Freeman v. Goldberg

GIBSON, C. J. — This is an appeal by defendants from an order vacating a previous order which denied plaintiff’s motion to tax costs.

The order appealed from was entered in an action dismissed pursuant to section 834 of the Corporations Code. The section provides that in a suit brought in the right of a corporation by a holder of shares or voting trust certificates representing shares, the court may require the plaintiff to furnish security for reasonable expenses, including attorney’s fees, that may be incurred by the defendant and shall dismiss the suit if the security is not furnished. A blank space for the costs to be awarded was left in the judgment of dismissal, and within ten days after entry of the judgment, on August 25, 1958, defendants served plaintiff with a memorandum of costs and disbursements in the amount of $7,651, including $7,500 for attorney’s fees. A motion to tax costs was not filed within five days after the service of a copy of the memorandum of costs as provided in section 1033 of the Code of Civil Procedure, and the clerk filled in the amount of $7,651 as costs in the blank space left in the judgment.1

On September 4, 1958, the clerk of the court received by mail a notice of motion, dated August 28, 1958, to tax the specified items of cost including the amount of $7,500 for [624]attorney’s fees. When the motion came on for hearing on September 12, plaintiff argued there was no authority in law for awarding attorney’s fees as costs in this kind of action. Defendants opposed the motion on the ground that it had not been filed in time and called the attention of the court to the fact that the envelope containing the notice bore a postmark of September 2, three days after the expiration of the five-day period specified in section 1033. Plaintiff’s request for a continuance to investigate the facts and present an explanation to the court was refused, and his motion was denied.

On November 26, 1958, plaintiff filed a notice of motion, based on section 473 of the Code of Civil Procedure, that the judgment and the order denying the motion to tax costs be vacated, and that a corrected judgment be entered that would not include any award of attorney’s fees.2 This motion was supported by an affidavit in which the secretary of plaintiff’s attorney stated that on Friday, August 29, the fourth day after the memorandum of costs was served on plaintiff, she deposited in a certain mailbox the notice of the motion to tax costs sent to the clerk and the copy of the notice sent to the attorney for defendants, that the deposit was made prior to 5 :48 p.m., the hour designated on the box as the time for the last daily collection and that several mail collections were designated for Saturdays. She stated further that after she was informed that the notice had not been received by the clerk until September 4, she ascertained from postal employees that, although Fridays and Saturdays were designated as days for collection at the mailbox in question, collections were frequently not made on those days. Monday, September 1, was Labor Day. A letter from the postmaster was filed which stated that mail was customarily collected at the mailbox in question on Saturdays but it was possible that mail deposited at the beginning of the Labor Day weekend remained in the box until the morning of September 2. An affidavit by plaintiff’s attorney stated that he was not in a position on September 12 to present the facts regarding the mailing of the notice, that defendants had suffered no prejudice as a result