The U.S. Fid. & Guar. Co. v. More

By this action plaintiff seeks to recover of the defendant the sum of $1964.41, with interest, damages, and counsel fees, alleged to be due on an indemnity contract given by defendant to plaintiff in consideration of the execution by plaintiff of a stay-bond on appeal in the replevin suit of Churchill v. More, 4 Cal. App. 219 , [ 88 Pac. 290 ]. For the facts of the litigation, reference may be had to Churchill v. More, supra; Churchill v. More, 7 Cal. App. 767 , [ 96 Pac. 108 ]; and More v. Churchill, ante, p. 368, [ 101 Pac. 9 ]. A general demurrer was sustained to plaintiff’s complaint, and from the judgment which followed plaintiff appeals.

The judgment against the Surety Company in the action of Churchill v. More, was given on motion of the plaintiff Churchill without notice and was based upon the undertaking on appeal executed by the Surety Company, purporting to authorize the taking of such judgment “if the appellant does not make such payment within thirty days after the filing of the remittihir of the supreme court in the court from which the appeal is taken.” The judgment in the ease of Churchill v. More being in the ordinary form of judgment upon claim and delivery (Code Civ. Proc., sec. 667), the only bond required to stay execution upon appeal is the statutory bond prescribed by section 943 of the Code of Civil Procedure. The condition of such an undertaking is not that judgment may be taken on motion. Such requirement is exacted only of the bond' prescribed by section 942 of the Code of Civil Procedure, from “a judgment or order directing the payment of money.” The judgment in Churchill v. More, it is unquestioned, was not such a judgment. It was a judgment for the recovery of personal property, with the alternative of a recovery of an amount of money named as the value of that property, in the event that a recovery of the property should not be had. (Code Civ. Proc., sec. 667.) The terms and conditions of an undertaking to stay execution upon appeal

In support of the judgment here appealed from, respondent urges two propositions, both of which we think are sound and fully support the judgment: 1. The amount of the undertaking in this case was not fixed by the court or by a judge thereof. This is a requirement of the statute and is essential to the efficacy of the undertaking for the single purpose for which it is given,—namely, the staying of execution; for if the requirement that the amount be fixed by the court be considered non-essential, it would necessarily follow that, regardless of the value of the property involved or its liability to depreciation in value pending appeal, a bond in any amount which the appellant might elect to give would be sufficient. As the amount of the undertaking was therefore not fixed by the court, the -undertaking itself failed to effectuate a stay of execution proceedings, and from this point of view there was no consideration whatsoever to support the surety’s promise that judgment might be taken against it on motion.

Again, assuming for the purposes of the present discussion that the undertaking did effectually secure a stay of proceedings, it has been pointed out that when the undertaking bound the surety, as it did, to hold itself responsible for the obedience by the appellant of such order as the appellate court might fender upon the appeal, it complied fully with the statutory requirement. In obligating itself in the penal sum named to secure obedience by the appellant of any order made upon appeal, the surety did all that the law required. No consideration moved to it or to any other person, for the added covenant that the surety would permit judgment to be taken against it on motion. The bond was given on behalf of More; he was not a party to it; the added condition was not one which Churchill had the right to insist upon or exact, and was manifestly not to the benefit of the surety’s principal. To the contrary, it was greatly to his injury, as, if enforced, it would permit against him, and against his protest, the conversion of a judgment for the delivery of personal property

Appellant further contends that, even if the judgment rendered against it on motion, to which it submitted and which it paid, is void, nevertheless, under the contract of indemnity given to it by respondent, it is entitled to a recovery. The language of the indemnity contract is “to indemnify and keep the said Guaranty Company indemnified from and against any and all loss, costs, charges, suits, damages, counsel fees and expenses of whatever kind or nature which said Guaranty Company shall or may, for any cause, at any time, sustain or incur or be put to for or by reason or in consequence of said Guaranty Company’s having executed said bond.” Clearly, this language does not import a right of recovery upon the part of a surety company for anything less than a legal liability which it may have incurred. Section 2778 of the Civil Code furnishes the rule for interpreting such a contract: “Upon an indemnity against liability, expressly, or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable.” Here, as has been said, the Surety Company had not become liable and was a mere volunteer.

Melvin, J., and Angellotti, J., concurred.

Hearing in Bank denied.