Court Opinion

ID: 9776676
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:42:04.109803+00
Date Added: 2024-06-11T09:09:15.779728
License: Public Domain

OPINION ON PETITION TO REHEAR
BROCK, Justice.
I
The appellants (bondholder class) have filed a petition to rehear in this cause *866which we have considered and find to be without merit. Accordingly, the petition to rehear filed by the bondholder class is denied.
II
The appellees, the Sklar firm, have requested, pursuant to Rule 40(d), T.R.A.P., that the Court authorize as an item of additional recoverable costs on appeal the premiums incurred by them for procuring and maintaining, while this case was in the appellate courts, premiums for a bond for stay of the judgment or decree rendered in the trial court. Appellees rely upon Rule 40(c), T.R.A.P., which provides:
“Recoverable costs on appeal “Recoverable costs on appeal include the cost of preparing and transmitting the record, the cost of a transcript of the evidence or proceedings, the cost of producing necessary copies of briefs and the record, the premiums paid for bonds to preserve rights pending appeal, and any other fees of the appellate court or clerk.”
This provision became part of our law for the first time on July 1, 1979, the effective date of the Tennessee Rules of Appellate Procedure. We are not aware of any court decisions construing it.
The bondholder class opposes this application for additional costs primarily upon the ground that the bond for stay was not necessary because the bondholder class at no time in this litigation has taken or threatened to take any action to enforce the judgment of the trial court pending appeal; they point out that
“... since there are 140-plus members of the class, it would have been the height of folly for the class representatives to have sought to enforce the judgment and distribute the funds while an appeal was pending.”
They further point out that even if there had been any necessity for a stay order at the time the original appeal was taken that necessity would have ended on February 3, 1981, the date of the judgment of the Court of Appeals reversing and setting aside the decree granted in the trial court in favor of the bondholder class.
Our research indicates that in other jurisdictions courts exercise discretion in considering whether or not, and to what extent, if any, an application for allowance of such premiums for stay or supersedeas bonds should be granted or denied. See Annot., 90 A.L.R.2d 448 (1963).
Rule 6 of the Tennessee Rules of Appellate Procedure requires that a bond for costs on appeal be filed by the appellant in the trial court with the notice of appeal. That rule further provides that this bond shall be in the sum or value of $500.00 unless the trial court fixes a different amount. It is not necessary that an appellant file any other bond unless he desires to stay execution of the judgment rendered in the trial court, in which case, Rule 62 of the Tennessee Rules of Civil Procedure requires that a bond for stay be executed and filed. The right to appeal is not conditioned upon the filing of a bond for stay; but, if the appellant desires the protection of a stay, then the bond for stay must be filed. The pertinent provisions of Rule 62, Tennessee Rules of Civil Procedure, are as follows:
“62.04 Stay on appeal
“Except as otherwise provided in Rule 62.01, when an appeal is taken the appellant by giving a bond may obtain a stay. The bond may be given at or after the time of filing the notice of appeal. The stay is effective when the bond is approved by the court.
“62.05 Bond for stay
A bond for stay shall have sufficient surety and: (1) if an appeal is from a judgment directing the payment of money, the bond shall be conditioned to secure the payment of the judgment in full, interest, damages for delay, and costs on appeal; .... ”
One principle applied by courts in other jurisdictions is that only necessary disbursements may be allowed as taxable costs. Christenson v. Cudahy Packing Co., 84 Cal.App. 237, 257 P. 906 (1927); *867Giemza v. Allied American Mut. Fire Ins. Co., 10 Wis.2d 555, 106 N.W.2d 609 (1960); Hackenjos v. Kemper Chevrolet Co., 193 Minn. 37, 257 N.W. 518 (1934), petition for rehearing 258 N.W. 433 (1935). In the Christenson case where the plaintiff recovered a money judgment and, on appeal, the judgment was modified to award costs to the defendant, it was held that the defendant could not recover the premium paid on a surety bond to stay execution of the judgment, since the premium on such a bond was not a necessary expenditure within the meaning of the code section permitting recovery of such expenditures. Although the court in the Giemza case, supra, allowed a stay bond premium to be included as an item of recoverable costs, it clearly recognized the validity of the principle that in order for such a premium to be allowed as costs the appellant must show that the stay bond was reasonably necessary. Upon the facts there presented, the court rejected the contention of the appel-lee that the premium should not be recovered because the undertaking to stay execution was unnecessary, stating that it sufficiently appeared that the plaintiff-appel-lee’s attorney had informed the defendant-appellant’s attorney that execution would be issued if an appeal were taken, and that this was an adequate showing of need for an undertaking to stay execution.
We hold that before stay bond premiums should be awarded as recoverable costs on appeal under the authorization set out in Rule 40(c) of the Tennessee Rules of Appellate Procedure, the applying appellant should show that there was a necessity for obtaining a stay of execution pending the appeal. Since the requirement that necessity be shown had not been announced prior to the instant appellant’s application for allowance of costs, we deem it just and proper to allow a further opportunity for the appellant to demonstrate such necessity and for the appellee class to demonstrate the lack of such necessity, by affidavits or otherwise. In accordance with the time schedule set out in Rule 40(d), T.R.A.P., the appellant is allowed fifteen (15) days from the filing of this opinion to file such proof as it desires and the appellee ten (10) days from receipt of appellant’s proof in which to file opposing proof. A decision of this one issue will be deferred until such proof is submitted to the Court.
COOPER, C.J., HARBISON and DRO-WOTA, JJ., and WALKER, Special Justice, concur.