LOEW INCORPORATED v. SUPERIOR COURT OF CALIFORNIA IN AND FOR COUNTY OF LOS ANGELES

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District Court of Appeal, Second District, Division 1, California.

LOEW'S INCORPORATED, a corporation, Petitioner, v. The SUPERIOR COURT OF the State of CALIFORNIA, IN AND FOR the COUNTY OF LOS ANGELES, Respondent.*

Civ. 21851.

Decided: July 16, 1956

Loeb & Loeb, John L. Cole, Alfred I. Rothman, Laurence M. Weinberg, Los Angeles, for petitioner. Hugo A. Steinmeyer, Robert H. Fabian, W. H. Taylor, Jr., Los Angeles, for real party in interest, Bank of America Nat. Trust & Sav. Ass'n.

Petitioner, Loew's Incorporated, seeks a writ of mandate requiring the Superior Court of Los Angeles County to set aside and vacate its order of June 6, 1956, ‘* * * that the motion of plaintiff (Bank of America) for a stay of injunction pending appeal be granted and that the operation and effect of that certain judgment heretofore entered in the above-entitled action on the 4th of April 1956 in Book 3070 at page 292 of Judgments in the Office of the County Clerk of Los Angeles County, California, be stayed pending the final determination of the appeal therefrom and 30 days thereafter and that the status quo shall be preserved during that period.’

The petition seeking to prohibit the making of that order was filed herein on June 6, and on June 8 after the making of said order a supplementary petition seeking mandate in lieu of prohibition was filed.

The judgment so ‘stayed’ was made in an action commenced by the Bank of America to quiet its title to certain personal property, and provides as follows:

‘It Is Ordered, Adjudged and Decreed:

‘1. Except as hereinafter otherwise specified in paragraphs 3 to 8, both inclusive, plaintiff, Bank of America National Trust and Savings Association, a national banking association, is the owner of the following described personal property, free and clear of all claims and demands whatsoever:

‘All properties of every kind and character relating to the feature-length motion picture photoplay entitled ‘Mr. Peabody and The Mermaid’, hereinafter in this paragraph 1 called the ‘Picture’, based upon a story by Guy Jones and Constance Jones and a screenplay by Nunnally Johnson, having as principal players William Powell and Ann Blyth, and which was produced by Inter-John, Incorporated, including, but without limiting the foregoing general language, the following:

‘(a) All of the literary, musical, dramatic and other material upon which * * *

‘(b) All physical properties of the picture * * *

‘(c) To the extent necessary to complete the picture, all assignable rights * * *

‘(d) All insurance * * *

‘(e) All copyrights * * *

‘(f) The right to exploit * * *

‘(g) All rent, revenue, income, compensation and profits * * *

‘2. * * *

‘3. Plaintiff may not advertise or announce William Powell's name in general advertising or publicity * * *

‘4. Plaintiff may not use William Powell's name or likeness in or in connection with any so-called ‘commercial tie-ups' * * *

‘5. Plaintiff may not cause or permit to be made or issued 16 mm. or other non-standard prints of said motion picture except * * *

‘6. Plaintiff shall give credit to William Powell as a star or co-star on all positive prints * * *

‘7. Plaintiff may not double or ‘dub’ (as that term is understood in the motion picture industry) any of William Powell's acts, poses, plays or appearances, or his voice, either in English or in any foreign language or languages, unless * * *

‘8. Plaintiff, its successors and assigns, are hereby enjoined, for the benefit of Loew's, its successors and assigns, from doing any act prohibited by any of the provisions of the foregoing paragraphs 3 to 7, both inclusive, and are ordered and directed, for the benefit of Loew's, its successors and assigns, to perform and observe the provisions of said paragraphs 3 to 7, both inclusive. * * *’

In said quiet title action, trial upon the merits was completed, and the facts contained in the following summary were found true.

On and after January 20, 1948, Inter-John, Incorporated, a corporation, borrowed money from the Bank and gave a promissory note therefor, secured by a chattel mortgage upon the properties described in the judgment. Inter-John failed to pay off a portion of the loan and, pursuant to the chattel mortgage, the properties were sold at public sale and purchased by the Bank, which then commenced the instant action to quiet its title to said properties.

Inter-John's ownership of the properties so mortgaged by it and sold to the Bank was subject to the terms of a ‘loan-out agreement’ between Loew's and Universal, and written instruments executed by Loew's, Universal and Inter-John in 1947. Under said contracts Inter-John had no right to do any of the things covered by the injunctive provisions of the judgment hereinbefore set forth.

‘The restrictive provisions * * * were included in the loan-out agreement for the purpose of protecting Loew's property rights in the services and performances of William Powell and in the results and proceeds thereof and for the purpose of protecting Loew's investment in Motion Pictures produced and to be produced by it in which William Powell appears.’

Loew's had no knowledge of Inter-John's dealings with the Bank, but the Bank's representative knew of the loan-out agreement and the restrictions therein contained for the protection of Loew's investment.

After denial of the Bank's motion for new trial, a minute order was made and filed on June 4, as follows: ‘Motion for reconsideration of order denying plaintiff's motion of new trial denied. Motion for stay of injunction pending appeal granted.’ Two days later the order first herein quoted was made.

The Bank, in its answer, urges that ‘* * * respondent superior court, having exercised its discretion to issue the order staying the injunctive provisions of the judgment, its act is not reviewable on mandamus', and in that regard cites the following cases: Hilmer v. Superior Court, 220 Cal. 71, 73, 29 P.2d 175; Lincoln v. Superior Court, 22 Cal.2d 304, 313, 139 P.2d 13; O'Bryan v. Superior Court, 18 Cal.2d 490, 496, 116 P.2d 49, 136 A.L.R. 595; Bauer v. Superior Court, 208 Cal. 193, 198, 281 P. 61; Kerr v. Superior Court, 130 Cal. 183, 185, 62 P. 479; People ex rel. Gesford v. Superior Court, 114 Cal. 466, 471, 46 P. 383; Friedland v. Superior Court, 67 Cal.App.2d 619, 623, 155 P.2d 90; Parker v. Superior Court, 16 Cal.App.2d 580, 583, 60 P.2d 1021; Greene v. Superior Court, 133 Cal.App. 35, 38, 23 P.2d 785.

An examination of these cases discloses that many of them stem directly or indirectly from Strong v. Grant, 99 Cal. 100, 101, 33 P. 733, 734, decided in 1893, wherein it was said: ‘The rule is so well established that it may be said to be universal that the writ of mandate cannot be used to correct the errors of a court in passing upon questions regularly submitted to it in the course of a judicial proceeding, or to control the exercise of its discretion.’

However, in the Matter of Ford, 1911, 160 Cal. 334, 346, 347–348, 116 P. 757, 761, 35 L.R.A.N.S., 882, it is said: ‘* * * And, while the general rule announced in Strong v. Grant, that a writ of mandate cannot be issued to correct the errors of a court in passing upon questions regularly submitted to it in the course of judicial proceedings or to control the exercise of its discretion undoubtedly obtains, it is not universally true that such writ will not issue to control such discretion or to require a judicial tribunal to which a matter for determination is submitted, to act in a particular way.

‘* * * ‘Otherwise there would be an admitted wrong without a remedy. The writ issues in such case to prevent a failure of justice. And this is its ancient office. In the language of Lord Mansfield: ‘It was introduced to prevent disorder from a failure of justice and defect of police. Therefore it ought to be used upon all occasions where the law has established no specific remedy, and where, in justice and good government, there ought to be one.’ * * *''

Each of the cases cited by the Bank in this regard is based upon the holding of Strong v. Grant, supra, or is distinguishable from the instant action. It would serve no useful purpose to consider them in detail here.

In Robinson v. Superior Court, 1950, 35 Cal.2d 379, 218 P.2d 10, 13, it appeared that a motion ‘was denied on the sole ground of lack of jurisdiction’, and it was held that ‘if the effect is to preclude a hearing and judgment on the merits of a matter properly before the court, and there is no other adequate remedy, mandate will lie to test the question of jurisdiction. * * * A denial of relief on the sole ground of lack of jurisdiction is not a decision on the merits. * * *’

In the instant action there was a decision on the merits, and then an order nullifying that decision. The parties to an action are entitled to more than a trial on the merits; they are entitled to the relief accorded them by law. In the instant action, the trial court found petitioner entitled to injunctive relief, made its judgment accordingly, and denied the Bank's motion for a new trial.

The Bank's motion for the stay of judgment pending appeal was based upon the fact that it is a national bank, and its claim that no court of the State of California has the power to enjoin a National Bank in any respect whatsoever, and that the Bank cannot be subjected to any injunction, prior to the completion of the last appeal and the finality of the judgment. No other reason has been given, and we have been able to find none, for the trial court's order staying the effect of its judgment pending appeal.

If, as found by the court, the Bank's ownership of the motion picture properties is subject to certain limitations, certainly it would not preserve the status quo pending appeal to permit the Bank to do the very acts which it has no right to do, among them the manufacture of non-standard films and the sale and use of them for advertising purposes. Since it was found by the court that exceptions and limitations had been included in the agreements for the purpose of maintaining the value of pictures made and to be made starring William Powell, it cannot be presumed that such acts during the pendency of the appeal will not render the judgment worthless in the event it is eventually affirmed.

In support of its contention that the superior court had no power to issue an injunction against it, and that, therefore, the order staying said injunctive provisions of the judgment, is correct and should not be interfered with by this court, the Bank sets forth the following argument: ‘The pertinent provision of Section 91 of Title 12 of the United States Code Annotated reads as follows:

“* * * [N]o attachment, injunction, or execution, shall be issued against such [national banking] association or its property before final judgment in any suit, action, or proceeding, in any State, county, or municipal court.'

‘It is respectfully submitted that the statute means just what it says, and the courts have so found.’

An examination of the last cited statute, however, brings to light the fact that the language quoted is immediately preceded by the portion of the section here quoted, as follows:

‘§ 91. Transfers by bank and other acts in contemplation of insolvency. All transfers * * * made after the commission of an act of insolvency, or in contemplation thereof, made with a view to prevent the application of its assets in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, * * * shall be utterly null and void; and no attachment, injunction, * * *.’

The Bank, in its memorandum indicates that ‘such association’ means ‘such (national banking) association’. But a reading of the entire section indicates that by the words ‘such association’, Congress referred to an insolvent national banking association. The entire chapter refers to national banking associations, but section 91 concerns only those which have committed ‘an act of insolvency,’ or are ‘in contemplation thereof’.

On the other hand, Section 24, Chapter 2, of Title 12, of the United States Code Annotated referring to national banking associations generally, provides that ‘from the date of the execution of its organization certificate * * * it shall have power—* * * Fourth. To sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons.’ Section 1348, of Title 28, after setting out the original jurisdiction of the federal district courts with regard to certain actions against national banks, says: ‘All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located.’ And, Section 94, of Title 12, provides that ‘Actions and proceedings against any [national banking] association under this chapter may be had in any district or Territorial court of the United States * * * or in any State, county, or municipal court in the county or city in which said association is located having jurisdiction in similar cases.’

Nowhere have we found any statutory limitation upon the power of the courts of the state to enjoin a national banking association when it is a party to an action pending before it, except in Section 91 which obviously refers only to insolvent banks.

Our attention has been called to only one case in which said Section 91 has been considered by the California courts. It is Dennis v. First National Bank of Seattle, 127 Cal. 453, 59 P. 777, decided in 1900. That decision was upon an appeal from an order dissolving an attachment which was levied upon a writ issued when the complaint and affidavit were filed. Only the portion of the statute quoted by the Bank in its Memorandum as hereinbefore set out is quoted in that decision, and it does not appear that the solvency or insolvency of the bank was there considered. It was therein unsuccessfully contended by the attaching plaintiff that the statute was unconstitutional. That decision is not determinative of the question now engaging our attention.

The apparent purpose of said Section 91 is to prevent a National Bank in contemplation of insolvency from preferring one creditor over another. As urged by the Bank, we believe the section ‘means just what it says'. It has no application to the situation now being considered, where the Bank attempts to so construe it as to permit the Bank pending appeal to exercise rights found and adjudged by the trial court to be owned by the petitioner herein and not by the Bank.

The order here challenged having been made under a misapprehension of applicable law with regard to the Bank's claimed exemption from injunctive action until final disposition on appeal of the judgment rendered, it becomes unnecessary to discuss or decide other questions presented in this proceeding.

The demurrer of the Bank, real party in interest, is overruled and it is ordered that a peremptory writ of mandate issue, requiring the respondent court to set aside and vacate its order of June 6, 1956, granting the motion of plaintiff Bank for stay pending appeal of the injunctive provisions of the judgment dated March 30, 1955, in action No. 599,919 in the respondent court.

WHITE, Presiding Justice.

DORAN and FOURT, JJ., concur.

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