Opinion
Hearing Granted by Supreme Court Feb. 20, 1928.
Appeal from Superior Court, Imperial County; M. W. Conkling, Judge.
Action by the Ocean Accident & Guarantee Corporation, Limited, of London, England, against Henrietta Johnson and another, doing business under the firm name and style of the Pioneer Transfer Company, to recover unpaid premiums for employer’s liability insurance. Judgment for plaintiff, and defendants appeal. Affirmed.
Collier, Justice pro tem., dissenting.
COUNSEL
A. L. Hubbell, of Esconido, for appellants.
George H. Moore and Hubert Starr, both of Los Angeles, and Dorsey Whitelaw, of El Centro, for respondent.
OPINION
CRAIG, Acting P. J.
The transaction out of which this action arose is one of employer’s liability insurance. The suit is for unpaid premium thereon. The counts are contained in the complaint. The first count alleges that the defendants became indebted to the plaintiff in the sum of $1,113.77 on account of premiums earned on a written policy of workmen’s compensation insurance covering a period of one year, of which only $591.89 had been paid, and $521.79 was due and unpaid. The second count alleges an account stated upon the same transaction by which the defendants agreed to pay the plaintiff $1,113.77, and had paid $591.89. From the bill of exceptions it appears that at the trial plaintiff introduced evidence to show that it issued a policy as alleged, that the work covered by it as stated in the contract was "truckmen, general trucking (not otherwise classified), classification No. 7208, premium rate $3.77. Pay roll to include all such employees as drivers, drivers’ helpers, chauffers, chauffeurs’ helpers, stablemen, blacksmiths, repairmen, and riggers, excluding only clerical office employees and storage warehouse employees." Also, that the place stipulated as that where the work was to be done was "Calexico, Imperial county, Cal." Section H of the policy is one over which the controversy principally arose. It reads, in part, as follows:
"The premium is based upon the entire remuneration earned during the policy period by all employees of the assured, and all employees of any contractor or subcontractor of the assured, engaged in the trade, business, or work described in said declarations. *** The assured shall keep complete and accurate record of the remuneration earned by employees classified according to the kind of work performed, and shall cause contractors and subcontractors to do likewise by inserting in all contract agreements entered into a provision requiring such records to be kept for examination by the assured and the corporation. Failure to keep such records on the part of the assured shall entitle the corporation to apply to the entire remuneration earned the premium rate applicable to the most hazardous work performed."
Evidence was introduced sufficiently establishing the account stated as alleged in the complaint, by which the defendants agreed to pay the plaintiff’s bill of $1,021.79, and that of this only $591.89 was paid. The prima facie case was also proved on the other count.
Both sides rely upon Frankfort Marine Accident & Plate Glass Ins. Co. v. California Artistic Metal & Wire Co., 28 Cal.App. 74, 151 P. 176, to sustain their respective contentions as to the law bearing upon the issues presented by the first count. The facts of the case are similar to those in the one before us. The policy there construed contained a provision similar to section H of the contract here presented, but counsel construe the language of the opinion differently.
It was sought by testimony of the secretary of the defendant company to segregate the pay roll, but the evidence offered was simply the "general recollection" of the witness, and this was founded upon no substantial data. The ruling of the trial court refusing admission of such testimony was sustained. The principles upon which the decision was based are, we think, applicable here. They are most clearly expressed in the opinion of the court in denying the application for rehearing. One reason which is indicated as sufficient to uphold the ruling of the superior court is:
"That the proposal to prove the fact by the ‘general recollection’ of an officer of the defendant, after the latter had said that there were available to him no data upon which an estimate could be made, was properly rejected by the court as involving proof incompetent for that purpose.
"We do not hold that a witness, in some instances, may not properly be permitted to give his ‘best recollection’ as to the existence or nonexistence of a particular fact relevant and material to some ultimate issue, in cases where the issue thus sought to be proved is not required to depend wholly for its establishment upon that character of proof and where there exists possible opportunity for the party against whom it is received to offer adversary proof upon the point to which it is addressed. In the case at bar, however, the ultimate question to be affected by the proposed proof, based entirely upon the ‘general recollection ’ of the witness, is the most vital in the case to the plaintiff. And, it is to be said, equally vital to the defendant; yet readily it can be perceived how impossible it would have been for the plaintiff to have met or attempted to overcome the force and the possible effect of testimony of so dubious an evidentiary nature and how easily thus its rights might be wholly destroyed. Through no fault of its own, the plaintiff was wholly without means of knowing, or the ability even to approximate (not even enjoying the doubtful advantage of general or the best recollection) how much of the total compensation paid to its employees by the defendant was received by the ‘outside employees,’ and, manifestly, had the defendant been allowed to make proof of that fact by a witness upon his mere ‘general recollection’ thereof, based upon no data of a substantial character, the plaintiff’s rights would have been placed at the mercy of testimony possessing little or no probative value and as to which an adversary showing was wholly impossible."
This quotation is most apt in its application to the facts of the instant case. While it is claimed here that the rejected testimony was the definite recollection of the witness as to employment of particular employees, it was based upon no "substantial data," and in fact upon no data of the character required by the contract of the parties. In the Frankfort Case the books included a record of all time spent by the employees whether within or without the shop. The issue was upon the segregation on that basis, and the books failed to supply the information. In the instant case it appears that the books are in identically the same condition. They show all of the time spent, but do not segregate it as to the character of work done or place of its performance. As to the lack, all data capable of being used for segregation purposes, the situations are the same. In the absence of such data stipulated by the parties as thus necessary, it is of no moment that here a witness stated that he knew the employees, nor would it meet the stipulations agreed upon by the parties themselves as to data required to show such segregation if he could tell what each did and where each worked. As in the opinion quoted, such testimony would have been determinative of the most vital issue in the case. The insurer would have been utterly at a loss to have secured or produced adversary proof. The insured had full opportunity to have kept and preserved competent evidence, and its failure to do so was not only neglect of its own interests, but a clear disregard and dereliction of a duty owed the insurer in a confidential relation of agency for the latter; and, finally, the injury which the appellants may sustain by being refused permission to use the evidence offered is the natural result of their own neglect, and to permit them now to foreclose the respondent from its day in court (which would be the practical result of allowing the issues in question to be established by the mere unsubstantiated recollection of the witness) would violate the maxim which forbids a party taking advantage of his own wrongful act.
Appellants further contend that there was testimony to the effect that $2,500 of the pay roll was paid to warehousemen, and that their work is not covered by the policy. The most that can be said to sustain this claim is that some conflict in the testimony appears to exist, but the only evidence to be found in the bill of exceptions indicating that any of the pay roll covered work of warehousemen is the statement of the witness Hill, based merely upon his general recollection, as to the competency of which evidence we have stated our views.
Finally, appellants make the contention that a part of the pay roll as reported by respondent’s auditor was for work in Mexicali, whereas the policy provided that it should cover work only in Calexico, Imperial county, Cal. The only place where the word "Mexicali" occurs is in a statement rendered by the company to defendants which was introduced in evidence as a part of the proof of the alleged account stated. The bill of exceptions does not contain the entire statement. It merely quotes the summary of which all that is germane to the question here under consideration is, "Total $31,547.36; Mexicali $1,093.88." With no more of the context than this from which to judge, it would be mere speculation to conclude that the word "Mexicali" as here used indicates that any work was performed outside of Calexico. On the other hand, the bill of exceptions contains the statement, which, of course, we must accept as true, that:
"On the trial evidence was introduced by plaintiff in support of all findings of fact made by the court."
One of the findings to which reference is made is that all of the allegations in paragraph 3 of the plaintiff’s first cause of action are true. These allegations contained one to the effect that the defendants became indebted to the plaintiff in this transaction in the sum of $1,113.77, which, according to the statement above mentioned, rendered by the plaintiff, includes the item, "Mexicali, $1,093.88"; hence the necessary inference that the work was done in Calexico. Upon the meager information contained in the bill of exceptions bearing upon this point we are not in a position to say that the trial court’s finding in this behalf is unsupported by the evidence.
In view of our decision concerning the issues presented in the first count, it is unnecessary to pass upon appellants’ contention concerning the court’s rulings to do with the alleged account stated as set forth in the second cause of action.
The judgment is affirmed.
THOMPSON, J. (concurring).
I concur in the affirmance of the judgment, but attach more importance to the stipulation of the parties than appears to me to be made manifest in the prepared opinion. Very substantial rights and liabilities of the parties were largely dependent upon the proper segregation and classification of the pay roll by the defendants during the period in which the premium was being earned. For the very reason that the only parties who could have knowledge sufficient to make the classification were the defendants, that duty was made to rest upon their shoulders, with this contractual proviso that "failure to keep such records" (that is, classified according to the kind of work performed) "on the part of the assured shall entitle the corporation to apply to the entire remuneration earned the premium rate applicable to the most hazardous work performed." Having made the assured its agent for the purpose of segregation and classification, it is readily discernible that liability for compensation might depend upon the acts of defendants in making the classification. It ill becomes the assured, after the premium has been earned and the liabilities determined, to attempt to avoid the controlling force of the contractual obligation, and this is especially true after a lapse of time when presumably it would be extremely difficult for the insurance carrier to controvert the "personal knowledge" of the bookkeeper. I am not suggesting that instances of specific and unquestioned errors of bookkeeping may not be corrected by proof as has been suggested in the authorities mentioned, but rather that a failure as extensive in its character as the one here involved to comply with the requirements of the written agreement should not be permitted to be provided in the manner here attempted, in contravention of the stipulation of the parties thereto.
COLLIER, Justice pro tem. (dissenting).
I dissent. I cannot agree with the main opinion for the following reasons:
In the first place, the testimony is undisputed that a set of books was kept by the defendants which showed the entire pay roll of all of the activities of the defendants, which included a contracting and other businesses not covered by the policy. Neither is it claimed that the books of account were incomplete in any particular. The whole difficulty was that the defendants did not keep a "record of the remuneration earned by the employees, classified according to the work performed. " The record of remuneration was kept, but it was not classified.
The witness B. Hill testified that he was employed as bookkeeper for the defendants from the date of the issuance of the policy until he entered the military service in September, 1918, which was after the termination of the insurance period. He further testified that defendants were in businesses not covered by the policy, to wit, contracting, excavating, buying and selling hay and fertilizer, renting of live stock, etc.; that he had checked over the pay roll; that approximately $2,500 of the pay roll covered work of warehousemen (who were not covered by the policy); that he arrived at the figures from a personal knowledge of the employees; that the pay roll was not segregated so as to show the class of work performed by the employees, but was together in one book; that it could be segregated by the recollection of himself and Mr. Isom (one of the defendants), and would take one or two days to segregate the several amounts earned by the various employees. The witness was then directed to take the next item in the segregation, whereupon the objection was sustained that the same was incompetent, irrelevant, and immaterial and not tending to prove or disprove any of the issues in the case; that it appeared, from the undisputed evidence, that an account or statement had been made by the defendants showing their entire pay roll, and showing the classification of their employees and the rate at which said employees were paid; and that under paragraph H of the policy the assured was required to keep an accurate and exact record of the pay roll of all employees and of the kind of work they were engaged in. Whereupon the following colloquy took place:
"Mr. Hubbell (Attorney for Defendants): Do I understand, your honor, that we cannot show any of the other items [meaning items not included in the work as a transfer and dray company] because we have not kept the books right?
"The Court: Absolutely. He must keep it and must cause all subcontractors to keep it."
Defendants then offered to prove, by competent testimony other than the books and records, that one-half of the money spent for the pay roll was for contract work in Mexico. This offer was refused by the court.
I have set these matters forth in detail for the reason that one or more of them will be material in the following discussion:
First. I disagree with the statement in the main opinion that the testimony of the witness Hill was based upon "no substantial data and in fact upon no data." The Standard Dictionary defines "data" as the plural of "datum," which it defines as:
"Something assumed, known, or conceded, as the basis of an argument, or a ground for a conclusion, or as material for an investigation or statement; a premise, a starting point, or a given fact."
Webster gives this definition:
"Something given or admitted; a fact or principle granted or presented; that upon which an inference or an argument is based; or from which an ideal system of any sort is constructed."
The books as kept by the defendant certainly contained "something *** known *** as the basis of an argument, or a ground for a conclusion." They certainly were sufficient "as material for an investigation," and were even more surely a "starting point" from which to proceed. With the pay roll, that is to say, "a list of those entitled to pay, together with the amount due them" (Standard Dictionary) before him, and a "personal knowledge of the employees," the witness Hill certainly had a "starting point" and "material for an investigation," as well as "a ground for a conclusion," to wit, that some of those employees whom he could segregate and designate by name labored as warehousemen, or in the contracting business, or in Mexico, etc., all of whom were specifically excluded from the policy.
I further take exception to the statement that Hill’s testimony was based upon his "general recollection"; for he testified without contradiction that he had a "personal knowledge of the employees," which is entirely different from a "general recollection."
This brings us to the case of Frankfort Marine Accident & Plate Glass Ins. Co. v. California Artistic Metal & Wire Co., 28 Cal.App. 74, 151 P. 176. It is true that the clause in the policy in the instant case is obviously similar to the one considered in the Frankfort Case so as to make the reasoning in the latter case applicable here. The difficulty arises in agreeing as to what the case decides. In the Frankfort Case the secretary of the defendant testified that the only way by which he could determine the amount that was expended for labor on the outside would be from an estimate, but that:
There "would be no data for such an estimate, except my general recollection of what it has been. *** As far as I know, there would not be any way of determining by examination of the books, or by questioning the bookkeeper, the exact amount that was expended for labor outside of the shop," etc.
In the instant case we have the witness Hill, who was the bookkeeper and who did testify, and testified from personal knowledge of the employees. Based on that personal knowledge, he testified that he could segregate the employees named on the pay roll into their proper classifications. When that was done the men could be summoned before the court to testify for the plaintiff, if there were any doubts as to the correctness of the segregation. Hence the question of "adversary proof," so fully discussed in the Frankfort Case, is disposed of; and it is not reasonable to presume that all of the men on the pay roll had died or vanished at the time the trial was had. Furthermore, the plaintiff would not be combating a mere "estimate" or "general recollection," but would be presented with a list of names which could be carefully checked against.
Again, in the Frankfort Case there were 50 men employed part of the time "inside" and part of the time "outside." Here it was proposed to prove that one-half of the pay roll was for work in Mexico, and $2,500 thereof was for wages paid to warehousemen. Any of these men would have no difficulty in answering a question as to whether or not he had ever worked in Mexico for the defendants, or whether he had ever worked for them in any other capacity than as warehouseman, etc.
I think the true rule is set forth in the main opinion in the Frankfort Case, as follows:
"In a sense, as before suggested, the defendant, by the provision requiring it to keep an accurate account of the pay roll to which the policies related was to that extent impressed with the character of agent of the plaintiff. It imposed upon the defendant the performance of a certain duty to the plaintiff involving the latter’s rights under the contracts. At any rate, the defendant, as shown, was the only party to the contract authorized to keep a record of its pay roll for the purposes of the contracts. Indeed, as is plainly manifest, it was the only one in a position to do so. The plaintiff was not authorized to perform that duty, and had it been it would have been impracticable for it to have done so, or, indeed, as was the case when ultimately it sought to inspect the defendant’s books, it might have been met with a refusal of the privilege of performing that duty. It was, therefore, up to the defendant to discover to the plaintiff the pay roll affected by the contracts. And if, as the defendant contends, the compensation paid to outside employees was intended to constitute the exclusive basis of the amount to be paid to the plaintiff as premiums, the burden was upon the defendant to show what proportion of the total amount paid as compensation to all its employees was paid to the inside employees [citing cases]. This proposition follows from the rule, which we think applies to this case, that where offsets to an account upon which a party sued exist in favor of the defendant, the burden is upon the latter at the trial to specifically point out and prove such offsets. Or, as has been elsewhere said, so it is correct to say here: ‘The plaintiff having established a prima facie case by introducing the account kept by the defendants, it was incumbent upon the defendants, if they desired to show that they had not kept the accounts as required by the contract, but had confused other matters therewith, to point out such matters specifically. They cannot be permitted to destroy the plaintiff’s claim by vaguely impeaching in general terms accounts which it was their duty to keep for the benefit of the plaintiff, and, if there are specific items which properly should be excluded, it was the duty of the defendants to point them out specifically. ’ Gilbane v. Fidelity & Casualty Co., 163 F. 673, 678, 90 C. C. A. 265." (Italics mine.)
In the instant case, "at the trial," the defendants desired to show "that they had not kept the books as required by the contract, but had confused other matters therewith," and "to point out such matters specifically." They tried and offered to "specifically point out in the proof such offsets," but were not allowed to do so. The evidence of the witness Hill, coming as it did from "personal knowledge," was competent to supplement the pay roll account. The pay roll account of the defendants was no more sacred than any other books of account, and the relation between the plaintiff and defendants in the instant case was no more of a fiduciary character than that of the partnership which existed in Schurtz v. Kerkow, 85 Cal. 277, 279, 24 P. 609, 610, where the court said:
"While the books were admissible evidence on the issue of profits they did not exclude other evidence. If the defendant or any other witness knew anything about those profits he should have been allowed to tell it. Of course, mere conclusions or opinions should be excluded." (Italics quoted.)
See, also, Shields v. Rancho Buena Ventura, 187 Cal. 569, 574, 203 P. 114, 117, where the court said:
"The books of account being properly admitted, it was not error to permit the plaintiff to read in evidence summaries of the accounts therein, for the purpose of avoiding delay. Code Civ. Proc. § 1855, subd. 5. Nor was error committed in admitting, in addition to these accounts, the testimony of the plaintiff concerning the transactions on the ranch during each of the years mentioned. If plaintiff was able to corroborate the accounts by testifying to facts from his own personal knowledge, certainly the admission of this testimony furnishes the defendant no ground of complaint." (Italics mine.)
The defendant Isom would also have been a competent witness as to those matters in his own knowledge, independent of the bookkeeper, Hill. See Globe Mfg. Co. v. Harvey, 185 Cal. 255, 261, 196 P, 261, 264, where it is said:
"An itemized summary of the expenditures of defendant under the contract was admitted in evidence under the issue of damages. Plaintiff assigns this as error, for the reason that the person who kept defendant’s books did not testify to their correctness. The statement, or summary, was admitted under subdivision 5 of section 1855 of the Code of Civil Procedure, because the original consisted of ‘numerous accounts or other documents, which cannot be examined in court without great loss of time.’ Defendant maintains a card system of bookkeeping and testified that he personally made up the statement in question by going over the cards and checking up the entries thereon with the original bills which he retained and which he knew had been paid. Therefore, the statement was, in fact, made from the original bills, of the payment of which defendant had personal knowledge, and defendant was competent to testify to the correctness of the items thereof upon his own knowledge, which he did. For this reason, testimony by the bookkeeper as to the correctness of the books of defendant was unnecessary and the statement was properly received in evidence." (Italics mine.)
Indeed, it has been held that in such cases evidence based on personal knowledge is not only admissible but "is of the highest character." Whitcomb v. Oller, 41 Okl. 331, 137 P. 709. Or, as another court has said:
"But, if we concede they [the books of account] were evidence, they constituted no higher evidence of the sale and delivery of the goods, than the positive proof of the witness, who testifies to their sale and delivery." Godbold v. Blair, 27 Ala. 595.
To the same effect see Hetzfeld v. Walsh, 55 Tex.Civ.App. 573, 120 S.W. 525, 526; Keene v. Meade, 3 Pet. (28 U. S.) 1, 7 L.Ed. 581; Crosland Co. v. Pearson, 86 S.C. 313, 68 S.E. 625, 626.
With the Appellate Court of Illinois (New Amsterdam Casualty Co. v. Saloman, 165 Ill.App. 264, 273), I "express the hope that if there be another trial of the case no obstructions will be placed in the way of an ascertainment of the truth concerning the number of persons and their compensation employed by the defendant during any policy period and purporting to be covered by a policy. The object of a trial on the facts is to ascertain the facts. That, and not any effort to conceal them, ought to be the end to which all efforts of counsel should tend. No competent evidence throwing light on the actual number and compensation of persons employed and covered by the policies should be excluded in this case. We deem it one in which the rulings of the trial court should be liberal in this regard."
Furthermore, the insurance policy was a "specialty." "A specialty is any sealed contract or obligation; a special contract as distinguished from an oral or verbal contract, a parol or unsealed contract, and a contract or obligation of record." Anderson’s Law Dictionary. The distinction between sealed and unsealed instruments has been abolished in this state. Section 1629, Civ. Code. "An account stated" cannot "become a substitute for an action *** upon a specialty, such as a promissory note or a bond for money. In such cases no subsequent statement of the amount due thereon, although agreed to by the payer, could supersede the special promise so as to form the basis of an action *** upon an account stated to recover the original debt. *** The action in such a case must be upon the original promise in writing and not upon account stated. " Bennett v. Potter, 180 Cal. 736, 745, 183 P. 156, 160. In the instant case the court has found upon both the "original promise in writing" and upon the account stated. Hence the judgment, if based on the findings as to an account stated, is erroneous. There is and can be no evidence to support it.
Again, if plaintiff relies upon an account stated, the court committed error in admitting any testimony regarding the items of the original account, except in case of fraud, mistake, omission, etc. "The action upon an account stated is not upon the original dealings and transactions of the parties. Inquiry may not be had into those matters at all. It is upon the new contract by and under which the parties have adjusted their differences and reached an agreement. *** As has been said, the original transactions between the parties are not the subject of inquiry and may not be made the subject of inquiry except upon such equitable considerations as fraud, duress, or mistake. And if it be sought to avoid the legal effect of the account stated upon any of these grounds, they must be pleaded." Gardner v. Watson, 170 Cal. 570, 574, 150 P. 994, 995. See, also, Klein-Simpson Fruit Co. v. Hunt, Hatch & Co., 65 Cal.App. 625, 633, 225 P. 14, and McLellan Co. v. East San Mateo Land Co., 166 Cal. 736, 740, 137 P. 1145. And the court refused to allow the defendants to prove mistakes and/or to amend their answer.
Should it be held that an account stated was before the court, then we are faced with the dilemma that the defendants asked leave to amend their answer to plaintiff’s second cause of action (account stated) to allege as follows:
"As a further and separate answer to the complaint defendants allege that at the time of the account stated as alleged in paragraph 2 of plaintiff’s second cause of action defendants acknowledged said account through a mistake of fact, believing that they were indebted to plaintiff and later discovered that they were not."
To which the court replied:
"I will allow the amendment to conform to the proof, whatever the proof shows, but I think you will want to make your answer a little more elaborate than that."
At the conclusion of defendants’ case they offered to prove:
"That defendants’ acknowledgement of the account stated by plaintiff was made through mistake of fact."
This offer was refused by the court, and such refusal was assigned as error by defendants. If the account stated was before the court, this last ruling was erroneous. An account stated "does not *** operate as an estoppel, and it may be impeached for fraud or mistake. Judge Story says: ‘If there has been any mistake, or omission, or accident, or fraud, or undue advantage, by which the account *** is in truth vitiated, and the balance is incorrectly fixed, a court of equity will not suffer it to be conclusive upon the parties, but will allow it to be opened and re-examined. ’ 1 Story, Eq. Juris. § 523." Green v. Thornton, 96 Cal. 67, 72, 30 P. 965, 966; Union Lumber Co. v. J. W. Schouten & Co., 25 Cal.App. 80, 83, 142 P. 910; White v. Thompson. 40 Cal.App. 447, 450, 180 P. 953. "Where an account has been adjusted by the parties, if any mistake is subsequently discovered, the whole account need not be opened and readjusted but the mistake may be corrected and the rights of the parties readjusted as to such mistake. *** In such actions, the court may allow evidence of omissions and errors therein and find in accordance with the developed facts." White v. Thompson, supra; Adams v. Gerig, 25 Cal.App. 638, 145 P. 106. (Italics mine.) Furthermore, an account stated "may be impeached for fraud or mistake either at law or in equity whenever it is brought forward as a defense or cause of action. " White v. Thompson, supra, page 449 (180 P. 954).
Neither can I agree with Justice THOMPSON in his conclusions. Let us suppose that the defendants had segregated the pay roll as required. Further, let us suppose that the witness Hill, the bookkeeper, made the segregation at the time it should have been done. Would he not have made it then, as at the time of the trial, from his "personal knowledge" of the men and the work they did? In what manner would the plaintiff have been worse off than if the segregation was made at the time of trial? In either event, plaintiff would have either relied on defendants’ records as kept by Hill, or made a check. And what prevented them from making the same check at the time of trial? And what would have prevented the court from finding that certain men did or did not work as warehousemen, or in Mexico, or elsewhere? The burden was on defendants to establish by competent proof the errors claimed by them, and the court could have compelled them to bring in the various workmen that they might be examined and cross-examined.
Again, I do not read the contractual proviso as does Justice THOMPSON. The penalty for not classifying the pay roll is not that the defendants shall be charged a premium based on their entire pay roll, whether covered by the policy or not, but that the plaintiff might apply "the premium rate applicable to the most hazardous work performed" to the "entire premium earned. " But the plaintiff did not and could not earn any premium on the pay roll of defendants’ employees who worked anywhere outside of Calexico, or as warehouse employees, or as clerical office employees. The very issue in this case was to determine the "premium earned. " This the defendants were not allowed to show. Had they been allowed to show that fact, then unquestionably it would bear "the premium rate applicable to the most hazardous work performed."
From the foregoing it seems to me that the judgment must be reversed because:
(1) The judgment on the account stated is erroneous, as there cannot be an account stated on a specialty.
(2) As there was an account stated before the court, the defendants should have been allowed to amend their answer and set up errors and mistakes. This right was denied them in two ways: (a) The court said it would allow the amendment to conform to the proof, which it did not do; and (b) the court refused to allow defendants to make the proof upon which to base an amendment to conform thereto.
(3) The evidence offered and rejected was competent and should have been admitted, either to correct the account stated or as matters going very materially to the defense on the contract itself.