(a) The market value of bonds or notes, including bearer bonds and bearer notes, shall be agreed upon by stipulation of the principal and beneficiary or, if the bonds or notes are given in an action or proceeding and the principal and beneficiary are unable to agree, the market value shall be determined by court order in the manner prescribed in this section. A certified copy of the stipulation or court order shall be delivered to the officer at the time of the deposit of the bonds or notes.
§ 995.720.Market Value of Bearer Bonds and Notes
Title 14. Of Miscellaneous Provisions · Chapter 2. Bonds and Undertakings · Article 7. Deposit in Lieu of Bond · Last amended 2015 · Last verified July 28, 2026
In one sentenceSection 995.720 lets the principal and beneficiary agree by stipulation on the market value of bonds or notes deposited in lieu of a bond, or, failing agreement in an action or proceeding, requires the court to set that value after a hearing held five to ten days after the principal's application is served.
Full Text of § 995.720
(b) If the bonds or notes are given in an action or proceeding, the principal may file a written application with the court to determine the market value of the bonds or notes. The application shall be served upon the beneficiary and proof of service shall be filed with the application. The application shall contain all of the following:
(1) A specific description of the bonds or notes.
(2) A statement of the current market value of the bonds or notes as of the date of the filing of the application.
(3) A statement of the amount of the bonds or notes that the principal believes would be equal to the required amount of the deposit.
(c) The application pursuant to subdivision (b) shall be heard by the court not less than five days or more than 10 days after service of the application. If at the time of the hearing no objection is made to the current market value of the bonds or notes alleged in the application, the court shall fix the amount of the bonds or notes on the basis of the market value alleged in the application. If the beneficiary contends that the current market value of the bonds or notes is less than alleged in the application, the principal shall offer evidence in support of the application, and the beneficiary may offer evidence in opposition. At the conclusion of the hearing, the court shall make an order determining the market value of the bonds or notes and shall fix and determine the amount of the bonds or notes to be deposited by the principal.
Plain-English Summary
When a deposit takes the form of bonds or notes rather than cash, someone has to put a dollar figure on it. This section starts with the simple path: if the principal and beneficiary agree by stipulation on the market value, a certified copy of that stipulation goes to the officer along with the deposit, and that settles the question.
When they can't agree -- and the deposit is being made in a pending action or proceeding -- the principal can ask the court to decide instead. The written application has to describe the bonds or notes, state the principal's view of their current market value, and state the amount the principal believes would satisfy the required deposit. It must be served on the beneficiary, with proof of service filed alongside it.
The hearing on that application has its own timing rule: not less than five days or more than ten days after service. If nobody objects to the market value the principal alleged, the court fixes the value there. If the beneficiary disputes it, the principal has to offer evidence supporting the claimed value, the beneficiary can offer contrary evidence, and the court decides based on the record and sets the amount of bonds or notes the principal must deposit.
Frequently Asked Questions
How is the market value of deposited bonds or notes usually determined?
By stipulation between the principal and the beneficiary, with a certified copy delivered to the officer at the time of deposit.
What happens if the principal and beneficiary can't agree on market value?
The principal can file a written application asking the court to determine it, served on the beneficiary with proof of service.
When is the hearing on that application held?
Not less than five days or more than ten days after service of the application.
What if the beneficiary disputes the value the principal claims?
The principal must offer evidence supporting the claimed market value, the beneficiary may offer evidence in opposition, and the court decides and fixes the amount to be deposited.
Amendment History
Amended by Stats 2014 ch 305 (AB 1856),s 2, eff. 1/1/2015.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: market value bearer bonds deposit californiavaluing bonds deposited in lieu of surety bond