First Nat. Bank of Oakland v. Superior Court of Santa Clara County

• Decision Date: 10 February 1966
• Citation: 240 Cal.App.2d 109,49 Cal.Rptr. 358
• Court: California Court of Appeals Court of Appeals
• Parties: FIRST NATIONAL BANK OF OAKLAND, a National banking association, Petitioner, v. SUPERIOR COURT OF the State of California, COUNTY OF SANTA CLARA, Respondent; NORTHERN CALIFORNIA SMALL BUSINESS INVESTMENT COMPANY, a corporation, Real Party in Interest. Civ. 23250.

Page 358

49 Cal.Rptr. 358

240 Cal.App.2d 109

FIRST NATIONAL BANK OF OAKLAND, a National banking association, Petitioner, v. SUPERIOR COURT OF the State of California, COUNTY OF SANTA CLARA, Respondent NORTHERN CALIFORNIA SMALL BUSINESS INVESTMENT COMPANY, a corporation, Real Party in Interest.

Civ. 23250.

District Court of Appeal, First District, Division 3, California.

Feb. 10, 1966.

As Modified on Denial of Rehearings March 11, 1966.

Hearing Denied April 5, 1966.

Hollander, Lipian, Horwitz & Kornfield, Oakland, for petitioner.

Roger L. Mosher, T. C. Carlstrom, McCloskey, Wilson, Mosher & Martin, William I. Cohen, Palo Alto, for real party in interest.

DRAPER, Presiding Justice.

Petitioner is a national banking association. It and real party in interest are beneficiaries of separate deeds of trust upon all or part of the same property. Defaults occurred under both deeds, and the beneficiaries differed as to their respective priorities.

Real party filed an action in the superior court. That court issued temporary restraining order prohibiting sale by petitioner under its deed of trust. Petitioner's request for dissolution of the order was heard shortly before the scheduled hour of sale. The court asked petitioner to postpone the sale for two hours to permit completion of other matters already set and to review petitioner's authorities. The request was denied and the court then refused to dissolve its restraining order. Petitioner nonetheless conducted the sale under the deed of trust, and bid in the property. After hearing on an order to show cause, the court held petitioner in contempt and assessed fine of $500. It also vacated the sale. Upon petition, writ of review and alternative writ of prohibition issued.

Federal statute provides that 'no attachment, injunction, or execution, shall be issued against [a national banking association] or its property before final judgment in any * * * action * * * in any State * * * court' (12 U.S.C.A. § 91).

Although the earlier clauses of the same section deal with insolvent banks, the legislative history makes clear that this qualification does not limit the last clause, that quoted above. The proscription of state court attachment or injunction before final judgment 'is by no means confined to cases of actual or contemplated insolvency.' Rather, it bars the interim remedy in state courts as to any national bank (Pacific National Bank v. Mixter, 124 U.S. 721, 727, 8 S.Ct. 718, 31 L.Ed. 567; see also Dennis v. First Nat. Bank of Seattle, 127 Cal. 453, 59 P. 777). It should be noted that assets of another, in possession of such a bank, are not immune to garnishment in an action against their owner (Earle v. Com. of Pennsylvania, 178 U.S. 449, 454, 20 S.Ct. 915, 44 L.Ed. 1146).

Real party argues that a temporary restraining order is not an injunction. But California has long recognized the substantial identity of the two in such jurisdictional matters as the right of appeal (Neumann v. Moretti, 146 Cal. 31, 79 P. 512; Laam v. McLaren, 28 Cal.App. 632, 153 P. 985). Recognition of procedural distinctions between the two, as in express statutes requiring a bond for one but not the other (Neumann v. Moretti, supra), does not aid real party. The federal statute...