Stockton Morris Plan Co. v. California Tractor & Equipment Corp.
| Decision Date | 15 August 1952 |
| Citation | 247 P.2d 90,112 Cal.App.2d 684 |
| Court | California Court of Appeals Court of Appeals |
| Parties | STOCKTON MORRIS PLAN CO. v. CALIFORNIA TRACTOR & EQUIPMENT CORP. Civ. 8037. |
Leon E. Warmke, Stockton, for appellant.
This is an appeal from a judgment in favor of plaintiff arising out of the assignment of a conditional sales contract by defendant to plaintiff. By its complaint plaintiff and respondent (referred to hereinafter as the finance company) alleged as follows: That on March 31, 1947 defendant and appellant (hereinafter referred to as the tractor company) transferred to the finance company a document, a copy of which is attached to the complaint; that this document was purportedly executed by the tractor company, as seller, and 'Mariposa County District No. 5', as buyer, for the sum of $6,500, upon which there was $2,744 of the contract price unpaid; that the finance company paid to the tractor company $2,362.57 for an assignment of the rights of the tractor company in said document; that the document was not executed by the said 'Mariposa County District No. 5' and that that district never agreed to pay any sum thereon to the tractor company; that the document was valueless as a claim by the tractor company or the finance company, its assignee, against 'Mariposa County District No. 5' for the payment of any money.
The trial court made the following findings of fact: That at all times mentioned in the complaint one S. A. Milton was a supervisor of Mariposa County for District 5 thereof and serving as such; that on March 31, 1947, Milton, purporting to act for the district, arranged with the tractor company for the purchase of an Adams Motor Patrol; that a conditional sales contract with the district, incorporating the details of the proposed transaction, was executed thereafter in the office of the finance company on a form supplied by it; that the financing details incorporated in said contract followed negotiations between the finance company, the tractor company and Milton; that on March 31, 1947 the tractor company sold and assigned to the finance company, without recourse, for a consideration of $2,362.50, all its interest in the contract 'purportedly executed by [the tractor company] as seller and Mariposa County District No. 5 as buyer'; that the contract was not what it purported to be for the reason that the district never was a legal entity capable of making a valid contract, that Milton had no authority to bind the County of Mariposa through the execution of the contract because the Board of Supervisors of the County had never approved the contract nor authorized Milton to execute it; that the contract was valueless; that neither the finance company nor the tractor company had 'actual' knowledge that the contract was invalid and unenforceable. As a conclusion of law the court declared that plaintiff was entitled to judgment as prayed. These findings are not attacked and could not be attacked as being unsupported by the record and the evidence.
Mariposa County District No. 5, while constituting an intracounty administrative agency, is not a legal entity capable of contracting. If the instrument be treated as in some manner a contract of the county, then it was void as not having been signed by the required number of supervisors (see. 909, Streets & Highways Code), and because it violated the provisions of section 18 of Article XI of the State Constitution, which provide that 'No county * * * shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year'. (This purported contract provided for installment payments extending considerably more than one year into the future.)
It appears from the transcript of the evidence taken by the court that Supervisor Milton wanted to obtain the motor patrol for use upon the roads in his district and proposed to turn in as part payment therefor certain road-working equipment already owned by the county, leaving a balance to be paid; that though the law specifically forbade such action to be taken by a single supervisor, under whatever guise he might purport to act, without following the procedure laid down for the acquisition of such road-working machinery and for the disposition of county property, he nevertheless began negotiating with the tractor company, proposing to accomplish his desires by simply purchasing the needed motor patrol through a conditional sales contract, receiving upon the price a credit for an agreed amount in consideration of turning over to the tractor company the road-working machinery he already was in charge of, and providing for the payment of the balance out of county revenues. The tractor company and Milton agreed upon the purchase price of the motor patrol and further agreed on the amount to be credited by the trade in of the other road-working machinery, thus fixing the unpaid part of the purchase price. The tractor company informed Milton that so far as it was concerned, however, it would not carry the paper and the deal would have to be a cash deal, that is, that he would have to procure other financing. He thereupon submitted the facts to a bank and was at first informed that the bank would agree to finance the deal but was later informed that the bank would not handle the transaction. He thereupon contacted the tractor company, asking if it could suggest other financing and was told that the finance company, respondent here, might be interested. Thereupon Milton, with a salesman for the tractor company, and an executive of the finance company, met at the finance company's offices and the proposed deal was discussed. Milton was introduced as the supervisor from District 5 in Mariposa...
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