Duhaime's Law Dictionary


Supersedeas Bond Definition:

A contract by which a surety obligates itself to pay a final judgment rendered against its principal under the conditions stated in the bond.

Related Terms: Supersedeas

Justice Duncan of the Court of Appeals of Texas, sitting in San Antonio, in the 1997 case of Amwest v Graham held:

"A supersedeas bond is a contract by which a surety obligates itself to pay a final judgment rendered against its principal under the conditions stated in the bond.

"Supersedeas bonds are therefore construed as any other contract, and the cardinal rule of construction is to ascertain the intent of the parties....

"Accordingly, the sureties are no further bound than they have contracted to be. They are given the simple justice of a literal interpretation of the language of their undertaking."

In Grimme Combustion v Mergentime, Justice Ford Elliott adopted these words

"Supersedeas bonds are judicial bonds which ... requires and as the bond at issue herein provides, binds and indebts the surety to the Commonwealth in the amount stated in the bond.

"Supersedeas bonds (are) a form of judicial bond ....The filing or submission of a judicial bond constitutes a surety's submission to the jurisdiction of a court.

"Although the characteristics of particular judicial bonds may vary, their general purpose is clearly to ensure that parties involved in civil litigation will fulfill their respective obligations. Given the fact that judicial bonds are essentially financial guaranty bonds ... sureties are well advised to secure adequate collateral and strong indemnitors before issuing a judicial bond."

One frequent use of the supersedeas bond is to stay enforcement proceedings. Thus, in Diversified Holdings v Turner, Justice Durham of the Supreme Court of Utah used these words, at ¶39:

"A supersedeas bond stays the execution of judgment pending appeal. A supersedeas bond protects a judgment creditor's interest by providing a surety to whom the creditor may look should the appeal fail and the judgment debtor's financial position so deteriorate between judgment and disposition of the appeal that payment of the judgment by the debtor becomes impossible. The purpose of a supersedeas bond is to protect nonappealing parties by maintaining the status quo during the appeal and insuring that those who have obtained the judgment under review will not be prejudiced by a stay of the judgment pending final determination of the appeal."

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