John Hancock Mut. Life Ins. Co. v. Hurley

• Decision Date: 07 November 1945
• Docket Number: No. 4079.,4079.
• Citation: 151 F.2d 751
• Parties: JOHN HANCOCK MUT. LIFE INS. CO. et al. v. HURLEY, Collector of Taxes.
• Court: U.S. Court of Appeals — First Circuit

151 F.2d 751 (1945)

JOHN HANCOCK MUT. LIFE INS. CO. et al. v. HURLEY, Collector of Taxes.

No. 4079.

Circuit Court of Appeals, First Circuit.

November 7, 1945.

Before MAGRUDER, MAHONEY and WOODBURY, Circuit Judges.

G. K. Richardson, of Boston, Mass. (Richardson, Wolcott, Patten & Bennett, of Boston, Mass., on the brief), for appellant.

Hirsh Freed, of Boston, Mass. (Frank J. Murray and William H. Kerr, both of Boston, Mass., on the brief), for appellee.

MAGRUDER, Circuit Judge.

This case, an aftermath of John Hancock Mutual Life Insurance Co. v. Thompson, 1 Cir., 1944, 147 F.2d 761, presents a somewhat troublesome little point of procedure pertaining to recovery on a supersedeas bond for damages to the appellee resulting from delay incident to an unsuccessful appeal.

There was pending before the court below a proceeding brought by the United States for the condemnation of a term for years in the Hotel Buckminster, Boston. The owner of this property was Carlton Hotel, Inc., the debtor in reorganization proceedings also pending before the same court. A sum of money had been deposited by the United States into the registry of the court representing the estimated just compensation for the proposed taking. On June 22, 1944, the District Court entered an order: "that the clerk of the court be, and he hereby is, directed to pay forthwith to Merritt Thompson as he is collector of taxes for the City of Boston, from the moneys deposited on August 21, 1943 in the registry of this court for or on account of the just compensation to be awarded for the condemnation of the interest in land taken in the above-entitled proceeding, the sum of nineteen thousand nine hundred ninety-eight dollars and nine cents ($19,998.09) together with interest at the rate of $2.12 per day from May 15, 1944 to the date of payment * * *." This sum of $19,998.09 represented the principal of the taxes due, plus interest at the rate of four per cent calculated up to May 15, 1944. Under Mass.G.L.(Ter.Ed.) c. 59, § 57, as amended, taxes due and unpaid bear interest at the rate of four per cent.

If no appeal had been taken from the order, the clerk would have made the payment to the City of Boston upon the expiration of ten days after the entry of the order, see F.R.C.P. Rule 62(a), 28 U.S. C.A. following section 723c. However, on June 30, 1944, John Hancock Mutual Life Insurance Company, which held a first mortgage on the hotel premises, filed a notice of appeal from the order of disbursement, and on the same day it filed a supersedeas bond in the penal sum of $1000, with the Fidelity and Deposit Company of Maryland as surety thereon, the condition of the bond being that if John Hancock should "prosecute its appeal to effect, and answer all damages and costs if it fails to make its appeal good, then the above obligation to be void; else to remain in full force and virtue." On December 22, 1944, this court dismissed the appeal on the ground that John Hancock had no standing to complain of the order appealed from. 147 F.2d 761. Our judgment merely stated: "The appeal is dismissed with costs to Merritt Thompson, Collector, appellee." Neither in our judgment nor in the ensuing mandate was any reference made to damages suffered by the appellee as a result of the delay in payment to him of the sum ordered disbursed by the District Court.

On December 29, 1944, upon receipt of our mandate, the clerk of the District Court paid over to the Collector of Taxes the sum of $20,095.61 ($19,998.09 plus interest at the rate of 4%, or $2.12 per day from May 15, 1944, to June 30, 1944, the date on which the supersedeas bond had been filed).

Thereafter, on January 4, 1945, the Collector filed a motion for judgment against principal and surety on the supersedeas bond for the amount of costs taxed against John Hancock by the Circuit Court of Appeals and for damages resulting to the City from the deprivation of the use of $20,095.61 from June 30, 1944, when the supersedeas bond was filed, to December 29, 1944. The motion was granted and on January 31, 1945, the District Court entered judgment for Merritt Thompson, Collector of Taxes for the City of Boston, against both principal and surety on the supersedeas as bond in the sum of $604.30,¹ plus $20 costs taxed by the Circuit Court of Appeals.

The present appeal is taken by John Hancock and by the surety on the supersedeas bond from the aforesaid judgment of January 31, 1945, awarding damages for the delay incident to the earlier appeal.

A preliminary point raised by appellants has to do with the proper interpretation of the District Court's order of disbursement dated June 22, 1944, from which the earlier appeal had been taken. That order, as above set forth, directed the clerk "forthwith" to pay over to the City the sum of $19,998.09 "together with interest at the rate of $2.12 per day from May 15, 1944 to the date of payment." Appellants contend that the City did not suffer damage by reason of the delay in payment because the order directed the clerk, in making the disbursement, to include interest up "to the date of payment"; and, the argument continues, when the disbursement was made on December 29, 1944, after the appeal had been dismissed and the mandate of the Circuit Court of Appeals had been received below, the clerk, by the very terms of the disbursement order, should have included interest up to December 29, 1944. But bearing in mind the purpose of the disbursement order, we do not think this is a fair interpretation of it. As the court below explained in its memorandum accompanying the order of disbursement, it was for the benefit of all persons interested in the estate and the mortgaged property that the taxes be paid so as to stop the further accrual of interest thereon. The disbursement order directed the clerk to pay the taxes "forthwith", which, in view of Rule 62(a), F.R. C.P., would normally mean upon the expiration of ten days after the entry of the order. It was not in the contemplation of the District Court that the fund should be further depleted by the payment of interest for an indefinite time consequent upon the taking of an appeal from the disbursement order and the filing by John Hancock of a supersedeas bond. As the District Court interpreted its disbursement order, an interpretation which strikes us as a reasonable one, upon the dismissal of the appeal the clerk had authority to pay interest on the unpaid taxes only up to June 30, 1944, when the supersedeas bond was filed.

The principal contention of appellants is that the obligation under the supersedeas bond to pay damages if the appeal should fail is merely to pay such damages as may be awarded by the appellate court, and that since the Circuit Court of Appeals in its judgment and mandate made no reference to damages, none may be collected on the supersedeas bond. But see Graysonia-Nashville Lumber Co. v. Goldman, 8 Cir., 1919, 260 F. 600; American Trust Co. v. Speers Sand & Clay Works, Inc., D.C.Md.1932, 60 F.2d 994; Brame v. Keystone Credit Corporation, 4 Cir., 1935, 76 F.2d 328; Gleeson's Estate, 1899, 192 Pa. 279 — in each of which cases damages for delay were assessed against the obligors on the supersedeas bond though, so far as appears, the judgment of the appellate court affirming the judgment below contained no reference to damages. The same was true of St. Louis Smelting & Refining Co. v. Wyman, C.C.Colo.1884, 22 F. 184. There the Circuit Court had given judgment for the plaintiff in a suit for ejectment. The defendant took the case to the Supreme Court on writ of error and gave a supersedeas bond. Judgment was affirmed. Steel v. St. Louis Smelting Co., 1882, 106 U.S. 447, 1 S.Ct. 389, 27 L.Ed. 226. Neither in the judgment of the Supreme Court nor in its mandate was any award made of damages for the delay.² When the case came back to the Circuit Court, Hon. David J. Brewer, then a circuit judge, gave judgment on the supersedeas bond for the amount of the rents and profits of which the plaintiff had been deprived during the pendency of the proceedings in error.

As an original question, we think it clear that the contention of appellants is not well taken. Rule 73(d), F.R.C.P. provides as follows:

"(d) Supersedeas Bond. Whenever an appellant entitled thereto desires a stay on appeal, he may present to the court for its approval a supersedeas bond which shall have such surety or sureties as the court requires. The bond shall be conditioned for the satisfaction of the judgment in full together with costs, interest, and damages for delay, if for any reason the appeal is dismissed or if the judgment is affirmed, and to satisfy in full such modification of the judgment and such costs, interest, and damages as the appellate court may adjudge and award. When the judgment is for the recovery of money not otherwise secured, the amount of the bond shall be fixed at such sum as will cover the whole amount of the judgment remaining unsatisfied, costs on the appeal, interest, and damages for delay, unless the court after notice and hearing and for good cause shown fixes a different amount or orders security other than the bond. When the judgment determines the disposition of the property in controversy as in real actions, replevin, and actions to foreclose mortgages or when such property is in the custody of the marshal or when the proceeds of such property or a bond for its value is in the custody or control of the court, the amount of the supersedeas bond shall be fixed at such sum only as will secure the amount recovered for the use and detention of the property, the costs of the action, costs on appeal, interest, and damages for delay."³

Since the supersedeas bond was given in compliance with Rule 73(d), the scope of liability under the bond should be interpreted in the light of the provisions of the rule. As appears from the text of the rule above quoted, it is only where the judgment is modified on appeal that the...