Sandell, Inc. v. Bailey

GRIFFIN, J.

Plaintiff and respondent Sandell, Inc., a corporation, brought an action in the Superior Court of Fresno

[519]

County against defendant, appellant and petitioner herein, John B. Bailey, upon a promissory note executed by him in the sum of $50,000. It was given for a loan by plaintiff Sandell, Inc., to Bailey, with an option to purchase stock of the Cleary Oil Company, Ltd., a corporation in which defendant and Victor I. Sandell were stockholders. All stockholders executed their preemptive rights. Bailey delivered to Sandell, as trustee, 5,000 unendorsed shares of corporate stock by way of pledge to secure the payment of said note. Petitioner alleges said stock, at that time, was valued at $50 per share. Sandell was given an option to personally purchase 1,500 shares for $10.50 per share. This option was exercised in December of 1955. There still remains a balance of 3,500 shares pledged as security for the loan.

In filing the complaint on the note in this action, plaintiff did not seek to foreclose on said pledge and did not allege said stock had depreciated in value or became worthless. The defense was that the loan was usurious and that the note, by its terms, was not due.

The court rendered a judgment against defendant in the sum of $50,000, plus interest and attorney’s fees, totaling $70,753.53, plus costs of $183.85. No mention was made in the findings or judgment in reference to the pledged stock. Defendant appealed from the judgment.

It is now argued, on this petition, that under Code of Civil Procedure, section 942, to stay execution on a money judgment, petitioner and appellant would be required to post a written undertaking in double the amount of the judgment, under Code of Civil Procedure, section 1056, or by posting an undertaking in one and one-half times that amount, if posted by a corporate security. It is argued that the cost of such bond would be prohibitive and that this court should take this fact into consideration, together with the fact that plaintiff still holds the securities, and fix an undertaking commensurate with these facts. (Citing

Julian

v.