Gottwals v. Rencher

ON MOTIONS OPINION Appellant, owner of an undivided half interest, and respondents, owners of the other undivided half interest in certain property at Boulder City, became involved in partnership difficulties, and the former, as plaintiff, brought suit against respondents (defendants) in the Eighth judicial district court, Clark County. The property involved consists of buildings and structures erected upon three city lots, a lease of said premises from the United States to appellant, and certain furniture and fixtures. Pursuant to an agreement of copartnership, the respective parties operated certain businesses in and upon said premises from November 1, 1935, until June 4, 1937. On the last-mentioned date a receiver was appointed by said district court, who after qualifying took possession of said properties and business, and has ever since operated, conducted and administered the same.

After trial, judgment was rendered and entered in January 1939, the last two paragraphs of the judgment as entered, reading as follows:

"That from the proceeds of such sale and from any other money belonging to the partnership in the Receiver's hands, said Receiver pay: (a) the expenses of the receivership, including compensation of the Receiver and of his attorney and other employees and the expenses incurred in operating the business during the receivership; (b) the general creditors of the business or partnership, charging to Plaintiff individually the item of Six Hundred Forty-five Dollars ($645.00) unpaid on accounts incurred by him prior to October 25, 1935, and also any other obligations incurred by Plaintiff prior to November 1, 1935; (c) to the Defendants the sum of Three Thousand Six Hundred Sixty-four and 51/100 Dollars ($3,664.51), plus a sum equal to all Plaintiff's withdrawals since the appointment of the Receiver, less any withdrawals by Defendants since said appointment, and plus also a sum equal to all obligations incurred by Plaintiff prior to November 1, 1935, and paid by the Receiver, plus Defendants' costs incurred herein taken at One Hundred One and 35/100 Dollars ($101.35); and (d) the residue equally to Plaintiff and defendants; and that said Receiver render unto the Court an account and report of his administration and of said sale; and obtain the confirmation and approval of the Court before paying over the sums herein mentioned.

"That in the event the funds in the hands of the Receiver from the sale of the properties and from all other sources be insufficient to pay the Defendants in full all of the sums mentioned in Subdivision (c) of Paragraph 8, after paying all sums mentioned in Subdivisions (a) and (b) of said Paragraph, then and in that event the Defendants have personal judgment against Plaintiff for the amount of such deficiency."

On February 25, 1939, the receiver noticed certain of said properties for sale on March 3, 1939. On March 2, 1939, the trial court denied plaintiff's motion for a new trial. On the same day (March 2) plaintiff served and filed his notice of appeal from said judgment and from the order denying his motion for new trial, and also filed his undertaking on said appeal. On said 2d day of March plaintiff served upon the attorneys for respondents and the attorneys for the receiver a written notice that he had perfected said appeal; said notice contained a demand that the respondents and the receiver "desist and refrain from all further acts and proceedings relating to the sale of the property, noticed to be sold by said Receiver herein, on the 3rd day of March, 1939, and that said sale be not made of said property, or any part thereof." On March 3 the receiver sold said property to respondent John S. Rencher for $5,200. On March 7 the receiver filed his return and account of sale and petition for order confirming and approving said sale. On the same day the district court fixed March 18 as the time for hearing said return, account and petition. Also, on the same day (March 7), receiver served upon appellant notice of the time and place so fixed by the court for the hearing of said return, account, and petition.

On March 11 appellant moved this court for an order staying the hearing of said return, account, and petition, vacating the order setting said hearing, vacating said sale and for a writ of supersedeas. The motion was made upon the ground that said proceedings were stayed by the perfecting of plaintiff's appeal to this court, and is based upon the notice of motion and the affidavit of appellant's attorney.

Section 16 of the 1937 new trials and appeals act, Stats. of Nevada, 1937, chap. 32, p. 53, at p. 58, provides in part that to render an appeal effectual for any purpose, a written undertaking in the sum of $300 must be filed, or the sum of $300 deposited with the clerk of the district court within five days after the notice of appeal has been served.

Section 17 of said act provides in part that if the appeal be from a judgment or order directing the payment of money, or from an order dissolving or refusing to dissolve an attachment, it shall not stay the execution of the judgment or order unless a written undertaking be given, conditioned as specially provided in said section 17.

Section 19 of said act provides in part that if the judgment or order appealed from directed the assignment or delivery of documents, or personal property, the execution of the judgment or order shall not be stayed by or upon appeal, unless the things required to be assigned or delivered be assigned and placed in the custody of such officer or receiver as the court may appoint, and an undertaking be entered into to be approved by the court or judge and in such amount as the court or judge may direct, and conditioned as specially provided in said section 19.

Section 20 of said act provides in part that if the judgment or order appealed from direct the execution of a conveyance or other instrument, the execution of the judgment or order shall not be stayed by the appeal until the instrument is executed and deposited with the clerk, and an undertaking executed to be approved by the court or judge in such amount as the court or judge may direct, and as specially provided in said section 20.

Section 21 of said act reads as follows: "If the judgment or order appealed from direct the sale or delivery of possession of real property, the execution of the same shall not be stayed unless a written undertaking be executed on the part of the appellant, with two or more qualified and sufficient sureties, or a bonding or surety company qualified to do business in the State of Nevada, to the effect that during the possession of such property by the appellant he will not commit, nor suffer to be committed, any waste thereon, and that if the judgment be affirmed he will pay the value of the use and occupation of the property from the time of the appeal until the delivery or possession thereof, pursuant to the judgment or order, not exceeding a sum to be fixed by the judge of the court by which the judgment was rendered or order made, and which shall be specified in the undertaking. When the judgment is for the sale of mortgaged premises, and the payment for a deficiency arising upon the sale, the undertaking shall also provide for the payment of such deficiency. In all other cases, not provided for in sections 16, 17, 19, 20, or 21 hereof, the amount and conditions of the undertaking to stay the execution of the judgment or order shall be fixed by the court or the judge thereof, in which the judgment was rendered or the order made."

Section 24 relates to the justification of sureties on undertakings on appeal, and to deposits of money in lieu of such undertakings.

Section 25 provides: "In cases not provided for in sections 17, 19, 20, 21 or 24 of this act, the perfecting of an appeal by giving the undertaking, and the justification of the sureties thereon, if required, or making the deposit mentioned in section 16, shall stay proceedings in the court below upon the judgment or order appealed from, except that where it directs the sale of perishable property the court below may order the property to be sold, and the proceeds thereof to be deposited to abide the judgment of the appellate court."

District court rule XXVI provides in part that: "No stay of execution upon motion for a new trial shall be granted or allowed, nor execution or other proceeding be stayed in any case, except upon the giving of a good and sufficient undertaking, in the manner and form as other undertakings are given, to be approved by the judge, with at least two sureties, for the payment of the judgment or debt, or performance of the act directed by the judgment or order, in such amount as may be fixed by the judge."

Without a stay of proceedings in the lower court, it seems clear that appellant might suffer irreparable injury in the event that his appeal should be successful. The main question to be determined by this court on appellant's motion is whether the perfecting of his appeal stayed further proceedings in the district court or whether, as contended by respondents, such stay could only be effected by the giving of a stay bond. Appellant relies upon section 25 of the 1937 new trials and appeals act, while respondents base their contention on section 21 of said act, and district court rule XXVI.

Sweeney v. Karsky, 25 Nev. 197, 58 P. 813, cited by respondents, grew out of an election contest. The losing party appealed to the supreme court and filed a stay bond in addition to the $300 appeal bond. The judgment having been affirmed, action was commenced on the undertaking to recover the fees and emoluments of office. Upon appeal from a judgment in favor of plaintiff, appellants contended that the undertaking was not authorized by law and was therefore void. This court, in its opinion, said in part: "It is provided in the last clause of section 3367 that, in all cases not mentioned, the amount of the undertaking to stay the execution of the judgment or order shall be fixed by court or the judge thereof. The stay of execution of judgment in contested election cases, not being specifically provided for, comes under this clause, and the recitals of the undertaking sufficiently show that all required steps were taken to render it a valid contract under the law."

O'Donnell v. District Court, 40 Nev. 428, 165 P. 759, 760, was an appeal from an order appointing a guardian. Appellant filed only an undertaking on appeal in the sum of $300. This court, holding that the appeal stayed proceedings in the court below without the giving of any further bond, said: "The undertaking on appeal filed by petitioner conforms to section 404 of the Civil Practice Act, and, as the procedure authorized by section 6162, Revised Laws, is not a case provided for in sections 404, 405, 408, and 409 of the Civil Practice Act, the perfecting of the appeal by giving the undertaking, as prescribed by section 404, stays proceedings in the court below upon the judgment and order appealed from. Section 5355, Revised Laws. It is argued by respondents that it is against the interest of petitioner, and against public policy, to permit petitioner to manage her property pending the time of her appeal. And it might have been suggested, by way of argument, that an appeal in such cases defeats the purpose of the statute. This position has been ruled upon adversely to respondents by the Supreme Court of California in construing a similar statute. Coburn v. Hynes, 161 Cal. 685,120 P. 26; In re Woods' Estate, 94 Cal. 566, 29 P. 1108; In re Moss, 120 Cal. 695, 53 P. 357. We are powerless to remedy what may be a defect or omission in the Civil Practice Act."

In Dunphy v. McNamara, 50 Nev. 113, 252 P. 943, 945, the appeal was from an order appointing a temporary trustee with directions to him to protect and preserve the property involved pending the litigation. The defendants perfected their appeal by giving the statutory $300 appeal bond, and contended that the appeal operated to suspend the order appealed from, and that appellants were entitled to the possession of the trust property pending the appeal. This court ruled against that contention, and after citing In the Matter of Real Estate Associates, 58 Cal. 356, and quoting from Morbeck v. Bradford-Kennedy Co.,18 Idaho, 458, 110 P. 261, proceeded to say: "So, in this proceeding, it clearly appears that it is necessary that the property involved should be preserved in statu quo as nearly as may be, pending the litigation concerning it, and both upon principles of equity and upon the authorities construing statutes substantially the same as ours we hold that the order appointing George Russell, Jr., temporary trustee or receiver pendente lite was not vacated or superseded by the giving of the statutory undertaking on appeal in the sum of $300. See 3 C.J. 1285, note 31."

So far as we have been able to learn, the California statutes have never contained a provision similar to the last sentence of section 21 of our 1937 new trials and appeals act. In Oregon, however, in the case of In re Workman's Estate, 156 Or. 333,65 P.2d 1395, 68 P.2d 479, the supreme court was confronted with statutory provisions similar to section 25, and the last sentence in section 21 of our 1937 act. The confusion naturally resulting from such provisions is well illustrated in this case, as well as in Dunphy v. McNamara supra; for, just as in the latter case Justice COLEMAN dissented, basing his dissent on the statute corresponding to section 25 of our said 1937 act, so in the Oregon case three of the seven justices dissented, one of the grounds of their dissent being that, in their opinion, under the provisions of that portion of their appeals statute corresponding to section 25 of the Nevada act of 1937, the appeal from an order denying and overruling a petition to be appointed executor operated to stay proceedings in the lower court, notwithstanding no supersedeas bond was given.

1. Respondents contend that this court is without jurisdiction to hear or determine appellant's motions, and cites 60 C.J. 1156, placing particular emphasis upon that portion of the passage cited, which reads: "But an application for a supersedeas of execution issuing on a judgment from the court below must first be made to that court, and refused by it, before the supreme court will hear such application." Two Arkansas cases are cited in support of the foregoing rule, but an examination of them has disclosed that both are criminal cases, not applicable to the pending motion. This court, on appeal, has power to stay proceedings in the district court. In re Workman's Estate, supra; Lund v. Idaho Wash. Northern R., 48 Wn. 453, 93 P. 1071; Hough v. Roberts Min. Mill. Co., 58 Nev. 317, 78 P.2d 102; Bancroft's Code Pr. Rem., vol. 8, pp. 8716, 8717, sec. 6597; Bancroft's Code Pl., Pr. Rem., Ten Year Supp., vol. 5, 419, sec. 6597.

Aside from the perplexing questions arising out of the conflict in the provisions of our appeals statutes hereinbefore mentioned, respondents contend that this case comes within the provisions of the first part of section 21 of the 1937 act, for the reason that the major portion of the property ordered sold is real property within the meaning of that section. They cite Adams v. Smith, 19 Nev. 259, at pages 272-273, 9 P. 337, 10 P. 353. Appellant, on the other hand, maintains that said property is personal property under the general rule that real property does not include estates less than freehold, such as leaseholds and estates for years which are, he contends, chattels real. He cites 50 C.J. 747, 748, notes 20, 21; and 50 C.J. 763, notes 24-28. It is clear that the trial court considered the property personal property, because in a modification of the judgment, appearing as "Exhibit B" in appellant's motion, the trial court in prescribing the time for posting and publication of notice of sale, followed the statutory provisions for the sale of personal, not real, property.

2. It is not necessary, however, for the court on this motion to determine whether the property ordered sold is real or personal property; because, conceding it to be real property, section 21 of the 1937 appeal act is not applicable, for the reason that said property, ever since the receiver took possession in June 1937 has been in his possession and not in the possession of appellant or any person subordinate to him. Zappettini v. Buckles, 167 Cal. 27, 138 P. 696; Bancroft's Code Pr. Rem., vol. 8, p. 8692; Keeling Collection Agency v. McKeever, 209 Cal. 625,289 P. 617; Bancroft's Code Pl., Pr. Rem., vol. 5, 4184, sec. 6573.

3. The judgment in this case provides for a personal judgment against plaintiff for the amount of any deficiency, should the funds realized from the sale be insufficient to pay defendants in full all of the sums mentioned in subdivision (c) of paragraph 8 of said judgment, after paying all sums mentioned in subdivisions (a) and (b) of said paragraph. But even if the property ordered sold should be conceded to be real property, the judgment for a deficiency would not bring this case within section 21 of the act of 1937. Arrington v. Wittenberg, 11 Nev. 285; Bancroft's Code Pr. Rem., vol. 8, p. 8692, note 20.

Until the last few years, the last sentence of the section corresponding to section 21 of the 1937 act read: "In all other cases, not hereinbefore mentioned, the amount of the undertaking to stay the execution of the judgment or order shall be fixed by the court or the judge thereof." Comp. Laws, sec. 8898. Appellant argues that the effect of the change in section 21, specifically excepting section 16, has been to remove any apparent conflict between section 25 and the last sentence of section 21. We are unable to concur in this view.

Appellant also maintains that section 25 of the 1937 act should control, under the rule that in case of conflicting provisions in the same statute, the last in point of time or order of arrangement should prevail. Ex parte Smith, 33 Nev. 466, at pages 480, 481, 111 P. 930; 59 C.J. 999, 1000; 25 R.C.L. 1011, 1012. But we are not disposed to consider this rule as decisive in this case, particularly in view of the fact that the conflicting provisions under discussion have been, with some variations, in our appeal statutes for approximately seventy years, and have, with slight modifications from time to time, been retained to the present time even when preceding acts have been supplanted by later ones.

4. All efforts of this court to reconcile the provisions mentioned have proved unavailing, nor have we been able to determine whether one provision should prevail over the other. Having in mind the inherent powers of the court, and in view of our holding in Dunphy v. McNamara, supra, the only conclusion we have been able to arrive at is that until the legislature sees fit to clarify this situation, a stay bond, in a case not provided for in sections 17, 19, 20, 21, or 24 of the new trials and appeals act of 1937, should be required only when it is made to appear that on principles of equity and justice such bond is necessary to protect an appellee against damages he may sustain by reason of an unsuccessful appeal. No showing of damage which may result from an unsuccessful appeal in this case has been made by respondents. They have filed no county affidavits, nor have they offered any evidence. They have relied entirely upon their contention that legally a stay may not be granted by this court without the giving of a stay bond, at least unless application be first made in the court below.

5. Appellant's motion for an order staying the hearing of the return and account and petition of the receiver for confirmation of sale, and vacating the order setting said hearing, is granted, and it is hereby ordered and adjudged that no further proceedings be had in the lower court, or any further steps taken by said court or the receiver towards the confirmation of said sale, or the conveyance of said property; or any portion thereof, pending the appeal herein. Appellant's motion for an order vacating said sale will be denied at this time, pending the decision of this court on the merits of the appeal.

NOTE — ORR, J., being disqualified, the Governor designated HON. EDGAR EATHER, Judge of the Third Judicial District, to sit in his stead.