Fulton v. Fletcher

12 App. D.C. 1, 1897 U.S. App. LEXIS 3197

• Court: Court of Appeals for the D.C. Circuit
• Decided: December 14, 1897
• Docket: No. 713
• Status: Published

Opinion

Mr. Justice Shepard

delivered the opinion of the Court:

Error has been assigned upon sixteen grounds relating to exceptions to the evidence and the charge, as well as to points made in the motion in arrest of judgment; but these have been condensed by counsel into certain points of contention that will be considered m their proper order.

1. The first of these is that the bond was void for the reason that the Court of Appeals had no jurisdiction of the appeal in the case of La Tourette v. Fletcher, 6 App. D. C. 324, because that appeal was not from a final decree, but from an interlocutory order only, without-the allowance of said court upon petition duly made therefor under the statute, defining its jurisdiction. Act February 9, 1893, Sec. 7, 27 Stat. 435.

If it be conceded that the appeal was from an interlocutory order, from which an appeal does not lie as a matter of right under the statute, but only within the discretion of the court, exercised upon a petition therefor, it still does not follow that the ground of objection is tenable. It appears by inference only, from the facts of the proceedings in that cause offered in evidence by the plaintiffs (and received over the objections of the defendant), that the appeal therein may have been taken outright and without leave granted.

Now, if it were the fact that the Court of Appeals could under no conditions whatever have taken jurisdiction of the ease, the point could be made in a collateral attack upon its decree of confirmation and upon the validity of all the proceedings on that appeal.

But as that court could exercise appellate jurisdiction in its discretion over all interlocutory decrees and orders, and did assume jurisdiction in that case and determine it, it should be presumed upon a collateral attack, and especially in the absence of anything in the record itself necessarily showing the contrary, that the necessary conditions did exist to confer jurisdiction. Dowell v. Applegate, 152 U. S. 327, 337, and cases cited.

2. The next proposition grows out of the assignments of error founded on exceptions taken to the admission in evidence of the bond and other proceedings in the equity cause and to the denial of the motion in arrest. It is that the assignment of the breach of the bond in the declaration is so defective that it is incapable of being cured even by the verdict. The condition of the bond was, as we have seen, that the appellants “ shall prosecute their said appeal to effect and answer all damages and costs if they shall fail to make good their plea.” The assignment of the breach in the declaration, after stating the facts showing the execution of the bond, the confirmation of the decree, and so forth, is that the appellants “did not prosecute their appeal to effect, and they have failed to make good their plea whereby the condition of the said writing obligatory was broken.” There was no demurrer to the declaration, and defendant entered the ordinary pleas. In the case of a similar assignment of the breach of a replevin bond it was said by the Supreme Court of the United States: “The breaches are not assigned with care, and the judgment recovered in the replevin suit is inartificially stated in the declaration ; but it seems where the declaration is on a bond given to prosecute with effect a writ of replevin a breach assigned as in this declaration, ‘ that the suit was not prosecuted with effect/ is sufficient.” Gorman v. Lenox, 15 Pet. 115, 117.

That was on a writ of error to the Circuit Court of the District of Columbia, and the question arose on demurrer and not, as in this case, on objections to evidence and on a motion in arrest of judgment. That case, however, is sought to be distinguished from this because from the peculiar nature of the action of replevin and the bond therein damages necessarily follow from the breach. In support of its ruling the court cited a case on an appeal bond, where it was said that “in assigning breaches the general rule is that they may be assigned by negativing the words of the covenant.” Karthaus v. Owings, 2 G. & J. 430, 441.

The same doctrine has been announced in the case of “gaol-delivery” bonds—Smith v. Jansen, 8 Johns. 111, 114; Hughes v. Smith, 5 Id. 168, 174—and also in actions on bonds for injunction. Burgess v. Lloyd, 7 Md. 178, 195; La Strange v. Roche, 58 Md. 26, 40.

The question of correct pleading in such cases, however, is not necessarily raised on this record. Here there was no demurrer on which opportunity to amend would have offered, but pleas denying liability, alleging performance, and the like; and if it be admitted that there was a defect that would have been fatal on demurrer, it is one that was clearly cured by the verdict. W. & G. R. Co. v. Hickey, 5 App. D. C. 436, 467, and cases therein cited. See also Weigley’s Admr. v. Weir, 7 Serg. & R. 309, 310; Thomas v. Roosa, 7 Johns. 460; Harrell v. McAlexander, 3 Rand, 94, 101; Brauns v. Glesege, 130 Ind. 167, 169.

3. The next objection in order, namely, that the decree in Fletcher v. La Tourette and others, ratifying the auditor’s report and ordering the payment of the net proceeds of the sale of the property to Fletcher, was not such a final decree or disposition of the cause as would authorize a suit upon the bond, is not well taken. The parties were all before the court. It is true that, by apparent neglect, there was no formal decree entered vacating and annulling, as prayed, the conveyances under which La Tourette had covered up the property, which was all personalty; but the order ratifying the report and directing the payment of the proceeds of the sale to Fletcher necessarily had that effect. When we look from its form to its substance we see that from no other point of view could it have been made. It was such a final decree or order as La Tourette and Davis could have appealed from without leave from this court. Gilbert v. Wash. Ben. Endowment Assn., 10 App. D. C. 316; Taylor v. State, 73 Md. 220. All of the property conveyed by La Tourette that could be found by the receiver was sold by order of court. There is nothing in the record to show that any more of it was then in reach of the process of the court or even in existence. On the other hand, every inference is to the contrary. If in fact there was more of the property that might have been seized, the circumstances in evidence were such as to shift to the defendant the burden of proving it in mitigation of damages.

4. The last as well as the most difficult question in the case is on the exceptions taken to the charge of the court and upon the refusal of certain prayers for instruction embodying the contention of the defendant in respect of the measure of damages for the breach of the bond.

The substance of the charge has been given in the preliminary statement. Defendant’s refused prayers were that under the evidence nominal damages only could be recovered; that the damages, if any, sustained are limited between the time of giving the bond and the date of filing the mandate of the Court of Appeals, and, further, that “the plaintiff is not entitled to damages by reason, of the delay in adjudicating the equity cause, whether such delay was occasioned by the complainant or the defendants in said cause.”

The difficulty lies in the peculiar character of the proceedings in the cause and of the decree that was appealed from and suspended by the approval of the bond. Had it been a final decree for the payment of money, the foreclosure of a mortgage, or for the possession of personal property, and the whole or a part had been lost by waste, the liability would be easily determined. Kountze v. Omaha Hotel Co., 107 U. S. 378, 386, 388, 392; Jenkins v. Hay, 28 Md. 547; Cook v. Marsh, 44 Ill. 178, 180; Everett v. State, use of McKaig, 28 Md. 190.

In the view taken of the bond in this case as disclosed by the appellant’s prayers for instruction, it would be difficult to conceive a case, other than those enumerated above, where the damages would be more than nominal; and yet the record presents a case where a certain, distinct and serious injury has accrued to the appellee through an appeal secured on the bond executed by the appellant. He was kept from his execution on the property by that appeal; at least, until it was decided; and by the action of the principals in the bond (the appellants in said cause), in advantage taken of the law’s delay, he has sustained damage. This delay was found not to have resulted from any want of diligence on the part of the appellee. The bond brought about the suspension of all proceedings and made good the possession of the property by the principals and the parties colluding with them, who were thus enabled to make way with the most of it and destroy its value.

Upon whom should this loss fall? Upon the plaintiff, who has been retarded in the pursuit of an adjudged right, or upon the signer of the bond by virtue of which he has been baffled in that pursuit?

The very wide range and varying character of actions, suits, judgments, and decrees necessitated broad generalization in the stipulated conditions of a form of.bond intended to operate in all. The very nature and uses of such bonds and their general recitals, in necessary conformity to the terms of statutes or rules of court, render it unreasonable and unjust to give the liability of sureties therein the strictness of interpretation that sometimes applies in the case of guarantors or special sureties in voluntary contracts between two parties. The interpretation, on the contrary, should rather be liberal, for the necessary protection of those who have nothing to do with the form or approval of the obligation, and are compelled, against their wills, to forego their legal claims and incur risk of loss by reason thereof. This view, we think, is sound in principle and supported by authority in analogous cases. McElroy v. Mumford, 128 N. Y. 307; Barton v. Fisk, 30 N. Y. 166, 172; Ives v. Merchants’ Bank, 12 How. 159; Sessions v. Pintard, 18 How. 106.

In a recent case in this court, a suit upon an official bond, the argument was made that the contract should be strictly construed, and that the liability should not be extended by implication.

Replying thereto, in the opinion it was said :

“ That, as a general principle, is certainly true, but it is equally true that sureties are as much bound by the true intent and meaning of the contract subscribed by them as the principal himself, and the general rule of construction is to hold the surety bound to the same extent that the principal is bound under the same contract. Benjamin v. Hillard, 23 How. 149; Read v. Bowman, 2 Wall. 591.” United States v. Maloney, 4 App. D. C. 505, 511.

In one of the cases relied on by the appellant, where the condition of the bond was the payment “> of all costs and such damages as the plaintiff may sustain by reason of the appeal,” it was said: “The fair and just construction of the words of the condition of the bond is that the obligors bound themselves in the event of the affirmance of the judgment to pay and satisfy the costs of the appeal and all such damages as were the natural, proximate consequence of the appeal, and its legal incident, the suspension of judgment.” Caball v. Citizens' Assn., 74 Ala. 541. The charge of the court, as we apprehend it, presented the case in this light to the j ury, namely, that the damages to be recovered were such as naturally and proximately resulted from the delay of plaintiffs right by z’eason of the appeal without being in any degree contributed to by the want of due diligence on the part of the plaintiff himself.

In Keen v. Whittington, 40 Md. 489, 497, 498, the action was on an appeal bond conditioned that the appeal should be prosecuted with effect, and that the appellants should “satisfy and pay the judgment appealed from in case that judgment should be affirmed.” The appeal was not prosecuted with effect, but was dismissed by the appellant. It was said that in case of affirmance the measure of damages was fixed by the amount of the judgment; but as it was not in fact affirmed, “the extent of recovery would depend upon the loss and injury sustained by reason of the stay of execution on the judgment appealed from.”

As we have before intimated, it is difficult to see, even from the meager statement of the evidence in the record, how damage could have failed to result in some material degree. The remoteness of damage is not to be tested by the mere difficulty in arriving at the actual result with certainty. '

From what appears in the bill of exceptions, which does not state that it sets out all of the evidence in the case, there was a rapid depreciation in the value, by deterioration and other causes perhaps, of the property during the time from the sale to the reinstatement of the case, the appeal, the time of affirmance, and the appointment of the receiver. The question was narrowed down to this: Did the plaintiff have a reasonable chance to realize all or a part of his judgment at the time the appeal bond was approved; and, if so, what was the natural and reasonably certain result of that appeal ?

As was said by Redfield, J., in McGregor v. Balch, 17 Vt. 562, 568: “Intervening damages are such as will make the party as well off as if no appeal had been taken.” In that case the question arose on the offer of proof to show that some time after the appeal the appellant came into property subject to execution more than enough to discharge the judgment, and that the same had disappeared before the judgment was affirmed. It was held that the evidence was admissible and the charge correct which submitted to the jury, as the measure of damage, the “chance” that the plaintiff may have had to make his debt out of that property had there been no impediment to the issue of execution and its diligent use.

It surely can not be a sound proposition of law that the liability of a surety on an appeal bond must be determined in all cases by the situation at the very time of the diligent return of the mandate of the appellate court and not one moment thereafter. If such were the rule, then the appellant, who may have had personal property ample to satisfy the entire judgment and costs on that day, might put it out of reach before an execution could be issued and levied with ordinary diligence or before a receiver, if an order of appointment had been made and then suspended by the appeal, could seize thereon. Would it be said in such event that the damages necessarily sustained thereby were not included in the condition of the bond, because it carried no liability or risk after the return of the mandate in due course? We think not. If, then, the liability does not terminate instantaneously with the mandate’s return, it must continue for some space of time reasonable under all the surrounding circumstances; and that reasonable time within which the loss of chances of satisfaction would continue to be indemnified would extend no further than such time'as the party could, by the use of proper diligence, avail himself of his right. Such must in all fáirness be the obligation that the surety assumes when he executes a bond in a case like this.

The appeal was parcel of the scheme of delay practiced in that cause. The property was depreciating in value and being disposed of during the pendency of litigation. The appointment of a receiver had been prevented by negotiations and promises which resulted finally in the fraudulent procurement of the discontinuance of the suit. When that order was sought to be vacated it was opposed, and when granted was appealed from. When application was made for a receiver, that was also opposed and delayed. The surety, aware of the situation and apprehending his probable liability, came into the cause and petitioned to be discharged from all further obligation." If there had been no appeal and a receiver had been appointed, after opposition and postponement for the same period of time as afterwards occurred, there would still have been property remaining, and capable of seizure and sale, more than enough to satisfy the plaintiff’s demand. The second application for and the appointment of a receiver were delayed by so much additional time as all proceedings were suspended by the appeal.

The delay thus secured by the appeal, with the time necessarily occupied after affirmance in. a diligent attempt to secure a receiver and seizure of the property, enabled time and the acts of the parties to practically destroy the value of the property.

If the evidence showed, and the jury found that it did show, the damage to have been the natural and proximate result of the appeal, it must be regarded as within the contemplation of the surety when he executed the bond and co-operated in the plan of delay.

. .In any other view, the parties who have been found to have committed fraud, and who have been decided against at every turn of the case, will, nevertheless, have accomplished in the main their fraudulent purpose to protect the property from seizure and sale in satisfaction of plaintiff’s judgment. To permit this would be a reproach to the law. The appellant, who is chargeable with knowledge of all that the record contained, voluntarily assumed the chances of the liability that has been fixed upon him.

As was said in a case in the Supreme Court of the United States not unlike this in one of its features: “ The condition of the appeal bond was for the prosecution of said appeal to effect, and to answer all damages and costs if there should be a failure to make the plea good in the Supreme Court. There was a failure to do this, and the penalty of the bond was incurred. Whatever hardship may be in this case is common to all sureties who incur responsibility and have money to pay. Beyond that of a faithful application of the proceeds of the land (the subject of foreclosure), in payment of the decree, the appellants have no equity.” Sessions v. Pintard, 18 How. 106, 109.

5. Some other questions arise on the general exceptions to the charge of the court which will be briefly considered.

(1) The court did not err in charging the jury that the plaintiff acquired a lien upon the property described in the bill. It was an equitable interest that could not be reached by execution and the filing of the bill was the commencement of the lien. Freedman’s Savings and Trust Co. v. Earle, 110 U. S. 710; Gottschalk Co. v. Distillery Co., 7 App. D. C. 169, 173. The decree of sale and distribution being, as we have before said, final in effect, the lien was thereby fixed conclusively.

(2) In respect of that part of the charge submitting the question of Fletcher’s due diligence to the jury, the complaint is that it was not submitted wholly to the jury without suggestion from the court as to what was not unusual delay in cases where a receiver may be applied for in a case of this kind. Assuming that the question of diligence was for the jury exclusively as one of fact only, we can find no reversible error in this expression of the court. The matter was in fact left to the jury and not taken from them by the court. As we had occasion to say in a former decision, “A trial judge ought certainly to be careful to avoid any remarks which might tend to convey an impression to the jury that he has an opinion with respect to the truth of any disputed fact that has been submitted to them for decision ; but if this be done, it does not necessarily follow that a new trial must be granted." Washington Gas Light Co. v. Poore, 3 App. D. C. 39. The rule laid down in repeated decisions of the Supreme Court of the United States goes much further than would be required to sustain the expressions of the court in this case. Railroad Co. v. Putnam, 118 U. S. 545, 547; Simmons v. United States, 142 U. S. 148, 151, 155; Lincoln v. Power, 151 U. S. 436, 442. As a matter of fact, the chief reliance of the defence was in the questions of law that have been considered above, and but little stress was laid upon the minor questions relating to the mode of arriving at the damages in the event that they might be allowed for anything occurring after the mandate was returned.

Iu our opinion, a much more serious objection to this charge would be that the court left too much to the jury in regard to the question of diligence.

Involving as it did the steps necessary, in accordance with the practice in equity, to procure the appointment of a receiver, the seizure, and the sale of property in satisfaction of the debt, the court should have been more specific in informing the jury in respect of these. It was his province to tell the jury what the practice was in such cases, and to leave to them the determination of such matters of fact only as in the pursuit of the remedy could be distinctly separated therefrom. No 'such objection has been made, and no special instruction was prayed that would have corrected the charge in these particulars.

(3) In connection with the consideration of exceptions to the charge, we think it proper to call attention to a question of practice.

In this, as in other cases appealed to this court, the practice has been followed of noting in a general bill of exceptions that such parts of the general charge as are included within brackets marking off paragraphs thereof have been excepted to, without stating the specific ground of the objections. This is a loose practice, to say the least of it, and whilst we have considered exceptions so taken when they have presented distinct and controlling questions of law, we will not extend the indulgence to matters of form or of minor consequence.

Errors and omissions in such respects would often be corrected if specifically pointed out at the time or attempted to be corrected by special instructions requested for the purpose.

Having found no reversible error in the proceedings, the judgment will be affirmed, with costs. Affirmed.