Superior Court of the City and County of San Francisco (California)

Procedural Posture: Corporate Lawyer San Diego

Appellant president of an insurance company sought review of an order by the Superior Court of the City and County of San Francisco (California), which entered judgment in favor of respondent insurance agent and which denied the president a new trial in his action to recover money alleged to have been paid to the agent. The agent and its former partner were a defunct firm that had entered into an agency agreement with the insurance company.

Overview

The company advanced sums to the agent after it was discovered that the agent's former partner owed money to the company for premiums he had collected and had not remitted. At the time the money was advanced, the agent was told that, if the accounts were squared up, the agency relationship would continue in spite of the former partner's wrongdoing. Upon withdrawal of the agency two years later, the president sought to recover the sums advanced. The agent contended that he was entitled to the money because termination of the agency was a breach of the agency agreement, which was orally modified at the time the sums were advanced. On appeal, the court reversed the judgment of the trial court. The court found reversible error in a jury instruction on damages, which failed to properly instruct the jury on assessing damages. The instruction directed the jury to measure and calculate damages in a way that the court found usurped the jury's function. The court also found that the agent failed to prove he was damaged by the termination of the agency relationship and that the payment of the money by the company was consideration to the agent's firm for the continuation of the agency.

Outcome

The court reversed the order and judgment of the trial court that had found in favor of the agent in an action brought by the president of the insurance company who sought to recover money he paid to the agent.

Procedural Posture

The State filed a breach of contract action against defendants, principal and sureties, upon a bond. The answer set up a counter-claim, and judgment was entered against the State by the Sixth District Court, Sacramento County (California) for the amount of the counter-claim. The State appealed the judgment and an order denying a new trial.

Overview

Defendants executed a bond for the faithful performance of a contract to build a State prison. On appeal, the court reversed the trial court's judgment and ordered a new trial. The court held that the State could not be sued--directly nor indirectly--by setting up a counterclaim or setoff. Neither could a judgment be recovered against the State except when permitted by express statute. The court en banc modified its judgment by striking that portion which ordered a new trial because the only error was that the trial court attempted to give judgment against the State.

Outcome

The court initially reversed the judgment and order of the trial court and remanded the cause for a new trial. The court en banc modified the court's initial opinion by striking therefrom that portion which ordered a new trial, and by inserting that the trial court was directed to enter judgment that the State had no cause of action against defendants.