El Dora Oil Co. v. Gibson

Defendant McDonald appeals from a judgment against him upon a bond made and executed by him, jointly with the other defendants, to stay the execution of an order of the superior court appointing a receiver of the El Dora Oil Company pending an appeal from said order, which appeal has been dismissed.

The circumstances connected with the execution of this bond are disclosed by the findings of the trial court, from which we recite the following facts:

In a certain action, wherein T.B. Fredendall, G.A. Lathrop, T.J. Green, L.C. Merideth, Monroe Thurman, and N.L. Hall were plaintiffs and El Dora Oil Company, John Shrader, E.S. Good, Trusten Clark, D.W. Staten, Herman Friedman and J.L. Campbell, Henry M. Jackson and John Schrader, copartners doing business under the firm name and style of Ohio Valley Construction Company, a corporation, were defendants, then pending in the superior court of the state of California, in and for the county of Los Angeles, said superior court on the seventeenth day of January, 1914, made and entered an order appointing J.A. Kibele receiver of said El Dora Oil Company and authorizing, empowering, and ordering the said Kibele to take possession and control of all the property and assets of the said El Dora Oil Company, and to conduct, operate, and manage its business and to conserve the assets thereof. Said action was instituted, prosecuted, and maintained by the plaintiffs therein named in the interest and on behalf of the said El Dora Oil Company and all of its stockholders in like situation as the plaintiffs, and in the supplemental and amended complaint in said action, it was alleged by the plaintiffs, and the facts were and are that said E.S. Good, Trusten Clark, D.W. Staten, Herman Friedman, and John Shrader were the directors of the said El Dora Oil Company, and that at the time said action was instituted, and for a long time prior thereto, the defendants therein named, E.S. Good and John Shrader, absolutely and entirely controlled the actions, conduct and management of the board of directors of said company, and that the defendants therein named, D.W. Staten, Trusten Clark and Herman Friedman, were, as directors of said El Dora Oil Company, absolutely and entirely subservient to the will, control, and direction of the said Good and Shrader, and cast their votes on all matters connected with the conduct, management and affairs of the said El Dora Oil Company as instructed and directed to do by the defendants Good and Shrader. The defendants E.S. Good, John Shrader, J.L. Campbell, and Henry M. Jackson were, at the time of the commencement of said action, handling and treating the funds and moneys of the said El Dora Oil Company as if same were their own, and were disbursing the same without any regard for the rights of the said El Dora Oil Company or its stockholders, and that they threatened and would continue to do so unless said receiver for said company were appointed.

In said action the plaintiffs prayed, among other things, that the defendants therein named be required to account for and pay over to the defendant therein named, El Dora Oil Company, all moneys and property theretofore or which thereafter might be taken and converted to their own use by the defendants E.S. Good and John Shrader.

After the making and entry in said action of the order appointing a receiver for the said El Dora Oil Company, certain of the defendants therein named, to wit, E.L. Foster, J.W. McGrath, G.R. Gibson, Charles A. Barnhart, and the Ohio Valley Construction Company, appealed from such order and for the purpose of procuring a stay of the execution of said order caused to be filed in said action an undertaking on appeal to stay said order, which undertaking was subscribed and executed by the defendants in the present action.

In April, 1921, the supreme court of the state of California made and entered an order dismissing the appeal from the said order appointing the receiver. Thereupon the present action was brought, in which it was found that by reason of the stay of execution of said order appointing a receiver for the property of the El Dora Oil Company, the plaintiff in this action has been damaged in the sum of thirty-five thousand dollars, for which sum judgment was given. [1] Appellant urges two grounds of appeal. The first is that the plaintiff in the present action was not the respondent named in the undertaking on which this action is based and therefore cannot sue upon it. From the facts herein recited it appears that the respondents named in the undertaking were acting for and in behalf of the El Dora Oil Company, the present plaintiff, and any recovery which might be had by them upon the undertaking would inure to the benefit of said company. Under such circumstances section 367 of the Code of Civil Procedure would require that the real party in interest bring the action. We see no merit in this objection to the judgment.

[2] The other objection is predicated upon the fact that, although the undertaking properly describes the joint appeal of Foster, McGrath, Gibson, Barnhart and Ohio Valley Construction Company and recites that these appellants desire to stay the execution of the order appealed from, it then provides that the sureties named promise and undertake "on the part of the above named appellant that if the order appealed from, or any part thereof, be affirmed or the appeal dismissed, the appellant will pay all damages which the respondent may sustain," etc. It is contended that the bond is not enforceable by or against the parties to this appeal because it cannot be ascertained from the language of the condition to or against whom it inures. The cases relied upon are Zane v. De Onativia, 135 Cal. 440 [67 P. 685], and Title Ins. Co. v. California Dev. Co., 168 Cal. 397 [143 P. 723]. Neither of these cases involve an undertaking such as we are considering here. Both have to do with cost bonds upon appeal, the filing of which was jurisdictional. The filing of the bond in the instant case had nothing to do with the jurisdiction of the appeal.

[3] In interpreting the terms of a contract of suretyship in this state, the same rules are to be observed as in the case of other contracts. (Civ. Code, sec. 2837) [4] A contract must be interpreted so as to give effect to the mutual intention of the parties, and the whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other. (Civ. Code, secs. 1636, 1641.) If the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed at the time of making it that the promisee understood it. (Civ. Code, sec. 1649) [5] The cases of Roberts v.Security T. S. Bank, 196 Cal. 557 [238 P. 673], and SatherBanking Co. v. Briggs Co., 138 Cal. 724 [72 P. 352], hold that a contract of suretyship is to be fairly construed with a view to effecting the object for which it was given and to accomplish the purpose for which it was designed, and that the old rule of strictissimi juris applies only to the extent that no implication shall be indulged in to impose a burden not clearly inferable from the language of the contract, but does not apply so as to hold that the contract shall not be reasonably interpreted as other contracts are.

We find no merit in the appeal and the judgment is affirmed.

Curtis, J., Preston, J., Richards, J., Waste, C.J., and Seawell, J., concurred.