Petition for Writ of Certiorari — Lipsky v. United States

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“TOPICAL INDEX >

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* Opinions Below ae ices Ceeelaeeeneees 2

Siatement of Groands for Jurisdiction... : 2:

Questions. Presettied for Review ie Spe ee oe : ea

: Constitution Provisions and Statutes nvelved : sles th Solves 2

Statement of ‘the Case coe. ae JR AQUA Gitar +

Federal Questions Timely and Properly Raised . sateen ars 5 }

a Rohebns for Alliseeling the Writ: aah | "4

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TABLE OF AUTHORITIES CITED

Ve oe oats * Cases : 3 as

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Adame % Bony: 80 Fed, Supp: 878 | SOR et ee eee f

Baltimore & Ohio Ry. Ge vi U nitedeStates. 298 U.S. . yn

349 at 366 .......... pectenkoneccube ieeatctets lesen Sue eles fi-

* ie / AR,

: Wm: Danzer Co. v. Gulf & S. 1. Ry. Go,, 204 U. S..633 . oe.

pe at ae . 8

“Midstates Hordbultural Assn. Vv. Pezin. Ry. \.. $02'U.S/- **. .

3356. 6+ S.Ct 128, sikh beacbrcats _danodst nigh sogrgesetess 5

‘Pollard v. Bailly, 20 Wall. 320, 526. 30 L. Ea. gee Ad

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Fidelity & Depdsit ( ‘ompln of “ae land V: Bud F Fisher Co; i

161: “Cal. Ape. 2d 43B Sf... estes a Stor Be eee pores 7 “

Fidelity & Deposit Cbppily « of Mary land v. W bition,

187 Cal. App. 24 731 oc 7 RASRES SAI) NEON 7

2 Be

: ‘odes ~

ia, Chapter 3, Section 4206 ........ 3

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IN THE

‘ee Court the ited Sates

\

\s

. October Te ‘rm, a 062

_ CARL WHITSON, :

meal Coa Petitioner and Defendant,

VS.

FIDELITY AND DEPOSIT COMPANY . OF.

MARYLAND, a ne

\ | Plaintif f and Re ‘ponde nt,

PETITION. FOR WRIT OF CERTIORARI g(t

TO THE DISTRICT COURT OF APPEAL

SECOND APPELLATE DISTRICT

“STATE OF CALIFORNIA ©

To the Honorable Chief paitioe and Associate Jus

tices of the — Court of the United States of -

_ America: a

Petitoner, Carl Whitson, prays that a. Writ of

- Certiorari issue to review the decision of the District

‘Court: of Appeal, Second Appellate District, of Cali-

_ fornia. ,

).

_ OPINIONS BELOW .

--The judgments and orders. of the t#ial court are

unreported and. are printed in Appendix “A” hereto.

The decisions of the District Court of Appeal are re-

ported in 187 Cal. App. 2nd 751, 10 Cal. Reptr. 6, and

‘in 205 A.C.A. at page 786, and are printed in Ap-

pendix “A” & _ hereto. 7

STATEMENT OF GROUNDS FOR JURISDICTION.

The last decision by the District Court of Appeal,

Second Appellate District, of California was entered es

on. July 19, 1962. Petition for Rehearing was. denied

on August .14, 1962:. Petitions for Hearings by the.

Supreme Court of California were denied. The last

such Petition for Hearing was denied by the Supreme

Court of California on September 11, 1962.

It is believed that jurisdiction of this Court is under

28 U.S.C. Section 1257. (3) (since a right to due pro-

\

- cess of law is claimed under the Fourteenth Amend- .

meet of the Constitution of the United States).

/

QUESTIONS PRESENTED FOR REVIEW ©

‘Is a litigant denied due process of law when .

fee of the state courts fail.and refuse to consider ~

and follow the decisions’ of the Supreme. Court of the

United States, Federal Courts, and > the decisions of

the Supreme Court of that State; and where such de- .

cisions’ are uniform and -have- been in 1 effect for over

one hundred years? mt ak

2. Is it due process of law for defendant to be held

2 liable after’ -the ‘statute of limitations have run ina

special. statute in regard public school lunchroom con-

- \

ee

‘| 4

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struction, and where the waiver of the time to sue,

- get out. in such statute, is waived by the attorney for .

plaintiff only, and wéthout the know wet or cdnsent

oe defendant?

. 1% Bit due process ‘of law for state julien to fail

and refuse to apply and. use simple arithmetic sub- .

traction of figures on written documents fur nished by

plaintiff i in order to hold defendant liable?

4. Is it equal protection ef the law, under the .

Fourteenth Amendment, for the same Justice to apply

rules of law to the same statute in directly sopposite

results, in order to hold in favor of the same plaintiff? Bs

~f

demand for a jury’trial at the/second trial, w here no

demand was made for such jury trial at the first trial? :

GONSTITUTION PROVISIONS AND

_ STATOTES INVOLVED

‘Chapter 3, Section 4206 Government ‘Code of. Cali-

. fornia provides as follows:

“Suit against the surety or sureties ¢ on thé con-

tractor’s bond may. be brought by any claimant,

‘6 Bb it ¢ due process of law to deny ‘defendant's °-""

or his assign, at any time after the claimant has

ceased to perform labor or furnish material, or

both, and until the expiration of six months after,

_the period in which. verified-claims may be filed |

as. provided in Section 1192.1 of the Code of Civil

Procedure. (As amended Stats, 1957, e 66, Pp

= 2.)” :

The Fourteenth Amendment ‘to the Constitution of |

the United States 1 is involved herein.

oe

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| STATEMENT OF THE. CASE »

On December 19, 1949 one F.L. B. Curtis, as a

- "° eontractor entered into a written contract with the

_ Long Beach, California, School District to build a

‘public schapl lunchroom building, and on December

29, 1949 plaintiff made a labor and material bond.

for the contractor. On February 17, 1950 _ plaintiff

requested petitioner to sign, an indemnity agreement,

which he did: After the buildings were completed

and ‘notice of completion filed February 21, 1951, all. -

of the sub-contractors: and material men filed claims

within. thirty days, as provided by Section 1192.1

Code of Civil Proeedure of California; and the School

Board withheld the final payments from the contractor. _’

~All furids’withheld by the School Board and funds.

- paid“in by the contractor, in the total-sum of $22,-

171.80-were paid to and turned over to plaintiff to pay

all outstanding claims amounting to a total-of $20,-

467.10. All‘claims were paid in full from sueh funds,

except one claim for $3,313.45 ‘which plaintiff tried

.

‘to settle for some $2,500.00 and settlement refused. ~

- A> written document signed by the attorney~for .

plaintiff entitled “Notice to Creditors” of Contractor

F. L. B. Curtis, and among other things, it is stated

> therein that “Fidelity’and Deposit Company of Mary-

land hereby waives the period of time within which

suits must be filed.” This document and attempted

waiver of time to sue by plaintiff's attorney caused

the last claimant to sue plaintiff herein for $3,313.45,

on: April 14, 1953 (over two years after filing its

claim). This suit was compromised by plaintiff on

_ April 2, 1958 for the sum of $2,500.00, and later peti-

&-

@

a

tioner was sued by respondent for ‘this. sum cud at-

_ torney fees and costs. 3 .

At the first trial on the merits a2 judge granted

“judgment against petitioner for $4,529.05, which

judgment: included two attorney fees af $1,000.00 each,

plus costs. This judgment was affirmed on appeal by -

the District Court of Appeal, Second Appellate Dis- -

. trict; and the case remanded to the trial court to as:

assess additional sum as additional attorney fees. A |

Petition for Hearing in the Supreme Court of Cali-

fornia was denied.

At the second trial or hearing, the : same judge, after -

‘denying defendant’s motion for a jury trial, granted

= judgment. against petitioner for an additional sum of —

$800.00 -as attorney fees, plus all costs. This resulted.

‘in d total judgment and costs of over $6,500.00, which

was appealed and affirmed by the District Court of

Appeal, Second ,Appellate District of California. A

ares petition for Hearing by the Supreme Court of Cali-’ |

fornia was again timely filed and denied on September

_ 11, 1962. ” : 4

FEDERAL QUEST! NS TIMELY

AND PROPERLY RAISED

At the pre-trial conference defendant raised the .

question of the attempted waiver of time to sue ‘on

claims and pointed out that the six months time had

elapsed lorig before suit ‘on this claim was. filed, and

called attention to the Holding of the Supreme Court

of the United States, in Pollard v. Bailey, 20 Wall.

520, 526, 22 L.Ed. 376, at 378; Wm. Danzer Co. v.

Gulf &.S. I. Ry. Co., 264 U.S. 633; Midstates Hor-

ticultural Assn. v. Pénn, Ry. its 302 U.S. 356, 64

‘ee ae

« 6

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S.Ct. 128; ‘aed v. Atel Ys, 80 Fed. Supp: 878. All ;

_ of these cases, it was pointed out, hold and have for over,

_ one-hundred years held that the lapse of, time, not

_only bars the remedy, but destroys the liability, and —

‘cannot be waived. There was no record képt of this

conference but the same points were again raised

by Motion for Pre-Trial Hearing on Special Defenses ;

’ this motion was denied. (Rep. Tr., p. 16; Vol. I; Cer.

Rec.)

The above cases and .others holding that where a

statute creates the right of action and sets the time

within which suits must be started, the terms can-

‘not be waived for any purpose by any party, were cited

and pointed out at every opportunity, ‘and on every

occasion. In each instance the judges disregarded such

cases and refused to follow the settledlaw. =

The District Court of Appeal-held and decided that

the Statute’of Limitation set in the above statute had.

"in fact expired, but by the waiver signed by plaintiff’s

attorney it was properly waived in such manner as

to hold defendant liable (Appendix A, page 2a). In-

_ _ the opinion of the District Court of Appeal, Second

oO

District, we find the following:

“Tt is conceded that Harbor Boat action was’)

filed after the Statute of Limitations against

“respondent as surety (six months) had run (Govt.

Code, Sec. 4206), and the plaintiff in that*law-

__ suit was properly in court only: because of a

“waiver of time (within which to sue) extended it

by respondent through its attorney, Mr. Crider.” |

The fact that all funds were turned over to plaintiff ..

to pay claims and the fact that more than ample

funds were under its control to pay all claims, in-

. . pon, a

_ eluding Herbor Boat. claim, was pointed out to the

State Courts at the first trial (Rep. Tr., pp. 44-45).

The judges refused to apply or ‘use simple arithmetic

subtraction in-order to hold.defendant liable. This, it

was pointed out, is not due process of law. The record

shows, and plaintiff admits that it received $22,171.80

to pay“all claims, including Harbor Boat claim, in

total amount of $20,467,10, or $1,714.70 more tHan

needed to pay all claims (Rep. Tr., p. 47, Vol. I, Certi-

fied Record). } |

It was pointed out to the State Court, in opening

briefs, that the same Court had held .the terms of |

_ Section 4206, Chapter 3, Government Code of Cali- .

- fornia, could not be waived, Fidelity & Deposit Com-

.nany of Maryland vs. Claud Fisher Co., 161 Cal. App.

2d 431, yet the very same Justice of the State Court

held in Fidelity & Deposit Company of Maryland vs.

Whitson, 187 Cal. App. 2d 751 (the instant case)

_ that such terms can be waived. This is not equal pro-

“ tection of the laws under the holding of this Court in

_ Baltimore & Ohio Ry. Co. v. United State: 8, 298.U.S. ©

349, at 366. :

‘ No demand for trial by jury was made at the first

trial, but at the second trial a jury was demanded and

refused.(Rep. Tr., p. 7, Vols 2, Cer. Rec.); It was:

pointed out that such denial was denying defendant due

process of law under the Constitution.

e

REASONS FOR ALLOWING THE WRIT

The amount of money involved herein is not large

fora multi-million dollar surety company such as plain-

tiff buf is a sizeable sum to petitioner. However, sev-

ap! .

~ law of the land as defined and established by this Court, —

and which have been established and settled for over

one hundred years, that a special Statute of Limitations .

cor ave

eral iaiedeia principles of law, and Federal questions |

of importance are involved, which should, it is urged, ©

givé this eourt jurisdiction to issue the writ.

FIRST

A public school lunchroom construction contract is in-

volved; hence the Federal Aid to school lunch program

is involved. No case in point on this question has been

found, and since this is an established and grow ing

program the law should be announced and — lines -

g

| established by this Court.

‘fits “ SECOND oe |

This Court is not called upon to: -&ercvise its juris-

diction to correct errors, as such, of ‘a State ‘Court.

However, it is called upon and urged to protect the

constitution rights of petitioner which have been clearly

violated by the State Courts in refusing to follow the

cannot be waived for any purpose or for any time.

THIRD

It would seem ‘clear, though no case has been found

to sustain stich a theory, that when, as happened here,

_ state judges fail and refuse to apply simple arithmetic

subtraction ‘in cases before them, such action parives

the party of due process of law.

FOURTH |

A trial by jury, in a case at law such as we have here,

is guaranteed by the Constitution of the United States,

and the Constitution of California. Such jury trial is

: a.

waived where no demand is made, as happened at the

first trial. However, at the-second trial, where more _

damayes were added to the judgment for additional -

attorney feos, a jury trial was demanded and refused.

Hence the State Court has held that.a waiver of jury at

the first trial is a waiver of such jury trial at any |

subsequent trial (Appendix “C” p. 3c). Thus a state -

. court has. decided a federal question of substance

(right to trial by jury) not theretofore determined by -

this court, or has, decided it in a way probably not in .

accord with applicable decisions of this court. |

FIFTH

When. a Statute of Limitation has run.in his fav or,

a property right - is ¢reated thereby, which cannot be

‘taken from him — reesei: due process of law

under the Constitution.

tg

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- CONCLUSION

Your petitioner respectfully submits that the Writ

of’ ‘Certiorari should issue’ to the end. that this Court

may review the decision of the District Court of Ap-

‘peal, Second District of California, - and determine

- whether ‘the defendant has been denied .any rights

guaranteed by the Fourteenth Amendme nt to the Con-

stitution of the United States. -

‘

—

—-.,———

Respectfully submitted,

CARL WHITSON

- _ Petitiover, in Pro. Per.

—la— ”

APPENDIX “A” )

IN THE SUPERIOR COURT OF THE:

; ~ STATE OF CALIFORNIA.

“IN AND FOR THE COUNTY OF LOS ANGELES

No. 711,587. 2! . :

JUDGMENT =

FIDELITY AND seenie COMPANY

OF MARYLAND, a Corporation, .

a Ps ie * Plaintiff,

. ae vs. -

CARL WHITSON, | .

ao at Defendart.

~The above entitled action came on regularly for trial

on February 11, 1960, and was continued for :trial

and was tried on February 15, 1960, and on February _

16, 1960, in Department “G" of South Branch (Long

Beach). of the above entitled Court, Honorable Beach

Vasey, Judge presiding, without a jury, a jury having

been expressly waived. Plaintiff appeared by its -at-

torneys, Sims, & Wallbert, by Maurice H. Wallbert,

Esq., and Carl Whitsori appeared in Propria Personam,-

and evidence both oral and documentary having been

introduced and the case having been argued and sub-

mitted for decision, and the court having heretofore

‘made and caused to be filed herein its written Find-

ings of Fact and Conclusions. of Law, and being fully

advised in the premises:

2a

Now. THEREFORE, by reason of the law and

findings: of fact. aforesaid, IT IS HEREBY OR-

a DERED, ADJUDGED AND DECREED:

That Plaintiff Fidelity, and‘ Deposit Company of

Maryland, a corporation, have and recover of and

- from the defendant, Carl Whitson the sum of FOUR

THOUSAND FIVE HUNDRED TWENTY-NINE |.

* AND 05 100 DOLLARS. ($4,529.05), together with -

interest on the sum of $2,500 at the rate of 7°, per

annum ig Apr Ne 1958, qr interest ‘in the sum

+ of $......0.., malg a total judgment in the amount. _

SP Wicntdecace apes » together with a costs in

the sum Of $...........e ;

THE CLERK IS HEREBY ORDERED TO

- ENTER THIS JUDGMENT .

' DATED this 2nd day of ‘March, 1960.

BEACH VASEY eo:

Judge of the Superior Court ; '

(THE. PART OF THE LAST JUDGMENT.

APPEALED FROM IS BELOW:) |

‘The Court finds and determines that a reasonable hoe |

attorney’s fee for services on appeal to plaintifff

Fidelity and Deposit Company of Maryland, a corpo-

ration, is the sum of $800.

NOW, THEREFORE, by reason of all of the fore- -

going, it is hereby ordered, adjudged and deereed,

that there be, and there is hereby, added to the amount

of the judgment heretofore rendered and entered in

the above entitled action in favor of plaintiff Fidelity .

‘ and Deposit Company of Maryland, and against de-

: ae

fendant Carl Whitson, the sum of $800 - as and for’

reasonable attorney’ s fee to plaintiff for services on

~ appeal, thereby making a total judgment in favor of

plaintiff Fidelity, and Deposit Company of Maryland,

a corporation, and_against Car] Whitson, in the sum

_ of $5,653.72, together with costs, as provided by law, . —

and. as heretofore entered on the judgnient,. together

with interest: on the ‘sum of $4,853.72 at the rate-of . +

7 per annum from March 4, 1960.

Sree this 20th day of April, 1961.

BEACH VASEY

Judge of the Superior Court |

» —lb— v

APPENDIX “B”

IN THE DISTRICT COURT OF APPEAL ~

OF THE STATE OF CALIFORNIA |

~ SECOND APPELLATE DISTRICT -

DIVISION. ONE

.

~ CIVIL No. 2as6g"

FIDELITY AND DEPOSIT C OMPANY

_ & F. MARYLAND, a Corporation, |

Plaintiff and Ke sponde nt}

ee VS. |

' ‘CARL WHITSON, : eater

ae ~ . Defendant and Appellant.

APPEAL from judgment of Superior Court of Los

Angéles County, Beach Vasey, Judge.

Maurice H. Wallbert for respondent, -

Carl Whitson, on propria persona, for appellant.

Plaintiff’s action sought to recover from defendant,

‘as indemnitor under a contract of indemnity, the sum —

of $3,529.05 plus interest, reasonable attorney’s fees.

and costs. Of this sum $2,500.00 represents monies

paid by plaintiff as surety in compromise and settle-

ment of a claim asserted undei: a labor and material

bond ‘executed on a construction job for Long Beach

Unified School District; the . balance -consisted of

$1,000.00 paid by plaintiff to its counsel for services - -

—2b—

rendered in connection with matters said to have

been covered by the contract of indemnity, and $29.05

_. expended in court costs. The trial court réendered/judg-

~ ment as prayed for, together with an additional award ..

of $1,000.00 counsel fees for maintaining theinstant |, |

action. Defendant has appealed from the judgment;

- plaintiff asks this court, in event of an/ /affirmance .-

and pursuant to a pertinent, paragraph of the con-

tract, for an order awarding, attorney’s fees on appeal. |

-. California Viking Sprinkley Co. v. Ch ey, 182 A.C. -

648, 635.

The salient facts, either admitt

School District’ to construct a Junch room assembly.

building at.a na med. Long Beach elementary school ;

on December 22, 1949, and in connection with such

contract, Curtis requested plaintiff to execute and :

furnish the performance and labor and material bonds

~ required by law (Gov. Code., Secs. 4200 et seq.) ; at

or about the same time defendant also requested plain-

‘tiff to exgeute for and on behalf of Curtis the required

bonds, agreeing to furnish plaintiff with an “Agree-

‘ment of Indemnity” in cMnection therewith, which

agreement was subsequently executed by- defendant

on February 17, 1950; following his entry upon the

job contracted for; Curtis neglected to pay numerous

claims of laborers, material men and subcontractors -

who, in due time, asserted their claims against plain-

tiff; defendant was ‘advised by plaintiff that these

claims were ‘being asserted; plaintiff was required

to, and did, employ counsel with respect to the pro-

by defendant or

otherwi ise found to be true, aré as follows: On De-

cember 19, 1949, one Curtis, as contractor, entered’

into a written contract with the Long Beach Unified

ese

cessing of the aforesaid claims, Ml of. which were

paid, save one, from funds’ held by the, school district

or contributed by Curtis; the one exception just men-. |

tioned, that of Harbor Boat Building Company foxy --

labor and material (plus _ attorney fees and costs), ,

becan re the subjéct ‘matter of a lawsuit ‘and was set- -

tled before trial for $2, 500. 00,> for which sum (and /.

counsel fees in connection therewith) this action seeks’ _

reimbursement. Finally, the following matters alleged —

in the complaint were admitted by the failure of de-

‘fendant: to. deny; on February 27, 1951, defendant

-

‘ practice in\ California. Oe ° *\ #

instituted an action against plaintiff seeking declara-

tory relief respecting his liability under the-‘“Agree-

ment of Indemnity’’; plaintiff (as a defendant in said

action) employed counsel to repr esent it, and became —

obligated to. pay reasonable attorney’s fees “on motion

_ of -plaintiff, said saction was subsequently dismissed.

for lack of prosecution.

Appellant’s briefs are in the nature of a “shotgun”

attack on the judgment below; contrary to settled

principles of appellated practice, they have placed an

undue burden on. this court to ascertain the exact

points contended: for?;. we have determined, however,

that appellant basically is claiming that the evidence

is insufficient to support the various findings, of

the. trial court. The claim is without mer ‘it. In the

_ diseussions which follow,: we shall give our yeasons

for the conclusion reached, touching upon such of .

appellant’s points as require comment., :

The evidence amply supports e finding that an

indemnity agreement was executed‘and delivered by

2 Appellant is a licensed member of the Oklahoma Bar although ,

che ce im Califor in' that states he never sought admission to

* a

> —4b—

appellant to respondent. Robert Hetch, employed by

respondent for approximately thirty-three years, testi-

fied that he and a fellow employee met appellant at a

Long Beach used car lot; then operated by appellant,

about one week before the. bonds on the school job

_ Were executed; they told appellant that their employer

_ was reluctant to proceed “without his (appellant)

being in the picture”; appellant stated then or later’

(but prior to the execution of the bond) that-he would -

furnish an indemnity agreement to respondent on

the particular project; Mr. Hetch also testified that -

respondent would not have executed -the bongs except

' for appellant’s- promise in thjs connection. The agree-

ment itself was introduced into evidence; it bears the

signature of appellant and Curtis, dated February

17, 1950,-the signature being acknowledged before a

. notary the same day. Shown the original court file

in the declaratory relief action filed by him against .

- respondent, appellant. testified .that he signed the

verification in blank (as was his practice when he ;

was a party to a lawsuit); his attention-was directed

to paragraph VII of the complaint therein reading

as follows: “At. the time of the execution of the faith.

ful performance bond mentioned in paragraph VI

above, the defendant Fidelity & Deposit Company re-

quested and obtained from plaintiff his agreement to

indemnify said defendant from any loss that:-he might

_ suffer as a result from being held liable on said bond’’;

as to the foregoing allegations,- appellant stated: o

‘ think thgy are generally true. I think the arnount is

true and I think that one is true”. There was evi-

dence that the agreement was returned to. appellant

to respondent, the face of the instrument bearing ©

the imprint “Contract Dept. Feb. 27, 1950.”

fos

hie a

Appellant contends that there was no consideration

for the agreement; he argues that the “Alleged Agree-

ment of Indemnity was signed and dated . . : about

two months after the bond to pay labor and material

was executed” hence consideration failed in that the in-

_ demnity contract was not executed simultaneously with

the principal obligation, citing 42 C.J.S, 571, See. 6(2);

further, he asserts, there was no compliance with Sec-

tion 2793, Civil Code, providing that’a surety obligation .

must bein writing. First, appellant’ s reference to Sec-

tion 2793, supra, pyesumably is based on the oral un-

derstanding between the parties. in December of 1949

pursuant to which the written agreement was entered

into; since the oral: guaranty was later acted upon

and fully executed, the point is without merit. (Solo-

mon v. Ellis, 34 Cal. App. 2d 672, 679) Second, the

rule cited by appellant (42 C.J:S. page 751, supra)

also declares that.a written agreement to indemnify

need not be executed simultaneously with the contract |

of indemnity if it be executed in pursuance of a prior

- agreement therefor. (Fidelity and Deposit Company

of Maryland v.-O’Bryan [Ky.] 202 S. W. 645, 646.

[cited by appellant]; Title Guaranty & Surety Co. vs.

Packard Co., [Wash.] 134-P. 812; 167 A.L.R. 1184-

1185, citing generally McDonough v. Chu Chew Shong,

21 Cal..App. 2d 257). There is here, of course, evi-

| -dence of a prior agreement pursuant to which the .

contract in suit was subsequently executed; it also

. appears that appellant neglected to plead lack or fail- -

ure of consideration as an affirmative defense and |

he is now foreclosed from ur ging the question. (Wil- ore

* - jiams v. Kinsey, 74 Cal. App. 2d 583, 603.)

SF

Next. the trial court found that ‘respondent suffered

ih.

-a loss,‘ reimbursable under. the provisions of the con-

tract of indemnity, by payment of the sum sued for; ;

specifically, the court found that the compromise and |

settlement of the Harbor Boat Building lawsuit by

payment of $2,500 was entered into in good faith

_ and upon recommendation of its counsel and in the

" honest belief that respondent. was liable to said claim-

ant, that respondent paid its counsel $1,000 for serv-

ices rendered in the processing of ‘claims connected

with the scheol job including the Harbor Boat Com-

pany settlenient as well as the defense ‘of appellant’s ©

declaratory relief action, and that such sum was rea-_

sonable fee. An indemnity agreement is to be con-

strued like any other contract with a view to de

termining the actual intentions of the parties; no.

artificial rules apply. (United Air Lines, Inc. v. West-

_ ern Air Lines, Inc., 132 Cal. App. 2d 308.) The perti-

nent paragraphs of the contract of indemnity con-—

tains the following provisions: In paragraph Second,

defendant agreed to.indemnify and hold harmless the

_ plaintiff from and against any and all loss, liability,

damag@, costs, counsel fees, charges and expenses of

whatever nature or kind which the plaintiff shall or

may at any time incur, sustain or be put to for or

by reason or in consequence of the execution of the .

bonds which were executed by- plaintiff ‘in connection

with the Burnett Elementary School job; in para-

. graph Eight defendant agreed to* and did waive all

notices of any-default or any. liability on the part of

defendant as indemnitor under the contract of in-

demnity; Paragraph Tenth provided that in the event

any claim or demand made upon plaintiff by reason

of bonds referred to, or any of them, plaintiff shall

be at liberty to pay or —_—- the same, and

—~Th—

vouchers *or- other evidence of payment, compromise

or settlement of any claim, demand_ liability, cost,

charge, expense, suit or judgment by reason of said

bonds shall be prima facie evidence of the. fact and

of the extent of the defendant’s liability as indemnitoy

under the contract of indemnity to the plaintiff; para-

graph Sixteen prov ides, in part, that plaintiff shall

have aright to apply: to the court in which any action

might be brought against plaintiff -as surety under

the bonds in question for an order making the de-

_fendant, as indemnitor, a party defendant thereto;

paragraph Seventeen provides that the obligation evi-

denced by the contract. of indemnity shall be liberally

construed so as to fully protect and indemnify the

plaintiff. .

Respondent's | dip aft; a ideas copy of which was

admitted into evidence by’stipulation, established pay-

ment by respondent of $2,500 in settlement of the

Harbor Boat Company law suit; a draft to the order

of Joe Crider, Jr., respondent’s attorney, in payment

of $1,000 counsel fees and costs ($29.05), was like-

wise introduced into evidence by stipulation. Under

the provision of ‘paragraph Tenth, the foregoing ex-

hibits constitute prima facie proof of the facet ‘of such

payment and the extent of appell ant’s liability; these

provisions, it appears, have the s ee |

“law (17 CUS., ‘Contracts, pp. sa ote 89) in-

deed, there is authority support ing ‘the validity of

pr ovisions that vouchers or other evidence of payment

shall be conclusive evidence thereof upon showi ing that »

payment was made in good faith. (42 C.J. S., Indem-

nity, p. 629, See. 35 [c]). Mr. Crider, an attorney with

some fifty yearsrof experience in the field of surety-

—8b—

ship law, testified that- he could- not see any defense °

to the Harbor Boat case: “I dickered with them and

we didn’t get any plaee”. Appellant did not negative

or rebut Mr., Crider’s testimony on the quéstion of

good faith, and the evidence otherwise supports the

finding that “‘said compromise and settlement was

entered into in. good faith by plaintiff-and upon

recommendation of its counsel in said proceeding and

in the. honest belief that plaintiff was liable to said

claimant . . .” Appellant makes the point that para-

graph Sixteen made it mandatory upon “respondent

to apply to- the court where such action was pending

-foy an order joining appellant as a. party defendant

therein; the pertinent paragraph did not require that — | |

“respondent pursue such remedy although it had the -

right to apply for an order of joinder.

Further on the finding that respondent suffered-a _

- loss, appellant argues that it was incumbent upon re-

spondent to allege and prove that it was legally liable,

that -a judgment had been secured against it, the

amount of such judgment.or that the fact that the

judgment had been paid. The law is to the contrary.

An indemnitee is not bound to submit to suit before

paying the claim; of course, if he pays without such

suit, he must prove that he was liable.for the amount

thus paid in order to recover from the indemnitee.

(Carpenter Paper Co. v. Kellogg, 114.Cal. App. 2d

640, 651). So where: there is no trial and no judgment

~ establishing liability, but a settlement of the litiga-

tion has been made, the settlement becomes presump-

tive evidence of the liability and the amount thereof,

- which presumption is subject to being overcome by

_-proof. (Lamb:v. Belt Casualty Co., 3 Cal. App. 2d 624,

a

631-632). It was for the tr: ial’ court to determine

whether the. presumption just mentioned Was oyer- .

come in the case at bar; its determination in the

record, favorable to respondent, is binding on this

-ecourt. et >

A deasevatiiattoin of appellant’s liability, or that of

any indemnitor,: must nevertheless be controlled by ——

the rule that a voluntary payment made by” the in-

‘ demnitee, without regard to its uae is not re-

-— eoverable. (Southern Cal. Gas Co. v. Ventura Pipe

Line Co., 150 Cal. App. 2d 235, 257), It is ‘concedéd

that Harbor Boat action was.filed after thé statute

of limitations against respondent as surety (six ’

months) had. run (Govt. Code, Sec. 4206), and the

plaintiff in‘ that lawsuit was properly in court only

because of a waiver of time .(withtn which to sue)

extended it by- respondent through its attorney Mr.

Crider.’ There was testimony by Mr. Crider. that.

numerous:claims- were asserted against his. client as

surety and that many of the claimants were threaten- .

ing to file suits—#in actions of this kind, Section

4207 of the Government Code provides for an award

of attorney’s fees to the prevailing party. Mr. Crider

testified that it was sound suretyship practice to ex-

tend time for the filing of suit on such claims in.

‘order to. avoid. lawsuits as well as the additional ex-

~ pense incident to attorney’s fees recoverable under

the government statute. Respondent, of course, had

a duty to minimize the loss of its indemnitor; further-

-more, it seems that the wisdom of Mr. Crider’s de-“

cision. was demonstrated by the fact that all claims

_. Save that of Harbor Boat Company, were settled.

‘- without the necessity of a-lawsuit. Irrespective of the |

—10b— |

realities of the situation, Section 4206 is a statute of

limitation (People v. Continental Casualty Co., 118

Cal. App. 2d 133, 135) and may be waived by the

“party entitled to assert the same. (Bon v. Watson, /

130 Cal. App. 2d 24, 36).”

_ Respondent properly maintains, in ‘response to, a

‘contrary claim by appellant, that the present action

was not barred by the four-year period embodied in

Section 337, subdivision 1, of the Code of Civil Pro- —

cedure. The four-year period commenced to run when ~

respondent sustained its loss, namely, the payment

of the sums herein sued for (Globe Indemnity ‘Co. v.

Larkin, 62 Cal. App. 2d 891, 894); the institution-of °

_ the instant action was within that period,

Finally, as to the matter of attorney’s fees the con-

tract of indemnity provided therefor, and the sole

question‘ before us’ is the reasonableness ‘of the sum

of ($1,000) paid to Mr. Crider by respondent prior

to the filing of the instant action and the additional

>. award of ($1,000) made by trial court, for services

in eonnection with the instant litigation. Mr. Crider

testified as to-the nature of Services rendered re- —

‘spondent: the processing of various claims, extended

negotiations for settlement of Harbor Boat. Company

lawsuit which represented ‘a “potential loss of $6,148” -

and defense of appellant’s declaratory relief action. ©

Where trial court has fixed the compensation of .an |.

attorney, its determination in that respect will not be

disturbed unless there is a plain and palpable abuse

of diseretion (Kurland v. Simmons, 126 Cal. App. 2d

79, 82} which, in the present case, has not been made

~. to appear: Appellant’s reliance on Byron Jackson Co.

v. Woods, 41 Cal.. App. 2d 777, is misplaced whére

‘ ih

there was a voluntary payment for defending a suit

: caused by the iridemnitee’s own wrongs; the case is *

factually dissimilar. As for the award of fees for the

maintenance of the present action, appellant does not:

‘question’ that he-istiable..therefor, _under paragraph °

Second of the contract, but he does maintain that “the

oe

award is excessive. Again, the familiar rule is ap-

_. plicable that it is for the trial court to judge the

reasonable value of legal services ; the award of $1,000

Was ‘not unreasonable under acce pted criteria ap

plicable here.

As indicated in the opening paragraph ‘of this.

opinion, respondent is also asking this court, in event

of ah affirmance, for an order awarding additional

attorney’s fees on appeal. Paragraph Second of the

contract panes for such fees, which. provision: is

also applicable to services <a red on appedl. (Cahi-

fornia Viking Sprinkler Co. . Cheney, supra, 182

A.C.A. 648).

The judgment is affirmed; the tr tale court is directed

to determine a reasonable: attorney's fee for services

on appeal and to add such fee to the principal amount

of the judgment.

oc 5) a

We concur:

WOOD, P. Z

FOURT, J.

—le— --

| APPENDIX “c"

_ IN THE DISTRICT COURT OF APPEAL

OF THE STATE OF CALIFORNIA.

SECOND APPELLATE DISTRICT

Civil No. 25948

| Civil No. 25949

F | 4 E D

July 19, 1962

ee te 2 Alley, Clerk

FIDELITY AND DEPOSIT COMPANY

OF 5 caeiaaeaie’ a corporation,

Plaintiff and Respondent,

“ys.

CARL WHITSON, | e

Defendant and Appellant,

4

APPEAL from two cnllere of the Superior Court of -

Los Angeles County. Beach Vasey, Judge. Affiymed. _

. Order awarding attorney’ s fees to plaintiff for

services on appeal affirmed. Appeal from judgment

- against surety on undertaking dismissed.

Carl Whitson in pro per as. Defendant and Ap-

pellant.

Maurice H. Wallbert for Plaintiff and Réspondent,-

os a me —2e—

Plaintiff Fidelity and Deposit C ompany filed an

action. against defendant Carl Whitson on an indem-

nity agreement on March 4, 1960, judgment was ren-

. dered: in favor. of ,plaintiff for the ‘sum of $4,853.

Defendant appealed therefrom, filing an undertaking

" “on appeal (pursuant to Section 942; Code. of Civil Pro--

_ cedure), in the penal ‘sum- of. $10,000 executed by

ee United States - Fidelity: and. Guaranty as surety.

The District Court of Appeal affirmed the judg-

ment.and directed the trial court ‘to determine a rea-

sonable attorney’ s fee for servicés on appeal to plain-

tiff, and. to add such fee to the principal amount of

_the judgment in favor of plaintiff. (Fidelity & Deposit.

' Co. v. Whitson, 187 Cal. App. 2d 751, 759),

On April 17, 1961, after ‘notice to defendant, . the

trial court held'a hearing and made a determination _

: and award of reasonable attor ney’s fees for services -

on appeal to plaintiff in the amount of $800. On

_ April 20; 1961, the court. made its order awarding .,

_ Said-sum of $800 as reasonable attorney’s: fees and

adding this amount to the original judgment. Defend- |

- ‘ant appeals from this last mentioned order.

‘Plaintiff :thereafter made written “demand upon.

United States Fidelity and Guaranty Company for

payment of the judgment on its undertaking on ap-—

peal, pursuant to, Section 942, Code of Civil Procedure;

demand was also made upon defendant for pay ment

of judgment. Nothing having beén_ paid, plaintiff

then. proceeded by. motion for entry.of judgment

against’ United States Fidelity and Guaranty Com-

pany for the amount of the original judgment, plus

interest, costs on appeal and attorney’s fees as al-

low ed by the court. After hearing on ‘the pion Bp upon °

‘ Aa ;

\

\.

ms TG

notice to defendant dia surety, judgement was entered

May 5, 1961 in favor of plaintiff and against United

States Fidelity and Guaranty/Company, the surety on

“the undertaking on appeal, in the amount of $6416.

‘Defendant has also appealed from this judgment and

the two appeals have been consolidated.

‘Aamaal from Award of Attorney's Fees.

Defendant first argues that the trial court had no.

jurisdiction to determine reasonable attor ney's ‘fees

for services on appeal. The District Court of Appeal:

specifically directed. the trial court “to. détermine 2

reasonable attor ney’s fee. for services. on:appeal and

to add such: fee to the principal amount of the judy-

— (Fidelity & Deposit Co. v. Whitson, 187 Cal.

2d 751, 759). That decision became final (peti-

Fa for hearing by the Supreme Court was-denied. on

February.21, 1961) and was and is clearly the law of

the case. Further, the appellate court in that cast

specifically held that the indemnity contract executed

by defendant pfovided for attorney's fees for in-

demnitee (plaintiff) and that this was applicable to

services rendered on appeal. The court said (page

759) : . :

“As indicated in the opening paragraph of this

opinion, respondent is also asking this court, in

the event of an affirmance, for an order award-"

ing additional attorriey’s fees on appeal. Para-

_ graph Second of the contract provides for such —

fees, which provision is also. applicable ‘to ser-

ices rendered on appeal. (California Viking

Sprinkler Co. v. ‘Cheney, supra, 182 Cal. App. 2d

564)”

i ak. ®

son

Defendant next argues that at the hearing on mat-

ter of attorney’s fees, he requested a a jury trial which

- was denied. In. the trial of the original action both

parties ‘had waived a jury under Section 631, Code of

Civil Procedure: The court’s ruling on defendant’s

objéction to the jurisdiction of the court-and his -re-

quest for a jury: trial, ‘as. shown by the. —

is as follows;

. “THE COURT: The shjection on the seeniali

of not being within. the jurisdiction of the Court .

is overruled and the Court will rule that you have

waived a jury in this proceeding . and that you

can’t-now claim a jury for this / ancillary ‘step

after the judgment.”

We approve the trial court’s’ ruling that after the

jury trial: had been. waived by the parties in the

original action, it could not be demanded as a matter .

of. right for. the trial of this one supplemental issue

pertaining to amount of attorney’s fees to be awarded’

for services on appeal.

In Spaulding v. Cameron, 127 Gal. App: 24 698, an

‘action for an injunction anu damages was originally

tried with both parties waiving a jury trial. On -the |

first appeal before the Supreme Court, the judgment:

was, affirmed in part and reversed in. part with in-

"structions. On the second trial, defendant demanded

a. jury trial and. this was denied. On second’ appeal |

this ruling by the trial court was affirmed. The court:

said (page 703): “If the trial court.on motion for a

_new trial had discovered its error and had’ granted

a limited retrial for the purpose.of adjudication issues

that had not been determined, or if after the evidence

was closed the trial had been reopened for evidence

/

oy

/

4 ; e

as to the permanency of.the nuisance it could’ se arce sly

have. been contended by defendant that: in the further

proceedings hé was not bound by his waiver of jury.

We see no substantial difference between the pro-

ceedings that were had pursuant to the mandate of

the Supreme Court and proceedings that weuld have

opened the case or had vacated its findings and judg-

‘ment in part and had proceeded to determine the ques-

tions which it eventually did determine pursuant to

the directions of the Supreme Court. It wa’ not error

‘to refuse the request for j jury tr ial.”

In the instant case the issue was clearly ancillary

because it could ‘only arise after the appeal was. de-

termined. Further, the. judgment in the main action

was affirmed and there is here no retrial of an issue

-- been had if the trial court of its own volition had re-®

because of a reversal. We hold that after there has |

been a waiver of-the right ‘to a jury in the trial of the

in this case; the waiver as. made originally. ds still

applicable. |

Where the trial court has fixed the amount of fees

for legal services, jts determination will not be dis-

turbed unless there is a plain abuse of discretion

(Kurland v. Simmons ,126 Cal. App. 2d 79, 82). The

award made i in this case of $800-as attorney's fees for

‘main action, there is no right to a jury trial of an

‘ancillary or supplemental issue such as was involved

services on appeal appears reasonable, and suppor ted)

by the evidence and the ‘record indicates no abuse of

discretion w hatsoev er.

Appeal from Judgment Against Surety

on Appeal Bond

‘This judgment was entered agpinst the surety on

—6e-- > se ae

the bond pursuantgo Section 942, Code of Civil Pro-

cedure, and not against defendant. The latter is not a

party aggrieved by it and no appeal ‘theréfrom may.

be taken by him (Section 938, Code of Civid Procedure)

for that reason such _ purported appeal should: ‘be . +

dismissed. eT

‘Even assuming for the purposes of discussion that

an appeal would lie, defendant’s contentions on ap-

peal are without merit.

The judgment against surety could have been made. -

ex parte (see Chas. F. Harper Co. v. DeWitt, ete. Co.,

10 Cal. 2d 467, 469). Here, however, a motion was

made and notice given both the surety and defendant.

- Prior to the hearing, defendant wired from Oklahoma

requesting a continuance of the hearing of the motion

which was deriied and of which denial defendant com-

plains. We see-no.abuse of. discretion by the trial court

as such notice of the hearing was given to the surety

and defendant by courtesy only. Under the terms of

the undertaking on appeal the surety consented to

entry of judgment without notice. E :

*

Defendant further argues that tr ial court ha ae

jurisdiction to enter the judgment against the surety

on undertaking on appeal because previous thereto,

the trial court had made its order’ regarding at-

torney’s fees and defendant had filed his notice of

appeal therefrom. Defendant argues that the appeal

from the previous order divested: the trial court of

jur isdiction.

How ever, ‘the appeal filed " defendatt. from the

ae

order deter mining reasonable attorney’s fees, pursuant ~

. to diréctions of the District: Court of Appeal. did not

oe? 7

—((C-— ,

divest the Superior Court of Jurisdiction with respect - -

. to collateral matters; namely, matters not embraced

within the subject of the or der determining reasonable — .

attorney’s fees for service On appeal. (See Neff’ v.

Ernst, 48 Cal. 2d 628 , 633-6: 54.) ; |

_ The other points made by defendant have no merit

-and are not pertinent to the orders appealed from.

Plaintiff made a request for additional attorney's

tion for services on the present appeal. While the

request has merit, it will be denied in the interest of

having the litigation finally terminated. However,

in the event of further appeals or proceedings by de-

fendant, it should be noted that this tlh by plain-

tiff is denied without prejudice. .

The order aw arding attorney’s fees is aff irmed ; the

. purported appeal from. the judgment against U nitéd

States F idelity and Guar anty Company is dismissed.

Q

ee % Ps ise ‘Balthis, ¥

We concur :.

Burke, P. J.

Jefferson, J.