Stockton Theatres, Inc. v. Palermo

• Decision Date: 07 December 1956
• Citation: 47 Cal.2d 469,304 P.2d 7
• Court: California Supreme Court
• Parties: STOCKTON THEATRES, Inc., a corporation, Plaintiff and Appellant, v. Emil PALERMO and Forrest E. Macomber, Defendants and Respondents. STOCKTON THEATRES, Inc., a corporation, Plaintiff and Appellant, v. Emil PALERMO and Forrest E. Macomber, Defendants and Respondents. Sac. 6600, 6732.

Page 7

304 P.2d 7

47 Cal.2d 469

STOCKTON THEATRES, Inc., a corporation, Plaintiff and Appellant, v. Emil PALERMO and Forrest E. Macomber, Defendants and Respondents.

STOCKTON THEATRES, Inc., a corporation, Plaintiff and Appellant, v. Emil PALERMO and Forrest E. Macomber, Defendants and Respondents.

Sac. 6600, 6732.

Supreme Court of California, In Bank.

Dec. 7, 1956.

Freed & Freed, Eli Freed and Eugene A. Mash, San Francisco, for appellant.

Smith & Zeller, Stockton, for respondent Palermo.

CARTER, Justice.

Stockton Theatres, Inc., appeals from two orders: (1) that portion of an order retaxing costs filed on December 17, 1954, which granted the motion of defendant Palermo to retax costs as to the premiums on a surety bond to preserve an attachment on appeal; (2) from a minute order of January 27, 1955, granting the motion of defendant Palermo to enter satisfaction of judgment and to discharge the liens created by the recording of abstracts of judgment and to release all levies of attachment or execution.

On June 5, 1944, Emil Palermo, the owner and lessor of the Star Theatre in Stockton, brought an action for declaratory relief against the lessee, Stockton Theatres, Inc., in an endeavor to have the lease declared void because the stockholders of the lessee were Japanese nationals. On June 11, 1945, the lease was declared void. Immediately thereafter Palermo brought an action for forcible detainer and a judgment was rendered in his favor whereby he obtained possession of the theater. Stockton Theatres appealed from both judgments. The judgment in the declaratory relief action was reversed by this court in Palermo v. Stockton Theatres, Inc., 32 Cal.2d 53, 195 P.2d 1. This had the effect of adjudicating that the lease was valid and that under it Stockton Theatres was entitled to possession of the theater as a tenant thereof.

Stockton Theatres then brought an action for restitution. During the pendency of the first appeals Palermo had operated the theater profitably and Stockton Theatres asked that he be compelled to account to it for the income he had derived therefrom. The trial court took an account and adjudged that Stockton Theatres recover from Palermo the sum of $13,658.75. Both parties appealed. The appeal was decided in favor of Stockton Theatres and the judgment of the lower court was modified to provide that Stockton Theatres recover the sum of $45,992.12 rather than the sum of $13,658.75 and that Stockton Theatres was entitled to recover costs on appeal. Stockton Theatres, Inc., v. Palermo, 121 Cal.App.2d 616, 264 P.2d 74. ¹

Stockton Theatres levied an attachment concurrently with the filing of the action for restitution. After the judgment was rendered against Palermo and prior to filing notice of appeal, Stockton Theatres filed an undertaking to preserve the attachment on appeal. Palermo then moved to discharge the attachment on the ground that Stockton Theatres had not complied with the time limitation of section 946 of the Code of Civil Procedure. The motion was denied in Stockton Theaters v. Palermo, 109 Cal.App.2d 616, 619, 241 P.2d 54, 56 (no petition for hearing), where the court had this to say: 'Defendants' second motion, which is predicated upon their interpretation of said Section 946 of the Code of Civil Procedure as to its applicability to the situation here presented, does not appear to be well founded. In the instant case plaintiff was the prevailing party in the trial court. Had the situation been reversed, that is, if the judgment had been in favor of Palermo, and had plaintiff sought to appeal, then the situation would have come squarely within the statute cited and relied upon by defendants. However, such is not the case, and since the lien of attachment has now merged with the judgment said section has no applicability.' (Emphasis added.) It appears that the court in the last cited case was of the opinion that because Stockton Theatres had recovered a portion of its demand in the trial court (even though it later appealed on the ground that it was entitled to recover the full amount of its demand) the section was inapplicable. Section 946 provides in part that: '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; and unless, within five days after written notice of the entry of the order appealed from, such appeal be perfected.' (Emphasis added.)

On the appeal in the restitution case, Stockton Theatres argued that it was entitled to $116,341.25. The bond premium necessary (in accordance with section 946, Code of Civil Procedure) for a sufficient bond to preserve the attachment during the pendency of the appeal amounted to a total sum of $6,980.49. When the remittitur came down, Stockton Theatres filed its memorandum of costs and disbursements on appeal. This memorandum included the amount o $6,980.49 for premium on the bond to preserve the attachment on appeal. Palermo objected to the inclusion of the bond premium as an item of costs. 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. An offer of costs less the amount of the bond premium as full satisfaction was refused by plaintiff. Palermo then moved to require Stockton Theatres to release the attachment and enter a satisfaction of judgment; Stockton Theatres objected on the ground that there was unpaid interest due on the judgment owing it, and on the ground that an appeal had been taken by it from the order retaxing costs. At the hearing on Palermo's second motion the interest due Stockton Theatres was paid by Palermo. Subsequently a written order was entered granting Palermo's motion that satisfaction of judgment be entered in the action; that the levy of attachment be released and that the liens created by recordation of abstracts of judgment be discharged. ²

As a preliminary matter Palermo's argument concerning the 'law of the case' must be discussed. It will be recalled that the District Court of Appeal in Stockton Theaters v. Palermo, 109 Cal.App.2d 616, 619, 241 P.2d 54, held that section 946 of the Code of Civil Procedure had no application to a situation where a plaintiff who has recovered a smaller amount than that sued for, appeals from the judgment to an appellate court. Section 946 is not so limited. It provides that '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 doublt the amount of the debt claimed by him, that the appellant will pay all costs and damages which the respondent may sustain * * *' etc. It therefore clearly appears that the statement in the opinion of the District Court of Appeal is incorrect. Palermo argues here that because of the holding which he contends has become the law of the case, Stockton Theatres has no legal authority to seek the cost of the premium on the bond as an item of costs on appeal. It seems that for the purposes of the law of the case, the statement heretofore referred to which held that section 946 was only applicable where the defendant had prevailed in the trial court may be considered dictum. The court concluded as follows: 'The motion to vacate the attachments is denied, and, as previously noted, the motion to dismiss plaintiff's appeal is deferred, to be considered and determined together with the appeal on its merits.' If, as previously set forth, the District Court believed that the lien of attachment had 'merged with the judgment (and) said section (946) has no applicability,' it would appear that defendants' motion to discharge the attachment should have been granted rather than denied. This could, however, apply only insofar as the judgment went to the sum of $13,658.75 awarded to plaintiff. The discussion or determination of a point not necessary to the disposition of a question that is decisive of the appeal is generally regarded as obiter dictum and not as the law of the case. We held in Allen v. California Mutual Blug. & Loan Ass'n, 22 Cal.2d 474, 489, 139 P.2d 321, 329, that 'This discussion is obviously based upon the erroneous assumption that the presentation of a claim by the investor was still required under the 1935 amendment, and this in spite of the inclusion of the words 'without presenting a claim' in the statute. And the doctring of the law of the case does not require this court to follow an interpretation which is clearly obiter dictum. The statement of facts in the discussion, assumed for the purpose of illustrating the necessity of the court's construction of the statute, presupposed a situation. * * *' In the instant case the court presupposed a situation for the purpose of illustrating its theory of how the statute should be construed. The illustration was clearly erroneous and it is obvious that the decision was not predicated upon the court's construction of the statute. Hence, we are not bound to follow the District Court's erroneous interpretation of the scope of section 946 of the Code of Civil Procedure under the doctrine of the law of the case. See, also, Hammond v. McDonald, 49 Cal.App.2d 671, 122 P.2d 332; 4 Cal.Jur.2d, § 698, p. 604; Millsap v. Balfour, 158 Cal. 711, 112 P. 450; Mulford v. Estudillo, 32 Cal. 131. In order to avoid confusion the holding of the District Court of Appeal in this respect is specifically disapproved.

Section 961 of the Code of Civil Procedure, which became effective in 1943, provides that 'The Judicial Council shall have the power to prescribe by rules for the practice and procedure on appeal, and for the time and manner in which the records on such appeals...