Herrmann v. Fireman's Fund Ins. Co.

• Decision Date: 27 September 1954
• Citation: 127 Cal.App.2d 560,274 P.2d 501
• Court: California Court of Appeals Court of Appeals
• Parties: Robert C. HERRMANN, Appellant and Respondent, v. FIREMAN'S FUND INSURANCE COMPANY, a corporation, Respondent, and John P. Dieterich, Appellant. Civ. 4867.

Page 501

274 P.2d 501

127 Cal.App.2d 560

Robert C. HERRMANN, Appellant and Respondent, v. FIREMAN'S FUND INSURANCE COMPANY, a corporation, Respondent, and John P. Dieterich, Appellant.

Civ. 4867.

District Court of Appeal, Fourth District, California.

Sept. 27, 1954.

Hearing Denied Nov. 24, 1954.

Newell & Chester, Los Angeles, for appellant and respondent John P. Dieterich.

Gray, Cary, Ames & Frye, San Diego, for appellant and respondent Robert C. Herrmann.

McCutchen, Black, Harnagel & Greene, Harold A. Black and Philip K. Verleger, Los Angeles, for respondent Fireman's Fund Ins. Co.

MUSSELL, Justice.

This is an action for declaratory relief in which plaintiff seeks recovery from either or both defendants, Fireman's Fund Insurance Company and John P. Dieterich, for loss of the yacht 'Coronado', which sank on the early morning of January 18, 1953, while en route from San Diego to Newport Beach, California.

Plaintiff alleged that on or about October 3, 1952, the defendant insurance company issued a policy of insurance in the amount of $20,000, for a period of one year, covering plaintiff's yacht. Plaintiff engaged a brokerage firm in San Diego to sell the vessel for him and John A. Miller, Jr., salesman employed by this firm, entered into negotiations with defendant Dieterich for the sale of the vessel to him. As a result of such negotiations, on or about January 8, 1953, plaintiff and defendant Dieterich entered into a written agreement for the sale of the vessel to Dieterich for the sum of $16,000 and Dieterich paid the sum of $1,200 as a deposit. It was further alleged that plaintiff and Dieterich agreed that the vessel should be transported to Newport Beach; that on or about January 16, 1953, Dieterich gave to the brokerage firm his check in the amount of $14,840.48, payable to plaintiff, as payment of the balance of the purchase price of the yacht; that on January 17, 1953, with the permission of plaintiff, Miller and defendant Dieterich took the vessel from San Diego for the purpose of delivering it to Newport Beach and that in the early morning of January 18, 1953, the vessel struck a submerged object and sank; that proof of loss was made to defendant insurance company and plaintiff's demand for payment was refused by it; that defendant Dieterich had stopped payment on his check for $14,840.48 and refused to pay said sum or any part thereof; that an actual controversy exists between plaintiff and the defendant insurance company in regard to their respective rights and liabilities upon and in connection with said policy of insurance, and between plaintiff and defendant Dieterich upon and in connection with said agreement of sale; that the defendant insurance company contends that the interest of plaintiff in said vessel was transferred to defendant Dieterich before the time of said sinking and loss and said policy was, therefore, according to the terms thereof, avoided prior to said sinking and loss; that defendant Dieterich contends that the interest of plaintiff in said vessel was not transferred to said defendant prior to the time of said sinking and loss and, therefore, said defendant is not liable upon said agreement of sale and that he is entitled to the return of the $1,200 deposit made by him; that plaintiff is in doubt as to whether he is entitled to redress against the insurance company or defendant Dieterich, or both of said defendants.

Defendant Dieterich demurred generally and specially and his demurrer was overruled. In his answer he admitted negotiating for the purchase of the vessel; that the sales agreement was entered into on January 8, 1953; that on or about January 16, 1953, he delivered to the brokerage firm his check, payable to plaintiff, in the sum of $14,840.48 as payment in full of the purchase price; that he and plaintiff's agent, Miller, took the vessel from San Diego for the purpose of delivering it at Newport Beach and that en route the vessel sank and was rendered a total loss. He denied that the vessel had hit a submerged object and alleged that it sank because of a defective propeller or propeller blade. He admitted stopping payment on the check given for the payment of the balance of the purchase price and alleged that the interest of the plaintiff in the vessel had not been transferred to him prior to her sinking and therefore claimed that he was entitled to the return of his $1,200 deposit.

In its answer the defendant Fireman's Fund Insurance Company admitted the execution of the policy involved, admitted the negotiation between plaintiff and defendant Dieterich leading up to the execution of the sales agreement, admitted that on or about January 17, 1953, defendant Dieterich took said vessel from San Diego and en route to Newport Beach it sank, admitted that it is the contention of the defendant insurance company that the interest of plaintiff in said vessel was transferred to said John P. Dieterich prior to the loss of said vessel, and that said policy was, therefore, according to the terms thereof, avoided. It was further admitted that there is a controversy between plaintiff, defendant Fireman's Fund Insurance Company, and defendant John P. Dieterich, and it was alleged that there is a further controversy between plaintiff and defendant in that the insurance company asserts that even if said interest was not transferred to John P. Dieterich, as aforesaid, said policy was in any event avoided by reason of the fact that there is as a matter of law an implied warranty of seaworthiness of said vessel at any time when said vessel puts out to sea and that said vessel was unseaworthy at the time she commenced the voyage to Newport Beach because said vessel had a loose blade in her propeller.

Trial was had without a jury and the court found, inter alia, that the purchase price of the vessel had been paid by defendant Dieterich; that upon payment of the purchase price, title to the vessel passed to defendant Dieterich; that it is not true that plaintiff agreed to deliver said vessel to Newport Beach and it is not true that plaintiff and said defendant agreed that said defendant would not become the owner of said vessel until such time as it arrived at Newport Beach; that delivery of the vessel to defendant Dieterich took place at San Diego when he and two friends designated by him to serve as crew boarded said vessel to take the same to Newport Beach; that said John A. Miller did not, by accompanying said John P. Dieterich and said crew to Newport Beach with said vessel, retain said vessel in the possession of plaintiff; that on the contrary, said vessel was in possession of said defendant Dieterich from the time the same left San Diego; that 'an actual controversy exists between plaintiff and defendant Fireman's Fund Insurance Company in regard to their respective rights and liabilities upon and in connection with said policy of insurance, and between plaintiff and defendant John P. Dieterich upon and in connection with said agreement for sale'; that said vessel was in a seaworthy condition at the time she commenced the voyage to Newport Beach and that the interest of said plaintiff in said vessel and the result of loss were transferred to defendant Dieterich prior to the said sinking and loss of said vessel.

The court concluded that plaintiff was entitled to judgment against defendant Dieterich in the sum of $14,840.48, interest and costs, and that defendant Fireman's Fund Insurance Company was entitled to a dismissal. Judgment was entered in accord with these conclusions and the findings and these appeals followed.

Plaintiff appeals from that part of the judgment which is as follows: 'It is further ordered, adjudged and decreed that the complaint be dismissed as to Fireman's Fund Insurance Company and that said defendant recover from plaintiff its costs of suit herein incurred in the sum of $8.50.' Defendant Dieterich appeals from that portion of the judgment adjudging that he pay plaintiff the sum of $14,840.48, interest and costs.

Appellant Dieterich contends that the court erred in overruling his demurrer to the complaint; that the complaint failed to state a cause of action in declaratory relief against him and that the ruling of the trial court had the effect of depriving him of his right to trial by jury. These contentions are untenable. The purpose of declaratory relief is to liquidate uncertainties and controversies which might result in future litigation. Whether a determination is proper in an action for declaratory relief is within the trial court's discretion and the court's discretion to grant or deny relief will not be disturbed on appeal unless it be clearly shown that the discretion was abused. Hannula v. Hacienda Homes, 34 Cal.2d 442, 448, 211 P.2d 302, 19 A.L.R.2d 1268. In Columbia Pictures Corp. v. DeToth, 26 Cal.2d 753, 760-761, 161 P.2d 217, 220, 162 A.L.R. 747, it was held that a complaint for declaratory relief is legally sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a contract and requests that these rights and duties be adjudged by the court; that it is not essential, to entitle a plaintiff to seek declaratory relief, that he should establish his right to a favorable declaration; that the purpose of the declaratory judgment is to "serve some practical end in quieting or stabilizing an uncertain or disputed jural relation"; that the court is empowered to determine disputed questions of fact and hence the remedy is not limited to cases involving a written instrument and that a disputed oral contract may properly be the subject of a declaratory judgment. It was further held:

'That a cause of action otherwise may have accrued and that other adequate relief may be available to plaintiff at the time are also factors to be considered by the court. The remedies provided by the statute are cumulative and declaratory relief...