Jenkins Petroleum Process Co. v. Sinclair Refining Co.

• Decision Date: 14 March 1939
• Docket Number: No. 1178.,1178.
• Citation: 26 F. Supp. 845
• Parties: JENKINS PETROLEUM PROCESS CO. v. SINCLAIR REFINING CO.
• Court: U.S. District Court — District of Maine

26 F. Supp. 845

JENKINS PETROLEUM PROCESS CO. v. SINCLAIR REFINING CO.

No. 1178.

District Court, D. Maine, S. D.

March 14, 1939.

Philip G. Clifford and Richard S. Chapman, both of Portland, Me., for plaintiff.

Verrill, Hale, Dana & Walker, of Portland, Me. (Robert Hale, of Portland, Me., of counsel), for defendant.

PETERS, District Judge.

The question now before this court involves the amount of costs on appeal. The judgment rendered July 6, 1937, on a verdict for the plaintiff for two million dollars, has been vacated and a new trial granted by the Circuit Court of Appeals, which has remanded the case to this court for further proceedings not inconsistent with its opinion. Sinclair Refining Co. v. Jenkins Pet. Process Co., 1 Cir., 99 F.2d 9.

The mandate includes the following language:

"The appellant recovers costs of appeal. Costs in this U. S. Circuit Court of Appeals for the First Circuit for which execution is to issue from said District Court in favor of said Sinclair Refining Company, Defendant, Appellant, and against said Jenkins Petroleum Process Company, Plaintiff, Appellee, are taxed at $5,084.32."

The bill of costs, aggregating the amount above stated, attached to the mandate, includes the usual small fees in the upper court and a little more than $5,000 for printing the transcript.

The defendant has filed a motion for judgment on the mandate with a form of order, prepared for the convenience of the court, which provides for the taxation of costs amounting to $47,694.37, made up of $5,084.32, the amount of costs specified in the mandate as costs of the Circuit Court of Appeals, and the sum of $42,610.05 "required to be paid and paid by the defendant in premiums on its supersedeas and appeal bond filed herein."

The questions raised by plaintiff relate wholly to the item of $42,610.05. That the amount was paid is not questioned, but it is claimed that the premium on the supersedeas and appeal bond is not properly a part of the defendant's costs and in any event not taxable by this court.

The defendant, in giving the bond, acted under the authority and met the requirements of the statute, Title 28, Section 874, which says that if a defendant "desires to stay process on the judgment, he may, having served his writ of error as aforesaid, give the security required by law within sixty days after the rendition of such judgment, or afterward with the permission of a justice or judge of the appellate court."

The court, as required by Section 869, took "good and sufficient security" that the appellant should prosecute his appeal to effect and, if he failed to make his plea good, should answer all damages and costs. The "good and sufficient security" was the bond in question, offered and accepted as such.

The then Rule 13 of the Circuit Court of Appeals provided that "Supersedeas bonds in the District Courts * * * must be taken with good and sufficient security, that appellant shall prosecute his appeal to effect and answer all damages and costs if he fail to make his plea good. 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." The supersedeas bond here was also the required security for costs.

I think it reasonable to say that the supersedeas bond was necessary. It certainly is unreasonable to say that a defendant should pay over two million dollars to a plaintiff and take his chances of getting it back after a successful appeal. The statute gave the defendant the right to have the judgment superseded on appeal. To get the benefit of this right he was obliged by the statute and the rule of court to give security which had to be good and sufficient and satisfactory to the court. By established business custom and good practice that now means a surety bond. The Federal Statutes provide that surety companies may act in such cases, a list of approved surety companies is always on file in court, and the liabilities and the methods of proceeding against them is regulated by statute.

That a surety bond on supersedeas, in a case like this, is a reasonable necessity, and that the cost of the premium, as a necessary expense of the appeal, is chargeable as a part of the costs, is supported by both reason and authority.

In the case of Edison v. American Mutoscope Co., C.C., 117 F. 192, Judge Lacombe in the Southern District of New York said:

"Two of the items disallowed by the clerk, to wit, the premiums paid for appeal bond and for supersedeas bond, should be allowed. The court of appeals in the Sixth circuit disallowed a similar charge when sought to be taxed as costs; the only reason stated being `there is no authority for taxing such an item.' * * * There is authority, however, for taxing legitimate and proper disbursements which are rendered necessary by rules of practice as disbursements in the circuit court, and these premiums seem to be such disbursements."

Judge Brown in Rhode Island, in the case of The Walter Adams, D.C., 271 F. 358, said:

"The libelant objects to the clerk's taxation as costs of an item of $120 paid for premiums on appeal bonds. These were required by rule 13 of the Circuit Court of Appeals. * * * The claimant, who prevailed upon appeal, was put to this expense in order to comply with a rule of court. The Governor Ames 1 Cir., 187 F. 40, 48, 49, and The Reliance, (D.C.) 189 F. 416 417, related to premiums on bonds given to release a vessel, and may be thus distinguished from the present case."

The Circuit Court of Appeals in this Circuit, in Crowe v. Peaslee-Gaulbert Co., 37 F.2d 216, 217, 218, where there was an objection to the allowance of the cost of the premium on a surety bond in a replevin case, among other things said:

"The right of the prevailing party in suits at common law in the federal courts to recover costs is now firmly established, unless prohibited or restricted by some federal statute. * * *

"While in some jurisdictions courts have followed The Governor Ames Case where the facts were similar, the authorities are not all in accord. * * * Under modern conditions and practice, bonds by surety companies have come to be the accepted and approved custom where bonds are required; and where the giving of the bond is compulsory, whether by order of court or by statute, the rule as to costs, in reason and authority requires that premiums on such bonds are properly included in a bill of costs of the successful party. United Water Works Co. Ltd. v. Stone (D.C.), 29 F.2d 428; The Walter Adams (D.C.), 271 F. 358; Corporation, etc., v. Houlihan, (C.C.A., 1 Cir.) 184 F. 252, 254, 255."

In Jones v. Edward B. Smith Co., C.C., 183 F. 990, Judge McPherson, in Pennsylvania, said:

"The only item in dispute is the premium paid to a surety company upon a supersedeas bond given upon a writ of error to a judgment of the Circuit Court. The bond was entered under rule 13 of the Circuit Court of Appeals (150 Fed. xxxix, 79 C.C.A. xxxix), and there is no controversy concerning the amount paid as premium. In my opinion the clerk of the Circuit Court was right in following the decision in The Bencliff, D.C. 158 F. 377. I need not repeat what was said in that case. As far as I am aware, all the other decisions upon this subject are cited there, and the item now in dispute seems to be justified by the rule that a disbursement may be properly allowed when it is made necessary by the standing order of a court."

Rule 13 of the C.C.A. in the Third Circuit, at the time of the above decision, was substantially the same as Rule 13 in this Circuit at the time in question.

The Circuit Court of Appeals for the Second Circuit, in discussing the matter of costs on appeal, on reversal, pointed out that the expense of a supersedeas bond was a necessary part of the expense of the appeal, saying:

"We think that the cost of the supersedeas bond was a necessary part of the expenses of appeal, caused by the erroneous decision of the court below. Although the bond was allowed as a favor and was not a matter of right, it was necessary to protect the appellant's interests pending the appeal." Columbia Motor Car Co. v. Duerr, 184 F. 893, 916.

In Land Oberoesterreich v. Gude, 93 F.2d 292, 293, the Court of Appeals in the Second Circuit reversed and remanded for a new trial, and the case subsequently came before the Circuit Court of Appeals on appeal from an order of the District Court on the mandate which taxed...