment is reversed, the account is restated to conform to the above views, and a final judgment will be entered here in accordance therewith, the defendant Linus Sanford to pay the costs incurred in the circuit court. All concur.

Albert v. Sanford

The evidence shows that November 16, 1880, the defendant, at the request of Mrs. Albert, paid $1,000 for the purchase of a judgment against her husband, which transaction resulted in material benefit to her and her family. The ground on which the respondents resist the allowance of this item is that the interest of Mrs. Albert vested in her at the death of her father in November, 1861, when she was a married woman, and, it being before the enactment of the married woman's statute, it did not become her separate estate, and therefore in 1880, when she requested the defendant to advance this money to save her home, she could not by contract bind her property. We need not discuss the married woman's act, or the power of Mrs. Albert to bind her property by contract. It is sufficient for the present purpose to say that this is a suit in equity in which the heirs of Mrs. Albert are asking a court of conscience to compel the defendant to render unto them what is right and just, and, if they ask equity, they must show a disposition to do equity themselves. Besides, the authority to advance this money to protect one of the testator's daughters from what the trustee though was a pending danger is to be found in the large discretionary power given the trustee by the will. Defendant is entitled to credit for that item.

The court refused to allow the trustee any sum for payment of his attorneys in this suit. The record shows that the trustee was faithful in the management of the estate, and exercised good business judgment in its preservation. In fact, it is due alone to the fidelity and good judgment of the defendant that there was any estate left for distribution. When it came into his hands, it was insolvent; and but for his services it would have all gone under the sheriff's hammer. The trial court recognized this fact, and allowed him as compensation for his own services the sum of $1,000, but by refusing to allow him anything as compensation for his legal counsel in this suit in effect compelled him to pay his counsel out of the sum allowed for his own labor. The court put its refusal to allow this item on the ground that in this suit the defendant is denying the plaintiffs' right to any part of the estate and is claiming it all as his own. The allowance of attorney's fees in a case of this kind is to a considerable extent within the discretion of the court. As a rule, a reasonable allowance is made unless bad faith or culpable mismanagement appears. Here there is no suspicion of bad faith, and, as already said, excellent management is shown. The fact that the defendant was advised that under the terms of the will these plaintiffs had no interest in the estate and no right to call him to account should not be charged up against him under the head of bad faith. If he was advised that such were his rights, he had a right to ask the judgment of the court to that effect. That it was a very doubtful question in the case is shown, not only by the elaborate briefs of learned counsel on both sides, but by the very learned written opinion of the trial judge with which we have been favored and by which we have been persuaded. But that stage of the cause once passed, and the defendant ordered to produce an account of his trusteeship, it is then a matter in which the conflict is not necessarily restricted to the plaintiffs on the one side and this defendant on the other, but one in which the respective interests of the beneficiaries among themselves are to be considered, not only among those present, but also the far away heirs of the deceased brother. The court ought to have allowed the defendant at least $500 for his attorney's fees.