Kountze v. Omaha Hotel Co.
107 U.S. 378 (1883)

Annotate this Case

U.S. Supreme Court

Kountze v. Omaha Hotel Co., 107 U.S. 378 (1883)

Kountze v. Omaha Hotel Company

Decided May 7, 1883

107 U.S. 378




1. An appeal bond in an ordinary foreclosure suit in a court of the United States does not operate as security for the amount of the original decree, nor for the interest accruing thereon pending the appeal, nor for the balance due after applying the proceeds of the mortgaged premises, nor for the rents and profits or the use and detention of the property pending the appeal, but only for the costs of the appeal, and the deterioration or waste of the property, and perhaps burdens accruing upon it by nonpayment of taxes and loss by fire if it be not properly insured. Quaere is its mere depreciation in market value any cause of recovery on the bond.

2. An appeal bond in such a suit, instead of following the statutory requirement, "that the appellant shall prosecute his appeal to effect, and if he fail to make his plea good, shall answer all damages and costs," superadds the words that he shall "pay for the use and detention of the property covered by the mortgage in controversy during the pendency of the appeal." In an action on the bond, held that these words must be rejected, and the bond construed as having its ordinary and proper legal effect, the judge taking it having no right to exact such an addition to the condition of an appeal and supersedeas.

3. This case distinguished from those in which official bonds, and bonds given to the government for the purpose of enjoying some office or privilege, have been sustained as contracts at common law.

The case is stated in the opinion of the Court.

MR. JUSTICE BRADLEY delivered the opinion of the Court.

This is an action on an appeal bond given for supersedeas of execution on a decree of foreclosure rendered by the Circuit

Page 107 U. S. 379

Court for the district of Nebraska, and appealed to this Court and affirmed, and the question is as to the measure of damages to be recovered on said bond.

The foreclosure suit was brought to raise the amount due on certain bonds of the Omaha Hotel Company out of certain land and premises situated in the City of Omaha, which had been mortgaged by the company to secure the payment thereof. A decree was made on the 8th of May, 1875, by which it was ordered that the mortgaged premises be sold and the proceeds applied to pay the debt, after paying costs of sale and insurance and taxes accruing in the meantime. The defendants appealed, and to obtain supersedeas of execution gave the appeal bond which is the subject of the present controversy. The bond was in the penalty of $50,500, and after reciting the decree and appeal, was conditioned as follows:

"Now, the condition of the said obligation is such that if the said Omaha Hotel Company shall duly prosecute said appeal to effect, and pay said Jeptha H. Wade, James W. Bosler, Thomas Wardell, John A. Creighton, administrator of the estate of Edward Creighton, deceased, Andrew J. Poppleton, Augustus Kountze, Herman Kountze, and Henry W. Yates, their executors, administrators, or assigns, for the use and detention of the property covered by the mortgage in controversy in this suit, during the pendency of said appeal, and the costs of the suit, and just damages for delay, and costs and interest on said appeal, if it fails to make good its plea, this obligation shall be void; otherwise to remain in full force and virtue."

The decree being affirmed and the premises sold, the proceeds were found to be insufficient to satisfy the debt, to the amount of $88,480.85, and for this deficiency a decree was rendered against the Omaha Hotel Company, and an execution issued, which was returned unsatisfied.

Thereupon the present suit was brought on the appeal bond, and the plaintiffs by their petition claimed the entire penalty and interest on the facts above stated and on the ground that the company was insolvent, that, pending the appeal, the property had depreciated in value $30,000, and that the use and detention of it was worth $30,000 more. The defendants, in their answer, averred that they had kept the property in good

Page 107 U. S. 380

repair at a large expense, had paid all the taxes upon it, and had kept it insured for the benefit of the bondholders to the amount of $100,000, and that instead of depreciating, it was worth much more when the sale was made than it was at the time of the original decree. The jury, by a special verdict, found that the rental value of the property, pending the appeal, with interest to the time of trial, was $44,838,67, and that the expenses paid by the defendants for taxes, insurance, and repairs, with interest thereon, was $26,082,71; that the value of the property in May, 1875, was $92,500, and in April, 1878, $139,000; that in May, 1875, it would have sold at master's sale for $62,000 [whereas it sold in 1878 for $120,000]; that the interest on the decree pending the appeal was $58,870.25, and that the penalty of the bond, with interest from July 11, 1878, to the time of the trial, amounted to $57,750, and that the costs of the original suit unpaid by the defendants was $530.

The court rendered judgment in favor of the plaintiffs for $19,735.93, being the difference between the rental value of the property pending the appeal, and the sums expended by the defendants for taxes, insurance, and repairs, allowing interest on both sides; with the addition of the item of $530 costs unpaid by the defendants, and interest from the time of trial to the date of the judgment.

Both parties brought writs of error.

The plaintiffs now contend that they ought to have had judgment for the entire penalty of the bond because first, the bond expressly provides that the Omaha Hotel Company shall pay for the use and detention of the property pending the appeal, as well as costs and just damages for delay, which greatly exceeds the penalty; secondly, if the bond is to be limited in effect to the terms of the statute prescribing a bond, the damages are still greater than the penalty, its legal effect being to secure, to the extent of the penalty, 1, payment of the whole decree beyond what may be produced by the sale of the property, 2, the interest accruing pending the appeal, which alone exceeds the penalty, 3, the value of the use and detention of the property pending the appeal.

The defendants contend that judgment should have been given for them.

Page 107 U. S. 381

The appeal bond sued on in this case was given under the requirement of sec. 1000 of the Revised Statutes, which declares that every justice or judge signing a citation or any writ of error shall, except in cases brought up by the United States, etc., take good and sufficient security that the plaintiff in error or the appellant shall prosecute his writ or appeal to effect, and, if he fail to make his plea good, shall answer all damages and costs, where the writ is a supersedeas and stays execution, or all costs only where it is not a supersedeas as aforesaid. Sec. 1007 gives the effect of a supersedeas to a writ of error where such a bond as above described is given, and the writ is sued out and filed in proper time. Sec. 1010 declares that where judgment is affirmed the court shall adjudge to the respondent in error just damages for his delay, and single or double costs at its discretion. Sec. 1012 declares that appeals from the circuit courts, etc., shall be subject to the same rules, regulations, and restrictions as are or may be prescribed in law in cases of writs of error.

These enactments are substantially a reproduction of like clauses in the Judiciary Act of 1789, as regards writs of error, and of the act of 1803, as regards appeals. The material words are the clause in the bond which declares

"that the plaintiff in error [or appellant] shall prosecute his writ to effect, and if he fail to make his plea good, he shall answer all damages and costs."

The scope and effect of this phrase, as applied to cases like the present, are the principal point in controversy. The bond sued on has an additional phrase not required by the law, the effect of which will be separately considered.

By the common law a writ of error, without any security, was of itself a supersedeas of execution from the time of its allowance or recognition by the court to which it was directed, and even before, if the defendant in error had notice of it; or, in the common pleas, from the time of its delivery to the clerk of the errors of that court, whose business it was, among other things, to prepare the returns. 1 Tidd's Pract. 530, 1145; Impey's Pract. C.P. 16; Petersd.Abr. tit. Error, I (H.a.). The presentation of the writ issuing from the superior

Page 107 U. S. 382

court stopped all further proceedings except such as were incidental to a compliance with its command to certify the record. But, as writs of error came to be sued out for the purpose of delay, various acts of Parliament were passed requiring security in certain cases in order that the writ might operate as a supersedeas. First, without referring to a statute in the time of Elizabeth, the statute of 3 James I. c. 8, declared that no execution should be stayed or delayed upon or by any writ of error, or supersedeas thereon, for the reversing of any judgment in debt upon a single bond, or a bond with condition for the payment of money only, or in debt for rent, or upon any contract, unless the plaintiff in error, with two sufficient sureties, should first be bound to the plaintiff in the judgment,

"by recognizance, in double the sum recovered by the former judgment, to prosecute the writ of error with effect, and also to satisfy and pay, if the said judgment should be affirmed, or the writ of error nonprossed, all and singular the debts, damages, and costs adjudged upon the former judgment, and all costs and damages to be awarded for the delaying of execution."

This statute was specific as to the cases in which bail in error (as it was called) was required, and it was frequently held that it could not be required in any other cases. 2 Sellon's Pract. 367-374; 2 Tidd, 1150. Subsequently, by the statute of 13 Car. II. c. 2, as enlarged by 16 & 17 Car. II. c. 8, the same recognizance was required to stay execution in all personal actions in which a judgment was rendered upon a verdict, and in most cases double costs were given in case the judgment was affirmed, and in writs of error upon judgment, after verdict in dower and ejectment, it was provided that execution should not be stayed unless the plaintiff in error should be bound to the plaintiff in such reasonable sum as the court below should think fit, with condition that if the judgment should be affirmed, or the writ of error discontinued, in default of the plaintiff in error, or he should be nonsuited therein, that then he should pay such costs, damages, and sum or sums of money as should be awarded upon or after such judgment affirmed, discontinuance, or nonsuit, and to ascertain the sum and damages to be awarded, it was provided that the court should issue a writ of inquiry as well of the mesne profits as

Page 107 U. S. 383

of the damages by any waste committed after the first judgment in dower or ejectment, and give judgment therefor and for costs. This was the form in which the law stood for more than a century prior to our revolution, and is believed to have generally prevailed in this country, either by force of the English statutes, or similar statutes adopted by the colonies themselves, down to the time of the passage of the Judiciary Act by Congress in 1789. See 1 Rev.Laws N.Y. (1813), p. 143, Act of 1801; Acts of New Jersey, Feb. 1, 1799, and Feb. 28, 1820, Elmer's Dig. 159, 169; Act of Maryland, 1713, c. 4, 1 Kilty's Laws, and Alexander's British Statutes in force in Maryland, 16 & 17 Car. II. c. 8. In Virginia, by the act of 1788, it was provided that before granting any appeal from a county to a district court, or issuing any writ of error or supersedeas, the party praying the same should enter into bond with sufficient security, in a penalty to be fixed by the court or judge, with condition to pay the amount of the recovery, and all costs and damages awarded, in case the judgment or sentence should be affirmed, and the damages were fixed at ten percent per annum upon the principal sum and costs recovered in the inferior court, and the same provisions were applied to appeals and writs of error to the court of appeals. By the act of 1794, on appeal from a decree in equity to the High Court of Chancery, the condition of the appeal bond required was to satisfy and pay the amount recovered in the county court, and all costs, and to perform in all things the decree, if the same should be affirmed. Laws of Virginia, ed. 1814, pp. 115, 87, 448. In Massachusetts, as appears by an early case (1804), a supersedeas was granted upon the plaintiff in error giving bond to respond all damages and costs in case the judgment should be affirmed. Bailey v. Baxter, 1 Mass. 156. In Pennsylvania, where the judgment was affirmed upon a writ of error, the execution included the interest from the date of the original judgment. Respublica v. Nicholson, 2 Dall. 256.

It is thus seen that, in the case of money judgments, bail in error was required to secure 1, the amount of the original judgment, 2, the costs and damages occasioned by the delay of execution, and, in the case of dower and ejectment, the only other cases in which bail was required, and where the

Page 107 U. S. 384

main thing in controversy was land, bail was required to secure only such costs, damages, and money as should be awarded after affirmance of judgment, for mesne profits and waste pending the appeal.

In relation to money judgments, a long train of decisions in England shows that the damages for delay for which the bail in error were to respond were the interest on the sum recovered below from the day of signing final judgment to the time of affirmance, and costs in the writ of error, and in some cases double costs. In the Exchequer Chamber, when double costs were recoverable, the court exercised its discretion whether to allow interest or not, it not being allowed as a matter of course; but interest was only allowed where the original demand was one that drew interest, and not in cases of mere tort or unliquidated damages. Tidd, 1182, 1183. In the House of Lords, they gave large or small costs in their discretion, according to the nature of the case, and the reasonableness or unreasonableness of litigating the judgment of the court below. Id., 1184.

We have no reason to believe that the rule of damages for delay on a recognizance, or bond in error, was materially different in this country, in 1789, from that which prevailed in England. The statutes being substantially the same, undoubtedly the same rule prevailed in administering them.

On appeals in chancery, the practice in England, in case of an appeal from the Master of the Rolls to the Lord Chancellor, was for the party appealing to deposit

Official Supreme Court caselaw is only found in the print version of the United States Reports. Justia caselaw is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.