Case Name: National Surety Company and Others v. Commonwealth of Virginia, ex rel. etc.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1919-06-12
Citations: 125 Va. 223
Docket Number: 
Parties: National Surety Company and Others v. Commonwealth of Virginia, ex rel. etc.
Judges: 
Reporter: Virginia Reports
Volume: 125
Pages: 223–243

Head Matter:
Mytheville.
National Surety Company and Others v. Commonwealth of Virginia, ex rel. etc.
June 12, 1919.
1. Appeal and ERROR&emdash;Supersedeas Bond&emdash;Remittitur. &emdash; Section 3485, Code of 1904, is as follows: “The appellate court shall affirm the judgment, decree, or order if there be no error therein, and reverse the same, in whole or in part, if erroneous, and enter such judgment, decree, or order as the court whose error is sought to be corrected ought to have entered.” (Italics supplied.) In other words, the statute in terms authorizes a partial reversal, and the entry by the appellate court of a judgment, the effect of which must be to affirm in part and reverse in part the original judgment. It must follow that to the extent to which the judgment is affirmed, it is still valid and binding upon the original judgment debtor, and also upon the sureties in the supersedeas bond, who will be held to have entered into their contract with knowledge that their liability under it was to be controlled by the provisions of section 3485.
2. Appeal and Error &emdash; Supersedeas Bond&emdash;Purpose of Bond.&emdash; The bond is one of indemnity, the object of which is to secure to a successful litigant the ultimate fruits of his recovery, in whole or in part, and to insure him against loss from the possible insolvency of his debtor, or from other cause, pending the appeal.
3. Appeal and Error&emdash;Supersedeas Bond&emdash;Remittitur.&emdash;It would be anomalous to hold the sureties bond for the entire judgment in the event of an absolute affirmance, but not for a lesser sum in case of a partial affirmance in conformity to the statute, on the supposition that the latter constitutes a new and different judgment. It is in no correct sense a new judgment, but an amendment of the old judgment, with the erroneous part of it expunged, made in contemplation of the statute and in obedience to its mandate. It does not nullify the old judgment, but amends it, and as amended affirms it.
4. Appeal and Error&emdash;Putting on Terms&emdash;Remittitur.&emdash;A party may be in effect put on terms in the appellate court as well as in the trial court. When a party is put on terms in the ap pellate court because a judgment in his favor is excessive, it may reverse the judgment of the trial court and remand the cause, with direction to the trial court to put the successful party upon terms to release the excess, or else submit to a new trial, and if the release is made, to overrule the motion for a new trial, and render judgment for the correct amount with interest and costs; or, if the error be one of mere calculation, readily corrected from the record, or if the verdict and judgment of the trial court is excessive and the record affords plain and certain proof of the amount of the excess so that it may with safety be corrected, in either event the appellate court will amend and affirm the judgment of the trial court, and will not remand the case for such amendment.
5. Appeal and Error — Supersedeas and Stay of Proceedings — Re-mittitur — Case at Bar. — By order of the Supreme Court of Appeals, after a conditional reversal, plaintiff was allowed to enter a remittitur as to the interest, in which event it was declared that the judgment should stand affirmed. Defendants insisted that this order released the sureties on the supersedeas bond conditioned to perform and satisfy the judgment in case the judgment be affirmed. It did not appear whether the principal debtor was or was not solvent; but, if insolvent and defendants’ plea prevailed, plaintiff would lose the principal of a demand to which the jury, the trial court, and the Supreme Court of Appeals had adjudged it entitled.
Held: That in reason defendants’ position could not be sustained.
6. Appeal and Error — Supersedeas and Stay of Proceedings — Re-mittitur — Case at Bar. — The only modification that resulted in the judgment of the lower court from the appeal was not due to any change made therein by the Supreme Court of Appeals or by the trial court, but was made by the plaintiff itself. And in no proper sense could the be said to constitute a change in the judgment. It recognized the continued existence of the judgment as originally rendered, but refrained from exacting a part of it. That was not a judicial ascertainment by this court that the judgment, or any part of it, was void or voidable, but was an affirmation of the judgment in toto, if the plaintiff should elect to enter a remittitur as to the interest.
7. Suretyship — Extent of Liability — Implication.—The surety’s liability is not to be extended by implication beyond the terms of his contract. But, whatever that contract is, the surety is bound by it. Its terms can no more be restricted by implication than extended.
8. Surety Companies — Principle by Which Contract Governed. — The general rule as to the contracts of surety companies, where they receive compensation for the risk assumed, is that they resemble insurance contracts and are governed by the same principles.
Error to a judgment of the Circuit Court of Loudoun county in an action of debt. Judgment for plaintiffs. Defendants assign error.
Affirmed.
The opinion states the case.
Mason Manghum, C. E. Nicol, J. J. Darlington, W. J. Lambert and Frank J. Hogan, for the plaintiffs in error.
Eppa Hunton, Jr., E. E. Garrett, George S. Law and John J. Jackson, for the defendants in error.

Opinion:
Whittle, P.,
delivered the opinion of the court.
This case is the sequel to an action of assumpsit brought by the defendant in error, the Westinghouse Electric and Manufacturing Company against the plaintiff in error, the Washington and Old Dominion Railway, in the Circuit Court of Loudoun county. In that action the plaintiff recovered against the defendant a judgment for $81,652.19, with interest at the rate of five per centum per annum from May 1, 1913, till paid, subject to a credit of $791.13, as of the last-named date, and costs. To that judgment a writ of error and supersedeas was granted by this court upon condition that the defendant execute bond with approved security in the penalty of $100,000.00 with condition according to law. Whereupon, the defendant executed the required bond, with the plaintiff in error, the National Surety Company, a corporation, as its surety.
On March 15, 1917, this court entered the following order : "This day came again the parties, by counsel, and the court having maturely considered the transcript of the rec ord of the judgment aforesaid and arguments of counsel, ¿s of opinion, for reasons stated in writing and filed with the record, that the circuit court erred in giving the instruction complained of upon the allowance of interest. It is, therefore, considered that said judgment be reversed and annulled, the verdict of the jury set aside, and that the plaintiff in error recover of the defendant in error its costs by it expended in the prosecution of its writ of error and supersedeas aforesaid here. And this cause is remanded to the said circuit court for a new trial to be had in conformity with the views expressed in the said written opinion. If, however, the defendant shall, within ninety days from the date hereof, elect in writing to relinquish the interest upon $81,652.19, the principal sum found by the jury, at five per centum per annum from May 1, 1913, subject to a credit of $791.13 as of that date, to March 16, 1915, the date of the verdict (such relinquishment to be filed with the papers in the cause in the clerk's office of the Circuit Court of Loudoun county as a part of the record), then said judgment shall stand affirmed. But in the event of a new trial, this provision is not to influence the jury in determining the question of interest."
The plaintiff, within ninety days from the day on which the foregoing order was entered, to-wit, on May 9, 1917, availed itself of its right of election, as provided in the order, and on that day elected in writing to relinquish the stipulated interest, filing its remittitur in writing with the clerk of the circuit court, who filed the same with the papers in the cause..
The plaintiffs in error, the National Surety Company and Washington and Old Dominion Railway, denying liability on the supersedeas bond, this action of debt was instituted thereon against them by the defendant in error, the Commonwealth of Virginia, suing at the relation and for the benefit of the Westinghouse Electric, and Manufactur ing Company. For convenience, the defendant in error will hereinafter be called the plaintiff, and the plaintiffs in error the defendants.
The defendants interposed a demurrer to the declaration and pleas of ml debet and conditions performed; and neither party requiring a jury, and all matters of law and fact having been submitted to the court, the demurrer was overruled and the judgment under review pronounced in favor of the plaintiff against the defendants.
There is no ambiguity about the issue in this case. The order of this court of March 15, 1917, in the original case, was in terms set out in the declaration in this case, and the decision overruling the demurrer to the declaration is controlling. If the mandate of this court of March 15, 1917, affirmed the original judgment in behalf of the plaintiff against the defendant, the Washington and Old Dominion Railway, according to the true intent and meaning of the condition of the supersedeas bond, then the demurrer to the declaration was rightly overruled, and the defendants have not performed and satisfied the obligation of the bond-, and are liable. If, on the other hand, the order of this court in intendment and result amounts to a reversal of the original judgment, then, in that event, the bond has- been satisfied and the obligors therein are discharged. The condition of the bond is, "to perform and satisfy the judgment in case the said judgment be affirmed, or the writ of error, or supersedeas, be dismissed, and also to pay all damages, costs and fees which may be awarded against or incurred by the petitioners, in the appellate court, and all actual damages incurred in consequence of the super-sedeas."
The question for our determination is within narrow limits and involves the construction of our own statutes and procedure. In such case little is to be gained by traveling beyond our borders to consult irreconcilable decisions of doubtful relevancy.
It seems to us that the clue to the correct solution, of the question is found in the opening' words of section 3485 of the Code (title, "Decision of appellate court"): "The appellate court shall affirm the judgment, decree, or order if there be no error therein, and reverse the same, in whole or in part, if erroneous, and enter such judgment, decree or order as the court, whose error is sought to be corrected, ought to have entered." (Italics ours.) In other words, the statute in terms authorizes a partial reversal, and the entry by the appellate court of a judgment, the effect of which must be to affirm in part and reverse in part the original judgment. It must follow that to the extent to which the judgment is affirmed, it is still valid and binding upon the original judgment debtor, and also' upon the sureties in the supersedeas bond, who will be held to have entered into their contract with knowledge that their liability under it was to be controlled by the provisions of section 3485. The bond is one of indemnity, the object of which is to secure to a successful litigant the ultimate fruits of his recovery, in whole or- in part, and to insure him against loss from the possible insolvency of his debtor, or from other cause, pending the appeal. It would, indeed, seem anomalous to hold, the sureties bound for the entire judgment in the event of- an absolute affirmance, but not for a lesser sum in case of a partial affirmance in conformity to the statute, on the supposition that the latter constitutes a new and different judgment. It is in no correct sense a new judgment, but an amendment of the old judgment, with the erroneous part of it expunged, made in contemplation of the statute and in obedience to its mandate. It does not nullify the old judgment, but amends it and, as amended, affirms it. The course of decision of this court has for more than a century so. construed statutes of this State substantially similar to the present statute. The cases of Williams v. Howard, 3 Munf. (17 Va.) 277, decided in 1812; Gibson v. Governor, 11 Leigh (38 Va.) 600; Lewis v. Arnold, 13 Gratt. (54 Va.) 454; Buena Vista v. McCandlish, 92 Va. 297, 23 S. E. 781; Worrell v. Kinnear Mfg. Co., 103 Va. 719, 49 S. E. 988, 2 Ann. Cas. 997; Moreland v. Moreland, 108 Va. 107, 60 S. E. 730; Aultman v. Gay, 108 Va. 647, 62 S. E. 946; McIntyre v. Smyth, 108 Va. 751, 62 S. E. 930; Powers v. Hamilton, 117 Va. 810, 86 S. E. 98; Washington & O. D. Ry. v. Westinghouse Co., 120 Va. 620, 89 S. E. 131, 91 S. E. 646.
Judge Burks, in his admirable work on Pleading and Practice, p. 772, says, with respect to "putting a party upon terms": "A party may be in effect put on terms in the appellate court as well as in the trial court. When a party is put on terms in the appellate court because a judgment in his favor is excessive, it may reverse the judgment of the trial court and remand the cause, with direction to the trial court to put the successful party upon terms to release the excess, or else submit to a new trial, and if the release is made, to overrule the motion for a new trial and render judgment for the correct amount, with interest and costs (citing Buena Vista Co. v. McCandlish, supra); or, if the error be one of mere calculation, readily corrected from the record, or if the verdict and judgment of the trial court is excessive and the record affords plain and certain proof of the amount of the excess so that it may with safety be corrected, in either event the appellate court will amend and affirm the judgment of the trial court, and will not remand the case for such amendment." (Citing Aultman v. Gay, supra, and McIntyre v. Smyth, supra; Code, sec. 3452; Ann. Code W. Va. 1906, sec. 4037; ante, sec. 373.)
We are persuaded that the procedure adopted by this court in the case of Washington and Old Dom. Ry. v. Westinghouse, supra, is so thoroughly established by direct and controlling decisions and has been so long acquiesced in and acted upon as to bring it within the influence of the maxim of stare decisis.
So far as we are advised, in all these years the liability of sureties in appeal bonds upon these modified aifirmanees has not been drawn' in question, and the present inquiry is res integra, in this court. At all events, the research of the very able counsel who represent the plaintiffs in error has failed to disclose any pertinent Virginia authority on the subject, or if they have discovered any they have omitted to draw our attention to it.
The case of Shepherd's Adm'r v. Chapman's Adm'r, 83 Va. 215, 2 S. E. 273, cited by counsel for defendants, is in accord with the long line of precedents to which attention has been called. That, it is true, was a chancery cause, but it was there held: "It is a familiar doctrine that where a decree is reversed in part and affirmed as to the residue, such reversal does not destroy the lien of so much of the decree as is affirmed." Chapman v. Shepherd, 24 Gratt. (65 Va.) 377; Knifong v. Hendricks, 2 Gratt. (43 Va.) 212, 44 Am. Dec. 385; Moss v. Moorman, 24 Gratt. (65 Va.) 97; 2 Barton's Chy. Pr., sec. 295. The court in the principal case affirmed the decree except as to a charge of compound interest, and remanded the cause with directions that the illegal interest be stricken out. The opinion then uses this language: "We do not mean to say that the view above expressed applies to cases at law where, after a jury trial and judgment, the judgment on writ of error is reversed and a new trial awarded; for in such cases the reversal is total and not partial, even though the reason for the reversal goes only to a part and not to tibe whole of a demand." That is an accurate statement as to the effect of the reversal of the judgment in the instance given; it was plainly an absolute reversal which set aside the judgment and awarded a new trial. But we do not understand the oninion to mean that under our decisions and section 3485 of the Code this court may not put a party uuon terms, or reverse a judgment, decree or order, "in whole or in part."
If the contention stressed upon demurrer possessed merit, it is hardly reasonable to suppose that it would have escaped the attention of the astute and able bar of the State all these years. The present case affords a startling illustration of the result that would flow from adopting defendants' contention. Plaintiff's judgment amounts to $81,-652.19, with interest (subject to a credit of $791.13). By the order of this court of March 15, 1917, after a conditional reversal, plaintiff was allowed to enter a remittitur as to the interest, in which event it was declared the judgment should stand affirmed. Defendants insist that the March order released the sureties. It does not appear whether the principal debtor is or is not solvent; but if insolvent, and defendants' plea prevails, plaintiff would lose the principal of a demand to which the jury, the trial court and this court have adjudged it entitled. Surely, to uphold so monstrous a perversion of justice, it should at least come well supported by authority.'
Our opinion is that the judgment of the circuit court in overruling defendants' demurrer to the declaration is sustained by our own precedents, and, therefore, a review of outside authorities upon a matter involving the construction of domestic statutes and procedure would not be helpful. We have no doubt of the correctness of the foregoing construction of our statutes with regard to the liability of the obligors, both principal and surety, on the bond in question. But with respect to the specific contention of counsel for the defendants, that the effect of the order of this court of March 15, 1917, and its acceptance by the plaintiff was to destroy the identity of the original judgment and constitute a new and different judgment as to which the surety bore no contractual relation and was under no obligation to discharge, we wish to observe: That in the instant case this court has not entered any new judgment nor has it ordered the circuit court to make any change in its judgment. It has done these things conditionally, but only conditionally. What was actually done, as the order and the subsequent facts show, was to adjudge that if the plaintiff would within ninety days release part of the recovery, the judgment of the lower court would stand affirmed in toto (including judgment for the interest). In other words, the only modification that has resulted in the judgment of the lower court from the appeal is one not due to any change made therein by this court or by the trial court, but made by the plaintiff itself. And, in no proper sense can that be said to constitute a change in the judgment. It recognizes the continued existence of the judgment as originally rendered, but refrains from exacting a part of it. That was not a judicial ascertainment by this court that the judgment, or any part of it, was void or voidable, but was an affirmation of the judgment in toto, if the plaintiff should elect to enter a remittitur as to the interest.
Viewing, then, the situation, not as at the date of this court's order (which was dependent on certain doubtful contingencies), but as at the time action was-brought on the supersedeas bond, the judgment of the circuit court stood affirmed as a •(whole, albeit part of it had been released by the plaintiff's own act.
Applying, then, the strictissimi juris doctrine to the liability of the surety, it seems clear that the condition of the supersedeas bond has been broken and the surety company is liable.
This court, in speaking of the above rule, says: "It (the surety's liability) 'is not to be extended by implication beyond the terms of his contract.' But, whatever that contract is, the surety is bound by it. Its terms can no more be restricted by implication than extended." Mann v. Mann, 119 Va. 630, 634, 89 S. E. 897, 898.
The general rule as to the contracts of surety companies, where they receive compensation for the risk as sumed, is that they resemble insurance contracts and are governed by the same principles. 27 Am. & Eng. Ency, L. (2d ed.) 452.
The second assignment of error complains of the disal-lowance of a set-off of a judgment for $417.32, costs recovered by the Washington and Old Dominion Railway against the plaintiff. That demand was not put in issue by the pleadings nor set out in the grounds of defense (Code, secs. 3249, 3298), and, therefore, was not within the cognizance of the court.
We think neither of the grounds of error assigned has been maintained, and are of opinion to affirm the judgment.
Affirmed.