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 �10, to be paid to the other party
if the decree was not materially varied, and he was also required
to pay the costs of the appeal, and on appeal from the Court of
Chancery to the House of Lords, the appellant was obliged to make a
deposit of �20, and give security by recognizance in the sum of
�200, to pay such costs to the defendant in the appeal as the court
should appoint, in case the decree should be affirmed. Harrison's
Pract. in Chancery, ed. Newland, pp. 342, 349. In 1810 these
amounts were doubled. Smith's Ch.Pr. 27, 44. If a party wished to
file a bill of review, the general rule was, that he must perform
the decree before filing his bill.
Page 107 U. S. 385
Such being the rules prevailing on the subject when the act of
1789 was passed, which required the plaintiff in error to give
security "to prosecute the writ of error to effect, and to answer
all damages and costs if he failed to make his plea good," the
extremely general terms of the law are noticeable. According to the
English law, the terms "all damages and costs," would only cover
the damages for delay, security for the original judgment being
expressly provided for by separate words; but the act of Congress
does not say "damages for delay," but generally "all damages and
costs," without any specific provision for the original judgment,
and the bond is required in all cases, and not merely on error to
money judgments and judgments in dower and ejectment, and not
merely in cases at law, but in cases of equity also; for the writ
of error was the process of review prescribed by the Judiciary Act
both at law and in equity, and when appeals were allowed in the
latter by the act of 1803, they were subjected to the same rules
and conditions as writs of error. The only guide, or hint of
guidance, given by the Judiciary Act as to what damages were to be
awarded on a bond in error, other than what might be deduced by
analogy from the English and state laws, is an expression contained
in the twenty-third section, where it is said that if, upon a writ
of error, the supreme or circuit court shall affirm a judgment or
decree, they shall adjudge or decree to the respondent in error
just damages for his delay, and single or double costs at
their discretion. So that, as the result of the whole, the matter
was left very much at large, and subject to the regulation of the
courts, and such analogies as existing laws afforded.
The Act of December 12, 1794, c. 3, it was declared that the
security to be required on signing a citation on a writ of error
which shall not be a supersedeas and stay execution, shall be only
to such an amount as, in the opinion of the judge taking the same,
shall be sufficient to answer all such costs as, upon an affirmance
of the judgment or decree, may be adjudged or decree to the
defendant in error. The substance of this act is reproduced in the
Revised Statutes; but it sheds no light on the question of damages
as distinguished from mere costs.
Page 107 U. S. 386
The supreme court at an early day (February term, 1803) adopted
the two following rules:
"1. In all cases where a writ of error shall delay the
proceedings on the judgment of the circuit court, and shall appear
to have been sued out merely for delay, damages shall be awarded at
the rate of ten percent per annum on the amount of the
judgment."
"2. In such cases, where there exists a real controversy, the
damages shall be only at the rate of six percent per annum. In both
cases, the interest is to be computed as part of the damages."
The latter rule was changed in 1852, when by an amended rule,
still in force, on affirmance of a judgment, interest was directed
to be calculated and levied from the date of the judgment below
until paid at the same rate that similar judgments bear interest in
the courts of the state where the judgment was rendered. 13 How.
v.
The other rule was amended in 1871, giving ten percent damages
in addition to interest, when the writ of error appears to be sued
out merely for delay. 11 Wall. x.
And both rules were extended to appeals from decrees in chancery
for the payment of money in 1852. 13 How. v.
These rules may undoubtedly be regarded as prescribing the
measure of damages for delay in the cases in which they apply --
that is, in the case of money judgments and decrees. But whether
the bond in error covered the original debt was not distinctly
decided until the case of
Catlett v.
Brodie, 9 Wheat. 553, came before the court. In
that case, judgment was rendered for the plaintiff below for a
large sum, but the judge who singed the citation took a bond in a
small amount to respond the damages and costs. On a motion to
dismiss the writ of error for insufficiency of the bond, it was
contended for the plaintiff in error that the act meant only to
provide for such damages and costs as the court should adjudge for
the delay. But the Court held that the word "damages" covered
whatever losses the plaintiff might sustain by the judgment not
being satisfied and paid after the affirmance; in other words, that
the bond in error had the same effect as the recognizance required
by the English statutes, and was intended to secure
Page 107 U. S. 387
payment of the original judgment, as well as the damages for
delay. Hence, the bond should have been taken in an amount
sufficient to secure the whole debt, and it was ordered that the
writ of error should be dismissed, unless, within thirty days from
the rising of the court, the plaintiff in error should give a bond
sufficient in amount to secure the whole judgment.
In
Stafford v. Union Bank of
Louisiana, 16 How. 135, though no decision was
made, because the case was not properly before the Court, an
opinion was delivered by Justice McLean, as for the Court, that the
same rule would apply in case of an appeal from a decree in equity
for the sale and foreclosure of certain negroes who had been
delivered to a receiver
pendente lite, and that the bond
should have been to secure the whole mortgage debt. Justice Catron
dissented from this view, holding that where there was a fund in
the possession of the court, no security to cover its contingent
loss should be required, and that to construe the act as if this
were a simple judgment at law would operate most harshly.
In accordance with the suggestion made by the Court, application
was made for a mandamus to the judge below, to compel him to cause
the decree to be carried into execution notwithstanding the appeal.
On a rule to show cause the judge returned the facts as above
stated, and that he had no power to take further order in the case.
But the court, deeming the appeal bond insufficient to operate as a
supersedeas, granted the mandamus.
Subsequent decisions have undoubtedly modified the rule followed
in this case, and, indeed, have overruled it, and are more in
accordance with the views expressed by Justice Catron.
In
Roberts v.
Cooper, 19 How. 373, which was an action of
ejectment for the recovery of mining lands, the plaintiff having
recovered the land with only nominal damages, a writ of error was
brought by the defendant, who was required to give a bond for only
$1,000. The plaintiff applied to this Court for an order requiring
additional security, producing affidavits to show that the damages
which he would sustain by the delay in working the mine, caused by
the supersedeas, would exceed $25,000. The Court refused the
motion, and said that if it
Page 107 U. S. 388
were a money demand, on which a sum certain had been given by a
judgment, it would have been the duty of the judge to take care
that good security was given; but that in ejectment, where only
nominal damages are recovered, the court cannot interfere to
enlarge the security to recover damages which a plaintiff may
recover in an action for mesne profits, or other losses he will
sustain by being kept out of possession. The Court held that the
case was not provided for by any legislation of Congress, as had
been done in England by the statute of 16 & 17 Car. II. c.
8.
In the
Rubber Company v.
Goodyear, 6 Wall. 153, the subject again came
before this Court on a question as to the amount of security
required upon appeal from a personal decree in equity, where a
portion of the amount had been secured by a deposit in court. The
decree was for over $300,000, and the judge following the usual
practice required a bond in double the amount of the decree. The
defendants, as security for the claim, had deposited in the court
below government bonds to the amount of $200,000. On a motion in
this Court to reduce the amount of the bond, the Court reduced it
to $225,000. Chief Justice Chase, delivering the opinion of the
Court, said: "It is not required that the security shall be in any
fixed proportion to the decree. What is necessary is that it be
sufficient."
From the amount involved in this case and the eminence of the
counsel engaged in it, it was no doubt carefully considered. After
its determination, the Court made a general rule as to the amount
of indemnity required in supersedeas bonds, which now stands as the
29th Rule of the Court. This rule declares that
"such indemnity, where the judgment or decree is for the
recovery of money not otherwise secured, must be for the whole
amount of the judgment or decree, including 'just damages for
delay' and costs and interest on the appeal; but in all suits where
the property in controversy necessarily follows the event of the
suit, as in real actions, replevin, and in suits on mortgages; or
where the property is in the custody of the marshal, under
admiralty process, as in case of capture or seizure; or where the
proceeds thereof, or a bond for the value thereof, is in the
custody or control of the court, indemnity in
Page 107 U. S. 389
all such cases is only required in an amount sufficient to
secure the sum recovered for the use and detention of the property,
and the costs of the suit, and just damages for delay, and costs
and interest on the appeal."
Since the adoption of this rule, the matter has come up for
consideration in several cases. In
French v.
Shoemaker, 12 Wall. 86, where the matter in
controversy was the possession of a railroad, the interest of the
defendant in which had been pledged as security for $5,000, and
which was in the hands of a receiver, upon a decree for the
complainant, and an appeal, the bond taken for a supersedeas was in
the penalty of $500, and this Court, after reciting the rule, held
that nothing appeared to show that the bond was insufficient.
In
Jerome v.
McCarter, 21 Wall. 17, an appeal was taken from a
decree of over a million of dollars for the foreclosure and sale of
a canal, subject to a prior lien of over a million and a half of
dollars. The canal company had become bankrupt, and the assignees
in bankruptcy brought the appeal. The appeal bond required of them
was $10,000, and motion was made in this Court to have the amount
of security increased. The Court, after reviewing the previous
cases, and adverting to the 29th rule, refused the motion, holding
that the amount of security in such a case was in the discretion of
the judge who took the bond, and that this Court would not
interfere with that discretion, unless there had been a change of
circumstances requiring additional security. The Chief Justice
said:
"This is a suit on a mortgage, and therefore, under this rule, a
case in which the judge who signs the citation is called upon to
determine what amount of security will be sufficient to secure the
amount to be recovered for the use and detention of the property,
and the costs of the suit, and just damages for the delay, and
costs and interest on the appeal. All this, by the rule, is left to
his discretion."
It being contended that the judge had disregarded the
established rule, to require security for the interest accruing
pending the appeal, which in that case would amount, on the debt
due to the complainant and on the prior liens, to more than half a
million of dollars, the court held that this is not the requirement
of the rule; that the object is to provide indemnity for the loss
by the accumulation
Page 107 U. S. 390
of interest consequent upon the appeal, not for the payment of
the interest, and that, as to this, the judge must determine. It
was added that the decree did not interfere with an action at law
against the company, if it were not bankrupt, nor with proving the
claim in bankruptcy, and obtaining a dividend, since it was
bankrupt.
So far as the point decided in this case goes, it determines
that on an appeal from a decree for the foreclosure of a mortgage,
the appeal bond is not intended as security for either the amount
of the decree or the interest accruing pending the appeal, but for
such damage as may arise from the delay incident to the appeal, and
although it is intimated that this damage may depend upon the use
and detention of the mortgaged property, yet that was not the point
in judgment.
In
Ex Parte French, 100 U. S. 1 (an
ejectment case), the bond being amply sufficient to cover the
damages, or mesne profits, recovered in the court below, this Court
refused to interfere, by a mandamus, to compel the court below to
proceed to execution. THE CHIEF JUSTICE said:
"In this view of the case, the bonds are sufficient in amount
and form. So far as the money parts of the judgment are concerned,
they are far in excess in each instance of the amount recovered
against the several defendants who seek the stay, and as to the
damages on account of the detention of the property, we decided in
Jerome v. McCarter, that the amount of the bond rested in
the discretion of the judge or justice who signed the citation, or
allowed the supersedeas, and would not be reconsidered here."
In this case, the Court did look to see whether the bond was
sufficient to cover the mesne profits or damages recovered below,
but declined to examine into its sufficiency to secure the mesne
profits accruing pending the proceedings in error, leaving that to
the discretion of the judge. The case decides nothing as to whether
such mesne profits would be recoverable under the bond or not. By
the English statute of 16 & 17 Car. II. c. 8, as we have seen,
they would be so recoverable; but in
Roberts v. Cooper,
before cited, it was held that our statute does not provide for the
case.
The last case to which we shall refer is that of
Supervisors
v. Kennicott, 103 U. S. 554.
There, the county whereof the plaintiffs
Page 107 U. S. 391
in error were supervisors had given a mortgage upon its swamp
lands to secure an issue of bonds by the Mount Vernon Railroad
Company. This mortgage was foreclosed, and the lands were decreed
to be sold to raise the amount due, which was ascertained by the
decree. The county appealed, and a supersedeas bond of $40,000 was
required to be given. The decree being affirmed by this Court, a
suit was brought on the appeal bond, and judgment was given against
the county for the whole penalty. The judgment was brought here by
writ of error, and reversed on the ground that no damages had been
shown which could be recovered on the bond. The damages set up by
the plaintiffs were 1, the interest on the debt which accrued
pending the appeal, which exceeded the penalty of the bond, 2, the
balance of the debt which remained unsatisfied after the lands were
sold, which largely exceeded the bond. We held that neither of
these items could properly be assigned as damages within the
meaning of the condition of the appeal bond. In that case, as was
observed by the Court, no claim was made for the use and detention
of the lands pending the appeal, except in the way above stated.
The debt was not the debt of Wayne County, and no damage could have
resulted from the stay of execution except the delay in the sale,
as no personal judgment could have been rendered against the county
for the debt, and, of course, no execution could have been issued
against it.
This case does not decide the precise question now before us,
because there was no party before the court who was personally
liable for the debt, and no claim was made for intermediate rents
and profits, or for use and detention of the land.
In view of the authorities, therefore, as far as they go, if the
bond in the present case is to be regarded as importing nothing
more than the bond prescribed by the statute, it is clear that it
did not operate as security for the original decree, nor for the
interest which accrued pending the appeal; nor, by consequence, for
the balance of these amounts, or either of them, after applying the
proceeds of the mortgaged property. The item of $530 costs unpaid
by the defendants in the original foreclosure suit, come under the
same head, being part of the original decree, to pay which the
lands were ordered to be
Page 107 U. S. 392
sold. The only ground of recovery upon the bond could be 1, the
depreciation of the property in market value pending the appeal; or
2, its deterioration by waste, or want of repair, or the
accumulation of taxes or other burdens; or 3, the use and detention
of the property pending the appeal -- that is, the rents and
profits, or 4, the nonpayment of the costs of the appeal, which
accrued in this Court; but the special verdict does not find that
these costs were unpaid.
If depreciation in market value can ever be laid as cause of
legal damages on a bond in error (which we greatly doubt), it
cannot be done in this case, because it is found by the special
verdict that the property considerably increased in value pending
the appeal. Deterioration by waste, etc., is a very different
matter; but that is equally out of question in this case, as no
deterioration is shown. The defendants paid the taxes and
insurance, and kept the property in repair. The principal question
for consideration therefore is, whether the plaintiffs were
entitled to recover the rents and profits, or damages for the use
and detention, as it is otherwise called.
We have seen that, even in ejectment, it has at least been
questioned by this Court whether the bond in error covers rents and
profits accruing pending the writ. And yet these is a material
difference between the case of ejectment and the suit for the
foreclosure of a mortgage.
The difference is this: in ejectment, the property of the land
is in question, and if the plaintiff has the right, he is entitled
to immediate possession and to the perception of the rents and
profits, which belong to him and for which the defendant in
possession is accountable to him. Every dollar, or dollar's worth,
is so much of the plaintiff's property of which he is deprived. And
the same is true in dower. But in the case of a mortgage, the land
is in the nature of a pledge, and it is only the land itself -- the
specific thing -- which is pledged. The rents and profits are not
pledged: they belong to the tenant in possession, whether the
mortgagor, or a third person claiming under him. This is not only
the common law, but it is the express statute law of Nebraska,
which declares that "in the absence of stipulations to the
contrary, the mortgagor retains the legal title and right of
possession." The plaintiff, in this
Page 107 U. S. 393
case, was not entitled to possession nor to the rents and
profits. His foreclosure suit did not seek possession, but sought a
sale of the specific thing, the land. In such a case, until the
litigation is ended, it doth not appear that there must be a sale,
or even that the plaintiff is entitled to a sale. The defendant in
possession is entitled to redeem the land until a sale is made, and
until then he is entitled to the rents and profits, which belong to
him, as of right. The taking of the rents and profits prior to the
sale does not injure the mortgagee, for the simple reason that they
do not belong to him. Waste -- that is, destruction or injury to
the land itself -- as before stated, is an injury to the mortgagee.
It diminishes the value of the pledge, and for such injury no doubt
he might recover on the appeal bond. Other deteriorations, such as
occur by want of repairs, accumulation of taxes, fires not covered
by reasonable insurance, and the like, probably might also be
fairly covered by the bond. But perception of rents and profits is
the mortgagor's right until a final determination of the right to
sell, and a sale made accordingly.
The mere delay of the sale for the purposes of an appeal does
not operate to the legal injury of the mortgagee. It does not
suspend execution for the debt; he has no right to such an
execution by the decree of foreclosure and sale. It is not a decree
against the person, and cannot be enforced by an execution against
goods and lands generally. It is simply a decree for the sale of
the land mortgaged, in order that the proceeds may be applied to
the debt. The amount due is ascertained by the decree, it is true,
but only for the purpose of determining the amount of charge on the
land. The debt may be prosecuted by a personal action against the
debtor, and this may be the defendants in the suit or some other
person. The rule of court by which a personal decree may, in some
cases, be entered up against the mortgagor for the residue of the
debt, after the proceeds arising from the sale of the land have
been applied, is a recent rule intended to obviate the necessity of
a separate action. It has not changed the essential nature of the
decree for foreclosure and sale.
It often happens that the debt is not fully ascertained when a
decree for sale and foreclosure is made; as where there are
Page 107 U. S. 394
many outstanding bonds which have to be called in and verified.
The sale in such cases is frequently made in advance, and the
proceeds brought into court for distribution among those who may
appear to be entitled thereto; all of which shows that a decree of
foreclosure is a very different thing from a personal decree or
judgment for the debt.
As it is the specific thing, the land itself, and not the rents
and profits, that constitutes the pledge, the delay of sale caused
by the appeal, as before said, deprives the mortgagee of no legal
right. It may be an incidental disadvantage or inconvenience, but
in our judgment it is not a legal damage contemplated by the appeal
bond. We are aware that a contrary view has sometimes been taken at
the circuit; but upon a full consideration of the subject, we have
come to the conclusion now expressed. The chances of actual
deterioration and waste in certain classes of property are so great
that a bond in considerable amount may well be required, and if
actual deterioration and waste supervenes, the amount may properly
be recovered.
In addition to these general considerations, a careful
examination of the 29th rule will show that in cases like the
present it does not, in terms at least, contemplate security for
the use and detention of the property pending the appeal. The words
are
"indemnity in all such cases [where the property in controversy
necessarily follows the event of the suit] is only required in an
amount sufficient to secure the sum recovered for the use and
detention of the property, and the costs of the suit, and just
damages for delay,"
etc. "The sum recovered for use and detention," here referred
to, means the sum recovered in the original judgment or decree,
such as damages and mesne profits in ejectment, damages in dower,
and replevin, etc., and the phrase "just damages for delay," refers
to those damages arising from the delay occasioned by the
proceedings in error or appeal, which are properly a legal damage
to the party delayed. We are thrown back, therefore, to a
consideration of the nature of the particular case, to ascertain
what those legal damages properly are. The words "use and
detention" do not assist us, as they relate to a cause of recovery
in the original judgment.
Page 107 U. S. 395
There is another consideration which relieves the conclusion
which we have reached from any supposed hardship or injustice to
mortgagees. Courts of equity always have the power, where the
debtor is insolvent, and the mortgaged property is an insufficient
security for the debt, and there is good cause to believe that it
will be wasted or deteriorated in the hands of the mortgagor, as by
cutting of timber, suffering dilapidation, etc., to take charge of
the property by means of a receiver, and preserve not only the
corpus, but the rents and profits for the satisfaction of the debt.
When justice requires this course to be pursued, and it is resorted
to by the mortgagee, it will give him ample protection. There is no
necessity therefore in order to protect him from injury, that a
party, in order to have the benefit of an appeal, should be obliged
to give security to account for the intermediate rents and profits
of his own property.
We have devoted so much space to a consideration of the
principal question that we must dismiss the other point in a few
words. The plaintiffs contend that the bond in terms requires the
defendant to respond for the "use and detention" of the property
covered by the mortgage during the pendency of the appeal. As the
judge had no authority to require such a condition to be inserted
in the bonds, and probably was not aware of its insertion in this
case, and as a party ought not to be deprived of his right of
appeal upon the terms which the law prescribes, we should be very
reluctant to hold that this was a voluntary bond, knowingly entered
into beyond the requirements of the statute. We should rather hold
that it was drawn by attempting to copy the words of the 29th rule,
instead of following the statute, and inadvertently omitting the
connecting words. As an appeal bond, or bond in error, is a formal
instrument required by the law and governed by the law, and has, by
nearly a century's use, become a formula in legal proceedings, with
a fixed and definite meaning, and as the important right of appeal
is greatly affected by it, we think that it is not allowable, in
practice, by a change in its phraseology, to give to it an effect
contrary to what the statute intended. It would be against the
policy of the law to allow such deviations and irregularities to
creep in. We think the
Page 107 U. S. 396
rule followed in some of the states is a sound one, that if the
condition of an appeal bond, or bond in error, substantially
conforms to the requisitions of the statute, it is sufficient to
sustain it though it contain variations of language, and that if
further conditions be superadded, the bond is not therefore
invalid, so far as it is supported by the statute, but only as to
the superadded conditions.
See Sanders v. Rives, 3 Stew.
(Ala.) 109;
Gardener v. Woodyear, 1 Ohio, 170.
We are award, as shown by the citations on the plaintiffs'
brief, that official bonds, and bonds given to the government for
the purpose of enjoying certain offices or privileges, and perhaps
some others subject to like reason, have often been sustained as
contracts at common law, voluntarily entered into, where they have
not conformed to the statutory requirements, and would have been
insufficient and ineffectual for the purposes of a recovery, if
those requirements had been applied to them. We do not think that
this case fairly belongs to that class of cases. Had the bond now
under consideration so entirely departed and varied from the
statute that it could not have been sustained with the effect of an
ordinary appeal bond, the question would then more properly have
arisen, whether, on the one hand, it might not be sustained as a
bond at common law, or, on the other, declared utterly void.
Our conclusion is that, as no damage or cause of action appeared
by the verdict of the jury, which could authorize a judgment for
the plaintiffs
Judgment reversed and cause remanded with instructions to
render judgment for the defendants below.
MR. JUSTICE MILLER, with whom concurred MR. JUSTICE FIELD,
dissenting.
The decision of the Court, with the grounds on which it is based
on this case, is so wide a departure from the former practice in
similar cases, and is likely to work so much injustice in future,
that I feel it to be my duty to dissent and to give the reasons for
it.
I am at a loss to see the value of the learned search into the
practices and precedents of the English law in writs of error and
appeals, and deem it only necessary to say that in our
Page 107 U. S. 397
system the right to a writ of error and to an appeal depends
wholly upon statutes granting that right, and not upon any
principle of the common law, nor upon any power in any court to
review the decisions of any other court which is not also the
creation of positive statute, and which, in the courts of the
United States, must necessarily depend upon an act of Congress. So
also the mode of exercising this right, the conditions on which the
writ of error or appeal may be had, and the effect of the writ on
the progress of the case, are all prescribed by statute.
A striking illustration of this is in the fact that every writ
of error or appeal, once allowed, transferred the case itself, its
record, and all proceedings under it, in the English courts, into
the reviewing tribunal, and left nothing in the inferior court on
which it could act. The acts of Congress proceed upon a wholly
different principle. They allow a party to take an appeal or writ
of error, which does not remove the record of the case into the
appellate court, but which may be heard there upon the transcript
of the record, the original remaining in the inferior court.
Unless the plaintiff in error takes other steps which the law
prescribes, the court which rendered the judgment complained of can
proceed to execute its judgment and enforce its decree in favor of
the successful party, though the case be pending in the appellate
court. In fact, unless the other steps mentioned be taken, a valid
sale of the property of the plaintiff in error may be made in the
very moment in which the appellate court is deciding to reverse the
judgment on which it is sold. It is this other step, then, which
the party appearing may take, and which totally suspends the power
of the inferior court to proceed, that is wholly and absolutely
statutory, which is no part of the common law, and which is here
for consideration in this case, and which should be decided alone
on the language and meaning of the statute.
This step is the giving of a bond which, because it has the
effect of suspending the action of the inferior court, is called a
supersedeas bond, in analogy to the effect of a writ of supersedeas
in the English law, from the superior to the inferior court.
The law of this subject is found in sec. 1000 of the Revised
Statutes:
"Every justice or judge signing a citation or any
Page 107 U. S. 398
writ of error shall, except in cases brought up by the United
States, or by direction of any department of the government, 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 good his plea, 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."
As thus stated in the Revision, the law is the result of sec. 22
of the Act of September 24, 1789, c. 20, and the amendment to that
section by the Act of Dec. 12, 1794, c. 3.
It has never been doubted under these statutes that the
appealing party could have his election to make his writ of error
operate as a supersedeas or not, and that the amount of security to
be given would depend very much on this choice. If he did not wish
to stay execution, he was only required to secure payment of the
cost of the appeal. If he did wish to stay execution, he must give
bond to answer all damages as well as costs, so that both the
condition of the bond to be given and the amount of it must depend
on the effect it had on further proceedings in the inferior
court.
The decisions of this Court and the practice of the judges under
it are given with reasonable accuracy in the opinion of the
majority, from the date of the last of these statutes until the
adoption of Rule 29 of this Court in 1867.
Rubber Company v.
Goodyear, decided in that year
73 U. S. 6 Wall.
153, and some decided previously, had shown great oppression in
exacting security in an excessive amount to stay execution in cases
where but little damage could accrue to the appellee, because, as
in case of proceedings
in rem, where there was no personal
liability, and there could be no loss except from the delay, and in
cases of mortgage foreclosures, where there could be no other
decree but for a sale of the property. The result was the adoption
of the 29th rule, in which the court undertook to define what
damages were allowable in the various classes of cases where the
plaintiff in error or appellant obtained a stay of execution or
supersedeas pending the appeal. This rule was intended for the
guidance of the judges whose duty it was to approve bonds in
appeals or writs of error. It was the construction of the members
of the Court of that day as to the damages which, in the
Page 107 U. S. 399
various kinds of cases mentioned in it, the party who had
obtained a supersedeas, and had failed in his appeal, was liable,
under the act of Congress, to pay for his false clamor to the party
whom he had unjustly delayed after final judgment against him, for
only final judgment can be reviewed in this Court. But two of the
justices who participated in framing that rule, in which all
concurred, remain, and neither of them concurs in the construction
now given to its by the majority of the Court nor in the
construction of the statute under which it was framed.
In the case before us, the bond sued on was given to suspend an
order of sale in a suit to foreclose a mortgage, and the question
is whether the bond, which is substantially conformable to the rule
of the court, covers the rental value of the mortgaged property
during the three years of delay while the case was pending in this
Court, the mortgaged property having been sold for a sum much below
the amount of the debt, for the payment of which it was decreed to
be sold, during which time the mortgagor was in possession of the
property, which was a public hotel, and the jury find the rent was
worth $38,241.75. The opinion of the Court is based upon two
propositions: 1. that the mortgagor had a right to the use and
occupation, even after condition broken, until judicial sale, and
was not bound to the mortgagee for their value; 2. that the rule
does not make any provision for rent pending the appeal. I do not
agree to either proposition. The mortgagor, after condition broken,
has no right in law or equity to the possession of the mortgaged
property unless it be so expressed in the mortgage. If it be
personal property, it is everyday practice for the mortgagee, after
condition broken, to seize the goods and chattels and hold them
until the debt be paid, or to sell in satisfaction of the debt. If
the mortgagor refuse to deliver possession on demand, the mortgagee
can recover it by replevin, and this is often done. How could this
be so if the mortgagor's right to possession remained after
condition broken? If the mortgaged property be real estate, the
common law allowed mortgagor an action of ejectment after condition
broken, and this was formerly the usual mode of foreclosure,
and
Page 107 U. S. 400
is retained in many states to this day. How can there be any
right in the mortgagor to possession when this right to recover by
an action of ejectment belongs to the mortgagee? The two rights are
inconsistent and cannot coexist. It is conceded that in such case
as the present one, where the mortgaged property is insufficient to
pay the debt, the mortgagee has the additional equitable right to
have a receiver appointed to take possession, and in the end, if
necessary, the rents and profits will be appropriated to pay the
deficiency. How can all this be done if the mortgagor has the right
to continue in possession after he has broken the condition of his
mortgage?
The truth is the idea has obtained footing in practice because
it is easier to get a decree and sell the property than to
dispossess the mortgagor, and hence attempts to do so are rare. But
when the mortgagee has pursued the former course and obtained his
order of sale -- a decree which is final, for no other decree can
be appealed from -- this right of the defaulting mortgagor to
further possession of the property, while he transfers the
litigation to another court and protracts it for three years, is an
inequitable abstraction, founded neither in the common law rights
of the parties nor in any principle of equitable jurisprudence. The
whole error is founded on the idea that so long as the mortgagor is
permitted to retain possession, he is not accountable for rent, and
not upon the existence of any right to retain possession.
And so the act of Congress says if you wish to appeal this case
to another court and go through another trial, instead of
appointing a receiver to take possession, we will require of you a
bond to secure all damages suffered by the appellee by reason of
the delay, and as he is entitled to have the land sold at once for
his debt, or to have possession delivered so that rents and profits
may be appropriated where they ought to go, you can only suspend
the operation of the decree by giving such a bond.
If this be not so, the grossest injustice must result in many
cases. In all cases of insolvent mortgagors, the rule, as construed
by the Court, offers a strong inducement to keep the mortgagee out
of his money as long as possible, without interest or any other
compensation for the delay. An insolvent
Page 107 U. S. 401
corporation -- a railroad company, for instance -- makes default
in its mortgage bonds which amount to twice the value of the
property mortgaged. A decree is obtained for its sale, and before a
receiver can be appointed, the directors take an appeal, give a
small bond, little more than the probable costs, and then use the
road for three years, making millions of dollars out of it with
which to pay debts subsequent to the mortgage, or distribute among
interested parties. No more striking instance of its injustice is
needed than the case before us, where an utterly insolvent
corporation, with a decree for money largely in excess of the value
of the hotel mortgage, is stayed by a bond for $50,000, under which
the corporation receives rent, or uses the property to the value of
$38,000 while they litigate, without a shadow of right, in this
Court for three years, and appropriate this $38,000 to their own
use, and are not held responsible for this, though the bond
expressly mentions "
the use and detention" of the property
as one of their liabilities if they fail to make good their
plea.
But, it is said, the rule only provides for the use and
detention of the property before the decree which is appealed from.
The language of the rule is that in such cases, mentioning mortgage
foreclosure suits specifically,
"indemnity in all such cases is only required in an amount
sufficient to secure the sum recovered for the use and occupation
of the property, and the costs of the suit and just damages for
delay, and costs and interest on the appeal."
That the use and detention here spoken of, like all the other
class of damages there mentioned, is such as may thereafter be
recovered is as plain as that the delay and the costs and interest
are such as follow, and not such as precede, the decree. It is
senseless without it meant this, and such has been the practical
construction since its adoption.
Not only is this true in practice, but in the leading case,
construing this rule for the first time, of
Jerome v.
McCarter, 21 Wall. 17, THE CHIEF JUSTICE expressly
held that the rent mentioned in the rule is that accruing after the
appeal.
That was an appeal from a foreclosure decree and a motion for
additional security in this Court. Mr. Phillips, for appellant, in
support of the sufficiency of the bond, cited
Roberts v.
Cooper to show that nothing could be recovered for
Page 107 U. S. 402
the use and detention of the property. But THE CHIEF JUSTICE,
after citing the rule verbatim, said:
"This is a suit on a mortgage, and therefore, under this rule, a
case in which the judge who signs the citation is called upon to
determine what amount of security will be sufficient to secure the
amount to be recovered for the use and detention of the property,
and the costs of the suit, and just damages for the delay and costs
and interest on the appeal."
Here is a construction of the rule by a unanimous Court in a
case where the precise question was presented.
The decision of the Court in this case overrules it, and
establishes in its place a rule which in many cases must work
injustice and in no case is equitable, for, in the language of that
rule, leaving out the words "use and detention," this is a
necessary part of the other words "just damages for delay."