Fox v. Hale & Norcross Silver Mining Co.

Beatty, C. J. This is an application by some of the defendants in the above-entitled action for a writ of prohibition or supersedeas to restrain the superior court [354]from enforcing its judgment against them pending their appeal to this court. By the judgment appealed from, the plaintiff, Fox, recovered of the defendants, who are petitioning here, a little more than a million of dollars, and the amount of the undertaking necessary to stay proceedings pending the appeal is therefore in excess of two millions of dollars. (Code Civ. Proc., sec. 942.) Such an undertaking in the proper amount—two million and thirty thousand dollars — was duly filed, but the only surety by which it was executed was the Western Surety and Guaranty Company, a corporation with a paid-up capital of no more than one hundred thousand dollars, incorporated under the laws of the state of California, for the purpose, among others, of making, guaranteeing, or becoming surety upon bonds or undertakings required or authorized by law.

Within due time the respondent, Fox, in pursuance of section 948 of the Code of Civil Procedure, excepted to the sufficiency of said undertaking and surety, and thereafter, upon notice duly given, the officers of said corporation appeared before the county clerk and proved the fact of incorporation, and full compliance by said company with all conditions necessary to entitle it to do business. They also proved that its entire capital stock of one hundred thousand dollars was paid up and intact. Upon this proof, the county clerk'certified that said corporation had justified to his satisfaction, and accepted its said undertaking as a good and sufficient undertaking to stay proceedings under said judgment pending the appeal. Notwithstanding this action of the clerk, the superior court was entertaining and proceeding to hear and determine a motion by respondent to issue its execution to enforce said judgment, when the appellants sued out the alternative writ, or order to show cause, issued herein.

At the hearing, the facts above stated were admitted or proved, and though certain preliminary-questions of practice were raised by the demurrer and answers then filed, all such matters were waived in the argument, and [355]the single question submitted for decision was, whether this corporation, with a paid-up capital of barely one hundred thousand dollars, is sufficient as sole surety upon an undertaking to secure more than twenty times that sum. The proposition that it is in fact sufficient is on its face a palpable absurdity. A corporation which has only one hundred thousand dollars can no more pay a loss of two millions than a natural person can. It is true that there is a personal liability on the part of the stockholders of a corporation for their proportion of its debts, and it is suggested that it was shown that some of the stockholders of this corporation were men of large means. 'But that fact does not help us to a construction of the law. Counsel for petitioners could not deny that the solvency and sufficiency of the stockholders of such corporations is a circumstance of which the law takes no account. If, under the statute upon which they rely, this undertaking is sufficient, it would be equally so if its amount, instead of two millions of dollars, had been twenty millions, and if the stockholders, instead of being in some instances men of means, were, every one of them, notoriously insolvent.