National Surety Co. v. Commonwealth

Sims, J.,

dissenting:

The writ of supersedeas, which was awarded by this court on granting the writ of error on the former appeal, stayed the proceedings on the judgment of the trial court.

The supersedeas bond in suit was executed under section 3470 of the Code of Virginia, as amended (Acts, 1914, p. 713), and the condition of it (which was in accordance with the terms of such statute) was, so far as material, “* * * to satisfy the judgment proceedings on which are stayed in case the said judgment be affirmed or the writ of error or supersedeas aforesaid be dismissed and also pay all damages, costs and fees which may be awarded against or incurred by the appellant or petitioner, in the appellate court and all actual damages incurred in consequence of the supersedeas.”

Neither the writ of error nor supersedeas was dismissed, nor were any damages, costs or fees awarded against or incurred by the said appellant.

Nor does the declaration allege any “actual damages incurred in consequence of the supersedeas.” It does not appear from the record before us that the said appellant is *234less financially responsible than it was when the proceedings aforesaid were stayed as aforesaid, or that the ability to enforce the payment of the judgment which subsequently came into being by the remittitur and under the order of this (the appellate) court, was in any way injuriously affected because of said supersedeas and the consequent delay pending the proceedings on appeal, etc.

The case before us, therefore, being an action of debt on the supersedeas bond, involves the determination of the meaning and effect of that part only of the obligation of the surety, the National Surety Company, which is contained in the following language of the bond, namely, * * to satisfy the judgment proceedings on which are stayed in case the said judgment be affirmed. * * *”

It is held by all the authorities on the subject, and unquestioned by either side in argument before us, that “it is elementary that the obligation • of sureties upon bonds is strictissimi jurist, and not to be extended by implication or enlarged construction of the terms of the contract entered into.” Crane v. Buckley, 203 U. S. 441, 27 Sup. Ct. 56, 51 L. Ed. 260.

On applying this rule, we see that the judgment named in the terms of the bond is the original judgment of the trial court in case the said judgment be affirmed. That is to say, the terms of the bond contain two stipulations with respect to the judgment which must be fulfilled before the obligation to pay the judgment arises, namely: (a) it must be the original judgment aforesaid of which payment is asked, and (b) it must be that judgment “affirmed.”

These two stipulations will be considered separately.

(a) The original judgment was held to be erroneous in part and the whole judgment “reversed and amended” by the order of this court entered in disposing of the case on appeal; the verdict of the jury was set aside with costs to' the said appellant, and the cause was “remanded to the' said circuit court for a new trial.”

*235If the order of this court had stopped at that point, there could be no doubt that the judgment of which payment is asked under the obligation of said bond is not (a) the original judgment aforesaid, or (b) that judgment “affirmed.”

But the order of this court goes further, and provides, in substance, that the defendant might elect to remit that portion of the judgment which this court held on appeal to be erroneous, and in the event that such right of election was exercised within the stipulated period by writing filed as stipulated, “then said judgment shall stand affirmed.” That is to say, when purged of said erroneous part of it, the judgment should “stand affirmed.”

When, therefore, the right of election aforesaid was exercised and the original judgment was purged of its error, that portion of it which stood “affirmed” was not the orig-. inal judgment of the trial court, but, in truth, the judgment of the appellate court. The appellate court had the right to enter such judgment under section 3485 of the Code. That statute, so far as material, provides: “The appellate court shall affirm the judgment * * * if there be no error therein, and reverse the same, in whole or in part, if erroneous, and enter such judgment * * * as the court whose error is sought to be corrected ought to have entered.” But since the appellate court did not “affirm the judgment,” but found error therein, when the judgment now in question came into being under the order of the appellate court, it was the judgment of the latter and not of the trial court; and, hence, such judgment is not that denominated in the terms of the bond aforesaid. To hold otherwise would be to extend the obligation of such bond “by implication or enlarged construction of the terms of the contract entered into,” which, as we have seen, cannot be done as against the surety on the bond. Hence, on this ground it is plain, I think, that the said obligation of the bond in suit cannot be held to require the surety to pay the judgment in question.

*236There is nothing in section 3485 of the Code aforesaid authorizing the appellate court to enter judgment against sureties on the appeal or supersedeas bond as there is in the statute law of some of the- States. With us, we have to look only to section 3470 of the Code and the terms of the appeal or supersedeas bond executed thereunder to ascertain the extent of the obligation of the sureties.

(b) And, as we have seen, the original judgment of the trial court was not “affirmed” either by the first portion or by the last portion of the order of this (the appellate) court entered on the disposition of the case on appeal. The first portion of the order expressly reversed the original judgment. The last portion of the order expressly affirmed only a part of the original judgment.' Doubtless, under the -statute last cited above (sec. 3485 of the Code) that the common law rule on the subject is changed, and the appellate court may reverse a judgment at law “in part”; but even so, the most favorable construction to the contention of the defendant in the instant case which can be given to the order of this court aforesaid is, that it reversed the original judgment of the trial court “in part” and affirmed it “in part.” That action, “strictissimi juris,” was not to affirm the judgment named in the terms of the bond, but only to partly affirm it. Hence, since such terms are not to be “extended by implication or enlarged by construction” against a surety, on this ground also it is plain, I think, that the obligation of the bond m suit cannot bo held to require the surety to pay the judgmen; in question.

The obligation of such a bond is purely a matter of statutory requirement on the subject. Our statute on that subject is section 3470 of the Code, as amended. As held in Bemiss v. Commonwealth, 113 Va. 490, at p. 493, 75 S. E. 115, such statute is to be read into every statutory super-sedeas bond which has been executed since its passage. However, in the instant case, there is no variance between the terms of the bond and the requirements of the statute.

*237Our statute might have provided that supersedeas bonds should contain the obligation to perform and satisfy, not only “the judgment proceedings on which are stayed in case the said judgment * * * be affirmed * * but also any judgment of the appellate court for any part of said judgment, or some words to that effect; but the statute does not so provide. . And, since our statute contains the provision that the supersedeas- bond shall contain the obligation to pay “all damages incurred in consequence of the superse-deas,” ho good reason is- perceived why such bond should contain any further obligation as to payment of any judgment other than the original judgment of the trial court. For if any part of the judgment is affirmed on appeal, the lien thereof on any real estate of the judgment debtor remains undisturbed by the appeal. Shepherd’s Adm’r. v. Chapman’s Adm’r, 83 Va. 215, 2 S. E. 273. And as to the enforcement of the payment of the part of the judgment affirmed on appeal by execution, if there be a change of condition, such as insolvency of the judgment debtor or decline in financial responsibility pending the appeal, so that any loss may occur in enforcing the judgment finally obtained by reason of the delay resulting from the supersedeas, indemnity against such loss is fully provided for by the clause in the bond or statute last above quoted; and if there is no change in such financial condition, the judgment' finally obtained can be as effectually enforced against'the principal debtor without as with a bond; and it would be an unnecessary burden and expense to require the appellant to give bond with surety creating the obligation to pay whatever judgment may be finally obtained against the appellant before he can seek relief from error going ori’y to a part of the original judgment, regardless of whether the delay caused by the appeal shall affect or not affect the ability of his creditor to enforce the judgment.

*238The supersedeas bond statutes of the different States involved in the numerous decisions cited in argument, differ among themselves in various ways, and, so far as quoted in argument or in the authorities cited, they all seem to differ from the Virginia statute in the lack of any provision such as that last above quoted.

There are four cases which are relied on by the defendant in error, namely, Hopkins v. Orr, 124 U. S. 510, 8 Sup. Ct. 590, 31 L. Ed. 523; Harding v. Kuessner, 70 Ill. App. 355, affirmed in 172 Ill. 125, 49 N. E. 1001; Butt v. Stinger, 4 Cranch. C. C. 252, Fed. Cas. No. 2246; and Page v. Johnson, 1 D. Chip. (Vt.) 338, to sustain the position that an order of an appellate court upholding a judgment of the court below in part and allowing a remittitur as to the residue thereof, is an affirmance of the judgment. But all four of these decisions are influenced by the peculiar statute law governing the subject in those jurisdictions. In all of them the effect of the statute law was to make the obligation of the appeal or supersedeas bonds cover whatever judgment might be rendered by the appellate court. See also Grover, etc., Co. v. Radcliffe, 137 U. S. 290, 11 Sup. Ct. 92, 34 L. Ed. 670, on the subject of the Hopkins v. Orr case.

A great number of cases are cited and relied on by the plaintiff in error to sustain the converse of the position of the defendant in error; but most of these cases are likewise influenced by peculiar statute law in force in those jurisdictions. All of these cases to which I have had access, like those relied on by the defendant in error, involve statutes which differ, it would seem, from the Virginia statute in the lack of the provision aforesaid, as to “all damages incurred in consequence of the supersedeas.” Such cases', with- notation as to the peculiar statutory or bond obligation features involved, are as follows: Seymour v. Gregory, Fed. Cas. No. 12,686, 10 Bliss 13 (to “prosecute writ of error to effect”) ; Crane v. Buckley, 203 U. S. 441, 27 Sup. Ct. 56, 51 *239L. Ed. 260 (to “prosecute appeal to effect”); Rothgerber v. Wonderly, 66 Ill. 390 (to “duly prosecute the appeal to effect”) ; Feemster v. Anderson, 6 T. B. Mon. (Ky.) 537 (to pay, “provided he gets cast”); Galloway v. Yates, 10 Minn. 75. (Gil. 53) (to “prosecute appeal to effect * * * and if the judgment be affirmed or any part thereof be affirmed”) ; Quinn v. Adair, 4 Ala. 315 (to “prosecute such appeal to effect; and in case he be cast therein”); Blair v. Sanborn, 82 Tex. 686, 18 S. W. 159 (to “prosecute the appeal with effect”) ; Cobb v. Morrison (Ala.), 73 So. 42 (“if the bondsmen shall fail in said appeal”).

In the following cases cited and relied on by the plaintiff in error there seems to have been nothing in the local statute law different from that of Virginia, except that it does not appear whether there was any provision as to the bond covering all actual damages incurred in consequence of the supersedeas.

In Kibble v. Butler, 27 Miss. 586, the condition of the bond was that the obligors “would pay the judgment if affirmed.” The appellate court reversed the judgment of the trial court merely because of its form, and entered a judgment of its own in another form, but “in effect the same judgment as the one reversed.” That holding goes even beyond the conclusion reached above in" the instant case, and is a convincing illustration of the application of the strietissimi juris rule.

In Lehman v. Amsterdam Coffee Co., 151 Wis. 207, 138 N. W. 606, Ann. Cas. 1914 A, 1299, the condition of the bond was that the obligors would pay “if the judgment so appealed from, or any part thereof, be affirmed,” and that the payment would be “the amount directed to be paid by said judgment, or the part of such amount as to which the said judgment shall be affirmed, if it be affirmed only in part. * * *” The appellate court reversed the judgment and ordered a new trial, unless the plaintiff elected to take *240judgment for $1,000, in which case the trial court was ordered to enter judgment for that amount. This was in substance what was done on the appeal involved in the case before us, the only difference being that this (the appellate) court itself entered such a judgment conditioned upon the election of remittitur being exercised. The appellate court in the case cited said: “No- part of the original judgment was left in existence after the judgment of this court upon the former appeal. The fact that another judgment might be rendered in the future by the trial court upon the exercise of a certain option by the plaintiff could not under any theory be construed as any affirmance, even in part. The sureties are only held according to the language of their bond, and that language does not cover this case. They never agreed to pay a judgment rendered in future in the trial court, but only the existing judgment, or some part thereof, in case of affirmance.” That holding, too, goes much beyond the conclusions reached above in the instant case in the application of the strietissimi juris rule. Assuredly, the circumstance cited of the later judgment being ordered by the appellate court to be entered by the trial court, instead of its being entered by the appellate court itself, as in the instant case, does not distinguish the one case from the other. It is alike true in both cases that the later judgment is not the same, or for the same amount, as the judgment named in the terms of the bond, but another judgment, rendered in the future, conditioned to come into existence only in the event of the exercise of a certain option by the plaintiff. And of such a judgment, in the instant case, we must also say, that “it could not undér any theory be construed as any affirmance” of the whole judgment. of the trial court. And that being true, it is plain that it is not embraced in the terms of the bond in suit. The difference between the first and the second judgments, both in the case cited and in the instant case, is more substantial *241than the difference made by the circumstances of the second judgment being entered at a different time by the trial court in the cited case and at a different time by the appellate court in the instant case from the time of the entry of the original judgment. If the strictissimi juris rule excludes the judgment in question in the case cited from the obligation of the surety, a fortiori will such rule exclude the judgment in question in the instant case from the obligation of the surety which is set out in the terms of the bond in suit.

Rothgerber v. Wonderly, 66 Ill. 390, contains the same holding in substance as that of the case last above cited.

In Heinlen v. Beans, 71 Cal. 295, 12 Pac. 167, the obligation of the bond was to pay “if the judgment be affirmed.5?' The appellate court reversed the judgment of the trial court, but permitted a remittitur, and remanded the cause to the court below with direction to enter judgment accordingly, which was done. The court, in its opinion, said: “Now, if this judgment was affirmed at all it was only affirmed in part, and the undertaking does not impose on the parties the obligation to pay on any such contingency, but only in case the judgment appealed from is affirmed. We construe this to mean affirmed as rendered by the court below*. It does not mean affirmed in part.” Such holding is directly in point as applied to the instant case. It is true that the court in that case says that such conclusion on its part '“is strengthened” by the consideration that there was a provision of statute in that State under which there might be a stay of execution in case of an appeal from a judgment by the giving of a certain bond, which such statute provided should not only covenant to pay the amount of the judgment, but also “the part of the amount as to whwh judgment or order is affirmed, if affirmed only in part;” whereas the last quoted language was not contained in the appeal bond statute under which the obligation in that suit *242was given. But the reasoning of the court is quite convincing, without the aid of 'such strengthening consideration.

!■ And in Galloway V. Yates, supra, 10 Minn. 75 (Gil. 53), the undertaking of the bond was to “prosecute the appeal with effect” and to pay the judgment appealed from in case it “be affirmed or any part thereof be affirmed,” the amount to be paid to be “the amount directed to be paid by the Judgment or the part of such amount as to which the judgment shall be affirmed.” And the appellate court, as stated in the opinion, reversed the judgment of the trial court “unless the plaintiff should within ten days remit the verdict as to all the defendants except one, and consent to take judgment against him alone, * * * in which event said order appealed from is affirmed.” This was, in substance, precisely what was done by the appellate court in the instant case. The opinion says: “Now, all that was done by the Supreme Court was to affirm or rather modify an order, not •a judgment in whole or in part. This was not, by the terms of the undertaking, the contingency upon the happening of which the appellants agreed to pay. There has been no >breach upon their part.” (Italics supplied.) From which •again appears a strictness of construction of the terms of ■the obligation of the surety in the appeal bond exceeding \that applied by the conclusion above reached in the instant ' case.

d And again, in Lang v. Pike, 27 Ohio St. 498, the bond was given by two appellants on appeal from a judgment against them both conditioned to pay if the judgment was “affirmed.” The judgment was affirmed in toto as to one of the appellants, but reversed as to the other. The court held that the surety was discharged. The court said: “To hold differently would be enlarging the term and changing the condition of the undertaking, thereby making, by construction a new undertaking of the parties and holding Pike responsible for conditions not in his contract.” Such and so strict is the rule applicable to the obligation of a surety.

*243By way of summary, therefore, it may be said that the record in the instant case does not raise the question whether the surety is released if the principal obligor has become insolvent pending the appeal, or if the enforceability of the later judgment by execution has been impaired by reason of the supersedeas and subsequent delay thereby occasioned. So that no perversion of justice is threatened on that score. The record before us raises only the question of the application of the terms of the bond aforesaid and the determination of the purely legal question of whether such terms, under the strictissimi juris rule, obligate the surety to pay the judgment which was entered by this (the appellate) court, which was not the judgment named in the bond, but a different judgment which at most can be said to be only the former judgment “affirmed in part.”

For the foregoing reasons, I think the case should be reversed, and hence am constrained to dissent from the majority opinion.