National Surety Co. v. Commonwealth
National Surety Co. v. Commonwealth
Opinion of the Court
delivered the opinion of the court.
This case is the sequel to an action of assumpsit brought by the defendant in error, the Westinghouse Electric and Manufacturing Company against the plaintiff in error, the Washington and Old Dominion Railway, in the Circuit Court of Loudoun county. In that action the plaintiff recovered against the defendant a judgment for $81,652.19, with interest at the rate of five per centum per annum from May 1, 1913, till paid, subject to a credit of $791.13, as of the last-named date, and costs. To that judgment a writ of error and supersedeas was granted by this court upon condition that the defendant execute bond with approved security in the penalty of $100,000.00 with condition according to law. Whereupon, the defendant executed the required bond, with the plaintiff in error, the National Surety Company, a corporation, as its surety.
On March 15, 1917, this court entered the following order : “This day came again the parties, by counsel, and the court having maturely considered the transcript of the rec
The plaintiff, within ninety days from the day on which the foregoing order was entered, to-wit, on May 9, 1917, availed itself of its right of election, as provided in the order, and on that day elected in writing to relinquish the stipulated interest, filing its remittitur in writing with the clerk of the circuit court, who filed the same with the papers in the cause..
The plaintiffs in error, the National Surety Company and Washington and Old Dominion Railway, denying liability on the supersedeas bond, this action of debt was instituted thereon against them by the defendant in error, the Commonwealth of Virginia, suing at the relation and for the benefit of the Westinghouse Electric, and Manufactur
The defendants interposed a demurrer to the declaration and pleas of ml debet and conditions performed; and neither party requiring a jury, and all matters of law and fact having been submitted to the court, the demurrer was overruled and the judgment under review pronounced in favor of the plaintiff against the defendants.
There is no ambiguity about the issue in this case. The order of this court of March 15, 1917, in the original case, was in terms set out in the declaration in this case, and the decision overruling the demurrer to the declaration is controlling. If the mandate of this court of March 15, 1917, affirmed the original judgment in behalf of the plaintiff against the defendant, the Washington and Old Dominion Railway, according to the true intent and meaning of the condition of the supersedeas bond, then the demurrer to the declaration was rightly overruled, and the defendants have not performed and satisfied the obligation of the bond-, and are liable. If, on the other hand, the order of this court in intendment and result amounts to a reversal of the original judgment, then, in that event, the bond has- been satisfied and the obligors therein are discharged. The condition of the bond is, “to perform and satisfy the judgment * * * in case the said judgment be affirmed, or * * * the writ of error, or supersedeas, be dismissed, and also to pay all damages, costs and fees which may be awarded against or incurred by * * * the petitioners, in the appellate court, and all actual damages incurred in consequence of the super-sedeas.”
We are persuaded that the procedure adopted by this court in the case of Washington and Old Dom. Ry. v. Westinghouse, supra, is so thoroughly established by direct and controlling decisions and has been so long acquiesced in and acted upon as to bring it within the influence of the maxim of stare decisis.
The case of Shepherd’s Adm’r v. Chapman’s Adm’r, 83 Va. 215, 2 S. E. 273, cited by counsel for defendants, is in accord with the long line of precedents to which attention has been called. That, it is true, was a chancery cause, but it was there held: “It is a familiar doctrine that where a decree is reversed in part and affirmed as to the residue, such reversal does not destroy the lien of so much of the decree as is affirmed.” Chapman v. Shepherd, 24 Gratt. (65 Va.) 377; Knifong v. Hendricks, 2 Gratt. (43 Va.) 212, 44 Am. Dec. 385; Moss v. Moorman, 24 Gratt. (65 Va.) 97; 2 Barton’s Chy. Pr., sec. 295. The court in the principal case affirmed the decree except as to a charge of compound interest, and remanded the cause with directions that the illegal interest be stricken out. The opinion then uses this language: “We do not mean to say that the view above expressed applies to cases at law where, after a jury trial and judgment, the judgment on writ of error is reversed and a new trial awarded; for in such cases the reversal is total and not partial, even though the reason for the reversal goes only to a part and not to tibe whole of a demand.” That is an accurate statement as to the effect of the reversal of the judgment in the instance given; it was plainly an absolute reversal which set aside the judgment and awarded a new trial. But we do not understand the oninion to mean that under our decisions and section 3485 of the Code this court may not put a party uuon terms, or reverse a judgment, decree or order, “in whole or in part.”
Viewing, then, the situation, not as at the date of this court’s order (which was dependent on certain doubtful contingencies), but as at the time action was-brought on the supersedeas bond, the judgment of the circuit court stood affirmed as a •(whole, albeit part of it had been released by the plaintiff’s own act.
Applying, then, the strictissimi juris doctrine to the liability of the surety, it seems clear that the condition of the supersedeas bond has been broken and the surety company is liable.
The second assignment of error complains of the disal-lowance of a set-off of a judgment for $417.32, costs recovered by the Washington and Old Dominion Railway against the plaintiff. That demand was not put in issue by the pleadings nor set out in the grounds of defense (Code, secs. 3249, 3298), and, therefore, was not within the cognizance of the court.
We think neither of the grounds of error assigned has been maintained, and are of opinion to affirm the judgment.
Affirmed.
Dissenting Opinion
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
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.”
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.
(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.
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
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
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
!■ 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.
For the foregoing reasons, I think the case should be reversed, and hence am constrained to dissent from the majority opinion.
Reference
- Full Case Name
- National Surety Company and Others v. Commonwealth of Virginia, ex rel. etc.
- Cited By
- 11 cases
- Status
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- Syllabus
- 1. Appeal and ERROR&emdash;Supersedeas Bond&emdash;Remittitur. &emdash; Section 3485, Code of 1904, is as follows: “The appellate court shall affirm the judgment, decree, or order if there be no error therein, and reverse the same, in whole or in part, if erroneous, and enter such judgment, decree, or order as the court whose error is sought to be corrected ought to have entered.” (Italics supplied.) In other words, the statute in terms authorizes a partial reversal, and the entry by the appellate court of a judgment, the effect of which must be to affirm in part and reverse in part the original judgment. It must follow that to the extent to which the judgment is affirmed, it is still valid and binding upon the original judgment debtor, and also upon the sureties in the supersedeas bond, who will be held to have entered into their contract with knowledge that their liability under it was to be controlled by the provisions of section 3485. 2. Appeal and Error &emdash; Supersedeas Bond&emdash;Purpose of Bond.&emdash; The bond is one of indemnity, the object of which is to secure to a successful litigant the ultimate fruits of his recovery, in whole or in part, and to insure him against loss from the possible insolvency of his debtor, or from other cause, pending the appeal. 3. Appeal and Error&emdash;Supersedeas Bond&emdash;Remittitur.&emdash;It would be anomalous to hold the sureties bond for the entire judgment in the event of an absolute affirmance, but not for a lesser sum in case of a partial affirmance in conformity to the statute, on the supposition that the latter constitutes a new and different judgment. It is in no correct sense a new judgment, but an amendment of the old judgment, with the erroneous part of it expunged, made in contemplation of the statute and in obedience to its mandate. It does not nullify the old judgment, but amends it, and as amended affirms it. 4. Appeal and Error&emdash;Putting on Terms&emdash;Remittitur.&emdash;A party may be in effect put on terms in the appellate court as well as in the trial court. When a party is put on terms in the appellate court because a judgment in his favor is excessive, it may reverse the judgment of the trial court and remand the cause, with direction to the trial court to put the successful party upon terms to release the excess, or else submit to a new trial, and if the release is made, to overrule the motion for a new trial, and render judgment for the correct amount with interest and costs; or, if the error be one of mere calculation, readily corrected from the record, or if the verdict and judgment of the trial court is excessive and the record affords plain and certain proof of the amount of the excess so that it may with safety be corrected, in either event the appellate court will amend and affirm the judgment of the trial court, and will not remand the case for such amendment. 5. Appeal and Error — Supersedeas and Stay of Proceedings — Re-mittitur — Case at Bar. — By order of the Supreme Court of Appeals, after a conditional reversal, plaintiff was allowed to enter a remittitur as to the interest, in which event it was declared that the judgment should stand affirmed. Defendants insisted that this order released the sureties on the supersedeas bond conditioned to perform and satisfy the judgment in case the judgment be affirmed. It did not appear whether the principal debtor was or was not solvent; but, if insolvent and defendants’ plea prevailed, plaintiff would lose the principal of a demand to which the jury, the trial court, and the Supreme Court of Appeals had adjudged it entitled. Held: That in reason defendants’ position could not be sustained. 6. Appeal and Error — Supersedeas and Stay of Proceedings — Re-mittitur — Case at Bar. — The only modification that resulted in the judgment of the lower court from the appeal was not due to any change made therein by the Supreme Court of Appeals or by the trial court, but was made by the plaintiff itself. And in no proper sense could the be said to constitute a change in the judgment. It recognized the continued existence of the judgment as originally rendered, but refrained from exacting a part of it. That was not a judicial ascertainment by this court that the judgment, or any part of it, was void or voidable, but was an affirmation of the judgment in toto, if the plaintiff should elect to enter a remittitur as to the interest. 7. Suretyship — Extent of Liability — Implication.—The surety’s liability is not to be extended by implication beyond the terms of his contract. But, whatever that contract is, the surety is bound by it. Its terms can no more be restricted by implication than extended. 8. Surety Companies — Principle by Which Contract Governed. — The general rule as to the contracts of surety companies, where they receive compensation for the risk assumed, is that they resemble insurance contracts and are governed by the same principles.