Opinion
Darwin, Rosenthal & Leff, Jay A. Darwin, Irwin Leff, San Francisco, for appellants.
Charles E. Hanger, Brobeck, Phleger & Harrison, San Francisco, for respondent.
MOLINARI, Justice.
This is an appeal by five defendants from a part of the judgment entered upon a jury verdict awarding plaintiff damages based upon alleged tortious conduct of said defendants as the result of the establishment of a picket line in connection with a strike.
Plaintiff, Fibreboard Paper Products Corporation, a corporation, will be hereinafter referred to as 'Fibreboard.' Defendants are: East Bay Union of Machinists, Local 1304, United Steelworkers of America, AFL-CIO, hereinafter sometimes referred to as the 'Local'; United Steelworkers of America, AFL-CIO, hereinafter sometimes referred to as the 'International'; Lloyd Ferber, Business Agent of the Local, hereinafter referred to as 'Ferber'; William F. Stumpf, Staff Representative of the International, hereinafter referred to as 'Stumpf'; and Dave Area, a member of the Local and its Recording Secretary in July and August 1959, hereinafter referred to as 'Arca.' The said Local and said International when referred to collectively shall be hereinafter designated as the 'Union.'
Factual Background
We shall hereinafter state the pertinent facts as they relate to the particular questions and issues presented on this appeal. Preliminarily, however, we set out the following factual background.
Fibreboard is a manufacturer of roofing, shingles, paint, insulations, floor coverings and other products at a plant located in Emeryville in California. In July 1959 over 800 persons worked in this plant, of whom more than 70 were involved in maintenance work. Fifty of the maintenance men were members of and represented by the Union. The production workers in the plant were represented by six different unions other than the Union, and the warehousemen employees were represented by the International Longshoremen's & Warehousemen's Union, hereinafter referred to as the 'ILWU.' On July 31, Fibreboard discharged all of its maintenance men, including those represented by the Union, because it had decided to contract the plant's maintenance work to an independent contractor, the Fluor Maintenance Company. In protest against the discharge the Local authorized and established a picket line at On August 3, Fibreboard filed its complaint for injunction in the present action and a temporary restraining order was issued by the superior court limiting the number of pickets and enjoining defendants from obstructing or interfering with ingress and egress of employees and others, and from intimidating, coercing, threatening or committing property damage or bodily harm or violence on persons attempting to enter or leave Fibreboard's plant. The restraining order was served on Ferber and Stumpf, and the pickets and other members of the Local were informed of the order and instructed to comply with it. Beginning on August 7, and thereafter during the month of August contempt proceedings alleging 26 counts of violations of the temporary restraining order were filed by Fibreboard. Contempt findings were made against the Local, and one of its members, for activities occurring on August 10th; against Arca, and another member of the Local, and the Local itself, for activities occurring on August 19th; and against Arca, Ferber, and two other individuals, and the Local itself, for activities occurring on August 21st. All other contempt counts were dismissed.
Unless otherwise specified herein all dates refer to the year 1959.
On August 24, a preliminary injunction was issued on the same terms as the temporary restraining order, and on September 4, the preliminary injunction was modified to enjoin all picketing. A supplemental complaint was thereafter filed by Fibreboard alleging that the acts complained of in its complaint for injunction continued from August 4th to September 5th, and praying for compensatory and punitive damages for its loss of business, profits and continuing expenses allegedly caused by defendants' acts. In addition to answers denying the essential allegations of the complaint and supplemental complaint, defendants filed an amended answer further answering the complaint, and alleging three affirmative defenses. The first defense alleged the existence of a collective bargaining agreement between Fibreboard and the Union and a breach thereof by Fibreboard in unlawfully discharging the maintenance employee members of the Union; the second, that Fibreboard 'does not come into equity with clean hands'; and the third, that the acts complained of in the complaint and supplemental complaint were caused and induced by Fibreboard in concert with others by assaulting and otherwise molesting the duly stationed pickets and by the use of "strikebreakers." Thereafter, and prior to the commencement of the trial, and on motion of Fibreboard, the aforesaid first affirmative defense was ordered stricken by the court below.
The cause proceeded to trial before a jury. During the course of the trial, defendants moved to amend their answer to add four additional affirmative defenses, designated, respectively, as the fourt, fifth, sixth and seventh defenses. The court granted the motion as to the seventh defense which alleged in essence that if the acts complained of in the complaint and supplemental complaint occurred at all they were provoked and induced by Fibreboard by reason of fraudulent representations made by Fibreboard to the Union. It was asserted that representations were made by Fibreboard that it intended to meet with the Union and negotiate a collective bargaining agreement to be effective on August 1, that that it did not intend to so do, and that the Union relied upon such representations to its detriment without being permitted to protect its position in relation to Fibreboard and with reference to the renewal provisions under the collective bargaining agreement then in existence.
Defendants assert on this appeal that the refusal to grant the motion to add the sixth affirmative defense was a prejudicial abuse of discretion. We shall hereinafter separately discuss the propriety of the trial court's action in regard to this proposed amendment.
The jury returned its verdict in favor of Fibreboard against all defendants for compensatory damages in the sum of $285,000, and for punitive damages against the International in the sum of $20,000 and
The instant appeal by defendants is from said judgment, excepting that portion denying a permanent injunction and vacating and dissolving the preliminary injunction. The questions raised on appeal by defendants are set out in the headings preceding the several subjects hereinafter discussed in this opinion.
Were the Damages Awarded Fibreboard Proximately Caused by the Tortious Conduct of Defendants?
No. Defendants contend that although there was evidence of 'incidents' on or near the picket line from which the jury could have arrived at the conclusion that some of the behavior on the picket line was tortious, there was no causal connection between such conduct and the damages suffered by Fibreboard. The assertion is accordingly made by defendants that in the instant case the determination of such causal connection is a question of law and not one of fact. The basis of defendants' argument is that Fibreboard's losses do not stem from the inability to 'produce' goods because of the picket line, but from the inability to 'move' goods through the warehousemen who were legally and properly observing the picket line. Fibreboard's response to this argument is that its damages are predicated upon the loss of sales resulting during the period the plant was closed because of the picket line, and that such losses resulted not only because the production workers 'stayed out' during such period, but also because there is ample evidence in the record from which the jury could conclude either that the warehousemen would have crossed the picket line if it had been safe to do so, or, if they had not crossed the picket line because of union principles, their employment would have been terminated and the work given to others. Accordingly, Fibreboard argues that the question of causation was one of fact for the jury whose determination, under the state of the record, may not be disturbed by the appellate court because of the limitations placed upon its reviewing powers insofar as questions of fact are concerned.
Turning to the record in this case, we find substantial evidence of tortious behavior on the picket line. Within an hour after the Local established the picket line cars attempting to enter the plant were halted. Robert Baldwin, J., pensonnel director of the plant, took a picture of a group of men congregating about the entrance of the plant. He was approached by Arca and other pickets, forcibly relieved of his camera and was knocked down in the process. On August 1st, R. C. Thumann, Fibreboard's director of industrial relations, and two other managers were refused entry into the plant by Arca, necessitating police intervention to effect entry. On August 2, production workers, who were members of the Pulp, Sulphide and Paper Mill Workers Union, coming to work the 'graveyard shift' did not cross the picket line and were sent home by their international representative, Bradford, after he was told by Ferber that if Bradford's member's attempted to go to work 'it wouldn't be a peaceful picket line.'
The first regular work day after picketing began was on Monday, August 3rd. In the morning of that day, approximately 25 to 30 cars were stopped by the pickets, resulting in a long caravan of automobiles; cars were shaken up and down and then were permitted to enter the premises; salaried Bradford also testified that on August 10th, he was told by Stumpf that if his men returned to work their front porches might be blown off or their cars overturned; that when he started to walk across the street to confer with Thumann he was accosted by Lincoln Beck of the Local and pushed 15 or 20 feet back up the street; and that Beck later drove his automobile down the street toward him and that he had to jump behind a car to avoid being struck.
During the days of August 19, 20 and 21, the following occurred: General foreman Jochum's car was stopped; he was struck and the windshield of his car was smashed and broken. Design foreman Paul Stearns' car was similarly handled; he was also struck while sitting in the car and the rear window of his car was broken. Stumpf threw an object at a car attempting to enter the plant and Ferber hit the window of a car with his fist. Two attorneys representing Fibreboard were battered when they tried to enter the plant on foot, and Arca and Beck were arrested. Frank Remley, one of the millwrights hired to do the maintenance work by Fluor Maintenance Company, was beaten and kicked by six or eight men and sustained injuries, including broken ribs, nose and tooth, which caused him to be hospitalized and off work for six or seven weeks. Arca then drove his truck into a car filled with millwrights, whereupon a group of men immediately overturned the car and injured millwright Luther Schockey. None of the other production workers made any attempt to return to work until August 31. On that day the Pulp and Sulphide Workers returned to work under police escort. Their union representative, Bradford, testified that at that time Stumpf and Ferber told him 'that some place or somewhere I was going into a dark place or into a dark alley, and if it was the last thing they ever did, they were going to get me.'
With respect to the conduct and activities of the warehousemen the record discloses of following: Prior to the picket line going into effect, William Burke, business agent for the ILWU, advised Thumann, that the warehousemen would not cross the picket line. Burke testified that it was the policy of the ILWU not to cross picket lines. During the month of August, Thumann sought to induce the warehousemen to return to work and to cross the picket line, to which request the ILWU replied by letter signed by Burke and two other business agents. The letter stated that the ILWU had the right to respect the picket line without breaching its contract. The letter quoted two paragraphs of the contract between Fibreboard and the ILWU, which read as follows: "Any action of the employees
On rebuttal, Thumann testified that if the warehousemen had refused to cross the picket line solely on the union principle that they never crossed picket lines, he would have required them to return to work, and if they failed to so do he would have employed others. He stated, further, that there were other workers available in the Bay Area to do this type of work.
The function and duties of the warehousemen, as described by witnesses presented by both sides, consisted of the unloading of raw materials, used in the various manufacturing processes, when delivered by trucks and trains; to store these materials until needed for production; to move such materials and finished products within the plant; and to ship out and load on trucks and trains the finished products for customer needs.
The only witness produced by Fibreboard to establish the extend of its damages was its assistant comptroller, Ben H. Rich, a certified public accountant. Rich testified as to the type of products manufactured in the Emeryville plant, and that certain of the products produced by Fibreboard were only manufactured at the Emeryville plant. Rich also testified that there was no production at the Emeryville plant during the month of August and the first week of September, except for some production in the floor covering plant. It was his testimony that he computed the profits lost by reason of the shutdown of the Emeryville plant from July 31 until September 7 upon the basis of estimate of sales, and that this loss amounted to $554,000. The computation of this loss was arrived at by Rich as follows: The estimated sales from five products produced at all Fibreboard plants had there not been a shutdown at the Emeryville plant, based upon a five-year seasonal sales pattern, should have been $3,548,000; from this sum was deducted the sum of $3,094,000 manufacturing cost estimate based upon the most recent manufacturing experience, i. e., the month before the shutdown, leaving an estimated profit of $454,000. To this last figure was added a loss of $100,000 resulting from what Rich referred to as 'actual results,' making the total loss of profits the aforesaid sum of $551,000. The 'actual results' were arrived at by him as follows: The actual sales of said five products were computed for the period of August and September 1959 and amounted to $2,539,000, from which was deducted the actual production cost for said
Fibreboard has 15 plants located throughout the United States.
On cross-examination, Rich testified: That when he refered to 'no sales' being made during the period of shutdown he meant that no finished goods moved out of the plant pursuant to an order which had to be filled; that as of July 31 there was an inventory in all of Fibreboard's plants; that during the month of August no goods were shipped from the Emeryville plant; that '[i]f goods could have been shipped, they would have resulted in sales * * * if we have no shipments, we have no sales'; and that there was no production in the Emeryville plant in the month of August.
Defendants do not attack, on this appeal, the method utilized by Fibreboard in computing loss of profits; nor do they claim that the damages thus established were not in fact sustained. They do contend, however, that there is no causal connection between these damages and whatever tortious conduct may be attributed to their activities on the picket line. The thrust of their argument is that Fibreboard's damages are predicated solely on lost sales, and that even if goods had been produced during the time the Emeryville plant was picketed, sales would not have been realized from such production because the warehousemen were not working out of respect for the picket line which they were legally intitled to recognize under the terms of their contract with Fibreboard. In other words, say defendants, the sales lost were occasioned by the failure of the warehousemen to move the finished goods and not because of lost production. It should be noted here that while goods were not produced during the shutdown period and therefore finished goods were not added to inventory, there is nothing in the record to show that the inventory on hand on July 31 was not adequate to meet orders for the months of August and September, the two months during which Fibreboard claims loss of profits. Under the evidence adduced, the nonproduction occasioned by the shutdown at the Emeryville plant could only be related to the months of August and September. Fibreboard's damages are predicated upon a loss computed on the basis of the net profit upon estimated sales from all plants, had there not been a shutdown, as compared to the actual net loss realized from sales made from such plants during the months of August and September. There was no evidence presented by Fibreboard as to the nature and extent of the nonproduction during the months of August and September, nor of the effect of such nonproduction upon future sales. It is apparent, under the state of the record, that Fibreboard's damages are predicated upon the inability to consummate sales in August and September. Such sales contemplate the existence of such goods in inventory, or the production of said goods to make up such inventory, plus the shipment of such goods to the customer. We are satisfied that there The record is barren of any threats, intimidation or violence directed to or prepetrated upon the warehousemen. Burke, the ILWU business agent, testified that he at no time saw any violence during the times he was in the picketed area. He testified, moreover, that it was a policy of his union not to cross picket lines, and that the warehousemen did not cross the picket line established by defendants because of this policy. It was sought to impeach this testimony through the aforementioned letter which quoted the two paragraphs of the contract between Fibreboard and the ILWU. Fibreboard claims that Burke's said testimony was impeached by the reference in the letter to the paragraph providing that the 'action of the employees leaving jobs for their own protection * * * shall not constitute a violation of this Agreement,' and Burke's interpretation of the word 'protection' and including, within its meaning, 'protection of the body.' It is apparent that Fibreboard was seeking to impeach Burke by showing that on some former occasion he made a statement or statements inconsistent with his present testimony, and that it was also attempting to have explained by parol evidence the meaning of the phrase 'for their own protection' in the said agreement.
The extent and nature of this inventory was not established.
The pertinent question and answer is as follows: 'Q. Well, Mr. Burke, what do the words 'for their own protection' mean to you? A. What does it mean to me? Q. Yes, what does that language mean to you? A. Well, it could be protection of body, protection of conscience, protection of feelings, protection of their social standing in the community. Q. You say, 'It could be protection of body'; is that correct? A. Among other things; yes.'
Turning first to the question of impeachment, it is doubtful, in view of the manner in which such evidence was adduced, whether the claimed impeaching testimony was inconsistent with or contradictory of that previously given by Burke. In order to impeach a witness on the ground of inconsistent statements, the impeaching testimony must be plainly inconsistent with that already given. (People v. Collum, 122 Cal. 186, 188, 54 P. 589; Estate of O'Connor, 118 Cal. 69, 70, 50 P. 4; People v. Burns, 16 Cal.App. 416, 423, 118 P. 454.) The purport of the quoted paragraphs in the letter, when coupled with Burke's testimony, is reasonably susceptible of an inference consistent with Burke's testimony. In the posture presented, the letter was subject to the interpretation that Burke, as one of the authors of the letter, was claiming that the ILWU could respect the picket line without risking a breach of its contract with Fibreboard on the basis of these two paragraphs in the contract. Assuming, arguendo, that such evidence was of sufficient substance as to be deemed a statement or statements contradictory of his testimony of the witness stand, such evidence could only be considered for the purpose of testing the credibility of the Albert v. McKay & Co.,
Except for the reading of the language of these two paragraphs into the record and the reference therein that these two paragraphs were quoted in the letter, we do not have the benefit of the context of the letter with respect to said paragraphs as the letter was not read or offered in evidence.
As concerns Burke's explanation of the meaning of 'protection' such evidence was admitted without objection. No contention is made on appeal that the admission of such evidence does violence to the parol evidence rule. Accordingly, such parol evidence may be considered by an appellate court in ascertaining whether inferences can be drawn from the written agreement as to the meaning of the agreement and the contracting parties' intention. (Santa Clara Properties Co. v. R. L. C., Inc., 217 A.C.A. 903, 910-912, 32 Cal.Rptr. 333.) Burke's testimony, in view of his explanation as to the meaning of the term 'protection,' was susceptible, therefore, of the inference that the word 'protection' as used in the agreement in question meant 'protection of the body,' 'protection of their feelings' and 'protection of their social standing in the community,' or any of such meanings. The last-mentioned definitions, insofar as a member of organized labor is concerned, are certainly compatible with attitudes which find their basis in the union principle of respecting a picket line irrespective of the fear of violence or bodily harm. In any event, the inference that such terminology may also mean 'protection of the body' does not of itself beget the inference that there existed in fact circumstances indicating the presence of violence and threats on the part of defendants.
A legal inference cannot be drawn from the nonexistence of a fact but it can be drawn only from a fact established. (Eramdjian v. Interstate Bakery Corp., 153 Cal.App.2d 590, 602, 315 P.2d 19; Estate ofGutierrez, 189 Cal.App.2d 165, 173, 11 Cal.Rptr. 51; Code Civ.Proc., §§ 1958, 1960.) It may not be based on suspicion alone, or on imagination, speculation, surmise, conjecture, or guesswork; but it must be a reasonable deduction from the facts proved, and, of course, must be logical. (Eramdjian v. Interstate Bakery Corp., supra, 153 Cal.App.2d p. 602, 315 P.2d pp. 25-26; Estate of Gutierrez, supra, 189 Cal.App.2d p. 173, 11 Cal.Rptr. p. 55; Estate of Kuttler, 185 Cal.App.2d 189, 204, 8 Cal.Rptr. 160; Estate of Braycovich, 153 Cal.App.2d 505, 512, 314 P.2d 767.) Whether a particular inference can be drawn is a question of law. (English v. Drumwright, 195 Cal.App.2d 809, 16 Cal.Rptr. 265; Marshall v. Parkes, 181 Cal.App.2d 650, 5 Cal.Rptr. 657.)
In the case at bench the question on appeal, insofar as the issue under discussion is concerned, is whether the evidence justifies the drawing of any inference that the warehousemen members of the ILWU did not cross defendants' picket line because of threats, violence or fear of bodily harm. In the light of the principles hereinabove discussed, we conclude that there is no evidence in this record, by inference or otherwise, which would at all support such a finding. Fibreboard's contention that
Turning to the question of damages in the present case, we are confronted with the question as to whether the damages proved by Fibreboard through the testimony of Rich were proximately caused by any tortious acts of defendants. The gravamen of Fibreboard's complaint, insofar as damages are concerned, is that it 'lost business and profits' and 'incurred continuing costs in the maintenance of its said plant and of its said business' during said period by reason of its being prevented by the conduct of defendants 'from operating its plant and producing its usual commodities * * *.' No proof was adduced at the trial that Fibreboard incurred any continuing costs in the maintenance of its said plant, nor was any evidence presented as to the nature and extend of the commodities which were not produced during the period in question. The damages claimed by Fibreboard were predicated solely upon a loss in sales during the shutdown period based upon goods they were unable to 'move out' or 'ship' during said period. While there is evidence that goods were not produced during said period, there is also evidence that there was an inventory of goods on hand at the commencement of the strike. The extent of this inventory was not established. It may well be that there was ample inventory to satisfy orders during the shutdown period had Fibreboard been able to ship such goods. There is no evidence, moreover, whether goods which might have been produced during said period would have been moved out or shipped during said period, and, if so, to what extent. We think it is a reasonable assumption, moreover, that goods which could have been produced during said period would not have been sold and delivered during said period, but would be added to inventory for future sale and delivery. Accordingly, the loss of profits from the failure to produce would be reflected in a period beyond the shutdown period.
The record does not disclose that any pretrial conference order was made.
The measure of damages in this state for the commission of a tort, as provided by statute, is that amount which will compensate the plaintiff for all detriment sustained by his as the proximate result of the defendant's wrong, regardless of whether or not such detriment could have been anticipated by the defendant. (Civ.Code, § 3333.) It is well established in California, moreover, that such damages may include loss of anticipated profits where an established business has been injured. (Natural Soda Prod. Co. v. City of L. A., 23 Cal.2d 193, 199, 143 P.2d 12; Hoag v. Jenan, 86 Cal.App.2d 556, 563, 195 P.2d 451; Guttinger v. Calaveras Cement Co., 105 Cal.App.2d 382, 387, 233 P.2d 914; Yates v. Kuhl, 130 Cal.App.2d 536, 542, 279 P.2d 563.) The basis of this principle is that where the operation of an established business is prevented or interrupted by a tort, damages Grupe v. Glick,
Hoag v. Jenan, Gainer v. Storck, Edwards v. Container Kraft Carton etc. Co., Natural Soda Prod. Co. v. City of L. A., Guttinger v. Calaveras Cement Co., Edwards v. Container Kraft Carton etc. Co., Natural Soda Prod. Co. v. City of L. A., Edwards v. Container Kraft Carton etc. Co., Natural Soda Prod. Co. v. City of L. A., Grupe v. Glick,Turning to the case at bench, there is ample evidence of operating experience sufficient to permit a reasonable estimate of probable income and expense to furnish a basis for estimating what the probable earnings would have been had there been no tort. However, the evidence adduced, in view of the conclusion reached by us that defendants' tortious acts did not prevent the warehousemen from moving out and shipping goods from the plant, falls short of establishing with reasonable certainty the damages for loss of profits sustained by Fibreboard. The proper basis of recovery is for the profits lost because of the tortious acts of defendants which prevented the production workers from producing goods during the shutdown period. It is apparent from Rich's testimony that the loss of profits resulted from 'lost sales' during the months of August and September and that the inability to make these sales resulted in substantial measure from the inactivity of the warehousemen. We cannot say, however, that therefore no damages were sustained as a matter of law. Fibreboard's theory of recovery was based on alleged tortious acts resulting from both the failure to produce goods and the failure to move and ship out goods through the warehousemen. Recovery ought not to be denied them because they have not established tortious conduct with respect to the activities of the warehousemen. Under the state of the record, the jury was entitled to consider the issue of lost profits on the basis of the inability to produce without regard to the inability to ship goods. Accordingly, the jury's determination should have been limited and restricted to whether defendants' tortious acts, during the period from August 4 to September 5, as alleged in the complaint, prevented and interfered with Fibreboard's production of its usual commodities, and, if so, whether such prevention
Fibreboard's inability to produce goods during the shutdown period, however, may or may not have resulted in a loss of profits. This determination depends upon whether the probable income and expense attributed to the units not produced would have resulted in an estimated profit. It is conceivable that the difference between the income realized from such units and the expense of producing and selling them might have resulted in loss. It is apparent that Fibreboard can, with a degree of certainty, establish the number of units which were not produced during the period in question and the profit, if any, that would have been realized therefrom had its inventory not been depleted to the extent of the units not produced during the shutdown period.
Did the Trial Court Commit Error in Excluding From Evidence Documents Filed and Statements Made by Fibreboard in its Appeal to the California Unemployment Insurance Appeals Board?
Yes. Defendants claim that the trial court committed prejudicial error in refusing to admit in evidence a certified copy of certain documents and statements in proceedings before the California Unemployment Insurance Appeals Board. The documents consist of forms filed by Fibreboard in an appeal to said Appeals Board and the transcript of portions of the oral argument of Fibreboard's counsel before said Board. These appeals were from decisions of a Referee awarding unemployment benefits to employees of Fibreboard who were unemployed during the strike. The record does not disclose the nature of the occupation of these employees. However, the briefs of the respective parties concede that the subject unemployment compensation hearings were concerned with the production workers. The proffered exhibit discloses that it was Fibreboard's position at the unemployment compensation hearings that the production workers stayed away from work voluntarily because of
The principle is well established in this state that a declaration of a litigant contrary to his position in the lawsuit is admissible under an exception to the hearsay rule as an admission. Such a declaration is not only admissible for purposes of impeachment, but it may also be used to prove the truth of the assertion, i. e., it constitutes affirmative or substantive evidence which the jury or court may believe as against other evidence, including the party's own contrary testimony on the stand. (Bonebrake v. McCormick, 35 Cal.2d 16, 18-19, 215 P.2d 728; People v. Southack, 39 Cal.2d 578, 585, 248 P.2d 12.) Although defendants assert that all of the statements contained in Exhibit 'Q' should have been admitted in their entirety as evidentiary admissions, the thrust of their argument, as disclosed by the briefs, is directed to the contention that the three appeal forms constitute admissions made in a pleading in a prior civil proceeding. It is, of course, also a well established principle in California that a pleading in a prior civil proceeding may be offered as evidence or for the purpose of impeachment in a subsequent proceeding. (Meyer v. State Board of Equalization, 42 Cal.2d 376, 385, 267 P.2d 257; Cahill Bros., Inc. v. Clementina Co., 208 Cal.App.2d 367, 383, 25 Cal.Rptr. 301; Dolinar v. Pedone, 63 Cal.App.2d 169, 146 P.2d 237; Nungaray v. Pleasant Valley etc. Assn., 142 Cal.App.2d 653, 667, 300 P.2d 285.) The rationale underlying this principle is that the allegations of fact in a pleading are presumed to be those of the party, and are therefore accepted as admissions, subject to the right of the party to controvert them by showing that they were not authorized by him or were made inadvertently or under a mistake of fact. (Dolinar v. Pedone, supra; Nungaray v. Pleasant Valley etc. Assn., supra, 142 Cal.App.2d p. 667, 300 P.2d p. 294; Witkin, Cal. Evidence, § 224, pp. 251, 252.) It is convenient to mention here that the same principle has also been applied to stipulations and other statements by attorneys within the scope of their authority. (Nungaray v. Pleasant Valley etc. Assn., supra, 142 Cal.App.2d p. 667, 300 P.2d p. 294 (stipulation of facts in prior trial); Gonzales v. Pacific Greyhound Lines, 34 Cal.2d 749, 754, 214 P.2d 809 (stipulation as to liability in prior trial); People v. Leyva, 187 Cal.App.2d 249, 254, 9 Cal.Rptr. 469 (stipulation as to prior conviction); Bell v. Staacke, 159 Cal. 193, 196-197, 115 P. 221 (letter written by attorney prior to trial); Scafidi v. Western Loan & Bldg. Co., 72 Cal.App.2d 550, 561, 165 P.2d 260 (admissions made in arguing a motion); see Witkin, Cal. Evidence, § 227, p. 255.) Parallel situations are those in which express concessions and assertions in a brief and in oral argument on appeal have been treated as an admission of a legal fact or point, controlling in the disposition of the case. (See Harmon v. Keough, 41 Cal.App. 773, 775, 183 P. 201; Kashow v. Plant, 97 Cal.App. 696, 697-698, 276 P. 117; Morris v. Board of Education, 119 Cal.App. 750, 752, 7 P.2d 364, 8 P.2d 502; Hospelhorn v. Newhoff, 43 Cal.App.2d 678, 680, 111 P.2d 688; Kohn v. Kohn, 95 Cal.App.2d 708, 716, 717-719, 214 P.2d 71; Browne v. Superior Court, 16 Cal.2d 593, 599, 107 P.2d 1, 131 A.L.R. 276;
Defendants lay considerable stress upon the assertion that the statements made by Fibreboard in its said appeal forms constitute admissions made in a prior pleading. Pleadings are generally associated with the trial of a cause and consist of the formal allegations of the parties of their respective claims and defenses for the judgment of the court. (See Code Civ.Proc., §§ 420, 422.) The office of pleadings is to outline the issues so that the parties may know what is involved in the litigation. (Horton v. Horton, 115 Cal.App.2d 360, 367, 252 P.2d 397; Brunson v. Babb, 145 Cal.App.2d 214, 227, 302 P.2d 647.) Accordingly, it has been held that in civil actions the 'pleadings' are those enumerated in section 422 of the Code of Civil Procedure and therefore do not include a notice of motion. (Sievers v. Pacific Gas & Elec. Co., 57 Cal.App.2d 455, 456, 134 P.2d 850.) In the instant case, we are not concerned with the pleadings referred to in the Code of Civil Procedure, but with the 'form of appeal' provided for in title 22, section 6002, of the California Administrative Code, applicable to appeals to the Unemployment Insurance Appeals Board.
§ 6002 of title 22 of the Cal.Admin.Code provides in pertinent part that: '(a) An appeal to the appeals board need not be formal, but it shall set forth the grounds or reasons for the appeal.'
No California case has been cited to us, nor has any been found by us, to the effect that a notice of appeal is a pleading. It should be noted, however, in the instant case, that an appeal to the Appeals Board is something more than a notice of appeal in the usual appeal from a judgment of a superior court which need only state that the appellant appeals from a specified judgment or a particular part thereof. (Rule 1(a), Calif.Rules of Court.) It is designated as an 'appeal document,' which 'shall set forth the grounds or reasons for the appeal.' (Cal.Admin.Code, tit. 22, §§ 6001, 6002.) It has been held in other jurisdictions, where the assignments of error are designated in the document initiating the appeal, that such document or petition is in the nature of a pleading and is regarded in every material respect like the initial pleading in the trial court. (Employers Ins. Co. v. Harrison, 250 Ala. 116, 33 So.2d 260, 264; Cole v. Farrier, 180 Va. 231, 22 S.E.2d 18, 25.) It is our view, however, that whether the appeal document in the present case is a pleading is not determinative of the question before us. The heart of the inquiry is whether Fibreboard made statements in its appeal document to the Board of Appeals contrary to the position it took in the instant lawsuit, so as to make such declarations admissible as admissions. The substance of the utterance, and not the form in which it is couched, is the determining factor. The distilled essence of the California rule, as declared by the cases hereinabove cited, is that the declaration or utterance must be one of fact and not a conclusion of law, opinion, legal contention, or argument. (See also Achen v. Pepsi-cola Bottling Co., 105 Cal.App.2d 113, 123, 233 P.2d 74; Kamm v. Bank of California, 74 Cal. 191, 195-198, 15 P. 765; Cullinan v. Mercantile Trust Co., 80 Cal.App. 377, 384, 252 P. 647; People v. Byars, 188 Cal.App.2d 794, 807, 10 Cal.Rptr. 677.) In Cullinan, the court made Dolinar v. Pedone,
The rule advocated by modern textook writers that a party's inconsistent utterances need not be such as to have been independently receivable as the testimony of a qualified witness because it is the inconsistency with the party's present claim which gives them logical force (4 Wigmore on Evidence, § 1053, p. 12; McCormick on Evidence, § 241, p. 507; Model C, Rule 506; and see Witkin, Cal.Evidence, § 222(c), p. 249), is not the California rule. This is recognized in the 1962 Pocket Supplement of 4 Wigmore on Evidence, p. 13 (note 4), wherein the Achen case is cited as being contra.
An analysis of the cases relied upon by Fibreboard discloses that they involve situations where the alleged inconsistent utterance was either a legal conclusion, an unauthorized statement, or a statement obviously not intended to be a stipulation of fact or a formal admission. thus in Adelstein v. Greenberg, 77 Cal.App. 548, 552, 247 P. 520, a statement of counsel during the course of an argument on demurrer was held to be merely a legal conclusion and not a statement made as an admission or stipulation of fact. Similarly, in Morrell v. Caldow, 99 Cal.App. 159, 162, 278 P. 247, a statement by counsel, during an interchange between court and counsel regarding the number of outstanding shares in a stockholder's liability suit, that "they figured up nearer 800" was held not to be intended as a stipulation or admission in the context and circumstances under which it was made. In Shaver v. Canfield, 21 Cal.App.2d 734, 742, 70 P.2d 507, a statement in a petition for guardianship inconsistent with a party's claim that certain property had been deeded to her was denied admission in evidence on the ground that it was prepared by an attorney without any direction as to its contents by the plaintiff and also upon the ground that such statement was merely a conclusion of the plaintiff. Cullinan v. Mercantile Trust Co., supra, 80 Cal.App. 377, 252 P. 647, supports what we comprehend to be the California rule. There a declaration made by counsel for the respondents in his opening statement that certain allegations in the pleadings were admitted, and to which the appellants made no objection or reply, was held to constitute an admission of the truth of said allegations.
Research discloses other cases wherein the distinction between statements of fact, on the one hand, and conclusions of law, opinion, and argument, on the other, is apparent. (See Sichterman v. R. M. Hollingshead Co., 117 Cal.App. 504, 506, 4 P.2d 181; Desny v. Wilder, 46 Cal.2d 715, 729, 299 P.2d 257; and see People v. Byars, 188 Cal.App.2d 794, 807, 10 Cal.Rptr. 677.)
Adverting to Exhibit 'Q' in the present case, we find that it contains
Oppenheimer v. Deutchman, Jones v. Tierney-Sinclair, Jones v. Tierney-Sinclair, L. Mini Estate Co. v. Walsh,As concerns the two transcripts of the oral argument by Fibreboard's counsel in the proceedings before the Appeals Board, which are also included in Exhibit 'Q,' these are clearly legal conclusions by way of argument, and, therefore, inadmissible as admissions under the rule hereinabove discussed. We thus have a situation wherein Exhibit 'Q' contains inadmissible as well as admissible evidence. The objection to such exhibit was, however, a general one. An inadmissible portion of a document, the remainder of which is admissible in evidence, cannot be reached by a general objection to the admission of the entire document, but the inadmissible portion must be specified. (People v. Lang Transportation Corp., 43 Cal.App.2d 134, 141, 110 P.2d 464; Newton v. Thomas, 137 Cal.App.2d 748, 768, 291 P.2d 503; Estate of De Laveaga, 165 Cal. 607, 133 P. 307; Coveny v. Hale, 49 Cal. 552, 556.) Accordingly, in the case at bench,
The pertinent portions of said argument are as follows:
Did the Trial Court Commit Error in Refusing to Give Certain Instructions Proposed by Defendants?
No. Defendants' defense, other than that set out in their affirmative defenses, rested on the public policy in California permitting a proper picket line to interfere with an employer's business without liability to the union. (See Lab.Code, § 923.) Defendants proposed certain instructions which they assert were consistent with this defense, and which the trial court refused to give. Error is accordingly claimed, based on the premise that the trial court did not instruct on a theory supported by the pleadings and the evidence. The instructions submitted by defendants on this theory of defense and which were not given by the court are set out in the footnote. The crucial issue for the jury's determination in the instant case was whether defendants' labor activities were lawful and proper. It is well settled in this state that, while a union may use the various forms of concerted action, such as a strike, picketing or boycott, to enforce an objective that is reasonably related to any legitimate interest of organized labor, the object of concerted labor activity must be proper and must be sought by lawful means. If such activity is not proper or lawful the persons injured by such activity may obtain damages or injunctive relief. (James v. Marinship Corp., 25 Cal.2d 721, 728-729, 155 P.2d 329, 160 A.L.R. 900; Messner v. Journeymen Barbers etc. International Union, 53 Cal.2d 873, 876-877, 4 Cal.Rptr. 179, 351 P.2d 347.) Accordingly, damages may be awarded for tortious conduct. (Garmon v. San Diego Bldg. Trades Council, 49 Cal.2d 595, 602-606, 320 P.2d 473; Seven Up Bot. Co. of L. A. v. Grocery Drivers Union, 49 Cal.2d 625, 628, 320 P.2d 492.) Such tortious conduct may consist of violent conduct, physical violence, threats and intimidation (United Construction Workers, Affiliated with United Mine Workers of America v. Laburnum Corp., 347 U.S. 656, 74 S.Ct. 833, 98 L.Ed. 1025); and it may also consist of non-violent conduct where the labor union activities amount to illegal practices in violation of the declared policy of California. (Garmon v. San Diego Bldg. Trades Council, supra, 49 Cal.2d pp. 602-606, 320 P.2d pp. 477-480.)
Instruction No. 35: 'The law in California recognizes that picketing by a labor union can and usually does interfere with and cause a loss of business and profits of the employer against whom the picketing is directed. When the picketing is for a legitimate labor objective, and in this case, the object of the picketing was such a legitimate objective, and the behavior on the picket line is lawful, neither a union nor its members are liable in damages for the results of such picketing.
In the case at bench, the trial court gave two instructions which, we are satisfied, properly declared to the jury the principles applicable to an award of damages for tortious conduct.
These instructions were as follows:
Turning to proposed Instruction No. 35, we find that although the first paragraph is a correct statement of the declared
Garmon v. San Diego Bldg. Trades Council, Huggans v. Southern Pacific Co., Jaeger v. Chapman,Proposed instructions numbered 36 and 37 appear to be a paraphrase of certain language taken from opinions in the case cited in support of the principle therein contained. The dangerous practice of taking excerpts from the opinions Francis v. City & County of San Francisco,
The first two paragraphs of Instruction No. 36 are taken from Republic Steel Corporation v. National Labor R. Bd., 3 Cir., 107 F.2d 472, 479. They are not verbatim quotations, nor did the case involve the giving of jury instructions. The last paragraph relating to 'isolated incidents' is taken from National Labor Relations Board v. Thayer Co., 213 F.2d 748, 756, with the addition of certain embellishments not found in Thayer.
Instruction No. 38 deals with burden of proof and preponderance of evidence. Instruction No. 45 is simply an elaboration of the agency instruction given by the court. These principles were adequately covered by other instructions given by the trial court. Error cannot be predicated on the trial court's refusal to give a requested instruction if the subject matter is substantially covered by the instructions given. (Luis v. Cavin, 88 Cal.App.2d 107, 115, 198 P.2d 563; Middleton v. Post Transportation Co., 106 Cal.App.2d 703, 706, 235 P.2d 855.) Instructions Nos. 39 to 43 are not only repetitive of the instructions on preponderance of evidence and proximate cause given by the court, but are also argumentative formula instructions. What we have hereinabove said concerning argumentative and repetitive instructions is likewise applicable to these instruction. It has been repeatedly stated by the reviewing courts that formula instructions ought not to be given and their final disappearance should be encouraged. (taha v. Finegold, 81 Cal.App.2d 536, 543, 184 P.2d 533; Rios v. Bennett, 88 Cal.App.2d 919, 924-925, 200 P.2d 73.) Accordingly, the refusal to give formula instructions is not error. (Roy v. Mission Taxi Co., 101 Cal.App.2d 438, 446-447, 225 P.2d 920.)
Did the Trial Court Commit Error With Respect to Instructions on Provocation?
Yes. Defendants next charge of error is that the trial court failed to instruct the jury on the defense of provocation based on fraudulent misrepresentation. This defense was urged in defendants' seventh affirmative defense. The evidence adduced before the jury in support of this defense was as follows: On May 26, the Union sent a letter to Fibreboard notifying it that the Union desired to modify the existing collective bargaining agreement between the parties as of August 1, and therein offered to meet with Fibreboard 'for the purpose of negotiating a new contract.' On June 2, Fibreboard acknowledged, by letter, the receipt of the Union's letter of May 26, 'requesting a meeting to discuss modifications of the current Agreement
At the conclusion of the trial, defendants submitted five identical instructions, each applicable to one of the defendants, upon the theory of defense based upon provocation resulting from fraudulent misrepresentation. The said instructions were to the effect that in its consideration of exemplary damages the jury must consider to what extent the acts of the respective defendants were provoked by Fibreboard or its agents, that '[s]uch provocation could be misrepresentation by the Plaintiff's agent in connection with the failure to hold collective bargaining negotiations in June and July, 1959,' and that it was for the jury to decide if Thumann's representations were fraudulent and whether such fraudulent misrepresentations could provoke the named defendant into acts which the jury might decide gave rise to exemplary damages. The proposed instruction then defined 'fraudulent misrepresentation' and concluded as follows: 'If you find that the Defendant * * * was provoked by the acts of the Plaintiff, or any of its agents, then you may not now award exemplary damages.' The trial court refused to give these proposed instructions. Prejudicial error is accordingly claimed, it being defendants' assertion that, by reason of such refusal, the court 'gave no instructions at all on the defense of provocation.' This last assertion is not accurate because the record discloses that the trial court gave two instructions relative to the defense of provocation. Provocation may only be considered to disprove actual malice or in mitigation of punitive damages resulting from such malice. (Earl v. Times-Mirror Co., 185 Cal. 165, 177, 196 P. 57; Marriott v. Williams, 152 Cal. 705, 710, 93 P. 875.) In the present case there was ample evidence justifying an instruction that the conduct and actions of Fibreboard might be considered in mitigation of examplary damages. Defendants were, therefore, entitled to an instruction on provocation in mitigation of exemplary damages as this was one of their theories of defense. It is the trial court's duty to give instructions expounding the law upon every reasonable theory of the case finding support in the evidence. (Billeter v. Rhodes & Jamieson, Ltd., 104 Cal.App.2d 137, 146-147, 231 P.2d 93; Stickel v. Durfee, 88 Cal.App.2d 402, 406, 199 P.2d 16.) The instructions submitted by defendants on provocation were not, however, correct expositions of the law. These instructions, as framed, told the jury that if they found provocation they were not to award any punitive damages at all. Acts of provocation do not absolutely bar recovery for exemplary damages but they are to be considered in reduction of, or set-off against, such damages. (Marriott v. Williams,supra, 152 Cal. p. 710, 93 P. p. 877; Earl v. Times-Mirror Co., supra, 185 Cal. p. 177, 196 P. pp. 62-63.) Turning to the instructions given by the court, we find that they are likewise insufficient. All that they told the jury was that it was to consider evidence of provocation 'for the limited purpose of determining whether or not the Defendants or any of them should be held liable for punitive damages; and, if so, for what amount,' but said instructions did not tell them how or in what manner they were to consider acts of provocation in mitigation of punitive damages. Accordingly, although the court undertook to instruct on a vital issue raised by the pleadings, it did not properly instruct on the applicable principle, and therefore committed error.
Instructions Nos. 48 to 52, inclusive, as modified.
The trial court's instructions were as follows:
Did the Trial Court Commit Error in Instructing That the Collective Bargaining Agreement was Terminated and was not Breached by Fibreboard?
Yes. Defendants contend that the trial court committed prejudicial error when it instructed the jury that the collective bargaining agreement between Fibreboard and the Union terminated on July 31, and that Fibreboard did not breach said contract in any respect. Initially, the court permitted the introduction of evidence relative to whether there was a termination or breach of the contract as bearing on the issue of provocation. At the end of the second week of trial the court ruled that as a matter of law the contract terminated on July 31 pursuant to its own terms and conditions.
The basis of claimed error is that the trial court erroneously interpreted the contract, and that the court's instruction, predicated upon such interpretation, had the prejudicial effect of discrediting defendants' witnesses who testified that they were relying upon the existence of a valid and binding contract. Defendants urge that the interpretation of the contract is controlled by the manifest intent of the parties, as shown by their conduct prior to the controversy. Such conduct, say defendants, is evidenced by the communications between the parties with respect to the negotiations relative to the modifications requested by the Union. The thrust of defendants' argument, therefore, is that the parties themselves treated the contract as an existing contract as to all of its terms, excepting those which had been reopened for negotiation by virtue of the request for modification.
We would here point out that whether the contract was breached is not vital to the issue of violence because a Our inquiry is therefore directed to whether the trial court's interpretation of the contract was correct. Defendants do not contend that Fibreboard breached said contract other than by its action in terminating it. The core of the inquiry, then, is whether the contract terminated pursuant to its own terms and conditions. If the construction of the contract is based upon its terms without the aid of extrinsic evidence, its construction is one of law and we are not bound by the trial court's interpretation. (Estate of Platt, 21 Cal.2d 343, 352, 131 P.2d 825; Meyer v. State Board of Equalization, supra, 42 Cal.2d 376, 381, 267 P.2d 257; Estate of Black, 211 Cal.App.2d 75, 83, 27 Cal.Rptr. 418.) It is the duty of the appellate court, therefore, to make the final determination in accordance with applicable principles of law. (Meyer v. State Board of Equalization, supra, 42 Cal.2d p. 381, 267 P.2d pp. 260-261; Estate of Platt, supra, 21 Cal.2d p. 352, 131 P.2d p. 830.) It is also the rule that where no extrinsic evidence has been introduced, the interpretation placed upon the contract by the trial court will be accepted by the reviewing court if such interpretation is reasonable, or if the interpretation of the trial court is one of two or more reasonable constructions of the instrument. (Prickett v. Royal Ins. Co., Ltd., 56 Cal.2d 234, 237, 14 Cal.Rptr. 675, 363 P.2d 907, 86 A.L.R.2d 711; Lundin v. Hallmark Productions, Inc., 161 Cal.App.2d 698, 701, 327 P.2d 166.) In the case at bench no contention is made by defendants that the contract in question is ambiguous so as to require the aid of extrinsic evidence; nor was any such evidence received. The evidence received relative to the communications between the parties concerning renegotiation of certain suggested modifications was not in the nature of extrinsic evidence received to aid in the contract's interpretation, but evidence of what the parties did relative to the modification or termination of the contract. The rule asserted by defendants that the construction given the contract by the acts and conduct of the parties with knowledge of its terms, before any controversy has arisen as to its meaning, is entitled to great weight and will, when reasonable, be adopted and enforced by the court, is not applicable here. This rule of interpretation comes into play when extrinsic evidence is resorted to for the purpose of explaining the intention of the parties. (See Woodbine v. Van Horn, 29 Cal.2d 95, 104, 173 P.2d 17.)
Adverting to the subject contract, we are satisfied that the pertinent clause under consideration is not subject to more than one reasonable construction. We believe, moreover, that the construction placed upon the instrument by the trial court is not a reasonable one. The first paragraph of the pertinent clause provides that the contract continues in full force and effect until July 31, 1959, and that it shall be considered renewed from year to year thereafter unless either party should give written notice to the other of its desire to change, modify or cancel the same at least 60 days prior to expiration. In the second paragraph thereof, it is provided that within 15 days 'after notice of peopening is given, the opening party shall submit a complete and full list of all proposed modifications' and that '[a]ll other sections shall remain in full
Did the Trial Court Commit Errors of Procedure Which Denied Defendants a Fair Trial?
No. Defendants contend that the trial court abused its discretion when it denied their motion, made during the course of the trial, to amend their answer by adding a sixth affirmative defense. This proposed defense asserted that as a result of the alleged fraudulent misrepresentations on the part of Fibreboard, relative to the negotiations with respect to the collective bargaining agreement, Fibreboard did not come into court with 'clean hands' and therefore was not entitled to the relief requested in its complaint. The record discloses that the trial court had, during the trial, allowed evidence concerning the proposed modifications to the collective bargaining agreement and the attempts to negotiate the same as relevant to the second affirmative defense asserting 'unclean hands' and the third affirmative defense alleging 'provocation.' Later, in the course of the trial, the court below concluded that under the pleadings the defenses of 'unclean hands' and 'provocation' were restricted to Fibreboard's alleged breach of contract. When the trial court ruled that Fibreboard did not breach the contract as a matter of law, defendants thereupon sought to amend their answer by adding said sixth defense, and, at the same time, proposed to add a seventh affirmative defense which alleged the said fraudulent misrepresentations as a basis for 'provocation.' The trial court permitted the seventh defense, but denied the amendment as to the sixth defense.
The general rule is that motions to amend an answer during the course of a trial are addressed to the sound discretion of the court and its ruling will not be disturbed on appeal in the absence of a clear abuse of discretion. (Moss Estate Co. v. Adler, 41 Cal.2d 581, 585-586, 261 P.2d 732; Peterson v. Peterson, 74 Cal.App.2d 312, 323, 168 P.2d 474; Code Civ.Proc., § 473.) In the present case the defense of provocation based on fraudulent misrepresentations was permitted and the evidence adduced thereunder was before the jury for its consideration under that issue. As we have hereinabove pointed out, the factual question as to whether there was a breach or termination of the contract should
The defense of unclean hands must be raised in the trial court to be available. Accordingly, it must be pleaded or called to the attention of the trial court in order that it may pass on the defense and also to permit the person against whom it is sought to be applied the opportunity to present such evidence as might bear on that issue. (Stone v. Lobsien, 112 Cal.App.2d 750, 758, 247 P.2d 357; Watson v. Poore, 18 Cal.2d 302, 311-312, 115 P.2d 478; Scannell v. Murphy, 82 Cal.App.2d 844, 849, 187 P.2d 790; Sears, Roebuck & Co. v. Blade, 139 Cal.App.2d 580, 594, 294 P.2d 140; Moriarty v. Carlson, 184 Cal.App.2d 51, 57-58, 7 Cal.Rptr. 282; and see Katz v. Karlsson, 84 Cal.App.2d 469, 474-475, 191 P.2d 541, where it was held, in a case involving flagrantly unconscionable conduct, that a court may sua sponte apply the clean hands doctrine on grounds of public policy and as a means of protecting the court's integrity.) Moreover, the application of the doctrine raises primarily a question of fact. (Boericke v. Weise, 68 Cal.App.2d 407, 418, 156 P.2d 781.)
Traditionally, the doctrine of unclean hands is invoked when one seeking relief in equity has violated conscience, good faith or other equitable principles in his prior conduct. (General Elec. Co. v. Superior Court, 45 Cal.2d 897, 899-900, 291 P.2d 945; DeGarmo v. Goldman, 19 Cal.2d 755, 765, 123 P.2d 1.) Accordingly, one who violates his contract cannot have recourse to equity to support that violation. (DeGarmo v. Goldman, supra, 19 Cal.2d p. 764, 123 P.2d p. 6; Gavina v. Smith, 25 Cal.2d 501, 506, 154 P.2d 681.) In the case at bench Fibreboard sought both injunctive relief and damages against defendants. Thus Fibreboard sought both equitable and legal relief. It cannot be questioned that the defense of unclean hands may be urged against a party seeking the aid of equity by way of an injunction. In the instant case, however, injunctive relief was denied Fibreboard. Defendants cannot be heard to complain, therefore, that they were prevented from urging the doctrine of unclean hands insofar as the equitable relief sought by Fibreboard is concerned. Defendants urge, however, that the defense was likewise available against Fibreboard's legal action for damages. The question as to whether the equitable defense of unclean hands applies as a defense to a legal action appears to be of first impression. There is no California authority expressly holding that the equitable defense of unclean hands is applicable to a demand for money damages. That such a defense is available appears to be the holding of A. I. Gage Plumbing Supply Co. v. Local 300 of Internat. Hod Carriers, 202 Cal.App.2d 197, 206, 20 Cal.Rptr. 860, 92 A.L.R.2d 1223. There a plumbing contractor brought an action against a laborers union and others for injunctive relief to prevent breach of a collective bargaining agreement, and, by way of a supplemental complaint, sought damages resulting from the alleged breach of contract. Damages were awarded the plaintiff. On appeal the defendants attacked the award of damages, one of the grounds being that the plaintiff was guilty of inducing the breach of contract and therefore had "unclean hands' which should deny it the right to seek damages.' (P. 206 of 202 Cal.App.2d, p. 865, of 20 Cal.Rptr., 92 A.L.R.2d 1223.) The opinion does not disclose whether the defense was urged in the court below, nor does it indicate whether any contention was made before the reviewing court that the defense was inapplicable. The appellate Morrison v. Willhoit,
We are satisfied that the equitable defense of unclean hands is available in this state as a defense to a legal action. We are persuaded to this conclusion, moreover, because in California, a defendant may set up as many defenses as he may have, regardless of the question as to whether they are of a legal or equitable nature, because the distinction which exists under the common law between actions at law and suits in equity, and the forms thereof, have been abolished. (See Carpentier v. City of Oakland, 30 Cal. 439, 442-443.) As stated in Terry Trading Corp. v. Barsky, 210 Cal. 428, 437, 292 P. 474, 478, 'It is well settled that under the system of Code pleading equitable defenses and equitable counterclaims may be set up in actions at law, as well as legal defenses and counterclaims in suits in equity.'
It is equally well settled in this state, however, that it is not every wrongful act nor even every fraud which prevents a suitor in equity from obtaining relief. The misconduct which brings the clean hands doctrine into operation must relate directly to the transaction concerning which the complaint is made, i. e., it must pertain to the very subject matter involved and affect the equitable relations between the litigants. Accordingly, relief is not denied because the plaintiff may have acted improperly in the past or because such prior misconduct may indirectly affect the problem before the court. (Bradley Co. v. Bradley, 165 Cal. 237, 242, 131 P. 750; Germo Mfg. Co. v. McClellan, 107 Cal.App. 532, 541-543, 290 P. 534; Carman v. Athearn, 77 Cal.App.2d 585, 598, 175 P.2d 926; Treager v. Friedman, 79 Cal.App.2d 151, 173, 179 P.2d 387; Sheppard v. Wilcox, 210 Cal.App.2d 53, 61-62, 26 Cal.Rptr. 412.) As was said in Moriarty v. Carlson, supra, 184 Cal.App.2d 51, 7 Cal.Rptr. 282: "The misconduct must infect the cause of action before the court. * * * A party may have relief in connection with a transaction itself untainted although his original title may have been tainted by improper conduct. * * *" (P. 57 of 184 Cal.App.2d, p. 285 of 7 Cal.Rptr.) And in Boericke v. Weise, supra, 68 Cal.App.2d 407, 419, 156 P.2d 781, 788, the court said: 'Of course if a party comes into a court of equity with unclean hands relating to the transaction before the court, he will be denied relief. But in determining that issue the trial court can properly consider only whether the moving party has clean or unclean hands in relation to the matters properly before the court. The trial of the issue relating to clean hands cannot be distorted into a proceeding to try the general morals of the parties.' Applying these principles to the case at hand, we find that the assertion of unclean hands is not directed to the 'transaction' before the court in the instant case. That transaction involves whether defendants were guilty of tortious conduct. It would amount to a straining of the doctrine to hold that defendants could escape liability for tort because Fibreboard breached its contract or because it was guilty of fraudulent misrepresentations. The wrong done to Fibreboard, which is the basis of its cause of action for damages, is independent of the transaction arising from the alleged breach of contract or misrepresentations. To hold otherwise Error is also claimed on the part of the trial court in that if failed to inform counsel prior to argument of the instructions it proposed to give as provided in Code of Civil Procedure section 607a. This requirement is only applicable when counsel request that they be so advised. In the absence of such a request the trial court is not obliged to advise counsel of the instructions to be given. The record discloses that neither counsel made such a request in the instant case. Defendants can hardly be heard to complain that they were prejudiced because of the failure to inform as to the instructions to be given on the basis that the trial court 'flipped through the proposed instructions,' particularly when counsel for defendants, contrary to the provisions of section 607a, delivered to the court and served upon counsel for Fibreboard their proposed instructions after both sides had rested their case. It appears from the record, moreover, that the instructions were discussed between court and counsel prior to argument and that the court gave its reactions to the proposed instructions. Under the circumstances, we perceive no error.
This tardy presentation was apparently with the trial court's acquiescence and without objection on the part of Fibreboard.
Defendants' final contention is that the verdict forms were confusing and biased against them. The trial court submitted two forms of verdict to the jury. One form was to be used in the event the jury should find for Fibreboard; the other if they should find for defendants. The trial court instructed the jury that if they found for plaintiff they were to insert the amount of compensatory damages and were to write in the names of defendants against whom such damages were assessed. On the same form and below the appropriate language for awarding compensatory damages was typed appropriate language for awarding punitive damages with the names of each of the defendants typed in and a blank line with a dollar sign after each name. While the jury was deliberating defendants interposed objections to the forms of verdict. Shortly thereafter, the jury returned to the courtroom for further instructions. At that time the court instructed the jurors that if they had 'any problems at all with the forms of verdict' they should advise the bailiff and that then the court would go over the forms with them. At that time counsel for defendants requested that the jury be instructed: 'That the fact that the verdict forms have dollar signs and an amount does not necessarily mean they must fill in that amount. If the finding is for 'Zero,' they may do that, likewise.' To this request the court stated: 'That is correct. All right. Now, are there any other questions?' There was no response from any of the jurors, whereupon the jury resumed its deliberations.
Subsequently, the jury returned to the courtroom and announced that it had reached a verdict. The verdict as then read by the clerk declared that the jury found in favor of plaintiff and assessed compensatory damages in the sum of $285,000 against 'Defendants: East Bay Union of Machinists, Local 1304, United Steelworkers of America, AFL-CIO' and assessed exemplary damages 'against the Defendants as follows: East Bay Union of Machinists, Local 1304, $4,000.00; United Steelworkers of America, AFL-CIO' $20,000.00; Lloyd Ferber, $0; William F. Stumpf, $0; Dave Arca, $0.' The trial court then queried the foreman of the jury as to the manner in which the designated defendant was listed in the portion providing for compensatory damages and asked whether it was one defendant or whether
The record discloses that the jury then left the courtroom at 11:35 p. m. and returned to the courtroom the next day at 11:10 a. m., at which time it announced that it had reached a verdict. The verdict, as read by the clerk, declared that the jury found in favor of plaintiff and assessed compensatory damages against all five defendants in the sum of $285,000 (each defendant was listed separately), and assessed punitive damages against defendants as follows: 'East Bay Union of Machinists, Local 1304, $4,000.00; United Steelworkers of America, $20,000.00; Lloyd Ferber, $0; William F. Stumpf, $0; Dave Arca, $0.' The jurors were then separately polled as to each defendant individually as to whether it was their verdict with respect to the compensatory damages. In each instance the ten jurors declared it was their verdict and the two that it was not. (The ten assenting and the two dissenting were the same in each instance.) The jurors were then polled as to the verdict on exemplary damages with respect to the Local and the International in the same manner and their assents and dissents in each instance were the same as on the polling with respect to compensatory damages.
Counsel for defendants announced that he did not wish the jury polled as to the verdicts on exemplary damages with respect to the three individual defendants.
Defendants do not point out how they were prejudiced by the manner in which the verdicts were returned except to state that the jury was apparently confused and that the conclusion is warranted that the jury felt that the court was criticizing them for not having listed all five defendants on the form finding for plaintiff and that 'they returned their second verdict to so oblige.' We find no basis for this assertion, nor do we perceive any prejudicial effect in the proceedings relative to the reception of the verdict. In the instant case the trial court followed the proper procedure when the jury first returned with a verdict which was clearly insufficient. 'The proper procedure where an informal or insufficient verdict has been returned is for the trial court to require the jury to return for further deliberation.' (Brown v. Regan, 10 Cal.2d 519, 523, 75 P.2d 1063, 1065; Bisnett v. Hollis, 207 Cal.App.2d 142, 150, 24 Cal.Rptr. 231; Mish v. Brockus, 97 Cal.App.2d 770, 776, 218 P.2d 849; Code Civ.Proc. § 619.) The trial court retains control over the proceedings with power to procure correction of informal or insufficient verdicts until the verdict is recorded and the jury is finally discharged. (Sparks v. Berntsen, 19 Cal.2d Brown v. Regan,
Crowe v. Sacks, Crowe v. Sacks, Crowe v. Sacks,Did the Error Committed by the Trial Court on the Issue of Liability Result in a Miscarriage of Justice?
No. The only error committed by the trial court in the instant case which touched the issue of liability was its exclusion from evidence of Exhibit 'Q' hereinbefore discussed. Having concluded that Exhibit 'Q' should have been admitted we must now determine whether its exclusion constituted prejudicial error. This determination presents the question whether such error requires a reversal in view of the provisions of article VI, section 4 1/2, of the California Constitution. The test generally applicable is stated in People v. Watson, 46 Cal.2d 818, 836, 299 P.2d 243, 254, as follows: 'That a 'miscarriage of justice' should be declared only when the court, 'after an examination of the entire cause, including the evidence,' is of the 'opinion' that it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.' Applying this test to the record before us, we are of the opinion that it is not reasonably probable that a result more favorable to defendants would have been reached in the absence of the error in excluding Exhibit 'Q.' An examination of the entire cause and the evidence adduced impels us to the conclusion that there was an abundance of evidence establishing tortious conduct on the part of defendants which caused the production workers to remain away from their work. This evidence consisted in the main of third-party objective evidence which established in detail the nature and extent of defendants' activities on the picket line. It does not appear reasonably probable to us that the admission in evidence of the statements of Fibreboard's attorney in the unemployment compensation proceedings, when weighed against the abundant evidence presented through witnesses not parties or privy to the litigation, would have resulted in a different verdict.
This section, in pertinent part, provides: 'No judgment shall be set aside, * * * in any case, on the ground * * * of the improper admission or rejection of evidence, * * * unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.'
Should the Cause be Remanded for Retrial on the Question of Damages?
Yes. From what has already been said with respect to the computation of compensatory damages and the sufficiency of the evidence with respect thereto, the record does not afford a substantial basis for a fairly accurate estimate of the loss suffered by Fibreboard by reason of defendants' tortious conduct. Accordingly, the judgment must be reversed. However, in view of the conclusion reached by us that the verdict was proper in all respects except as to damages, there is no necessity for a retrial on the issue of liability. An appellate court has power to remand cases for retrial on a single issue such as damages. Little v. Superior Court,
Brewer v. Second Baptist Church, Mondine v. Sarlin,The award of exemplary damages must likewise be reopened for redetermination along with the issue of compensatory damages, not only because the trial court erred in its instructions concerning punitive damages in the respects hereinbefore indicated, but also because exemplary damages cannot be imposed unless the plaintiff has suffered actual damages, i. e., until they are assessed. (Brewer v. Second Baptist Church, supra, 32 Cal.2d pp. 801-803, 197 P.2d pp. 720-721; Foster v. Keating, 120 Cal.App.2d 435, 455, 261 P.2d 529.)
In order to avoid what defendants claim were confusing verdicts with respect to the form thereof in regard to compensatory and punitive damages, we would suggest that upon a retrial the verdict forms with respect to compensatory and punitive damages should follow the same format. As to the form to be used in the event the jury should find for plaintiff and with respect to compensatory damages, the jury should be instructed to write in the spaces provided the amount of damages awarded plaintiff and then should write in the name or names of the one or more defendants against whom it finds. With respect to punitive damages, the same form should contain a statement that punitive damages are assessed, and, in the spaces provided, the jury should be instructed to write in the name or names of the defendant or defendants against whom such damages are awarded and, in connection with each name, the amount of damages awarded against the person bearing such name. As to the form to be used in the event the jury should find for defendants, or any of them, the jury should be instructed to write in the space provided the name or names of the one or more defendants in whose favor it will have decided. Before instructing the jury as to the forms of verdict the jury should be reminded by an appropriate instruction as to the name of plaintiff and the names of defendants in the case.
The portion of the judgment appealed from is reversed, and the cause is remanded for retrial on the issue of damages alone in accordance with the views herein expressed. Each party will bear his own costs on this appeal.
BRAY, P.J., and SULLIVAN, J., concur.
'II
'By reason of said conduct of the defendants and their pickets, plaintiff was prevented from operating its plant and producing its usual commodities from August 4, 1959 to September 5, 1959.
'III
'By reason of the foregoing, plaintiff lost business and profits and plaintiff incurred continuing costs in the maintenance of its said plant and of its said business during the period of August 4, 1959 to September 5, 1959, all to plaintiff's damage in the sum of Six Hundred Seventy-nine Thousand Dollars ($679,000.00).'
Unemp.Ins.Code § 1952 provides in pertinent part as follows: 'The Appeals Board and its representatives and referees are not bound by common law or statutory rules of evidence or by technical or formal rules of procedure but may conduct the hearings and appeals in such manner as to ascertain the substantial rights of the parties.'
"We submit in this case the members of this union, in compliance with the policy of the Labor Council and with their own individual convictions, had failed to report for work because of union principles and not because of any prevention by violence."
"We submit that was the real purpose there with respect to these men, that evidence was uncontradicted by them. They did not work because of their union principles and are therefore ineligible under the rules * * *."
'If you find that the behavior of the Defendants, or any of them, in the picketing activity was reasonable in the light of the circumstances, then you must find that the Defendants or any of them are not liable for the damages claimed by the Plaintiff.'
Instruction No. 36: 'The law recognizes that the right to strike and picket includes the possibility of some disorder in any extensive or long drawn-out strike. Engaged in the activities are human beings whose feelings are stirred to the depths.
'Rising tempers can call forth hot words which in turn can lead to blows. Such unfortunate developments are hard to prevent, even when cool heads direct the picketing.
'By this Instruction I do not mean that the law excuses intimidation on the picket line. This would exceed the bounds of proper conduct. However, isolated incidents of vigorous behaving in picketing do not make the entire picketing activity unlawful, nor do such isolated incidents make a union liable for damages to an employer's business caused by picketing.'
Instruction No. 37: 'Picketing is more than free speech, since the very presence of the picket line can induce action of one kind or another, quite irrespective of the nature of the ideas which are being disseminated. Nevertheless, such picketing is protected by our Constitution.
'The right of free speech in picketing cannot be denied by drawing from a trivial rough incident or a moment of animal exuberance the conclusion that otherwise peaceful picketing has the taint of force.'
Instruction No. 38: 'The occurrence of unlawful behavior, if any, in the vicinity of Plaintiff's Emeryville plant at the time of the picketing activity, is not by itself enough to connect the wrongdoing to the Defendants.
'The Plaintiff is required to establish by a preponderance of the evidence that the Defendants, and each of them, were responsible for such behavior, if any.'
Instruction No. 39: 'The Defendant Unions had a picket line before the entrance to Plaintiff's Emeryville plant from July 31 to September 4, 1959. This picket line interfered with the Plaintiff's business and caused loss of sales.
'I instruct you that the law in California is that such picketing, if for a lawful object and by lawful means, does not render the picketing unions and its members liable for the loss of sales that result from the picket line.
'Plaintiff claims it suffered damages different from or in addition to the loss of sales from a lawful picket line because of acts of intimidation and coercion on the picket line for which Defendant Lloyd Ferber was responsible.
'Plaintiff must prove by a preponderance of the evidence that the loss of sales it suffered was proximately caused by acts of intimidation and coersion on the picket line, if such acts occurred.
'If you find that acts of coersion and intimidation on the picket line did not occur, or were not the acts of the Defendant Lloyd Ferber, then there is no basis for charging this Defendant with the damages claimed by the Plaintiff, and you will find for this Defendant.
'If you find that acts of coersion and intimidation did occur, and were acts attributable to Defendant Lloyd Ferber, but if you find that such acts were not the proximate cause of the loss of sales (that is, the damages occurred but for other reasons than this Defendant's coersion and intimidation, if any), then you will find for this Defendant.
'If you find that the loss of sales were proximately caused by acts of coersion and intimidation attributed to Defendant Lloyd Ferber, and such loss of sales damaged the Plaintiff, then, and only then, you will find for the Plaintiff as to this Defendant.
'It is only if you reach this conclusion that you will consider the amount of damages to award.'
(Note: Instructions Nos. 40-43 are identical with Instruction No. 39, except that each applies to one defendant.)
Instruction No. 45: 'The mere presence of individuals in the vicinity of the Plaintiff's Emeryville plant at the time of the picketing does not make these individuals agents of the Defendants Unions. Strikes, lockouts, and picketing activity, by their nature, become public events and attract crowds of people who may be affected by the outcome of the activities. The crowds may show their sympathies for one side or the other, but their actions are not attributable to the Defendants unless these individuals are proved to be agents.'
'Members of a Union have a right to peacefully patrol or stand near the approach to a business establishment in order to persuade workmen employed there to withhold their labor, to attempt to persuade the public of the justness of their cause, or to accomplish proper economic goals.
'However, neither the officers, members nor other representatives of a Union have the right to conduct mass picketing, to intimidate or coerce others, to cause violence, or to make threats of violence as a part of picketing or otherwise; and such actions are a proper basis upon which to award damages for loss or injury incurred as a proximate result thereof.
'The use of vile and abusive language and the threats of violence, if any, amount to physical intimidation which may not be justified under any principles governing the rights of persons engaged in labor disputes, and such actions, if any, may give rise to a cause of action for damages.'
The first paragraph of Instruction No. 37 is taken from the concurring opinion of Justice Douglas in Bakery and Pastry Drivers and Helpers Local 802 of International Brotherhood of Teamsters v. Wohl, 315 U.S. 769, 776, 62 S.Ct. 816, 86 L.Ed. 1178, with a substitution of language in the last line of the quotation, i. e., 'Nevertheless, such picketing is protected by our Constitution,' for 'Hence those aspects of picketing make it the subject of restrictive regulation.' The second paragraph presumes to derive its support from dictum in the opinion of Justice Frankfurter in Milk Wagon Drivers Union of Chicago, Local 753 v. Meadowmoor Co., 312 U.S. 287, 293, 61 S.Ct., 552, 555, 85 L.Ed. 836, wherein he was expressing the reason for the court's decision. We do not see in Justice Frankfurter's language what defendants have distilled from it. What he said, in context with other language preceding it, is as follows: 'But utterance in a context of violence can lose its significance as an appeal to reason and become part of an instrument of force. Such utterance was not meant to be sheltered by the Constitution.'
'The Defendants have pleaded provocation as a defense to this action. You are instructed that this defense applies only to the claim for punitive damages and is not to be considered by you in determining the compensatory damages to be awarded to Plaintiff, if any.
'In connection with the defense of provocation, certain evidence has been received by the Court which relates to the feelings or state of mind of the members of the Defendant Unions.
'This evidence is to be considered by you for the limited purpose of determining whether or not the Defendants or any of them should be held liable for punitive damages; and, if so, for what amount.'
'This Agreement shall continue in full force and effect to and including July 31, 1959, and shall be considered renewed from year to year thereafter between the respective parties unless either party hereto shall give written notice to the other of its desire to change, modify, or cancel the same at least sixty (60) days prior to expiration.
'Within fifteen (15) days after notice of reopening is given, the opening party shall submit a complete and full list of all proposed modifications. All other sections shall remain in full force and effect. Negotiations shall commence no later than forty-five (45) days prior to the anniversary date of the Agreement unless otherwise mutually changed.'