Opinion
4-18-1958
STOCKTON THEATRES, Inc., a corporation, Plaintiff and Appellant, v. Emil PALERMO and Forrest E. Macomber, Defendants and Respondents. * Civ. 9312.
Freed & Freed, San Francisco, for appellant. Smith & Zeller, Stockton, for respondents.
STOCKTON THEATRES, Inc., a corporation, Plaintiff and Appellant,
v.
Emil PALERMO and Forrest E. Macomber, Defendants and Respondents. *
Freed & Freed, San Francisco, for appellant.
Smith & Zeller, Stockton, for respondents.
WARNE, Justice pro tem.
This is an appeal from an order disallowing as an item of cost on appeal the premium paid on a corporate surety bond filed to continue in force an attachment pending appeal.
In this action for restitution, the appellant, Stockton Theatres, prayed for judgment in the sum of $130,000 and caused an attachment to be levied on the respondent Palermo's bank accounts and real property owned by him. Stockton Theatres received judgment in the sum of $13,658.75. Both parties appealed from the judgment. Stockton Theatres claimed on appeal that it was entitled to $116,341.25 additional and in accordance with the provisions of Section 946 of the Code of Civil Procedure concurrently filed a bond in double that amount to preserve the attachment during the pendency of the appeal. The bond premiums amounted to a total sum of $6,980.49. When the remittitur came down, Stockton Theatres filed its memorandum of costs and disbursement on appeal. This memorandum included the amount of $6,980.49 for the premium on the bond to preserve the attachment on appeal as an item of cost. Palermo objected to the inclusion of the bond premium as an item of cost. The court granted Palermo's motion to tax costs on appeal as to this item on the ground that Section 1035 of the Code of Civil Procedure did not apply to costs on appeal. On appeal, the order was reversed and the trial court directed 'to determine the necessity for the bond required to preserve the attachment pending appeal, and, if it determined that such bond was necessary, allow the amount of the premium paid.' Stockton Theatres, Inc., v. Palermo, 47 Cal.2d 469, 478-479, 304 P.2d 7, 12. Pursuant to the Supreme Court's directive, the trial court, after taking evidence, determined it was unnecessary to file the corporate surety bond for the preservation of the attachment on appeal and ordered that the $6,980.49, costs of premiums, be stricken from the cost bill.
Stockton Theatres contends that it was legally necessary that a bond in double the amount of the debt claimed by it be filed in order to preserve the attachment on appeal, since Section 946 of the Code of Civil Procedure in part provides: '* * * An appeal does not continue in force an attachment, unless an undertaking be executed and filed on the part of the appellant by at least two sureties, in double the amount of the debt claimed by him, that the appellant will pay all costs and damages which the respondent may sustain by reason of the attachment, in case the order of the court below be sustained.'
However, the fact that an undertaking was required to preserve the attachment on appeal does not mean that, as a matter of law, the surety bond filed herein was necessary within the meaning of said Section 1035 of the Code of Civil Procedure. If it were, the Supreme Court certainly would have so held instead of remanding the case to the trial court for determination of the necessity of the bond. We think it clear that under the ruling of the Supreme Court in the instant case, Section 1035 of the Code of Civil Procedure must be construed as providing that the premiums on any surety bond, including one for an undertaking on attachment, may be recovered as costs unless the trial court determines, as a question of fact, that the bond was unnecessary. In the instant matter the trial court has determined that question and found that 'it was unnecessary to file the corporate surety bond herein for the preservation of the attachment on appeal.' While the evidence shows that Palermo withdrew large sums of money out of his bank accounts in this state and placed the money in a bank safety deposit box in Reno, Nevada, and thereafter carred his bank accounts in his brother's name to avoid attachment, it also shows that he owned unencumbered real property of a value in excess of $100,000 upon which the Stockton Theatres judgment was a lien. We believe this latter evidence is sufficient to support the findings. The trial court presumably found such security to be ample. The appellant was not required to file his surety bond but might have filed a personal bond for which no premium would have been required. Christenson v. Cudahy Packing Co., 84 Cal.App. 237, 239, 257 P. 906. Further, as stated in Stenzor v. Leon, 130 Cal.App.2d 729, 735, 279 P.2d 802, 806: '* * * It is well settled that where a claim is made for a disbursement the necessity for which is doubtful, and the item is properly challenged by motion to tax costs, the burden is on the claimant to establish necessity for the disbursement; its allowance is within the discretion of the trial court and if no abuse of discretion is shown the action of the trial court will not be disturbed. [Citing cases.]'
While the evidence is such that the trial court could have arrived at a different conclusion it does not necessarily follow that the court abused its discrtion.
No other points require discussion.
The order is affirmed.
VAN DYKE, P. J., concurs.
PEEK, Justice.
I dissent. I can attach no meaning to section 1035 other than precisely what it says, that the costs allowed to the prevailing party '* * * shall include the premium on any surety bond * * * unless the court determines that the bond was unnecessary.' Nor can I attach any meaning to section 946 of the same code other than what it says, that '* * * an appeal does not continue in force an attachment, unless an undertaking be executed and filed on the part of the appellant * * *' as therein provided. Although I know of no case in this state wherein the word 'unnecessary' has been defined, our courts have held that its converse, the word 'necessary' may mean '* * * something which in order to accomplish a given object cannot be dispensed with * * *'. Westphal v. Westphal, 122 Cal.App. 379, 382, 10 P.2d 119, 120. Thus, in the present case for the plaintiff to accomplish the object of its attachment, to maintain the security for the judgment it had obtained, it was necessary for it, under the mandatory provisions of section 946, to execute and file and undertaking. And since the bond was necessary, how then can it be said to have been unnecessary?
The majority, while noting the provisions of sections 946 and 1035, holds that it does not follow that a bond was required, otherwise '* * * the Supreme Court certainly would have so held instead of remanding the case to the trial court for determination of the necessity of the bond.'
It is difficult for me to attribute such meaning to the words used by the Supreme Court in that opinion. Rather I take it to mean that in view of the somewhat unique wording of the exceptive clause of section 1035, all the Supreme Court was saying was that by reason of that clause the trial court was compelled to specifically find if the proceeding came within that class of case wherein a bond was not required to maintain the status quo as provided in section 946, and hence for that reason a bond would be unnecessary. Illustrative of such a case would be an appeal from a judgment quieting title wherein a bond is not required as distinguished from the present one where a bond is specifically required under section 946 to maintain the attachment. I am convinced that to give to the word 'unnecessary' a meaning so broad as to include all cases and thereby give to the trial court the discretionary hindsight to conclude otherwise in a case coming squarely within the mandatory provisions of section 946 is to defeat the very purpose of section 1035.
The practical effect of the majority opinion is to say to the attorney and his client although section 946 compels you to file a bond in a proper case, nevertheless you to so at your peril since at some future date a judge may determine that necessary means unnecessary. It is true, as the majority says, a litigant may file a personal bond for which no premium is required. But how many persons in the first place could qualify in an action where the demand was comparable to that sought by plaintiff herein, and secondly, even if qualified persons could be found, how many would be willing to do so?
The judgment which plaintiff recovered in the original proceeding (see Stockton Theatres v. Palermo, 121 Cal.App.2d 616, 264 P.2d 74) was only one-tenth of the amount which it sought. There can be little question that under the facts disclosed therein plaintiff had every reason to believe that it was entitled to a substantially greater recovery. Its judgment lien against defendants' property was somewhat in excess of $13,000, but it had no lien for the additional sum of approximately $30,000 which was allowed by this court on appeal. Furthermore during the course of the present appeal Palermo could have disposed of his real property and thereby thwarted any attempt by plaintiff to collect the full amount of its judgment. Even in the absence of any activity on the part of Palermo the property could have been destroyed through various means. In light of such possibilities and the admitted activities of Palermo in placing all possible assets beyond the reach of plaintiff, certainly its apprehensions and the necessity for a bond were more than adequately substantiated. Surely the Legislature had no intent in adopting section 1035 to place a litigant in such an impossible situation. Nor can I bring myself to the conclusion that such is the meaning of the Supreme Court decision.
However, even if the majority be correct in its holding that the portion of section 1035 here in issue casts upon the trial court the discretionary power to determine in any given case, irrespective of the provisions of section 946, as a factual question, the necessity of an undertaking to continue the attachment in force pending the appeal, the determination by the trial court herein should not be upheld. Palermo admittedly removed $27,000 from a checking account in one Stockton bank and $10,000 from a safe deposit box in another and placed the entire amount in a safe deposit box in a Reno, Nevada, bank. He was most vague as to what was ultimately done with these funds. He further testified he opened a commercial account, as well as a savings account, in the name of an incompetent brother. Except for the testimony that at one time the checking account held as much as $4,000, there was no evidence as to what transactions went through this account. Palermo gave no testimony concerning the savings account, but an officer of the bank testified that the largest balance at any one time in this account was approximately $15,000. It was Palermo's further testimony that the building, which was obviously a one-purpose building, had a value of from $100,000 to $110,000 when this action was instituted in 1948; however, it was appraised at $33,000 at the time of his father's death in 1941; that the residence has a value of $10,000 in 1951, and although it had increased in value, he sold the same in 1955 for the identical amount. Additionally it should be noted that in the previous case (121 Cal.App.2d 616, 264 P.2d 74) it appeared that Palermo had sold all of the equipment in the theater to one Rowan and had rented the same back for $25 per month.
If the bond premium was not necessary as a matter of law (as I believe it was) and hence a proper and allowable item of costs under section 1035, but to the contrary its necessity as the majority holds was a question of fact for determination by the trial court, then it would be my further conclusion that under the facts as presented to the trial court, it cannot be said that a bond was unnecessary and hence the judgment should be reversed.
Rehearing denied: PEEK, J., dissenting. --------------- * Opinion vacated 333 P.2d 10.