Apendix To Claim of Right2

APPENDIX OF AUTHORITIES
UNDER THE CARDINAL RULES OF STATUTORY

CONSTRUCTION, COURTS HAVE RULED THAT:
“[W]e interpret a statute in context, examining other legislation on the
same subject, to determine the Legislature’s probable intent.
[Citations.]” ( California Teachers Assn. v. Governing Bd.
of Rialto Unified School Dist., supra, 14 Cal.4th at p. 642.)
“ ‘ “[P]rovisions relating to the same subject matter must be
harmonized to the extent possible.” ’ ”( Cooley v. Superior Court
(2002) 29 Cal. 4th 220, 248.) “Where . . .two codes are to be
construed, they ‘must be regarded as blending into each other and
forming a single statute.’ [Citation.]” ( Tripp v. Swoap (1976) 17
Cal.3d 671,” SEE ALSO: Building Material & Construction
Teamsters’ Union v. Farrell (1986) 41 Cal.3d 651, 665.]
“Courts are bound by the statute not by individual opinions of its

interpretation.” Maia VS Selunly
Lumber &Construction Co., 160 C.A. 2d 16, 21; In Re Levine , 2 Cal. 2D
324, 327.
[1] A court must, where reasonably possible, harmonize statutes, reconcile

seeming inconsistencies in them, and construe them to give force and effect to
all of their provisions. (County of Placer v. Aetna Cas. etc. Co., 50 Cal.2d 182,
188-189 [323 P.2d 753]; Estate of Stevens, 27 Cal.2d 108, 119 [162 P.2d 918];
County of Los Angeles v. Frisbie, 19 Cal.2d 634, 641-642 [122 P.2d 526];
Southern Pac. Co. v. Railroad Com., 13 Cal.2d 89, 100 [87 P.2d 1055].) This
rule applies although one of the statutes involved deals generally with a subject
and another relates specifically to particular aspects of the subject. (See Pierce
v. Riley, 21 Cal.App.2d 513, 518 [70 P.2d 206]; Cohn v. Isensee, 45 Cal.App.
531, 536-537 [188 P. 279].)
DUE PROCESS OF LAW;
NOTICE & OPPORTUNITY
TO BE HEARD & TO DEFEND
–-–----------------------------------------------
“A judicial decision made without giving a party an opportunity to present

argument or evidence in support of his contention "is lacking in all the attributes
of a judicial determination." Spector v. Superior Court (1961), 55 Cal. 2d 839 at
page 843.
It is a cardinal principle of our jurisprudence that a party should not be bound or
concluded by a judgment unless he has had his day in court. This means that a
party must be duly cited to appear and afforded an opportunity to be heard and to
offer evidence at such hearing in support of his contentions. His right to a
hearing does not depend upon the will, caprice or discretion of the trial
judge who is to make a decision upon the issues.
An order or judgment without such an opportunity is lacking in all the
attributes of a judicial determination. (McClatchy [55 Cal.2d 844] v. Superior
Court, 119 Cal. 413, 418, 421 [51 P. 696, 39 L.R.A. 691]; Collins v. Superior
Court, 145 Cal.App.2d 588, 594 [4] [302 P.2d 805]; Estate of Buchman, 123
Cal.App.2d 546, 554 [5] 560 [267 P.2d 73,47 A.L.R.2d 291] [hearing denied by
the Supreme Court]
VOID JUDGMENTS
THE COURT IN THE CASE OF Burtnett v. King, 33 Cal.2d 805 (1949) at page 807 ruled:
“It has been held repeatedly, and recently, that where a statute requires a court to
exercise its jurisdiction in a particular manner, follow a particular procedure, or
subject to certain limitations, an act beyond those limits is in excess of its
jurisdiction. (See Tabor v. Superior Court, 28 Cal.2d 505 ; Lord v. Superior Court, 27 Cal.2d
855 ; Redlands etc. Sch. Dist. v. Superior Court, 20 Cal.2d 348 ; Abelleria v. District Court of
Appeal, 17 Cal.2d 280;Fortenbury v. Superior Court, 16 Cal.2d 405 [106 P.2d 411]; Evans v.
Superior Court, 14 Cal.2d 563 [96 P.2d 107]; Rodman v. Superior Court, 13 Cal.2d 262;
Spreckels S. Co. v. Industrial Acc. Com., 186 Cal. 256 .)”
As stated by our Supreme Court in the case of: Abelleira v. District Court of Appeal, 17
Cal. 2d 280; S. F. No. 16357. In Bank. February 7, 1941, at page: 288:
“But in its ordinary usage the phrase "lack of jurisdiction" is not limited to these fundamental
situations. For the purpose of determining the right to review by certiorari, restraint by
prohibition, or dismissal of an action, a much broader meaning is recognized. Here it may be
applied to a case where, though the court has jurisdiction over the subject matter and the
parties in the fundamental sense, it has no "jurisdiction"(or power) to act except in
a particular manner, or to give certain kinds of relief, or to act without the
occurrence of certain procedural prerequisites.”
“[2] A judgment is void on its face if the court which rendered the judgment
lacked personal or subject matter jurisdiction or exceeded its jurisdiction in
granting relief which the court had no power to grant. (Becker v. S.P.V.
Construction Co. (1980) 27 Cal.3d 489, 493; Jones v.World Life Research
Institute (1976) 60 Cal.App.3d 836, 840-848 If the judgment is void, it is
subject to collateral attack. (Craft v. Craft (1957) 49 Cal.2d 189, 192”
The Supreme Court & Courts of Appeal in California have Ruled in numerous cases that the
requirements for a Perfected Title include there be no grave doubts about the validity of the
title, & that there be no litigation over the Title,& the party claiming title must have both
Equitable & Legal Titles: S. P. & C. v. Hollis (1987) 196 Cal. App. 3d 948 ruled at page 952:
“[2] To establish that he is a proper plaintiff, one who has purchased property at a
trustee's sale and seeks to evict the occupant in possession must show that he acquired the
property at a regularly conducted sale and thereafter 'duly perfected' his title.[Citation.]"
(Vella v. Hudgins (1977) , 20 Cal 3rd 251, at page 255; see Cruce v. Stein (1956) 146 Cal.App.2d
688, 692; Kelliher v. Kelliher (1950) 101 Cal.App.2d 226, 232 ; Higgins v. Coyne (1946) 75
Cal.App.2d 69, 73; Nineteenth Realty Co. v. Diggs (1933) 134 Cal.App. 278, 288-289 .
The same Court in S.,P. & C. v. Hollis (1987) 196 C.A.3d 948 Cited the case of Hocking v.Title
Ins. & Trust Co. (1951), 37 Cal. 2d 649, when it further stated at page 953:
"Title is duly perfected when all steps have been taken to make it perfect, i.e., to convey to the
purchaser that which he has purchased, valid and good beyond all reasonable doubt. (Hocking
v.Title Ins. & Trust Co.(1951),37 Cal.2d 644 ,649, which includes good record title (Gwin v.
Calegaris (1903),139 Cal.384, ."(Kessler v. Bridge (1958) 161 Cal. App.2d Supp.837,841”
The Case Relied on by the Court in the Case of Stephens, Partain & Cunningham
v. Hollis (1987) 196 Cal. App. 3d 948, Hocking v Title Ins. & Trust Co. (1951) 37 Cal.
2d 644, clearly stated at page 649: “In Sheehy v. Miles (1892), 93 Cal. 288, 292, the
following appears: "In the case of Turner v. McDonald, 76 Cal. 177, this court said: 'A perfect
title must be one that is good and valid beyond all reasonable doubt'; and in that case it was
conceded by counsel upon both sides that a title, to be good, 'should be free
from litigation, palpable defects, and grave doubts, should consist of both legal
and equitable titles, and should be fairly deducible of record.' It would seem, in
fairness to the vendee, that the foregoing requirements should be held absolutely
necessary, in order to fully satisfy the covenant of perfect title. Certainly such a
condition of title must exist before it can be said to be good and valid
beyond reasonable doubt. [Citations.]".
Hayashi v. Lorenz, (1954) 42 Cal. 2d 848 [In Bank. May 28, 1954.] ruled at page 851
regarding Judgments that are void as follows:
A judgment void on its face may be set aside at any time. (Hayashi v. Lorenz
(1954) 42 Cal.2d 848, 851; Estate of Estrem. (1940),16 Cal.2d 563, 572; Plaza
Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal. App.4th 1,
19.”“Both in their amended complaint and in their motion to vacate the orders in the
guardianship proceeding, plaintiffs took the position that each of the orders therein was
void on its face. In such a case they could be attacked and their invalidity shown at
any time.” (In re Dahnke, 64 Cal.App. 555, 560 ; see also Olivera v. Grace, ,19 Cal.2d 570 ,
573-574 ; Estate of Estrem,16 Cal.2d 563, 571; Luckenbach v. Krempel,188 Cal.175,177;People
v.Davis,143 Cal.673, 675-676; Winrod v.Wolters,141 Cal. 399, 402-403; Kreiss v. Hotaling, 96
Cal. 617, 622-623; People v.City of Barnes,105 Cal. App. 618, 622-623 ”
The Court in: Asuncion v. S.Ct.(W.C.Fin.,Inc.)(1980) 108 Cal. App. 3d 141 Ruled at page 146 :
“[1] We are prepared to hold homeowners cannot be evicted, consistent with due
process guaranties, without being permitted to raise the affirmative defenses
which if proved would maintain their possession and ownership. Such a
procedure would be as unfair as the situation forbidden in Vargas. Accordingly,
title to the property is inevitably in issue in this unlawful detainer action, and the
action is not within the jurisdiction of the municipal court.”...“A possibility, which
we understand is frequently utilized in other counties, is for the superior court to
stay the eviction proceedings until trial of the fraud action, based on the authority
of Code of Civil Procedure section 526 which permits a preliminary injunction to
preserve the status quo on such grounds as irreparable injury, multiplicity of legal
actions, or unconscionable relative hardship. fn. 1 (See, e.g.,Continental Baking
Co. v. Katz (1968) 68 Cal.2d 512, 528 , and see general discussion of subject in 2
Witkin, Cal. Procedure (2d ed. 1970) Provisional Remedies, § 47, p. 1496; § 73,
pp. 1511-1512.)”..” “It has been held where foreclosure of a trust deed would
moot a claim of right under a deed, and the deed is attacked as a fraudulent
conveyance, a preliminary injunction is permitted to prevent foreclosure pending
trial (Weingand v. Atlantic Sav. & Loan Assn. (1970) 1 Cal.3d 806 . Staying the
eviction here is analogous.”
"Summary proceeding in unlawful detainer is subject to control of equity

in proper case; hence, if defendant in such action possessed valid equitable rights
in property that would make it inequitable for plaintiff to proceed, defendant
could, by seeking injunction in quiet title suit pending between parties, prevent
plaintiff from proceeding. Byrne v. Baker (1963, Cal App 2d Dist) 221 Cal App 2d
1"
Woods-Drury, Inc. v. Superior Court, (1936) 18 Cal. App. 2d 340, at page 344 :
“Chapter IV, title III, part III, of the Code of Civil Procedure (secs. 1159-1179a) is commonly
referred to as our Unlawful Detainer Act.”“A proceeding in unlawful detainer was not
known at common law. (Sec. 713, Taylor's Landlord and Tenant; Estate of Fair, 132 Cal. 523,
534 [60 P. 442, 64 P. 1000, 84 Am . St. Rep. 70].) The proceeding is entirely statutory. (15
Cal. Jur. 849; 36 C.J. 616.) [1] Since special proceedings are created and authorized
by statute, the jurisdiction over any special proceeding is limited by the terms and
conditions of the statute under which it was authorized. (Lay v. Superior Court, 11
Cal.App. 558, 560 [105 P. 775].)”
[1] An unlawful detainer action is a summary proceeding, the primary purpose of which is to
obtain the possession of real property in the situations specified by statute.(Childs v.
Eltinge 29 Cal.App.3d 843,852-853; Union Oil Co. v. Chandler, 4 Cal.App.3d 716, 721.
“The statutory procedure must be strictly followed. Greene v. Municipal
Court, 51 Cal. App. 3d 446, 450 “and such statutes will be construed strictly.
(Iburg v. Fitch, 57 Cal. 189.) [3] In construing the provisions of said act effect
must be given to one and all of the foregoing rules.” Iburg v. Fitch, 57 Cal. 189."
[3] "The general rule is that once a judgment has been entered, the trial court
loses its unrestricted power to change that judgment. The court does retain
power to correct clerical errors in a judgment which has been entered.
However, it may not amend such a judgment to substantially modify it or
materially alter the rights of the parties under its authority to correct clerical
error. [Citations.] This general rule is applicable even though time for appeal
from the judgment has not yet passed. [Citation.] [¶] Once judgment has been
entered, the trial court does retain jurisdiction for a limited period of time to
entertain and grant a motion for a new trial ([Code Civ. Proc.,] § 655 et seq.) or
a motion for a judgment notwithstanding the verdict. ([Code Civ. Proc.,] § 629.)
The court also retains jurisdiction to consider and grant a motion to vacate a
judgment and enter a different judgment for either of two reasons: an incorrect
or erroneous legal basis for the decision, not consistent with or supported by
the facts, or a judgment not consistent with or not supported by the special
verdict. ([Code Civ. Proc.,] §§ 663, 663a.) The court also retains jurisdiction to
entertain and grant a motion for relief from a judgment taken against a party
through mistake, inadvertence, surprise, or excusable neglect. ([Code Civ.
Proc.,] § 473.)" (Craven v. Crout (1985) 163 Cal.App.3d 779, 782-783 [209
Cal.Rptr. 649]; see also 7 Witkin, Cal. Procedure (4th ed. 1997) Judgment, § 67,
pp. 594-595.) [67 Cal.App.4th 1238]
III. A Void Judgment Is Subject to Attack at Any Time, Either Directly or by

Way of an Independent Action in Equity
[5] A judgment void on its face because rendered when the court lacked
personal or subject matter jurisdiction or exceeded its jurisdiction in granting
relief which the court had no power to grant, is subject to collateral attack at
any time. (See County of Ventura v. Tillett (1982) 133 Cal.App.3d 105, 110 [183
Cal.Rptr. 741] disapproved of on other grounds by County of Los Angeles v.
Soto (1984) 35 Cal.3d 483 [198 Cal.Rptr. 779, 674 P.2d 750]; see also Security
Pac. Nat. Bank v. Lyon (1980) 105 Cal.App.3d Supp. 8, 13 [165 Cal.Rptr. 95].)
An attack on a void judgment may also be direct, since a court has inherent
power, apart from statute, to correct its records by vacating a judgment which
is void on its face, for such a judgment is a nullity and may be ignored. (Olivera
v. Grace (1942) 19 Cal.2d 570, 574 [122 P.2d 564, 140 A.L.R. 1328].)
In sustaining plaintiff's demurrer without leave to amend, the trial court in the
present action agreed with defendants' contention that the statute of limitations
governing actions for fraud served to bar the plaintiff's action. (Code Civ. Proc., §
338, subd. (d).) Based on the above authorities which hold that a judgment void
on its face may be attacked at any time, we conclude that this was an erroneous
basis on which to sustain defendants' demurrer.
IV. The Doctrine of Res Judicata Is Inapplicable to Void Judgments
[6] Defendants contended below and the trial court agreed in sustaining plaintiff's
demurrer that the present action is barred by the doctrine of res judicata.
Specifically, defendants assert that plaintiff's failure to file a cross-appeal from
the amended judgment resulted in the amended judgment becoming final and
having preclusive effect. Defendants also contend that plaintiff's failure to file a
notice of appeal (rather than a petition for writ of mandate), from the trial court's
May 23, 1996, order denying plaintiff's motion to vacate the amended judgment
also resulted in that order becoming final and having preclusive effect. We
disagree.
The doctrine of res judicata is inapplicable to void judgments. "Obviously a

judgment, though final and on the merits, has no binding force and is subject to
collateral attack if it is wholly void for lack of jurisdiction of the [67
Cal.App.4th 1240] subject matter or person, and perhaps for excess of
jurisdiction, or where it is obtained by extrinsic fraud. [Citations.]" (7 Witkin,
Cal. Procedure, supra, Judgment, § 286, p. 828.)
As discussed above, the amended judgment was void and of no effect. Plaintiff's
failure to file a cross-appeal from the amended judgment, thus in a sense allowing
it to become final, plainly does not give the amended judgment preclusive effect.
fn. 6 The amended judgment is a nullity, and can have no such effect.
In addition, the trial court's subsequent order denying plaintiff's motion to vacate
the amended judgment, in that it gives effect to a void judgment, is itself void.
(County of Ventura v. Tillett, supra, 133 Cal.App.3d at p. 110.) While defendants
are correct in stating that the order denying the motion to vacate was itself
appealable, plaintiff's failure to appeal from it, thus allowing it to become final,
makes no difference. A "final" but void order can have no preclusive effect. " 'A
void judgment [or order] is, in legal effect, no judgment. By it no rights are
divested. From it no rights can be obtained. Being worthless in itself, all
proceedings founded upon it are equally worthless. It neither binds nor bars any
one.' [Citation.]" (Bennett v. Wilson (1898) 122 Cal. 509, 513-514 [55 P. 390].) We
conclude that the trial court erred in sustaining defendants' demurrer on the basis
of res judicata.
The Standard of Due Care
“While failure to observe custom may be evidence of negligence, the

standard of due care is not fixed by custom or altered by its presence or
absence.” Pauly -vs- King, 42 Cal. 2D 649, 655
THE TENTH AMENDMENT
The Supreme Court of the United States of America Ruled in the Case of : NATIONAL
LABOR REALTIONS BOARD VS JONES & LAUGHLIN STEEL CORPORATION
301 US 615 (1937) at page 620-621, addressing a challenge to the Constitutionality of
the National Labor Relations Act of July 5, 1935, 49 Stat. 449, 29 U.S.C. § 151 Et Seq.,
stating:
“The Act is challenged in its entirety as an attempt to regulate all industry,

thus invading the reserved powers of the States over their local concerns. It
is asserted that the references in the act to interstate commerce are
colorable at best; that the act is not a true regulation of such commerce or
of matters which directly affect it, but on the contrary has the fundamental
object of placing under the compulsory supervision of federal government
all industrial labor relations within the nation. The argument seeks support
in the broad words of the preamble (section 13) and in the sweep of the
provisions of the act, and it is further insisted that its legislative history
shows a universal purpose in the light of which its scope can not be limited
by either construction or by the application of the separability cause. [2] If
this conception of terms, intent and consequent inseparability were sound,
the act would necessarily fall by reason of (end of page 620) the limitation
on the federal power which inheres in the constitutional grant, as well as
because of the explicit reservation of the Tenth Amendment. Schechter
Corporation v. United States, 295 U.S. 495, 549, 550, 554, 55 S. Ct. 837,
851, 853, 79 L. Ed. 1570, 97 A.L.R. 947. The authority of the federal
government may not be pushed to such an extreme as to destroy the
distinction, which which the commerce clause itself establishes, between
commerce “among the several states” and the internal concerns of a state.
That distinction between what is national and what is local in the activities
of commerce is vital to the maintenance of our federal system. Id.”
FROM THE UNANIMOUS DECLARATION OF INDEPENDENCE OF THE THIRTEEN

UNITED STATES OF AMERICA ADOPTED IN CONGRESS ON JULY 4, 1776;
''WE HOLD THESE TRUTHS TO BE SELF EVIDENT, THAT ALL MEN ARE
CREATED EQUAL. THAT THEY ARE ENDOWED BY THEIR CREATOR
WITH CERTAIN UNALIENABLE RIGHTS, THAT AMONG THESE ARE LIFE,
LIBERTY, AND THE PURSUIT OF HAPPINESS''“THAT TO SECURE THESE
RIGHTS GOVERNMENTS ARE INSTITUTED AMONG MEN, DERIVING
THEIR JUST POWERS FROM THE CONSENT OF THE GOVERNED.”
3 The denial by employers of the right of employees to organize cited in footnote 2 of the opinion
FROM ONE OF THE ORIGINAL FOUNDERS OF, AND, THE SECOND PRESIDENT OF
THE UNITED STATES OF AMERICA, John Adams:
"You have Rights Antecedent to all earthly Governments, Rights that

can not be repealed or restrained by human laws; Rights derived from
the Great Legislater of the Universe. "
FROM : THE UNITED STATES SUPREME COURT DECISION IN THE CASE OF:
CHISOLM EXECUTOR, VS GEORGIA, 2 DALL 419 (1793);
" The only reason, I believe, why a free man is bound by human laws, is,
that he binds himself."
(Put in quotes from Chisholm regarding the Sovereignty is in the

People)
FROM ONE OF THE ORIGINAL FOUNDERS OF THE UNITED STATES OF AMERICA,

Thomas Jefferson:
"It is error alone which needs the support of Government. Truth can
stand by itself."
U.S. SUPREME COURT IN Yick Wo v. Hopkins, 118 U.S. 356 (1886) Stated:
"Sovereignty itself is, of course, not subject to law, for it is the author and source
of law; but in our system, while sovereign powers are delegated to the agencies of
government, sovereignty itself remains with the people, by whom and for whom
all government exists and acts. And the law is the definition and limitation of
power."
“When we consider the nature and the theory of our institutions of government,
the principles upon which they are supposed to rest, and review the history of
their development, we are constrained to conclude that they do not mean to leave
room for the play and action of purely personal and arbitrary power.
Sovereignty itself is, of course, not subject to law, for it is the author
and source of law; but in our system, while sovereign powers are
delegated to the agencies of government, sovereignty itself remains with
the people, by whom and for whom all government exists and acts. And
the law is the definition and limitation of power. It is, indeed, quite true
that there must always be lodged somewhere, and in some person or body, the
authority of final decision; and in many cases of mere administration, the
responsibility is purely political, no appeal lying except to the ultimate tribunal of
the public judgment, exercised either in the pressure of opinion, or by means of
the suffrage. But the fundamental rights to life, liberty, and the pursuit of
happiness, considered as individual possessions, are secured by those maxims of
constitutional law which are the monuments showing the victorious progress of
the race in securing to men the blessings of civilization under the reign of just
and equal laws, so that, in the famous language of the Massachusetts bill of
rights, the government of the commonwealth 'may be a government of laws
and not of men.' For the very idea that one man may be compelled to
hold his life, or the means of living, or any material right essential to
the enjoyment of life, at the mere will of another, seems to be
intolerable in any country where freedom prevails, as being the essence
of slavery itself.”
State VS United States Citizenship
The US Supreme Court in Saenz vs Roe 119 S. Ct. 1518, 526 US 489; 143 L.Ed
2d 689 Ruled the following:
“Citizens of the United States, whether rich or poor, have the right to choose to
be citizens of the State wherein they reside, states, however, do not have any
right to select their citizens.”
The US Supreme Court Ruled in the Case of U.S. VS CRUIKSHANK (1875) 92

US 542; 23 L.Ed 588; 2 Otto 542 stated:
“There is in our political system a government of each of the several states, and a
government of the United States. Each is distinct from the others, and has citizens
of its own, who owe it allegiance, and whose rights within its Jurisdiction, it must
protect.”
The US Supreme Court Rule in the Slaughterhouse Cases, 83 US 36, 16 Wall. 36,
21 L.Ed. 394, “Citizenship of the United States and Citizenship of a State are
distinct from each other.”
The US Supreme Court Ruled in the Case of Dred Scott VS Sanford, 60 US 393,
19 How. 393, 15 L. Ed 691, “One having all rights and privileges of a Citizen of a
State is not necessarily a citizen of the United States.
-----------------------------------------------------------------------------------------------------------------------
Constitutional Protection of the Human Body
Cruzan v. Director, Missouri Dept. of Health (1990) 497 U.S. 261, 343 [111
L.Ed.2d 224, 282, 110 S.Ct. 2841] (dis. opn. of Stevens, J.)("[T]he constitutional
protection for the human body is surely inseparable from concern for the mind
and spirit that dwell therein."); id., at pages 279, 287-289 (conc. opn. of
O'Connor, J.), 304-306 (dis. opn. of Brennan, J.) [111 L.Ed.2d at pages 242, 247-
248, 258-260]; Schmerber v. California (1966) 384 U.S. 757, 767 [16 L.Ed.2d
908, 917, 86 S.Ct. 1826]
Mr. Justice Brandeis, whose views have inspired much of the 'right to
be let alone' philosophy, said in Olmstead v. United States.... 'The
makers of our Constitution ... sought to protect Americans in their
beliefs, their thoughts, their emotions and their sensations. They
conferred, as against the Government, the right to be let alone-the
most comprehensive of rights and the right most valued by civilized
man.'
Thor v. Superior Court (Andrews) (1993) 5 Cal.4th 725 ,

ARABIAN, J.
More than a century ago, the United States Supreme Court declared,
"No right is held more sacred, or is more carefully guarded, by the
common law, than the right of every individual to possession and
control of his own person, free from all restraint or interference of
others, unless by clear and unquestionable authority of law. ... 'The
right to one's person may be said to be a right of complete immunity:
to be let alone.' [Citation.]"
right to one's person may be said to be a right of complete immunity: to
be let alone.' [Citation.]" (Union Pacific Railway Co. v. Botsford (1891)

141 U.S. 250, 251 [35 L.Ed. 734, 737, 11 S.Ct. 1000].) Speaking for the
New York Court of Appeals, Justice Benjamin Cardozo echoed this
precept of personal autonomy in observing, "Every human being of adult
years and sound mind has a right to determine what shall be done with
his own body ...." (Schloendorff v. Society of New York Hospital (1914)
211 N.Y. 125 [105 N.E. 92, 93], overruled on other grounds in Bing v.
Thunig (1957) 2 N.Y.2d 656 [163 N.Y.S.2d 3, 143 N.E.2d 3].) And over
two decades ago, Justice Mosk reiterated the same principle for this
court: "[A] person of adult years and in sound mind has the right, in the
exercise of control over his body, to determine whether or not to
submit to lawful medical treatment." (Cobbs v. Grant (1972) 8 Cal.3d
229, 242 [104 Cal.Rptr. 505, 502 P.2d 1].) [5 Cal.4th 732] [4] The
common law has long recognized this principle: A physician who
performs any medical procedure without the patient's consent commits
a battery irrespective of the skill or care used. (Estrada v. Orwitz (1946)
75 Cal.App.2d 54, 57 [170 P.2d 43]; Valdez v. Percy (1939) 35 Cal.App.2d
485, 491 [96 P.2d 142]; Schloendorff v. Society of New York Hospital,
supra, 211 N.Y. 125 [105 N.E. at p. 93]; see Union Pacific Railway Co. v.
Botsford, supra, 141 U.S. at p. 252 [35 L.Ed.2d at pp. 737-738]; Mohr v.
Williams (1905) 95 Minn. 261 [104 N.W. 12, 14- 15], overruled on other
grounds in Genzel v. Halvorson (1957) 95 Minn. 261 [80 N.W.2d 854,
859]; Prosser on Torts (4th ed. 1971) § 18, pp. 104-106; Rest.2d Torts, §
49.) As a corollary, the law has evolved the doctrine of informed
consent. (See Cobbs v. Grant, supra, 8 Cal.3d at pp. 239-241.) "Under
this doctrine, 'the patient must have the capacity to reason and make
judgments, the decision must be made voluntarily and without
coercion, and the patient must have a clear understanding of the risks
and benefits of the proposed treatment alternatives or nontreatment,

along with a full understanding of the nature of the disease and the
prognosis.' [Citations.]"(Rasmussen v. Fleming, supra, 154 Ariz. 207
[741 P.2d at p. 683].) While the physician has the professional and
ethical responsibility to provide the medical evaluation upon which
informed consent is predicated, the patient still retains the sole
prerogative to make the subjective treatment decision based upon an
understanding of the circumstances. (In re Gardner, supra, 534 A.2d at
p. 951; In the Matter of Conroy (1985) 98 N.J. 321 [486 A.2d 1209, 1222,
48 A.L.R.4th 1].) Accordingly, the right to refuse medical [5 Cal.4th 736]
treatment is equally "basic and fundamental" and integral to the
concept of informed consent. fn. 6 (Bouvia, supra, 179 Cal.App.3d at p.
1137; Bartling, supra, 163 Cal.App.3d at p. 195; Cruzan v. Director,
Missouri Dept. of Health, supra, 497 U.S. at p. 277 [111 L.Ed.2d at p.
241]] (Cruzan); In re Gardner, supra, 534 A.2d at p. 951; Brophy, supra,
398 Mass. 417 [497 N.E.2d at p. 633]; In the Matter of Conroy, supra, 98
N.J. 321 [486 A.2d at p. 1222].) "The purpose underlying the doctrine of
informed consent is defeated somewhat if, after receiving all
information necessary to make an informed decision, the patient is
forced to choose only from alternative methods of treatment and
precluded from foregoing all treatment whatsoever." (Rasmussen v.
Fleming, supra, 154 Ariz. 207 [741 P.2d at p. 683].) "Obviously, if a
patient is powerless to decline medical treatment upon being properly
informed of its implications, the requirement of consent would be
meaningless." (McKay v. Bergstedt (1990) 106 Nev. 808 [801 P.2d 617,
621]; see Cal. Code Regs., tit. 22, § 70707, subd. (6) [under
administrative regulations patients have right to "[p]articipate actively
in decisions regarding medical care. To the extent permitted by law,
this includes the right to refuse treatment."].)

ARTICLES OF CONFEDERATION OF 1778 STATES:
"The style of this Confederacy shall be "The united States of America ".
ARTICLE XIII OF THE ARTICLES OF CONFEDERATION STATES :
Every State shall abide by the determinations of the United States in
Congress Assembled, on all questions which by this Confederation
are submitted to them. And the Articles of this Confederation shall be
inviobly observed by every State, and the Union shall be perpetual;
Nor shall any alteration at any time hereafter be made in any of them,
unless such alteration be agreed to in a congress of the United States,
and be afterwards confirmed by the legislatures of every state. "
FROM: FEDERALIST PAPERS NUMBER 40;

CREDITED TO: James Madison;
"To the People of the State of New York:

THE SECOND point to be examined is, whether the convention were authorized to frame
and propose this mixed Constitution. The powers of the convention ought, in strictness, to be
determined by an inspection of the commissions given to the members by their respective
constituents. As all of these, however, had reference, either to the recommendation from the
meeting at Annapolis, in September, 1786, or to that from Congress, in February, 1787, it
will be sufficient to recur to these particular acts. The act from Annapolis recommends the
"appointment of commissioners to take into consideration the situation of the United States;
to devise SUCH FURTHER PROVISIONS as shall appear to them necessary to render the
Constitution of the federal government ADEQUATE TO THE EXIGENCIES OF THE
UNION; and to report such an act for that purpose, to the United States in Congress
assembled, as when agreed to by them, and afterwards confirmed by the legislature of every
State, will effectually provide for the same."
"The recommendatory act of Congress is in the words following: "WHEREAS,
There is provision in the articles of Confederation and perpetual Union, for making
alterations therein, by the assent of a Congress of the United States, and of the
legislatures of the several States; and whereas experience hath evinced, that there
are defects in the present Confederation; as a mean to remedy which, several of
the States, and PARTICULARLY THE STATE OF NEW YORK, by express
instructions to their delegates in Congress, have suggested a convention for the
purposes expressed in the following resolution; and such convention appearing to
be the most probable mean of establishing in these States A FIRM NATIONAL
GOVERNMENT:
"Resolved, That in the opinion of Congress it is expedient, that on the second
Monday of May next a convention of delegates, who shall have been appointed by
the several States, be held at Philadelphia, for the sole and express purpose OF
REVISING THE ARTICLES OF CONFEDERATION, and reporting to Congress and
the several legislatures such ALTERATIONS AND PROVISIONS THEREIN, as shall,
when agreed to in Congress, and confirmed by the States, render the federal
Constitution ADEQUATE TO THE EXIGENCIES OF GOVERNMENT AND THE
PRESERVATION OF THE UNION."
"In one particular it is admitted that the convention have departed from the tenor of
their commission. Instead of reporting a plan requiring the confirmation OF THE
LEGISLATURES OF ALL THE STATES, they have reported a plan which is to be
confirmed by the PEOPLE, and may be carried into effect by NINE STATES ONLY.”
"But that the objectors may be disarmed of every pretext, it shall be granted for a
moment that the convention were neither authorized by their commission, nor
justified by circumstances in proposing a Constitution for their country: does it
follow that the Constitution ought, for that reason alone, to be rejected? "

Credited to James Madison;
"A list of the cases in which Congress have been betrayed, or forced by the
defects of the Confederation, into violations of their chartered authorities, would
not a little surprise those who have paid no attention to the subject; "

CREDITED TO; James Madison;
" Two questions of a very delicate nature present themselves on this occasion: 1.
On what principle the Confederation, which stands in the solemn form of a
compact among the States, can be superseded without the unanimous consent of
the parties to it? 2. What relation is to subsist between the nine or more States
ratifying the Constitution, and the remaining few who do not become parties to it?
The first question is answered at once by recurring to the absolute necessity of the case; to the
great principle of self-preservation; to the transcendent law of nature and of nature's God, which
declares that the safety and happiness of society are the objects at which all political institutions
aim, and to which all such institutions must be sacrificed. PERHAPS, also, an answer may be found
without searching beyond the principles of the compact itself. It has been heretofore noted among
the defects of the Confederation, that in many of the States it had received no higher sanction than
a mere legislative ratification. The principle of reciprocality seems to require that its obligation on
the other States should be reduced to the same standard. A compact between independent
sovereigns, founded on ordinary acts of legislative authority, can pretend to no
higher validity than a league or treaty between the parties. It is an established
doctrine on the subject of treaties, that all the articles are mutually conditions of
each other; that a breach of any one article is a breach of the whole treaty; and
that a breach, committed by either of the parties, absolves the others, and
authorizes them, if they please, to pronounce the compact violated and void. Should
it unhappily be necessary to appeal to these delicate truths for a justification for dispensing with
the consent of particular States to a dissolution of the federal pact, will not the complaining parties
find it a difficult task to answer the MULTIPLIED and IMPORTANT infractions with which
they may be confronted? The time has been when it was incumbent on us all to veil the ideas
which this paragraph exhibits. The scene is now changed, and with it the part which the same
motives dictate.
The second question is not less delicate; and the flattering prospect of its being
merely hypothetical forbids an overcurious discussion of it. It is one of those
cases which must be left to provide for itself. In general, it may be observed, that
although no political relation can subsist between the assenting and dissenting
States, yet the moral relations will remain uncancelled. The claims of justice, both
on one side and on the other, will be in force, and must be fulfilled; the rights of
humanity must in all cases be duly and mutually respected; whilst considerations
of a common interest, and, above all, the remembrance of the endearing scenes
which are past, and the anticipation of a speedy triumph over the obstacles to
reunion, will, it is hoped, not urge in vain MODERATION on one side, and
PRUDENCE on the other.
PUBLIUS.
FROM: CHISOLM EXECUTOR, VS GEORGIA, 2 DALL 419 (1793);
The King, accordingly, in England is called a corporation. 10 Co. 29. b.

So also, by a very respectable author (Sheppard, in his abridgement, 1
Vol. 431.) is the Parliament itself. In this extensive sense, not only each
State singly, but even the United States may without impropriety be
termed 'corporations.' I have, therefore, in contradistinction to this
large and indefinite [2 U.S. 419, 448] term, used the term 'subordinate
corporations,' meaning to refer to such only (as alone capable of the
slightest application, for the purpose of the objection) whose creation
and whose powers are limited by law. "By a State I mean, a complete
body of free persons united together for their common benefit, to enjoy
peaceably what is their own, and to do justice to others. It is an
artificial person. It has its affairs and its interests: It has its rules: It
has its rights: And it has its obligations. It may acquire property distinct
from that of its members: It may incur debts to be discharged out of the
public stock, not out of the private fortunes of individuals. It may be
bound by contracts; and for damages arising from the breach of those
contracts. In all our contemplations, however, concerning this [2 U.S.
419, 456] feigned and artificial person, we should never forget, that, in
truth and nature, those, who think and speak, and act, are men”
FROM: MYERS VS U.S. (1926) 272 US 52;

"In any rational search for answer to the questions arising upon this
record, it is important not to forget- That this is a government of limited
powers, definitely enumerated and granted by a written Constitution.
That the Constitution must be interpreted by attributing to its words the
meaning which they bore at the time of its adoption, and in view of
commonly-accepted canons of construction, its history, early and long-
continued practices under it, and relevant opinions of this court.
"..."Checks and balances were established in order that this should be
'a government of laws and not of men. "
“State Law Determines questions of when a corporation

exists and what the terms of its existence are.” IN RE
HEARK CORP. (1982)
Bkrtcy., 18 B.R. 557, at page 558;
“The United States has the burden of proving that Federal

Jurisdiction Exists.” United States vs King, 781 F. Supp. 315
(1991) at page 316.” “Unless and until the United States has
accepted Jurisdiction over lands hereafter to be acquired as
aforesaid it shall be conclusively presumed that no such
Jurisdiction has been accepted.” U.S.CODE, TITLE 40, Section
255; (Last Sentence) “Whether the United States has acquired
exclusive Jurisdiction over a Federal Enclave is a Federal Question
DEKALB COUNTY,GEORGIA VS HENRY C. BECK COMPANY, 382 F.
2d 992 (1967), at page 995, citing PAUL VS U.S., 371 US 245;
S. CT. 426 (1963); AND ADAMS VS US, U.S. 312, 63 S. CT. 1122; 87
L. Ed. 1421 (1943)”
“The Constitution is a limited Grant of Power. Nothing is to be

presumed but what is Expressed.” US Supreme Court in 1804
Ruling in the Case of: _____________________________________________
“Congress can not make any Law in Violation of the Prohibitions

of the Constitution.” US Supreme Court in the Case of DE Lima vs
Bidwell, 182 U.S. 1041 (1900) at page 1043, along with numerous
other cases cited therein;
CALIFORNIA CONSTITUTION OF 1879, ARTICLE III STATES:
"THE STATE OF CALIFORNIA IS AN INSEPARABLE PART OF THE

UNITED STATES OF AMERICA AND THE UNITED STATES
CONSTITUTION IS THE SUPREME LAW OF THE LAND."
The California Constitution is "the supreme law of the state" to which all statutes
must conform. (Carter v. Seaboard Finance Co. (1949)33 Cal. 2d 564, 579
Therefore, "[a] statute inconsistent with the California Constitution is, of course,
void."
Hotel Employees & Restaurant Employees Internat. Union v. Davis (1999)21 Cal.
4Th 585, 602; see also People v. Navarro (1972)7 Cal. 3d 248, 260 [40 Cal.4th
964] ["Wherever statutes conflict with constitutional provisions, the latter must
prevail."].) More particularly, a statute that broadly and directly impinges on the
right of privacy guaranteed by the state Constitution is void unless supported by a
compelling governmental interest that cannot be achieved by less restrictive
means. (American Academy of Pediatrics v. Lungren (1997) 16 Cal. 4Th 307,
348(lead opn. of George, C. J.).)
Because a statute is subordinate to, and must be in conformity with, the state
Constitution, a statutory privilege cannot of its own force defeat a right of action
that is required or guaranteed by the state Constitution. In determining the scope
of the constitutional privacy right, however, and whether that right exists in a
particular situation, a court may consider traditional statutory privileges. I agree
with the majority that the privacy right guaranteed by the state Constitution does
not extend to situations covered by the litigation privilege.
Equal Protection Analysis
“Cal Constitution Art. IV Section 16, Subdivision (a), providing that all laws of a
general nature must have uniform operation, will not Tolerate a criminal law so
lacking in definition that each defendant is left to the vagaries of individual
Judges and Juries .”
People vs Soto (1985) 2nd dist. 171 C.A. 3d 1158.
B. The Tort of Abuse of Process.
[5] The common law tort of abuse of process arises when one uses the court's
process for a purpose other than that for which the process was designed. (5
Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 459, [37 Cal.4th 1057] p.
547; see also Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1463.) It has been
"interpreted broadly to encompass the entire range of 'procedures' incident to
litigation." (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 104, fn. 4
(Barquis).)
"[T]he essence of the tort [is] . . . misuse of the power of the court; it is an act
done in the name of the court and under its authority for the purpose of
perpetrating an injustice." (Meadows v. Bakersfield S. & L. Assn. (1967)250
Cal.App.2d 749, 753.) To succeed in an action for abuse of process, a litigant
must establish that the defendant (1) contemplated an ulterior motive in using
the process, and (2) committed a willful act in the use of the process not proper
in the regular conduct of the proceedings. (Oren Royal Oaks Venture v.
Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1168 (Oren
Royal Oaks Venture).)
FROM: WEST VIRGINIA STATE BOARD OF EDUCATION VS
BARNETTE (1943) 319 US 624;
"The very purpose of a Bill of Rights was to withdraw certain subjects
from the vicissitudes of political controversy, to place them beyond the
reach of majorities and officials and to establish them as legal principles
to be applied by the courts. One's right to life, liberty, and property, to
free speech, a free press, freedom of worship and assembly, and other
fundamental rights may not be submitted to vote; they depend on the
outcome of no elections."
FROM: GRISWALD VS CONNECTICUT, 381 US 479 (1965);

The right of freedom of speech and press includes not only the right to
utter or to print, but the right to distribute, the right to receive, the right
to read (Martin v. Struthers, 319 U.S. 141, 143 and freedom of inquiry,
freedom of thought, and freedom to teach (see Wieman v. Updegraff, 344
U.S. 183, 195
FROM:
NEW YORK v. UNITED STATES, 505 U.S. 144 (1992) ;
"The constitutional authority of Congress cannot be expanded by the

"consent" of the governmental unit whose domain is thereby narrowed,
whether that unit is the Executive Branch or the States. State officials
thus cannot consent to the enlargement of the powers of Congress
beyond those enumerated in the Constitution." "A departure from the
Constitution's plan for the intergovernmental allocation of authority
cannot be ratified by the "consent" of state officials, since the
Constitution protects state sovereignty for the benefit of individuals,
not States or their governments, and since the officials' interests may
not coincide with the Constitution's allocation."
" The Constitution does not protect the sovereignty of States for the
benefit of the States or state governments as abstract political entities,
or even for the benefit of the public officials governing the States. To
the contrary, the Constitution divides authority between federal and
state governments for the protection of individuals. "
"Where Congress exceeds its authority relative to the States, therefore,
the departure from the constitutional plan cannot be ratified by the
"consent" of state officials.""State officials thus cannot consent to the
enlargement of the powers of Congress beyond those enumerated in
the Constitution. "
FROM: REID v. COVERT, 354 U.S. 1 (1957) 354 U.S. 1;
"The United States is entirely [354 U.S.1,6] a creature of the Constitution.3
Its power and authority have no other source. It can only act in
accordance with all the limitations imposed by the Constitution. " "
Article VI, the Supremacy Clause of the Constitution, declares:
"This Constitution, and the Laws of the United States which shall
be made in Pursuance thereof; and all Treaties made, or which
shall be made, under the Authority of the United States, shall be
the supreme Law of the Land; . . . . "
"There is nothing in this language which intimates that treaties and
laws enacted pursuant to them do not have to comply with the
provisions of the Constitution. Nor is there anything in the debates
which accompanied the drafting and ratification of the Constitution
which even suggests such a result. These debates as well as the
history that surrounds the adoption of the treaty provision in Article VI
make it clear that the reason treaties were not limited to those made in
"pursuance" of the Constitution was so that agreements made by the
United States under the Articles of Confederation, including the
important peace treaties which concluded the Revolutionary [354 U.S. 1,
17] War, would remain in effect. 31 It would be manifestly contrary to
the objectives of those who created the Constitution, as well as those
who were responsible for the Bill of Rights - let alone alien to our entire
constitutional history and tradition - to construe Article VI as permitting
the United States to exercise power under an international agreement
without observing constitutional prohibitions. 32 In effect, such
construction would permit amendment of that document in a manner
not sanctioned by Article V. The prohibitions of the Constitution were
designed to apply to all branches of the National Government and they
cannot be nullified by the Executive or by the Executive and the Senate
combined. "
"There is nothing new or unique about what we say here. This Court
has regularly and uniformly recognized the supremacy of the
Constitution
over a treaty. 33 For example, in Geofroy v. Riggs, 133 U.S. 258,
267(1798) it declared:
"The treaty power, as expressed in the Constitution, is in terms
unlimited except by those restraints which are found in that instrument
against the action of the government or of its departments, and those
arising from the nature of the government itself and of that of the
States. It would not be contended that it extends so far as to authorize
what the Constitution forbids, or a change in the character of the [354
U.S. 1, 18] government or in that of one of the States, or a cession of any
portion of the territory of the latter, without its consent."
"This Court has also repeatedly taken the position that an Act of
Congress, which must comply with the Constitution, is on a full parity
with a treaty, and that when a statute which is subsequent in time is
inconsistent with a treaty, the statute to the extent of conflict renders
the treaty null. 34 It would be completely anomalous to say that a treaty
need not comply with the Constitution when such an agreement can be
overridden by a statute that must conform to that instrument.
TAX LAW
(add quotes from Patten vs Brady definition of Excise Tax & quotes from
federal cases saying you can arrange your personal affairs as to lawfully avoid
taxes ; add regulations re California taxes based on Federal income tax law; US
vs Butler quotes, quotes from Congressional Record of 1933 the new currency
A loan from the Creditor Class to the debtor class;
Is this why the California State Taxing Agency is Called : the “Franchise Tax Board”:
31 U.S.C. § 3124 : “Exemption from Taxation”
“(a) Stocks and obligations of the United States Government are exempt from taxation by State
or political subdivision of a State. The exemption applies to each form of taxation that would
require the obligation, the interest on the obligation, or both, to be considered in computing a
tax, except-(1)a nondiscriminatory franchise tax or another non property tax instead of a
franchise tax, imposed on a corporation; and (2) an estate or inheritance tax.
(b) The tax status of interest on obligations and dividends, earnings, or other income from
evidences of ownership issued by the Government or an agency and the tax treatment of gain
and loss from the disposition of those obligations and evidences of ownership is decided under
the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.). An obligation that the Federal
Housing Administration had agreed, under a contract made before March 1, 1941, to issue at a
future date, has the tax exemption privileges provided by the authorizing law at the time of the
contract. This subsection does not apply to obligations and evidences of ownership issued by the
District of Columbia, a territory or possession of the United States, or a department, agency,
instrumentality, or political subdivision of the District, territory, or possession.”
COMMISSIONER OF INTERNAL REVENUE v. WILCOX, 327 U.S. 404 (1946)COMMISSIONER

OF INTERNAL REVENUE v. WILCOX et al. No. 163. Argued Jan. 8, 1946.Decided Feb. 25,1946.
“Section 22(a) is cast in broad, sweeping terms. It 'indicates the purpose of Congress to use
the full measure of its taxing power within those definable categories.' Helvering v. Clifford,
supra, 309 U.S. 334 , 60 S.Ct. 556. The very essence of taxable income, as that concept is
used in Section 22(a), is the accrual of some gain, profit or benefit to the taxpayer.
This requirement of gain, of course, must be read in its statutory context. Not every
benefit received by a taxpayer from his labor or investment necessarily renders him
taxable. Nor is mere dominion over money or property decisive in all cases. In fact,
no single conclusive criterion has yet been found to determine in all situations what
is a sufficient gain to support the imposition of an income tax. No more can be said
in general than that all relevant facts and circumstances must be considered. See
Magill, Taxable Income (1945). [327 U.S. 404, 408] For present purposes, however,
it is enough to note that a taxable gain is conditioned upon (1) the presence of a
claim of right to the alleged gain and (2) the absence of a definite, unconditional
obligation to repay or return that which would otherwise constitute a gain. Without
some bona fide legal or equitable claim, even though it be contingent or contested in
nature, the taxpayer cannot be said to have received any gain or profit within the
reach of Section 22(a). See North American Oil v. Burnet, 286 U.S. 417, 424 , 52
S.Ct. 613, 615. Nor can taxable income accrue from the mere receipt of property or
money which one is obliged to return or repay to the rightful owner, as in the case of
a loan or credit. Taxable income may arise, to be sure, from the use or in connection
with the use of such property. Thus if the taxpayer uses the property himself so as to
secure a gain or profit therefrom, he may be taxable to that extent. And if the
unconditional indebtedness is cancelled or retired taxable income may adhere, under
certain circumstances, to the taxpayer. But apart from such factors the bare receipt
of property or money wholly belonging to another lacks the essential characteristics
of a gain or profit within the meaning of Section 22(a).”
CR-1-93-1
Case Law
United States of America v. Lloyd Long
Tennessee Man Freed on Tax Charges

In an amazing court case involving the "income tax," a Chattanooga jury agreed with the
argument by the defendant that the "income tax" is actually an excise tax and only applie
to certain classes of people. Nationally prominent attorney Lowell Becraft of Huntsville,
Alabama, assisted by attorney Russell J. Leonard of Sewanee, Tennessee, who defended
Lloyd R. Long of Decherd, Tennessee, who was charged by the Internal Revenue Service
with "willful failure to file income tax returns" for the years 1989 and 1990.
In presenting the case for the IRS, assistant U.S. Attorney Curtis Collier, assisted by Special
Agent Michael Geasley of the IRS, declared that Mr. Long had gross income in excess of
$49,000 for each of the years 1989 and 1990, and that he had "willfully" failed to file income
tax returns for those years as "required by law."
The defense admitted that Mr. Long did in fact have income in excess of $49,000 for each of
the years in question and that he did not file a return. He then proceeded to prove to the jury
beyond a reasonable doubt that he was not "liable" for an income tax, nor was he "required
by law" to file.
Defense testimony presented a case titled Brushaber v. Union Pacific Railroad, 240 U.S. 1,
wherein it was the unanimous decision of the U.S. Supreme Court that the Sixteenth
Amendment did not give Congress any new power to tax any new subjects. It merely tried to
simplify the way in which the tax was imposed. It also showed that the income tax was in fact
an excise tax on corporate privileges and privileged occupations. The defense then brought
out a case entitled Flint v. Stone Tracy, 220 U.S. 107, wherein an excise tax was defined as a
tax being laid upon the manufacture, sale and consumption of commodities within the
country upon licenses to pursue certain occupations and upon corporate privileges.
Mr. Long's attorneys also brought out a case entitled Simms v. Arehns, cite omitted, wherein
the court ruled that the income tax was neither a property tax nor a tax upon occupations of
common right, but was an excise tax. The defense then brought out a case entitled Redfield v.
Fisher, cite omitted, wherein the court ruled that the individual, unlike the corporation,
cannot be taxed for the mere privilege of existing but that the individual's right to live and
own property was a natural right upon which an excise tax cannot be imposed. Defense also
pointed to a couple of studies done by the Congressional Research Service that shows the
income tax is an excise tax. Next, defense pointed out that in the Tennessee Supreme Court
Case Jack Cole v. Commissioner, cite omitted, the court ruled that citizens are entitled by
right to income or earnings and that could not be taxed as a privilege. And, in another
Tennessee Supreme Court Case, Corn v. Fort, cite omitted, the court ruled that individuals
have a right to combine their activities as partnerships and that this is a natural right,
independent and antecedent of government. The prosecution did not challenge or attempt to
refute any of the cases cited or the conclusions of the courts. Defense brought out in
testimony the fact that nowhere in the Internal Revenue Code was anyone actually made
liable for the income tax. They showed that in the IRS' own privacy act notice only three
sections were cited and that none of these sections made anyone liable for the tax. They also
proved that this was not an oversight by showing that the alcohol tax was worded so clearly
that no one could misinterpret who was made liable for the alcohol tax. [Editorial note: Why
do you think the Infernal Revenue Code is over 9,000 pages? How many decent, desperate
Americans can (1) afford to buy Title 26 - both volumes? And (2) Once they open up this
labrinyth of deceptive mish-mash, they give up, take a gun to their head and pull the trigger.
Yes, this has happened too many times. Keep passing more and more and more laws so no
one can find the one sentence which makes us liable and in this case, it doesn't exist!]
Prosecution did not challenge or attempt to refute this point, nor were they able to show a
statute that made anyone liable for the income tax. Defense then presented the mission
statement of the IRS stating that the income tax relied upon "voluntary compliance" and a
statement from the head of alcohol and tobacco tax division of the IRS which in essence
showed that the income tax is 100% voluntary, as opposed to the alcohol tax which is 100%
enforced. [Editorial note: I have a copy of the February 3, 1953 hearings before A
Subcommittee Of The Committee On Ways and Means, House of Representatives, Eighty-
Third Congress: Administration of the Internal Revenue Laws, Part A, page 13 and I quote
Dwight D. Avis, Head of Alcohol, Tobacco Tax Division:
"Let me point this out now: Your income tax is 100 percent VOLUNTARY tax and your
liquor tax is 100 enforced tax. Now, the situation is as different as day and night.
Consequently, your same rules just will not apply and therefore the alcohol and tobacco tax
has been handled here in this reorganization a little differently because of the very nature of
it, than the rest of the over all tax problem." Try not filing and you will end up just like Mr.
Long because 90% of the judges in this country at the federal level are rotten to the core.
You think they can't read the law? Please. Mr. Long stated that in 1988 he knew that the
income tax was in fact an excise tax and that he was not enjoying any corporate privileges
nor engaged in any privileged occupation, that income or earnings from the exercise of
common right could not be taxed as an excise or otherwise, that nowhere in the IR Code was
he made liable for the tax and that the income tax was voluntary. But, Mr. Long was still so
intimidated by the IRS that he filed and paid his voluntary assessment. He then began a
series of letters to the IRS explaining that he had no licenses or privileges issued to him by
the federal government. He asked for direct answers to simple questions such as "Am I
required to file federal income tax returns?" and "Am I liable for federal income taxes?"
The IRS never gave a direct answer to any of his questions. Instead, they inferred and
insinuated and extrapolated and beat around the bush and generally avoided answering. As
a result, Mr. Long testified that he decided to stop "volunteering." The IRS brought two
"expert" witnesses. Both were actually IRS employees who had received training as
professional witnesses. Upon cross-examination by Mr. Becraft, one witness stated that a
secret code known only to the IRS and encoded on Mr. Long's permanent record [Note: This
is the IMF, Individual Master File], showed that the IRS knew he was not required to mail or
file a return. The witness made every effort to avoid this admission, to the point that she was
beginning to frustrate the jury. The other witness, upon cross-examination by Mr. Becraft,
gave testimony that conflicted with the privacy act notice. The government also attempted to
insinuate "guilt by association" in that they claimed Mr. Long had known and replied upon
persons of questionable character. The argued that the writers of some of the books he read
and people he knew had been convicted of tax-related charges in the past and were, in fact,
criminals. Mr. Long responded that just because a person had been convicted of a crime by a
court, this did not invalidate everything he said. To illustrate, he pointed out that the Apostle
Paul was a murderer but that by the Grace of God, he became the greatest of the Apostles.
He added that he, Mr. Long, did not rely on anything that he did not personally check out
thoroughly. In summation, Mr. Becraft reminded the jury that Galileo was imprisoned for
holding a belief that conflicted with what everyone else knew as a "fact" and that Columbus,
acting on a belief which conflicted with what everyone else knew was a "fact," discovered
something no one else thought existed. The jury agreed with the defense. By finding Mr.
Long "NOT GUILTY" on all counts, they have ventured into hitherto uncharted territory in
their monumental decision. A Chattanooga TV station quoted a government spokesman as
saying that this case will change the way the IRS will handle such cases in the future. They
indicated that they (the government) will be less likely to prosecute if a jury wasn't going to
decide in their favor. Mr. Long's spirit was best expressed when he was asked for a final
statement by a reporter as he was leaving the courtroom. His words, "Glory be to God."
**End of article. This case is CR-1-93-1, United States of America v. Lloyd Long filed in the
U.S. District Court, Eastern District of Tennessee and was decided on October 15, 1993.
Naturally, one heard not a peep from Gunga Din Dan Blather, Tom Brokenjaw or any of the
other "news" mouthpieces for the government.
WORDS OF US SUPREME COURT JUSTICE BRANDEIS FROM HIS

DISENTING OPINION IN THE CASE OF OLMSTEAD v. U.S., 277 U.S. 438
(1928) 277 U.S. 438 OLMSTEAD et al. v. UNITED STATES. No. 493. GREEN
et al. V SAME No. 532. McINNIS v. SAME. No. 533. Argued Feb. 20 and 21,
1928. Decided June 4, 1928.
The government makes no attempt to defend the methods

employed by its officers. Indeed, it concedes [277 U.S. 438, 472] that, if wire tapping can
be deemed a search and seizure within the Fourth Amendment, such wire tapping as
was practiced in the case at bar was an unreasonable search and seizure, and that the
evidence thus obtained was inadmissible. But it relies on the language of the
amendment, and it claims that the protection given thereby cannot properly be held
to include a telephone conversation.
'We must never forget,' said Mr. Chief Justice Marshall in McCulloch v. Maryland, 4
Wheat. 316, 407 4 L. Ed. 579, 'that it is a Constitution we are expounding.' Since then
this court has repeatedly sustained the exercise of power by Congress, under various
clauses of that instrument, over objects of which the fathers could not have dreamed.
See Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1 , 9; Northern
Pacific Ry. Co. v. North Dakota, 250 U.S. 135 , 39 S. Ct. 502; Dakota Central Telephone
Co. v. South Dakota, 250 U.S. 163 , 39 S. Ct. 507, 4 A. L. R. 1623; Brooks v. United
States, 267 U.S. 432 , 45 S. Ct. 345, 37 A. L. R. 1407. We have likewise held that general
limitations on the powers of government, like those embodied in the due process clauses
of the Fifth and Fourteenth Amendments, do not forbid the United States or the states
from meeting modern conditions by regulations which 'a century ago, or even half a
century ago, probably would have been rejected as arbitrary and oppressive.' Village of
Euclid v. Ambler Realty Co., 272 U.S. 365, 387 , 47 S. Ct. 114, 118 (71 L. Ed. 303); Buck
v. Bell, 274 U.S. 200 , 47 S. Ct. 584, 71 L. 1000. Clauses guaranteeing to the individual
protection against specific abuses of power, must have a similar capacity of adaptation to
a changing world. It was with reference to such a clause that this court said in Weems v.
United States, 217 U.S. 349, 373 , 30 S. Ct. 544, 551 (54 L. Ed. 793, 19 Ann. Cas. 705):
'Legislation, both statutory and constitutional, is enacted, it is true, from an experience
of evils, but its general language should not, therefore, be necessarily confined to the
form that evil had theretofore taken. Time works changes, brings into existence new
conditions [277 U.S. 438, 473] and purposes. Therefore a principal to be vital must be
capable of wider application than the mischief which gave it birth. This is peculiarly true
of Constitutions. They are not ephemeral enactments, designed to meet passing
occasions. They are, to use the words of Chief Justice Marshall, 'designed to approach
immortality as nearly as human institutions can approach it.' The future is their care
and provision for events of good and bad tendencies of which no prophecy can be made.
In the application of a Constitution, therefore, our contemplation cannot be only of what
has been but of what may be. Under any other rule a Constitution would indeed be as
easy of application as it would be deficient in efficacy and power. Its general principles
would have little value and be converted by precedent into impotent and lifeless
formulas. Rights declared in words might be lost in reality.'
When the Fourth and Fifth Amendments were adopted, 'the form that evil had theretofore
taken' had been necessarily simple. Force and violence were then the only means known to
man by which a government could directly effect self-incrimination. It could compel the
individual to testify-a compulsion effected, if need be, by torture. It could secure possession of
his papers and other articles incident to his private life-a seizure effected, if need be, by
breaking and entry. Protection against such invasion of 'the sanctities of a man's home and the
privacies of life' was provided in the Fourth and Fifth Amendments by specific language. Boyd
v. United States, 116 U.S. 616, 630 , 6 S. Ct. 524. But 'time works changes, brings into existence
new conditions and purposes.' Subtler and more far-reaching means of invading privacy have
become available to the government. Discovery and invention have made it possible for the
government, by means far more effective than stretching upon the rack, to obtain disclosure in
court of what is whispered in the closet. [277 U.S. 438, 474] Moreover, 'in the application of a
Constitution, our contemplation cannot be only of what has been, but of what may be.' The
progress of science in furnishing the government with means of espionage is not likely to stop
with wire tapping. Ways may some day be developed by which the government, without
removing papers from secret drawers, can reproduce them in court, and by which it will be
enabled to expose to a jury the most intimate occurrences of the home. Advances in the psychic
and related sciences may bring means of exploring unexpressed beliefs, thoughts and emotions.
'That places the liberty of every man in the hands of every petty officer' was said by James Otis
of much lesser intrusions than these. 1 To Lord Camden a far slighter intrusion seemed
'subversive of all the comforts of society.' 2 Can it be that the Constitution affords no protection
against such invasions of individual security?
A sufficient answer is found in Boyd v. United States, 116 U.S. 616 , 627-630, 6 S. Ct. 524, a
case that will be remembered as long as civil liberty lives in the United States. This court there
reviewed the history that lay behind the Fourth and Fifth Amendments. We said with reference
to Lord Camden's judgment in Entick v. Carrington, 19 Howell's State Trials, 1030:
'The principles laid down in this opinion affect the very essence of constitutional liberty
and security. They reach farther than the concrete form of the case there before the
court, with its adventitious circumstances; they apply to all invasions on the part of the
government and its employe of the sanctities of a man's home and the privacies of life. It
is not the breaking of his doors, and the rummaging of his drawers, that constitutes the
essence of the offense; but it is the invasion of his indefeasible right of personal se- [277
U.S. 438, 475] curity, personal liberty and private property, where that right has never
been forfeited by his conviction of some public offense-it is the invasion of this sacred
right which underlies and constitutes the essence of Lord Camden's judgment. Breaking
into a house and opening boxes and drawers are circumstances of aggravation; but any
forcible and compulsory extortion of a man's own testimony or of his private papers to
be used as evidence of a crime or to forfeit his goods, is within the condemnation of that
judgment. In this regard the Fourth and Fifth Amendments run almost into each
other.'3
In Ex parte Jackson, 96 U.S. 727 , it was held that a sealed letter intrusted to the mail is
protected by the amendments. The mail is a public service furnished by the government. The
telephone is a public service furnished by its authority. There is, in essence, no difference
between the sealed letter and the private telephone message. As Judge Rudkin said below:
'True, the one is visible, the other invisible; the one is tangible, the other intangible; the one is
sealed, and the other unsealed; but these are distinctions without a difference.'
other.'3
'True, the one is visible, the other invisible; the one is tangible, the other intangible; the
one is sealed, and the other unsealed; but these are distinctions without a difference.'
The evil incident to invasion of the privacy of the telephone is far greater than that involved in
tampering with the mails. Whenever a telephone line is tapped, the privacy of the persons at
both ends of the line is invaded, and all con- [277 U.S. 438, 476] versations between them
upon any subject, and although proper, confidential, and privileged, may be overheard.
Moreover, the tapping of one man's telephone line involves the tapping of the telephone of
every other person whom he may call, or who may call him. As a means of espionage, writs of
assistance and general warrants are but puny instruments of tyranny and oppression when
compared with wire tapping.
Time and again this court, in giving effect to the principle underlying the Fourth Amendment,
has refused to place an unduly literal construction upon it. This was notably illustrated in the
Boyd Case itself. Taking language in its ordinary meaning, there is no 'search' or 'seizure'
when a defendant is required to produce a document in the orderly process of a court's
procedure. 'The right of the people of be secure in their persons, houses, papers, and effects,
against unreasonable searches and seizures,' would not be violated, under any ordinary
construction of language, by compelling obedience to a subpoena. But this court holds the
evidence inadmissible simply because the information leading to the issue of the subpoena has
been unlawfully secured. Silverthorne Lumber Co. v. United States, 251 U.S. 385 , 40 S. Ct.
182. Literally, there is no 'search' or 'seizure' when a friendly visitor abstracts papers from an
office; yet we held in Gouled v. United States, 255 U.S. 298 , 41 S. Ct. 261, that evidence so
obtained could not be used. No court which looked at the words of the amendment rather than
at its underlying purpose would hold, as this court did in Ex parte Jackson, 96 U.S. 727 , 733,
that its protection extended to letters in the mails. The provision against self-incrimination in
the Fifth Amendment has been given an equally broad construction. The language is:
'No person ... shall be compelled in any criminal case to be a witness against himself.'
Yet we have held not only that the [277 U.S. 438, 477] protection of the amendment extends to
a witness before a grand jury, although he has not been charged with crime (Counselman v.
Hitchcock, 142 U.S. 547, 562 , 586 S., 12 S. Ct. 195), but that:
'It applies alike to civil and criminal proceedings, wherever the answer might tend to
subject to criminal responsibility him who gives it. The privilege protects a mere witness
as fully as it does one who is also a party defendant.' McCarthy v. Arndstein, 266 U.S.
34, 40 45 S. Ct. 16, 17 (69 L. Ed. 158).
The narrow language of the Amendment has been consistently construed in the light of its
object, 'to insure that a person should not be compelled, when acting as a witness in any
investigation, to give testimony which might tend to show that he himself had committed a
crime. The privilege is limited to criminal matters, but it is as broad as the mischief against
which it seeks to guard.' Counselman v. Hitchcock, supra, page 562 (12 S. Ct. 198).
Decisions of this court applying the principle of the Boyd Case have settled these things.
Unjustified search and seizure violates the Fourth Amendment, whatever the character of the
paper;4 whether the paper when taken by the federal officers was in the home,5 in an office,6
or elsewhere;7 whether the taking was effected by force,8 by [277 U.S. 438, 478] fraud,9 or in
the orderly process of a court's procedure. 10 From these decisions, it follows necessarily that
the amendment is violated by the officer's reading the paper without a physical seizure, without
his even touching it, and that use, in any criminal proceeding, of the contents of the paper so
examined-as where they are testified to by a federal officer who thus saw the document or
where, through knowledge so obtained, a copy has been procured elsewhere11-any such use
constitutes a violation of the Fifth Amendment.
The protection guaranteed by the amendments is much broader in scope. The makers of our
Constitution undertook to secure conditions favorable to the pursuit of happiness. They
recognized the significance of man's spiritual nature, of his feelings and of his intellect. They
knew that only a part of the pain, pleasure and satisfactions of life are to be found in material
things. They sought to protect Americans in their beliefs, their thoughts, their emotions and
their sensations. They conferred, as against the government, the right to be let alone-the most
comprehensive of rights and the right most valued by civilized men. To protect, that right, every
unjustifiable intrusion by the government upon the privacy of the individual, whatever the
means employed, must be deemed a violation of the Fourth Amendment. And the use, as
evidence [277 U.S. 438, 479] in a criminal proceeding,of facts ascertained by such intrusion
must be deemed a violation of the Fifth.
Applying to the Fourth and Fifth Amendments the established rule of construction, the
defendants' objections to the evidence obtained by wire tapping must, in my opinion, be
sustained. It is, of course, immaterial where the physical connection with the telephone wires
leading into the defendants' premises was made. And it is also immaterial that the intrusion was
in aid of law enforcement. Experience should teach us to be most on our guard to protect liberty
when the government's purposes are beneficent. Men born to freedom are naturally alert to
repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in
insidious encroachment by men of zeal, well-meaning but without understanding. 12
Independently of the constitutional question, I am of opinion that the judgment should be
reversed. By the laws of Washington, wire tapping is a crime. 13 Pierce's [277 U.S. 438, 480]
Code 1921, 8976(18). To prove its case, the government was obliged to lay bare the crimes
committed by its officers on its behalf. A federal court should not permit such a prosecution to
continue. Compare Harkin v. Brundage (No. 117) 276 U.S. 36 , 48 S. Ct. 268, decided February
20, 1928
[277 U.S. 438, 481] The situation in the case at bar differs widely from that presented in
Burdeau v. McDowell, 256 U.S. 465 , 41 S. Ct. 574, 13 A. L. R. 1159. There only a single lot of
papers was involved. They had been obtained by a private detective while acting on behalf of a
private party, without the knowledge of any federal official, long before any one had thought of
instituting a [277 U.S. 438, 482] federal prosecution. Here the evidence obtained by crime was
obtained at the government's expense, by its officers, while acting on its behalf; the officers who
committed these crimes are the same officers who were charged with the enforcement of the
Prohibition Act; the crimes of these officers were committed for the purpose of securing
evidence with which to obtain an indictment and to secure a conviction. The evidence so
obtained constitutes the warp and woof of the government's case. The aggregate of the
government evidence occupies 306 pages of the printed record. More than 210 of them are filled
by recitals of the details of the wire tapping and of facts ascertained thereby. 14 There is
literally no other evidence of guilt on the part of some of the defendants except that illegally
obtained by these officers. As to nearly all the defendants (except those who admitted guilt), the
evidence relied upon to secure a conviction consisted mainly of that which these officers had so
obtained by violating the state law. As Judge Rudkin said below (19 F.(2d) 842):
'Here we are concerned with neither eavesdroppers nor thieves. Nor are we concerned
with the acts of private individuals. ... We are concerned only with the acts of federal
agents, whose powers are limited and controlled by the Constitution of the United
States.'
The Eighteenth Amendment has not in terms empowered Congress to authorize any one to
violate the criminal laws of a state. And Congress has never purported to do so. Compare
Maryland v. Soper, 270 U.S. 9 , 46 S. Ct. 185. The terms of appointment of federal prohibition
agents do not purport to confer upon them authority to violate any criminal law. Their superior
officer, the Secretary of the Treasury, has not instructed them to commit [277 U.S. 438, 483]
crime on behalf of the United States. It may be assumed that the Attorney General of the United
States did not give any such instruction. 15
When these unlawful acts were committed they were crimes only of the officers individually.
The government was innocent, in legal contemplation; for no federal official is authorized to
commit a crime on its behalf. When the government, having full knowledge, sought, through
the Department of Justice, to avail itself of the fruits of these acts in order to accomplish its own
ends, it assumed moral responsibility for the officers' crimes. Compare the Paquete Habana,
189 U.S. 453, 465 , 23 S. Ct. 593; O'Reilly de Camara v. Brooke, 209 U.S. 45, 52 , 28 S. Ct. 439;
Dodge v. United States, 272 U.S. 530, 532 , 47 S. Ct. 191; Gambino v. United States, 275 U.S.
310 , 48 S. Ct. 137, and if this court should permit the government, by means of its officers'
crimes, to effect its purpose of punishing the defendants, there would seem to be present all the
elements of a ratification. If so, the government itself would become a lawbreaker.
Will this court, by sustaining the judgment below, sanction such conduct on the part of the
executive? The governing principle has long been settled. It is that a court will not redress a
wrong when he who invokes its aid has unclean hands. 16 The maxim of unclean hands comes
[277 U.S. 438, 484] from courts of equity. 17 But the principle prevails also in courts of law.
Its common application is in civil actions between private parties. Where the government is the
actor, the reasons for applying it are even more persuasive. Where the remedies invoked are
those of the criminal law, the reasons are compelling. 18
The door of a court is not barred because the plaintiff has committed a crime. The confirmed
criminal is as much entitled to redress as his most virtuous fellow citizen; no record of crime,
however long, makes one an outlaw. The court's aid is denied only when he who seeks it has
violated the law in connection with the very transaction as to which he seeks legal redress. 19
Then aid is denied despite the defendant's wrong. It is denied in order to maintain respect for
law; in order to promote confidence in the administration of justice; in order to preserve the
judicial process from contamination. The rule is one, not of action, but of inaction. It is
sometimes [277 U.S. 438, 485] spoken of as a rule of substantive law. But it extends to matters
of procedure as well. 20 A defense may be waived. It is waived when not pleaded. But the
objection that the plaintiff comes with unclean hands will be taken by the court itself. 21 It will
be taken despite the wish to the contrary of all the parties to the litigation. The court protects
itself. Decency, security, and liberty alike demand that government officials shall
be subjected to the same rules of conduct that are commands to the citizen. In a
government of laws, existence of the government will be imperiled if it fails to
observe the law scrupulously. Our government is the potent, the omnipresent
teacher. For good or for ill, it teaches the whole people by its example. Crime is
contagious. If the government becomes a lawbreaker, it breeds contempt for law;
it invites every man to become a law unto himself; it invites anarchy. To declare
that in the administration of the criminal law the end justifies the means-to
declare that the government may commit crimes in order to secure the conviction
of a private criminal-would bring terrible retribution. Against that pernicious
doctrine this court should resolutely set its face.”
"The wisdom of the legislation is not at issue in [27 Cal.3d 893] analyzing its
constitutionality, and neither the availability of less drastic remedial alternatives
nor the legislative failure to solve all related ills at once will invalidate a
statute."Hale v. Morgan, supra, 22 Cal.3d 388, 398. It is true, of course, that
when a statutory or legislative scheme utilizes a means to reach its end and which
is unduly harsh or exacts a penalty which may be deemed oppressive in light of
the legitimate objectives sought to be achieved, it may be held to be violative of
constitutional due process guarantees. (Hale v. Morgan, supra; Walsh v. Kirby
(1974) 13 Cal.3d 95, 105-106 [118 Cal.Rptr. 1, 529 P.2d 33]; People v. Western Air
Lines, Inc. (1954) 42 Cal.2d 621, 642 [268 P.2d 723], and cases there cited.) Here,
however, we are not concerned with a remedy in the nature of a penalty or
exaction. Rather we deal with a system whereby a city, in furtherance of its police
power and pursuant to statutory authorization, chooses to make the availability of
all municipal utility services relating to public health protection contingent upon
payment in full of a unified billing therefor. While those residents who do not
choose to take part in the system in accordance with its terms may suffer serious
practical consequences in the form of discontinued services, we cannot conclude
that an unconstitutional deprivation results.”
“Our Legislature has consistently frowned upon the arbitrary termination of
essential utility services. Where improperly undertaken by a private landlord
severe civil sanctions are authorized. (Civ. Code, § 789.3; Kinney v. Vaccari
(1980) 27 Cal.3d 348 [165 Cal.Rptr. 787, 612 P.2d 877].) Specific due process
requirements have been prescribed prior to termination of service by a public
utility. (Pub. Util. Code, §§ 779, 780.) What is improper conduct for a private
landlord and for a public utility would seem to be equally improper for a
municipality. Here the city has acted inconsistently with the implied legislative
intent to prevent unnecessary denial of utility service. Such insensitive conduct
demonstrates that to a bureaucrat with a hammer in his hand everything looks
like a nail.”
The California Supreme Court Ruled in the Case of People v. Redmond,(1969)
71 Cal.2d 745 [Crim. No. 13093. In Bank. Aug. 5, 1969.]
It is equally true that a defendant who represents himself is not entitled to less
consideration than a defendant represented by an attorney. (People v. Maddox,
supra, 67 Cal.2d 647, 653.)
[12] Although a trial judge may not be required to aid a defendant who
represents himself, it is a common practice in both civil and criminal cases for
trial judges, by advice and suggestion, to assist persons who represent
themselves. (Witkin, Cal. Criminal Procedure (1963) p. 383.) The primary goal
of the effective administration of justice in this country is to assure that legal
controversies are determined on the merits, and this goal is not furthered if a
determination is based not on the merits but on the inabilities of a litigant
untrained in the law who has chosen perhaps unwisely to represent himself and
who is not fully conversant with legal procedures. It is in the highest tradition of
American jurisprudence for the trial judge to assist a person who represents
himself as to the presentation of evidence, the rules of substantive law, and legal
procedure, and judges who undertake to assist, in order to assure that there is no
miscarriage of [71 Cal.2d 759] justice due to litigants' shortcomings in
representing themselves, are to be highly commended. It is apparent that, as
here, in a few cases a trial judge, acting with the highest motives in seeking to
assist a defendant representing himself, will give erroneous or misleading
advice because he is not thoroughly familiar with the case or because in the
press of other judicial business he may have forgotten all of the details of the
case. The danger that such error might occur in isolated cases does not
outweigh the benefits to the administration of justice which will flow from trial
judges who undertake to assist defendants representing themselves. And the
danger of error should not deter a trial judge from undertaking to assist those
defendants to make sure that their innocence or guilt will be based on the
merits and not their inability to understand legal procedure. [13] Nevertheless,
when a trial judge gives misleading advice to a defendant not represented by
counsel, we must determine whether such advice may have caused a
miscarriage of justice.
CONTRACT LAW
“[7] Any contract must be construed as a whole, with the various

individual provisions interpreted together so as to give effect to all, if
reasonably possible or practicable. (Civ. Code, § 1641; Code Civ. Proc.,
§ 1858; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 686,
pp. 619-620.) Courts must interpret contractual language in a manner
which gives force and effect to every provision, and not in a way which
renders some clauses nugatory, inoperative or meaningless. (New
York Life Ins. Co. v. Hollender (1951) 38 Cal.2d 73, 81-82 [237 P.2d 510];
Titan Corp. v. Aetna Casualty & Surety Co. (1994) 22 Cal.App.4th 457,
473-474 [27 Cal.Rptr.2d 476].)”
“[1] The interpretation of a written instrument, even though it involves
what might properly be called questions of fact (see Thayer,
Preliminary Treatise on Evidence, pp. 202-204), is essentially a judicial
function to be exercised according to the generally accepted canons of
interpretation so that the purposes of the instrument may be given
effect. (See Civ. Code, §§ 1635-1661; Code Civ. Proc., §§ 1856-1866.) [2]
Extrinsic evidence is "admissible to interpret the instrument, but not to
give it a meaning to which it is not reasonably susceptible" (Coast
Bank v. Minderhout, 61 Cal.2d 311, 315 [38 Cal.Rptr. 505, 392 P.2d 265];
Nofziger v. Holman, 61 Cal.2d 526, 528 [39 Cal.Rptr. 384, 393 P.2d 696];
Imbach v. Schultz, 58 Cal.2d 858, 860 [27 Cal.Rptr. 160, 377 P.2d 272]),
and it is the instrument itself that must be given effect. (Civ. Code, §§
1638, 1639; Code Civ. Proc., § 1856.) [3] It is therefore solely a judicial
function to interpret a written instrument unless the interpretation
turns upon the credibility of extrinsic evidence. [4] Accordingly, "An
appellate court is not bound by a construction of the contract based
solely upon the terms of the written instrument without the aid of
evidence [citations], where there is no conflict in the evidence
[citations], or a determination has been made upon incompetent
evidence [citation]." (Estate of Platt, 21 Cal.2d 343, 352 [131 P.2d 825].
Accord, Moore v. Wood, 26 Cal.2d 621, 629-630 [160 P.2d 772]; Western
Coal & Mining Co. v. Jones, 27 Cal.2d 819, 826-827 [167 P.2d 719, 164
A.L.R. 685]; Estate of [62 Cal.2d 866] Wunderle, 30 Cal.2d 274, 280 [181
P.2d 874]; Estate of Fleming, 31 Cal.2d 514, 523 [190 P.2d 611]; Meyer v.
State Board of Equalization, 42 Cal.2d 376, 381 [267 P.2d 257].) fn. 2”
INTERPRETATION OF CONTRACTS
“[7] Any contract must be construed as a whole, with the various

individual provisions interpreted together so as to give effect to all, if
reasonably possible or practicable. (Civ. Code, § 1641; Code Civ. Proc.,
§ 1858; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 686,
pp. 619-620.) Courts must interpret contractual language in a manner
which gives force and effect to every provision, and not in a way which
renders some clauses nugatory, inoperative or meaningless. (New
York Life Ins. Co. v. Hollender (1951) 38 Cal.2d 73, 81-82 [237 P.2d 510];
Titan Corp. v. Aetna Casualty & Surety Co. (1994) 22 Cal.App.4th 457,
473-474 [27 Cal.Rptr.2d 476].)”
“[1] The interpretation of a written instrument, even though it involves
what might properly be called questions of fact (see Thayer,
Preliminary Treatise on Evidence, pp. 202-204), is essentially a judicial
function to be exercised according to the generally accepted canons of
interpretation so that the purposes of the instrument may be given
effect. (See Civ. Code, §§ 1635-1661; Code Civ. Proc., §§ 1856-1866.) [2]
Extrinsic evidence is "admissible to interpret the instrument, but not to
give it a meaning to which it is not reasonably susceptible" (Coast
Bank v. Minderhout, 61 Cal.2d 311, 315 [38 Cal.Rptr. 505, 392 P.2d 265];
Nofziger v. Holman, 61 Cal.2d 526, 528 [39 Cal.Rptr. 384, 393 P.2d 696];
Imbach v. Schultz, 58 Cal.2d 858, 860 [27 Cal.Rptr. 160, 377 P.2d 272]),
and it is the instrument itself that must be given effect. (Civ. Code, §§
1638, 1639; Code Civ. Proc., § 1856.) [3] It is therefore solely a judicial
function to interpret a written instrument unless the interpretation
turns upon the credibility of extrinsic evidence. [4] Accordingly, "An
appellate court is not bound by a construction of the contract based
solely upon the terms of the written instrument without the aid of
evidence [citations], where there is no conflict in the evidence
[citations], or a determination has been made upon incompetent
evidence [citation]." (Estate of Platt, 21 Cal.2d 343, 352 [131 P.2d 825].
Accord, Moore v. Wood, 26 Cal.2d 621, 629-630 [160 P.2d 772]; Western
Coal & Mining Co. v. Jones, 27 Cal.2d 819, 826-827 [167 P.2d 719, 164
A.L.R. 685]; Estate of [62 Cal.2d 866] Wunderle, 30 Cal.2d 274, 280 [181
P.2d 874]; Estate of Fleming, 31 Cal.2d 514, 523 [190 P.2d 611]; Meyer v.
State Board of Equalization, 42 Cal.2d 376, 381 [267 P.2d 257].) fn. 2”
THE RIGHT TO FREEDOM OF THE PERSON & BODY
More than a century ago, the United States Supreme Court declared, "No right is
held more sacred, or is more carefully guarded, by the common law, than the
right of every individual to possession and control of his own person, free from all
restraint or interference of others, unless by clear and unquestionable authority
of law. ... 'The right to one's person may be said to be a right of complete
immunity: to be let alone.' [Citation.]" (Union Pacific Railway Co. v. Botsford
(1891) 141 U.S. 250, 251 [35 L.Ed. 734, 737, 11 S.Ct. 1000].) Speaking for the
New York Court of Appeals, Justice Benjamin Cardozo echoed this precept of
personal autonomy in observing, "Every human being of adult years and sound
mind has a right to determine what shall be done with his own body ...."
(Schloendorff v. Society of New York Hospital (1914) 211 N.Y. 125 [105 N.E. 92,
93], overruled on other grounds in Bing v. Thunig (1957) 2 N.Y.2d 656 [163
N.Y.S.2d 3, 143 N.E.2d 3].) And over two decades ago, Justice Mosk reiterated the
same principle for this court: "[A] person of adult years and in sound mind has
the right, in the exercise of control over his body, to determine whether or not to
submit to lawful medical treatment." (Cobbs v. Grant (1972) 8 Cal.3d 229, 242
[104 Cal.Rptr. 505, 502 P.2d 1].) [5 Cal.4th 732]
"A facial challenge to the constitutional validity of a statute or ordinance

considers only the text of the measure itself, not its application to the particular
circumstances of an individual. [Citation.]" (Tobe v. City of Santa Ana (1995) 9
Cal.4th 1069, 1084.) By contrast, an as-applied challenge "contemplates analysis
of the facts of a particular case or cases to determine the circumstances in which
the statute or ordinance has been applied and to consider whether in those
particular circumstances the application deprived the individual to whom it was
applied of a protected right." (Ibid.) The same distinction applies in the context of
a constitutional takings claim: "A facial challenge involves 'a claim that the mere
enactment of a statute constitutes a taking,' while an as-applied challenge
involves 'a claim that the particular impact of a government action on a specific
piece of property requires the payment of just compensation.' [Citation.]" (Levald,
Inc. v. City of Palm Desert (9th Cir. 1993) 998 F.2d 680, 686, quoting Keystone
Bituminous Coal Ass'n v. DeBenedictis (1987) 480 U.S. 470, 494. See also, Yee v.
Escondido (1992) 503 U.S. 519, 534; Hensler v. City of Glendale (1994) 8 Cal.4th
1, 21 (Hensler): "An otherwise valid statute or regulation may be invalid as
applied to a particular property if compensation is not paid.")
FROM ONE OF THE ORIGINAL FOUNDERS OF THE UNITED STATES OF AMERICA

John Adams, SECOND PRESIDENT OF THE UNITED STATES OF AMERICA:
"You have Rights Antecedent to all earthly Governments, Rights that

can not be repealed or restrained by human laws; Rights derived from
the Great Legislater of the Universe. "
FROM ONE OF THE ORIGINAL FOUNDERS OF THE UNITED STATES OF AMERICA

Thomas Jefferson:
"It is error alone which needs the support of Government. Truth can
stand by itself. "
FROM : CHISOLM EXECUTOR, VS GEORGIA, 2 DALL 419 (1793);

" The only reason, I believe, why a free man is bound by human laws, is,
that he binds himself. "
U.S. SUPREME COURT IN Yick Wo v. Hopkins, 118 U.S. 356 (1886) Stated:
"Sovereignty itself is, of course, not subject to law, for it is the author and source
of law; but in our system, while sovereign powers are delegated to the agencies of
government, sovereignty itself remains with the people, by whom and for whom
all government exists and acts. And the law is the definition and limitation of
power."
[“When we consider the nature and the theory of our institutions of government,
the principles upon which they are supposed to rest, and review the history of
their development, we are constrained to conclude that they do not mean to leave
room for the play and action of purely personal and arbitrary power.
Sovereignty itself is, of course, not subject to law, for it is the author
and source of law; but in our system, while sovereign powers are
delegated to the agencies of government, sovereignty itself remains with
the people, by whom and for whom all government exists and acts. And
the law is the definition and limitation of power. It is, indeed, quite true
that there must always be lodged somewhere, and in some person or body, the
authority of final decision; and in many cases of mere administration, the
responsibility is purely political, no appeal lying except to the ultimate tribunal of
the public judgment, exercised either in the pressure of opinion, or by means of
the suffrage. But the fundamental rights to life, liberty, and the pursuit of
happiness, considered as individual possessions, are secured by those maxims of
constitutional law which are the monuments showing the victorious progress of
the race in securing to men the blessings of civilization under the reign of just
and equal laws, so that, in the famous language of the Massachusetts bill of
rights, the government of the commonwealth 'may be a government of laws
and not of men.' For the very idea that one man may be compelled to
hold his life, or the means of living, or any material right essential to
the enjoyment of life, at the mere will of another, seems to be
intolerable in any country where freedom prevails, as being the essence
of slavery itself.”]
Cruzan v. Director, Missouri Dept. of Health (1990) 497 U.S. 261, 343
[111 L.Ed.2d 224, 282, 110 S.Ct. 2841] (dis. opn. of Stevens, J.)
("[T]he constitutional protection for the human body is surely

inseparable from concern for the mind and spirit that dwell
therein."); id., at pages 279, 287-289 (conc. opn. of O'Connor, J.),
304-306 (dis. opn. of Brennan, J.) [111 L.Ed.2d at pages 242, 247-248,
258-260]; Schmerber v. California (1966) 384 U.S. 757, 767 [16
L.Ed.2d 908, 917, 86 S.Ct. 1826]
Mr. Justice Brandeis, whose views have inspired much of the 'right to
be let alone' philosophy, said in Olmstead v. United States .... 'The
makers of our Constitution ... sought to protect Americans in their
beliefs, their thoughts, their emotions and their sensations. They
conferred, as against the Government, the right to be let alone-the
most comprehensive of rights and the right most valued by civilized
man.'
right to one's person may be said to be a right of complete immunity:
to be let alone.' [Citation.]"
FROM THE UNANIMOUS DECLARATION OF INDEPENDENCE OF THE

THIRTEEN UNITED STATES AMERICA ADOPTED IN CONGRESS ON
JULY 4, 1776;
'' WE HOLD THESE TRUTHS TO BE SELF EVIDENT, THAT ALL MEN ARE
CREATED EQUAL. THAT THEY ARE ENDOWED BY THEIR CREATOR
WITH CERTAIN UNALIENABLE RIGHTS, THAT AMONG THESE ARE LIFE,
LIBERTY, AND THE PURSUIT OF HAPPINESS''
“THAT TO SECURE THESE RIGHTS GOVERNMENTS ARE INSTITUTED
AMONG MEN, DERIVING THEIR JUST POWERS FROM THE CONSENT OF
THE GOVERNED.”
ARTICLES OF CONFEDERATION OF 1778 STATES:

"The style of this Confederacy shall be "The united States of America".
ARTICLE XIII OF THE ARTICLES OF CONFEDERATION STATES:
Every State shall abide by the determinations of the United States in Congress
Assembled, on all questions which by this Confederation are submitted to them.
And the Articles of this Confederation shall be inviobly observed by every State,
and the Union shall be perpetual; Nor shall any alteration at any time hereafter be
made in any of them, unless such alteration be agreed to in a congress of the
United States, and be afterwards confirmed by the legislatures of every state. "
43
CREDITED TO: James Madison;
"To the People of the State of New York:

THE SECOND point to be examined is, whether the convention were
authorized to frame and propose this mixed Constitution.
The powers of the convention ought, in strictness, to be determined by an
inspection of the commissions given to the members by their respective
constituents. As all of these, however, had reference, either to the
recommendation from the meeting at Annapolis, in September, 1786, or to that
from Congress, in February, 1787, it will be sufficient to recur to these
particular acts.
The act from Annapolis recommends the "appointment of commissioners to
take into consideration the situation of the United States; to devise SUCH
FURTHER PROVISIONS as shall appear to them necessary to render the
Constitution of the federal government ADEQUATE TO THE EXIGENCIES
OF THE UNION; and to report such an act for that purpose, to the United
States in Congress assembled, as when agreed to by them, and afterwards
confirmed by the legislature of every State, will effectually provide for the
same. "
"The recommendatory act of Congress is in the words following: "WHEREAS,
There is provision in the articles of Confederation and perpetual Union, for
making alterations therein, by the assent of a Congress of the United States,
and of the legislatures of the several States; and whereas experience hath
evinced, that there are defects in the present Confederation; as a mean to
remedy which, several of the States, and PARTICULARLY THE STATE OF
NEW YORK, by express instructions to their delegates in Congress, have
suggested a convention for the purposes expressed in the following resolution;
and such convention appearing to be the most probable mean of establishing in
these States A FIRM NATIONAL GOVERNMENT:
"Resolved, That in the opinion of Congress it is expedient, that on the second
Monday of May next a convention of delegates, who shall have been appointed by
the several States, be held at Philadelphia, for the sole and express purpose OF
REVISING THE ARTICLES OF CONFEDERATION, and reporting to Congress and
the several legislatures such ALTERATIONS AND PROVISIONS THEREIN, as shall,
when agreed to in Congress, and confirmed by the States, render the federal
Constitution ADEQUATE TO THE EXIGENCIES OF GOVERNMENT AND THE
PRESERVATION OF THE UNION."
"In one particular it is admitted that the convention have departed from the tenor of
their commission. Instead of reporting a plan requiring the confirmation OF THE
LEGISLATURES OF ALL THE STATES, they have reported a plan which is to be
confirmed by the PEOPLE, and may be carried into effect by NINE STATES ONLY. ”
" But that the objectors may be disarmed of every pretext, it shall be granted for a
moment that the convention were neither authorized by their commission, nor
justified by circumstances in proposing a Constitution for their country: does it
follow that the Constitution ought, for that reason alone, to be rejected? "
FROM: FEDERALIST PAPERS NUMBER 42; Credited to James

Madison;
" A list of the cases in which Congress have been betrayed, or forced by the
defects of the Confederation, into violations of their chartered authorities, would
not a little surprise those who have paid no attention to the subject; "

CREDITED TO; James Madison;
" Two questions of a very delicate nature present themselves on this occasion:
1. On what principle the Confederation, which stands in the solemn form of a
compact among the States, can be superseded without the unanimous consent
of the parties to it? 2. What relation is to subsist between the nine or more
States ratifying the Constitution, and the remaining few who do not become
parties to it?
The first question is answered at once by recurring to the absolute necessity of
the case; to the great principle of self-preservation; to the transcendent law of
nature and of nature's God, which declares that the safety and happiness of
society are the objects at which all political institutions aim, and to which all
such institutions must be sacrificed. PERHAPS, also, an answer may be found
without searching beyond the principles of the compact itself. It has been
heretofore noted among the defects of the Confederation, that in many of the
States it had received no higher sanction than a mere legislative ratification.
The principle of reciprocality seems to require that its obligation on the other
States should be reduced to the same standard.
A compact between independent sovereigns, founded on ordinary acts of

legislative authority, can pretend to no higher validity than a league or treaty
between the parties. It is an established doctrine on the subject of treaties, that all
the articles are mutually conditions of each other; that a breach of any one article
is a breach of the whole treaty; and that a breach, committed by either of the
parties, absolves the others, and authorizes them, if they please, to pronounce the
compact violated and void. Should it unhappily be necessary to appeal to these
delicate truths for a justification for dispensing with the consent of particular
States to a dissolution of the federal pact, will not the complaining parties find
it a difficult task to answer the MULTIPLIED and IMPORTANT infractions
with which they may be confronted? The time has been when it was incumbent
on us all to veil the ideas which this paragraph exhibits. The scene is now
changed, and with it the part which the same motives dictate.
The second question is not less delicate; and the flattering prospect of its being
merely hypothetical forbids an overcurious discussion of it. It is one of those
cases which must be left to provide for itself. In general, it may be observed, that
although no political relation can subsist between the assenting and dissenting
States, yet the moral relations will remain uncancelled. The claims of justice, both
on one side and on the other, will be in force, and must be fulfilled; the rights of
humanity must in all cases be duly and mutually respected; whilst considerations
of a common interest, and, above all, the remembrance of the endearing scenes
which are past, and the anticipation of a speedy triumph over the obstacles to
reunion, will, it is hoped, not urge in vain MODERATION on one side, and
PRUDENCE on the other.
PUBLIUS.
FROM: CHISOLM EXECUTOR, VS GEORGIA, 2 DALL 419 (1793);
The King, accordingly, in England is called a corporation. 10 Co. 29. b.

So also, by a very respectable author (Sheppard, in his abridgement, 1
Vol. 431.) is the Parliament itself. In this extensive sense, not only each
State singly, but even the United States may without impropriety be
termed 'corporations.' I have, therefore, in contradistinction to this
large and indefinite [2 U.S. 419, 448] term, used the term 'subordinate
corporations,' meaning to refer to such only (as alone capable of the
slightest application, for the purpose of the objection) whose creation
and whose powers are limited by law. "By a State I mean, a complete
body of free persons united together for their common benefit, to enjoy
peaceably what is their own, and to do justice to others. It is an
artificial person. It has its affairs and its interests: It has its rules: It
has its rights: And it has its obligations. It may acquire property distinct
from that of its members: It may incur debts to be discharged out of the
public stock, not out of the private fortunes of individuals. It may be
bound by contracts; and for damages arising from the breach of those
contracts. In all our contemplations, however, concerning this [2 U.S.
419, 456] feigned and artificial person, we should never forget, that, in
truth and nature,those, who think and speak, and act, are men”
TAX LAW
[add quotes from Patten vs Brady definition of Excise Tax & quotes from
federal cases saying you can arrange your personal affairs as to lawfully avoid
taxes ; add regulations re California taxes based on Federal income tax law; US
vs Butler quotes, quotes from Congressional Record of 1933 the new
currency A loan from the Creditor Class to the debtor class ]
______________________________________________________________
Is this why the California State Taxing Agency is Called :
the “Franchise Tax Board” :
31 U.S.C. § 3124 : Exemption from taxation
(a) Stocks and obligations of the United States Government are exempt from taxation by a State
or political subdivision of a State. The exemption applies to each form of taxation that would
require the obligation, the interest on the obligation, or both, to be considered in computing a
tax, except-(1)a nondiscriminatory franchise tax or another non property tax
instead of a franchise tax, imposed on a corporation; and (2) an estate or
inheritance tax.
(b) The tax status of interest on obligations and dividends, earnings, or other income from
evidences of ownership issued by the Government or an agency and the tax treatment of gain
and loss from the disposition of those obligations and evidences of ownership is decided under
the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.). An obligation that the Federal
Housing Administration had agreed, under a contract made before March 1, 1941, to issue at a
future date, has the tax exemption privileges provided by the authorizing law at the time of the
contract. This subsection does not apply to obligations and evidences of ownership issued by the
District of Columbia, a territory or possession of the United States, or a department, agency,
instrumentality, or political subdivision of the District, territory, or possession.
COMMISSIONER OF INTERNAL REVENUE v. WILCOX, 327 U.S. 404 (1946)COMMISSIONER

OF INTERNAL REVENUE v. WILCOX et al. No. 163. Argued Jan. 8, 1946.Decided Feb. 25,1946.
“Section 22(a) is cast in broad, sweeping terms. It 'indicates the purpose of Congress to use
the full measure of its taxing power within those definable categories.' Helvering v. Clifford,
supra, 309 U.S. 334 , 60 S.Ct. 556. The very essence of taxable income, as that concept is
used in Section 22(a), is the accrual of some gain, profit or benefit to the taxpayer.
This requirement of gain, of course, must be read in its statutory context. Not every
benefit received by a taxpayer from his labor or investment necessarily renders him
taxable. Nor is mere dominion over money or property decisive in all cases. In fact,
no single conclusive criterion has yet been found to determine in all situations what
is a sufficient gain to support the imposition of an income tax. No more can be said
in general than that all relevant facts and circumstances must be considered. See
Magill, Taxable Income (1945). [327 U.S. 404, 408] For present purposes, however,
it is enough to note that a taxable gain is conditioned upon (1) the presence of a
claim of right to the alleged gain and (2) the absence of a definite, unconditional
obligation to repay or return that which would otherwise constitute a gain. Without
some bona fide legal or equitable claim, even though it be contingent or contested in
nature, the taxpayer cannot be said to have received any gain or profit within the
reach of Section 22(a). See North American Oil v. Burnet, 286 U.S. 417, 424 , 52
S.Ct. 613, 615. Nor can taxable income accrue from the mere receipt of property or
money which one is obliged to return or repay to the rightful owner, as in the case of
a loan or credit. Taxable income may arise, to be sure, from the use or in connection
with the use of such property. Thus if the taxpayer uses the property himself so as to
secure a gain or profit therefrom, he may be taxable to that extent. And if the
unconditional indebtedness is cancelled or retired taxable income may adhere, under
certain circumstances, to the taxpayer. But apart from such factors the bare receipt
of property or money wholly belonging to another lacks the essential characteristics
of a gain or profit within the meaning of Section 22(a).”
CR-1-93-1
Case Law
United States of America v. Lloyd Long
Tennessee Man Freed on Tax Charges
In an amazing court case involving the "income tax," a Chattanooga jury agreed with the
argument by the defendant that the "income tax" is actually an excise tax and only applies
to certain classes of people. Nationally prominent attorney Lowell Becraft of Huntsville,
Alabama, assisted by attorney Russell J. Leonard of Sewanee, Tennessee, who defended
Lloyd R. Long of Decherd, Tennessee, who was charged by the Internal Revenue Service
with "willful failure to file income tax returns" for the years 1989 and 1990.
In presenting the case for the IRS, assistant U.S. Attorney Curtis Collier, assisted by Special
Agent Michael Geasley of the IRS, declared that Mr. Long had gross income in excess of
$49,000 for each of the years 1989 and 1990, and that he had "willfully" failed to file income
tax returns for those years as "required by law."
The defense admitted that Mr. Long did in fact have income in excess of $49,000 for each of
the years in question and that he did not file a return. He then proceeded to prove to the jury
beyond a reasonable doubt that he was not "liable" for an income tax, nor was he "required
by law" to file.
Defense testimony presented a case titled Brushaber v. Union Pacific Railroad, 240 U.S. 1,
wherein it was the unanimous decision of the U.S. Supreme Court that the Sixteenth
Amendment did not give Congress any new power to tax any new subjects. It merely tried to
simplify the way in which the tax was imposed. It also showed that the income tax was in fact
an excise tax on corporate privileges and privileged occupations. The defense then brought
out a case entitled Flint v. Stone Tracy, 220 U.S. 107, wherein an excise tax was defined as a
tax being laid upon the manufacture, sale and consumption of commodities within the
country upon licenses to pursue certain occupations and upon corporate privileges.
Mr. Long's attorneys also brought out a case entitled Simms v. Arehns, cite omitted, wherein
the court ruled that the income tax was neither a property tax nor a tax upon occupations of
common right, but was an excise tax. The defense then brought out a case entitled Redfield v.
Fisher, cite omitted, wherein the court ruled that the individual, unlike the corporation,
cannot be taxed for the mere privilege of existing but that the individual's right to live and
own property was a natural right upon which an excise tax cannot be imposed. Defense also
pointed to a couple of studies done by the Congressional Research Service that shows the
income tax is an excise tax. Next, defense pointed out that in the Tennessee Supreme Court
Case Jack Cole v. Commissioner, cite omitted, the court ruled that citizens are entitled by
right to income or earnings and that could not be taxed as a privilege. And, in another
Tennessee Supreme Court Case, Corn v. Fort, cite omitted, the court ruled that individuals
have a right to combine their activities as partnerships and that this is a natural right,
independent and antecedent of government. The prosecution did not challenge or attempt to
refute any of the cases cited or the conclusions of the courts. Defense brought out in
testimony the fact that nowhere in the Internal Revenue Code was anyone actually made
liable for the income tax. They showed that in the IRS' own privacy act notice only three
sections were cited and that none of these sections made anyone liable for the tax. They also
proved that this was not an oversight by showing that the alcohol tax was worded so clearly
that no one could misinterpret who was made liable for the alcohol tax. [Editorial note: Why
do you think the Infernal Revenue Code is over 9,000 pages? How many decent, desperate
Americans can (1) afford to buy Title 26 - both volumes? And (2) Once they open up this
labrinyth of deceptive mish-mash, they give up, take a gun to their head and pull the trigger.
Yes, this has happened too many times. Keep passing more and more and more laws so no
one can find the one sentence which makes us liable and in this case, it doesn't exist!]
Prosecution did not challenge or attempt to refute this point, nor were they able to show a
statute that made anyone liable for the income tax. Defense then presented the mission
statement of the IRS stating that the income tax relied upon "voluntary compliance" and a
statement from the head of alcohol and tobacco tax division of the IRS which in essence
showed that the income tax is 100% voluntary, as opposed to the alcohol tax which is 100%
enforced. [Editorial note: I have a copy of the February 3, 1953 hearings before A
Subcommittee Of The Committee On Ways and Means, House of Representatives, Eighty-
Third Congress: Administration of the Internal Revenue Laws, Part A, page 13 and I quote
Dwight D. Avis, Head of Alcohol, Tobacco Tax Division:
"Let me point this out now: Your income tax is 100 percent VOLUNTARY tax and your
liquor tax is 100 enforced tax. Now, the situation is as different as day and night.
Consequently, your same rules just will not apply and therefore the alcohol and tobacco tax
has been handled here in this reorganization a little differently because of the very nature of
it, than the rest of the over all tax problem." Try not filing and you will end up just like Mr.
Long because 90% of the judges in this country at the federal level are rotten to the core.
You think they can't read the law? Please. Mr. Long stated that in 1988 he knew that the
income tax was in fact an excise tax and that he was not enjoying any corporate privileges
nor engaged in any privileged occupation, that income or earnings from the exercise of
common right could not be taxed as an excise or otherwise, that nowhere in the IR Code was
he made liable for the tax and that the income tax was voluntary. But, Mr. Long was still so
intimidated by the IRS that he filed and paid his voluntary assessment. He then began a
series of letters to the IRS explaining that he had no licenses or privileges issued to him by
the federal government. He asked for direct answers to simple questions such as "Am I
required to file federal income tax returns?" and "Am I liable for federal income taxes?"
The IRS never gave a direct answer to any of his questions. Instead, they inferred and
insinuated and extrapolated and beat around the bush and generally avoided answering. As
a result, Mr. Long testified that he decided to stop "volunteering." The IRS brought two
"expert" witnesses. Both were actually IRS employees who had received training as
professional witnesses. Upon cross-examination by Mr. Becraft, one witness stated that a
secret code known only to the IRS and encoded on Mr. Long's permanent record [Note: This
is the IMF, Individual Master File], showed that the IRS knew he was not required to mail or
file a return. The witness made every effort to avoid this admission, to the point that she was
beginning to frustrate the jury. The other witness, upon cross-examination by Mr. Becraft,
gave testimony that conflicted with the privacy act notice. The government also attempted to
insinuate "guilt by association" in that they claimed Mr. Long had known and replied upon
persons of questionable character. The argued that the writers of some of the books he read
and people he knew had been convicted of tax-related charges in the past and were, in fact,
criminals. Mr. Long responded that just because a person had been convicted of a crime by a
court, this did not invalidate everything he said. To illustrate, he pointed out that the Apostle
Paul was a murderer but that by the Grace of God, he became the greatest of the Apostles.
He added that he, Mr. Long, did not rely on anything that he did not personally check out
thoroughly. In summation, Mr. Becraft reminded the jury that Galileo was imprisoned for
holding a belief that conflicted with what everyone else knew as a "fact" and that Columbus,
acting on a belief which conflicted with what everyone else knew was a "fact," discovered
something no one else thought existed. The jury agreed with the defense. By finding Mr.
Long "NOT GUILTY" on all counts, they have ventured into hitherto uncharted territory in
their monumental decision. A Chattanooga TV station quoted a government spokesman as
saying that this case will change the way the IRS will handle such cases in the future. They
indicated that they (the government) will be less likely to prosecute if a jury wasn't going to
decide in their favor. Mr. Long's spirit was best expressed when he was asked for a final
statement by a reporter as he was leaving the courtroom. His words, "Glory be to God."
**End of article. This case is CR-1-93-1, United States of America v. Lloyd Long filed in the
U.S. District Court, Eastern District of Tennessee and was decided on October 15, 1993.
Naturally, one heard not a peep from Gunga Din Dan Blather, Tom Brokenjaw or any of the
other "news" mouthpieces for the government.
WORDS OF US SUPREME COURT JUSTICE BRANDEIS FROM HIS

DISENTING OPINION IN THE CASE OF OLMSTEAD v. U.S., 277 U.S. 438
(1928) 277 U.S. 438 OLMSTEAD et al. v. UNITED STATES. No. 493. GREEN
et al. V SAME No. 532. McINNIS v. SAME. No. 533. Argued Feb. 20 and 21,
1928. Decided June 4, 1928.
The government makes no attempt to defend the methods employed

by its officers. Indeed, it concedes [277 U.S. 438, 472] that, if wire tapping can be deemed a
search and seizure within the Fourth Amendment, such wire tapping as was practiced in
the case at bar was an unreasonable search and seizure, and that the evidence thus
obtained was inadmissible. But it relies on the language of the amendment, and it claims
that the protection given thereby cannot properly be held to include a telephone
conversation.
'We must never forget,' said Mr. Chief Justice Marshall in McCulloch v. Maryland, 4
Wheat. 316, 407 4 L. Ed. 579, 'that it is a Constitution we are expounding.' Since then
this court has repeatedly sustained the exercise of power by Congress, under various
clauses of that instrument, over objects of which the fathers could not have dreamed.
See Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1 , 9; Northern
Pacific Ry. Co. v. North Dakota, 250 U.S. 135 , 39 S. Ct. 502; Dakota Central Telephone
Co. v. South Dakota, 250 U.S. 163 , 39 S. Ct. 507, 4 A. L. R. 1623; Brooks v. United
States, 267 U.S. 432 , 45 S. Ct. 345, 37 A. L. R. 1407. We have likewise held that general
limitations on the powers of government, like those embodied in the due process clauses
of the Fifth and Fourteenth Amendments, do not forbid the United States or the states
from meeting modern conditions by regulations which 'a century ago, or even half a
century ago, probably would have been rejected as arbitrary and oppressive.' Village of
Euclid v. Ambler Realty Co., 272 U.S. 365, 387 , 47 S. Ct. 114, 118 (71 L. Ed. 303); Buck
v. Bell, 274 U.S. 200 , 47 S. Ct. 584, 71 L. 1000. Clauses guaranteeing to the individual
protection against specific abuses of power, must have a similar capacity of adaptation to
a changing world. It was with reference to such a clause that this court said in Weems v.
United States, 217 U.S. 349, 373 , 30 S. Ct. 544, 551 (54 L. Ed. 793, 19 Ann. Cas. 705):
'Legislation, both statutory and constitutional, is enacted, it is true, from an experience
of evils, but its general language should not, therefore, be necessarily confined to the
form that evil had theretofore taken. Time works changes, brings into existence new
conditions [277 U.S. 438, 473] and purposes. Therefore a principal to be vital must be
capable of wider application than the mischief which gave it birth. This is peculiarly true
of Constitutions. They are not ephemeral enactments, designed to meet passing
occasions. They are, to use the words of Chief Justice Marshall, 'designed to approach
immortality as nearly as human institutions can approach it.' The future is their care
and provision for events of good and bad tendencies of which no prophecy can be made.
In the application of a Constitution, therefore, our contemplation cannot be only of what
has been but of what may be. Under any other rule a Constitution would indeed be as
easy of application as it would be deficient in efficacy and power. Its general principles
would have little value and be converted by precedent into impotent and lifeless
formulas. Rights declared in words might be lost in reality.'
other.'3
'True, the one is visible, the other invisible; the one is tangible, the other intangible; the one is
sealed, and the other unsealed; but these are distinctions without a difference.'
other.'3
'True, the one is visible, the other invisible; the one is tangible, the other intangible; the
one is sealed, and the other unsealed; but these are distinctions without a difference.'
The evil incident to invasion of the privacy of the telephone is far greater than that involved in
tampering with the mails. Whenever a telephone line is tapped, the privacy of the persons at
both ends of the line is invaded, and all con- [277 U.S. 438, 476] versations between them
upon any subject, and although proper, confidential, and privileged, may be overheard.
Moreover, the tapping of one man's telephone line involves the tapping of the telephone of
every other person whom he may call, or who may call him. As a means of espionage, writs of
assistance and general warrants are but puny instruments of tyranny and oppression when
compared with wire tapping.
Time and again this court, in giving effect to the principle underlying the Fourth Amendment,
has refused to place an unduly literal construction upon it. This was notably illustrated in the
Boyd Case itself. Taking language in its ordinary meaning, there is no 'search' or 'seizure'
when a defendant is required to produce a document in the orderly process of a court's
procedure. 'The right of the people of be secure in their persons, houses, papers, and effects,
against unreasonable searches and seizures,' would not be violated, under any ordinary
construction of language, by compelling obedience to a subpoena. But this court holds the
evidence inadmissible simply because the information leading to the issue of the subpoena has
been unlawfully secured. Silverthorne Lumber Co. v. United States, 251 U.S. 385 , 40 S. Ct.
182. Literally, there is no 'search' or 'seizure' when a friendly visitor abstracts papers from an
office; yet we held in Gouled v. United States, 255 U.S. 298 , 41 S. Ct. 261, that evidence so
obtained could not be used. No court which looked at the words of the amendment rather than
at its underlying purpose would hold, as this court did in Ex parte Jackson, 96 U.S. 727 , 733,
that its protection extended to letters in the mails. The provision against self-incrimination in
the Fifth Amendment has been given an equally broad construction. The language is:
'No person ... shall be compelled in any criminal case to be a witness against himself.'
Yet we have held not only that the [277 U.S. 438, 477] protection of the amendment extends to
a witness before a grand jury, although he has not been charged with crime (Counselman v.
Hitchcock, 142 U.S. 547, 562 , 586 S., 12 S. Ct. 195), but that:
'It applies alike to civil and criminal proceedings, wherever the answer might tend to
subject to criminal responsibility him who gives it. The privilege protects a mere witness
as fully as it does one who is also a party defendant.' McCarthy v. Arndstein, 266 U.S.
34, 40 45 S. Ct. 16, 17 (69 L. Ed. 158).
The narrow language of the Amendment has been consistently construed in the light of its
object, 'to insure that a person should not be compelled, when acting as a witness in any
investigation, to give testimony which might tend to show that he himself had committed a
crime. The privilege is limited to criminal matters, but it is as broad as the mischief against
which it seeks to guard.' Counselman v. Hitchcock, supra, page 562 (12 S. Ct. 198).
Decisions of this court applying the principle of the Boyd Case have settled these things.
Unjustified search and seizure violates the Fourth Amendment, whatever the character of the
paper;4 whether the paper when taken by the federal officers was in the home,5 in an office,6
or elsewhere;7 whether the taking was effected by force,8 by [277 U.S. 438, 478] fraud,9 or in
the orderly process of a court's procedure. 10 From these decisions, it follows necessarily that
the amendment is violated by the officer's reading the paper without a physical seizure, without
his even touching it, and that use, in any criminal proceeding, of the contents of the paper so
examined-as where they are testified to by a federal officer who thus saw the document or
where, through knowledge so obtained, a copy has been procured elsewhere11-any such use
constitutes a violation of the Fifth Amendment.
The protection guaranteed by the amendments is much broader in scope. The makers of our
Constitution undertook to secure conditions favorable to the pursuit of happiness. They
recognized the significance of man's spiritual nature, of his feelings and of his intellect. They
knew that only a part of the pain, pleasure and satisfactions of life are to be found in material
things. They sought to protect Americans in their beliefs, their thoughts, their emotions and
their sensations. They conferred, as against the government, the right to be let alone-the most
comprehensive of rights and the right most valued by civilized men. To protect, that right, every
unjustifiable intrusion by the government upon the privacy of the individual, whatever the
means employed, must be deemed a violation of the Fourth Amendment. And the use, as
evidence [277 U.S. 438, 479] in a criminal proceeding,of facts ascertained by such intrusion
must be deemed a violation of the Fifth.
Applying to the Fourth and Fifth Amendments the established rule of construction, the
defendants' objections to the evidence obtained by wire tapping must, in my opinion, be
sustained. It is, of course, immaterial where the physical connection with the telephone wires
leading into the defendants' premises was made. And it is also immaterial that the intrusion was
in aid of law enforcement. Experience should teach us to be most on our guard to protect liberty
when the government's purposes are beneficent. Men born to freedom are naturally alert to
repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in
insidious encroachment by men of zeal, well-meaning but without understanding. 12
Independently of the constitutional question, I am of opinion that the judgment should be
reversed. By the laws of Washington, wire tapping is a crime. 13 Pierce's [277 U.S. 438, 480]
Code 1921, 8976(18). To prove its case, the government was obliged to lay bare the crimes
committed by its officers on its behalf. A federal court should not permit such a prosecution to
continue. Compare Harkin v. Brundage (No. 117) 276 U.S. 36 , 48 S. Ct. 268, decided February
20, 1928
[277 U.S. 438, 481] The situation in the case at bar differs widely from that presented in
Burdeau v. McDowell, 256 U.S. 465 , 41 S. Ct. 574, 13 A. L. R. 1159. There only a single lot of
papers was involved. They had been obtained by a private detective while acting on behalf of a
private party, without the knowledge of any federal official, long before any one had thought of
instituting a [277 U.S. 438, 482] federal prosecution. Here the evidence obtained by crime was
obtained at the government's expense, by its officers, while acting on its behalf; the officers who
committed these crimes are the same officers who were charged with the enforcement of the
Prohibition Act; the crimes of these officers were committed for the purpose of securing
evidence with which to obtain an indictment and to secure a conviction. The evidence so
obtained constitutes the warp and woof of the government's case. The aggregate of the
government evidence occupies 306 pages of the printed record. More than 210 of them are filled
by recitals of the details of the wire tapping and of facts ascertained thereby. 14 There is
literally no other evidence of guilt on the part of some of the defendants except that illegally
obtained by these officers. As to nearly all the defendants (except those who admitted guilt), the
evidence relied upon to secure a conviction consisted mainly of that which these officers had so
obtained by violating the state law. As Judge Rudkin said below (19 F.(2d) 842):
'Here we are concerned with neither eavesdroppers nor thieves. Nor are we concerned
with the acts of private individuals. ... We are concerned only with the acts of federal
agents, whose powers are limited and controlled by the Constitution of the United
States.'
The Eighteenth Amendment has not in terms empowered Congress to authorize any one to
violate the criminal laws of a state. And Congress has never purported to do so. Compare
Maryland v. Soper, 270 U.S. 9 , 46 S. Ct. 185. The terms of appointment of federal prohibition
agents do not purport to confer upon them authority to violate any criminal law. Their superior
officer, the Secretary of the Treasury, has not instructed them to commit [277 U.S. 438, 483]
crime on behalf of the United States. It may be assumed that the Attorney General of the United
States did not give any such instruction. 15
When these unlawful acts were committed they were crimes only of the officers individually.
The government was innocent, in legal contemplation; for no federal official is authorized to
commit a crime on its behalf. When the government, having full knowledge, sought, through
the Department of Justice, to avail itself of the fruits of these acts in order to accomplish its own
ends, it assumed moral responsibility for the officers' crimes. Compare the Paquete Habana,
189 U.S. 453, 465 , 23 S. Ct. 593; O'Reilly de Camara v. Brooke, 209 U.S. 45, 52 , 28 S. Ct. 439;
Dodge v. United States, 272 U.S. 530, 532 , 47 S. Ct. 191; Gambino v. United States, 275 U.S.
310 , 48 S. Ct. 137, and if this court should permit the government, by means of its officers'
crimes, to effect its purpose of punishing the defendants, there would seem to be present all the
elements of a ratification. If so, the government itself would become a lawbreaker.
Will this court, by sustaining the judgment below, sanction such conduct on the part of the
executive? The governing principle has long been settled. It is that a court will not redress a
wrong when he who invokes its aid has unclean hands. 16 The maxim of unclean hands comes
[277 U.S. 438, 484] from courts of equity. 17 But the principle prevails also in courts of law.
Its common application is in civil actions between private parties. Where the government is the
actor, the reasons for applying it are even more persuasive. Where the remedies invoked are
those of the criminal law, the reasons are compelling. 18
The door of a court is not barred because the plaintiff has committed a crime. The confirmed
criminal is as much entitled to redress as his most virtuous fellow citizen; no record of crime,
however long, makes one an outlaw. The court's aid is denied only when he who seeks it has
violated the law in connection with the very transaction as to which he seeks legal redress. 19
Then aid is denied despite the defendant's wrong. It is denied in order to maintain respect for
law; in order to promote confidence in the administration of justice; in order to preserve the
judicial process from contamination. The rule is one, not of action, but of inaction. It is
sometimes [277 U.S. 438, 485] spoken of as a rule of substantive law. But it extends to matters
of procedure as well. 20 A defense may be waived. It is waived when not pleaded. But the
objection that the plaintiff comes with unclean hands will be taken by the court itself. 21 It will
be taken despite the wish to the contrary of all the parties to the litigation. The court protects
itself. Decency, security, and liberty alike demand that government officials shall
be subjected to the same rules of conduct that are commands to the citizen. In a
government of laws, existence of the government will be imperiled if it fails to
observe the law scrupulously. Our government is the potent, the omnipresent
teacher. For good or for ill, it teaches the whole people by its example. Crime is
contagious. If the government becomes a lawbreaker, it breeds contempt for law;
it invites every man to become a law unto himself; it invites anarchy. To declare
that in the administration of the criminal law the end justifies the means-to
declare that the government may commit crimes in order to secure the conviction
of a private criminal-would bring terrible retribution. Against that pernicious
doctrine this court should resolutely set its face.”
"The wisdom of the legislation is not at issue in [27 Cal.3d 893] analyzing its
constitutionality, and neither the availability of less drastic remedial alternatives
nor the legislative failure to solve all related ills at once will invalidate a
statute."Hale v. Morgan, supra, 22 Cal.3d 388, 398. It is true, of course, that
when a statutory or legislative scheme utilizes a means to reach its end and which
is unduly harsh or exacts a penalty which may be deemed oppressive in light of
the legitimate objectives sought to be achieved, it may be held to be violative of
constitutional due process guarantees. (Hale v. Morgan, supra; Walsh v. Kirby
(1974) 13 Cal.3d 95, 105-106 [118 Cal.Rptr. 1, 529 P.2d 33]; People v. Western Air
Lines, Inc. (1954) 42 Cal.2d 621, 642 [268 P.2d 723], and cases there cited.) Here,
however, we are not concerned with a remedy in the nature of a penalty or
exaction. Rather we deal with a system whereby a city, in furtherance of its police
power and pursuant to statutory authorization, chooses to make the availability of
all municipal utility services relating to public health protection contingent upon
payment in full of a unified billing therefor. While those residents who do not
choose to take part in the system in accordance with its terms may suffer serious
practical consequences in the form of discontinued services, we cannot conclude
that an unconstitutional deprivation results.”
“Our Legislature has consistently frowned upon the arbitrary termination of
essential utility services. Where improperly undertaken by a private landlord
severe civil sanctions are authorized. (Civ. Code, § 789.3; Kinney v. Vaccari
(1980) 27 Cal.3d 348 [165 Cal.Rptr. 787, 612 P.2d 877].) Specific due process
requirements have been prescribed prior to termination of service by a public
utility. (Pub. Util. Code, §§ 779, 780.) What is improper conduct for a private
landlord and for a public utility would seem to be equally improper for a
municipality. Here the city has acted inconsistently with the implied legislative
intent to prevent unnecessary denial of utility service. Such insensitive conduct
demonstrates that to a bureaucrat with a hammer in his hand everything looks
like a nail.”
FROM: MYERS VS U.S. (1926) 272 US 52;
"In any rational search for answer to the questions arising upon this
record, it is important not to forget-
That this is a government of limited powers, definitely enumerated and
granted by a written Constitution. That the Constitution must be
interpreted by attributing to its words the meaning which they bore at
the time of its adoption, and in view of commonly-accepted canons of
construction, its history, early and long- continued practices under it,
and relevant opinions of this court. "..."Checks and balances were
established in order that this should be 'a government of laws and not
of men. "
FROM:
WEST VIRGINIA STATE BOARD OF EDUCATION VS BARNETTE(1943) 319 US 624
"The very purpose of a Bill of Rights was to withdraw
certain subjects from the vicissitudes of political
controversy, to place them beyond the reach of
majorities and officials and to establish them as legal
principles to be applied by the courts. One's right to

life, liberty, and property, to free speech, a free press,
freedom of worship and assembly, and other
fundamental rights may not be submitted to vote;
they depend on the outcome of no elections."
FROM: GRISWALD VS CONNECTICUT , 381 US 479 (1965);
The right of freedom of speech and press includes not only the right to
utter or to print, but the right to distribute, the right to receive, the right
to read (Martin v. Struthers, 319 U.S. 141, 143 and freedom of inquiry,
freedom of thought, and freedom to teach (see Wieman v. Updegraff, 344

U.S. 183, 195
FROM: NEW YORK v. UNITED STATES, 505 U.S. 144 (1992) 505 U.S. 144
" The constitutional authority of Congress cannot be expanded by the
"consent" of the governmental unit whose domain is thereby narrowed,
whether that unit is the Executive Branch or the States. State officials
thus cannot consent to the enlargement of the powers of Congress
beyond those enumerated in the Constitution. " "A departure from the
Constitution's plan for the intergovernmental allocation of authority
cannot be ratified by the "consent" of state officials, since the
Constitution protects state sovereignty for the benefit of individuals,
not States or their governments, and since the officials' interests may
not coincide with the Constitution's allocation. "
" The Constitution does not protect the sovereignty of States for the
benefit of the States or state governments as abstract political entities,
or even for the benefit of the public officials governing the States. To
the contrary, the Constitution divides authority between federal and
state governments for the protection of individuals. "
" Where Congress exceeds its authority relative to the States,
therefore, the departure from the constitutional plan cannot be ratified
by the "consent" of state officials. "
" State officials thus cannot consent to the enlargement of the powers
of Congress beyond those enumerated in the Constitution. "
FROM : REID v. COVERT, 354 U.S. 1 (1957) 354 U.S. 1;

" The United States is entirely [354 U.S. 1, 6] a creature of the
Constitution. 3 Its power and authority have no other source. It can only
act in accordance with all the limitations imposed by the Constitution. "
" Article VI, the Supremacy Clause of the Constitution, declares:
"This Constitution, and the Laws of the United States which shall
be made in Pursuance thereof; and all Treaties made, or which
shall be made, under the Authority of the United States, shall be
the supreme Law of the Land; . . . . "
"There is nothing in this language which intimates that treaties and
laws enacted pursuant to them do not have to comply with the
provisions of the Constitution. Nor is there anything in the debates
which accompanied the drafting and ratification of the Constitution
which even suggests such a result. These debates as well as the
history that surrounds the adoption of the treaty provision in Article VI
make it clear that the reason treaties were not limited to those made in
"pursuance" of the Constitution was so that agreements made by the
United States under the Articles of Confederation, including the
important peace treaties which concluded the Revolutionary [354 U.S. 1,
17] War, would remain in effect. 31 It would be manifestly contrary to
the objectives of those who created the Constitution, as well as those
who were responsible for the Bill of Rights - let alone alien to our entire
constitutional history and tradition - to construe Article VI as permitting
the United States to exercise power under an international agreement
without observing constitutional prohibitions. 32 In effect, such
construction would permit amendment of that document in a manner
not sanctioned by Article V. The prohibitions of the Constitution were
designed to apply to all branches of the National Government and they
cannot be nullified by the Executive or by the Executive and the Senate
combined. "
" There is nothing new or unique about what we say here. This Court
has regularly and uniformly recognized the supremacy of the
Constitution over a treaty. 33 For example, in Geofroy v. Riggs, 133 U.S.
258, 267(1798) it declared:
"The treaty power, as expressed in the Constitution, is in terms
unlimited except by those restraints which are found in that
instrument against the action of the government or of its
departments, and those arising from the nature of the government
itself and of that of the States. It would not be contended that it
extends so far as to authorize what the Constitution forbids, or a
change in the character of the [354 U.S. 1, 18] government or in that
of one of the States, or a cession of any portion of the territory of
the latter, without its consent."
"This Court has also repeatedly taken the position that an Act
of Congress, which must comply with the Constitution, is on a full
parity with a treaty, and that when a statute which is subsequent in
time is inconsistent with a treaty, the statute to the extent of conflict
renders the treaty null. 34 It would be completely anomalous to say that
a treaty need not comply with the Constitution when such an
agreement can be overridden by a statute that must conform to that
instrument.
VOID COURT ORDERS & JUDGMENTS; LACK OF SUBJECT
MATTER JURISDICTION; EXCESS OF JURISDICTION
_______________________________________________________________
_
THE COURT IN THE CASE OF Burtnett v. King, 33 Cal.2d 805 (1949) at page 807 Ruled:
“It has been held repeatedly, and recently, that where a statute requires a court to
exercise its jurisdiction in a particular manner, follow a particular procedure, or
subject to certain limitations, an act beyond those limits is in excess of its
jurisdiction. (See Tabor v. Superior Court, 28 Cal.2d 505 ; Lord v. Superior Court, 27 Cal.2d
855 ; Redlands etc. Sch. Dist. v. Superior Court, 20 Cal.2d 348 ; Abelleria v. District Court of
Appeal, 17 Cal.2d 280;Fortenbury v. Superior Court, 16 Cal.2d 405 [106 P.2d 411]; Evans v.
Superior Court, 14 Cal.2d 563 [96 P.2d 107]; Rodman v. Superior Court, 13 Cal.2d 262;
Spreckels S. Co. v. Industrial Acc. Com., 186 Cal. 256 .)”
As stated by our Supreme Court in the case of: Abelleira v. District Court of Appeal, 17
Cal. 2d 280; S. F. No. 16357. In Bank. February 7, 1941, at page: 288:
“But in its ordinary usage the phrase "lack of jurisdiction" is not limited to these fundamental
situations. For the purpose of determining the right to review by certiorari, restraint by
prohibition, or dismissal of an action, a much broader meaning is recognized. Here it may be
applied to a case where, though the court has jurisdiction over the subject matter and the
parties in the fundamental sense, it has no "jurisdiction"(or power) to act except in
a particular manner, or to give certain kinds of relief, or to act without the
occurrence of certain procedural prerequisites.”
“[2] A judgment is void on its face if the court which rendered the judgment
lacked personal or subject matter jurisdiction or exceeded its jurisdiction in
granting relief which the court had no power to grant. (Becker v. S.P.V.
Construction Co. (1980) 27 Cal.3d 489, 493; Jones v.World Life Research
Institute (1976) 60 Cal.App.3d 836, 840-848 If the judgment is void, it is
subject to collateral attack. (Craft v. Craft (1957) 49 Cal.2d 189, 192”
A judgment void on its face may be set aside at any time. (Hayashi v. Lorenz
(1954) 42 Cal.2d 848, 851; Estate of Estrem. (1940),16 Cal.2d 563, 572; Plaza
Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal. App.4th 1,
19.”“Both in their amended complaint and in their motion to vacate
the orders in the guardianship proceeding, plaintiffs took the position
that each of the orders therein was void on its face. In such a case they
could be attacked and their invalidity shown at any time.” (In re Dahnke, 64 Cal.App.
555, 560 ; see also Olivera v. Grace, ,19 Cal.2d 570 ,573-574 ; Estate of Estrem,16 Cal.2d 563,
571; Luckenbach v. Krempel,188 Cal.175,177;People v.Davis,143 Cal.673, 675-676; Winrod
v.Wolters,141 Cal. 399, 402-403; Kreiss v. Hotaling, 96 Cal. 617, 622-623; People v.City of
Barnes,105 Cal. App. 618, 622-623 ”
“The party procuring a judgment against another without due process of law, or
by fraud, takes it at his peril, .."citing at page 731 the California Supreme Court
Ruling in the Case of Lapham v. Campbell, 61 Cal. 296 at page 300. Thereafter at
page 732 the same Appellate Court stated: “ Likewise in Forbes v. Hyde, 31 Cal.
342, 347 (oftentimes quoted by the Supreme Court) it is said: "A judgment
absolutely void upon its face may be attacked anywhere, directly or collaterally,
whenever it presents itself, either by parties or strangers. It is simply a nullity,and
can be neither the basis nor evidence of any right whatever.”
“Whether the want of jurisdiction appears on the face of the judgment or is
shown by evidence aliunde, in either case the judgment is for all purposes a
nullity--past, present and future. (Cf.Hill v.City Cab etc.Co.,79 Cal. 188 "Nothing
can be acquired or lost by it; it neither bestows nor extinguishes any right ... It
neither binds nor bars anyone. All acts performed under it and all claims flowing
out of it are void ... No action upon the part of the plaintiff, no inaction upon the
part of the defendant, no resulting equity in the hands of third persons, no power
residing in any legislative or other department of the government, can invest it
with any of the elements of power or of vitality." (1 Freeman on Judgments, 5th ed., §
322, pp. 643-644.) It is not amiss here to add that while the phrase "void
judgment" is convenient, it is a contradiction in terms. IF A JUDGMENT IS
VOID IT IS NOT A JUDGMENT.”
ARBITRARY CAPRICIOUS ACTIONS OF COURTS & JUDGES

VOID ON THEIR FACE
“A judicial decision made without giving a party an opportunity to present

argument or evidence in support of his contention " is lacking in all the
attributes of a judicial determination." Spector v. Superior Court (1961), 55 Cal.
2d 839 at page 843.
The same court further stated at page 842-844:
“ [2] Second. In proceeding No. 91313 was petitioner deprived of his day in court?
Yes. On December 21, 1960, when petitioner's motion for an order modifying the
preliminary injunction came on for hearing, Judge Cotton refused to permit
counsel for petitioner to present any evidence or argument in support of his
client's position.
“[3] It is a cardinal principle of our jurisprudence that a party should not be
bound or concluded by a judgment unless he has had his day in court. This means
that a party must be duly cited to appear and afforded an opportunity to be heard
and to offer evidence at such hearing in support of his contentions.
[4] His right to a hearing does not depend upon the will, caprice or
discretion of the trial judge who is to make a decision upon the issues.
An order or judgment without such an opportunity is lacking in all the
attributes of a judicial determination. (McClatchy [55 Cal.2d 844] v. Superior
Court, 119 Cal. 413, 418, 421 [51 P. 696, 39 L.R.A. 691]; Collins v. Superior
Court, 145 Cal.App.2d 588, 594 [4] [302 P.2d 805]; Estate of Buchman, 123
Cal.App.2d 546, 554 [5] 560 [267 P.2d 73,47 A.L.R.2d 291] [hearing denied by the
Supreme Court].
[5] Refusal to permit counsel for petitioner to present evidence and make a
reasonable argument in support of his client's position was not a mere error in
procedure. It amounted to a deprival of a substantial statutory right and is not
covered by article VI, section 4 1/2, of the Constitution. (People v. Sarazzawski, ,
27 Cal.2d 7 17 [13] et seq. [161 P.2d 934].)
CALIFORNIA PENAL CODE SECTION 96.5 MANDATES THE

FOLLOWING:
“ 96.5. (a) Every judicial officer, court commissioner, or referee who commits
any act that he or she knows perverts or obstructs justice, is guilty of a public
offense punishable by imprisonment in a county jail for not more than one year.
(b) Nothing in this section prohibits prosecution under paragraph
(5) of subdivision (a) of Section 182 of the Penal Code or any other law.”
“The fundamental conception of a court of justice is condemnation only after

notice and hearing. No one may be deprived of anything which is his to enjoy
until he shall have been divested thereof by and according to law. [13] Under the
constitutional guaranties no right of an individual, valuable to him pecuniarily or
otherwise can be justly taken away without its being done conformably to the
principles of justice [123 Cal.App.2d 560] which afford due process of law,
unless the law constitutionally otherwise provides. [14] Due process of law
does not mean according to the whim, caprice, or will of a judge (Matter of
Lambert, 134 Cal. 626, 632- 633 [66 P. 851, 86 Am.St.Rep. 296, 55 L.R.A. 856]); it
means according to law. It excludes all arbitrary dealings with persons or
property. It shuts out all interference not according to established principles of
justice, one of them being the right and opportunity for a hearing to cross-
examine, to meet opposing evidence, and to oppose with evidence. (Massachusetts
etc. Ins. Co. v. Industrial Acc. Com., )74 Cal.App.2d 911” “Judicial absolutism is
not a part of the American way of life. The odious doctrine that the end justifies
the means does not prevail in our system for the administration of justice. The
power vested in a judge is to hear and determine, not to determine without
hearing. [15] When the Constitution requires a hearing, it requires a fair one,
one before a tribunal which meets established standards of procedure. It is not
for nothing that most of the provisions of the Bill of Rights have to do
with matters of procedure. [16] Procedure is the fair, orderly, and deliberate
method by which matters are litigated. [17] To judge in a contested
proceeding implies the hearing of evidence from both sides in open court, a
comparison of the merits of the evidence of each side, a conclusion from
the evidence of where the truth lies, application of the appropriate laws to
the facts found, and the rendition of a judgment accordingly.”
Quotes from case law on the power of sale:
Bank of America v. La Jolla Group II (2005)129 Cal.App.4th

706 , 28 Cal.Rptr.3d 825
[No. F045318. Fifth Dist. May. 19, 2005.] at page: 712 stated:
“[3] “..””“A power of sale in a deed of trust is a creature of contract, arising from
the parties' agreement. "The power of sale only exists if it is expressly granted by
the trustor in the security documents." (4 Miller & Starr, Cal. Real Estate (3d ed.
2003) § 10:123, p. 381.) The statutory scheme governing nonjudicial foreclosures
does not expand the beneficiary's sale remedy beyond the parties' agreement, but
instead provides additional protection to the trustor: "Statutory provisions
regarding the exercise of the power of sale provide substantive rights to the
trustor and limit the power of sale for the protection of the trustor." (Ibid.”
Bisno v. Sax, 175 Cal.App.2d 714

[Civ. No. 24042. Second Dist., Div. Two. Dec. 2, 1959.]
“Miller and Starr assert that "[t]he statutory presumption [created by section
2924] only applies to the propriety of the required notices, [and] it does not apply
to other requirements of the foreclosure process." (4 Miller & Starr, supra, §
10:211, p. 680.) For the reasons stated above, we agree.”
“The section 2924 presumptions pertain only to notice requirements, not to every
defect or inadequacy short of fraud. [129 Cal.App.4th 715] ”
“Katemis v. Westerlind, 120 Cal.App.2d 537, 543 [261 P.2d 553]: "The general
rule in equity is that time is not of the essence unless it has been made so by its
express terms or is necessarily so from the nature of the contract. (Williston on
Contracts, vol. III (rev. ed. 1936), p. 2385.) In Miller v. Cox, 96 Cal. 339 [31 P.
161], it is stated that the intent to make a particular date, or time, 'the essence of
the contract must be clearly, unequivocally and unmistakably shown by an
express declaration. ... [4] In order to render time thus essential, it must be [175
Cal.App.2d 722] clearly and expressly stipulated that it shall be so; it is not
enough that a time is mentioned during which or before which something shall be
done [citations.]' (P. 345.)”
“No action other than foreclosure can be brought upon a trust deed
note (Brown v. Jensen, 41 Cal.2d 193, 195-196 [259 P.2d 425]; 34
Cal.Jur.2d, § 430, pp. 101-102), and both of these instruments
contemplate a foreclosure in the customary manner--sale under the
power conferred upon the trustee.”
“Civil Code, section 3275, provides: "Whenever, by the terms of an obligation, a
party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason
of his failure to comply with its provisions, he may be relieved therefrom, upon
making full compensation to the other party, except in case of a grossly negligent,
willful, or fraudulent breach of duty." (Emphasis added.) [15”
“[17] That a court of equity will relieve the debtor from the enforcement of an
acceleration clause when confronted with genuinely equitable grounds therefor
seems to be settled law. See annotation to 70 American Law Reports 993, 1000.
This is true whether the court considers an acceleration of maturity as a
penalty or not. A nisi prius judge pertinently observes in Bard v. Rabinfried
Realty Co., 126 Misc. 427 [213 N.Y.S. 44, 45]: "[W]hatever the holding may be
on this matter of definition, the courts have shown a tendency to [175
Cal.App.2d 727] get away from the general rule, and in a number of cases have
relieved mortgagees from their defaults on the basis of doing equity." Likewise,
in Caspert v. Anderson Apartments, 94 N.Y.S.2d 521, 525: "There is no
undeviating rule that equity must enforce the covenants of a mortgage
regardless of surrounding circumstances. The whole system of equity
jurisprudence presents an excellent example of the triumph of equitable
principles over strict and inflexible dogmas of the common law. Pomeroy on
Equity Jurisprudence, Section 382, Fifth Edition. The growth of the
jurisdiction of equity is founded on cases which have broken away from rigid
and irrevocable enforcement of agreements."
“Mr. Justice Cardozo, dissenting in Graf v. Hope Bldg. Corporation, 254 N.Y. 1
[171 N.E. 884, 70 A.L.R. 984], at pages 886-888 [171 N.E.], says: "There is no
undeviating principle that equity shall enforce the covenants of a mortgage,
unmoved by an appeal ad misericordiam, however urgent or affecting. The
development of the jurisdiction of the chancery is lined with historic monuments
that point another course. ... To all this, acceleration clauses in mortgages do not
constitute an exception. They are not a class by themselves, removed from
interference by force of something peculiar in their internal constitution. In
general, it is true, they will be enforced as they are written. ... However fixed the
general rule and the policy of preserving it, there may be extraordinary conditions
in which the enforcement of such a clause according to the letter of the covenant
will be disloyalty to the basic principles for which equity exists. ... The restriction,
however, is not obdurate, for always the gravity of the fault must be compared
with the gravity of the hardship. [Citations.] Let the hardship be strong enough,
and equity will find a way, though many a formula of inaction may seem to bar
the path. [Citations.]" This dissent was quoted with approval in Murphy v. Fox,
___ Okla. ___ [278 P.2d 820-825]. Other New York cases apply the principles
enunciated by Mr. Justice Cardozo. See Norbant Realty Corp. v. A. C. Oaks, Inc.,
116 N.Y.S.2d 215, 216; Rockaway Park Series Corp. v. Hollis Auto. Corp., 206
Misc. 955 [135 N.Y.S.2d 588, 590]; Scelza v. Ryba, 169 N.Y.S.2d 462, 464.”
“[18] California recognizes that: "Equity does not wait upon precedent which
exactly squares with the facts in controversy, but will assert itself in those
situations where right and justice would be defeated but for its intervention."
(Times-Mirror Co. v. Superior Court, 3 Cal.2d 309, 331 [44 P.2d 547].) In the
same spirit it is said in Wuest v. Wuest, 53 Cal.App.2d 339, 346 [127 P.2d 934]:
"Living as we do in [175 Cal.App.2d 729] a world of change, equitable remedies
have necessarily and steadily been expanded to meet increasing complexities of
such changing times, and no inflexible rule has been permitted to circumscribe
the power of equity to do justice. As has been well said, equity has contrived its
remedies 'so that they shall correspond both to the primary right of the injured
party, and to the wrong by which that right has been violated,' and 'has always
preserved the elements of flexibility and expansiveness, so that new ones may be
invented, or old ones modified, in order to meet the requirement of every case,
and to satisfy the needs of a progressive social condition, in which new primary
rights and duties are constantly arising, and new kinds of wrongs are constantly
committed.' (1 Pom. Eq.Jur., 4th ed., p. 125, § 111.)" While the briefs and our
own research have failed to reveal any case which is factually parallel with the
one at bar, it does appear that principles concerning forfeitures were applied to a
trust deed foreclosure in McCue v. Bradbury, 149 Cal. 108, 113 [84 P. 993].”
“Equity having taken jurisdiction over a cause does complete justice, even to the
extent of exceeding the specific prayers of the complaint when necessary. [19]
Petersen v. Ridenour, 135 Cal.App.2d 720, 727 [287 P.2d 848]: "It is fundamental
that equity, having taken jurisdiction, will grant complete relief. This is especially
true in a declaratory judgment action. [20] 'If a controversy exists as in this
proceeding and a complaining party is entitled to some relief a trial court may not
refuse to declare the rights of the parties concerning the controversy. [Citation.]
[21] The purpose of the action is to set at rest or at least quiet, until the
occurrence of further events, the rights and relations of the parties. [Citations.]"
[22] "[T]he absence of a prayer is not fatal, the court being charged under section
580, Code of Civil Procedure with the duty in a contested case of granting any
relief consistent with the case made by the complaint and embraced within the
issue." (See also Selby v. Battley, 149 Cal.App.2d 659, 664-665 [309 P.2d 120].)”
CALIFORNIA CIVIL CODE SECTION:
2953.Any express agreement made or entered into by a borrower at
the time of or in connection with the making of or renewing of any
loan secured by a deed of trust, mortgage or other instrument
creating a lien on real property, whereby the borrower agrees to
waive the rights, or privileges conferred upon him by Sections 2924,
2924b, 2924c of the Civil Code or by Sections 580a or 726 of the Code
of Civil Procedure, shall be void and of no effect. The provisions
of this section shall not apply to any deed of trust, mortgage or
other liens given to secure the payment of bonds or other evidences
of indebtedness authorized or permitted to be issued by the
Commissioner of Corporations, or is made by a public utility subject
to the provisions of the Public Utilities Act.
Legal Rescission and Equitable Rescission

The parties do agree on some points, even though they disagree on the issue of whether this
particular action by NMS is legal (as NMS contends) or equitable (as the County contends).
The points of agreement are aptly summarized in Runyan v. Pacific Air Industries, Inc. (1970)
2 Cal.3d 304 (Runyan) as follows:
"In California prior to 1961 there were two methods provided for in the Civil Code by which a
party entitled to rescind could obtain rescissionary relief. The first, found in sections 1688-
1691, specified certain instances in which a party to a contract might rescind it and provided
that such rescission could be accomplished by the rescinding party by giving notice of the
rescission and offering to restore everything of value which he had received. This method
contemplated a rescission 'by the individual act of one of the parties to the contract' and has
been referred to as a unilateral rescission. [Citation.] Having rescinded the contract by his own
act, the rescinding party then brought an action to enforce the out-of-court rescission.
[Citation.][ fn. 3 ] Such action was considered to be one at law brought on the implied promise
on the part of the nonrescinding party to repay or return the consideration received. [Citation.]
'In reality, it is an action in which the law, in order to prevent the unjust enrichment of
defendants from the property of plaintiff, itself implies a promise to repay the sum demanded.
In other words, it is an action in assumpsit upon a promise implied by law.' [Citation.]
"The second method by which a party could obtain rescissionary relief was the action for a
judicial rescission. [Citation.] Former sections 3406-3408 provided that a rescission could be
adjudged on any of the grounds specified in section 1689 together with two additional grounds.
Unlike the method of unilateral rescission, however, this method was viewed as an action for
specific judicial relief for the wrong giving rise to the right of rescission, and was deemed
equitable in nature. [Citation.] [152 Cal.App.4th 962]
"In short, the two procedures which we have described contemplated 'two types of action for
rescissionary relief' -- the first an 'action to enforce a rescission' and the second an 'action to
obtain a rescission.' [Citation.] Significant substantive and procedural differences existed
between these two methods for obtaining rescissionary relief. The right to a jury trial, the
applicable statute of limitations, the availability of the provisional remedy of attachment and the
possibility of joinder of other claims all depended upon which of these two methods the plaintiff
elected to use in seeking rescissionary relief. The result was a body of law which was
'unnecessarily complex and confusing to both courts and attorneys, to say nothing of laymen.'
[Citation.]
"As previously mentioned ... the Legislature made several changes in these procedures in 1961.
Prominent among these was the addition of section 1692 ... and the repeal of sections 3406-
3408. 'This legislation, in effect, abolished the action to obtain court rescission and left only an
action to obtain relief based upon a party effected rescission.' [Citation.] [Citation.] As the Law
Revision Report indicates, the purpose of the statutory changes was to eliminate the confusing
and complex duality of rescission procedures by 'providing a single, simple procedure to be
followed in all situations where rescissionary relief is sought.' [Citation.]" (Runyan, supra, 2
Cal.3d at pp. 311-313, fn. omitted.)
[4] The parties' disagreement is this. NMS contends that because its rescission action seeks
recovery of only money, it is an action at law. The County contends that because what NMS
seeks to recover is something other than the consideration NMS gave under the contract (i.e.,
something other than the land NMS conveyed to the County), the action is equitable in nature.
We think the County has the better argument.
"Under pre-1961 law ... an action at law to enforce an out-of court rescission was, by its very
nature, invariably restricted to the recovery of the consideration given by the rescinding party."
(Runyan, supra, 2 Cal.3d at p. 314.) Here, NMS is seeking something other than the land it
conveyed to the County. NMS contends that the 1961 changes to the law of rescission give a
rescinding plaintiff the right to a jury trial whenever that plaintiff seeks only a monetary
recovery. We do not agree.
Runyan points out that the 1961 changes to the rescission law were "intended by the
Legislature to effectuate the recommendations of the Law Revision Commission," including a
recommendation appearing on page D-7 of the California Law Revision Commission's
Recommendations and Study [152 Cal.App.4th 963] Relating to Rescission of Contracts (1960)
3 California Law Revision Commission Report (Sept. 1961) pages D-5 to D-35 (Law Revision
Report). (Runyan, supra, 2 Cal.3d at p. 313.) That particular recommendation states:
"The rescission statutes should make plain that, after rescinding a contract, a
party may seek any form of relief warranted under the circumstances, whether
legal or equitable. As all such actions will be to enforce a rescission, the right of
the parties to a jury and the court in which the action must be brought will be
determined by the nature of the substantive relief requested and not by the form of
the complaint. For example, if a bare money judgment is sought, a justice court
will have jurisdiction in appropriate cases, and the plaintiff may not convert the
action into an equity action and thus deprive the justice court of jurisdiction
merely by a prayer for rescission. The statute should also make plain that the
court may grant any other relief that is appropriate under the circumstances if it
develops at the trial that the plaintiff has mistaken his remedy and the purported
rescission was not effective." (Law Revision Report, at p. D-7.)
[5] We do not read this language as meaning that any rescission action that seeks
a money judgment must be deemed an action at law, even if the plaintiff paid no
money as consideration for the contract. Rather, we read this language as saying
that a rescinding plaintiff who does seek to recover money paid as consideration
for a contract may not deprive the defendant of a jury trial merely by framing the
complaint as an action in equity asking for judicial rescission. As the Runyan
court stated in discussing the 1961 changes, "[w]e perceive in this fusing of the
two former rescission procedures no intention on the part of the Legislature to
disturb, much less eradicate, substantive differences theretofore underlying such
procedures." (Runyan, supra, 2 Cal.3d at p. 313.) To state this a bit differently, if
a rescission action seeking to recover something other than the consideration paid
was an equitable action prior to the 1961 amendments, then it is an equitable
action today. And that is our conclusion in this case.
Authorities Cited by NMS
NMS cites a number of cases in support of its argument, but none of them say a rescission
action that seeks to recover something other than the consideration paid by the rescinding
plaintiff is an action at law. fn. 4 [152 Cal.App.4th 964]
In Philpott v. Superior Court (1934) 1 Cal.2d 512, the plaintiff paid $625 to the defendant for
bank stock that turned out to be worthless. The plaintiff used the "unilateral" or "out-of-
court" rescission procedure (see Runyan, supra, 2 Cal.3d at pp. 311-312) to recover the $625,
and this was held to be an action at law. (Philpott, at p. 526.)
In Davis v. Security-First Nat. Bank (1934) 1 Cal.2d 541, the plaintiff used the out-of-court
rescission procedure to rescind two contracts for the purchase of land. The plaintiff had been
induced by fraudulent representations of the seller to enter into the contracts. Plaintiff
sought to recover the payments she had made on the two lots. The trial court denied the
plaintiff a jury trial "upon the ground that the cause of action was equitable and not legal."
(Id. at p. 542.) The California Supreme court reversed, stating: "[W]e have no hesitancy in
declaring that the facts here alleged state an action at law." (Ibid.)
Paularena v. Superior Court, supra, 231 Cal.App.2d 906 is a post-1961 case similar to Davis.
In Paularena the trial court refused to allow the rescinding plaintiffs a jury trial, and the
Court of Appeal issued a writ directing the trial court to allow trial by jury. In addition to
the plaintiffs' recovery of the amounts they had paid for the properties, the case presented
issues of whether, and in what amounts, the plaintiffs also should recover for improvements
made by them upon the properties and whether the defendant should be entitled to an offset
for the reasonable value of the use of the properties by the plaintiffs while the plaintiffs were
in possession. "We conclude that any ancillary relief of an equitable nature to be afforded
the parties under the cause of action based upon the subject rescission is merely incidental to
the recovery of a money judgment; that the relief sought is legal and not equitable; and that
plaintiffs are entitled to a jury trial as a matter of right." (Paularena, at p. 914.)
Here, however, all of the relief sought is something other than the consideration paid by
NMS, that is, something other than the land NMS conveyed to the County. There is no
ancillary relief of an equitable nature. Rather, the entire relief sought is equitable.
In Masero v. Bessolo (1927) 87 Cal.App. 262, the plaintiffs conveyed real property worth
$10,000 to the defendants. The plaintiffs were to receive a share of the profits from the
business conducted by the defendants on the property. The plaintiffs received nothing and
sued for rescission. The trial court granted the defendants a nonsuit, in part on the ground
that lack of consideration was not a sufficient ground for rescission of a conveyance of real
property. The Court of Appeal reversed, stating: "This being an equity case, the plaintiffs
were entitled to the relief made by their [152 Cal.App.4th 965] pleadings and the testimony,
irrespective of whether they were correct or incorrect in their views as to the relief to which
they were entitled." (Id. at p. 266.)
The court noted that the plaintiffs still could recover monetary relief, and that "the
testimony showing that property worth $10,000 had been transferred by the plaintiffs to the
defendant without consideration being paid therefor, the inference, if not necessarily, at least
very fairly, and we may say strongly arises that the plaintiffs have suffered damages in just
that sum." (Masero v. Bessolo, supra, 87 Cal.App. 262 at p. 269.) The Court of Appeal
ordered the trial court to "allow the plaintiffs ... to present all the issues which may be
properly tendered and tried in this case to the intent that the plaintiffs may be awarded such
relief as may be consonant with equity and justice." (Id. at pp. 271-272.) We see nothing in
this case that supports NMS's argument that a rescission action in which the plaintiff seeks a
monetary recovery in place of the nonmonetary consideration actually paid by the plaintiff
must be deemed a legal action and not an equitable one.
Ripling v. Superior Court (1952) 112 Cal.App.2d 399 and Raedeke v. Gibraltar Sav. & Loan
Assn. (1974) 10 Cal.3d 665, also cited by NMS, do not involve rescission at all. Jensen v.
Harry H. Culver & Co. (1932) 127 Cal.App.Supp. 783 held that an action to enforce an out-
of-court rescission in which the plaintiff had been fraudulently induced to pay $2,000 to the
defendant was an action at law and not in equity. Again, the plaintiff in Jensen sought merely
to recover the $2,000 he had paid.
The Snelson fn. 5 Case
The trial court relied heavily on Snelson. In Snelson the plaintiffs were buyers of residential
real property who brought a successful rescission action against the sellers. The sellers had
represented that the lot was "cut," but the lot "contained fill material," and after heavy
rains "a large landslide occurred on the edge of" the lot. (Snelson, supra, 5 Cal.App.3d at p.
250.) The case was tried without a jury and the plaintiffs were awarded $9,088.50, consisting
of a return of their $4,800 down payment, plus an additional $4,288.50 for improvements the
plaintiffs had made to the property.
The Court of Appeal rejected various arguments raised on appeal by the defendants and
noted in its opinion that the plaintiffs appeared to be entitled to even more incidental
damages, including the monthly payments they had [152 Cal.App.4th 966] made on the
property and $467.05 in closing costs. It reversed the judgment so that the trial court could
take additional evidence and "modify its findings, conclusions and judgment to conform
with the views set forth in the opinion ...." (Snelson, supra, 5 Cal.App.3d 243 at p. 258.) The
defendants then petitioned for rehearing and argued that they (or at least some of them)
were entitled to a jury trial.
The Court of Appeal amended its opinion by adding to it and explaining why it was denying
a rehearing. The Snelson court gave two reasons why the defendants were not entitled to a
jury trial. One was that "[o]ne may not permit an issue to be tried as an equity matter in the
trial court without objection and then claim on appeal that it should have been tried as a law
question on the legal side of the court." (Snelson, supra, 5 Cal.App.3d at p. 259.)
The Snelson court's other stated reason for denying rehearing played a much larger role in
the case here. That other reason was that "[i]n marked contrast to the factual situation in
Paularena v. Superior Court[, supra,] 231 Cal.App.2d 906, the gravamen of the cause of
action before the trial court and this court was primarily a proceeding in equity to
adjudicate a rescission in the face of defendants' denial of the existence of a basis for
rescission. As pointed out in the principal opinion, the awarding of damages was ancillary to
the equitable disposition of the cause." (Snelson, supra, 5 Cal.App.3d at p. 259.) The trial
court in the case before us relied on this language to conclude that because the County
denied the existence of any basis for rescission of the contract, the existence (or not) of a
ground for rescission was an issue to be tried, and the case therefore was an action in equity.
NMS contends this aspect of Snelson was decided wrongly. It argues that Snelson in effect
attempts to restore the judicial rescission procedure abolished by the 1961 amendments.
Under Snelson, argues NMS, any defendant who disputed a plaintiff's assertion of a right to
rescind could be denied a jury trial (even in an action seeking to recover money paid) on the
theory that this denial automatically made the action an equitable action. While we are
inclined to agree with NMS on this issue, our agreement does not help NMS because a ruling
that is correct will not be reversed simply because it may have been based on an incorrect
reason. (Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329330.) As we have stated, we
conclude that the action is equitable because it seeks something other than a return of the
consideration given by NMS. [152 Cal.App.4th 967]
Nilsson v. City of Los Angeles [249 Cal. App. 2d 976]

[Civ. No. 29551. Second Dist., Div. Three. Apr. 6, 1967.]
NANCY ANNE NILSSON, Petitioner and Appellant, v. CITY OF LOS ANGELES,

Defendant and Respondent.
COUNSEL
Sussman & Spevack and Norman R. Spevack for Petitioner and Appellant.
Roger Arnebergh, City Attorney, Bourke Jones, Assistant City Attorney, and John F.
Haggerty, Deputy City Attorney, for Defendant and Respondent.
OPINION
MOSS, J.
Appellant appeals from a minute order denying her petition for leave to present a late claim
against the City [249 Cal. App. 2d 978] of Los Angeles filed pursuant to section 912 of the
Government Code fn. 1 after the statutory period of 100 days had expired, but before the
expiration of one year from the date of the accrual of the cause of action.
The facts upon which appellant relies are set forth in the affidavit of her attorney, Norman
R. Spevack, attached to her petition. The city filed no affidavits or declarations in opposition.
Appellant was arrested on December 29, 1963. Charges were dropped and she was released
from custody some time before January 2, 1964. While she was in custody she consulted an
attorney who, on January 2, 1964, wrote a letter to the Los Angeles Police Department
suggesting that his client might have a cause of action for false imprisonment and requesting
the names of the complainants, the arresting officers, and the deputy district attorney
contacted after the arrest. The time for presentation of a claim against the city expired on
April 7, 1964, the 100th day after the arrest. (Gov. Code, § 911.2.) Mr. Spevack stated in his
affidavit: "that because of an error in calendaring in affiant's office, the Claim for Damages
which should have been filed with the City of Los Angeles on or before April 7, 1964 was
actually filed on May 19, 1964. The late filing of the Claim for Damages was entirely due to
an office error in calendaring a date, and clearly was not done for the purpose of prejudicing
or in any manner hiding the fact that a claim was to be made. Further, immediately upon
discovery of the late date, claim was presented and filed." fn. 2 On September 19, 1964
appellant's attorney filed on her behalf an application for leave to present a late claim
pursuant to section 911.4 of the Government Code. The city did not act upon the application
within 35 [249 Cal. App. 2d 979] days and it was therefore deemed denied on October 26,
1964. (Gov. Code, § 911.6.) fn. 3
Since appellant's application for leave to present a late claim was filed within one year after
the accrual of her cause of action and no showing was made that the city would be
prejudiced if such leave were granted, the trial court could only have based its order on a
finding (1) that appellant did not make her application for leave to present a late claim
within a reasonable time, or (2) that her failure to present her claim was not through
mistake, inadvertence, surprise or excusable neglect, or (3) that a combination of the
foregoing findings was true.
[1] "The showing required of a petitioner seeking relief because of mistake, inadvertence,
surprise or excusable neglect under section 912, subdivision (b)(1), of the Government Code
is the same as required under section 473 of the Code of Civil Procedure for relieving a party
from a default judgment. (See Van Alstyne, Cal. Government Tort Liability (Cont. Ed. Bar) §
8.29, pp. 388-389; n. 4, p. 711.)" (Viles v. State of California, 66 Cal. 2d 24, 29 [56 Cal.Rptr.
666, 423 P.2d 818].)
Section 473 of the Code of Civil Procedure has been applied with liberality in relieving
parties from their defaults where relief can be granted without injustice to other parties. (See
City of Los Angeles v. Board of Supervisors, 105 Cal.App. 199, 201 [287 P. 135].) "An order
denying relief runs counter to the law's policy encouraging trial and disposition on the
merits. It is subject to closer appellate scrutiny than one granting relief, and doubts will be
resolved in favor of the party attempting to get to trial." (Daley v. County of Butte, 227
Cal.App2d 380, 389 [38 Cal.Rptr. 693].)
[2] "There is a well-established rule that appellate courts will not reverse the trial court
except for abuse of discretion. This rule, however, does not preclude reversal of an order
denying relief where adequate cause for such relief is shown by uncontradicted evidence in
affidavits of the petitioner. ..." (Viles v. State of California, supra, 66 Cal. 2d 24, 28-29;
Beckley v. Reclamation Board, 48 Cal. 2d 710 [312 P.2d 1098] [plaintiff's attorney, a state
senator, sought extension of time to plead because of legislative duties (material facts
apparently uncontradicted)]; Brill v. Fox, [249 Cal. App. 2d 980] 211 Cal. 739 [297 P. 25]
[mistaken belief by defendants as to liability of codefendants induced in part by allegations
of complaint, and ignorance of special defense (material facts apparently uncontradicted)];
Waite v. Southern Pac. Co., 192 Cal. 467 [221 P. 204] [defendant's attorney failed to answer
under mistaken but honest belief that jurisdiction was in the federal court (material facts
uncontradicted)]; Daley v. County of Butte, supra, 227 Cal. App. 2d 380 [dismissal for failure
to prosecute within two years set aside where plaintiff's attorney totally neglected her case
(material facts uncontradicted)]; Van Dyke v. MacMillan, 162 Cal. App. 2d 594 [328 P.2d
215] [on date set for trial in Yuba City, defendant's attorney on trial in Los Angeles and
under treatment by a Los Angeles physician (no opposition to motion)]; Gore v. Witt, 149
Cal. App. 2d 681 [308 P.2d 770] [defendant mistaken as to date of service and misinformed
his attorney who attempted to file answer after default taken (opposing affidavits filed but
material facts undisputed)]; Roehl v. The Texas Co., 107 Cal.App. 708 [291 P. 262]
[defendant corporation allowed default to be taken under mistaken belief that its motion to
quash service would be granted (opposing affidavit filed)]; Toon v. Pickwick Stages, Inc., 66
Cal.App. 450 [226 P. 628] [employee of defendant's attorney inadvertently misfiled summons
and complaint (no opposing affidavits filed)].)
[3] In weighing a motion for relief under section 473 of the Code of Civil Procedure the trial
judge could properly consider as a factor favoring relief the absence of any prejudice to the
opposing party as the result of its order. (Brill v. Fox, supra, 211 Cal. 739, 744; Waite v.
Southern Pac. Co., supra, 192 Cal. 467, 471; Daley v. County of Butte, supra, 227 Cal. App.
2d 380, 395; City of Los Angeles v. Board of Supervisors, supra, 105 Cal.App. 199, 201; Toon
v. Pickwick Stages, Inc., supra, 66 Cal.App. 450, 455.)
[4] While not every mistake of an attorney constitutes excusable neglect (see, for example,
cases cited in 3 Witkin, Cal. Procedure (1954) 2108), calendar errors by an attorney or a
member of his staff are, under appropriate circumstances, excusable. (Haviland v. Southern
Cal. Edison Co., 172 Cal. 601, 605 [158 P. 328] ["It will hardly be claimed that the
inadvertent entry of a wrong date in the book or journal in which defendant's attorneys kept
a record of the proceedings to be taken by them could not fairly have been held by the trial
court to furnish sufficient ground for relief under the [249 Cal. App. 2d 981] remedial
provisions of section 473"]; Van Dyke v. MacMillan, supra, 162 Cal. App. 2d 594; Stub v.
Harrison, 35 Cal. App. 2d 685 [96 P.2d 979] [before expiration of time to plead, son of
defendant's attorney seriously injured, accumulation of work and distress caused attorney to
forget due date of pleading]; Soda v. Marriott, 130 Cal.App. 589 [20 P.2d 758], [attorney
appointed to bench, office disbanded, unfinished business handled by one remaining
attorney, cost bill filed late]; City of Los Angeles v. Board of Supervisors, supra, 105
Cal.App. 199 [through oversight of calendar clerk in legal division of city department
opening brief on appeal not timely filed]; H. G. B. Alexander & Co. v. Martz, 90 Cal.App.
360 [265 P. 881] [calendar clerk employed by attorney for eight years became ill, neglected to
enter time for filing brief]; Hagenkamp v. Equitable Life Assur.Soc., 29 Cal.App. ing]; Soda
v. Marriott, 130 Cal.App. 589 [20 P.2d 758] 713 [156 P. 520] [attorney mistakenly entered
trial date on his calendar as August 8 instead of August 7, missed trial].)
In Viles v. State of California, supra, 66 Cal. 2d 24, plaintiff's wife died in a highway collision
in which his minor son was severely injured. Plaintiff's claim and that of his minor son
against the State were based upon the asserted dangerous and defective condition of the
highway. Plaintiff was contacted by representatives of the insurance companies insuring two
of the cars involved in the collision and was advised that he had one year in which to file an
action for wrongful death. Relying on this information he did not consult an attorney until
almost nine months after the accident, when he first learned that a claim had to be presented
not later than the 100th day after the accrual of the cause of action. Two weeks after
consulting an attorney plaintiff and his minor son applied for leave to file a late claim. The
son's application was granted, but plaintiff's was denied. His petition to the superior court
for leave to present a late claim was denied without findings. The Supreme Court, in
reversing the order of the trial court stated, "Under the well- recognized policy of law to
liberally construe remedial statutes designed to protect persons within their purview, and the
modern trend of judicial decisions in favor of granting relief unless absolutely forbidden by
statute (Hobbs v. Northeast Sacramento County Sanitation Dist., supra, 240 Cal. App. 2d
552, 556 [49 Cal.Rptr. 606]; Gonzales v. County of Merced, 214 Cal. App. 2d 761, 765 [29
Cal.Rptr. 675]; O'Brien v. City of Santa Monica, 220 Cal. App. 2d 67, 74-75 [9] [33 Cal.Rptr.
770]) we [249 Cal. App. 2d 982] are of the opinion that the trial court's denial of the petition
defeats the legislative objective and was an abuse of discretion." (66 Cal. 2d 24, 32-33.)
Mr. Viles waited nine months to consult a lawyer who then two weeks later on his behalf
made application for leave to present a late claim. Appellant Nilsson immediately consulted a
lawyer who then waited nine months to make a similar application. We do not think the
remedial purpose of section 912 would be served by granting relief to a claimant whose own
neglect caused the delay as in Viles and denying relief to a claimant in the position of
appellant whose attorney caused the delay. Indeed, this case is perhaps the stronger of the
two because the courts "are somewhat loath to penalize a litigant on account of some
omission on the part of his attorney, particularly where the litigant himself has acted
promptly and has relied, as in the instant case, upon the attorney to protect his rights." (Stub
v. Harrison, supra, 35 Cal. App. 2d 685, 689- 690.)
[5] We recognize that a claimant must act with reasonable diligence after discovering his
default. (Viles v. State of California, supra, 66 Cal. 2d 24, 31.) Plaintiff's attorney was not as
diligent as Mr. Viles' attorney in preparing an application for leave to present a late claim;
plaintiff's attorney waited several months while Mr. Viles' attorney acted within two weeks.
However, in the absence of any showing of prejudice to the City, the delay in filing the
application was immaterial. (Waite v. Southern Pac. Co., supra, 192 Cal. 467, 471 [more than
five months' delay in seeking relief under § 473, Code Civ. Proc.]; Morrill v. City of Santa
Monica, 223 Cal. App. 2d 703 [35 Cal.Rptr. 924] [order granting leave to present claim of
minor pursuant to former section 716 of the Government Code, affirmed]; City of Los
Angeles v. Board of Supervisors, supra, 105 Cal.App. 199, 200 [opening brief due January 1,
application for relief filed March 20.].)
The City points out that the affidavit of appellant's attorney does not state facts showing how
the calendaring error occurred in that it does not indicate what office procedure was
followed in order to make timely entries, nor does it indicate who made the error. [6] We
agree that the affidavit sets forth the crucial event in conclusional terms; however,
conclusional or not, the averments of the affidavit became competent evidence when no
objection to their use was made in the trial court. (O'Brien v. City of Santa Monica, supra,
220 Cal. App. 2d 67, 74; Falk v. Falk, 48 Cal. App. 2d 780, 789 [249 Cal. App. 2d 983] [120
P.2d 720].) The failure to show an established office calendaring procedure was not a critical
omission. (See Toon v. Pickwick Stages, Inc., supra, 66 Cal.App. 451, 453 [no established
procedure, several changes in office staff]; compare H. G. B. Alexander & Co. v. Martz,
supra, 90 Cal.App. 360, 361 [same clerk for eight years].) Under the circumstances of this
case the trial court's denial of the petition for leave to present a late claim was an abuse of its
discretion.
The order is reversed.
Ford, P. J., and Cobey, J., concurred.
FN 1. In 1964 section 912 provided in pertinent part: "(b) The superior court shall grant
leave [to file a late claim] if the court finds that the application to the board [to file late] was
made within a reasonable time not to exceed one year after the accrual of the cause of action
and was denied ... and that:
"(1) The failure to present the claim was through mistake, inadvertence, surprise or
excusable neglect unless the public entity ... establishes that it would be prejudiced if leave to
present the claim were granted; ... * * *
"(e) The court shall make an independent determination upon the application. The
determination shall be made upon the basis of the petition, any affidavits in support of or in
opposition to the petition, and any additional evidence received at the hearing on the
petition."
In 1965 section 912 was repealed and a modified procedure for obtaining judicial relief was
set forth in section 946.6 of the Government Code.
FN 2. Mr. Spevack does not state anywhere in his affidavit who in his office committed the
error, when and how it happened, and when and how he discovered the error.
FN 3. The 35- day period was increased to 45 days by a 1965 amendment to section 911.6.
_______________________________________________________________
Young v. Bank of America (1983) 141 Cal.App.3d 108 , 190 Cal.Rptr. 122
[Civ. No. 52096. Court of Appeals of California, First Appellate District,
Division Five. March 22, 1983.]
CHRIS D. YOUNG, Plaintiff and Respondent, v. BANK OF AMERICA,
Defendant and Appellant.
(Opinion by Low, P. J., with King and Haning, JJ., concurring.) [141
Cal.App.3d 109]
COUNSEL
Theodore Sachsman, Robert A. Padway, June E. Moroney and George M. Duff
for Defendant and Appellant.
Andrew H. Swartz and Spiering, Scherzer & Swartz for Plaintiff and
Respondent. [141 Cal.App.3d 111]
OPINION
LOW, P. J.
Defendant Bank of America (Bank) appeals from a judgment awarding
plaintiff Young $150,000 in compensatory and treble damages based upon a
finding that the Bank violated provisions of the Song-Beverly Credit Card Act
of 1971. Plaintiff reported to the Bank that her credit card had been stolen, but
the Bank tenaciously sought collection of charges she did not make. In
awarding damages, the jury considered her claim for emotional distress. We
affirm.
Under the Credit Card Act (Civ. Code, § 1747 et seq.) a credit card issuer is
required to correct billing errors within 60 days of notification by the
cardholder. The Credit Card Act also prohibits the card issuer from
communicating unfavorable credit information to a third party while a billing
dispute is under investigation. A cardholder who is injured as a result of the
wilful violations of either of these provisions may collect damages, which can be
trebled in the court's discretion. (Civ. Code, §§ 1747.50, 1747.70.)
In her complaint for declaratory relief and damages, plaintiff alleged that she
notified the Bank that her credit card had been stolen; that the charges
thereafter incurred were unauthorized; that despite being so informed the
Bank refused to remove these charges from her account; and that the Bank
knowingly communicated this erroneous credit information to a credit
reporting service, all in violation of Civil Code sections 1747.50 and 1747.70.
Following a bifurcated trial on the issues of liability and damages, the trial
court found and concluded that Young was not liable for the charges to her
account, and limited her liability to the Bank in the amount of $50 pursuant to
former Civil Code section 1747.20. That section limited the cardholder's
liability for the unauthorized use of a credit card to $50, on condition that the
cardholder inform the card issuer that the card was lost or stolen within a
reasonable time after the event. A jury tried the issue of damages and returned
a general verdict in favor of respondent for $50,000. The trial court concluded
that the Bank's conduct was wilful and callous and trebled the damage award
as permitted under Civil Code sections 1747.50, subdivision (c) and 1747.70,
subdivision (d).
The facts, as stated in an agreed statement submitted to the trial court are as
follows: On May 24, 1979, plaintiff permitted her friend Jerry Wooden to use
her BankAmericard Visa credit card issued by the Bank for the sole purpose of
purchasing a one-way airplane ticket to Hawaii, in the approximate sum of
$150, on condition that Wooden telephone plaintiff everyday from Hawaii and
return the credit card to her when he returned to California. Wooden
disappeared after May 24th; he never telephoned Young and did not return her
credit [141 Cal.App.3d 112] card to her. On May 26, 1979, Young telephoned
the Bank and informed them that her credit card had been stolen and to cancel
it effective immediately. On September 3, 1979, the Bank recovered the credit
card, but not before Wooden or some other person incurred $2,198.32 in
charges. The Bank refused to adjust Young's balance and billed her for the
charges.
The evidence at the damages phase of trial established that on June 13, 1979,
Young visited the Monterey branch of the Bank and confirmed her earlier
telephone call. She later wrote a letter to the Bank repeating her earlier report
that her credit card was stolen. During the investigation of the disputed
charges, the Bank informed TRW credit reporting service that Young had
exceeded her credit limit and that her account was 30 days past due. The Bank
did not notify TRW that a dispute existed. Neither did the Bank advise Young
of the unfavorable credit report. For several weeks following the reported loss,
Bank employees made numerous telephone calls to Young's parents' home and
her place of work regarding the outstanding balance on her account and
continued to send her statements demanding payment of the disputed amount.
In January 1980, Young applied for and was refused a credit card from the
Monterey branch of the Valley National Bank. The decision to reject the
application was based on the unfavorable TRW credit report. Young's credit
report reflected a "negative" credit profile indicating that her account was 120
days delinquent with a balance due of $2,198. Young testified that she suffered
emotional stress.
[1] In support of its first contention, the Bank argues that since Wooden had
apparent authority to use the credit card, the credit card could not be
considered lost or stolen within the meaning of Civil Code section 1747.20. We
disagree.
The former statute provided: "If an accepted credit card is lost or stolen after
the credit card has reached the cardholder, and the cardholder notifies the card
issuer within a reasonable time by telephone, telegraph, letter, or any other
reasonable means after discovery of loss or theft or after the time in which a
reasonable man in the exercise of ordinary care would have discovered the loss
or theft, the cardholder is not liable for any unauthorized use of the credit card.
In no event shall the liability of a cardholder for the unauthorized use of a
credit card exceed fifty dollars ($50)." (Repealed by Stats. 1982, ch. 545, § 6;
and replaced by § 1747.10, Stats. 1982, ch. 545, § 5 [limits liability for
unauthorized use to $50].)
"Unauthorized use" as defined in former Civil Code section 1747.02,
subdivision (f) means: "[T]he use of a credit card by a person, other than a
cardholder, (i) who does not have actual, implied, or apparent authority for
such use and (ii) from which the cardholder receives no benefit. 'Unauthorized
[141 Cal.App.3d 113] use' does not include the use of a credit card by a person
who has been given authority by the cardholder to use the credit card. Any
attempted termination by the cardholder of such person's authority is
ineffective as against the card issuer until such time as the cardholder complies
with such procedures as may be required by the card issuer to terminate such
authority. [Furthermore,] following the card issuer's receipt of oral or written
notice from a cardholder indicating that it wishes to terminate the authority of
a previously authorized user of a credit card, the card issuer shall follow its
usual procedures for precluding any further use of a credit card by an
unauthorized person." (Amended by Stats. 1982, ch. 545, § 2.)
The facts support the trial court's finding that the credit card was stolen and
Wooden's use of it was unauthorized. After receiving the credit card, Wooden
failed to perform as promised; i.e., to telephone daily, to limit the use of the
card to one plane ticket and to return the card shortly. It may be reasonably
concluded that he took it under false pretenses, never intending to return it to
Young. (See People v. Fujita (1974) 43 Cal.App.3d 454, 467-468 [117 Cal.Rptr.
757].) Wooden retained possession of the credit card beyond any permission
given, with intent to deprive Young permanently of the benefits of ownership.
Therefore, the credit card was stolen within the meaning of the statute.
It is not significant that Young had voluntarily loaned the credit card to
Wooden in the first instance or that the name on the card could denote that the
cardholder was male or female. On May 26, 1979, two days after Wooden
disappeared, Young informed the Bank that the card was stolen and that any
subsequent use was unauthorized. Young had fulfilled her duties under the
statute and the trial court properly limited her liability to $50.
The Bank next urges that the trial court erred by permitting Young to amend
her complaint to include a prayer for damages from emotional distress. Before
we reach this issue we must decide whether damages for pain and suffering and
emotional distress are recoverable at all. The statute provides that a cardholder
may bring an action for recovery of damages in the event of a wilful violation of
the statute. (Civ. Code, § 1747.50, subd. (c), 1747.70, subd. (d).) The Bank
argues that its conduct amounted to a breach of contract for which emotional
distress damages are not recoverable. We disagree.
This is an action sounding in tort rather than in contract because it seeks
damages for a violation of a duty imposed by statute. Applying the general rule
for fixing tort damages, all harm proximately caused by the defendant's breach
of a legal duty is compensable, including damages for emotional distress. (Civ.
Code, § 3333; seeNeal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 920, fn.
3, 922 [148 Cal.Rptr. 389, 582 P.2d 980];Crisci v. Security Ins. Co. (1967) 66
Cal.2d 425, 432 [58 Cal.Rptr. 13, 426 P.2d 173].) [141 Cal.App.3d 114]
A like result was reached in Royal Globe Ins. Co. v. Superior Court (1979) 23
Cal.3d 880 [153 Cal.Rptr. 842, 592 P.2d 329], which held that a private litigant
may bring an action for economic and emotional distress damages against an
insurer that violates certain unfair claims practices set forth in the unfair
practices act. (Ins. Code, § 790 et seq.;Royal Globe Ins. Co., supra, at p. 886.) The
Credit Card Act similarly imposes fair business practices for the protection of the
consumers. "Such a law is remedial in nature and in the public interest [and] is to
be liberally construed to the end of fostering its objectives." (Continental Cas. Co.
v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 434 [296 P.2d 801, 57 A.L.R.2d
914].) [2] We believe that wilful violations of the statutory standards entitle a
cardholder to compensation for all damages resulting therefrom, including
damages for mental and emotional distress.
[3] The trial court acted within its discretion in permitting plaintiff to amend
her complaint to contain a prayer for damages for pain, suffering and
emotional distress. (See Code Civ. Proc., § 473.) On the day before the damages
phase of the trial, the trial court granted plaintiff's motion to amend her prayer
for damages to include "general damages, for pain, suffering, anxiety, grief and
other elements of general damages ...."
The damages plaintiff sought are general damages which need not be
specifically pleaded in any event. The prayer for damages in the original
complaint was sufficient to put the Bank on notice that plaintiff would be
seeking recovery for pain and mental suffering. Moreover, the amended prayer
did not state a new cause of action as defendant claims and the Bank was
neither prejudiced nor should it have been surprised. Under these
circumstances there was no abuse of discretion. (See Rainer v. Community
Memorial Hosp. (1971) 18 Cal.App.3d 240, 254-255 [95 Cal.Rptr. 901].)
Defendant urges that the evidence presented at trial was insufficient to
establish the type of "extreme and outrageous conduct" which would justify an
instruction on emotional distress damages.
[4] In order to recover damages for emotional distress, the injury suffered must
be severe, i.e., substantial or enduring as distinguished from trivial or
transitory. (Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d
376, 379 [89 Cal.Rptr. 78, 47 A.L.R.3d 286].) Such injury may include "'all
highly unpleasant mental reactions, such as fright, horror, grief, shame,
humiliation, embarrassment, anger, chagrin, disappointment, worry and
nausea.' [Citation.]" (Golden v. Dungan (1971) 20 Cal.App.3d 295, 311 [97
Cal.Rptr. 577];
Fletcher, supra, at p. 397.) [141 Cal.App.3d 115]

Young testified that as a result of her negative credit rating and the rejection by
Valley National Bank of her credit card application, she experienced difficulty
cashing personal checks at retail establishments. She was embarrassed and
ashamed and would no longer shop at stores where she did not know the
employees. She experienced feelings of helplessness and frustration because the
Bank refused to adjust her account and repeatedly demanded payment. She
complained of severe stress, nervousness, headaches, and insomnia. Because of
this preoccupation with the disputed charges, her job performance suffered for
which she was reprimanded. Out of desperation she also contemplated filing
for bankruptcy. Other witnesses confirmed her suffering from stress and
mental anguish.
There is ample evidence to support the trial court's finding that the emotional
distress experienced by plaintiff was substantial and of the requisite severity to
warrant an instruction to the jury. (See Golden v. Dungan, supra, 20
Cal.App.3d at p. 311; Fletcher v. Western National Life Ins. Co., supra, 10
Cal.App.3d at p. 397.)
[5] The Bank argues that the verdict was excessive and that the trial court
erred in refusing the Bank's request for a new trial on that basis. The jury
awarded plaintiff $50,000 in general damages. The harm suffered by plaintiff,
which included humiliation, anxiety and grief, is not easily quantifiable and is
best left to the sound discretion of the jury. (See Agarwal v. Johnson (1979) 25
Cal.3d 932, 953 [160 Cal.Rptr. 141, 603 P.2d 58]; Bertero v. National General
Corp. (1974) 13 Cal.3d 43, 64 [118 Cal.Rptr. 184, 529 P.2d 608, 65 A.L.R.3d
878].) Given the severe mental and emotional pain suffered by Young over
several months, and the Bank's computer-hearted insensitivity towards its
customer, the award was not excessive.
[6] Lastly, the Bank contends that the trial court abused its discretion when it
trebled the damages awarded. The decision to award treble damages is for the
sound discretion of the trial judge which should not be overturned except upon
a showing of a clear abuse of discretion. (See generally Roche v. Casissa (1957)
154 Cal.App.2d 785, 788 [316 P.2d 776].)
The Bank persistently refused to adjust or correct Young's credit card
statement within the statutory time limit and continued to demand payment
despite being repeatedly informed that she cancelled her credit card and
legitimately disputed the charges. Stubbornly, the Bank declined to even
acknowledge that a dispute existed. Even after the trial court found that the
charges were unauthorized, the Bank did not, as required by statute and its
own guidelines printed on the reverse side of the statement, report the error to
TRW. Without first attempting to resolve the dispute with Young, the Bank
reported negative credit information to TRW, certainly aware of the adverse
consequences. [141 Cal.App.3d 116]
This conduct was a wilful violation of the statute, and constituted a callous
indifference to plaintiff's credit rating and to the financial difficulties she would
likely suffer. An award of treble damages in light of such conduct was well
within the discretion of the trial court.
The judgment is affirmed. King, J., and Haning, J., concurring.
_________________________________________________________________
Continental Cas. Co. v. Phoenix Constr. Co. , 46 Cal.2d 423

[L. A. No. 23225. In Bank. May 4, 1956.]
CONTINENTAL CASUALTY COMPANY (a Corporation), Appellant, v.
PHOENIX CONSTRUCTION COMPANY (a Corporation) et al., Defendants
and Respondents; UNDERWRITERS AT LLOYD'S, LONDON (an
Unincorporated Association) et al., Interveners and Respondents.
COUNSEL
Jennings & Belcher, Sigurd E. Murphy and Louis E. Kearney for Appellant.
Robert W. Stevenson, John F. O'Hara, Martin, Hahn & Camusi, William P.
Camusi and Oscar F. Catalano for Respondents and Interveners.
Bledsoe, Smith, Cathcart, Johnson & Phelps, Early, Maslach, Foran &
Williams as Amici Curiae on behalf of Respondents.
OPINION SCHAUER, J.
In this suit for declaratory relief determination is sought, as among the
contesting insurance companies, of the order of incidence and of the limits of
their respective contractual obligations to defendants Phoenix Construction
Company, Oilfields Trucking Company (hereinafter called, respectively,
Phoenix and Oilfields), and James E. Mason, all as affected by certain
judgments previously recovered by defendant Leming in an action for personal
injuries. Leming was injured in a highway truck collision on July 10, 1951,
caused by the negligent driving by Oilfields' employe, Mason, of a truck owned
by Oilfields. In April, 1955, this court affirmed a judgment (in Kern County
Superior Court [46 Cal.2d 427] action No. 56455) in Leming's favor against
Oilfields and Phoenix in the principal sum of $213,460.02 (Leming v. Oilfields
Trucking Co., 44 Cal.2d 343 [282 P.2d 23]); a judgment entered against Mason
in the same action, in the principal sum of $212,585.69, had previously become
final. Phoenix and Oilfields as joint venturers contracted with the State of
California to do certain highway construction work known as the Haypress
Canyon Job. The business of Phoenix was highway and similar construction;
that of Oilfields was the truck hauling of oil surfacing materials and heavy
construction equipment. The two companies had entered into the highway
contract pursuant to a written agreement between themselves that they should
engage in certain unspecified joint ventures. The present suit was commenced
by Continental Casualty Company (hereinafter called Continental), which had
issued an insurance policy to Phoenix, to have declared the liabilities arising
under various outstanding policies. Named as defendants were (1) Phoenix, (2)
Oilfields, (3) Transport Indemnity Company (hereinafter called Transport), the
insurer of Oilfields, (4) Leming, (5) Mason, who defaulted, and (6) various
other persons as to whom the action was dismissed before trial. Complaints in
intervention were filed on behalf on "Underwriters at Lloyd's, London, an
unincorporated association" (hereinafter called Lloyd's London), and on behalf
of "Certain Underwriters at Lloyd's London" (hereinafter called Pacific
Lloyd's). Lloyd's London had issued a certificate of excess insurance over the
basic policy issued by Transport fn. 1 to Oilfields, and Pacific Lloyd's had
issued certificates of excess insurance over the basic policy issued by
Continental to Phoenix.
After extensive oral argument the trial court concluded (1) that Oilfields,
Phoenix and Mason are covered under the Continental and Pacific Lloyd's
policies; (2) Oilfields, but not Phoenix or Mason, is covered under the
Transport and Lloyd's London policies; (3) that the liability should be prorated
among the insurers according to a formula set out in the judgment.
Continental, the appellant herein, contends that its basic policy provided no
coverage for the liability here involved, either to Phoenix, to Oilfields or to
Mason, both by reason of certain endorsements and exclusions attached to that
[46 Cal.2d 428] policy and upon the theory that the liability which had attached
to Phoenix was based solely on imputed negligence as a joint venturer, and not
as an employer of Mason. fn. 2 The trial court in the present suit found, among
other things, that Mason was a general employe of Oilfields and a special
employe of Phoenix, and that at the time and place of the accident he was
"acting in the scope and course of his employment as such employee and
agent"; Continental questions the sufficiency of the evidence to support the
finding insofar as it refers to Phoenix. Transport (with Lloyd's London),
although admitting coverage of Oilfields for any liability chargeable to it which
arises from the accident, denies that any coverage was extended by Transport
to Phoenix or to Mason. Transport, Oilfields, Phoenix and Leming all contend
that the Continental policy (and Pacific Lloyd's excess certificates) extended
coverage to Phoenix, Oilfields and Mason.
For reasons which are hereinafter developed we have reached the following
conclusions:
1. Insofar as the issues now before us are concerned, Mason, as the negligent
driver, bears the primary liability to Leming.
2. The Transport policy, together with its related excess insurance, provides
$1,000,000 coverage to Mason as well as to Oilfields, an amount more than
sufficient to pay the Leming award.
3. The Continental policy, together with its related excess certificates, covers
neither Mason nor Oilfields.
4. Hence, there is no need to decide either (a) whether the evidence supports the
trial court's determination that Mason was acting as an employe of Phoenix at
the time of the accident, or (b) whether either the Continental or the Transport
policy (and excess insurance) covers Phoenix.
5. Result: Transport and Lloyd's London must pay the entire award to Leming.
[1] Where a judgment has been rendered against an employer for damages
occasioned by the unauthorized negligent act of his employe, the employer may
recoup his loss in an action against the negligent employe (Popejoy v. Hannon
(1951), 37 Cal.2d 159, 173 [19] [231 P.2d 484]; Bradley v. Rosenthal (1908), 154
Cal. 420, 423 [97 P. 875, 129 Am.St.Rep. 171]; Johnston v. City of San Fernando
(1939), 35 Cal.[46 Cal.2d 429] App.2d 244, 246 [95 P.2d 147]; Myers v.
Tranquility Irr. Dist. (1938), 26 Cal.App.2d 385, 389 [79 P.2d 419]; Ledgerwood
v. Ledgerwood (1931), 114 Cal.App. 538, 542- 543 [300 P. 144]; Rest.,
Restitution, 418-419, § 96; 35 Am.Jur. 530-531, § 101; 56 C.J.S. 502, § 79; see
also Aynes v. Winans (1948), 33 Cal.2d 206, 208-209 [200 P.2d 533]); that is, as
between employer and employe in such a situation, the obligation of the
employe is primary and that of the employer secondary. Respondents cite
Consolidated Shippers, Inc. v. Pacific Emp. Ins. Co. (1941), 45 Cal.App.2d 288,
293 [114 P.2d 34]; Air Transport Mfg. Co. v. Employers' Liab. Assur. Corp.
(1949), 91 Cal.App.2d 129, 132 [204 P.2d 647]; Employers Liab. Assur. Corp. v.
Pacific Emp. Ins. Co. (1951), 102 Cal.App.2d 188, 192 [227 P.2d 53]; and
Traders etc. Ins. Co. v. Pacific Emp. Ins. Co. (1955), 130 Cal.App.2d 158, 165-
166 [278 P.2d 493], as supporting a contrary view; such cases are broadly
distinguishable on their facts but it would unduly extend this opinion and serve
no useful purpose to individually discuss and differentiate them as any
implications therein contrary to the long established rule above stated must be
deemed disapproved.
[2] Under equitable principles of subrogation the insurer of the employer who
has been compelled to pay the judgment against the employer may recover
against the negligent employe or the employe's insurer. (Canadian Indem. Co.
v. United States F. & G. Co. (1954, 9 Cir.), 213 F.2d 658, 659; see also Maryland
Cas. Co. v. Employers Mut. Liab. Ins. Co. (1953), 208 F.2d 731; United Pacific
Ins. Co. v. Ohio Cas. Ins. Co. (1949, 9 Cir.), 172 F.2d 836, 840 (note 5), 846-848.)
Here, it is established that the negligent act upon which the Leming judgment is
based was the unauthorized act of Mason who, it will be remembered, is not
only a judgment debtor to Leming but is also a defaulted defendant in this
proceeding. It follows that if Mason was covered with sufficient insurance to
pay the total Leming judgment, then the insurance coverage of Oilfields and
Phoenix becomes immaterial insofar as concerns the issues now involved.
Consideration will therefore first be given to whether and to what extent Mason
is covered by the two lines of policies, Continental and Transport.
[3] Copies of the insurance policies and excess certificates which were in effect
at the time of the Leming accident were introduced into evidence by
stipulations, not subject to conflicting [46 Cal.2d 430] inferences, and no parol
evidence was offered in aid of construction. Therefore, construction of the
policies is a matter of law. (Western Coal & Mining Co. v. Jones (1946), 27
Cal.2d 819, 826-827 [167 P.2d 719, 164 A.L.R. 685]; see also Arenson v. National
Automobiles & Cas. Ins. Co. (1955), 45 Cal.2d 81 [286 P.2d 816].)
The Continental policy, which is entitled "Comprehensive General--
Automobile fn. [3] Liability Policy," commences with "Item 1. Name of insured
Phoenix Construction Co., Inc.", and in paragraph I of the printed "insuring
agreements" identifies the primary protection as Coverages A. B, and C. fn. 4
Coverage A, thus included in the printed policy form, extends coverage to
Phoenix for bodily injury liability. An endorsement, numbered R6309202 and
hereinafter referred to as No. 202, reads as follows: "It is agreed Oil Fields
Trucking Company is added as an additional insured in connection with
construction operations conducted as a joint venture with the Phoenix
Constrcution Company, Inc.
"It is further agreed that this policy excludes coverage for all operations of Oil
Fields Trucking Company other than construction operations conducted as a
joint venture with Phoenix Constrcution Company, Inc."
A second endorsement, numbered R6309208 and hereinafter referred to as No.
208, reads: "It is agreed that this policy does not apply to automobiles owned,
maintained or used by the Oil Fields Trucking Company, even though, they
might be used in a joint venture operation with other named insureds." (Italics
added.)
[4a, 5] Although if there is any ambiguity in an insurance policy it must be
resolved against the insurer (Arenson v. [46 Cal.2d 431] National Auto. & Cas.
Ins. Co. (1955), supra, 45 Cal.2d 81, 83; Coit v. Jefferson Standard Life Ins. Co.
(1946) 28 Cal.2d 1, 3 [168 P.2d 163, 168 A.L.R. 673]; Fageol T. & C. Co. v.
Pacific Indem. Co. (1941), 18 Cal.2d 731, 747 [117 P.2d 661]), nevertheless if
there is a conflict in meaning between an endorsement and the body of the
policy, the endorsement controls. (Fageol T. & C. Co. v. Pacific Indem. Co.
(1941), supra, p. 738; Tarleton v. De Veuve (1940), 113 F.2d 290, 297.) [6]
Likewise under the provisions of section 1651 of the Civil Code, fn. 5 the
written or specially prepared portions of a contract control over those which
are printed or taken from a form. The provisions of the two endorsements, as
quoted above, are typewritten, while, as already mentioned, the insuring
agreements are part of the printed policy form.
[7] Thus, the clear import of the two endorsements is that (No. 202) Oilfields is
added as a second named insured, but only as to construction operations
conducted as a joint venture with Phoenix, and (No. 208) that the policy does
not apply to (i.e., provides no coverage for) liability arising out of the operation
of automobiles owned, maintained or used by Oilfields, even though "used in a
joint venture operation with other named insureds." It follows that the
Continental policy (and excess certificates ancillary thereto) provided no
coverage to Mason for the accident to Leming, which resulted from Mason's
negligent operation of a truck owned by Oilfields. The suggestion of various of
the respondents on appeal that certain of the other printed policy provisions fn.
6 may be [46 Cal.2d 432] construed to include Mason as an insured must
likewise give way to the provisions of the endorsement excluding liability
arising from the operation of vehicles owned by Oilfields, from coverage of the
policy. [8] An insurance company has the right to limit the coverage of a policy
issued by it and when it has done so, the plain language of the limitation must
be respected. (See Coit v. Jefferson Standard Life Ins. Co. (1946), supra, 28
Cal.2d 1, 11; Long v. West Coast Life Ins. Co. (1940), 16 Cal.2d 19, 23-24 [104
P.2d 646]; Sampson v. Century Indem. Co. (1937), 8 Cal.2d 476, 478-480 [66
P.2d 434, 109 A.L.R. 1162]; Security T. & S. Bank v. New York Indem. Co.
(1934), 220 Cal. 372, 376-377 [31 P.2d 365]; John G. Speirs & Co. v.
Underwriters at Lloyd's, London (1948), 84 Cal.App.2d 603, 605 [191 P.2d
124]; Guidici v. Pacific Auto. Ins. Co. (1947), 79 Cal.App.2d 128, 134 [179 P.2d
337]; Boole v. Union Marine Ins. Co., Ltd. (1921), 52 Cal.App. 207, 209 [198 P.
416]; American Mut. Liability Ins. Co. v. Meyer (1940, 3 Cir.), 115 F.2d 807.)
The next question is whether Mason had insurance coverage under the
Transport line of policies. It is undisputed that at the time of the Leming
accident Mason was an employe of Oilfields, that the Leming judgment was
based upon an implied jury finding that in driving Oilfields' truck Mason was
acting within the scope of his employment at the time of the accident, and that
the trial court in the present litigation likewise found that he was acting within
such scope. It is also undisputed that at the time of the accident Mason was
exercising sole control and direction of the truck.
It now becomes essential to consider certain provisions of the basic Transport
policy. Under Coverage Clause (1) Transport agrees "To pay on behalf of the
insured all sums which the insured shall become legally obligated to pay for
damages, arising out of the occupation of the named insured, as a result of
bodily injury ... or death to persons or for damage to property of others ..."
Various endorsements attached to the policy state that it "is an Automobile
Bodily Injury Liability and Property Damage Liability policy" and declare that
the "Occupation of the named insured is Motor Carrier for Hire." Another
endorsement provides that the "Name of the Insured ... is amended to read:
Oilfields Trucking Company and P. A. Phoenix and H. E. Phoenix, as co-
partners only, jointly and not severally, doing business as Phoenix Brothers
Garage and Storage Company [and] It is further agreed that the named
insured is: Corporation- Co-Partnership." [46 Cal.2d 433] Under the heading
"Conditions" the policy provides: "(3) Definitions (a) Named Insured The term
'named insured' shall mean the insured named in the declarations. (b) Insured
The unqualified word 'insured' includes the named insured and also includes as
respects Coverage Clause 1: (1) any partner, executive officer, managing
employee, director or stockholder thereof while acting within the scope of his
duties as such or in so far as he is or may be liable by reason of his occupying
such position. (c) Automobiles The word 'automobile' shall mean a land motor
vehicle, trailer or semi-trailer and its equipment ... (6) Financial Responsibility
Laws Such insurance as is afforded by this policy shall comply with the
provisions of the motor vehicle financial responsibility law of any state or
province which shall be applicable with respect to any such liability arising out
of the existence, ownership, maintenance or use of any automobile during the
policy period, to the extent of the coverage and limits of liability required by
such law." (Italics added.)
It is further to be noted (and the significance will later appear more clearly)
that the basic policy prominently displays advice seemingly applicable to the
person directly in charge of, operating, or "managing" the motor vehicle.
Under the heading "What To Do in Case of Accident" it admonishes: "Stop,
render aid. Place flags, flares, or post someone to warn other traffic--avoid
other accidents. Get names and addresses of witnesses. If no eye witnesses,
obtain names and addresses of first persons to arrive. Get license numbers of
vehicles if persons refuse names. Report accidents involving injury (no matter
how slight) immediately by telephone to our nearest claim office. Order
photographs in all serious accidents; the Exchange will assume the cost. Be
courteous--Good Conduct Helps. Draw rough diagram of scene of accident
showing position of vehicles or skidmarks; step off distances. This will assist in
giving an accurate report. Protect your equipment or cargo from further
damage or theft." Under the heading "What Not To Do in Case of Accident" it
cautions: "Do not admit responsibility; let the Exchange determine if you are
legally responsible. Do not agree to pay anything, except for immediate First
Aid treatment. In accidents involving death, do not talk nor give statements
until you are represented by an attorney--you have this right under the law.
Don't argue responsibility [46 Cal.2d 434] for the accident. Don't make any
verbal statements at the scene of accident regarding the accident. Statements
you make may be used as evidence against you. Do Not Sign Anything, except
for your insurance investigator. Be sure to identify the insurance investigator as
representing your company, not someone else." (Italics added.)
At the times concerned Oilfields, by reason of its occupation, was subject to the
Highway Carriers Act (Stats. 1935, ch. 223) and was required (§ 5) "to procure,
and continue in effect during the life of the permit [issued by the Public Utilities
Commission and without which Oilfields' operations would be unlawful],
adequate protection ... against liability imposed by law ... for the payment of
damages for personal bodily injuries ..." Section 6 of the Highway Carriers Act
further enacts that "The protection required under section 5 shall be evidenced
by the deposit with the Railroad [now Public Utilities] Commission, covering
each vehicle used or to be used under the permit applied for, of a policy of
public liability and property damage insurance ... or of a bond of a surety
company ... or of a personal bond ..."
At the times concerned Oilfields was also subject to California's general
automobile financial responsibility law. That law is found in sections 410
through 423.1 of the Vehicle Code. (See Escobedo v. State (1950), 35 Cal.2d 870,
878 [222 P.2d 1].) Sections 410-418.5, which comprise chapter 2, cover the
matter of establishing responsibility after an accident and an unpaid judgment,
while sections 419-423.1, which comprise chapter 3, provide for such a showing
after the accident and before any judgment, all directly intended for the benefit
of drivers and owners of motor vehicles as a means of forestalling suspension of
the license of the driver and of the registration of the vehicle or vehicles, and,
more fundamentally, designed to give monetary protection to that ever
changing and tragically large group of persons who while lawfully using the
highways themselves suffer grave injury through the negligent use of those
highways by others. [9] Such a law is remedial in nature and in the public
interest is to be liberally construed to the end of fostering its objectives. (See
Wheeler v. O'Connell (1937), 297 Mass. 549 [9 N.E.2d 544, 111 A.L.R. 1038,
1041].) As said by Mr. Justice Heydenfeldt for this court long ago, and still the
law, "The rule of law in the construction of remedial statutes requires great
liberality, and wherever the meaning is doubtful, it must be so construed [46
Cal.2d 435] as to extend the remedy." (White v. Steam-tug Mary Ann (1856), 6
Cal. 462, 470 [65 Am.Dec. 523]; see also Cullerton v. Mead (1863), 22 Cal. 96, 98;
Cormerais v. Genella (1863), 22 Cal. 116, 125; Davis v. Hearst (1911), 160 Cal.
143, 188 [116 P. 530].)
Under the unpaid judgment provisions of chapter 2, the owner of a motor
vehicle which has been operated with his consent (here, Oilfields, whose truck
was operated by Mason) suffers suspension of the registration of the vehicle
(Veh. Code, § 410, subd. (c); Sheehan v. Division of Motor Vehicles (1934), 140
Cal.App. 200, 205 [35 P.2d 359]) unless he files "an affidavit stating that at the
time of the accident ... he was insured, that the insurer is liable to pay such
judgment, and the reason, if known, why such insurance company has not paid
such judgment. He shall also file the original policy of insurance or a certified
copy thereof, if available," and if his showing is satisfactory his registration
certificate will not be suspended. (Veh. Code, § 411.5.) Under section 411 the
procedure is made applicable to successive accidents and judgments.
Section 415 is entitled "Requisites of Motor Vehicle Liability Policy," and
provides: "(a) A 'motor vehicle liability policy,' as used in this code means a
policy of liability insurance ... to or for the benefit of the person named therein
as assured, which policy shall meet the following requirements:
"(1) Such policy shall designate by explicit description or by appropriate
reference all motor vehicles with respect to which coverage is thereby intended
to be granted.
"(2) Such policy shall insure the person named therein and any other person
[here, Mason] using or responsible for the use of said motor vehicle or motor
vehicles with the express or implied permission of said assured.
"(3) Such policy shall insure every said person on account of the ... operation of
every motor vehicle therein covered ... against loss from the liability imposed by
law arising from such ... operation to the extent ... with respect to each such
motor vehicle, of five thousand dollars ($5,000) for bodily injury to or death of
each person as a result of any one accident and, subject to said limit as to one
person, the amount of ten thousand dollars ($10,000) for bodily injury to or
death of all persons as a result of any one accident ... [46 Cal.2d 436]
"(c) Any such policy may grant any lawful coverage in excess of or in addition
to the coverage herein specified or contain any agreements, provisions or
stipulations not in conflict with the provisions of this code and not otherwise
contrary to law. ..." (Italics added.)
[10] Thus, although the financial responsibility statute does not in so many
words make mandatory the procuring of a liability insurance policy prior to
the first accident and judgment, the Highway Carriers Act does. Furthermore,
an employer who is a highway carrier, as a practical matter in the ordinary
course of business, in order to protect against the possibility of suspension in
case of a judgment against himself and his employe, must have in force a policy
complying with the requisites of section 415. (See Code Civ. Proc., § 1963,
subds. 4, 20.) Here, of course, it is not disputed that the Transport liability
insurance policy was executed; the only dispute with which we are seriously
concerned is whether and to what extent the policy covered Mason in his
operation of Oilfields' truck at the time of the Leming accident.
It is the position of Transport (among other contentions) that California's
financial responsibility laws do not require that Mason's liability be covered,
that section 415 of the Vehicle Code has no application to the present case, and
that in order to avoid the forfeiture or suspension provisions of the law by
evidence of insurance it is not necessary for the owner of a motor vehicle to
show that the personal liability of his employe is insured. We have given careful
consideration to all of Transport's arguments. fn. 7 It is, however, our
conclusion reached in the light of all pertinent provisions of [46 Cal.2d 437] the
law and the terms of the policy, that Transport's coverage fairly includes
Mason's operation of Oilfields' truck and that its liability is direct to Mason as
an insured as well as to Oilfields as a named insured.
[4b] It is elementary in insurance law that any ambiguity or uncertainty in an
insurance policy is to be resolved against the insurer. (Arenson v. National Auto.
& Cas. Ins. Co. (1955), supra, 45 Cal.2d 81, 83; Coit v. Jefferson Standard Life
Ins. Co. (1946), supra, 28 Cal.2d 1, 3; 5 Am.Jur. 790, § 507.) [11] If semantically
permissible, the contract will be given such construction as will fairly achieve its
object of securing indemnity to the insured for the losses to which the insurance
relates. (Fageol T. & C. Co. v. Pacific Indem. Co. (1941), 18 Cal.2d 748, 751 [117
P.2d 669].) [12] If the insurer uses language which is uncertain any reasonable
doubt will be resolved against it; if the doubt relates to extent or fact of coverage,
whether as to peril insured against (Fageol T. & C. Co. v. Pacific Indem. Co.
(1941), 18 Cal.2d 731, 746-747 [16, 17] [117 P.2d 661]; Ocean etc. Corp., Ltd. v.
Industrial Acc. Com. (1924), 194 Cal. 127, 132 [228 P. 1]; Miller v. United Ins.
Co. (1952), 113 Cal.App.2d 493 [248 P.2d 113]; Pendell v. Westland Life Ins. Co.
(1950), 95 Cal.App.2d 766, 770 [214 P.2d 392]; see also Christoffer v. Hartford
Acc. etc. Co. (1954), 123 Cal.App.2d Supp. 979 [267 P.2d 887]), the amount of
liability (Hobson v. Mutual Benefit H. & A. Assn. (1950), 99 Cal.App.2d 330, 333
et seq. [221 P.2d 761]; see also Narver v. California State Life Ins. Co. (1930), 211
Cal. 176, 180 et seq. [294 P. 393]) or the person or persons protected (Olson v.
Standard Marine Ins. Co. (1952), 109 Cal.App.2d 130, 135 [1, 5] [240 P.2d 379];
see [46 Cal.2d 438] also Island v. Fireman's Fund Indem. Co. (1947), 30 Cal.2d
541, 543, 548 [184 P.2d 153, 173 A.L.R. 896]; Sly v. American Indem. Co. (1932),
127 Cal.App. 202 [15 P.2d 522]), the language will be understood in its most
inclusive sense, for the benefit of the insured. [13a] Here we have the seemingly
explicit provision of section 415 of the Vehicle Code that "A 'motor vehicle
liability policy,' as used in this code means a policy ..., which policy shall meet the
following requirements: ... (2) Such policy shall insure the person named therein
and any other person using or responsible for the use of said motor vehicle ... with
the ... permission of said assured," and coupled with that are the provisions of the
Highway Carriers Act and the language of the policy, some of it as already
emphasized being apparently directed primarily to the driver of the vehicle,
admonishing him as to his duties upon the happening of an accident, and in
another place declaring that the coverage provided "shall comply with the
provisions of the motor vehicle financial responsibility law ... which shall be
applicable with respect to any such liability arising out of the existence ... or use
of any automobile ... to the extent of the coverage and limits of liability required
by such law." (Italics added.) That language cannot properly be construed to
mean minimum coverage or minimum limits; rather, it must be interpreted as
providing full or maximum coverage in both aspects insofar as encompassed by
the law and not exceeding the clear limitations of the contract.
[14] We have hereinabove noted the contract provision expressly stating that
"The unqualified word 'insured' includes the named insured and also as
respects Coverage Clause 1 [the coverage clause here involved] ... any partner,
executive officer, managing employee, director or stockholder thereof while
acting within the scope of his duties as such ..." Obviously the term "managing
employee" is used for generic inclusion. 55 Corpus Juris Secundum, page 2,
tells us that "managing" means "To have under control and direction; to
control and direct; ... to guide." Webster's New International Dictionary gives
the same meanings. We need not go farther. It is undisputed that Mason at the
time of the Leming accident was Oilfields' employe and that he had Oilfields'
truck under his control and direction; he was guiding it and he was acting
within the scope of his duties. In respect to the several tons of equipment
entrusted to him he was Oilfields' sole managing employe. The very [46 Cal.2d
439] identities and relationships and the diversified characters of the several
other classes listed in the inclusory clause all lend support to the view that the
words "managing employee" as used therein include an employe entrusted
with the duties and responsibilities and performing the functions of Mason
under the circumstances shown. The most that could be said in favor of
construing the generic term as not including one in the position of Mason is
that the term is uncertain in scope and signification. This argument, however,
for reasons given in the authorities already cited, must be resolved against the
insurer and in favor of coverage. We must therefore conclude, as already
indicated, that the Transport policy insured Mason in his operation, direction
and control of the Oilfields truck here involved.
[13b] With respect to the extent or limits of coverage of Mason, it has already
been noted that condition (6) of the basic Transport policy states, "to the extent
of the ... limits of liability required by such law" and that such language must
be given its full and inclusive, as opposed to a restrictive, meaning. The
primary Transport policy, Number 46-001, is limited to $5,000 for injury or
death of one person and $10,000 for two or more persons injured or killed in
any one accident. Lloyd's London excess certificate 46-C3-32 provides
insurance in the amount of $40,000 excess over $10,000 "against the hazards
and perils of Comprehensive Bodily Injury, Property Damage and Cargo
Liability Coverage as insured under policies issued by the Transport Indemnity
Company ... to Oilfields Trucking Company, et al. and other persons ... named
as insureds under said policies, all hereinafter called the Assured." The
certificate further declares that "It is the intention of the parties that under this
Policy the Assured is to be indemnified up to $40,000.00 as aforesaid, against all
liability in excess of the liability of the Primary Insurer under its policies.
"It is agreed that this Policy is subject to the same Warranties, Terms and
Conditions (except as regards ... the amount and limit of Liability ...) as are
contained in, or as may be added to said Policy of the Primary Insurer."
Inasmuch as Mason was covered by the primary Transport policy (No. 46-001,
with limits of $5,000 and $10,000), the Lloyd's London certificate (46-C3-32)
thus increases his coverage by the amount of $40,000.
Transport policy 46-002 furnishes additional excess coverage "over $50,000.00"
in an amount of $950,000. The "special [46 Cal.2d 440] excess endorsement"
provides, "Notwithstanding anything in the policy to the contrary, it is further
agreed that this policy is subject to the same warranties, terms and conditions
(except as regards ... the amount and limit of liability ...) as are contained in, or
as may be added to the primary policy issued by ... Transport ..." Thus,
Mason's coverage was increased by this policy to an aggregate total of one
million dollars, obviously sufficient to meet the Leming judgment of less than a
quarter of a million.
Inasmuch as the Transport line of policies did, and the Continental line did not,
afford personal coverage to Mason, the driver upon whom ultimate
responsibility for the Leming judgment otherwise devolves, it follows that no
further controversy remains to be decided as between the other parties to this
litigation. It may further be noted that placing the responsibility for the
insurance coverage squarely upon the carriers for Mason and for his employer,
the owner of the truck he was driving, not only accords with the purposes and
intents of the policy provisions and of the financial responsibility law, but
appears also to accomplish justice as among all the parties involved in this
declaratory suit.
[15] One final matter remains for mention. Plaintiff-appellant, Continental, has
filed in this court an application for leave to produce additional evidence (see
rule 23, subd. (b), Rules on Appeal) which it avers will show that full payment
of the Leming judgment has been made by or on behalf of Phoenix, Oilfields,
and Transport; that full satisfaction of such judgment has been entered of
record; and that by reason of such facts and upon various asserted legal
principles any theory for contribution by Continental has become
unenforceable. In view of our conclusions as stated hereinabove, no useful
purpose would be served in receiving such evidence, and the application to
produce the same will be denied.
[16] Because there will be no factual issues to be determined after a reversal of
the judgment, since the errors of the trial court were of law only, it is
appropriate to reverse with directions. (Code Civ. Proc., § 53; Estate of Davis
(1936), 8 Cal.2d 11, 12 [62 P.2d 582, 63 P.2d 827]; Wixom v. Davis (1926), 198
Cal. 641, 645 [246 P. 1041]; Stauter v. Carithers (1921), 185 Cal. 160, 164 [196
P. 37].) fn. 8 [46 Cal.2d 441]
Plaintiff's application to produce additional evidence is denied; the judgment is
reversed with directions to the trial court to amend its conclusions of law and
enter judgment declaring the relative and respective rights and obligations of
the parties to this action in accordance with the views expressed in this opinion.
Gibson, C.J., Traynor, J., Spence, J., and McComb, J., concurred.
CARTER, J.
I dissent.
I agree that the Transport insurance covered Mason and Oilfields but do not
agree that the Continental insurance did not cover Oilfields and Mason. The
majority opinion holds that Mason and Oilfields are not covered by
Continental because of an endorsement on the Continental policy which it says
excludes the operation of automobiles.
Oilfields and Phoenix were engaged in a joint venture. Continental issued a
policy to Phoenix as the named insured. The policy was mainly concerned with
coverage of liability arising out of the operation of automobiles. At the time the
policy was issued the endorsements here involved were attached. Both
endorsements 202 and 208 were added at the same time, one following the other
in attachment to the policy and both were typewritten. They read (202): "It is
agreed Oil Fields Trucking Company is added as an additional insured in
connection with construction operations conducted as a joint venture with the
Phoenix Construction Company, Inc.
"It is further agreed that this policy excludes coverage for all operations of Oil
Fields Trucking Company other than construction operations conducted as a
joint venture with Phoenix Construction Company." And 208 read: "It is
agreed that this policy does not apply to automobiles owned, maintained or
used by the Oil Fields Trucking Company, even though, they might be used in a
joint venture operation with other named insureds." These endorsements must
be read together for they deal with the same subject. Inasmuch as they are both
typewritten they are on an equal footing and one does not control over the
other. Hence the rule, that [46 Cal.2d 442] the typewritten controls over the
printed part, relied upon by the majority, is not applicable.
Endorsement 202 expressly makes Oilfields a named insured along with
Phoenix insofar as the two are engaged in a joint venture. Hence Oilfields is as
fully covered as Phoenix, that is, to the same extent as if it had been named
along with Phoenix in the policy, the main purpose of which was to cover
automobile operations. Then comes endorsement 208. It is possible to interpret
that endorsement to exclude operation of trucks owned by Oilfields and used in
the joint venture as is done by the majority. However, it may be interpreted to
be in direct conflict with 202 on the basis that 202 extends coverage to Oilfields
as an insured and then 208 purports to take that coverage away. So viewed, the
rule of construction against the insurer would require that 208 be ignored.
There is another wholly reasonable construction which limits 208 to joint
ventures between Oilfields and Phoenix and others who might be insureds. It
will be recalled that in making Oilfields an insured, 202 expressly mentions and
makes it such an insured in joint venture construction operations between
Oilfields and Phoenix by that name. Endorsement 208 then says that, as to
automobile operations by Oilfields, the policy does not extend even though they
might be used in a joint venture with other insureds. It is reasonable to
interpret "even though" as "if" (May v. Missouri Pac. R. Co., 143 Ark. 75 [219
S.W. 756, 757]; Webster's New Inter. Dict. (2d ed.), pp. 885, 77) and "other"
insured as "different from that which has been specified" (Robinson v. First
Nat. Life Ins. Co., (La.App.) 10 So.2d 249, 251; In re Nelson's Estate, 152 Misc.
245 [273 N.Y.Supp. 268]; Webster's New Inter. Dict. (2d ed.), p. 1729).
Endorsement 208 then reads that the policy does not cover automobiles owned
by Oilfields if they are used in joint venture operations with different insureds.
We already have a joint venture expressly named in 202. A different one then
would be a venture between Oilfields and some insured other than Phoenix.
Hence where, as here, the liability arose out of the Phoenix-Oilfields joint
venture and none other, 208 is not applicable.
Oilfields being a named insured, then Mason, its employee, the driver of the
truck is clearly covered because the policy states that the insured includes "any
person while using an owned automobile" if the use is by the insured "or with
[46 Cal.2d 443] his permission." An "owned automobile" is one owned by the
insured. Here the truck was owned by Oilfields, the insured, and was not hired
from anyone.
The rule stated in Pendell v. Westland Life Ins. Co., 95 Cal.App.2d 766, 770
[214 P.2d 392], is particularly appropriate: "Exceptions in a contract of
insurance which purport to limit the risk assumed by the insurer in the general
provisions thereof are to be construed most strongly against the insurer and in
favor of the insured and if susceptible of two meanings, the one most favorable
to the insured is to be adopted. (Mah See v. North American Acc. Ins. Co., 190
Cal. 421, 424 [213 P. 42, 26 A.L.R. 123]; Bayley v. Employers' etc. Corp., 125
Cal. 345, 352 [58 P. 7].) The insurer is bound to use such language as to make
the exceptions and provisions of the contract clear to the ordinary mind; and in
case it fails to do so, any uncertainty or reasonable doubt is to be resolved
against it. (Pacific etc. Co. v. Williamsburg etc. Co., 158 Cal. 367, 370 [111 P.
4].)" (Emphasis added.)
In accordance with that rule, endorsement 208, being susceptible of the
construction that it does not take away the coverage given by 202, must be so
construed.
I therefore agree with the holding of the trial court that since Mason and
Oilfields are covered by Continental as well as Transport, the former as well as
the latter is liable for the payment of the judgment recovered by Leming
against Mason, Oilfields and Phoenix within the limits of their respective
policies.
I would therefore affirm the judgment.
The petition of respondents Oilfields Trucking Co., Transport Indemnity Co.,
and Underwriters at Lloyd's London for a rehearing was denied May 29, 1956.
Shenk, J., and Carter, J., were of the opinion that the petition should be
granted. [46 Cal.2d 444]
FN 1. Transport had also issued a policy (No. 46-002) of excess insurance over
that provided by the Lloyd's London excess certificate.
FN 2. The liability of Pacific Lloyd's as excess insurer is, of course, dependent
on Continental's liability under the basic policy issued to Phoenix.
FN [3]. The policy defines "automobile" as "a land motor vehicle."
FN 4. Such coverages read as follows: "Coverage A--Bodily Injury Liability
"To pay on behalf of the insured all sums which the insured shall become
legally obligated to pay as damages because of bodily injury, sickness or
disease, including death at any time resulting therefrom, sustained by any
person.
"Coverage B--Property Damage Liability--Automobile
legally obligated to pay as damages because of injury to or destruction of
property, including the loss of use thereof, caused by accident and arising out of
the ownership, maintenance or use of any automobile.
"Coverage C--Property Damage Liability--Except Automobile
legally obligated to pay as damages because of injury to or destruction of
property, including the loss of use thereof, caused by accident."
FN 5. Section 1651: "Where a contract is partly written and partly printed, or
where part of it is written or printed under the special directions of the parties,
and with a special view to their intention, and the remainder is copied from a
form originally prepared without special reference to the particular parties and
the particular contract in question, the written parts control the printed parts,
and the parts which are purely original control those which are copied from a
form. And if the two are absolutely repugnant, the latter must be so far
disregarded."
FN 6. Such provisions, found in paragraph III of the printed insuring
agreements, read as follows so far as here material: "The unqualified word
'insured' includes the named insured and also includes ... (2) under coverages A
and B, any person while using ... a hired automobile ..., provided the actual use
of the automobile is by the named insured or with his permission ... [except that
the] insurance with respect to any person ... other than the named insured does
not apply: ... (d) with respect to any hired automobile, to the owner thereof or
any employee of such owner. ..."
It may be noted that even if respondents were successful in their contention
that "hired automobile" includes the Oilfields' truck here involved,
nevertheless it appears that exception (d) would deny coverage to Mason, the
admitted employe of Oilfields.
FN 7. We note in this connection that under the provisions of chapter 3 (Veh.
Code, §§ 419-423.1), as they existed on the date of the accident here involved
(July 10, 1951), it is made the duty of the driver, and in case the driver was
permissively operating "a motor vehicle owned, operated or leased by" his
employer then it is the duty of the employer rather than of the driver (§ 419), to
report to the department of motor vehicles any accident which resulted in
personal injury or death; except that the employer need not make such a report
if the vehicle involved in the accident "is owned or operated by any person or
corporation who has filed with the department a certificate of an insurance
carrier or bonding company that there is in effect a policy or bond meeting the
requirements of Section 422.6 and when such insurance policy or bond was in
full force and effect in respect to such vehicle at the time of the accident."
Unless a driver can meet the pre-accident security provisions laid down in
chapter 3, he is required to deposit security or suffer suspension of driving
privileges in this state, except that if he was permissively driving his employer's
motor vehicle then the suspension provisions do not apply to the driver but
instead do apply to the employer; unless the employer can meet the pre-
accident security provisions (i.e., insurance policy, or bond) in such case, he is
required to deposit security or suffer the suspension of "registration of all
vehicles not covered by insurance ... owned, operated or leased by him ..." (§§
420, 421.)
Section 422.5 declares that exemption from the requirements of posting
security following an accident may be established by satisfactory proof to the
department (a) that the owner had "in effect with respect to the driver or the
motor vehicle involved in the accident ... an automobile liability policy or
bond ... [which] shall meet the requirements of Section 422.6"; (b) that the
driver, if not the owner, had in effect a policy or bond covering his own driving;
"(c) That such liability as may arise from the driver's operation of the motor
vehicle involved in the accident is, in the judgment of the department covered
by some form of liability insurance or bond which complies with the
requirements set forth under Section 422.6."
Section 422.6 sets forth certain qualifications of the insurance company and
requires policy limits of not less than $5,000 for injury or death of one person in
any one accident, $10,000 for two or more persons in the same accident, and
$1,000 property damage.
___________________________________________________________________
Florez v. Linens 'N Things, Inc. (2003) 108 Cal.App.4th 447 , 133
Cal.Rptr.2d 465
[No. G030590. Fourth Dist., Div. Three. Apr. 30, 2003.]

FLORA FLOREZ et al., Plaintiffs and Appellants, v. LINENS 'N THINGS,
INC., Defendant and Respondent.
(Superior Court of Orange County, No. 01CC00335, William F. McDonald,
Judge.)
(Opinion by Aronson, J., with Bedsworth, Acting P. J., and Moore, J.,
concurring.)
COUNSEL
Fineman & Associates, Neil B. Fineman; The Anderson Law Firm and Martin
W. Anderson for Plaintiffs and Appellants.
Cooley Godward, Michael G. Rhodes and Allison H. Goddard for Defendant
and Respondent. [108 Cal.App.4th 449]
OPINION
ARONSON, J.—
Flora Florez, suing on behalf of herself and others, appeals from a judgment of
dismissal entered after a demurrer to her complaint against Linens 'N Things,
Inc. (LNT), for violations of the Song-Beverly Credit Card Act (Civ. Code, §
1747.8) fn. 1 and unfair business practices was sustained without leave to
amend. Because the allegation that the store improperly requests personal
identification information from its customers is sufficient to state a viable cause
of action, we reverse.
I
[1] (See fn. 2.) According to the allegations of the second amended complaint,
Florez visited an LNT store on July 16, 2001, and brought various items to the
cashier for purchase. name="AFootnote1"
href="http://login.findlaw.com/scripts/callaw?
dest=ca/caapp4th/108/447.html#BFootnote1"fn. 2 Pursuant to the store's
"Telephone Capture Policy," the cashier asked Florez for her telephone
number. Florez obliged, believing it was required to complete the transaction,
and the cashier typed the information into the electronic cash register.
Producing her credit card, Florez then paid for her purchases.
Many retailers use credit card transaction forms with imprinted spaces for
addresses and telephone numbers, leading consumers to believe this
information is necessary to complete a purchase. The information acquired by
the retailer is then used to create customer records for business purposes, like
mailing lists for in-house marketing efforts, or it is sold to direct-mailing
specialists. LNT uses computer software that performs a reverse telephone
search capable of matching an address to a phone number. Assembling the
various pieces of the puzzle, the store created a record containing Florez's
name, credit card number, telephone number, and address. The contents of this
record can be viewed, printed, distributed, and sold by the store.
II
At the heart of this dispute is the proper interpretation of section 1747.8. It
provides, in relevant part, as follows: "(a) Except as provided in subdivision (c),
no person, firm, partnership, association, or corporation which [108
Cal.App.4th 450] accepts credit cards for the transaction of business shall do
either of the following: [¶] (1) Request, or require as a condition to accepting
the credit card as payment in full or in part for goods or services, the
cardholder to write any personal identification information upon the credit
card transaction form or otherwise. [¶] (2) Request, or require as a condition to
accepting the credit card as payment in full or in part for goods or services, the
cardholder to provide personal identification information, which the person, firm,
partnership, association, or corporation accepting the credit card writes, causes to
be written, or otherwise records upon the credit card transaction form or
otherwise." (Italics added.)
As defined by the statute, " 'personal identification information' " means,
"information concerning the cardholder, other than information set forth on
the credit card, and including, but not limited to, the cardholder's address and
telephone number." (§ 1747.8, subd. (b).)
[2] Section 1747.8 is part of the Song-Beverly Credit Card Act, designed to
promote consumer protection. The act "imposes fair business practices for the
protection of the consumers. 'Such a law is remedial in nature and in the public
interest [and] is to be liberally construed to the end of fostering its objectives.' "
(Young v. Bank of America (1983) 141 Cal.App.3d 108, 114 [190 Cal.Rptr. 122];
see also Pitney-Bowes, Inc. v. State of California (1980) 108 Cal.App.3d 307, 324
[166 Cal.Rptr. 489].) fn. 3
We begin with a brief synopsis of the parties' contentions on appeal. Florez
argues section 1747.8, subdivision (a)(2) is violated when a retailer who accepts
credit cards either requests personal identification information, such as a
telephone number, or requires such information as a condition of credit card
payment. In its original form, the statute only prohibited retailers from
requiring and recording a consumer's personal identification information. A
1991 amendment added the word "request" at the beginning of subdivision (a)
(2).
LNT responds it may request personal identification information before a
customer announces his or her preferred method of payment, and no authority
prevents a retailer from assembling a database of personal customer
information (excluding credit card information), if the customer knowingly and
voluntarily supplies it. But if the information is acquired as part of a credit
card transaction, the collection and use of such data is prohibited [108
Cal.App.4th 451] unless the retailer first advises the customer this information
is not required to complete the purchase.
[3a] The key issue, as the parties see it, is the effect of the 1991 amendment
adding the word "request" to the statute. LNT argues the legislative history
confirms the phrase "as a condition to accepting the credit card" modifies the
word "request." Florez, on the other hand, relies on language in the Enrolled
Bill Report of the California Department of Consumer Affairs, Assembly Bill
No. 1477 (1991-1992 Reg. Sess.): "This bill would prohibit requesting or
requiring" personal information "[s]ince the card issuer already has that
information, there is no need for the retailer to request it (some retailers
request it for mailing list purposes)." Thus, we are told, a retailer's "request" is
prohibited even if the customer responds on a voluntary basis.
[4] We review issues of statutory interpretation under a de novo standard.
(Heavenly Valley v. El Dorado County Bd. of Equalization (2000) 84 Cal.App.4th
1323, 1334 [101 Cal.Rptr.2d 591].) We look first at the statutory language, and if
it is clear and unambiguous, we apply it according to its terms. (People v. Jones
(1993) 5 Cal.4th 1142, 1146 [22 Cal.Rptr.2d 753, 857 P.2d 1163].) At the same
time, we note section 1747.8 is a consumer protection statute, and the retailer's
request for personal identification information must be viewed from the
customer's standpoint. [3b] In other words, the retailer's unannounced subjective
intent is irrelevant. What does matter is whether a consumer would perceive the
store's "request" for information as a "condition" of the use of a credit card.
Viewed from this perspective, we think there is nothing ambiguous or unclear
about the statute. By its plain language, it prohibits a "request" for personal
identification information in conjunction with the use of a credit card. As the
Senate Committee on the Judiciary Analysis of Assembly Bill No. 1477 (1991-
1992 Reg. Sess.) explains, section 1747.8 was amended to add the word
"request," and "[t]his bill would clarify that persons may neither require nor
request, as a condition to accepting the credit card, the taking or recording of
personal identification information from the cardholder. (Current law states
such information may not be required, but does not prohibit requesting such
information.)"
We note that nothing prevents a retailer from soliciting a consumer's address
and telephone number for a store's mailing list, if that information is provided
voluntarily. Retailers are not without options in this regard. A merchant can
easily delay the request until the customer tenders payment or makes his or her
preferred method of payment known. If the payment is [108 Cal.App.4th 452]
made with cash, and the customer is so inclined, personal identification
information can be recorded at that time. Alternatively, retailers could delete a
customer's personal identification information as soon as the customer reveals
an intention to pay by credit card. In other words, the statutory mandate can
hardly be described as draconian. None of these alternatives represents any
great imposition on retailers.
On the other hand, a policy of obtaining more information than credit card
companies require to complete a transaction creates a conflict with credit card
company rules prohibiting a retailer from refusing a sale if a consumer refuses
to provide this additional information on a credit card transaction form.
Section 1747.8 dovetails with policy by prohibiting the solicitation of
information obtained under the false pretense that the transaction cannot or
will not be completed without it. Because we think section 1747.8
unambiguously includes a request for personal identification information, we
conclude the trial court erred in sustaining the demurrer to this cause of action.
Legislative history further supports our conclusion. [5] As we pursue that task,
we keep the following admonition in mind: "It is a well-established canon of
statutory construction that a court should go beyond the literal language of the
statute if reliance on that language would defeat the plain purpose of the
statute ...." (Bob Jones University v. United States (1983) 461 U.S. 574, 586 [103
S.Ct. 2017, 2025, 76 L.Ed.2d 157].)
Our inquiry begins with the California Assembly Committee on Finance and
Insurance, Background Information Request on Assembly Bill No. 2920 (1989-
1990 Reg. Sess.): "AB 2920 seeks to protect the personal privacy of consumers
who use credit cards to purchase goods or services by prohibiting retailers from
requiring consumers to provide addresses, telephone numbers and other
personal information that is unnecessary to complete the transaction and that
the retailer does not need." (Italics added.) In essence, the original enactment
(Stats. 1990, ch. 999, § 1, pp. 4191-4192 [Assem. Bill No. 2920]) was a response
to two principal privacy concerns. "[F]irst, that with increased use of computer
technology, very specific and personal information about a consumer's
spending habits was being made available to anyone willing to pay for it; and
second, that acts of harassment and violence were being committed by store
clerks who obtained customers' phone numbers and addresses." fn. 4
[3c] LNT insists its employees did nothing to suggest the provision of a
telephone number was a requirement or condition of payment by credit card.
[108 Cal.App.4th 453] Because there was no discernible link between the
request and the use of the credit card, LNT claims section 1747.8 does not
apply here. As LNT interprets it, section 1747.8 allows a retailer to request
consumer telephone numbers before the manner of payment is known because
the timing of the request eliminates any concern that the provision of such
information is a condition of credit card payment.
The argument is not persuasive. As evidenced by the 1991 amendment, section
1747.8 is designed to prevent a "request" for personal information, because a
customer might perceive that request as a condition of credit card payment. In
effect, the 1991 amendment prevents a retailer from making an end-run around
the law by claiming the customer furnished personal identification data
"voluntarily." In fact, the Enrolled Bill Report of the California Department of
Consumer Affairs, Assembly Bill No. 1477 (1991-1992 Reg. Sess.), specifically
addressed this problem, noting "[t]his bill would prohibit requesting or
requiring that information." As we read it, the legislative intent suggests the
1991 amendment simply clarified that a "request" for personal identification
information was prohibited if it immediately preceded the credit card
transaction, even if the consumer's response was voluntary and made only for
marketing purposes.
The obvious purpose of the 1991 amendment was to prevent retailers from
"requesting" personal identification information and then matching it with the
consumer's credit card number. LNT's interpretation leads to an absurd
conclusion, i.e., the retailer may evade the statutory prohibition by rushing to
obtain the information before the customer makes his or her payment
preference known. That interpretation, if allowed, would completely
undermine the purpose of the statute. fn. 5
Based on our review, we conclude the addition of the word "request" to section
1747.8 bars a preliminary request for personal identification information.
Accordingly, the allegations in Florez's second amended complaint were
sufficient to state a cause of action for a violation of section 1747.8, and we
reverse the judgment of dismissal.
III
The second cause of action, for violations of Business and Professions Code
section 17200, is itself premised on a violation of section 1747.8. [108
Cal.App.4th 454] Raising what is in effect a "house of cards" argument, LNT
claims Florez's Business and Professions Code section 17200 claim must fail
because she cannot state a viable cause of action under section 1747.8. Given
our conclusion that Florez has pleaded a valid claim under section 1747.8, we
think the opposite is true.
The judgment is reversed with directions to overrule the demurrer to Florez's
second amended complaint. Florez shall recover her costs on appeal.
Bedsworth, Acting P. J., and Moore, J., concurred.
Respondent's petition for review by the Supreme Court was denied July 30,
2003. George, C. J., and Brown, J., did not participate therein.
FN 1. All further statutory references are to the Civil Code unless otherwise
noted.
FN 2. " 'An appellate court's " 'only task in reviewing a ruling on a demurrer is
to determine whether the complaint states a cause of action.' " ...' " (Gentry v.
eBay, Inc. (2002) 99 Cal.App.4th 816, 824 [121 Cal.Rptr.2d 703].) The superior
court's decision is reviewed de novo, and we assume the truth of all facts
properly pleaded by the plaintiff.
FN 3. No California court has yet had the occasion to consider the precise
meaning of section 1747.8. In Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429 [97
Cal.Rptr.2d 179, 2 P.3d 27], the California Supreme Court considered certain
aspects of class action certification under the statute.
FN 4. At oral argument, counsel for LNT could not explain how the retailer's
interpretation of the statute addressed either one of these concerns.
FN 5. We note the Legislative Counsel's Digest of the 1991 amendment
specifically states that "[t]his bill would provide that the merchant in such a
transaction may neither request personal identification information, nor
require that information as a condition to acceptance of the card ...." (Legis.
Counsel's Dig., Assem. Bill No. 1477 (1991-1992 Reg. Sess.) p. 1.)
__________________________________________________________________
Alford v. Pierno , (1972) 27 C. A. 3d 682

[Civ. No. 30439. Court of Appeals of California, First Appellate District,
Division Four. September 12, 1972.]
L. E. ALFORD et al., Plaintiffs and Appellants, v. ANTHONY R. PIERNO, as
Commissioner, etc., Defendant and Respondent; MARCOM, INC., Real Party
in Interest and Respondent [27 Cal.App.3d 683]
(Opinion by Bray, J., with Devine, P. J., and Rattigan, J., concurring.)
COUNSEL
Weiss & Wald and Robert B. Freedman for Plaintiffs and Appellants.
Evelle J. Younger, Attorney General, and Mervin R. Samuel, Deputy Attorney
General, for Defendant and Respondent.
Thelen, Marrin, Johnson & Bridges and Fielding H. Lane for Real Party in
Interest and Respondent.
OPINION
BRAY, J.
Plaintiffs and appellants appeal from an order and judgment denying their
petition for writ of mandamus. [27 Cal.App.3d 686]
Questions Presented
Record
On August 10, 1970 plaintiffs filed in Alameda County Superior Court a
petition for writ of mandamus ordering defendant Commissioner of
Corporations to set aside his decision granting real party in interest, Marcom,
Inc. (hereinafter, Marcom) the curative permit hereinafter discussed. At the
hearing in the trial court, plaintiffs moved for an extension of time to obtain a
transcript of the proceedings before the Commissioner of Corporations. The
motion was denied. Plaintiffs' request for findings of fact and conclusions of
law was first granted and then the order granting was vacated and the request
denied. Order and judgment was entered denying the petition for peremptory
writ of mandamus.
Facts
Marcom was incorporated in the State of California on September 17, 1962. Its
business was the manufacture and sale of a device operated in connection with
the telephone and known as a "call diverter."
A total of 238 shares of stock was issued in contravention of Marcom's permit
issued by the commissioner, in that such shares were issued for cancellation of
prior indebtedness rather than for cash as required by the permit. In addition,
Marcom issued a total of 14 additional shares to two of the plaintiffs without
any permit whatsoever.
On April 18, 1969 Marcom entered into an agreement with Ford Industries
whereby Ford agreed to buy all of the assets from Marcom to be liquidated.
On June 27, 1969 an action was filed in the Superior Court of Alameda County,
whereby plaintiffs sought to recover the consideration paid by them to Marcom
on the grounds that the issuance of the aforementioned stock was either without
permit or in contravention of the terms of the existing permit. [27 Cal.App.3d
687]
Thereafter, Marcom obtained an order from the Superior Court of the City and
County of San Francisco, whereby that court assumed judicial supervision of
the windup of Marcom's corporate affairs subsequent to Marcom's filing of a
Certificate of Election to Wind-Up and Dissolve with the California Secretary
of State on June 6, 1969.
On January 16, 1970 Marcom filed an amended application for a curative
permit authorizing the sale and issuance of securities previously sold and issued
without a permit or in nonconformity with the permit previously obtained.
On June 3, 1970 the commissioner issued his decision adopting the proposed
decision of the hearing officer, which recommended the requested curative
permit be granted.
On August 10, 1970 plaintiffs filed in the Alameda County Superior Court this
petition for writ of mandate ordering the commissioner to set aside the issuance
of the curative permit.
At the hearing before the trial court, plaintiffs stated that application for relief
was based on the ground that the findings were not supported by the record,
and asked for time to obtain the necessary funds for a transcript of the
proceedings before the hearing officer. On the ground that plaintiffs had
already been given reasonable time for that purpose, the court denied the
request. The matter was then heard on the findings of the Corporations
Commissioner, plaintiffs contending that the findings did not support the
commissioner's decision granting the curative permit.
1. A curative permit may be issued to a corporation in the process of
dissolution.
[1a] Corporations Code section 25802 provides: "Upon application in
accordance with this division, the commissioner may issue a curative permit
authorizing the issuance and sale of any security previously issued or sold
without a permit, or in nonconformity with any provision of a permit
previously obtained. The commissioner shall issue a curative permit only if he
finds that the plan of business of applicant and the issuance of the curative
permit are fair, just, and equitable and that the applicant is transacting and
intends to transact its business fairly and honestly and that in his opinion the
issuance of the curative permit will not work a fraud upon the holders of any of
the issued and outstanding securities of applicant."
Plaintiffs contend that while engaged in dissolution and windup of its corporate
affairs, Marcom was not transacting or intending to transact business and thus
is not entitled to the relief provided by section 25802. [27 Cal.App.3d 688]
There is no case law interpreting Corporations Code section 25802. Consequently,

this is a case of first impression necessitating an interpretation and construction
of the aforementioned statute.
[2] One of the cardinal rules of construction requires that words be given such
interpretation as will promote rather than defeat the general purpose and policy
of the law. (City of L. A. v. Pac. Tel. & Tel. Co. (1958) 164 Cal.App.2d 253, 256
[330 P.2d 888].) [3] A statute should be interpreted so as to produce a result that is
reasonable. (Ivens v. Simon (1963) 212 Cal.App.2d 177, 181 [27 Cal.Rptr. 801].)
If two constructions are possible, that which leads to the more reasonable result
should be adopted. (In re Kernan (1966) 242 Cal.App.2d 488, 491 [51 Cal.Rptr.
515].)
[4] In construing a statute, the court should ascertain the intent of the Legislature
so as to effectuate the purpose of the law. (Select Base Materials v. Board of
Equal. (1959) 51 Cal.2d 640, 645 [335 P.2d 672].) [5] The courts must look to the
context of the law, and where uncertainty exists, consideration should be given to
the consequences that will flow from a particular interpretation. (Ivens v. Simon,
supra, 212 Cal.App.2d 177, 181.) [6] The court should take into account matters
such as context, the object in view, the evils to be remedied, the history of the
times and of legislation upon the same subject, public policy, and
contemporaneous construction. (Estate of Jacobs (1943) 61 Cal.App.2d 152, 155
[142 P.2d 454].)
[7] The apparent purpose of a statute will not be sacrificed to a literal
construction. (Select Base Materials v. Board of Equal., supra, 51 Cal.2d 640,
645; Ivens v. Simon, supra, 212 Cal.App.2d 177, 181.)
[8] Lastly, "Remedial statutes such as [the one] under consideration, are to be
liberally construed. [Citation.] They are not construed within narrow limits of the
letter of the law, but rather are to be given liberal effect to promote the general
object sought to be accomplished. [Citation.]" (California Grape etc. League v.
Industrial Welfare Com. (1969) 268 Cal.App.2d 692, 698 [74 Cal.Rptr. 313].)
[1b] With the aforementioned principles in mind, we must now determine whether
Marcom, while in the process of windup and dissolution, was entitled to a curative
permit pursuant to Corporations Code section 25802.
Under the old law, Corporations Code section 26100, securities sold or issued
without a permit were absolutely void and buyers were permitted to rescind
long after a transaction was concluded. (Witkin, Summary of [27 Cal.App.3d
689] Cal. Law (1969 Supp.) Corporations, § 114A at p. 1255.) The old rule and
the lack of power in the commissioner to cure substantial defects was subject to
much criticism. In 1967, the Legislature authorized the commissioner to grant
curative permits for the issuance and sale of any security previously issued or
sold without a permit or in contravention of a permit previously obtained. (Id.,
§ 122A at p. 1258; see also 43 State Bar J. 103.)
The apparent legislative purpose of Corporations Code section 25802 was to
enable the Commissioner of Corporations to cure technical defects in the
issuance or sale of any security, preventing recission of a transaction long after
it had been concluded. In so issuing a permit, the commissioner must find that
"the plan of business of applicant and the issuance of the curative permit are
fair, just, and equitable and the applicant is transacting and intends to transact
its business fairly and honestly ...." (Corp. Code, § 25802.)
[9] "When the word 'business' is used in an ordinance or statute its meaning
depends upon the context or upon the purpose of the Legislature." (City of
Lewiston v. Mathewson (1956) 78 Idaho 347, 352 [303 P.2d 680, 683].) In Hise v.
McColgan (1944) 24 Cal.2d 147 [148 P.2d 616], the question before the court
was whether a corporation in liquidation was doing business so as to be subject
to payment of franchise taxes. The Bank and Corporation Franchise Tax Act
defined doing business as "... actively engaging in any transaction for the
purpose of financial or pecuniary gain or profit." (Id. at p. 149.) The court held
that during the process of liquidation, business transactions were conducted;
and "[w]hile no profit may have been made as that term is usually understood,
such factor is not controlling in the definition of the term 'doing business';
rather the criterion is whether or not the goal or aim is financial or pecuniary
gain. [Citation.] It should be clear that the commissioner in liquidating ... [the
corporation] was endeavoring to get the best price obtainable for its assets and
to conduct its affairs in liquidation to the end that the most financial gain
would be realized for its creditors and stockholders. ... It is not necessary to
constitute doing business for franchise tax purposes that there be a regular
course of business or transactions." (Id. at pp. 150-151.)
[1c] With the legislative purpose in mind -- curing technical errors in the sale or
issuance of securities -- the word "business" should be given its broadest
possible meaning so as to effectuate the statutory objectives. No rationale can
be discovered for denying to a corporation in liquidation a curative permit
when it has transacted its business, including that engaged [27 Cal.App.3d 690]
in during the process of liquidation, in a fair, just, and equitable manner.
During the process of liquidation, the corporation will endeavor to realize for
its creditors and stockholders the greatest financial benefits obtainable. Under
Corporations Code section 25802, this is sufficient to entitle a corporation to a
curative permit if the commissioner determines that all other requirements
have been met.
We therefore hold that the word "business" in Corporations Code section
25802 encompasses those activities engaged in during the process of
liquidation; thus, an applicant in the process of dissolution and windup of its
corporate affairs is entitled to relief pursuant to section 25802. There was no
error committed by the trial court in refusing to issue a writ of mandamus
directing the commissioner to set aside his decision granting Marcom a curative
permit because Marcom was in the process of dissolution.
2. The commissioner's findings support the decision.
[10a] Plaintiffs' second contention on appeal is that the trial court erred in
refusing to issue the writ of mandate because the commissioner's findings do
not disclose facts from which it may be concluded that the issuance of the
curative permit is fair, just, and equitable.
Plaintiffs, it should first be noted, did not provide the trial court with a
transcript from the administrative hearing. Plaintiffs agreed that, if the trial
court refused to grant additional time in which to obtain the transcript, they
would submit the dispute upon the evidence before the court. Therefore,
plaintiffs are not now contending that the findings are not supported by the
evidence (obviously they could not do so, because of the absence of a
transcript), but rather that the decision is not supported by the findings.
Code of Civil Procedure section 1094.5, which deals with review of
administrative orders, provides, in subdivision (b), that "Abuse of discretion is
established if ... the order or decision is not supported by the findings, ..." (See
also Le Strange v. City of Berkeley (1962) 210 Cal.App.2d 313, 320 [26
Cal.Rptr. 550].)
Under Corporations Code section 25802, in order for the commissioner to grant
a curative permit he must find: "(a) that the plan of business and the issuance
[of the curative permit] are fair, just, and equitable; (b) that the applicant is
transacting and intends to transact business fairly and honestly; and (c) that
the issuance will not work a fraud upon the holders of outstanding securities."
(Witkin, Summary of Cal. Law (1969 Supp.) Corporations, § 122A, pp. 1258-
1259.)
[11] "Where the petition's allegations of irregular procedure or insufficient [27
Cal.App.3d 691] evidence have been denied, presumptions arise that the
administrative proceedings were in fact regular and supported by the evidence.
[Citation.] Thus the burden of proof falls upon the party attacking the
administrative decision to demonstrate wherein the proceedings were unfair, in
excess of jurisdiction, or showed 'prejudicial abuse of discretion.' It is the
responsibility of the petitioner to make available to the court an adequate
record of the administrative proceedings; if he fails to do this the presumption
of regularity will prevail. [Citation.]" (Gong v. City of Fremont (1967) 250
Cal.App.2d 568, 574 [58 Cal.Rptr. 664].) [10b] In the instant action, plaintiffs
failed to make available to the trial court a record of the administrative
hearing. Consequently, the presumption of regularity prevails on the issue of
whether the findings were supported by substantial evidence, and our inquiry
is limited to determining whether the findings, presuming them to be based
upon substantial evidence, supported the decision of the commissioner.
In Tabory v. State Personnel Board (1962) 208 Cal.App.2d 543 [25 Cal.Rptr.
333], the appellants contended that the board's findings were fatally defective.
The court therein stated that "[a]dministrative findings ... need not be stated
with the formality and precision required in judicial proceedings. [Citation.]"
(Id. at p. 546.) Nor must the court remand if it determines that the required
findings may be reasonably implied. (Cal. Administrative Mandamus
(Cont.Ed.Bar 1966) § 5.48, at p. 62, citing Sacramento etc. Dist. v. Pac. G. & E.
Co. (1946) 72 Cal.App.2d 638, 647 [165 P.2d 741].)
By the trial court's action in denying issuance of the writ, it is implicit that it
found the findings were sufficiently stated, or that the required findings could
be reasonably implied.
In Bixby v. Pierno (1971) 4 Cal.3d 130 [93 Cal.Rptr. 234, 481 P.2d 242],
plaintiffs appealed from a judgment denying their petition for writ of
mandamus to compel defendant Commissioner of Corporations to set aside his
decision approving a recapitalization plan submitted by Ranch Company, the
real party in interest. (Id. at p. 134.) Under the articles of incorporation, bylaws
and applicable provisions of law, specified majorities of the directors and
shareholders may adopt a plan of recapitalization unless the commissioner
concludes that the plan is not fair, just or equitable to all security holders
affected. (Corp. Code, § 25510 [now found in § 25142]; id. at p. 148.) The court
was asked to hold as a matter of law that the proposed plan was not fair, just
and equitable. (Id. at p. 149.)
The court, in answer thereto, held that "[t]he statutory discretion of the
commissioner would be entirely abrogated were we to hold that the question
[27 Cal.App.3d 692] of the fairness of securities transactions necessarily
constitutes questions of law for the courts to decide. By its very nature, the
exercise of discretion requires the ability to choose between permissible
alternatives. If the Legislature has conferred upon an administrative officer or
agency the authority to apply such broad standards as the 'fair, just and
equitable' criteria involved herein, the courts should not substitute their own
judgment for that of the agency, but should uphold the administrative decision
unless it is arbitrary, capricious, or fraudulent, having no reasonable basis in
law or no substantial basis in fact." (Id. at pp. 150-151.)
In the instant case, the commissioner's decision encompasses a lengthy and
technical discussion of the activities engaged in by Marcom. After reviewing the
evidence, the commissioner found all the requirements of section 25802 to have
been met. "Such an administrative decision necessarily involves overwhelming
technical knowledge as to matters of corporate structure, finance, taxation, and
business judgment." (Bixby v. Pierno, supra, 4 Cal.3d 130, 148.)
Such a decision also necessarily involves a determination that the plan of
dissolution and the issuance of the curative permit are fair, just and equitable.
Since the commissioner's decision was based on lengthy and numerous facts,
and his conclusions were reasonable in view of the broad statutory discretion
vested in him, the trial court was correct in upholding his decision and denying
issuance of the writ of mandamus.
3. No fraud resulted from the granting of the curative permit.
[12] Plaintiffs contend that granting of the curative permit worked a fraud on
them in contravention of Corporations Code section 25802, in that they would
have forced upon them shares in a defunct corporation with a stock structure
devoid of the protections existing at the time they purchased the subject shares
of Marcom. The protections previously existing included a waiver condition
limiting participation of promotional shares in distribution, which plaintiffs
were not informed could be removed; however, at a later date, such conditions
were in fact removed pursuant to an Order Removing Conditions issued by the
Commissioner of Corporations. A limitation on the salaries paid to corporate
officers was also later removed after a public hearing was held before the
Department of Corporations. Subsequent to said hearing, an amended permit
was issued whereby said condition was in fact deleted.
Under Corporations Code section 25802, in determining whether a curative
permit should issue, it must be found that "the issuance of the curative [27
Cal.App.3d 693] permit will not work a fraud upon the holders of any of the
issued and outstanding securities of applicant." (Italics added.)
From the language of section 25802, it is evident that in determining whether to
grant a curative permit, the Commissioner of Corporations must consider
whether such issuance would work a fraud not only on the holders of securities
issued without or in contravention of a permit, but also upon holders of validly
issued securities.
In the instant case, plaintiffs contend that if the permit is allowed to stand, they
will be compelled to hold securities having significantly different characteristics
from those existing at the time of the original purchase.
The protective conditions which were removed in the instant case were
removed in accordance with proper procedure. The waiver condition limiting
participation of promotional shares in distribution was removed pursuant to an
order removing conditions issued by the Commissioner of Corporations. The
limitation on the salaries paid to corporate officers was removed after a public
hearing and issuance of an amended permit. The removal of such protections
would affect equally those holders of securities which had been validly issued.
The rights of these holders must also be considered in determining whether the
curative permit should issue. Thus, it would appear that a limited few, the
holders of 282 shares out of 38,712, should not benefit by mere technical defects
at the expense of the remaining stockholders who would be equally affected by
the removal of the aforementioned protections. Therefore, issuance of the
curative permit did not work a fraud upon plaintiffs.
4. No error in denial of findings of fact and conclusions of law.
[13] Plaintiffs' last contention on appeal is that the trial court erred in denying
preparation of findings of fact and conclusions of law.
Code of Civil Procedure section 632 provides that upon the trial of a question of
fact, the court shall make findings if requested by one of the parties. This
requirement is made applicable to a mandamus proceeding by Code of Civil
Procedure section 1109.
Where no evidence is presented to the trial court and the hearing is reduced to
a decision on a question of law, no findings are necessary. (Baroldi v. Denni
(1961) 197 Cal.App.2d 472, 477 [17 Cal.Rptr. 647]; Johnston v. Security Ins.
Co. (1970) 6 Cal.App.3d 839, 844 [86 Cal.Rptr. [27 Cal.App.3d 694] 133].) In
the instant case no evidence was proffered to the trial court; the issue before the
trial court was one of law -- whether the findings of the commissioner
supported the decision. Consequently, no findings were necessary and the trial
court did not err in denying plaintiffs' request therefor.
The trial court's denial of the petition for writ of mandamus was proper.
Order and judgment affirmed.
Devine, P. J., and Rattigan, J., concurred.
Pitney-Bowes, Inc. v. State of California (1980) 108 Cal.App.3d 307 , 166
Cal.Rptr. 489
[Civ. No. 57520. Court of Appeals of California, Second Appellate District,

Division One. July 17, 1980.]
PITNEY-BOWES, INC., Plaintiff and Respondent, v. THE STATE OF
CALIFORNIA et al., Defendants and Appellants.
(Opinion by Hanson (Thaxton), J., with Lillie, Acting P. J., concurring.
Separate dissenting opinion by Schwartz, J.)
COUNSEL
George Deukmejian, Attorney General, R. H. Connett, Assistant Attorney
General, Douglas B. Noble, Deputy Attorney General, John A. Larson, County
Counsel, and William D. Ross, Deputy County Counsel, for Defendants and
Appellants.
Paul, Hastings, Janofsky & Walker, Donald A. Daucher and Steven C.
Kenninger for Plaintiff and Respondent.
OPINION
HANSON (Thaxton), J.
Background
Plaintiff/respondent Pitney-Bowes, Inc. (hereinafter plaintiff and/or Pitney-
Bowes) since 1935 has been engaged in business in California of
manufacturing, selling and servicing business equipment, including specialized
scales designed and used for computing transportation and delivery charges for
letters, packages, parcels and other items. As of April 1978 Pitney-Bowes had
approximately 31,438 scale customers in California using 39,606 of their scales,
about 28,415 of which were sold to customers within 9 years preceding the trial
of this case. Plaintiff also employs 337 service representatives in California to
service the scales which it sells, either on a call-for-service basis or pursuant to
an equipment maintenance agreement.
In March 1975 there was a meeting between legal counsel for plaintiff Pitney-
Bowes and general counsel for defendant/appellant State of California
Department of Food and Agriculture (hereinafter the State) regarding the
applicability or nonapplicability of California's weights and measures
legislation embodied in Business and Professions Code sections 12001 through
12540 (hereinafter section 12001 et seq. or the regulatory scheme or the statute)
fn. 1 to Pitney-Bowes' scales and scale repairmen. [108 Cal.App.3d 310]
In June 1975 counsel for Pitney-Bowes and the State exchanged letters setting
forth their respective legal positions concerning the applicability of the
regulatory scheme to Pitney-Bowes' scales and scale repairmen. Thereafter, the
State in a letter dated June 16, 1975, addressed to Pitney-Bowes' counsel ruled
that plaintiff's scales were subject to the regulatory and licensing scheme
contained in section 12001 et seq. which includes model approval, installation
testing and sealing procedures, and licensing of their repairmen. Defendant
State further told plaintiff to advise all former and future customers, except for
Pitney-Bowes' scales sold to and used exclusively by post offices, to arrange to
have their scales sealed. The State also told plaintiff that the foregoing
advisements would not deter criminal prosecution or civil actions based on
violations of the regulatory scheme but sought Pitney-Bowes' compliance with
the laws "as soon as possible, hopefully within 30 days."
In August 1975 Pitney-Bowes, threatened with criminal prosecutions and civil
actions, filed a complaint in the superior court seeking declaratory relief and an
injunction naming as defendants the State and the County of Los Angeles
Department of Weights and Measures (hereinafter the County) which is
involved with enforcing certain aspects of the regulatory scheme.
In February 1979 following a hotly contested nonjury trial, the superior court
granted the relief sought by plaintiff declaring that the regulatory and licensing
scheme embodied in section 12001 et seq. does not apply to plaintiff Pitney-
Bowes' scales or scale repairmen and enjoined defendants from enforcing the
statute against plaintiff herein.
Defendants State and County appeal from the above judgment.
Facts
The following brief summary of the extensive, unchallenged findings of fact
made by the trial court is adequate for the purposes of this appeal:
Plaintiff Pitney-Bowes, a Delaware corporation with principal offices in
Connecticut, sells and services three types of scales in California which are
specially designed for the particular purpose of computing [108 Cal.App.3d
311] postage and parcel transportation and delivery charges for the United
States Postal Service (hereinafter the USPS) and the United Parcel Service
(hereinafter UPS) and parcel delivery services other than USPS and UPS.
Customers of the foregoing services also use the scales for computing
transportation and delivery charges for items prior to turning them over to
delivery services.
Two types of plaintiff's scales (a balance-beam type scale [model 4916] and a
fan-type scale) are equipped with USPS rate charts and are capable of weighing
items to compute delivery charges but are not equipped with UPS rate charts.
The third type of scale (a parcel scale with optical display) is equipped with
both USPS and UPS rate charts.
USPS has the final authority for determining the adequacy of postal charges,
has the prerogative to reweigh a letter or package, and has at least four
different programs in operation to test the adequacy of postal charges. In those
cases where the charge is not checked or verified by USPS, the computation
made by the customer establishes the delivery charge. If USPS discovers an
overpayment of postal charges by a customer, the decision of whether to make a
refund to the customer is made in the local postal office.
UPS, a common carrier operating in 35 states including California and the
District of Columbia, is engaged in the business of picking up and delivering
small parcels, and also has the prerogative to reweigh a package which has
been weighed by one of its customers and has final authority for determining
the adequacy of its parcel delivery charges. UPS also has programs and audit
procedures in existence designed to check the accuracy of charges paid by
customers and to spot check the weights of packages in order to determine that
rates are charged strictly in accordance with approved tariff schedules. When a
customer of UPS weighs a package on one of plaintiff's scales, the computation
made by the customer establishes the amount paid by the customer in those
cases where the charge is not checked or verified by UPS.
(The record shows that USPS is an agency of the United States government
delegated the responsibility for making the final determination of the accuracy
of postage charges and that UPS, being a common carrier, is regulated by
another agency of the United States government, the Interstate Commerce
Commission [ICC] which determines UPS' interstate rates and charges and by
the California Public Utilities [108 Cal.App.3d 312] Commission [PUC] which
determines UPS' intrastate rates and charges.)
The scales are designed and intended by plaintiff to be kept at a "fixed
location" as that term is used in section 12510, subdivision (d), and as
previously noted, plaintiff employs 337 service representatives in California to
service its scales, either on a call-for-service basis or pursuant to an equipment
maintenance agreement.
There is no evidence that plaintiff's scales are being used for any purpose other
than for the particular purpose for which they were designed and intended as
hereinbefore described. There is also no question about the fact, nor do
defendants contend otherwise, (1) that plaintiff Pitney-Bowes' scales are
specially designed, equipped and used to compute the charge for a service,
namely, that of transporting and delivering letters, packages and other items,
and (2) that when an item is weighed on any type of plaintiff's scales, no
purchase or sale price for the item weighed is determined.
Issues
The umbrella issue on appeal is whether or not the trial court erred in
concluding that plaintiff Pitney-Bowes' scales and repairmen are not subject to
the regulatory and licensing scheme contained in section 12001 et seq.
However, the parties agree that resolution of the above issue turns on dual core
issues, namely, (1) whether or not plaintiff's scales are used for "commercial
purposes" within the meaning of the statute, and (2) whether or not the word
"commodities" employed in the statute was intended to include "services." fn.
2
Defendants State and County contend that plaintiff's scales are used for
"commercial purposes" and that the term "commodities" includes a "service";
that the terms are not explicitly defined in the statute and are [108 Cal.App.3d
313] ambiguous and unclear; and that this court should construe them very
broadly as did defendant State, the administrative agency empowered by
statute to enforce the regulations. fn. 3
Plaintiff Pitney-Bowes asserts that its scales are not used for "commercial
purposes," that "service" is not included in the term "commodities" and that
the terms in the full context of the statute are in no way ambiguous or unclear.
It argues that the trial court correctly construed the legislative intent as
exempting its scales and repairmen from the requirements of the regulatory
scheme since its scales are designed and used only for the purpose of computing
the charge for a delivery "service" and not for computing the cost for tangible
goods.
Discussion
It is our duty in construing the statute in question (§ 12001 et seq.) to ascertain
the intent of the Legislature so as to effectuate the purpose of the law and in a
fashion which is in harmony with the whole system of law of which it is a part.
We must give significance to every word, phrase, sentence and part of the
statute in pursuance of the legislative purpose, but must not sacrifice the
purpose to a literal construction of any part of the statute. (See Select Base
Materials v. Board of Equal. (1959) 51 Cal.2d 640, 645 [335 P.2d 672];Moyer v.
Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230 [110 Cal.Rptr. 144,
514 P.2d 1224];Cossack v. City of Los Angeles (1974) 11 Cal.3d 726, 732-733
[114 Cal.Rptr. 460, 523 P.2d 260]; Eckl v. Davis (1975) 51 Cal.App.3d 831, 848-
849 [124 Cal.Rptr. 685]; People v. Taylor (1975) 46 Cal.App.3d 513, 531 [120
Cal.Rptr. 762]; Anaheim Union Water Co. v. Franchise Tax Bd. (1972) 26
Cal.App.3d 95, 105-106 [102 Cal.Rptr. 692].)
[1] In addition, "Statutes must be construed in a reasonable and commonsense
manner, not in a manner that would lead to absurd consequences. The rule is
well established that '"where the language of a statute is reasonably susceptible
of two constructions, one of which in application will render it reasonable, fair
and harmonious with its manifest purpose, and another which would be
productive of absurd [108 Cal.App.3d 314] consequences, the former
construction will be adopted."' (City of L.A. v. Pac. Tel. & Tel. Co. (1958) 164
Cal.App.2d 253, 256-257 [330 P.2d 888]; see also, DeCelle v. City of Alameda
(1960) 186 Cal.App.2d 574, 582 [9 Cal.Rptr. 549].) ...
"'"Statutes must be given a reasonable and common sense construction in
accordance with the apparent purpose and intention of the lawmakers--one
that is practical rather than technical, and that will lead to a wise policy rather
than to mischief or absurdity." (45 Cal.Jur.2d 625-626.) "[I]n construing a
statute the courts may consider the consequences that might flow from a
particular interpretation. They will construe the statute with a view to
promoting rather than to defeating its general purpose and the policy behind
it." (Id, p. 631.)... '" (Anaheim Union Water Co. v. Franchise Tax Bd., supra, 26
Cal.App.3d at p. 105.)
[2] Applying the above fundamental rules of statutory construction, we
conclude: (1) That the California Legislature at the time of drafting and
enacting the scale regulatory and licensing scheme contained in section 12001 et
seq. was fully aware of the widespread use of weighing devices by the large
"service" industry for the purpose of computing "postage" and "freight"
charges for transportation and delivery of letters, packages, parcels and other
items; (2) that the state Legislature in clear and unambiguous terms in the
statute said what it meant to say; and (3) that its intended primary purpose for
enacting the statute was to regulate only those weighing devices used in
determining the cost of tangible goods (commodities) "for sale, hire or reward"
and that the regulations were not intended to apply to scales specially designed
and used for computing charges for the "service" of transporting and
delivering letters, parcels, packages or other items.
We, therefore, hold that the court below did not err in finding that the
regulatory and licensing scheme contained in section 12001 et seq. is
inapplicable to Pitney-Bowes' scales and scale repairmen and in granting the
declaratory and injunctive relief sought. Our reasoning follows:
Sections 12210, subdivision (a), and 12500, subdivision (c), are key sections
since they, when considered separately and in conjunction with other portions
of the statute, are definitional in character and instructive in determining the
intended meaning of the terms "commercial" [108 Cal.App.3d 315] and
"commodities" in the statute and whether or not the scope of the latter term
was intended to include "service(s)."
We first focus on section 12210, subdivision (a), which pertains to the
inspection of scales. In relevant part this subdivision refers to scales sold or
used "in proving the size, quantity, extent, area, weight or measurement of
quantities, things, produce, articles for distribution or consumption, purchased,
or offered or submitted by such person or persons for sale, hire or reward... ."
(Italics added.)
The conspicuous absence of the word "service" from the language of section
12210, subdivision (a), is of significance. The Legislature was certainly aware of
the word "service" and its meaning and intended to use it separately and
distinctly from the word "commodity" since it included both words in section
12510, subdivision (d), in the following manner: Any person is guilty of a
misdemeanor who "[u]ses in the buying or selling of any commodity, fn. 4 or
for determining the charge for a service, fn. 5 any weight or measure or
weighing or measuring instrument which is not kept at a fixed location, ..."
which does not bear a seal. (Italics added.) fn. 6
Moreover, the Legislature was surely aware of the clause "or in computing any
basic charge or payment for services rendered on the basis [108 Cal.App.3d
316] of weight or measure" fn. 7 which it could have inserted after the words
"or reward" in section 12210, subdivision (a), if it had intended to include
services within the scope of the section.
Of importance also is the fact that the Legislature in section 12210, subdivision
(b), provided a different procedure for " non-commercial" measuring devices.
The procedure does not include affirmative regulatory action by defendant
administrative agencies and only comes into play when initiated "upon the
written request of any person, firm or corporation." Since subdivision (b)
provides a different procedure for "non-commercial" weighing devices, it is
reasonable to conclude the Legislature intended subdivision (a) of section 12210
to be definitional of what constitutes "commercial" devices subject to the
regulatory provisions of the statute.
Applying the facts of the case at bench to the language of section 12210,
subdivision (a), as construed, it is clear that plaintiff's scales are not subject to
the regulatory aspects of the statute. Plaintiff's scales are used only to compute
the charge for a "service," namely the service of transporting and delivering
packages or other tangible items. The packages weighed on plaintiff's scales are
neither purchased nor sold, nor offered for hire or reward within the meaning
of section 12210, subdivision (a). The packages or items offered to either USPS
or UPS or other such services and their customers are for transportation and
delivery only. No purchase or sale price, or compensation for the hire, of the
package or item itself is determined and no reward is involved.
We turn now to section 12500, subdivision (c), which is the other provision in
the statute which throws light on the Legislature's intended meaning of the
term "commercial." This section provides: "Weights or measures or weighing,
measuring, or counting instruments for sale or [108 Cal.App.3d 317] use for
commercial fn. 8 purposes shall include devices which are used at the time of,
or for the purpose of, the trading in, exchanging, selling, or purchasing of
commodities but shall not include such devices when for use or operation solely
within a plant or business as a part of the manufacturing, processing or
preparing for market of commodities." (Italics added.)
Defendants argue that section 12500, subdivision (c), is not definitional because
it employs the words "shall include" rather than the word "means" after the
words "commercial purposes" and point to section 12500, subdivisions (a), (b)
and (d), where in each instance the word being defined is followed by the word
"means."
Defendants' construction is strained and faulty because such interpretation
would not be in harmony with other portions of the statute. While the word
"includes" may be used as either a word of enlargement or of limitation, in
making that determination the comprehensiveness of the language following
the word "includes" is of vital importance. Here, the language following the
word "includes" is specific and detailed. (See In re Martinez (1942) 56
Cal.App.2d 473 [132 P.2d 901]; Coast Oyster Co. v. Perluss (1963) 218
Cal.App.2d 492 [32 Cal.Rptr. 740].) In addition, the obvious purpose of the
section is to specify which weighing devices are to be regulated by the statute.
We conclude the Legislature intended to use the words "shall include" to limit
the scope of the regulatory scheme to scales used in buying and selling tangible
goods (commodities). To conclude otherwise would make no sense considering
the language of the entire statute and would not be consistent and in harmony
with the purpose of the law and the overall regulatory scheme.
In any event, here again (as in our previous discussion of § 12510, subd. (d)),
plaintiff's scales are expressly exempted in section 12500, subdivision (c) from
the burdens of the regulatory scheme since its scales are typically used solely
within plants or businesses as part of the distribution process in preparing their
product (commodities) for shipment to their customers or to the market place.
In section 12500, subdivision (c), the word "commodities" is also a key word.
As previously discussed, the Legislature obviously knew the [108 Cal.App.3d
318] difference between "commodities" and "services" and when it meant to
include "services," it said so. Examples of this, other than those already
mentioned, can be found in sections 12024 and 12024.1 which are nearly
identical in purpose and effect but not in subject matter, one section dealing
with "commodities" and the other with "services."
Section 12024 provides: "Every person, who by himself, or through or for
another, sells any commodity in less quantity than he represents it to be is
guilty of a misdemeanor."
Section 12024.1 provides: "Every person, by himself, or through or for another,
who willfully misrepresents a charge for service rendered on the basis of
weight, time, measure, or count is guilty of a misdemeanor."
Although sections 12024 and 12024.1 were drafted to meet different problems,
it is clear from their inclusion in the statute that the words "commodities" and
"services" as used in the regulatory scheme are not synonymous. To conclude
otherwise would make sections 12024 and 12024.1 unintelligible.
Plaintiff Pitney-Bowes points to the fact that in June of 1975, the same month
defendant State sent its ruling to plaintiff as hereinbefore described, it
(defendant State) offered to the Legislature a proposed amendment to section
12510 (which defines the penalty for using incorrect commercial weighing or
measuring devices) which would have expanded the scope of that section to
include scales used to determine a "service" charge. The proposed amendment
to section 12510 (Assem. Bill No. 1711) sought to add the following italicized
clause to the existing language: "Any person, who by himself, or through or for
another, does any of the following is guilty of a misdemeanor:
"(a) Uses, in the buying or selling of any commodity, or for determining the
charge for a service, or retains in his possession an incorrect weight or measure
or weighing or measuring instrument ...."
Following strenuous opposition by the "service" industry, in February of 1976
the proposed amendment to section 12510 described above was stricken in its
entirety from Assembly Bill No. 1711. Plaintiff argues that the history of the
proposed amendment and other evidence shows that the existing regulatory
scheme did not and does not include scales [108 Cal.App.3d 319] used to
estimate the charge for a "service" unless the Legislature specifically says "or
for determining the charge for a service."
Defendants argue that the legislative history surrounding the demise of
defendant State's proposed amendment (unpassed bill) to section 12510,
subdivision (a), has little value as evidence of legislative intent concerning the
regulatory scheme contained in the original (existing) statute since "unpassed
bills of later legislative sessions evoke conflicting inferences" citing Sacramento
Newspaper Guild v. Sacramento County Bd. of Suprs. (1968) 263 Cal.App.2d
41 [69 Cal.Rptr. 480].
We have no quarrel with the latter proposition and merely view defendant
State's attempt to amend section 12510, subdivision (a), as described above as
little more than an admission of the shakiness of its interpretation of the
existing law. Our conclusions expressed herein are arrived at independently of
the legislative papers bearing on the rejection of the proposed amendment. We
cannot, however, ignore the fact that the opinions expressed in four separate
documents concerning the proposed amendment are in complete accord with
our interpretation of the original (existing) statute. fn. 9
As previously indicated plaintiff Pitney-Bowes has plants and/or operations in
many states, including California. USPS is an agency of the United States
government delegated the responsibility for making the final determination of
the accuracy of postage. UPS is a common carrier operating in more than 35
states and the District of Columbia and is regulated by another agency of the
United States government, the ICC which determines UPS' interstate rates and
charges and by the PUC which determines UPS' intrastate rates and charges.
Each of the two latter agencies has the responsibility for insuring that UPS does
not overcharge its customers. Both USPS and UPS have programs designed to
check the accuracy of charges paid by their customers and to spot check the
weight of packages in order to determine that rates are charged strictly in
accordance with approved tariff schedules. In no [108 Cal.App.3d 320] state in
which Pitney-Bowes operates are its scales or repairmen regulated by agencies
other than the ICC or the local PUC.
It is reasonable to assume that California legislators in their wisdom did not
include weighing devices used in the service industry in California's weights
and measures regulatory scheme because they assumed, as they must, that the
USPS and the ICC-PUC were doing their job; that there was adequate
regulation on the federal level for consumer protection and that the stacking on
of two more layers of bureaucratic regulation at the state and county level fn.
10 simply was unnecessary and unwarranted. fn. 11
In short we find the arguments of defendants State and County relating to
statutory construction of the statute under consideration strained and
unpersuasive. They suggest that the consumer protection purpose of the
legislation would justify this court to construe the statute to apply to plaintiff's
scales. If we were to construe the statute in the manner urged by defendants, it
would require us to take pen in hand and literally write into section 12210,
subdivision (a), after the word "reward" the clause "or in computing any basic
charge or payment for services rendered on the basis of weight or measure";
write into section 12510 the [108 Cal.App.3d 321] clause "or for determining
the charge for a service" which has already been rejected, for whatever reason,
by the Legislature; add the words "or service" after the word "commodity";
and make related changes throughout the entire statute. This would require a
wholesale rewriting of the statute and would consist of rank judicial legislation.
fn. 12 This, in deference to constitutional concept of separation of powers, we
refuse to do. "If it is advisable that [a] statute be changed, the solution lies
within the province of the Legislature." fn. 13 (Orpustan v. State Farm Mut.
Auto. Ins. Co. (1972) 7 Cal.3d 988, 994 [103 Cal.Rptr. 919, 500 P.2d 1119].)
In summary, for the reasons stated, we conclude that the legislative intent and
purpose of the mandatory regulatory and licensing scheme embodied in section
12001 et seq. is to protect consumers from unfair dealings where the person
who sells tangible goods weighs the goods and collects a charge based on the
weight of the goods sold and does not apply when scales are used, as in the
instant case, to determine a charge for a delivery service. fn. 14 [108
Cal.App.3d 322]
Having so concluded, we need not address plaintiff's other contentions that the
regulations, if applicable, would violate the supremacy clause of the United
States Constitution in respect to postal scales and would violate the interstate
commerce clause of the United States Constitution and article XII of the
California Constitution in respect to UPS scales.
Disposition
The judgment of the superior court is affirmed in its entirety.
Lillie, Acting P. J., concurred.
SCHWARTZ, J.
I dissent. To distinguish a "commercial" weighing or measuring device from a
"non-commercial" device, it is necessary to look to what use the device is put.
Plaintiff's scales are used for the following purposes: (a) Use by USPS to
compute the postal charges; (b) use by customers of USPS to compute the
postal charges; (c) use by customers of UPS to compute parcel delivery
charges; (d) use by parcel delivery services other than USPS and UPS to
compute delivery charges; or (e) use by customers of parcel delivery services
other than USPS and UPS to compute parcel delivery charges. The record
reflects that there were approximately 39,600 Pitney-Bowes scales in California
as of April 21, 1978.
United Parcel Service (UPS) is in the business of picking up and delivering
small packages. UPS gets customer packages in three ways. First, it has a
customer counter where business and individuals bring in their own packages,
which are weighed and charges computed on scales owned by UPS. These scales
have to be sealed but UPS does not use any Pitney-Bowes scales at its counters
in California. The other two ways involve UPS picking up packages at the
customers' locations. One way is the automatic, daily pickup from certain
customers; the other is the occasional pickup on request from either business or
individual customers. Either way, the customer is expected to have a scale and
to weigh every package and compute the UPS charge using a UPS rate chart
before the package is picked up by UPS. In the case of some individuals who
are only occasional customers, this may be done on a bathroom scale, although
most regular customers use scales and metering devices made by Pitney-Bowes,
Friden, Postalia, National Cash Register, or Orbitron. [108 Cal.App.3d 323]
UPS has approximately 69,000 daily pickup customers in California and makes
about 2,000 pickups each day on request. These customers ship 620,000
packages a day. Calculating 20-21 working days a month and an average
service charge of $1.50 per package, UPS collects upward of $20 million each
month in charges computed by scales such as those manufactured by Pitney-
Bowes.
UPS pickup customers make the computations that result in all these charges.
UPS reserves the right to make a final determination as to any charge and
makes adjustments when it audits and finds an error in the customer's
computation. However, UPS audits each daily pickup customer a minimum of
only one day a year, and even then UPS does not always audit every package in
the customer's daily shipment. Furthermore, whether occasional pickup
customers ever get audited is largely a matter of chance. This alone is not
adequate protection for the consumer who causes 620,000 packages a day to be
weighed and shipped daily. These figures as to the use of the Pitney-Bowes
scales clearly demonstrate that they play a significant role in the stream of
commerce.
Even if we assume that "commodities" in division 5 of the Business and
Professions Code refers only to tangible goods, a questionable assumption, fn. 1
there can be little doubt that service transactions fall within the general term
"business intercourse." The United States Supreme Court recognized this
inAdair v. United States (1908) 208 U.S. 161, 177 [52 L.Ed. 436, 443, 28 S.Ct.
277], when it defined "commerce among the several states" to include a
number of services: "... traffic, intercourse, trade, navigation, communication,
the transit of persons, and the transmission of messages by telegraph ...." [108
Cal.App.3d 324]
That service transactions are included in "commercial" is also clear under
Webster's second definition with its emphasis on financial profit. There is no
qualification that could even arguably distinguish services from goods.
Subsequent dictionary definitions of "commercial" repeat this definition: "...
from the point of view of profit; having profit as the primary aim ... ."
(Webster's Third New Internat. Dict. (unabridged 1961).) "Having financial
profit as the primary aim ...." (Funk & Wagnalls Standard Collegiate Dict.
(1973).) "Having profit, success, or immediate results as a chief aim: a
commercial painter ...." (American Heritage Dict. of the English Language
(new college ed. 1976).)
All these definitions emphasize the business element of the meaning of
"commercial." While "commerce" once simply referred to goods, that
definition was outdated by at least the early 19th century, as the practical
realities of modern life brought services onto an equal footing. (See Gibbons v.
Ogden (1824) supra, 22 U.S. 1, 229 [6 L.Ed. 23, 78].) The state Court of Appeal
has recently recognized this fact once again, in Siegel v. City of Oakland (1978)
79 Cal.App.3d 351, 358 [145 Cal.Rptr. 62]. There, the test of whether city-
owned parking meters were "commercial" turned on whether they were used
in a business relationship, not whether goods or services were involved.
There is no doubt that the purpose of division 5 is to protect the consumer by
assuring that weighing and measuring devices used in commercial transactions
are accurate (46 Ops.Cal.Atty.Gen. 103, 104 (1965)). Consumer protection
statutes should be liberally construed so as to accomplish their purpose. (See In re
Fujii (1922) 189 Cal.55, 58-59 [207 P. 537].) Where they are susceptible of two
constructions, one of which, in application, would render the statutes harmonious
with the legislative purpose and one of which would be productive of absurd
consequences, the former construction will be adopted. (County of Orange v.
Heim (1973) 30 Cal.App.3d 694, 713 [106 Cal.Rptr. 825]; Hall v. C & A Navarra
Ranch, Inc. (1972) 24 Cal.App.3d 774, 788 [101 Cal.Rptr. 249]; City of Plymouth
v. Superior Court (1970) 8 Cal.App.3d 454, 466 [96 Cal.Rptr. 636].) Appellants
State and County contend that division 5 should be construed so as to afford
maximum protection to consumers and that "commercial" should thus be
construed to include service transactions as well as tangible goods transactions.
Pitney-Bowes agrees that the purpose of division 5 is consumer protection but
only in transactions involving the sale of goods. [108 Cal.App.3d 325]
There is no reason to distinguish between selling goods and selling services. The
purpose of division 5 is to protect consumers from being overcharged due to an
inaccurate scale. An inaccurate scale can result in overcharge whether it is used
to compute the cost of goods sold according to weight or the cost of service of
processing or shipping goods according to their weight. It makes no difference
to the overcharged consumer whether he is overpaying for goods or for a
service. He is still being overcharged, and it is hard to imagine that the
Legislature intended to protect him in one instance and not in the other. In the
absence of any evidence showing legislative intent to so limit the protection of
division 5, such an absurd consequence should not be imposed by judicial
construction.
On the other hand, it makes sense to define "commercial" in terms of the
business nature of the transaction rather than on the basis of what is sold. The
crucial fact is that money changes hands in a business relationship based on the
weight shown on a scale. This is in contrast, for example, to the situation
covered in section 12500, subdivision (c), wherein a scale is used "solely within
a plant or business."
The most reasonable interpretation of "commercial," consistent with the
consumer protection intent of division 5, is in reference to the use of weighing
or measuring devices in business transactions in which the parties paying the
charges computed by the devices do not control them. This would exclude from
regulation bathroom scales used by individuals to compute their own charges
and also scales used by merchants and businesses to compute charges that are
not passed on to their customers; but it would regulate scales used by
merchants and businesses to compute USPS or UPS shipping charges which are
passed on to their customers.
In light of the modern understanding of "commercial," the consumer
protection purpose of division 5, and the illogic of artificially distinguishing
services transactions from goods transactions in regard to inaccurate scales,
any ambiguities in the statutory language itself should be resolved in favor of
the construction more protective of the consumer, the logical inclusion of
service transactions within the meaning of "commercial" and within the
requirements of division 5. [108 Cal.App.3d 326]
The Rejected Amendment to Assembly Bill No. 1711 Offers No Support for
Excluding Service Transactions From "Commercial"
Pitney-Bowes' use of a rejected amendment to Assembly Bill No. 1711 is not
persuasive in support of its position. Pitney-Bowes contends that the
amendment was rejected because it would have enlarged the coverage of
misdemeanor section 12510, subdivision (a) to apply to service transactions,
and that this shows that "commodity" transactions, already covered by the
statute, do not include services. However, unadopted legislative proposals have
limited value as indicators of legislative intent. (Sacramento Newspaper Guild
v. Sacramento County Bd. of Suprs. (1968) 263 Cal.App.2d 41, 58 [69 Cal.Rptr.
480]; Ambrose v. Cranston (1968) 261 Cal.App.2d 137, 143-144 [68 Cal.Rptr.
22].)
For the reasons stated herein, the model approval, testing, sealing, notification,
and device repairmen requirements of division 5 of the California Business and
Professions Code should be applied to scales, such as those manufactured and
sold by Pitney-Bowes, which are sold or used to determine charges for shipping
packages according to weight.
I would reverse the judgment.
FN 1. Once it has been determined that a weighing device falls within the
regulatory scheme a number of onerous burdens befall a seller, user or servicer
of such devices, such as model approval; presale sealing except for "non-
portable" scales; notification of sale, installation and repair or adjustment; in-
use inspection and testing; registration and regulation of device repairing; and
certification of test weights.
FN 2. A weighing device can be used for either a commercial or a
noncommercial purpose. Only commercial devices must comply with the
regulatory scheme.
Even a cursory inspection of the statute would disclose that an interpretation of
the words "commercial" and "commodities" is central to resolution of the
umbrella issue since throughout the statute it is made clear that only scales and
weighing devices used for "commercial purposes" and for weighing
"commodities" are subject to the regulatory and licensing provisions of the
statute.
FN 3. As previously indicated defendants State and County do not claim
jurisdiction over scales used exclusively by USPS in its postal offices, but do
claim jurisdiction over scales used by customers of USPS as well as by UPS,
other parcel services and their customers.
FN 4. Black's Law Dictionary (5th ed. 1979) states the term "commodities"
refers "to those things which are useful or serviceable, particularly articles of
merchandise movable in trade. Goods, wares and merchandise of any kind;
movables; articles of trade or commerce. Movable articles of value; things that
are bought and sold." (P. 248, col. 2, italics added.)
Webster's Third New International Dictionary (unabridged 1961) defines
"commodity" in the commercial sense as: "1 ... (c) something used or valued
esp. when regarded as an article of commerce -- 2a: an economic good; esp. a
product of agriculture, mining or, sometimes manufacture as distinguished
from services... b: an article of commerce, esp. one delivered to a transportation
company for shipment 3 obs: a parcel or quantity of goods..." (Id, at p. 458,
italics added.)
FN 5. Black's Law Dictionary, supra, refers to the word "service" in the
context of contract law as meaning "Duty or labor to be rendered by one
person to another; ... the performance of labor or benefit of another, or at
another's command." (P. 1227, col. 1.)
FN 6. Section 12510, subdivision (d), was probably directed at vendors using
portable scales such as strawberry pickers. (See 54 Ops.Cal.Atty.Gen. 141
(1971).)
This section does not apply to plaintiff Pitney-Bowes even though it refers to
scales used to determine the charge for a service because it specifically exempts
scales kept at a fixed location and defendants concede that plaintiff's scales are
designed and intended to be kept and used at a "fixed location."
FN 7. The National Bureau of Standards Handboo 44, "Specifications,
Tolerances and Other Technical Requirements for Commercial Weighing and
Measuring Devices," under General Code section G-A.1 (a) and the Model
State Registration of Servicemen and Service Agencies Regulation published by
the United States Department of Commerce in 1966, section 2.3, both contain
language identical to section 12210, subdivision (a), except they do include the
magic words referred to. It is reasonable to assume that the drafters and
enacters of section 12210, subdivision (a), were aware of the above publications
and deliberately intended to omit the clause and exempt scales used by the
service industry to compute transportation and delivery charges from the
onerous burdens of the regulatory scheme.
FN 8. Black's Law Dictionary, supra, states that the word "commercial" in its
generic sense refers in "most all aspects [to the] buying and selling [of things
("commodities")]." (P. 245, col. 1, italics added.)
FN 9. The Legislative Counsel's analysis contained in his Digest of Assembly
Bill No. 1711; the Assembly Finance, Insurance and Commerce Committee
analysis; the Assembly Office of Research Analysis; and the Assembly Office of
Research Concurrence in Senate Amendments Analysis all, in essence, state
what was stated in the first mentioned analysis with respect to the proposed
amendment and that is: "Under existing law it is a misdemeanor to use an
incorrect weight or measure in the buying or selling of any commodity. This
would also make it a misdemeanor to use an incorrect weight or measure for
determining the charge for a service."
FN 10. The evidence in the case at bench indicates that if the regulatory and
licensing scheme was applicable to plaintiff herein, substantial bureaucratic
burdens would be stacked into plaintiff's business operations on the state and
county level. For example, plaintiff in addition to design interference by a
governmental agency would be required to change its distribution procedures
to allow for inspection and sealing within the various counties which would
involve considerable expense in unpacking, setting up and repacking the scales;
the additional paperwork of giving notification of sale and installation would
require additional red tape (in 1977 alone plaintiff sold 5,094 scales in
California); registration of plaintiff's 337 device repairmen in California and
the notices required of them would entail additional expense and red tape (the
application fee for device repairmen is $5 per man and would require special
training in all aspects of the California statute); and the notices of repair and
adjustment would entail a great amount of additional paperwork. In argument
before the trial court counsel for plaintiff said: "With respect to notice of repair
or adjustment, which is described in various exhibits that have been received in
evidence, Mr. Goodwin estimated that during 1975, '76, and '77, there were
17,000, 33,000, and 16,000 reportable service calls made, respectively, in those
years, which would have, under section 12515, resulted in a report to the State,
so somewhere in the neighborhood of 15,000 to 35,000 reports of repairs to the
State ..."
FN 11. In our view defendants' concern for consumer protection of those using
plaintiff's scales other than USPS and UPS and their customers is probably
unwarranted. The design, quality control, testing and repair arrangements of
Pitney-Bowes along with the oversight by the USPS and the ICC-PUC carries
through and provides safeguards in respect to possible overcharges on Pitney-
Bowes' scales which may be used by those other than USPS or UPS or their
customers.
FN 12. In our view, absent a clear legislative mandate, in the interest of the wise
public policy of avoiding uncalled for and unnecessary regulation in the free
market place, courts should exercise judicial restraint and refrain from
scratching administrative agencies' itch to expand their regulatory powers.
FN 13. There is no showing whatsoever that customers' scales used in
computing delivery charges are resulting in an overcharge for postal and parcel
delivery services. If such a showing ever surfaced in respect to scales used by
USPS and UPS which was not adequately covered by the penalty provisions of
the statute, it would appear that the USPS and the ICC-PUC should be advised
so that those agencies could take corrective action. If evidence was ever
uncovered of the overcharging of customers other than USPS and UPS, it
would appear that the proper forum for making changes and finding solutions
is the state Legislature. The Legislature is better equipped to conduct
investigations and conduct hearings where the competing views of consumer
protective groups and representatives of the service industry can be aired. The
Legislature is better equipped than the courts to ask and answer such questions
as: "Is there a problem of overcharging by reason of the use of scales in the
service industry? If so, how widespread is it? and would the financial cost
passed on to consumers by reason of the burdens added to the service industry
and increased taxes imposed to fund additional regulations exceed overcharges,
if any? What would be the impact on the service industry as a whole?" Courts
are not equipped to look into or effectively handle such questions.
FN 14. We note that in a letter from plaintiff Pitney-Bowes' counsel to general
counsel for the State dated April 10, 1975 (plaintiff's exhibit No. 1), there is the
statement that "if the [State] believes that Pitney-Bowes scales may potentially
be used in isolated instances for commercial purposes, we believe that Pitney-
Bowes would undertake a reasonable program designed to limit or eliminate
even such isolated instances. Pitney-Bowes is always available to assist in
whatever manner it can and is always available for discussion in that regard."
FN 1. It might be argued that the juxtaposition of the terms "commodity" and
"service" as between sections 12024 and 12024.1 and within section 12510,
subdivision (d) indicates that the terms are mutually exclusive for purposes of
division 5. Nevertheless, this runs counter to the modern understanding of the
term "commodity," dating back to Gibbons v. Ogden (1824) 22 U.S. (9 Wheat.)
1, 229 [6 L.Ed. 23, 78], where the United States Supreme Court defined
"commerce" as follows: "Commerce, in its simplest signification, means an
exchange of goods; but in the advancement of society, labor, transportation,
intelligence, care, and various mediums of exchange, become commodities, and
enter into commerce; ..." The California Supreme Court has taken a similar
view in cases regarding the meaning of "commodities" under the Cartwright
Act. That court has held that a definition limiting "commodities" to goods, not
services, is "insupportable in California case law, which has broadly defined
'commodity.'" (Marin County Bd. of Realtors, Inc. v. Palsson (1976) 16 Cal.3d
920, 927 [130 Cal.Rptr. 1, 549 P.2d 833].) The court has further declared that "a
service consisting in the main of human labor" is a commodity even though the
Cartwright Act specifically provides that labor alone is not. (Marin County Bd.
of Realtors, Inc., supraMessner v. Journeymen Barbers etc. International
Union (1960) 53 Cal.2d 873, 886 [4 Cal.Rptr.179, 351 P.2d 347].)
MISCELLANEOUS
"The very meaning of 'sovereignty' is that the decree of the sovereign makes
law." American Banana Co. v. United Fruit Co., 29 S.Ct. 511, 513, 213 U.S. 347,
53 L.Ed. 826, 19 Ann.Cas. 1047.
"'Sovereignty' means that the decree of sovereign makes law, and foreign
courts cannot condemn influences persuading sovereign to make the decree."
Moscow Fire Ins. Co. of Moscow, Russia v. Bank of New York & Trust Co., 294
N.Y.S. 648, 662, 161 Misc. 903.
RESERVATION OF SOVEREIGNTY: "[15] (b) Even if the Tribe's power to
tax were derived solely from its power to exclude non-Indians from the
reservation, the Tribe has the authority to impose the severance tax. Non-
Indians who lawfully enter tribal lands remain subject to a tribe's power to
exclude them, which power includes the lesser power to tax or place other
conditions on the non-Indian's conduct or continued presence on the
reservation. The Tribe's role as commercial partner with petitioners should not
be confused with its role as sovereign. It is one thing to find that the Tribe has
agreed to sell the right to use the land and take valuable minerals from it, and
quite another to find that the Tribe has abandoned its sovereign powers simply
because it has not expressly reserved them through a contract. To presume that
a sovereign forever waives the right to exercise one of its powers unless it
expressly reserves the right to exercise that power in a commercial agreement
turns the concept of sovereignty on its head. MERRION ET AL., DBA
MERRION & BAYLESS, ET AL. v. JICARILLA APACHE TRIBE ET AL.
1982.SCT.394 , 455 U.S. 130, 102 S. Ct. 894, 1 L. Ed. 2d 21, 50 U.S.L.W. 4169
pp.144-148.(Bold emphasis added here)
United States and State of California are two separate sovereignties, each
dominant within its own sphere. Redding v Los Angeles (1947) 81 CA2d 888, 185
P2d 430, app dismd 334 US 825, 92 L Ed 1754, 68 S Ct 1338
As independent sovereignty, it is State's province and duty to forbid
interference by another state or foreign power with status of its own citizens.
Roberts v Roberts (1947) 81 CA2d 871, 185 P2d 381. Black's Law Dictionary,
4th Ed., p 1300
A county is a person in a legal sense, Lancaster Co. v. Trimble, 34 Neb. 752, 52
N.W. 711; but a sovereign is not; In re Fox, 52 N.Y. 535, 11 Am.Rep. 751; U.S. v.
Fox 94 U.S. 315, 24 L.Ed. 192 .... Black's Law Dictionary, 4th Ed., p 1300
A person is such, not because he is human, but because rights and duties are
ascribed to him. The person is the legal subject or substance of which the rights
and duties are attributes. An individual human being considered as having such
attributes is what lawyers call a "natural person." Pollock, First Book of Jurispr.
110. Gray, Nature and Sources of Law, ch. II. Black's Law Dictionary, 4th
Edition, p 1300
The terms "citizen" and "citizenship" are distinguishable from "resident" or
"inhabitant." Jeffcott v. Donovan, C.C.A.Ariz., 135 F.2d 213, 214; and from
"domicile," Wheeler v. Burgess, 263 Ky. 693, 93 S.W.2d 351, 354; First Carolinas
Joint Stock Land Bank of Columbia v. New York Title & Mortgage Co., D.C.S.C.,
59 F.2d 35j0, 351. The words "citizen" and citizenship," however, usually include
the idea of domicile, Delaware, L.&W.R.Co. v. Petrowsky, C.C.A.N.Y., 250 F. 554,
557; citizen inhabitant and resident often synonymous, Jonesboro Trust Co. v.
Nutt, 118 Ark. 368, 176 S.W. 322, 324; Edgewater Realty Co. v. Tennessee Coal,
Iron & Railroad Co., D.C.Md., 49 F.Supp. 807, 809; and citizenship and domicile
are often synonymous. Messick v. Southern Pa. Bus Co., D.C.Pa., 59 F.Supp. 799,
800. Black's Law Dictionary, 4th Ed., p 310
Domicile and citizen are synonymous in federal courts, Earley v. Hershey Transit
Co., D.C. Pa., 55 F.Supp. 981, 982; inhabitant, resident and citizen are
synonymous, Standard Stoker Co. v. Lower, D.C.Md., 46 F.2d 678, 683. Black's
Law Dictionary, 4th Ed., p 311
The Constitution emanated from the people and was not the act of sovereign
and independent States.*1 The preamble contemplates the body of electors
composing the states, the terms "people" and "citizens" being synonymous.
Negroes, whether free or slaves, were not included in the term "people of the
United States at that time.*2 *1 McCulloch v. Maryland, 4 Wheat. 316 [1819].
See also Chisholm v. Georgia, 2 Dall. 419, 470 [1793]; Penhallow v. Doane, 3
Dall. 54, 93 [1795]; Martin v. Hunter, 1 Wheat. 304, 324 [1816]; Barron v.
Baltimore, 7 Pet. 247 [1833]. *2 Scott v. Sandford, 19 How 393, 404 [1857].
The words "sovereign state" are cabalistic words, not understood by the disciple
of liberty, who has been instructed in our constitutional schools. It is our
appropriate phrase when applied to an absolute despotism. The idea of sovereign
power in the government of a republic is incompatible with the existence and
foundation of civil liberty and the rights of property. Gaines v. Buford, 31 Ky. (1
Dana) 481, 501.
Government: Republican Government. One in which the powers of sovereignty
are vested in the people and are exercised by the people, either directly, or
through representatives chosen by the people, to whom those powers are
specially delegated. In re Duncan, 139 U.S. 449, 11 S.Ct. 573, 35 L.Ed. 219;
Minor v. Happersett, 88 U.S. (21 Wall.) 162, 22 L.Ed. 627. Black's Law
Dictionary, Fifth Edition, p. 626
Democracy. That form of government in which the sovereign power resides in

and is exercised by the whole body of free citizens directly or indirectly through
a system of representation, as distinguished from a monarchy, aristocracy, or
oligarchy. Black's Law Dictionary, Fifth Edition, p. 388
LEGISLATIVE INTENT
“In Bosse VS Marye, 80 Cal. App. 109 , Claudine Spreckels, a license to operate a motor
vehicle.
She invited Helen Marye, 80 Cal. App. 109, also a minor, to drive her automobile. While Miss
Marye, while Mis Marye , who did not hold an operator's license , was driving, the machine
collided with and injured Louis Bosse, the plaintiff. In an action for damages, plaintiff
alleged negligent operation of said automobile. A verdict was rendered against said Rudolph
Spreckels.
The Court made a distinction upon appeal by Spreckels between “operating” and “driving”
an automobile, saying: “The liability of a parent , under the statute is not limited, however,
to negligent acts of the minor resulting from 'driving' an automobile, the statute employing
the broader term , 'operating or driving,' showing a clear intention to include within such
liability any negligent act which is the direct result of the privilege extended by the statute to
said minor
under his or her operators license to operate an automobile on the public highway. (italics
ours.)
'To drive is defined as meaning 'to impel the motion and quicken'; whereas 'to operate'
means, 'to direct or superintend.' Century Dictionary.”
“A change of legislative purpose is to be presumed from a material change in the wording of
a statute. McCarthy VS Board of Fire Commissioners, ( ) 37 C.A. 495 ; Thomas VS
Joplin ( )
14 C.A. 662. That there is a difference in the meaning of the words “drive” and “operate” is
clearly pointed out in Bosse VS Marye, supra. It is elementary that the legislature is
presumed to know the meaning of language. [2] We must assume, therefore, that it was the
intention of the legislature to limit the imputation of negligence, as provided by this act
(Motor Vehicle Act of 1923) to that resulting from the actual driving, for the more
comprehensive word “operating” is eliminated, leaving only the word “driving” instead of
“operating or driving.”
LUNDQUIST Et Al VS LUNDSROM (1928) 94 C.A. 109, at page 112.

Apendix To Claim of Right2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Apendix To Claim of Right2

Uploaded by

Copyright:

Available Formats

APPENDIX OF AUTHORITIES

UNDER THE CARDINAL RULES OF STATUTORY

“Courts are bound by the statute not by individual opinions of its

[1] A court must, where reasonably possible, harmonize statutes, reconcile

“A judicial decision made without giving a party an opportunity to present

regarding Judgments that are void as follows:

"Summary proceeding in unlawful detainer is subject to control of equity

III. A Void Judgment Is Subject to Attack at Any Time, Either Directly or by

The doctrine of res judicata is inapplicable to void judgments. "Obviously a

“While failure to observe custom may be evidence of negligence, the

THE TENTH AMENDMENT

“The Act is challenged in its entirety as an attempt to regulate all industry,

FROM THE UNANIMOUS DECLARATION OF INDEPENDENCE OF THE THIRTEEN

"You have Rights Antecedent to all earthly Governments, Rights that

(Put in quotes from Chisholm regarding the Sovereignty is in the

FROM ONE OF THE ORIGINAL FOUNDERS OF THE UNITED STATES OF AMERICA,

The US Supreme Court Ruled in the Case of U.S. VS CRUIKSHANK (1875) 92

Constitutional Protection of the Human Body

Thor v. Superior Court (Andrews) (1993) 5 Cal.4th 725 ,

"No right is held more sacred, or is more carefully guarded, by the

common law, than the right of every individual to possession and

control of his own person, free from all restraint or interference of

others, unless by clear and unquestionable authority of law. ... 'The

right to one's person may be said to be a right of complete immunity: to

be let alone.' [Citation.]" (Union Pacific Railway Co. v. Botsford (1891)

New York Court of Appeals, Justice Benjamin Cardozo echoed this

precept of personal autonomy in observing, "Every human being of adult

exercise of control over his body, to determine whether or not to

submit to lawful medical treatment." (Cobbs v. Grant (1972) 8 Cal.3d

common law has long recognized this principle: A physician who

performs any medical procedure without the patient's consent commits

a battery irrespective of the skill or care used. (Estrada v. Orwitz (1946)

75 Cal.App.2d 54, 57 [170 P.2d 43]; Valdez v. Percy (1939) 35 Cal.App.2d

grounds in Genzel v. Halvorson (1957) 95 Minn. 261 [80 N.W.2d 854,

49.) As a corollary, the law has evolved the doctrine of informed

consent. (See Cobbs v. Grant, supra, 8 Cal.3d at pp. 239-241.) "Under

judgments, the decision must be made voluntarily and without

and benefits of the proposed treatment alternatives or nontreatment,

prognosis.' [Citations.]"(Rasmussen v. Fleming, supra, 154 Ariz. 207

ethical responsibility to provide the medical evaluation upon which

informed consent is predicated, the patient still retains the sole

prerogative to make the subjective treatment decision based upon an

understanding of the circumstances. (In re Gardner, supra, 534 A.2d at

48 A.L.R.4th 1].) Accordingly, the right to refuse medical [5 Cal.4th 736]

treatment is equally "basic and fundamental" and integral to the

concept of informed consent. fn. 6 (Bouvia, supra, 179 Cal.App.3d at p.

1137; Bartling, supra, 163 Cal.App.3d at p. 195; Cruzan v. Director,

Missouri Dept. of Health, supra, 497 U.S. at p. 277 [111 L.Ed.2d at p.

241]] (Cruzan); In re Gardner, supra, 534 A.2d at p. 951; Brophy, supra,

informed consent is defeated somewhat if, after receiving all

information necessary to make an informed decision, the patient is

forced to choose only from alternative methods of treatment and

precluded from foregoing all treatment whatsoever." (Rasmussen v.

Fleming, supra, 154 Ariz. 207 [741 P.2d at p. 683].) "Obviously, if a

patient is powerless to decline medical treatment upon being properly

informed of its implications, the requirement of consent would be

administrative regulations patients have right to "[p]articipate actively

in decisions regarding medical care. To the extent permitted by law,

this includes the right to refuse treatment."].)

FROM: FEDERALIST PAPERS NUMBER 40;

"To the People of the State of New York:

FROM: FEDERALIST PAPERS NUMBER 42;

FROM: FEDERALIST PAPERS NUMBER 43;