Opinion
Rehearing Denied Jan. 6, 1961.
Hearing Granted Jan. 31, 1961.
Opinion vacated 12 Cal.Rptr. 668.
Albert G. Bergman, Los Angeles, for appellants.
Carl S. Kegley, Riverside, for respondent.
McMURRAY, Justice pro tem.
Plaintiff brought an action for breach of contract, damages, declaratory relief, specific performance and for restraining orders. Defendants obtained an order requiring plaintiff to provide indemnity for costs in the sum of $7,500 as the probable reasonable expenses to be incurred in the defense of said action. This order was made pursuant to the provisions of Sections 830 and 834 of the Corporations Code.
Plaintiff failed to timely provide the indemnity ordered and on August 15, 1958 defendants obtained a dismissal of the action by judgment which also allowed defendants' costs. Thereafter and on August 25, 1958 defendants served on plaintiff and filed a memorandum of costs and disbursements in the action in the total amount of $7,651. Plaintiff failed to file a motion to tax costs within five days after receipt of a copy of the cost bill and the clerk of the court entered the total of defendants' cost bill in the blank provided therefor in the judgment. Included in these costs was an attorney's fee of $7,500. On September 4, 1958, some nine days after service upon him of defendants' cost bill, plaintiff filed a motion to tax costs. At the hearing of the motion to tax costs, defendants made objection to the motion on the ground that it was not timely filed and that plaintiff had waived his objection to the costs by failing to state the grounds of the motion to tax, and filed a written memorandum thereof; the court denied this motion on September 12, 1958, on which date notice of said ruling was given plaintiff and filed with the clerk.
On November 26, 1958 plaintiff filed a 'Notice of Motion to Vacate and Set Aside Judgment for Costs and Ruling on Motion to Tax Costs--Section 473 C.C.P.' based upon the records and files of the case and affidavits of plaintiff's attorney and his secretary alleging that the original motion to tax costs had been mailed at a substation Post Office on August 29, 1958 in a timely manner and that because of the Labor Day holiday, the mail service had not functioned properly thereby accounting for the late filing of the Motion to Tax with the County Clerk. Also appended to this Notice of Motion to Vacate was a letter from the postmaster stating that the postal service might possibly have been responsible for the delay in delivery; a photostat of the delivery hours stated on the front of the mailbox and a photostat of the envelope in which the motion to tax costs had been received by the County Clerk showing postmark of 'Sep. 2 1958.'
After hearing the motion to vacate, the trial court granted it and set aside the order of September 12, 1958 denying plaintiff's 'Motion to Tax Costs.' From this order defendants appeal.
Appellants vigorously contend that the motion to vacate was defective under the provisions of Code of Civil Procedure section 473 in that the court in effect regarded the motion as a means to correct a judicial error and further that the notice of motion itself was fatally defective in not showing any excuse for the delay between the ruling on September 12, 1958 and the filing of the notice of motion to vacate on November 26, 1958.
A motion under Code of Civil Procedure section 473 or 473a is a correct method to challenge a judgment which is in fact void. Gould v. Richmond Sch. Dist., 58 Cal.App.2d 497, 136 P.2d 864; Hollywood Garment Corp. v. J. Beckerman, Inc., 61 Cal.App.2d 658, 143 P.2d 738.
The trial court, therefore, properly considered the merits of the attack made upon the order denying the motion to tax costs and properly concluded that such motion should not have been denied. Indeed, in proper circumstances, a court has the inherent power to vacate void judgments even without statutory authority (Richert v. Benson Lumber Co., 139 Cal.App. 671, 34 P.2d 840), and certainly attack can be made upon a judgment or order in the court that rendered it. Parsons v. Weis, 144 Cal. 410, 77 P. 1007.
The alleged deficiencies of the motion urged by appellants therefore are not controlling Corporations Code section 830 insofar as here applicable provides as follows:
' § 830. Indemnity for litigation expenses of officer, director or employee
'(a) Assessment by court; grounds; amount. When a person is sued, either alone or with others, because he is or was a director, officer, or employee of a corporation, domestic or foreign, in any proceeding arising out of his alleged misfeasance or nonfeasance in the performance of his duties or out of any alleged wrongful act against the corporation or by the corporation, indemnity for his reasonable expenses, including attorneys' fees incurred in the defense of the proceeding, may be assessed against the corporation, its receiver, or its trustee, by the court in the same or a separate proceeding, if both of the following conditions exist:
'(1) The person sued is successful in whole or in part, or the proceeding against him is settled with the approval of the court.
'(2) The court finds that his conduct fairly and equitably merits such indemnity.
'The amount of such indemnity shall be so much of the expenses, including attorneys' fees, incurred in the defense of the proceeding, as the court determines and finds to be reasonable.
'(b) Application for indemnity. Application for such indemnity may be made either by a person sued or by the attorney or other person rendering services to him in connection with the defense, and the court may order fees and expenses to be paid directly to the attorney or other person, although he is not a party to the proceeding.
'(c) Service of notice of application. Notice of the application for such indemnity shall be served upon the corporation, its receiver, or its trustee, and upon the plaintiff and other parties to the proceeding.
'The court may order notice to be given also to the shareholders in the manner provided in this division for giving notice of shareholders' meetings, in such form as the court directs.
'(d) Proceedings subject to section. This section applies to all proceedings specified in subdivision (a), whether brought by the corporation, its receiver, its trustee, one or more of its shareholders or creditors, any governmental body, any public official, or any private person or corporation, domestic or foreign.
'(e) Right and remedy exclusive. The rights and remedy provided by this section are exclusive. The awarding of indemnity for expenses, including attorneys' fees, to parties to such proceedings, whether terminated by trial on the merits or by settlement or dismissal, shall be made only upon order of court pursuant to this section, and shall not be governed by any provision in the articles of by-laws of the corporation or by resolution or agreement of the corporation, its directors, or its shareholders.'
and section 834 of the same code provides, in part, in regard to a shareholder's action against a corporation or its officers or directors:
' § 834. Motion to require security; grounds; hearing on motion.
'(b) In any such action, at any time within 30 days after service of summons upon the corporation or any defendant who is an officer or director of the corporation, or held such office at the time of the acts complained of, the corporation or such defendant may move the court for an order, upon notice and hearing, requiring the plaintiff to furnish security as hereinafter provided. Such motion shall be based upon one or more of the following grounds:
'(1) That there is no reasonable posibility that the prosecution of the cause of action alleged in the complaint '(2) That the moving party, if other than the corporation, did not participate in the transaction complained of in any capacity.
'The court on application of the corporation or any defendant may, for good cause shown, extend such 30-day period for an additional period or periods not exceeding 60 days.
'At the hearing upon such motion, the court shall consider such evidence, written or oral, by witnesses or affidavit, as may be material: (a) to the ground or grounds upon which the motion is based, or (b) to a determination of the probable reasonable expenses, including attorney's fees, of the corporation and the moving party which will be incurred in the defense of the action. If the court determines, after hearing the evidence adduced by the parties at the hearing, that the moving party has established a probability in support of any of the grounds upon which the motion is based, the court shall fix the nature and amount of security to be furnished by the plaintiff for reasonable expenses, including attorney's fees, which may be incurred by the moving party and the corporation in connection with such action, including expenses for which said corporation may become liable pursuant to Section 830. A determination by the court that security either shall or shall not be furnished or shall be furnished as to one or more defendants and not as to others, shall not be deemed a determination of any one or more issues in the action or of the merits thereof. The corporation and the moving party shall have recourse to such security in such amount as the court shall determine upon the termination of such action. The amount of such security may thereafter from time to time be increased or decreased in the discretion of the court upon showing that the security provided has or may become inadequate or is excessive. If the court, upon any such motion, makes a determination that security shall be furnished by the plaintiff as to any one or more defendants, the action shall be dismissed as to such defendant or defendants, unless the security required by the court shall have been furnished within such reasonable time as may be fixed by the court.'
A full reading of these sections shows that indemnity for expenses of the type litigation thereby covered shall be posted as a prerequisite to continuance of such litigation. Neither section indicates that attorney's fees shall be recovered if the indemnity provided is not posted. Contrariwise, it would appear that both of these sections assume that if the indemnity ordered be not forthcoming the defendant will be spared further expense and worry by the dismissal of the action; but that if such indemnity be posted, after order, such indemnity shall be available for expenses incurred after its posting and after the trial or dismissal of the action results favorably to defendants. Kaiser v. Easton, 151 Cal.App.2d 307, 311 P.2d 108.
The trial court, by allowing an award of costs which included attorney's fees, acted beyond its power as there is here no express authority to so award such fees and furthermore '* * * where a 'statute authorizes the allowance of an attorney's fee, the fee is not technically regarded as part of the costs.'' (Cirimele v. shinazy, 124 Cal.App.2d 46, 52, 268 P.2d 210, 214.) In Abelleira v. District Court of Appeal, 17 Cal.2d 280, at page 289, 109 P.2d 942, at page 947, 132 A.L.R. 715 it is said: 'A court with jurisdiction over a cause may hear and determine it and give judgment, but it cannot award costs in a situation not provided by statute.'
Here the court exceeded its powers when it allowed attorney's fees as an item of costs. The order appealed from is affirmed.
GRIFFIN, P. J., and SHEPARD, J., concur.