Court Opinion

ID: 5649178
Source: CourtListenerOpinion
Date Created: 2022-01-11 21:53:55.613053+00
Date Added: 2024-06-11T08:38:30.087747
License: Public Domain

Miller, J.
Each of the instruments upon which the plaintiffs recovered in this action was in the usual form of *252an undertaking, upon an appeal to the Court of Appeals, and provided for the payment of the judgment recovered, as well as for all damages which should be awarded upon the appeal. These undertakings were executed prior to the passage of an act of the legislature, by which section 307 of the Code was amended, by inserting in the sixth subdivision of that section, which provided for costs on appeal to the Court of Appeals, the following clause: “ And when a judgment is affirmed, the court may, in its discretion, also award damages for the delay, not exceeding ten per cent on the amount of the judgment.” (S. L. of 1858, p. 49.)
When the undertakings in question were entered into then, there was no provision which authorized any such damages to be awarded,.and the first question which arises for our determination in this case is, whether the amendment cited extends to appeals taken previous to the period when it'was adopted, and embraces the undertakings upon which the judgment in this action was obtained.
I think that the amendment cited was not retrospective in its operation, and did not include appeals which were perfected prior to the time of its enactment. It is a general rule,' that no statute is to have a retrospect beyond the time of its commencement. (Bac. Abr., Statute.) And Blackstone, in his Commentaries (vol. 1, p. 46), says: “All laws shall be made to commence in futuro, and be notified before their commencement.”
The effect of an amendment of a statute amending another statute and incorporating changes and additions, was considered in the case of Ely v. Helton (15 N. Y. 595), and it was held, that the part which remains unchanged is to be considered as having continued the law from- the time of its original enactment, and the new or changed portion to have become law only at and subsequent to the passage of the amendment. Several other adjudications in this State hold, that amendments of a like character are not in terms retrospective, and should not be thus construed.
In Hamilton v. Averill (11 Wend. 622), an action was brought upon an appeal bond, entered into for the prosecu*253t*on of an appeal from a judgment by a justice of the peace to the Court of Common Pleas, executed prior to the Revised Statutes, which provides, that if a judgment be rendered in favor of the appellee, that he should sue an execution thereon within thirty days after the time when such judgment was rendered, or the sureties on the appeal bond should be discharged, and it was decided, that the party obtaining the judgment was not bound to issue execution within the time provided, such provision being applicable only to bonds executed subsequent to the Revised Statutes going into operation.
Kelson, J., says, that “it was not competent for the legis lature to change the obligation to the prejudice of the surety, and that they had not done so.”
In Bailey v. The Mayor of New York (7 Hill, 141), a question arose, whether interest could be taxed upon a verdict rendered prior to the act of May 7, 1844, and it was held, that it did not apply to verdicts rendered before the act was passed, and that it ought not to be so construed as to give it a retroactive effect. The phraseology of the third section of the act, under which it was claimed, that interest was allowable, was general, and made it lawful for any party who should have a verdict or report in his favor, to tax interest upon it as costs.
In Bull v. Ketchum, (2 Denio, 188), where the verdict was rendered" prior to the passage of the act of 1844, it was held, that the statute did not retroact, and that the plaintiff could only have interest for the period during which he had been delayed in obtaining judgment by the acts of the defendant. (See also Beatty v. Smith, 2 Herring & Munfred, 397; Burr v. Calvalk, 4 Nev. & Man. 894; Rex v. Wise, 2 Barnw. & Ad. 204, and note, where similar questions were involved.)
It would seem to be quite clear that the amendment in question was not retrospective in its operation, and cannot affect an undertaking entered into prior to its adoption. The damages which the undertaking provides shall be awarded upon the appeal, evidently means such damages as it'might *254be lawful to impose at the time when the contract was made, and not such as legislative enactments, subsequently made, might add to those already existing. Such is the import and true meaning of the terms employed, and of the engagements entered into by the defendants, and I am not able to discover how those terms can be extended, by the application of any sound principle of law.
Mor is there, in my opinion, any validity in the position that the damages provided for, were in the nature of costs, which are subject to statutory regulation, which is obligatory upon sureties, although sometimes retrospective. The provision in question is not an enactment relating to the recovery of costs, but in the nature of a legislative penalty for vexatious delay in litigation. It is not general in its application, and does not embrace all cases without regard to their character, or the circumstances surrounding them, but its operation is restricted and confined to such only as the court, in the exercise of its discretion, shall adjudge to have been needlessly delayed by frivolous appeals. It requires a special direction of the court to award these damages, and they are only imposed as a statutory penalty, and as a punishment for a dilatory appeal.
Besides, costs and damages are distinctive in their character, and cannot be considered as the same thing, or even as synonymous terms. Hence, it has been held that an undertaking entered into upon an appeal, under the Code, to pay, agreeing to pay all damages, without providing for costs, is not sufficient to compel the party to pay the costs,- and that an agreement to pay the one, imposes no obligation to pay the other. (Langley v. Warner, 1 Comst. 607.)
These remarks lead to the conclusion that the recovery of the ten per cent damages was erroneous, as against the sureties, and cannot be sustained. It is very manifest, I think, that they were not embraced within the engagement entered into, and were not such damages as the plaintiffs were entitled to recover in the actions brought by them, but were penalties imposed upon the party litigating for interposing a defense which had no force or validity, and which *255the court, in its judgment, considered as set up to harass and delay the opposite party.
It may also be remembered, that the question discussed has been distinctly adjudicated in two of the States, and it has been held, that damages under laws passed subsequent to the period when the undertaking was executed cannot be added to the obligations of a surety. In Steen v. Finley (25 Miss. 535), the bond upon which the action was brought, was entered into prior to the passage of a law which imposed upon the court the duty of giving “judgment for ten per cent damages, in addition to the interest now allowed by law.” The court below gave the ten per cent damages, and the Court of Appeals decided that they could not apply the statute to the case considered, without giving it a retrospective application and enlarging the contract of the sureties; that when the sureties became bound, there was no law imposing such a penalty, and that they could not impose any additional burden not undertaken by them at the time they entered into the bond, and reversed the judgment as to the ten per cent damages, and allowed it to stand as to the balance.
In Woodson v. Johns (3 Munf. Va. 230), the action was against the principal and sureties upon an injunction bond executed in 1791. An act was passed after its execution, providing that the Court of Appeals, “ in all eases where any decree rendered for any sum of money, shall, on appeal therefrom, be affirmed, shall award to the appellee damages at the rate of ten per centum.”
Ten per cent damages were allowed, and, on appeal to the Court of Appeals, it was held erroneous upon several grounds —one of which was, that no damages on the affirmance of a decree were allowed by law at the time of executing the bond. The doctrine laid down in this case was afterward affirmed in Jeter v. Laughesne (5 Galt. 210). There are no cases in this State in conflict with these decisions, and I think they harmonize with the cases to which I have adverted, where the effect of laws were considered, which it was claimed operated retrospectively.
*256If we concede that the sureties were not legally obligated to pay the ten per cent damages provided for by the amend-. ment cited, the question arises whether the fact of erroneously including these damages in the judgment wholly absolves them from the undertaking.
It is claimed by the defendants, that it was an act of the plaintiffs in procuring the statutory penalty to be included in the judgment, which exonerates the sureties from liability. This position is based upon the assumption, that the undertaking itself was enlarged, and that the act was an alteration of and an addition to the liability which it imposed, which extinguishes the obligation. The rule is well settled, that as between private parties, any alteration in the obligation or contract in respect to which a person has become surety, without the consent of the latter; extinguishes the obligation and discharges him. «And this rule applies, irrespective of the inquiry whether the alteration would work to the injury of the surety or not. The reason of the rule is, that the surety never made the contract upon .which it is sought to charge him. (People v. Vilas, 36 N. Y. 459.; see also Rochester City Bank v. Élwood, 21 N. Y. 90.)
The insertion of the ten per cent damages did not, in my opinion, within the principle laid down, affect the obligation or contract of the sureties in these undertakings. It did not add an iota to his responsibility, or increase it in any respect. It was an act outside of the contract and independent of it. The judgment clearly embraced damages which the party was not entitled to recover; but it made no change in the legal relations of the parties, so far as the undertaking is concerned, and did not extend its scope. As has already been shown, this law did not operate retrospectively, and hence, the undertakings did not embrace the ten per cent damages, and adding Them to the judgment erroneously would not enlarge them. These damages should not have been allowed, and having been inserted, cannot affect the obligation of the sureties. They still remain liable for what they were obligated to pay before the amendment was passed, and the insertion of an amount beyond this in the judgment, cannot *257increase that liability. The fact that a judgment was obtained for a larger amount than the sureties were bound to pay, is not, in my opinion, conclusive upon the question presented as to the enlargement of the obligation. As it is apparent what these damages amounted to, it is not difficult to separate the sums from the remainder of the judgment. If the undertaking had been for costs alone, and the judgment had embraced both costs and damages, there would seem to be no question, in a suit upon the undertaking, the court have power to separate the one from the other, and allow a recovery for the costs alone. It would be quite easy to deduct the damages allowed, which the plaintiff was not entitled to' recover. With the same facility the ten per cent damages could have been deducted from the judgments recovered. The fact that the court inadvertently awarded these damages is not conclusive and final as against the sureties. They were not parties in the suit, had no opportunity to be heard on the subject, and no status in the court which would enable them to make a motion to correct a palpable erroneous direction. They were not, therefore, bound ‘ by such a direction. Although the insertion of these damages does not affect the undertaking and exonerate the sureties, yet, it being evident that the court erred in allowing them, the judgment is erroneous to this extent, and the amount should be deducted. Otherwise the judgment should be affirmed. .
Grover, J.
The only question discussed by the counsel for the appellants was, whether the defendants were discharged as sureties upon the undertakings given upon the appeals to the Count of Appeals, by reason of the allowance by the court of five per cent upon the judgments appealed from, to the respondents as damages, by virtue of subdivision 6, section 11, Laws of 1858, page 493. The other questions raised upon the trial were not insisted upon by the counsel, and there is nothing requiring consideration in any of them. The section above referred to was passed during the pendency in the Oourt.of Appeals of the cases in which the undertakings were given. It is insisted by the counsel for the appellant, *258that the statute in question can only be applied prospectively to cases where the appeal was brought after its enactment, and several authorities are cited in support of this position. It is not necessary to determine this point, for if the counsel is correct, it would only show that the Court of Appeals committed an error in rendering judgment. Such, even if committed, would not discharge the sureties upon the undertaking. They undertook, in case of affirmance of the judgment, or any part of it, to pay the amount directed to be paid by said judgment, and all costs and damages which might be awarded against the appellants upon the appeal. This bound the sureties to pay the judgment if affirmed, although the court might have erred in point of law in such affirmance. It also bound the sureties to pay the costs and damages awarded by the court, although a similar error might have been committed in awarding the same. It was therefore immaterial as to the liability of the sureties whether the statute in question applied to cases pending at the time of its passage, or to appeals thereafter brought. If the latter be the' true construction, the award of five per cent damages upon the amount of the judgment was unauthorized by law, and the judgment in this respect should have been corrected upon motion. But it is said by counsel, that at the time of the execution and filing of the undertakings by the defendant, there was no law authorizing the court to award as damages any thing but interest upon the affirmance of the judgment. This is correct. The counsel from this argues that if the statute authorizing a further allowance is applicable to cases pending at the time of its passage, the liability of the sureties was thereby increased without their assent, and consequently they were thereby discharged. The same argument would apply to an increase of costs upon affirmance, made by statute. The liability of the sureties would in such case be increased, and the like effect would follow from a statutory increase of the rate of interest, and in either event, the sureties would be discharged if the reasoning of the counsel in the present ease is sound. I cannot concur in this reasoning; I think the defendant’s contract *259was entered into subject to the power of the legislature to change the law in these respects, and that they are bound by the contract, construed by the law as it exists at the time they are called upon to perform it. This class of cases has no analogy to those where parties have, by their own acts, changed their contract to the prejudice of a surety of one without his assent. (See People v. Vilas, 36 N. Y. 659.) The same reasoning is applicable in this respect to the present case, as was applied by the court in that case. There is no more reason for discharging the sureties in case of a change in the statute authorizing an additional allowance of damages, than there is of a like change imposing additional costs. In neither is the surety discharged. The counsel cites Stern v. Finley (25 Mississippi, 535). In this case, during the pendency of the action in which the bond was given, the legislature passed an act making it the duty of the court, in that class of cases, to give judgment for ten per cent damages in addition to the interest. The court held, that the statute did not apply to pending, but to future cases only, and accordingly held, that the surety was not liable for the ten per cent damages. In Woodson v. Johns (3 Munf. Va. 230), a similar judgment was given, the court saying that at the time of the execution of the bond, no such damages were allowed by law. If by this the court designed to be understood that the law was only applicable to future cases, it has no application to the present case, for we have seen that that question can not be raised in this action, but only by motion to correct the judgment of the Court of Appeals, and that motion must be made to that court in the original cause, according to the practice in this State. If the court proceeded upon the ground, that the statute did apply to the case so far as the party was concerned, and that a judgment against him for the damages would have been, legal, but that it could not be applied against the surety, for the reason that it enlarged his liability without his consent, the court should have held the surety entirely exonerated by the change. The obligation of the principal was no longer the same. He would be held upon one contract, and his *260surety upon another. The liability of the surety would be on the contract under the law, as it was at the time it was entered into, while that of the principal would be more extensive under the law at the time of pronouncing judgment. When the contract is changed by the act of the parties, it is never held that the principal is liable upon the new contract, and the surety upon the old, but the latter is entirely discharged. The judgment appealed from must be affirmed, with costs.
Mason, Bacon, Dwight, Woodruff and Clerks, JJ., concurring ; Hunt, Ch. J., not voting.
Judgment affirmed.