Home Fire Insurance v. Dutcher

Irvine, C. The Home Fire Insurance Company instituted an action in the district court of Douglas county to foreclose — 756 — a mortgage executed by Warren Dntcber on premises which he afterwards conveyed to defendant A. J. Butcher. The petition contained allegations to the effect that the present value of the premises is less than the mortgage indebtedness; that taxes on the premises to a large amount have been suffered to become delinquent, and that waste was being committed. There was a prayer for a receiver pendente lite. The district court, upon hearing evidence on the application for a receiver, sustained said application and appointed, a receiver for the premises. From this order the defendants have appealed. The district court, at the time of making the order, fixed the amount of the supersedeas bond at $500, and within the statutory period the defendants entered into a bond in that sum conditioned according to the third subdivision of section 677 of the Code of Civil Procedure. This subdivision is as follows: “When the judgment, decree, or order directs the sale or delivery of possession of real estate, the bond shall be in such sum as the court or judge thereof in vacation shall prescribe, conditioned that the appellant or appellants will prosecute such appeal without delay and will not, during the pendency of such appeal, commit or suffer to be committed any waste upon such real estate.” A motion was made to strike this bond from the files on the grounds, first, that there is no authority in law for superseding an order appointing a receiver pendente lite; and second, that if such an order may be superseded, the bond should be conditioned to pay the reasonable rental value of the property pending appeal. This motion the court sustained., and an application having been made by the receiver for a writ of assistance, the appellants made application to this court for an order restraining the district court and the receiver from taking any further steps pending the appeal. The primary question presented is that stated as the first ground of the motion to strike the bond from the files, to-wit: Is there any authority for superseding an — 757 — order appointing a receiver pendente lite? In considering tlie application we are, therefore, not reviewing the order striking the bond from the flies, because, if an order appointing a receiver can be superseded as a matter of right, it must be under the third subdivision of section 677, as that is the only provision which could possibly apply to such a case. In such event the filing and approval of the bond operated as a supersedeas and the order striking the bond from the files was a nullity. If, on the other hand, there is no authority for a supersedeas in such a case, the bond itself was a nullity and the district court had authority to proceed in disregard of such bond. The question so presented is by no means free from difficulty. A supersedeas is now almost everywhere so much controlled by statute, and the statutes are so different in their provisions, that but little assistance can be had from the adjudications of other states. After a severe struggle it became established in England that an appeal of itself operated as a supersedeas. Following the analogy of this practice, it is held in some states that statutes providing special conditions, such as the giving of a bond, in order to effect a supersedeas are merely restrictive in their character, and that the appeal itself works a supersedeas where there is no statute requiring a bond or a compliance with other conditions. A different doctrine has, however, been announced in this state; and it must be accepted as the established rule here that a supersedeas can be had as a matter of right only where it is affirmatively provided for by statute. (Gandy v. State, 10 Neb., 243; State v. Judges, 19 Neb., 149; State v. Meeker, 19 Neb., 444; Cooperrider v. State, 46 Neb., 84.) Owing to this difference between the rule on the subject in this state and the rule in many others, as well as the very broad differences between our statute and most others, the cases cited on behalf of the appellants have little or no application to that before us. Thus, State v. Johnson, 13 Fla., 33, was based on statutes making the — 758 — allowance of a supersedeas in all cases a matter of discretion. Everett v. State, 28 Md., 190, was based on a statute quoted in Blondheim v. Moore, 11 Md., 365, expressly providing tbe terms of a supersedeas in sucb cases. Northwestern Mutual Life Ins. Co. v. Park Hotel Co., 37 Wis., 125, was based on a construction of a statute providing for supersedeas bonds in certain cases, followed by a provision fixing tbe terms of tbe bond in “all other cases.” Tbe court beld tbis general provision applicable to orders appointing receivers, by virtue of tbe doctrine already mentioned as prevailing in some places that an appeal itself is a supersedeas unless a statute in a particular case requires some further condition to be complied with, or denies tbe right. That tbis is tbe Wisconsin doctrine appears more clearly perhaps from tbe case of Hudson v. Smith, 9 Wis., 122. Elliot v. Whitmore, 10 Utah, 238, seems to have been based on a statute like ours, and is, therefore, more nearly in point. In that case tbe defendant was in possession of a stream and bad appropriated tbe water by means of a ditch to bis own use. Tbe plaintiff! obtained a decree entitling him to tbe use of a part of tbe water, enjoining tbe defendant from using that portion awarded tbe plaintiff, and appointing a commissioner to put into tbe stream a certain device which would make a partition of tbe water in tbe proportions decreed. It was beld that tbe case fell within a statute identical with subdivision 3 of section 677 of our Code, and that the decree was superseded by a bond thereunder, tbe decree in effect directing tbe delivery of possession of real estate. It seems to us that tbe court thereby gave an exceedingly liberal construction to tbis provision. But there is tbis difference between tbe case cited and that before us, that in tbe Utah case tbe decree was final, and considered as an order for tbe delivery of possession of real property, it was an order for a final and perpetual delivery to tbe adverse party; while in tbe case before us tbe possession of property is not ordered delivered finally to tbe plaintiff, but to an officer of tbe court, to bold tbe same on be — 759 — half of all parties to the suit as their rights may ultimately be determined, and as a provisional remedy only. This distinction will be later adverted to. In Swing v. Townsend, 24 O. St., 1, the action was for the construction of a will, an order to sell real estate, and for distribution. Receivers were appointed in the court below. An appeal having been taken from the decree, the supreme court held that the appeal did not supersede the receivership and that the powers and duties of the receivers continued notwithstanding. It would seem, however, from Eaton & H. R. Co. v. Varnum, 10 O. St., 622, that an order appointing a receiver was not at that time in Ohio an appealable order, as it is made here by section 275 of the Code of Civil Procedure. In the Matter of the Real Estate Associates, 58 Cal., 356, it was held that an appeal from an order adjudicating insolvency and appointing a receiver did not suspend the functions of the receiver, the court saying: “For obvious reasons it would be dangerous to hold that the functions of the receiver are suspended during the appeal. It may be imperatively necessary to the preservation of the estate that his functions should not be suspended.” This case has a certain significance from the fact that section 945 of the California Code of Civil Procedure bears a close analogy to our section 677, subdivision 3; but other provisions of the California law are so different that we cannot give -the case the weight which it would otherwise be entitled to. A series of cases in Tennessee is instructive. That state has a statute which provides that “the supreme court in term or either of the judges in vacation may grant writs of supersedeas to an interlocutory order or decree or execution issued thereon as in case of a final decree.” (Statutes of Tennessee, vol. 2, sec. 3933.) It would seem that the language of this statute was broad enough to authorize, by a liberal construction at least, the allowance of a supersedeas on. appeal from an order appointing a receiver; but the Tennessee court holds — 760 — that it does not apply to such an order. (Baird v. Turnpike Co., 1 Lea [Tenn.], 394; Bramley v. Tyree, 1 Lea [Tenn.], 531; Roberson v. Roberson, 3 Lea [Tenn.], 50.) The reason given for this construction is that the statute was intended only to apply to orders adjudicating rights, and that it does not extend to orders made pending litigation for the preservation of rights, but not adjudicating them. The foregoing comprise all the cases to which the briefs direct our attention, as well as those most nearly approaching the question before us which an independent examination has brought to our attention. There are other cases treating an order appointing a receiver as one which should be superseded by appeal in the absence of express statute; but these cases emanate from jurisdictions following the old English practice, which we have shown does not prevail in this state. For several reasons we think that section 677 of the Code should not be so construed as to authorize a supersedeas of an order appointing a receiver pendente lite as a matter of right. In the first place, as already intimated, the third subdivision, which provides for orders directing the delivery of possession of real estate, is the only provision which could apply, and the condition of the bond in such case is merely that the appellants will not commit waste. If the sole object of a receivership is to prevent waste, that object can be more readily accomplished and with less hardship by an injunction. If the object is to otherwise-preserve the property, or to sequester the rents and profits, the condition of the bond would be entirely inadequate to the protection of the party on whose application a receiver was appointed. In the next place it has been held that the district court may, in a proper case, appoint a receiver after decree and pending an appeal, and this in the case of a mortgage foreclosure after an order of confirmation. (Eastman v. Cain, 45 Neb., 48; Philadelphia Mortgage & Trust Co. v. Goos, 47 Neb., 804.) The propriety of such an appointment may largely depend upon the fact that a bond conditioned under the — 761 — third subdivision of section 677 is the only security that the appellant is required to give to supersede an order of confirmation; and that such security may frequently be inadequate. If we should now hold that an appeal could be taken in such case from an order appointing a receiver, and that order be superseded by another bond, conditioned in the same manner as the bond in the appeal from the order of confirmation, we would deny the very protection which the cases cited hold the mortgagee or purchaser is entitled to. The most conclusive reason, however, for the construction which we have indicated, is that the appointment of a receiver is a provisional remedy. It does not adjudicate any rights. Its purpose is merely the protection of the property in dispute pending the action. Provisional orders are usually summary, frequently not subject to review, always largely discretionary, and almost universally not subject to be superseded. The provisional remedies now existing by virtue of our Code of Civil Procedure are the writs of replevin and attachment, injunction, and receivers. (Code of Civil Procedure, title 8.) The Code contains no provision whereby the defendant in replevin can supersede the writ of replevin or even by a forthcoming bond obtain the return of the property pending the suit. In case of an attachment, there is no provision whereby the execution of the writ of attachment may be superseded; but there are two special provisions whereby the defendant can regain possession of the property upon giving bonds. (Code of Civil Procedure, secs. 206 and 219.) There is also an express provision whereby an order discharging the attachment may be superseded by certain procedure, and upon the giving of a bond specially provided in such case. (Code of Civil Procedure, sec.,236e.) There is no provision whereby an order allowing an injunction may be superseded, when it is solely prohibitive in its character; but there is a special provision whereby an order dissolving an injunction may be superseded so as to continue the injunction in force. (Code of Civil Procedure, — 762 — wees. 677, 679, 680, 681.) It will be observed, therefore, that generally the Code contemplates that the orders allowing any one of the provisional remedies shall stand in force until discharged by the court allowing them or by this court on appeal; and that wherever there is a special reason for suspending any of such remedies, the legislature has deemed it necessary to provide expressly therefor. It is evident that the legislature has not considered the general provisions for a supersedeas applicable to the provisional remedies in such a manner as to prevent their enforcement. The special provisions referred to have always been considered as exclusive in their character. The chapter relating to receivers contains no special provision for the superseding of an order of appointment; nor is there elsewhere in the Code any provision of that character. As pointed out already, to allow'- a supei^sedeas as a matter of right would in many cases defeat the whole purpose of the order, and we think the obvious intention of the legislature was that such purpose should not be in that manner defeated, and for that reason no provision was made for superseding such an order. Furthermore, the Code provides protection to the defendant from the-results of continuing provisional remedies in the way of bonds which are always required for that purpose. In holding that a party may not, as a matter of right, supersede an order appointing a receiver, we do not hold that a supersedeas may not be granted in the discretion of the court. This court has already held that a writ of ouster in. a quo warranto case and a writ of mandamus are writs which may not be superseded as a matter of right;, but it has also held that the court may in its discretion allow a supersedeas in such cases. (Gandy v. State, 10 Neb., 248; State v. Judges, 19 Neb., 149; Cooperrider v. State, 46 Neb., 84.) It is quite clear from the record that the district court has been proceeding on the theory that there was no authority whatever for a supersedeas in this case, and has not exercised, or been called upon to — 763 — exercise, its discretion in granting or refusing a super-sedeas. This court now bas jurisdiction of tbe case on appeal, and we have no doubt of its power to itself grant a stay on proper conditions. (City of Janesville v. Janesville Water Co., 89 Wis., 159; Haught v. Irwin, 166 Pa. St., 548.) Inasmuch as the allowing of a stay is wholly a matter of discretion, it follows that the court may, in allowing the stay, affix such conditions as in its judgment are necessary for the protection of the parties. A. bond conditioned merely not to commit waste is, as we have seen, not a sufficient protection. We think the bond should be further conditioned to pay the reasonable rental value of the property to the receiver in case the order appointing him should be affirmed. The record .discloses that the premises are now occupied by one of the appellants as a homestead, and this state of facts demands that we should permit in this case the order appealed from to be superseded. In view of the evidence as to the value of the property and its probable rental value, we think the bond should be in the penal sum of $1,000. If a bond in that sum, and so conditioned, be filed within twenty days, with sureties approved by the clerk of the district court, the enforcement of the order will be suspended pending appeal. If not so given, the order heretofore entered staying proceedings will stand discharged. Order accordingly.