Paramount Pictures, Inc. v. Sparling

264 P.2d 648, 122 Cal. App. 2d 221, 1953 Cal. App. LEXIS 1475
California Court of Appeal·Decided December 22, 1953·No. Civ. No. 15622·Published·Cited by 3 cases

Opinion

DOOLING, J.

This is an appeal from an order denying two motions to fix and award reasonable attorneys’ fees to plaintiffs’ counsel and to order such fees paid out of the assets in the hands of respondent Superintendent of Banks (hereinafter called the superintendent) which are available for the payment of interest upon the approved claims of depositors or creditors of The Yokohama Specie Bank, Ltd. (hereinafter called the bank). The theory of appellants is that in the main litigation they established the right of all such creditors and depositors to interest as a class and that following the settled equitable principle an award may be made for attorneys’ fees to be paid from the common fund so made available for the payment of such interest. (Adams v. California Mut. B. & L. Assn., 18 Cal.2d 487 [116 P.2d 75]; Winslow v. Harold G. Ferguson Corp., 25 Cal.2d 274 [153 P.2d 714]; Estate of Marré, 18 Cal.2d 191 [114 P.2d 591]; Ticonic Nat. Bank v. Sprague, 303 U.S. 406 [58 S.Ct. 612, 82 L.Ed. 926].)

A brief history of the main litigation in which the services of these attorneys were rendered will be helpful to a proper disposition of.the points argued on this appeal. Following the Japanese attack on Pearl Harhor the respondent superintendent assumed control of the bank and its assets and [223] thereafter the United States Treasury Department licensed the superintendent to liquidate the bank and to act as conservator. In due course appellants, who were large depositors, presented their claims to the superintendent for the principal amounts of their deposits with interest thereon. The superintendent allowed the claims as to principal but rejected them as to interest. Appellants thereupon commenced these actions seeking a determination that they were entitled to interest out of any assets remaining after the payment of principal. The Alien Property Custodian (hereinafter called the custodian), who had vested the bank’s assets, intervened and opposed the payment of interest. The superintendent by answer alleged the conflicting claims of the plaintiffs and the custodian and requested the court to adjudicate their adverse claims for his protection. On the issues so made the cases went to trial and the court entered its judgments determining the plaintiffs’ right to interest. The superintendent and the custodian appealed and the judgments were affirmed by this court in Paramount Pictures, Inc. v. Sparling, 93 Cal.App.2d 768 [209 P.2d 968]. The superintendent and the custodian petitioned the Supreme Court of California for a hearing and those petitions were denied. (93 Cal.App.2d 777.) The superintendent and the custodian then filed petitions for certiorari in the United States Supreme Court, which petitions were also denied. (McGrath v. Paramount Pictures, Inc., 339 U.S. 953 [70 S.Ct. 838, 94 L.Ed. 1366]; Sparling v. Paramount Pictures, Inc., 339 U.S. 953 [70 S.Ct. 839, 94 L.Ed. 1366].)

One of the controlling issues in these cases was the claim by the custodian that under section 5 (b) (2) of the Trading With the Enemy Act the payment of the principal of the deposits when due was excused and for this reason the plaintiffs were not entitled to interest. The portion of that section relied upon reads: “No person shall be held liable in any court for or in respect to anything done or omitted in good faith in connection with the administration of, or in pursuance of and in reliance on, this subdivision, or any rule, regulation, instruction, or direction issued hereunder.”

The issue as made was whether the failure of the interned officers of the bank to apply to the Secretary of the Treasury for a special license to pay its depositors showed an absence of “good faith” within the meaning of the quoted section. After a protracted trial the superior court found (quoting from Paramount Pictures, Inc. v. Sparling, supra, [224]*22493 Cal.App.2d at p. 773): “that there was nothing to prevent these officers from applying for a special license to pay the creditors of the bank or these plaintiffs and as a conclusion of law that their failure to do so showed an absence of ‘good faith’ of section 5 (b) (2) of the Trading With the Enemy Act.”

This is a question which the trial court could easily under the evidence have resolved the other way and if it had done so that would have been an end of the case for plaintiffs. Indeed, this fact question was so close that on the main appeal the custodian and the superintendent argued with quite persuasive force that the finding and conclusion of the trial court on this issue found no support in the evidence and we sustained the finding on the narrow ground that “(t)he inferences and conclusions from the evidence are for the trial court to draw” (Paramount Pictures, Inc. v. Sparling, supra, 93 Cal.App.2d at p. 774), a basis upon which a contrary finding would have been as well affirmed if the trial court had seen fit to make such finding.

In view of this the position taken by the superintendent before the trial court on this factual issue and thereafter consistently urged by him at every stage of the appellate proceedings is important in view of the basis of the trial court’s order here under appeal and the arguments made by respondents to support it. That position is clearly stated in the superintendent’s petition to the Supreme Court of the United States for a writ of certiorari to this court after we had affirmed the judgment by our opinion in Paramount Pictures, Inc. v. Sparling, supra, 93 Cal.App.2d 768. We quote from page 11 of that petition:

“The Superintendent of Banks of the State of California, both in the trial court and in his briefs before the District Court of Appeal, and also in his petition for a hearing by the Supreme Court of the State of California, has consistently maintained that the officers of the bank, interned as they were as alien enemies, and with the bank's license to do business revoked by the United States Government, and possession of the bank seized by the Superintendent of Banks of the State of California, could not reasonably be expected to take steps to secure a license to reopen the bank and pay depositors. It is submitted that the failure of the bank’s officers to apply for such a license cannot be held to constitute bad faith.”

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Paramount Pictures, Inc. v. Sparling, 264 P.2d 648, 122 Cal. App. 2d 221, 1953 Cal. App. LEXIS 1475 (Cal. Ct. App. 1953).

264 P.2d 648 (Paramount Pictures, Inc. v. Sparling) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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