Opinion
Hearing Granted by Supreme Court Oct. 24, 1938
Original applications for writs of prohibition and mandamus, by the Golden State Glass Corporation and others against the Superior Court of Los Angeles County and others to restrain the court from any further proceedings in the case entitled G.C. DeGarmo and another against A. Goldman and others, and to compel the court to recognize Oscar C. Sattinger as attorney for the corporation.
Applications denied.
Oscar C. Sattinger, of Los Angeles, for petitioners Golden State Glass Corporation and Oscar C. Sattinger.
Mitchell, Silberberg, Roth & Knupp, of Los Angeles, for petitioner A. Goldman.
Frank M. Gunter, of Los Angeles, for petitioner N.E. Shenberg.
John H. O’Connor, Co. Counsel, Douglas De Coster, Asst. Co. Counsel, and Biby & Biby, all of Los Angeles, for respondents.
OPINION
CRAIL, Presiding Justice.
This is an original application, filed in the Supreme Court and by that court transferred to this court for decision, asking that a writ of prohibition issue directed to the respondent court restraining it from any further proceedings in the case entitled, G.C. DeGarmo and W.M. Crane, Plaintiffs, v. A. Goldman, N.E. Shenberg, Golden State Glass Corporation, a Corporation, et al., No. 528700, in the superior court of Los Angeles county, and prohibiting and restraining the respondents from enforcing any of the orders made by the said court appointing a receiver ex parte and pendente lite, and prohibiting Herbert Selig, as receiver, from taking any further steps pursuant to said order, and directing the said receiver to surrender possession of all the assets and business of said corporation to petitioners Shenberg and Goldman as vice-president and secretary, respectively, and (2) for a writ of mandamus ordering and compelling said respondent to recognize petitioner Sattinger as the attorney for said corporation, and to permit said Sattinger to appear before the respondent court as such attorney for such corporation, and for the court to hear and pass upon any and all motions made by said Sattinger on behalf of said corporation, and asking an order restraining and enjoining each and all of respondents from any further proceedings in the enforcement of said ex parte order appointing said receiver and the order appointing a receiver pendente lite, and that said orders be vacated.
Said action was commenced in the superior court on the 31st day of May, 1938, the complaint alleging that the directors of said corporation are now and ever since the 7th day of September, 1935, have been said DeGarmo and W.M. Crane on the one hand, and A. Goldman and N.E. Shenberg on the other, and further that, "Ill feeling, dissension, hatred, mutual hostility and distrust have arisen and now exist between the said plaintiffs and directors, G.C. DeGarmo and W.M. Crane, on the one side and the said defendant and directors, A. Goldman and N.E. Shenberg, on the other side. Because of said ill feeling, dissension, hatred, mutual hostility and distrust of said directors toward each other no business of the corporation has been transacted by said corporation since on or about the 1st day of January, 1938, and it is impossible because of said ill feeling, dissension, hatred, mutual hostility and distrust of the board of directors and the members of said board for them to transact any business of the corporation or to elect any person to act as manager or to give any person authority or power to transact business for said corporation, and because thereof said corporation is not now transacting any business and said corporation and its business, assets and property because thereof have been injured and said corporation has been greatly damaged."
Thereupon the court made an order ex parte appointing Herbert Selig as a receiver of all of the assets of said corporation and ordered the said corporation and the said Goldman and Shenberg to show cause before said court on the 8th day of June why said order should not be made pendente lite. At the said hearing both of the defendant directors filed answers and affidavits. At said hearing Oscar C. Sattinger attempted to appear on behalf of said corporation, having been appointed to do so by the two directors who were defendants. Upon objection of DeGarmo the court ruled that Sattinger was not authorized to appear for defendant corporation because a majority of the board of directors did not authorize his employment, but that he appeared in good faith. The court held that neither the plaintiffs nor the individual defendants can employ an individual to represent the corporation. The order appointing the receiver pendente lite was confirmed.
This is the sole question necessary to determine: Do petitioners have a plain, speedy and adequate remedy in the ordinary course of law? In our view this question must be answered in the affirmative. Santa Ynez Mercury Corp., Ltd. v. Superior Court, Cal.App., 79 P.2d 185. In that case it was said: "It is the settled law of California that since an appeal lies from an order appointing a receiver, section 963, subsec. 2, Code Civ.Proc., and an undertaking may be given staying all proceedings upon said order pending the determination of the appeal upon its merits, section 943, Code Civ.Proc., this procedure constitutes a plain, speedy, and adequate remedy in the ordinary course of law within the meaning of section 1103 of the Code of Civil Procedure. Jacobs v. Superior Court, 133 Cal. 364, 365, 65 P. 826, 827, 85 Am.St.Rep. 204; Pacific Broadcasting Co. v. Superior Court, 100 Cal.App. 649, 650, 280 P. 991."
The contention of Sattinger that the corporation was denied due process of law by the court’s refusal to recognize him as the duly appointed attorney of said corporation is without merit. The court had appointed a receiver on the theory that the board of directors was deadlocked and could not transact the business of the company, and the court could not very well recognize Sattinger as the attorney for said corporation when he had been appointed by only two of the directors. Both of the defendant directors and their attorneys were present at the time of the hearing, and the trial court then advised them that if a motion were made he would appoint an attorney to represent said corporation. No such motion was made by any of the directors. Thus, it appears that instead of said court depriving said corporation of the privilege of having an attorney represent it, he offorded an opportunity which, if taken advantage of by said Goldman and Shenberg or their attorneys, would have resulted in said corporation being represented at said hearing on the order to show cause. The court also made an order then and there that no default be entered against said corporation until after the expiration of 10 days after giving of notice to said Goldman and Shenberg as directors of said corporation.
On the day of the oral argument before this court the petitioners were permitted to file an amendment to their petition in which they set forth that DeGarmo, one of the plaintiffs in the superior court, caused a bond to be executed by the Fidelity and Deposit Company of Maryland in the principal sum of $2,000 to be filed in said superior court action; that said bond did not comply with the provisions of section 566 of the Code of Civil Procedure in that said bond was not signed by DeGarmo and Crane, or either of them, and was not an undertaking by the applicants in said action as required by said section, and that the orders appointing a receiver ex parte and also pendente lite were void and without the jurisdiction of the superior court for the reason that the provisions of said section had not been complied with.
It is the contention of the petitioners herein that a bond executed by a surety company alone and not by the plaintiffs in the action does not comply with said section. The section reads as follows: "*** If a receiver is appointed upon an ex parte application, the court, before making the order, must require from the applicant an undertaking, with sufficient sureties, in an amount to be fixed by the court, to the effect that the applicant will pay to the defendant all damages he may sustain by reason of the appointment of such receiver and the entry by him upon his duties, in case the applicant shall have procured such appointment wrongfully, maliciously, or without sufficient cause; and the court may, in its discretion, at any time after said appointment, require an additional undertaking." There is no merit in this contention. The statute requires that the plaintiffs furnish an undertaking and not a bond. In the case of Alexander v. Superior Court, 91 Cal.App. 312, 315, 266 P. 993, 994 the court said: "It has been determined that the distinction between a bond and an undertaking is that the principal should sign the former and that he need not sign the latter. (Russell v. Chicago, B. & Q.R. Co., 37 Mont. 1, 94 P. [488], 501.)" In the case of City of Sacramento v. Dunlap, 14 Cal. 421, 423, the court said, "There is no analogy between them [bonds] and undertakings required of sureties, by statute, in our civil and criminal practice. In the latter case, the undertaking is an original and independent contract on the part of the sureties, to which the signature of the principal is not essential. (Curtis v. Richards et al., 9 Cal. 33.)" The undertaking which was given by the plaintiffs was in compliance with the statute. Title Ins. & Trust Co. v. California Development Co., 164 Cal. 58, 127 P. 502.
The applications for writ of prohibition and writ of mandate are denied.
We concur: WOOD, J.; McCOMB, J.