Ex parte Alfab, Inc.

• Decision Date: 23 August 1991
• Citation: 586 So.2d 889
• Parties: Ex parte ALFAB, INC. (Re ALFAB, INC. v. Raymond E. MURRAY, et al.) 1901295.
• Court: Alabama Supreme Court

Page 889

586 So.2d 889

Ex parte ALFAB, INC.

(Re ALFAB, INC. v. Raymond E. MURRAY, et al.)

1901295.

Supreme Court of Alabama.

Aug. 23, 1991.

Joe S. Pittman and J. Stafford Pittman, Jr. of Pittman, Whittaker & Pittman, Enterprise, for appellant.

J. Fairley McDonald III of Copeland, Franco, Screws & Gill, Montgomery, for appellee.

HOUSTON, Justice.

Alfab, Inc., has petitioned this Court for a writ of mandamus directing the Honorable Gary McAliley, Judge of the Coffee County Circuit Court, to set aside his order staying execution on Alfab's judgment against Raymond E. Murray, insofar as that judgment pertains to certain funds that were previously held in an escrow account under the supervision and control of Herbert A. Barr and that are now held in an account under the supervision and control of the circuit court clerk ("the escrowed funds"). The writ is denied.

The pertinent facts, which were adequately set out in Alfab's petition, are as follows:

"On January 31, 1986, Alfab, Inc. (Alfab), an Alabama corporation domiciled in Enterprise, Alabama, purchased all the shares of Specialty Maintenance Construction, Inc. (SMCI), a Florida corporation domiciled in Lakeland, Florida, from its shareholders, Raymond E. Murray (Murray) (80% shareholder), Fred L. Solomon, Jr. (Solomon) (10% shareholder), and James G. Solomon (Solomon) (10% shareholder).

"A portion of the purchase price ($249,203.00) was placed in escrow with Herbert A. Barr by oral agreement of the parties.

"[A controversy] arose as to who should receive the escrow funds. Suit was filed in the Circuit Court of Coffee County in November 1986. The case was tried before [the] Honorable Riley P. Green, Circuit Judge, sitting without a jury, on Alfab's claims of: (1) declaratory judgment; (2) breach of contract; and (3) fraud; and on Murray's counterclaim for his portion of the funds.

"[The Solomons] admitted [that the] assets [of SMCI] were overstated and on August 18, 1988, entered into a pro tanto settlement in which they relinquished their claims to [the] funds in escrow to Alfab.

"On November 8, 1990, the court entered judgment in favor of Alfab and against Raymond E. Murray, awarding Alfab the funds in the hands of the escrow agent, together with an additional sum of $236,316, without punitive damages, together with costs and attorney fees as provided by the [contract of sale].

"Murray filed [a motion for new trial] on December 5, 1990.

"On December 19, 1990, after a hearing, the court denied Murray's [post-trial motion], awarded Herbert A. Barr, escrow agent, the sum of $5,932.20 for services and expenses, and awarded attorney fees and expenses of $23,750.00 and $1,850.94, respectively, to Pittman, Whitaker & Pittman, attorneys for Alfab, and ordered [that] these sums be paid from [the] funds in escrow.

"On January 22, 1991, Murray filed [a notice of appeal] to [the Alabama Supreme Court].

"On February 1, 1991, Jim Ellis, circuit clerk, upon the application of Alfab, issued an execution pursuant to the court's judgments of November 8 and December 19, 1990. The execution was placed in the hands of the Sheriff of Coffee County.

"On February 4, 1991, the sheriff levied on the escrow funds, took them into possession and delivered the same to the circuit clerk on the same day. On February 5, 1991, the clerk deposited the funds to his regular account.

"On February 6, 1991, Murray filed [a motion for stay pending appeal].

"On February 6, 1991, Herbert A. Barr filed [a] petition for [an] order relieving [him] of all duties, responsibilities, and obligations.

"On February 22, 1991, [the] Honorable Gary L. McAliley entered an order [relieving Barr of his duties as the escrow agent].

"On March 1, 1991, [the] Honorable Gary L. McAliley ... entered an order granting [Murray's motion for a stay pending appeal] on condition that Murray execute bond with good and sufficient sureties, approved by the clerk of the court, payable to Alfab in the amount of $10,000.00. The court further held: 'Upon the execution and approval of said bond, all further efforts by any party to execute against the escrow funds held by the clerk shall be stayed pending rendition of judgment in this cause by the Supreme Court of Alabama.' The order further provided, 'The clerk is directed to deposit the escrow funds in an interest-bearing account pursuant to Rule 67 of the Alabama Rules of Civil Procedure pending further orders of the court.' "

The sole issue before this Court is whether Alfab is entitled to immediate possession of the escrowed funds, or, stated another way, whether the trial court had the authority to stay execution on the escrowed funds pending Murray's appeal.

It is well established that mandamus is a drastic and extraordinary writ to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court. Ex parte Loeb & Co., 349 So.2d 9 (Ala.1977).

Alfab contends that the trial court had no authority to stay execution on the escrowed funds because at the time the order staying execution was entered those funds had been transferred to the circuit court clerk pursuant to a writ of execution. Alfab further contends that the order staying execution on the escrowed funds was invalid because, it says, Murray failed to post an adequate bond under Rule 8(a), A.R.App.P. Alfab also asserts that the trial court's order prohibited it from receiving that portion of the escrowed funds that was the subject of the settlement agreement between it and the Solomons, and that the trial court had no authority to freeze those funds.

At common law, the execution on a judgment had to be superseded prior to the levy under a writ of execution or else the execution on the judgment could continue. ¹ This rule was based on the theory that the judgment was fully executed from the time of the levy. However, although the execution on the judgment was allowed to continue when it was not superseded prior to the levy under a writ of execution (e.g., the sale of goods was permitted when the goods were seized under a writ of execution prior to the issuance of a writ of supersedeas), a writ of supersedeas issued after the levy, but prior to satisfaction of the judgment, stayed the disbursement of any proceeds generated by the execution. See 4 Am.Jur.2d Appeal and Error § 372 (1962); 4A C.J.S. Appeal and Error § 667 (1957); United States v. Dashiel, 70 U.S. (3 Wall.) 688, 18 L.Ed. 268 (1865); Meriton v. Stevens, Willes 271, 125 Eng.Rep. 1168 (1741). The common law rule appears to have been widely abrogated by statute, at least partially, and the rule now in effect in most jurisdictions is that a proper supersedeas becomes effective notwithstanding a levy, and stays any further proceedings under the writ of execution. 4 Am.Jur.2d, supra, § 372; 4A C.J.S., supra, § 667:

"At common law a supersedeas does not destroy the lien effected by the previous levy of an execution or effect a stay of further proceedings thereon; but, under the statutes providing for the allowance and the perfecting of a supersedeas on the execution of a prescribed bond, the common-law rule and the theory that the levy and sale under an execution are indivisible and that the execution must be regarded as fully executed from the time of the levy are changed, and the general rule now is that a supersedeas becomes effective notwithstanding a levy, and stays further proceedings thereunder, or the court, either trial or appellate, may, in its discretion, make an order recalling or staying proceedings under the execution until the determination of the appeal or writ of error."

In Alabama, Rule 62(d), Ala.R.Civ.P., provides:

"Stay Upon Appeal. When an appeal is taken the appellant by giving a supersedeas bond may obtain a stay subject to the exceptions contained in subdivision (a) of this rule. The bond may be given at or after the time of filing...