(193 P.) being used to pay off two mortgages which operative and void; (3) the estate and title had been executed and recorded prior to the of plaintiff in the said premises is inferior execution of the $2,200 mortgage by Max and subject to this prior subsisting mortKeffel. May 10, 1911, after these two prior gage; (4) defendant, by right of subrogation mortgages, together with certain tax liens, and legal assignment, is the owner of the had been satisfied and released, and the ex- $2,200 mortgage and entitled to enforce the penses incident to the escrow had been paid, same against the premises to the extent of the escrow was closed, and the balance of the the amount paid by it in satisfaction of the $11,000, namely $1,046.96, was paid over to judgment in favor of the incompetent. Johanna Agnes Keffel. Shortly before the closing of the escrow, to wit, May 6, 1911, Johanna Agnes Keffel, as guardian, released of record the $2,200 mortgage, which had been recorded at the request of an agent of defendant March 13, 1911. Neither the acceptance of this mortgage by the guardian nor its release by her was authorized by order of court, and no part of the sum secured thereby was ever returned to the ward's estate. [1, 2] It appears from the record of the guardianship proceedings, which was introduced in evidence, that the petition for appointment, upon which the superior court made the order appointing Johanna Agnes Keffel guardian of her incompetent son, was unverified. The failure to verify the petition of appointment in accordance with the requirements of section 1763 of the Code of Civil Procedure amounted to no more than a defect in pleading and the verification was Johanna Agnes Keffel died intestate in Oc- not a jurisdictional requirement for the maktober, 1911, leaving no estate, other than the ing of the appointment. Where parties proaforesaid real property and $15 in money. On ceed to trial upon an unverified petition or February 21, 1914, Frank N. Goodman, who answer without objection thereto, they are subsequently qualified as guardian of the in- held, by so doing, to waive their right to ob competent son, instituted an action on the ject to the want of verification. People v guardianship bond against the administrator Reis, 76 Cal. 269, 275, 18 Pac. 309; Hill v of the estate of Johanna Agnes Keffel, de Nerle, 29 Cal. App. 473, 156 Pac. 981. It ap ceased, and Fidelity & Deposit Company of pears that, after the filing of the petition for Maryland, defendant herein, as surety, for appointment as guardian, notice was duly givthe recovery of the money misappropriated en and a hearing was regularly held, and the from the ward's estate. Judgment was ren- defect in pleading was therefore waived, and, dered in favor of the ward for the sum of no want of jurisdiction being disclosed on the $3,645.40, with interest. It appearing, upon face of the record, the order of appointment petition of the guardian, that an appeal was cannot be collaterally attacked. Isaacs v. about to be prosecuted from that judgment, Jones, 121 Cal. 257, 261, 53 Pac. 793, 1101; the court authorized and empowered the In re Lundberg, 143 Cal. 402, 77 Pac. 156. guardian to compromise the claim arising For the purposes of this case, Johanna Agnes from said judgment by accepting from de Keffel must be considered the duly appoint fendant Fidelity & Deposit Company the ed guardian of her incompetent son and sub sum of $2,500 in complete satisfaction of said Ject to the rules governing such a guardian judgment, and, on receipt of this sum, to make an assignment in writing to defendant, Fidelity & Deposit Company, of all interest of the ward and his guardian in the $2,200 mortgage executed to Johanna Agnes Keffel as guardian. This assignment was duly executed July 16, 1914, and the mortgage constitutes the basis of defendant's claim of an interest in the property in suit. Plaintiff held the $11,000 Turner mortgage by assignment, and, having obtained a decree of foreclosure upon said mortgage December 5, 1914, purchased the property at a sale held in pursuance of the decree. Whether or not the mortgage assigned to defendant can be asserted as a valid, subsisting, and superior lien upon the property in suit is the problem propounded for solution. The conclusions of law of the trial court were: (1) That the $2,200 mortgage was a valid lien on the premises, created for the protection of the incompetent and to secure the restoration to his estate of the moneys misappropriated by the guardian; (2) the marginal release of this mortgage was in The facts of the case are substantially the same as those in the case of Cummings v. Strobridge Land Syndicate, 150 Cal. 209, 88 Pac. 901, 119 Am. St. Rep. 189. There the guardian had embezzled $2,000 of the ward's money and executed a mortgage upon his own land in favor of the ward, by way of securing the deficit. Subsequently the guardian borrowed $2,000 from a third person, and, without authority from the court, released of record the mortgage previously executed by him to his ward. There was no agreement that the guardian was to apply the money received from the new mortgagee to the extinguishment of the ward's mortgage; he stated, however, that he would see that the ward's mortgage did not affect the lien of the new mortgage, and it was the understanding between the parties that the lien of the new mortgage should be a first lien upon the property. It was held that, inasmuch as the money was paid by the subsequent mortgagee to the guardian upon the release of the mortgage, such payment would be deemed a complete satisfaction of the mortgage, although the money was never, in fact, received by the ward. In that case the court said: "But, aside from this and other like questions with which the case abounds, one proposition is determinative of the matter, and upon it this decision may rest. Assuming or conceding that the note and mortgage as given to the ward were valid, so as to incumber the land; assuming, also, and conceding that the release of this mortgage was without authority of the court; conceding, also, that the witness Sayle [the guardian] does endeavor * to have it appear that he did not pay over to his ward the money which he received from the Baird mortgage-the fact remains that equity itself, under such circumstances as those here disclosed, makes such payment in pursuance of its maxim that it will regard as done that which ought to have been done. When the money for the release of this mortgage came into Sayle's hands, it was, in equity, the ward's money, and any improper use which Sayle thereafter made of it was but a second embezzlement of the ward's funds." ment of the other charges. But, however that may be, there was no contract or agreement which prohibited the guardian from putting in escrow money in addition to that derived from the new mortgagee, so as to render the sum sufficient for the extinguishment of all existing liens and charges. In fact, it was the duty of the guardian to do this, in view of the understanding between the parties that plaintiff's assignor was to be given a new first mortgage upon the property in consideration of the $11,000 loan, and the lender had the right to assume that this was done. The lender was not required to go . back of the record of the release and see that the money called for by the mortgage was actually applied to the deed of the ward; all that she was obliged to do under the circumstances was to see that there was placed in the hands of or to the credit of the guardian the amount of the ward's mortgage and, having done so, the receipt of the guardian, as such, was a sufficient acknowledgment of the appropriation of that amount to the use of the ward's estate, and thereupon the satisfaction of the mortgage became operative. The cases relied upon by respondent in support of the point that the release of the mortgage to the ward was void differ from the present case in important particulars. In Aldrich v. Willis, 55 Cal. 81, the party executing the release was not the guardian, and consequently was wholly unauthorized to represent the minor. In Jennings v. Jennings, 104 Cal. 150, 37 Pac. 794, inasmuch as the ward's mortgage was released several months prior to the execution of the new mortgage, and the loan by the subsequent mortgagee was made to the mortgagor and a third party upon their joint promissory note, there is no indication of any relation between such payment and the release of the mortgage to the ward. The mortgage, as appears from the syllabus of that case, was released without any payment whatever. In Martin v. De Ornelas, 139 Cal. 41, 72 Pac. 440, it was, in effect, agreed between the person advancing the money and the guardian that the debt to the ward was not to be paid, but was to be secured by a new mortgage on different property, which was to be substituted for the released mortgage, and, of course, the ward was not bound by this unauthorized change of security, but could elect between the two mortgages. [3] The facts of the present case bring it within the rule of equity thus enunciated. The owner of the property borrowed $11,000 upon her property from plaintiff's assignor, which was $8,800 in excess of the amount called for by a mortgage which she had previously executed to her ward. In order to obtain this $11,000 she released the ward's mortgage, and therefore there is traceable a direct connection between the payment of the money secured by plaintiff's mortgage and the release of the ward's mortgage. As a result equity regards the money, to the extent of $2,200, as paid to the use and for the benefit of the ward. If the money is applied by the guardian to other uses, such misappropriation amounts to an embezzlement on the part of the guardian, for which the person who pays the money to the guardian cannot be held accountable (Civ. Code, 2244), and in such a case the ward must look to the guardianship bond for reimbursement. It is true that there were mortgages upon the property prior in time of execution to the ward's mortgage, which, together with the taxes and other items, amounted to nearly $10,000, and that therefore the $11,000 advanced by plaintiff's assignor was insufficient to pay both the ward's mortgage and these additional charges. But there is no proof that the release of the ward's mortgage was executed after the payment of the other liens. The escrow was begun April 24, the ward's mortgage was released May 6, and an escrow statement was rendered May 10, from which it appeared that the liens prior to the ward's mortgage and certain expenses had been paid by that date, leaving a balance of $1,046. From all that appears, the ward's mortgage was released prior to the other payments, and the money which was the consideration for that re The view we take of the validity of the release of the $2,200 mortgage renders unnecessary any consideration of plaintiff's various contentions with regard to its right to subrogation and the legal effectiveness of the ward's mortgage and the assignment thereof to defendant. Likewise it is unnecessary to discuss plaintiff's assignments of error in the admission of evidence. [4] The judgment of the trial court de (193 P.) "That defendant Fidelity & Deposit Company | ployé is injured by reason of serious and willof Maryland is the owner of said mortgage and ful misconduct on the part of an executive or entitled to enforce the same against said prem- managing "officer" of a corporation, by "offiises for the sum of $2,500 and interest there- cer" means a person in the corporation's emon from the 16th day of July, 1914; and ploy, either elected or appointed, invested with that the estate and title of the plain- the general conduct and control in a particular tiff in and to the said premises is subject to place of the business, the word not being used the lien of said mortgage to the amount of in its technical, legal sense as one elected or said sum of $2,500 and interest." whose office is provided for by articles of incorporation or by-laws. The recorded mortgage and the note secured thereby were for the specific sum of $2,200, and defendant could npt, in any event, become entitled to enforce the mortgage for a greater sum than $2,200, with interest, regardless of the amount paid by it under its obligation as surety, and the judgment was therefore erroneous in this additional particular. Since defendant's mortgage does not constitute a valid and subsisting lien upon the premises, the judgment in favor of defendant must be reversed. We concur: ANGELLOTTI, C. J.; BUR, J.; OLNEY, J.; SHAW, J.; LOR, J. (184 Cal. 180) [Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Officer.] Evidence 4. Master and servant 405(1) held to show accidental injury by "serious and willful misconduct of executive or managing officer," within Compensation Act. Evidence held to sustain the Industrial Commission's finding that the accidental injury to an employé caught in a revolving shaft was the result of the "serious and willful misconduct of an executive or managing officer" of the corporate employer, justifying increased compensation under Workmen's Compensation Act, § 6b. WILLAW-5. Constitutional law E. CLEMENS HORST CO. v. INDUSTRIAL (Supreme Court of California. Oct. 20, 1920. 48-Presumptions to be indulged in favor of validity of act. All presumptions are to be indulged in faIvor of the validity of an act of the Legislature. 6. Master and servant 347 Workmen's Compensation Act provision for additional allowance for willful misconduct of employer held constitutional. Const. art. 20, § 21, empowering the Legislature to create a liability on the part of employers to compensate employés for injuries 1. Master and servant 352 Employer's received irrespective of the fault of either par"serious misconduct" within Compensation ty, authorized the enactment of Workmen's Act defined. Compensation Act, § 6b, providing for compen "Serious misconduct" of an employer with-sation, increased by one-half in case the injuin Workmen's Compensation Act, § 6b, au- ries were caused by willful and serious misconthorizing increased compensation, means con- duct of the employer. duct which the employer either knew or should have known to be conduct likely to jeopardize the safety of his employés. Employer's "willful misconduct" within Compensation Act defined. In Bank. Application for certiorari by the E. Clemens Horst Company, a corporation, the employer, to review an order of the Industrial Accident Commission of the State of California, awarding compensation for injuries to Mrs. La Verne Hamilton, the employe. Rehearing denied in bank; ANGELLOTTI, An employer's serious misconduct, causing injury to his employé and justifying the award of increased compensation under Workmen's Award affirmed. Compensation Act, § 6b, is "willful," particularly with reference to the requirement of knowledge to the employer, though the evidence does C. J., dissenting. not show positively that the employer was notified of the unsafe condition, if it appears from the circumstances that the acts of omission or commission evinced a disregard for the safety of others and willingness to inflict the injury complained of, as a failure to guard shafting, in directing violation of a general safety order of the Industrial Accident Commission. [Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Willful.] 3. Master and servant 352-Employer's "officer" chargeable with misconduct within Compensation Act defined. Workmen's Compensation Act, § 6b, authorizing increased compensation where the em Edward C. Harrison and Maurice E. Har rison, both of San Francisco (Arthur W. Bolton, of San Francisco, of counsel), for petitioner. A. E. Graupner, of San Francisco (Warren H. Pillsbury, of San Francisco, of counsel), for respondents. LAWLOR, J. This cause is before us on a writ of certiorari issued upon the application of petitioner, E. Clemens Horst Company, a corporation, to review an award made on October 24, 1919, by the respondent Industrial Accident Commission in favor of For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes respondent Mrs. La Verne Hamilton as compensation for injuries sustained by her on June 7, 1919, while in petitioner's employ. The sum of $8.89, payable weekly in advance, was awarded to her against the Ocean Accident & Guarantee Corporation, petition er's insurance carrier, as "a temporary total disability indemnity," and one-half of that sum, $4.45, also payable weekly in advance, was awarded her against petitioner as additional compensation by reason of the fact, as found by the commission, that her injuries were occasioned by petitioner's "serious and willful misconduct." 1. We shall first consider petitioner's claim that the finding that the injury was caused by the employer's serious and willful misconduct is not supported by the evidence. Section 6(b) of the Workmen's Compensation Act (Stats. 1917, p. 834; Deering's General Laws, Consol. Supp. 1917-1919, Act 2143c, p. 1392), as it stood at the time of the accident, read in part: "Where the employé is injured by reason of * * * serious and willful misconduct on the part of an executive or managing officer [of a corporation], the amount of compensation otherwise recoverable for injury or death, as hereinafter provided, shall be increased onehalf: * Provided, however, that said increase of award shall in no event exceed twen The said insurance carrier is not a party to this proceeding, and the only question presented is as to the validity of the award of additional compensation against the petition-ty-five hundred dollars." er. The latter's contentions are: (1) That section 6(b) of the Workmen's Compensation Act (St. 1917, p. 834) is unconstitutional; and (2) "that even if this section were valid, there is no evidence of 'serious and willful misconduct on the part of an executive or managing officer' of the petitioner corporation, and that therefore the commission was without jurisdiction to make the award." At the date of the accident Mrs. Hamilton was employed in petitioner's vegetable drying plant near Wheatland, Yuba county, which had been built about three months before. E. Clemens Horst was petitioner's president and general manager. George E. Miller was general superintendent of petitioner's ranches. It appears that he was not a director or stockholder of petitioner. T. L. Conrad was superintendent of the plant at Wheatland, and was neither a director nor a stockhold er of petitioner. When Mrs. Hamilton was injured she was working on a small platform raised about two feet from the floor of the plant. It was her duty to watch a conveyor belt which passed in front of her, and upon which potatoes were being carried from a peeling machine to a "slicer" about two feet to her left, and to pick out and pare those potatoes which had not been properly treated by the peeling machine. Directly over, and parallel to the conveyor belt, and about 51⁄2 feet above the platform on which she was standing, was a rapidly revolving The commission has found on this point: "(8) That at the time of said injury, the employer was a corporation. That the employer structed said plant and placed therein the by its executive and managing officers contransmission shafting upon which applicant was injured, parallel to and directly over the belt upon which applicant worked, at a height on a level with her eyes and without any guard or protection on the under side thereof. That applicant's work required her to bend forward with her head beneath said shafting, and it was That her necessary for her to stoop to do so. to the unguarded portion of said shafting, which hair was thereby brought into close proximity was at all times revolving rapidly. That said shafting was at all times herein mentioned maintained in said condition by said employer through its executive and managing officers and by said Miller and Conrad. That said construction and maintenance were, and each of them was, a direct and open violation of the provisions of sections 33, 34, 35, and 36 of the Workmen's Compensation, Insurance, and Safety Act of 1917. That the duty owed by said employer and its executive and managing officers to employés, under the said provisions, cannot be delegated by them, or any of them so as to free them, or any of them, from responsibility for the violation of said duty, and under the ruling in the case of Fidelity & Deposit Co. of Maryland v. Industrial Accident Commission, 171 Cal. 728, 154 Pac. 834, L. R. A. 1916D, 903, constituted serious and willful misconduct on the part of said employer. That said serious and willful misconduct was the proximate cause of said injury. "That said construction and maintenance were further in violation of General Safety Order No. 6(a) of the Industrial Accident Commission, then in full force and effect, which proAll transmission shaft * * * * * shaft which operated the various machines in the plant. This shaft was protected by a board on the side nearest the employé, but was unprotected below. The accident occurred under these circumstances: About 8 vides that: p. m. the mouth of the "slicer" at Mrs. Ham- ing, either horizontal or vertical, in workrooms ilton's left became clogged. Leaning over the and located within seven feet of the belt and under the shaft, she reached out to floor or platform, must be guarded.' clear the potatoes away from the "slicer." In this position her hair was caught by the shaft and pulled from her head, so that she was completely scalped. It is admitted by petitioner that "the accident happened in the "That therefore applicant is entitled to have course of her employment, and no question is her compensation for said injury increased onemade of her right to recover compensation." half under section 6(b) of said act, said in "That said violation of said safety order constituted serious and willful misconduct on the part of the executive and managing officers of said corporation, and of said corporation, and was the proximate cause of said injury. (193 P.) crease to be paid by said employer, and not by, tioner, she admitted that no instructions had said insurance carrier." The question, then, is: Does the evidence sustain this finding? Mrs. Hamilton testified that she had been engaged in this particular work for ten days prior to the accident; that on the day in question two foremen had told her "to watch to see that it [the belt] didn't stop up at the end," where it dumped the potatoes into the "slicer"; that she could not reach that end of the belt without stooping under the shaft; that when she commenced to work at this plant she had been told "the general nature of the work, but not just what I was to do"; that she had not seen any signs on the premises warning employés against approaching the machinery; and that she had not "tried to take potatoes out of the slicer" except on the occasion when she was injured. Mrs. Daisy Cope testified that she had been working on the same belt as Mrs. Hamilton; that the revolving shaft which caused the lat ter's injuries was "right over the belt" on a level with her eyes; that no one had called her attention to any danger signs in the plant, and that she had seen none; that prior to the been given to any one except to the applicant to clear the "slicer," and stated that she herself had not been told to do it until after Mrs. Hamilton was injured, but that during the 10 days prior to the accident she frequently used the pole to keep the mouth of the machine clear. Mrs. Marion Sherman, who was working about 5 feet from Mrs. Hamilton when the latter was hurt, testified that she had not been instructed as to whose duty it was to keep the "slicer" clear, but that "any one who was working on that end of the belt, right there, they was to keep the potatoes moving"; that she, too, had noticed the effect of the shaft on her hair when she stood erect; that the shaft was about 22 feet above the belt; and that any one working in front of the belt would naturally stoop under the shaft in order to reach the mouth of the "slicer." T. L. Conrad testifying for petitioner, stated at the plant; that the distance between the that he was "fairly familiar” with conditions shaft and the platform on which Mrs. Hamilton was working was about 5% feet; that after the accident the shafting was boxed in at his direction; that one Boyd was the accident she herself had felt the suction from the revolving shaft tugging at her hair, but had not spoken about it to her fellow em-night foreman at the plant under him; that ployés; that she had not been warned "to look out for the shaft"; that "the shaft is right over the belt, and if you are not careful you would raise up under it"; that the board protecting the shaft on the side nearest her was "right even" with her head; that there was sufficient distance between the shaft and the belt at the point where the witness worked so that her hair would not become entangled in the shaft unless she leaned over the belt, but that the belt ran "upward" as it approached Mrs. Hamilton's position, "and it was closer to the shaft there than it was where I was." that it was Mrs. Parker's duty to keep it the "slicer" occasionally became clogged; clear, and not the duty of an employé sta tioned where Mrs. Hamilton was; that he did not know whether or not his foremen, ployés when they went to work about their who were "supposed to instruct these emduties," had given these or other instructions; that "we had signs up in regard to the safety of the machinery"; that, so far as he knew, Horst himself had no knowledge of the dangerous position of the shaft; that surface of the shafting was smooth; that he had never seen "any woman working in the same position Mrs. Hamilton was cleaning the slicer"; that "she had no business there," clearing the mouth of the machine; and that a woman working "below" Mrs. Hamilton on another belt had been instructed by him and by the foreman to keep the "slicer" from becoming clogged. On cross-examination he stated that prior to the accident he had frequently noticed the position of the shaft; that he had been on the platform where Mrs. Hamilton worked, and had seen that the shaft was "open underneath and on the back," although there were two boards "in front"; that he had never called the attention of Horst or Miller to the position of the shaft; that he had never told any other foreman "to cover it up or box it in"; that he thought Horst was in the East, and had not been in the plant before the accident; and that he himself had considered the plant "as ready to run Mrs. A. M. Parker stated that at the time the applicant was injured she was "forelady, overseeing the work"; that she had not instructed Mrs. Hamilton "to be careful or about the machinery in any way"; that she did not remember seeing any warning signs in the plant; that the "slicer" frequently became clogged; that she did not know whose duty it was to clear the machine in such cases, but that the "day boss" had told Mrs. Hamilton to do so; that in order to do so she would have to lean over the belt so that her head "came right under the shaft"; that within a few days after this accident the shaft was boxed in; that she (the witness) had a pole which she often used to clear potatoes from the "slicer," but that this was not generally known among the employés, and that "the most of the time I used it was after she got hurt"; and that the pole was not located so that Mrs. Hamilton could use it. When recalled by peti- and absolutely safe." |