Mercado v. Hoefler

• Decision Date: 13 March 1961
• Citation: 11 Cal.Rptr. 787,190 Cal.App.2d 12
• Court: California Court of Appeals Court of Appeals
• Parties: John F. MERCADO, Plaintiff and Respondent, v. Harry HOEFLER and Ray Hoefler, Defendants and Appellants. Civ. 18635.

Page 787

11 Cal.Rptr. 787

190 Cal.App.2d 12

John F. MERCADO, Plaintiff and Respondent, v. Harry HOEFLER and Ray Hoefler, Defendants and Appellants.

Civ. 18635.

District Court of Appeal, First District, Division 2, California.

March 13, 1961.

Hearing Denied May 10, 1961.

Jensen & Zavlaris, San Jose, for appellant Harry Hoefler.

Malovos, Mager & Chasuk, by Herman J. Mager and Chalmers Smith, San Jose, for appellant Ray Hoefler.

Boccardo, Blum, Lull, Niland & Teerlink, by Edward J. Niland, San Jose, for respondent.

SHOEMAKER, Justice.

This is an appeal by defendants Harry and Ray Hoefler from a judgment in an action for slander awarding plaintiff John F. Mercado $17,500 as compensatory damages.

The record discloses that appellant Harry Hoefler was the operator of six real estate offices in Northern California. The appellant Ray Hoefler managed the San Jose office where respondent was employed as a real estate salesman. Prior to October of 1952 and during his employment, respondent handled three different deals for a Mr. Yoshihara, a Nisei, all of which fell through, including a prospective sale of a home owned by a Mr. Amstutz. A petition signed by residents in the neighborhood protesting the sale of the Amstutz home to any non-Caucasian was presented to Ray Hoefler by one of the petitioners and was placed in the office files. Subsequently respondent, at the request of Mr. Amstutz, obtained the petition from the files and delivered it to them. On October 8, 1952, the San Jose Evening News reported the fact of the petition against the sale to Yoshihara. The next day appellant Ray Hoefler called respondent into his office and said to him, 'We are through, John. I want the keys to the office.' On October 10, 1952, Mr. Goodman called appellant Ray Hoefler, identifying himself as a reporter on the Evening News, and asked him about the alleged firing of Mercado, concerning which Ray Hoefler stated to Goodman, 'He was fired for not doing things properly and for not following office rules. As a matter of fact, I am seriously considering bringing charges against Mercado before the Real Estate Commissioner. He has taken papers out of my private file without right to do so. Other brokers have also had trouble with Mercado.' This statement was later published in the newspaper and given wide circulation in the area.

On argument before this court, the parties concede that said remarks are defamatory per se. However, each have their separate contentions as to why the judgment should be reversed. Appellant Harry Hoefler contends that he is not liable for the remarks made by Ray Hoefler and that the judgment against him cannot be supported on any basis, and particularly not upon any relationship of partner, joint venturer, or master and servant. He also cites error on the part of the court in admission of evidence, comment by the court, and the instructions to the jury.

At the trial, respondent asserted the appellants were partners, and presented evidence to this effect which was strenuously opposed by Harry Hoefler and the jury was instructed upon the subject. He contends that the issue of partnership was not raised by the pleadings and hence the reception of any evidence or instructions thereon was error. This argument cannot stand, for the question of partnership was raised in the pretrial order which effectively put this matter into issue at the trial. Rule 8.8, Rules for Superior Courts. The burden of proving the existence of a partnership lies upon the party asserting its existence, in this case the respondent. Milstein v. Sartain, 1943, 56 Cal.App.2d 924, 932, 133 P.2d 836. Testimony was produced that Ray Hoefler, as manager, controlled the San Jose office, that he received no salary as office manager but that he divided the net income of the San Jose office equally with Harry. Whether an agreement to share profits constitutes the undertaking of a partnership or merely a method of paying an employee presents a question of fact (Nelson v. Abraham, 1947, 29 Cal.2d 745, 750, 177 P.2d 931), and the mere fact that Ray Hoefler contributed labor and skill rather than capital does not preclude the existence of a partnership. Kaufman-Brown Potato Co. v. Long, 9 Cir., 1950, 182 F.2d 594, 600. Where, as here, a determination of the fact question of partnership is supported by substantial evidence, the judgment cannot be interfered with by the appellate court. Dills v. Delira Corp., 1956, 145 Cal.App.2d 124, 133, 302 P.2d 397.

This appellant next points out that joint venture was not in issue under the pleadings or specifically put in issue by the pretrial order, and that it was error for the court to instruct the jury as to this theory of liability. This contention is untenable, for if a case is tried on a theory which is sufficient and evidence accordingly is received without objection, the sufficiency of the pleading may not later be attacked upon this ground (McClure v. Donovan, 1949, 33 Cal.2d 717, 731, 205 P.2d 17), and particularly in the present situation where there are a great many similarities between joint venture and partnership which was in issue under the pretrial order. The existence of a joint venture, like that of a partnership, is a question of fact. Nels E. Nelson, Inc. v. Tarman, 1958, 163 Cal.App.2d 714, 724, 329 P.2d 953. Since the jury could have found the relationship between Harry and Ray Hoefler to be that of joint venturers, the judgment as to Harry Hoefler on this theory would be warranted.

The appellant Harry Hoefler next contends that even if it be assumed that Ray was his employee, his remarks were not within the scope of his employment, and therefore he sustained no liability by reason thereof. It is well established that a principal can be liable for the malicious torts of his employee committed within the scope of his employment, despite any contention that the employee may not have had authority to engage in tortious conduct. Carr v. Wm. C. Crowell Co., 1946, 28 Cal.2d 652, 654, 171 P.2d 5; Fields v. Sanders, 1947, 29 Cal.2d 834, 841, 180 P.2d 684, 172 A.L.R. 525. The transcript indicates that there was sufficient evidence for the jury to find that Ray Hoefler as manager was acting within the scope of his authority in speaking for his firm, which was concerned in the racial controversy, particularly Ray Hoefler's testimony which expressed his concern for the firm's reputation and motivated his remarks to the reporter. Since a principal can be liable for torts which are defamatory in nature when committed within the scope of an agent's employment (Draper v. Hellman Com. T. & S. Bank, 1928, 203 Cal. 26, 38, 263 P. 240; Rest., 2d Agency § 247, comment c), the judgment against Harry Hoefler cannot be successfully attacked on this ground.

The appellants jointly contend that the trial court erroneously denied their motions for nonsuit, directed verdict, and judgment notwithstanding the verdict. The basis of this argument is that respondent failed to comply with the provisions of Civil Code, § 48a, which requires a demand for correction '[i]n any action for damages for the publication of a libel in a newspaper,' otherwise the plaintiff is limited to special damages. Respondent points out that appellants failed to make reference to failure to comply with this code section in their answers. However, it would appear that where in fact the section is applicable it is the plaintiff's duty to plead compliance therewith. Pridonoff v. Balokovich, 1951, 36 Cal.2d 788, 791, 228 P.2d 6. However, we have concluded this section is not applicable to the present action, which is one for slander, not libel. Civil Code, § 46, defining slander, includes language which upon its face has a natural tendency to injure a person's reputation either generally or with respect to his occupation. Semple v. Andrews, 1938, 27 Cal.App.2d 228, 232, 81 P.2d 203. The mere fact that oral defamation is subsequently quoted or printed in a newspaper does not make it libel. It is still slander. Oberkotter v. Woolman, 1921, 187 Cal. 500, 505, 202 P. 669; Semple v. Andrews, supra. The repetition of slander may be shown, as was done here, since it bears on the extent of liability. Schessler v. Keck, 1956, 138 Cal.App.2d 663, 669, 292 P.2d 314; Rest. Torts, § 576. The appellant argues that labeling defamation slander is a devious way to circumvent the intended legislative effect of the section. Although the application of the section extends beyond newspapers themselves to some processes related to them (see Pridonoff v. Balokovich, supra, involving the author of a newspaper article; Farr v. Bramblett, 1955, 132 Cal.App.2d 36, 281 P.2d 372, involving the advertisers of a libelous advertisement), it has been pointed out that the section was enacted primarily to protect news dissemination. Werner v. Southern Cal. etc. Newspapers, 1950, 35 Cal.2d 121, 128, 216 P.2d 825, 13 A.L.R.2d 252. If appellants' argument were to prevail, persons guilty of oral defamation would enjoy the same protection any time such remarks subsequently found their way into a newspaper. We do not believe that the legislators ever intended such a result in the adoption of said section.

The appellants contend that the trial court erred in admitting into evidence certain newspaper clippings. The first three concerned the local controversy regarding the alleged refusal to sell the Amstutz home to a non-Caucasian. The fourth contained the defamatory statements made by appellant Ray Hoefler to the reporter. Counsel for both appellants objected to introduction of the clippings on the ground of noncompliance with Civil Code, § 48a. In view of the earlier discussion regarding Civil Code, § 48a, we find no error in the admission of this evidence. Thereafter, counsel for appellants objected on the ground that the clippings were hearsay, and incompetent, irrelevant and immaterial. The evidence was admitted for the limited purpose of showing the notoriety given the...