San Mateo County v. Consolidated Farms, Inc.

• Decision Date: 21 April 1959
• Docket Number: No. 18209,18209
• Citation: 169 Cal.App.2d 735,337 P.2d 840
• Court: California Court of Appeals Court of Appeals
• Parties: COUNTY OF SAN MATEO, a political subdivision of the State of California, Plaintiffs and Appellants, v. CONSOLIDATED FARMS, INC., a corporation, Alvin Arata, Evelyn Arata, David Arata, Linda Arata, Josephine Cilia, Alex Dalbesio, Giovanna Dalbesio, Ray Giorgi, Thelma Giorgl, Joe Lunghi, Jean Lunghi, Ernest Martini, Rita Martini, Evo Martini, Rizieri Martini, Ester Martini, Mary Colter, Armando Palla, Josephine Palla, Joe Pardini, Lena Pardini, David Petroni, Adele Petroni, John Petroni, Assunta Petroni, Ray Valente and Josephine Valente, Defendants and Respondents.

Page 840

337 P.2d 840

169 Cal.App.2d 735

COUNTY OF SAN MATEO, a political subdivision of the State of California, Plaintiffs and Appellants, v. CONSOLIDATED FARMS, INC., a corporation, Alvin Arata, Evelyn Arata, David Arata, Linda Arata, Josephine Cilia, Alex Dalbesio, Giovanna Dalbesio, Ray Giorgi, Thelma Giorgl, Joe Lunghi, Jean Lunghi, Ernest Martini, Rita Martini, Evo Martini, Rizieri Martini, Ester Martini, Mary Colter, Armando Palla, Josephine Palla, Joe Pardini, Lena Pardini, David Petroni, Adele Petroni, John Petroni, Assunta Petroni, Ray Valente and Josephine Valente, Defendants and Respondents.

No. 18209.

District Court of Appeal, First District, Division 1, California.

April 21, 1959.

Keith C. Sorenson, Dist. Atty. of County of San Mateo, Howard E. Gawthrop, Deputy Dist. Atty., Redwood City, for appellant.

Wagstaffe, Daba & Hulse, Redwood City, for respondents.

BRAY, Presiding Justice.

Plaintiff appeals from a judgment in favor of defendants.

Question Presented.

Were defendants operating a commercial hog ranch within the meaning of an ordinance defining such ranch?

Facts.

San Mateo County Ordinance No. 568 (codified in Ch. 7 of Part Two, Div. V of the San Mateo County Ordinance Code, § 5560.1) provides: 'Commercial hog ranch shall mean any premises where more than forty (40) head of swine are maintained, raised, fed or fattened, or where two or more head of swine are maintained, raised, fed or fattened upon commercial garbage.'

Consolidated Farms, a California corporation, owns a 2,500 acre ranch in San Gregorio, San Mateo County. Farms is in the farming and stock raising business, including the raising of hogs, in California and Nevada. In December, 1954, Farms had a 100 acre portion of the San Gregorio ranch surveyed, which was later divided into one acre plots. Farms paid for the surveying and fencing of the parcels and for supplying waterlines, roads and feeding troughs.

On June 15, 1955, Farms leased for fifteen years the 100 acre portion to the individual named defendants as tenants in common. With one exception, the lessees were the stockholders in Farms and their wives. By a judgment of partition of the lease the leased property was divided among the lessees into 100 one acre plots. In June or July, the lessees entered into an oral agreement with David Arata, president of Farms, a stockholder and named defendant, whereby Arata would act as trustee for each lessee in conducting hog raising on the parcels.

The individual lessees advanced no cash for purchase of hogs or feed from Farms. Arata kept separate accounts for each lessee showing expenses and credits for hogs sold. An accounting was made each year. Between July, 1955, and December 1955, the maximum number of hogs on the 100 acres was 1554 at any one time; from then to the time of filing of the complaint, 137; and in June, 1957, the number was 150. No more than forty hogs have even been on any one parcel, no commercial garbage was used as feed and no commercial hog ranch license was obtained by the lessees or by Farms.

The trial court found that defendants were not conducting a commercial hog ranch and that each of said parcels is a separate premise under the ordinance.

The Ordinance Is Violated.

Under the well known rule this court is bound by the findings of the trial court if there is any substantial conflict in the evidence or in the reasonable inferences to be drawn therefrom. See Dickey v. Pattison, 92 Cal.App.2d 659, 207 P.2d 1081; McIntyre v. Doe & Roe, 125 Cal.App.2d 285, 270 P.2d 21. There is no conflict in the evidence nor is there more than one reasonable inference to be drawn therefrom, and that inference is contrary to the one drawn by the court. The evidence clearly shows that the operation conducted by defendants is in essence one commercial hog ranch operation under a rather ingenious scheme devised to attempt to get away from the effect of the ordinance.

This is an equitable proceeding. Equity regards substance rather than form. Acts of individuals will be recognized as being those of corporations to prevent fraud, protect the rights of third persons and accomplish justice. In re Clear Lake Beach Co., D.C., 12 F.Supp. 250; see also Lencioni v. Fidelity Trust & Sav. Bank, 1928, 95 Cal.App. 490, 497, 273 P. 103, 274 P. 75.

In addition to the facts hereinbefore stated, there are the additional ones bearing on the true relations of the defendants and the operations. Farms' stockholders are lessees in proportion to their interests in the corporation. Each stockholder received 6 of the 100 parcels. In the case of married stockholders the 6 parcels were divided equally between husband and wife. One nonstockholder received 12 parcels, the equivalent of what 2 stockholders, the only ones who received none of the parcels, would have received. In substance, the corporation managed all the operations. Its president, Arata, was trustee under an oral agreement. No specific compensation for him or the corporation was set and none paid by the...