Tackett v. United States Fidelity and Guaranty Company

• Decision Date: 06 January 1923
• Docket Number: 23,993
• Parties: KATHERINE TACKETT, Appellee, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellant
• Court: Kansas Supreme Court

212 P. 357

112 Kan. 500

KATHERINE TACKETT, Appellee, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellant

No. 23,993

Supreme Court of Kansas

January 6, 1923

Decided January, 1923.

Appeal from Wyandotte district court, division No. 1; EDWARD L FISCHER, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. APPEAL BOND--Liability of Sureties on Appeal or Supersedeas Bond When Appeal is Not Perfected. The surety on an appeal or supersedeas bond has no voice in the conduct of the litigation nor any interest in the matters involved. The understanding is that the appeal is for the sole benefit of the principal in the bond, who alone has the right to carry on or terminate the appeal in the manner he chooses (in the absence of fraud or connivance between himself and the appellee), and if at any time he concludes that continuing the litigation will be of no advantage to him, or will entail useless expense, he has the right to stipulate for an affirmance or dismissal of the appeal, or he may abandon the appeal, without thereby releasing the surety.

2. SAME--Notice of Appeal Not Filed in the Office of the Clerk--Liability of Sureties on Supersedeas Bond. A surety company executed a supersedeas bond which contained the recital that "Whereas, the said The Kansas City Railways Company intends to prosecute" an appeal. The bond followed the language of section 586 of the civil code and was conditioned "that the appellant will pay the condemnation money, and costs in case the judgment or final order shall be affirmed in whole or in part." The bond was filed with the clerk of the trial court, and notice of the appeal was served by the defendant in the action upon plaintiff's attorneys, but no notice was filed in the office of the clerk of the trial court (which is necessary in order to perfect an appeal). In an action on the bond the answer alleged that no proceedings were taken toward an appeal other than the service of a notice of an appeal; that the notice was never filed in the office of the clerk, and that the time never arrived when the bond could or did prevent the issuance of and execution or stay proceedings; that neither the defendant nor the principal in the bond received any benefit, and that the plaintiff was never in any way prejudiced by reason thereof, and that there was no consideration for the bond. Held, that a demurrer was properly sustained to the defense.

3. SAME--Subsequent Agreement Between Original Parties that No Appeal Should Be Taken Did Not Release Sureties. The answer alleged as another defense that after the bond was executed an arrangement was entered into between the principal and the railways company, defendant in the original action, that no appeal should be taken and that plaintiff's judgment should be paid in monthly installments of $ 1,000; that payments were made in pursuance of this arrangement until her judgment was reduced from $ 15,000 to $ 9,500, at which time further payments ceased because of the insolvency of the railways company. At the conclusion of the evidence on this defense the court directed a verdict against the surety company. Held, that the ruling was correct.

L. W. Keplinger, of Kansas City, R. E. Ball, and I. P. Ryland, both of Kansas City, Mo., for the appellant.

David F. Carson, C. A. Miller, William Drennan, and James T. Cochran, all of Kansas City, for the appellee.

OPINION

PORTER, J.:

Katherine Tackett recovered a judgment in the district court against the Kansas City Railways Company for $ 15,000. This is an action on a supersedeas bond given by the surety company, defendant. The petition alleged that for the purpose of staying execution and superseding the judgment, the defendant herein executed the bond, which was filed in the office of the clerk of the district court; that the railways company served notice of appeal, and that the bond stayed execution and the collection of the judgment.

The answers, besides a general denial, admitted the rendition of the judgment but alleged that at the time the bond was executed the railways company was contemplating an appeal, and as a means of staying execution during the pendency of the appeal, should any be taken, procured the defendant's signature on the bond; but that no proceedings were taken toward an appeal further than the service of a notice of appeal; that the notice was never filed in the office of the clerk of the district court and that the time never arrived when the bond could or did prevent the issuance of an execution or stay the proceedings; that neither defendant nor the railways company ever received any benefit by reason of the bond, plaintiff was never in any way prejudiced by reason thereof, and, therefore, there was no consideration for the bond.

Another defense alleged was that after the bond was executed an arrangement was entered into between Katherine Tackett and the railways company to the effect that judgment should be entered in favor of plaintiff's husband in another suit then pending in the same court against the railways company; that no appeal should be taken in Katherine Tackett's case, and that the judgment in her favor should be paid in monthly installments of $ 1,000; that payments were made in pursuance of this arrangement until her judgment was reduced from $ 15,000 to $ 9,500, at which time further payments ceased by reason of the insolvency of the judgment debtor.

The answer alleged that the surety company was not a party to the agreement which it is claimed was entered into by plaintiff and the railways company under which the proceedings were stayed in consideration of the payment of the judgment in monthly installments.

The court sustained a demurrer to the second defense--based on the failure to perfect an appeal; and at the close of the evidence on the third defense, directed a verdict in favor of plaintiff for $ 9,500. From this judgment defendant appeals.

Briefly stated, the defendant's contentions respecting the defense, to which the court sustained the demurrer, are these: The bond was not an absolute promise to pay, because on appeal the judgment might be reversed, which would inure to the benefit of the surety; and the chance that there might be a reversal or modification of the judgment constituted part of the consideration for the bond. In this connection, it is argued that, after making it impossible for the railways company to secure a reversal of the judgment, plaintiff is now claiming the same right to which she would be entitled if the judgment in that case had been affirmed.

It is urged that the surety is in no manner estopped, by reason of any recitals in the bond, from alleging and proving that no appeal was taken, the recital in the bond being: "And, whereas, the said, The Kansas City Railways Company, intends to prosecute" an appeal--not that it has taken an appeal. The defendant concedes that if there had been an actual appeal which was afterwards dismissed for some failure to comply with the requirements of a perfect appeal, it would be liable on the bond.

In defendant's brief it is said:

"The supersedeas is not an agreement that no execution shall issue. That execution shall be stayed is an incident which the law attaches . . . during the pendency of the appeal. Here there never was an appeal and the incident never did attach. The right to a stay of execution is purely statutory. The only authority for a stay is the provision that no appeal shall operate as a stay unless a supersedeas be given."

The manner in which an appeal is taken under the new procedure (1909) is provided for in section 569 of the code. (Gen. Stat. 1915, § 7473.)

"Appeals to the supreme court shall be taken by notice filed with the clerk of the trial court, stating that the party filing the same appeals from the judgment, order or decision complained of to the supreme court. . . . A copy of such notice must be personally served on all adverse parties whose rights are sought to be affected by the appeal. . . . or their attorneys of record."

The appeal is perfected by the filing of the notice with the clerk of the trial court, and from that moment the supreme court has jurisdiction. (Schmuck v. Railway Co., 85 Kan. 447, 116 P. 818; Thisler v. Little, 86 Kan. 787, 121 P. 1123; The State v. Roselli, 106 Kan. 689, 189 P. 136.)

A notice of appeal was served upon the attorneys of Katherine Tackett, but no notice of appeal was ever filed with the clerk. The supersedeas bond was filed with the clerk. The statute further provides that no appeal from a money judgment "shall operate to stay execution unless the clerk of the court in which the record of such judgment or final order shall be, shall take a written undertaking, to be executed on the part of the appellant to the adverse party, . . . to the effect that the appellant will pay the condemnation money and costs in case the judgment or final order shall be affirmed in whole or in part." (Civ. Code, § 586; Gen. Stat. 1915, § 7490.)

Under the old "case-made" practice, which required several months before proceedings in error could be perfected, no one supposed that execution was stayed until the proceedings in error were complete and the supreme court had acquired jurisdiction. A situation often arose by which after notice had been given that an appeal was to be taken and after a supersedeas bond had been given and filed, the party appealing was obliged to procure an order of the district court staying execution until the appeal could be perfected. The order of the court staying proceedings made the bond effective and furnished a sufficient consideration for the bond, pending the appeal. Under the present practice, an attorney upon whom a notice of appeal has been served would naturally take for ...