Poplar Grove Planting and Refining Co., Inc. v. Bache Halsey Stuart, Inc.
| Decision Date | 20 August 1979 |
| Docket Number | No. 79-1673,79-1673 |
| Parties | POPLAR GROVE PLANTING AND REFINING CO., INC., Plaintiff-Appellee, v. BACHE HALSEY STUART, INC., Defendant-Appellant. Summary Calendar. * |
| Court | U.S. Court of Appeals — Fifth Circuit |
Phillip A. Wittmann, James C. Gulotta, Jr., New Orleans, La., for defendant-appellant.
John V. Parker, Baton Rouge, La., for plaintiff-appellee.
Appeal from the United States District Court for the Middle District of Louisiana.
Before CLARK, GEE and HILL, Circuit Judges.
Poplar Grove Planting and Refining Co., Inc. (Poplar Grove) was awarded an unconditional $270,985.65 judgement plus interest and costs against the defendant, Bache Halsey Stuart, Inc. (Bache) in the United States District Court for the Middle District of Louisiana. Bache filed with that court a timely notice of appeal. On Bache's ex parte motion to fix the amount of a supersedeas bond in order to stay enforcement of the final judgment pending disposition on appeal, the court fixed a $10,000 bond as the total security required for supersedeas (Fed.R.Civ.P. 62(d)) and costs. (F.R.A.P. 7). Upon filing of the $10,000 bond by Bache, the court stayed execution of the judgment pending disposition of the appeal.
Poplar Grove took issue with the court's summary determination and immediately moved in the district court to increase the amount of the supersedeas bond. In denying the motion, the district court reasoned only that "no useful purpose would be served by increasing the amount of the supersedeas bond." The order was appealed to this court which, unable to divine the underlying reasons for limiting plaintiff's bond protection, remanded with directions "for the limited purpose of enabling that court to explicate the basis upon which its actions were predicated, with directions to embody the statement of its reasoning in a supplemental order which shall be filed with this court as promptly as reasonably possible."
Rather than supplying information which would facilitate meaningful review of its exercise of discretion, the court responded:
It is difficult to state reasons for the setting of the $10,000 bond other than to say the court thought then and thinks now it is sufficient.
By way of amplification, it said:
It is a bond which will cover the costs in the case, and under the evidence submitted to the court it is ridiculous to even suggest that the defendant could not respond to the judgment if and when it becomes final. Plaintiff has nothing to gain by the court increasing the bond, and it has nothing to lose if the bond remains as set by the court. To increase the bond as indicated by the plaintiff simply penalizes the defendant for taking an appeal in this case when the plaintiff has presented absolutely no evidence of any kind to even suggest that the defendant could not and would not respond to the judgment rendered if and when it becomes final. A supersedeas bond should not be used as a penalty for a party availing itself of its appeal rights, which is all that an increased bond in this case would accomplish.
The purpose of a supersedeas bond is to preserve the status quo while protecting the non-appealing party's rights pending appeal. A judgment debtor who wishes to appeal may use the bond to avoid the risk of satisfying the judgment only to find that restitution is impossible after reversal on appeal. At the same time, the bond secures the prevailing party against any loss sustained as a result of being forced to forgo execution on a judgment during the course of an ineffectual appeal.
The predecessor to present Fed.R.Civ.P. 62(d), originally Civil Rule 73(d), had directed that the amount of the bond be computed by the district court to include "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...
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...The purpose of posting a supersedeas bond is to preserve the status quo pending appeal. Poplar Grove Planting and Refining Co., Inc. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1190-91 (5th Cir.1979)). Other jurisdictions have indicated that "the rule and the inherent discretion and power ......
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