Moss v. Smith

• Decision Date: 26 October 1962
• Citation: 361 S.W.2d 511
• Parties: H. A. MOSS, JR., Individually, and/or Administrator of the Estate of H. A. Moss, Sr., Appellant, v. William M. SMITH and Paul Liebreich, Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 511

361 S.W.2d 511

H. A. MOSS, JR., Individually, and/or Administrator of the Estate of H. A. Moss, Sr., Appellant, v. William M. SMITH and Paul Liebreich, Appellees.

Court of Appeals of Kentucky.

Oct. 26, 1962.

John P. Sandidge, Woodward, Hobson & Fulton, Louisville, for appellant.

Marvin H. Morse, Louisville, for Paul Liebreich, appellee and cross-appellant.

C. L. Bell, Louisville, for William M. Smith, appellee.

STEWART, Chief Justice.

H. A. Moss, Jr., as administrator of the estate of H. A. Moss, Sr., intervened in a suit against William M. Smith; recovered judgment against him; and levied execution on his real estate, a rooming house in Louisville. At a judicial sale Moss, Jr. individually purchased the property subject to certain mortgages of record thereagainst, said property having been appraised at $12,000. The report of sale was confirmed, a deed was ordered delivered and a writ of possession thereafter issued on motion of Moss, Jr.

On June 29, 1955, Smith filed a notice of appeal from the judgment and order of sale and executed a supersedeas bond in favor of Moss, Jr., with Paul Liebreich, an appellee and cross-appellant herein, as surety thereon. On May 10, 1957, the Court of Appeals affirmed the judgment against Smith, Ky., 301 S.W.2d 2.

On July 11, 1957, Moss, Jr., pursuant to CR 73.07, moved for judgment against Liebreich, the surety on the supersedeas bond, seeking to recover $34,000 for loss of rent and $4000 damage to the property due to neglect. A commissioner, under an order of reference, heard the evidence and advised that Moss, Jr. receive $8175.39 as the reasonable net rental for the property for the twenty-three months he had been kept out of possession of it.

The chancellor, however, refused to follow the recommendation of the commissioner, stating: '* * * I find no reliable basis for assessing damages in the testimony. In the circumstances, I believe KRS 21.130 (providing 10% damages on a superseded money judgment) a good analogy, and that judgment should go against the surety for $2,300 (23/24 X 20% X $12,000) plus costs incurred in the action since June, 1955.' (Emphasis supplied.)

Moss, Jr., as an individual and as administrator aforesaid, hereinafter referred to as Moss, Jr., appeals from the judgment contending the chancellor's method of assessing damages was incorrect and that the surety is liable on the basis of the language of the bond itself rather than within the limits of CR 73.04, or, in the alternative, that the terms and conditions of the bond do not violate the spirit and intent of the rule. Another point is raised later that will be discussed. Liebreich, who will be so referred to hereinafter, has moved for a cross-appeal, asking that Smith be dismissed as a party to this appeal and that the chancellor's judgment be reversed, thus denying Moss, Jr. any damages whatsoever.

The pertinent portion of the supersedeas bond, which is based upon the phraseology set forth in Section 748 of the Civil Code of Practice, reads:

'Now we, William M. Smith and surety, Paul Liebreich, do covenant to and with appellee, H. A. Moss, Jr. that the appellant will pay to the appellee all costs and damages that shall be adjudged against the appellant on appeal * * *, and also pay all rents, hire and damages which during the pendency of the appeal, may accrue on any part of the property of which the appellee is kept out of possession by reason of the appeal.' (Emphasis added.)

The primary question is whether and to what extent the surety is liable on the bond in the light of CR 73.04, effective July 1, 1953, which, insofar as applicable here, reads:

'* * * When the judgment determines the disposition of the property in controversy as in real actions or replevin, or when such property is in the custody of the sheriff, 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, * * *' (Emphasis added.)

The position taken by appellee and crossappellant, Liebreich, the surety, is that a supersedeas bond taken in an action for the possession of real property does not cover any items of liability except those explicitly stated in the rule. It is pointed out that CR 73.04 was adopted almost verbatim from F.R.Civ.P. rule 73(d), 28 U.S.C.A. and that the phrase 'damages for delay' appears after the word 'interest' in the federal rule but that this phrase is absent from the Kentucky rule; therefore, it is reasoned that this deletion apparently was intentional and, in consequence, precludes the recovery of any rent and waste under CR 73.04. The surety relies upon certain federal decisions which he insists hold that the recovery of such rents and waste is solely predicated upon the undertaking in the supersedeas bond to pay 'damages for delay.' See John Hancock Mutual Life Insurance Co. v. Hurley, 1 Cir., 151 F.2d 751; Spurks v. U. S. Fidelity & Guaranty Co., 3 Cir., 138 F.2d 812; Woodworth v. Northwestern Mutual Life Insurance Company, 185 U.S. 354, 22 S.Ct. 676, 46 L.Ed. 945.

Appellant maintains the expression 'amount recovered for the use and detention of the property' in CR 73.04 means the same as 'rents, hire and damages' set forth in the old Civil Code. Liebreich has a contrary view, arguing that federal courts in construing F.R.Civ.P. rule 73(d) have held otherwise. See Kountze v. Omaha Hotel Co., 107 U.S. 378, 2 S.Ct. 911, 27 L.Ed. 609, which seems to bear out his contention in interpreting similar phraseology.

It appears the language, 'damages for delay,' was inadvertently omitted from CR 73.04 as originally written, because this rule was...