46 Cal. App. 2d 823 | Cal. Ct. App. | 1941
The plaintiffs sued to recover a sum of money claimed to be due from the defendant as surety on a bond. Judgment was given for plaintiffs, and defendant appeals. Defendant does not deny liability on the bond, but contends that the judgment was awarded for an amount in excess of its liability, and that as against the correct amount it was entitled to have credited the sum of $1200 theretofore paid in cash by the principal to the obligee, and since held by the obligee for the purpose for which defendant became surety on the bond. We are of the opinion that both points are well taken.
The return match set for March 29, 1939, failed to materialize; and on May 10, 1939, Gan and Wolfe brought a second action against Levitt for the recovery of the $2500
As to the first point, it is obvious that since the judgment against Levitt, the principal, was for $2630.32. plus interest, the liability of the surety, exclusive of interest, cannot exceed that amount. "The obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; and if in its terms it exceeds it, it is reducible in proportion to the principal obligation” (sec. 2809, Civil Code; Alexander v. Bosworth, 26 Cal. App. 589, 596 [147 Pac. 607]); and where judgment has been entered against the principal a greater amount may not be recovered from the surety in a subsequent action brought against him (United States v. Allsbury, 4 Wall. (71 U. S.) 186 [18 L. Ed. 321]; 1 Freeman on Judgments (5th ed.) p. 1026, sec. 466; 21 R. C. L. 1085, 1091; 5 A. L. R 594, note; 50 Corpus Juris, 93).
Respondents contend that inasmuch as neither side introduced in evidence the judgment fixing Levitt’s liability as principal in the sum of $2630.32, the amount of that judgment was not here legally established; moreover, that at the trial of the present action appellant abandoned the point that as surety it could not be held liable for an amount
As to the issue of the $1200, the undisputed evidence shows that at Levitt’s request and with the approval of the commission the inspector took from the box office $1200 for the express purpose of paying the fighters that night. The receipt given by Shields for the money plainly so stated. It was cash that the promoter would have used to pay the fighters that night; and Shields would have used it that night to pay Gan for his participation in the fight if a dispute had not arisen. Under well settled legal principles, therefore, the defendant surety company is entitled to have this cash applied in reduction of its liability on the bond. As shown, the deposit was made with funds of the principal; as between the principal and surety the principal is primarily liable; and the surety who is called upon to pay the debt of his principal may seek reimbursement. Section 2845, Civil Code, provides: “A surety may require his creditor to proceed against the principal, or to pursue any other remedy in his power which the surety can not himself pursue, and which would lighten his burden; and if in such case the
Nor do we find any merit in respondents’ contention that Gan and Wolfe acquired paramount rights to the $1200 by virtue of the levy of attachment, for the reason that at the time of the levy it was not Levitt’s money. As already pointed out, Levitt paid the money to and it was accepted by Shields as the duly authorized representative of the commission, for the express purpose of paying the fighters therewith that night for the services rendered by them on that particular program. If it had not been so paid, the commission would not have allowed the show to open. The moment the money was paid to and accepted by Shields, it became trust money to be used for a-specific purpose, and hence not subject to garnishment. (Van Orden v. Anderson, 122 Cal. App. 132 [9 Pac. (2d) 572].) Stated another way, since the money was taken officially by the commission for the definite purpose of paying the fighters on that particular program, one of whom was Gan, the law will not permit him to defeat the rights of the surety to have the money applied to that purpose by attaching it for breach of contract for failure to hold the second contest.
Respondents’ assertion that Levitt exercised control over the money after it was delivered to Shields is not supported by the record. All that Levitt said to Shields that night was, “We will not pay off either one of the main event fighters tonight,” but he made no reference whatever to the $1200.
The appeal is now before the court on rehearing, which was
In accordance with the views above expressed it is ordered that the judgment appealed from be and the same is hereby reversed; and that a new judgment be entered directing the commission to pay the $1200 now held by it to M. H. Myers & Co., as assignee of Gan and Wolfe; and that respondents do have and recover of and from the appellant bonding company the difference between the amount of the judgment rendered against Levitt, to-wit, the sum of $2630.32, and the sum of $1200, with interest on the net amount from November 30,