Opinion
Nos. 70-113, 70-153.
May 26, 1970.
Appeal from the Circuit Court, Dade County.
Bolles, Goodwin, Ryskamp Ware, Miami, for appellants.
Horton Schwartz, Miami, for appellees.
Before PEARSON, C.J., and CHARLES CARROLL and SWANN, JJ.
These appeals by Voyle C. Johnson and Mary Howland have been consolidated for appellate purposes. Appellees are James H. Price Co., a dissolved Florida corporation, and James H. Price, individually and at last director and statutory trustee of the assets of James H. Price Co., Inc., hereinafter referred to as Price. These consolidated appeals arise from the following facts gleaned from the record on appeal.
In the original suit Johnson and Howland recovered a judgment against Price which found that they were entitled to receive certain shares of Airlift International stock then held by Price. Price appealed from that judgment and obtained a stay of its execution by posting supersedeas bonds as principal with Resolute Insurance Company as surety. The supersedeas bond posted for Johnson on the appeal was for $41,000 and was $7,000 for Howland.
The supersedeas bonds in pertinent part provided:
* * * * * *
"* * * if the said principal shall pay the costs of this action * * * and depreciation of any property involved in the event said appeal is dismissed or the said judgment or order is affirmed, then this obligation shall be null and void; otherwise to remain in full force, effect and virtue. * * *"
* * * * * *
The prior appeal by Price from the original judgment was affirmed. Price v. Johnson, Fla.App. 1969, 222 So.2d 212. Upon remand the stock certificates in Airlift were delivered to Johnson and Howland but the stock apparently had dropped in value from 7 3/8 on the date of the original judgment to 3 3/4 on the date of their delivery.
On October 21, 1969, Johnson and Howland moved, in the original suit, to require the surety Resolute Insurance Company to show cause why a judgment should not be entered against it for the face amount of the supersedeas bonds. Rule 5.11, F.A.R., 32 F.S.A. No liability or judgment was prayed for by Howland and Johnson against the principal Price in the proceedings to fix liability on the supersedeas bonds.
On December 23, 1969 Johnson and Howland filed in the original suit their amended claims against Price seeking a judgment for damages allegedly sustained by them "by reason of the unsuccessful appeal taken by Price." No relief or judgment was prayed for in the amended claims against Resolute, the surety, and it was not made or designated as a party defendant in that action. Price moved to dismiss on the ground that the amended claims failed to state a cause of action. The trial court granted the motion to dismiss with prejudice on January 13, 1970, but ruled that Johnson and Howland "are not precluded from filing whatever claim they might have in an independent action against Price." On January 29, 1970, this interlocutory appeal was taken from that order.
On February 4, 1970, the trial court entered final judgments as requested by Johnson and Howland in their motions of October 21, 1969 solely against the surety, Resolute Insurance Company. The final judgment for Johnson was for the face amount of the bonds, i.e., $41,000 and $7,000 for Howland.
The final judgments entered against the surety Resolute after this interlocutory appeal was taken by the appellants were included in the record on appeal. We do not consider them necessary or proper as we take judicial notice that the surety, Resolute, has appealed from those final judgments and the consolidated appeals are presently pending in this court. We, therefore, pretermit any opinion or decision concerning the validity of the final judgments entered against the surety, Resolute, on February 4, 1970.
Depreciation in the value of stock pending an appeal has been held to be recoverable as an element of damage in an action against a surety on the supersedeas bond. Gore v. News-Journal Corporation, 146 Fla. 552, 1 So.2d 559 (1941); and All Florida Surety Company v. Vann, Fla. App. 1961, 128 So.2d 768.
The amended claims herein were not actions against a surety on a supersedeas bond to recover damages for depreciation of stock during an appeal, however. They contained no allegations referring to a breach of the terms of the supersedeas bonds or any prayer for a judgment against Price as principal on the bonds. Howland and Johnson had previously moved to impose liability under the terms of the bonds as fixed by the contract of the surety, Resolute, and had not sought any relief against the principal Price in that proceeding. The gravamen of the amended claims in this separate proceeding was that Johnson and Howland had suffered damages as a result of an unsuccessful appeal and the posting of supersedeas bonds by Price from the original judgment of distribution because the Airlift stock dropped in value from 7 3/8 to 3 3/4 during the pendency of the appeal.
The allegation that Price "wrongfully withheld or caused to be withheld" from Johnson and Howland their shares of stock "by unsuccessful appellate proceedings and the posting of successive supersedeas bonds (thereby causing the distribution order in the judgment to be stayed)" does not sufficiently plead a cause of action ex delicto or ex contractu in our opinion.
The cause of action alleged against Price in the amended claims was apparently an attempt to allege that he breached some legal duty which he owed to Johnson and Howland by taking an unsuccessful appeal and obtaining and posting the supersedeas bonds. The right to take an appeal has been said to be an absolute right. Crownover v. Shannon, Fla. 1964, 170 So.2d 299. The right to apply for and receive a supersedeas bond is provided by law and there was no proper or sufficient allegations of a breach of any legal duty owed by Price to Howland and Johnson by the allegation of taking an unsuccessful appeal or obtaining and posting the supersedeas bonds. See Rule 5.9, F.A.R.
There were no allegations that there was any fraud involved in the unsuccessful appeal by Price, or that there was a wrongful injunction and bond maliciously obtained by Price which would give rise to a cause of action, or that there was any breach of any statutory duty or bond. Cf. Kane v. Mendenhall, 5 Cal.2d 749, 56 P.2d 498 (1936); and Miller Surfacing Company v. Bridgers, Tex.Civ.App. 1924, 269 S.W. 838.
The allegations in these amended claims do not contain ultimate facts showing that Howland and Johnson were entitled to the relief from Price for which they prayed.
We agree that under these allegations a cause of action was not stated against Price in the amended claims which alleged basically that he took an unsuccessful appeal and posted supersedeas bonds.
Lastly, the appellants claim reversible error by the trial court ruling that Johnson and Howland "are not precluded from filing whatever claim they might have in an independent action against" Price.
At the time of such ruling, the appellants had already moved according to the record on appeal and prayed for relief and judgment on the supersedeas bonds solely against Resolute, the surety. Afterwards, they filed these amended claims against Price which seem to sound in tort, or as an ex delicto action. If the appellants have a valid tort claim against Price, they should not be prevented from filing it in an independent action. If they have an action, ex delicto, which can be properly plead against Price it should not be the original suit which was commenced in order to determine certain stock ownership. If they have a valid action, ex contractu, against Price they never attempted to allege it or requested permission to amend their pleadings in this suit. As previously stated, they have never sought to recover against Price under or on a breach of a contract, to-wit, the supersedeas bonds.
We see no reversible error by the trial judge in not precluding the appellants from filing "whatever claims they might have in an independent action" under these circumstances.
Affirmed.
I respectfully dissent from the affirmance of the trial court's order which dismissed the petition with prejudice in this cause, but in effect with leave to proceed for damages in a separate action. Although the petition for damages did not declare on the supersedeas bond, the record disclosed that the petitioners Johnson and Howland were entitled to judgment for damages against Price and the trustees of the dissolved Price corporation as principals on the supersedeas bond (as had been adjudged in the petitioners' favor on their prior petition for damages against the surety on the bond).
For the reasons set out below it is my opinion that the order appealed from should be reversed and the cause remanded to the circuit court with direction to entertain the petition of Johnson and Howland and award them the damages to which they are found to be entitled under the supersedeas bond, against Price and the dissolved Price corporation as principals on the bond, not in excess of the amount or amounts specified in the supersedeas bond.
The law prescribes the manner in which an appellee can be protected against certain losses where the appellant supersedes the order or judgment appealed from, and that is by requiring the appellant to file a supersedeas bond. The protection which the appellee receives in that regard is by and through the bond which shall have been furnished as required by law and the order of the court. Florida Appellate Rules, Part V.
On the appeal from which this claim for damages arose (following an affirmance), the supersedeas had operated to stay enforcement of a judgment which called for delivery of certain shares of the stock of a corporation to Johnson and Howland. One of the elements of damage expressly provided for in the supersedeas bond was depreciation in value of the stock. The quantity of stock involved was such that the depreciation it suffered during the pendency of the appeal amounted to a sum which exceeded by a considerable extent the $41,000 and $7,000 face amounts of the supersedeas bond under which Johnson and Howland were obligees respectively. By petitioning in the cause for damages against the appellants without expressly declaring upon the supersedeas bond, it is apparent that Johnson and Howland were attempting to recover, because of the unsuccessful appeal, damages as referred to in excess of the amount of the supersedeas bond. Since the unsuccessful appeal from the final judgment did not operate to subject Price and his corporation, who took the unsuccessful appeal, to damages other than those provided for by their supersedeas bond, there was no purpose to be served by relegating the matter to a separate suit, and on their petition Johnson and Howland should have been granted the damages to which they were entitled, within the provisions and limitations of the bond.
By Rule 5.11 FAR, which first appeared in 1942 as Supreme Court Rule 35(g), provision is made whereby the surety on a supersedeas bond, the obligation of which has been breached, notwithstanding such surety is not a party to the suit, submits itself to jurisdiction of the court by virtue of its position on the bond, and is subject to judgment thereon, upon motion in the cause following notice in the form of a citation, without the need to resort to an independent action.
That rule does not also state that recovery can be had against the principal on a supersedeas bond by motion in the cause without resorting to independent action, but it would be illogical to conclude otherwise as to the principal, who as a party to the cause already is within the jurisdiction of the court, when the rule authorizes such action to be taken on motion in the cause against the nonparty surety, by providing that by citation the surety can be brought within the jurisdiction of the court in the case for such purpose.
This view is expressed in the Author's Comment which follows the statement of Rule 5.11 FAR, relating to sureties on supersedeas bonds, in Florida Statutes Annotated, viz.:
"This rule provides a simple and positive procedure for enforcing a supersedeas bond. A motion should be filed in the lower court requesting an order directing the surety and principal to appear and show cause why an order should not be entered adjudicating the liability of each, which order would be enforced in the same manner as a contempt citation."
Since the principals and surety were jointly and severally liable on the bond, it was proper to proceed against them by separate motions or petitions as was done in this case.
It is settled that where an appeal with supersedeas proves unsuccessful, although damages of the kind covered by the supersedeas bond may have resulted to an extent exceeding the principal sum of the bond, the liability of the surety is limited to the amount of the bond. See Kulhanjian v. Moomjian, Fla. 1958, 105 So.2d 783; All Florida Surety Company v. Vann, Fla. App. 1961, 128 So.2d 768; Conlee Construction Co. v. Cay Construction Co., Fla.App. 1969, 221 So.2d 792. See also, Annot. 87 A.L.R. 257.
The liability of an appellant in such circumstance is no greater whether enforcement is sought by motion in the cause or by separate suit. This is so because his liability does not result from the unsuccessful prosecution of an appeal, but from the fact that the order or judgment appealed from was superseded, and because in such instance the law requires the appellant to supply a bond with good and sufficient surety as protection to the appellee against loss resulting from or during the appeal.
Since it is by virtue of the supersedeas bond, and by that alone, that the appellant's liability in such situation is created and imposed, it follows that, except where it is shown that the appeal was instituted with malice and without probable cause, the principal sum of the bond marks the limit of liability of the appellant-principal. An extensive search of the authorities, which by no means may have been complete, failed to disclose decisions holding otherwise, but did reveal a case so holding. In Friedman Bros. v. Lemle (1886) 38 La. Ann. 654, the Supreme Court of Louisiana held that the principal on a supersedeas bond could not be held for damages for more than the amount of the bond, "without proof of malice and want of probable cause."
Limiting the damages of an appellant to his liability as principal on the supersedeas bond, and to the amount of the bond, should not operate to the prejudice of an appellee who is diligent in seeking an adequate bond. For example, if the amount of the bond as initially fixed by the trial court is considered by the appellee to be inadequate, the appellee can seek increase thereof by petition in the appellate court to review the trial court's supersedeas order, under Rule 5.10 FAR. Also, a supersedeas bond which becomes inadequate during an appeal may be increased. Assuming a supersedeas bond as initially fixed is adequate, and, as in this case, the judgment appealed from directed delivery of corporate stock and the elements of damage in the supersedeas bond included depreciation in value of the stock pending the appeal, if it should become observable during the pendency of the appeal that the stock in question was depreciating at a rate or to an extent which indicated a need for increase of the supersedeas bond in order for the bond to continue to afford adequate security, an appellee finding himself in that situation could apply (in the appellate court, or with its permission in the trial court) for an order for the bond to be increased by an amount found to be necessary, and requiring the appellant to comply therewith as a condition of the continuance of the supersedeas. If the appellees had done so in this case at the appropriate time or times, and increase of the bond had been ordered, the appellant then would have had opportunity to elect either to post a higher bond, or to accede to the termination of his supersedeas in event he was unwilling to obligate himself for a greater liability than that provided for initially by the supersedeas bond, such as could result from further depreciation in value of the stock prior to the end of the period of the appeal.
See Florida Orange Hedge Fence Co. v. Branham, 32 Fla. 289, 13 So. 281; Edgerton v. West, 38 Fla. 338, 21 So. 278; Stegemann v. Emery, 103 Fla. 735, 137 So. 888.