The sole point involved on this appeal is whether, under the circumstances of this case, after the judgment was reversed with directions, and, pursuant to. such directions, a revised judgment was entered, interest should start to run from the date of the original judgment or from the date of the revised judgment. We have concluded that under the rules announced in Stockton Theatres, Inc. v. Palermo,
The problem arises under the following circumstances. The Snapps had a policy of insurance in the amount of $25,000 with the State Farm Fire and Casualty Company, insuring them against all but certain excepted risks not here involved, for any physical loss to certain described real property. During the term of the policy the insured house began to slip due to a faulty fill, and was badly damaged. After the insurance company had denied liability, the insured brought an action for declaratory relief. In that action the questions involved were whether the policy covered the injury involved, and, if so, the extent of liability. The trial court held that the policy covered the injury, that the insured had suffered damage far in excess of the $25,000 limits of the policy, but that the company was only liable to the extent of damage that had occurred up to the termination date of the policy.. It' fixed such damage at $8,168.25. judgment was entered for that amount on October 31, 1960. This is the original judgment. Although the trial court limited the recovery, it also found that plaintiffs had actually suffered a loss far in excess of $25,000, the amount of the policy, and, on substantial evidence, found that the damage occurring after the termination date of the policy, for which it denied recovery, was a continuation of the damage that had started during the term of the policy, and was caused by factors existing before the termination date. The Snapps appealed.
The appellate court held that the policy covered the kind of damages suffered. That determination is now final, and is not challenged. The appellate court then held that the insurance company was liable, under the findings, and as a matter of law, not only for the $8,168.25, the amount of damage that
The trial court, acting pursuant to that order, on November 23, 1962, without the taking of further evidence, entered its judgment against the insurance company for $25,000. This is the revised judgment. The trial court, however, over plaintiffs’ objection, allowed interest only from the date of entry of the revised judgment, that is from November 23, 1962. Apparently, out of an abundance of caution, the trial court also provided that “said judgment [is] to be without prejudice to the right of plaintiffs Snapp to appeal from the denial of interest from the date of entry of the original judgment. ’ ’
As already pointed out, the sole question now presented is whether interest on $25,000 should be allowed from the date of the original judgment or only from the date of the revised judgment. This in turn depends upon whether the reversal of the original judgment was, in fact and in law, a mere reversal, or was, in fact and in law, a modification. (For a general discussion of the differences between a reversal and a modification see 4 Cal.Jur.2d, Appeal and Error, , § 661, p. 543; § 662, p. 546; § 666, p. 550; § 669, p. 558.) The law on this subject was summarized in the Stockton Theatres case, supra,
“A judgment bears legal interest from the date of its entry in the trial court even though it is still subject to direct attack. (Bellflower City School Dist. v. Skaggs,52 Cal.2d 278 , 280 [339 P.2d 848 ].) When a judgment is modi- . fied upon appeal, whether upward or downward, the new sum*819 draws interest from the date of entry of the original order, not from the date of the new judgment. (Beeler v. American Trust Co.,28 Cal.2d 435 , 438 [170 P.2d 439 ]; Barnhart v. Edwards,128 Cal. 572 , 575 [61 P. 176 ]; 1 A.L.R2d 479, 510-512, 520-521.) On the other hand, when a judgment is reversed on appeal the new award subsequently entered by the trial court can bear interest only from the date of entry of such new judgment. ’ ’
These rules are not challenged by the parties. Thus the question presented is whether the original judgment was reversed ” or “ modified. ’ ’
The respondent insurance company argues that, on the first appeal, the appellate court had the election to reverse or to modify; that it elected to reverse; and that a general reversal, with or without a direction, vacates the original judgment so that there is no judgment in existence until a new judgment is entered in conformity with the remittitur. This position finds some support in the broad and general language of Cowdery v. London etc. Bank,
That language, when applied to the facts of the Cowdery case, embodies sound principles of law, but it is much too broad when applied to facts such as are involved in the instant case. In referring to that very language in the Stockton Theatres case, supra,
In the present case we are not dealing with an indivisible judgment as was involved in the Cowdery case, supra,
This is amply demonstrated by the rules set forth in the Stockton Theatres case, supra,
Again, at page 444, it was stated: “The result of that order, couched in terms of a ‘reversal,’ was to hold that on April 12, 1957, plaintiff was legally entitled not only to the costs totaling $1,097.37 that had not been contested, but was entitled to an additional $6,980.49, making the total amount of costs on appeal to which plaintiff is entitled the sum of $8,077.86. That was the legal effect of the order of ‘reversal’ contained in the opinion in
The application of these rules to the facts of the instant ease is obvious. The District Court of Appeal on the first appeal decided that the plaintiffs were not only entitled to recover $8,168.25, on October 31, 1960, but on that date were entitled to recover more—that is, as a matter of law, the trial court should have allowed $25,000. This required no further determination of law or of fact. It required no taking of evidence. It required no legal showing or argument. The appellate court decided, as a matter of law, that $25,000 was owed. There never was a “reversal” of the determination that at least $8,168.25 was owed, but simply a determination that the amount due was, at all times involved, in fact $25,000. The original judgment was not vacated or declared void. It was declared insufficient as a matter of law. There never was a vacation of the original judgment. The original judgment was simply insufficient. Thus the facts in this case parallel those in the Stockton Theatres case, and the rules there announced are controlling. The broad language above quoted from the Cowdery case, insofar as it implies that the rules there stated should apply to cases like the instant one, is disapproved.
It is not the form of the order on the first appeal that controls, but the substance of that order. Obviously, since the appellate court on the first appeal decided that not $8,168.25 but $25,000 was due as a matter of law, and no further proceedings were required, it could and perhaps should have formally modified the first judgment, as was done in Feckenscher v. Gamble,
The judgment for $25,000 is modified to provide that it bears interest from October 31, 1960. As so modified, the judgment is affirmed. Appellants to recover costs on appeal.
Gibson, C. J., Traynor, J., Schauer, J., MeComb, J., Tobriner, J., and Peek, J., concurred.