Rosenthal v. Perkins

California Supreme Court Dec 31, 1898 No. Sac. No. 346Published

Before: Britt

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Holding. The court held that sureties on a redelivery bond are liable for the value of released property when the primary obligation to return the property becomes impossible due to the principal's insolvency, as the bond creates an alternative obligation. Furthermore, the court held that the attachment lien is extinguished upon the release of property via such a bond, meaning subsequent insolvency proceedings do not discharge the sureties' liability.

Issues

Whether the insolvency of a principal debtor discharges the liability of sureties on a redelivery bond when the return of the property becomes impossible.
Whether an attachment lien persists on property after it has been released to the debtor upon the execution of a redelivery bond.
Whether the issuance and return of an execution against an insolvent debtor is a condition precedent to suing sureties on a redelivery bond.

Disposition. affirmed

Quotations verified verbatim against the opinion

“If an agreement is in the alternative, and one branch of the alternative cannot by law be performed, the party is bound to perform the other.”

“It is impossible that property can be “released from the operation of the attachment” if it yet remains subject to the attachment lien.”

“We are satisfied that no lien of the attachment persisted on the goods in this case after the release to the owner.”

Synopsis

Attachment—Redelivery Bond—Dissolution of Attachment—Insolvency of Defendant—Liability of Sureties.—A redelivery bond given for the release of property attached, conditioned that if plaintiff recover judgment in the action, the defendant will, on demand, redeliver the attached property to the proper officer, or that, in default thereof, the defendant and his sureties will, on demand, pay the value thereof, not exceeding the fixed sum, operates to release the property from the attachment and to dissolve the attachment as to the property so released, and upon an adjudication of the insolvency of the defendant, his ability to return the property having ceased, and in case of a recovery of judgment by the plaintiff, the sureties on the bond become liable to an action by him for the value of the property.

Id.—Alternative Contract—Impossibility of One Alternative.—If an agreement is in the alternative, and one of the alternatives becomes impossible or cannot be lawfully performed, the party so contracting is bound to perform the other alternative, and the obligation is to be interpreted as if the other alternative stood alone.

Id.—Insolvency Proceeding—Previous Dissolution of Attachment.—■ If at the time of commencing a proceeding in insolvency there is no attachment in force upon which the proceeding can operate, an attachment against the insolvent debtor having been previously dissolved, by a bond given for that purpose, the liability of the sureties on such bond is not released or affected by the insolvency proceeding.

Id.—Order fob Release of Attached Property—Recital in Undertaking—Presumption.—Where the goods were in fact released as a consequence of the bond being given, and the undertaking for the release of the attached property recited that it was given pursuant to an order of the court requiring it to be given, and the officer accepted the bond and surrendered the property, it must be presumed that an order discharging the attachment was made pursuant to sections 554 and 555 of the Code of Civil Procedure, and that the officer regularly performed his duty in releasing the goods.

Id.—Execution against Insolvent.—The issuance of an execution against the insolvent debtor is not a condition precedent to an action on the undertaking against the sureties on the bond given by him for the redelivery of attached property.

Id.—Demand for Return of Property not Required.—A demand need not be made upon the insolvent debtor for the return of the property before an action can be maintained against the sureties on his bond to release attached property.

BRITT, C. The plaintiffs here sued one Brusie in a justice’s court, and procured a writ of attachment to he issued which was levied by the township constable on one hundred tons of hay, the property of Brusie. Afterward, the defendants in the present ease executed an undertaking in which was recited that Brusie had appeared in such action in the justice’s court, and [242]applied for an order to discharge the attachment “upon the execution of an undertaking in accordance with the provisions of sections 554 and 555 of the Code of Civil Procedure,” and that said court had fixed the amount of such undertaking at five hundred dollars; the instrument proceeded that in consideration of the release of the property and the discharge of the attachment the obligors undertook “that in case the said plaintiffs recover judgment in said action the said defendant will on demand redeliver such attached property so released to the proper officer, .... or that, in default thereof, the said defendant and sureties will on demand pay to the said plaintiff the value of the property released, not exceeding the sum of five hundred dollars.” Upon the execution of said bond the officer released the hay to Brusie; a few days later, and in less than a month from the time of the levy of the writ, said Brusie filed his voluntary petition in insolvency under the Insolvent Act of 1880, and in the usual course of such proceedings an assignee was appointed to whom was conveyed all his estate. By permission of the court entertaining the matter in insolvency the plaintiffs prosecuted their action in the justice’s court “for the purpose of fixing the liability of the sureties upon such undertaking” (section 45 of said act), and obtained judgment against Brusie for the sum of three hundred and seventeen dollars, which has not been paid. Demand was made on Brusie and his said assignee for the return of the property released as aforesaid, but without effect. The defendants also refused on demand to pay the value of the property or the amount of plaintiffs’ judgment; hence the present action on the said bond.

Section 17 of said Insolvent Act provides that the assignment shall vest the title to the estate of the insolvent in the assignee “although the same is then attached on mesne process, and shall dissolve any attachment made within one month next preceding the commencement of the insolvency proceedings”; defendants contend that the effect of this provision was to dissolve the attachment in Rosenthal et al. v. Brusie, and render impossible the return of the released property to the attaching officer, and hence to destroy the obligation of their undertaking. The investigator is impressed at the outset that this bond embodied

Rosenthal v. Perkins

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