The surety for the appellants from a decree in admiralty gave
bond to pay all costs and damages which might be adjudged by this
Court.
This Court having affirmed the decree of the circuit court with
costs and six percent damages, judgment was entered upon the
receipt of the mandate by the circuit court for the amount of the
original judgment together with the amount of costs and damages
calculated up to that day, and execution was awarded.
Under this execution, the vessel, which had been attached under
the libel, was sold for less than this aggregate amount.
The surety is not entitled to have a relative proportion of the
proceeds of sale applied to the reduction of his bond, but is
responsible upon it to the entire amount.
By the 26th section of the Judiciary Act, the courts have power
to assess damages upon bonds &c., and to render judgment for so
much as is due according to equity, in cases of default or
confession or demurrer. This section does not apply to a case heard
on agreed facts.
But then when the case heard on agreed facts was the case of an
appeal bond, it was proper for the court to give judgment for the
penalty of the bond (being less than the judgment under the
mandate) and allow interest from the date of the institution of the
suit, although the amount to be paid in this way would exceed the
penalty of the bond.
Page 53 U. S. 160
This case was a consequence of the case of
New Jersey
Steam Navigation Company v. Merchants' Bank of
Boston, 6 How. 344.
The Merchants' Bank of Boston was the plaintiffs in the circuit
court, and the cause of action is thus stated in the brief of the
counsel for the plaintiff in error in this Court. There was a
special declaration in the circuit court, to which the defendant
demurred:
The facts set forth in the declaration and admitted by the
demurrer, upon which the questions here presented arise, are
shortly these:
The suit in admiralty -- New Jersey Steam Navigation Company,
Appellant and Libellee v. Merchants' Bank of Boston, Libellant and
Appellee, lately decided by the Supreme Court of the United States
and commonly called the
Lexington Case, was commenced in
the District Court of the District of Rhode Island by attachment of
the steamer
Massachusetts, then belonging to the
Navigation Company. The suit coming by appeal to the Circuit Court
of the United States for the District of Rhode Island, a decree
therein was rendered against the Navigation Company at the November
Term 1843, whereupon an appeal was taken by the company to the
Supreme Court of the United States, and Moses B. Ives, the
plaintiff in error, entered into appeal bond as surety for the
company, of which he was a member, in the penal sum of $2,500, with
the following condition:
"Now therefore if the said New Jersey Steam Navigation Company
shall prosecute their said appeal before the said Supreme Court of
the United States with effect and shall well and truly pay all such
costs and damages as shall be adjudged for them to pay by said
Supreme Court or by said circuit court by reason of said appeal,
then the before-written obligation to be void and of no effect,
otherwise it shall remain in full force and effect."
The suit terminated in the Supreme Court in a decree in favor of
the libellant and appellee, and execution finally issued against
the Navigation Company for the sum of $28,302.26 debt, and costs
taxed at $680.50, which, together with the sum of 75 cents for the
execution, made the whole amount of the execution $28,983.51, the
debt drawing interest from 19 June, 1848.
Of the debt, so called, embraced in the above execution the sum
of $6,228.78, consisted of the costs and damages of the
Page 53 U. S. 161
appeal decreed by the Supreme Court -- that is to say, $6,078.26
of it was interest on the amount decreed accruing during the
pendency of the appeal, given by way of damages of the appeal, and
the balance, $150.52, were the costs of the appeal. This sum,
$6,228.78, drawing interest from 19 June, 1848, is the sum for
which Mr. Ives would have been liable, to the extent of the penalty
of the appeal bond, had the execution remained wholly unsatisfied.
But the above execution was levied by the marshal upon the steamer
Massachusetts, attached as aforesaid on the original
process in the suit, and on 26 July, 1848, the
Massachusetts was sold by the marshal under the levy for
the sum of $25,000, and, deducting therefrom the sum of $883.38,
the marshal's fees and expenses, the sum of $24,116.62 was paid
over by the marshal to the Merchants' Bank, and the execution
thereupon returned satisfied for that amount, and unsatisfied for
the balance -- that is to say between four and five thousand
dollars of the execution remained unpaid.
The present action is an action by the Merchants' Bank against
Mr. Ives, the surety on the above appeal bond, to recover the costs
and damages of appeal, and the plaintiff and defendant in error
claimed below that he was entitled to apply the $24,116.62, not
proceeds of the Massachusetts, first to that portion of his
execution not protected by the appeal bond, and was compelled to
apply the balance only to that portion of the execution protected
by the appeal bond, treating the sum made upon the execution in the
same manner as if it had been a voluntary payment without direction
by the payor, in which case the right of appropriation remains with
the payee. To this result the learned judge who tried the case
below for various reasons came, and rendered judgment against Mr.
Ives for the penalty of the bond with interest from the day of
demand by action brought.
Page 53 U. S. 163
MR. JUSTICE CATRON delivered the opinion of the Court.
At November term, 1843, in the Circuit Court of Rhode Island,
the Merchants' Bank of Boston recovered against the New Jersey
Steam Navigation Company, by decree in an admiralty suit, the sum
of $22,224 and costs of suit. From which decree the respondents
appealed to this Court, and on December 14, 1843, Moses B. Ives,
the present plaintiff in error, became bound as surety for the
appellants in a penal bond of $2,500, with a condition
"that the said Navigation Company should prosecute their appeal
with effect, and should well and truly pay all such costs and
damages as should be adjudged for them to pay by said Supreme Court
or by said circuit court by reason of said appeal in case of
failure."
At December term, 1847, the appeal was heard before the Supreme
Court, and the decree affirmed, with costs and six percent damages.
On return of the mandate, a judgment was entered in the circuit
court against the Navigation Company for the original amount, and
also for $6,078.20 damages, arising by reason of the appeal, and
for $529.98, being costs covered by the appeal bond. The entire sum
for principal, damages, and costs, being $28,452.78. Execution
issued for the aggregate sum, and the steamboat Massachusetts was
sold 20 July, 1848, for $25,000, by virtue of the writ. The vessel
had been attached when the proceeding was commenced, and continued
subject to a lien until sold, but, not bringing a sum equal to the
final decree, Ives was sued on his appeal bond, and the circuit
court gave judgment against him for the amount of the penalty, and
also for six percent interest on the $2,500 from October 10, 1848,
being the time when he was served with the writ, the penalty and
interest amounting to $2,605.80, for which judgment was rendered at
the June term, 1849. To bring up this judgment, Ives sued out the
present writ of error.
First it is insisted and assigned for error that the $25,000
made by a sale of the vessel covered about eighty percent of the
amount included in the execution, and ought to have been
proportioned to every part of the demand, and if thus applied to
damages and costs, would have reduced them to about $1,200, and
that plaintiff in error was responsible for no more.
Ives was bound to pay such damages as might be awarded by the
Supreme Court and costs, and could have been sued and a judgment
had against him had no execution issued. He was positively bound to
the amount of his bond, and could not be heard to allege an
extinguishment of it in part because of a payment made by his
principals, leaving an amount due equal to the bond.
This is the plain equity of the case. If the appeal had not
Page 53 U. S. 164
been taken and the property attached had been sold in due time
after the first decree for $25,000, no damages would have been
sustained by the plaintiffs below, and as the surety was
instrumental in delaying satisfaction, it is equitable that he
should respond to such damage as his act occasioned, and which
enlarged the amount. The second ground relied on to reverse is that
by uniform practice, costs are deducted from the first proceeds
collected on an execution including them, and that a surety for
costs is never held liable when an amount sufficient to cover costs
is made of the principal.
It is not necessary at present to decide this matter of
practice, nor shall we do so, as the unsatisfied damages, exclusive
of costs, far exceeded the judgment rendered by the circuit
court.
The third and remaining question is one of general importance
and some difficulty. The surety was bound in a penal bond, and this
penalty the circuit court exceeded by allowing interest on it from
the time of demand by suit, and it is insisted that in this there
was error. The action was debt, with an allegation of damages
sustained by its detention. The parties came to a hearing on an
agreed case which set forth the facts, and submitted the law
arising on them to the court, and as the 26th section of the
Judiciary Act of 1789 only gives the courts power to assess damages
and to render judgment for so much as is due according to equity,
in cases of default or confession or on demurrer, it does not apply
in cases heard on agreed facts or tried upon pleadings and proofs.
This Court so held in
Farrar & Brown v.
United States, 5 Pet. 385, and which construction
we follow. In the same cause it was adjudged that in an action of
debt against the sureties of a surveyor who had received moneys of
the United States to disburse and given bond with sureties to
account for them, the practice was to render judgment in debt for
the penalty, to be discharged by the amount actually due, and that
this amount could not exceed the penalty.
In cases where unascertained damages are claimed about which
there is a contest, the foregoing is the proper rule, although it
was departed from in the case of
McGill
v. Bank of the United States, 12 Wheat. 514, where
payments had been made by the sureties after a defalcation, and an
account was taken between the parties, and interest calculated on
both sides and a balance struck, which, when added to previous
payments, exceeded the penalty of the bond. But these cases widely
differ from the present. Here, the surety was bound to pay damages
that might be adjudged against his principal in the Supreme Court.
They were established and settled at $6,078.26, and this judgment
bore six percent interest from
Page 53 U. S. 165
its date. It was conclusive as against the principal, and
equally conclusive of the fact that the surety was bound to pay it
to the extent of $2,500. Then this amount was due by the bond,
which could have been at once enforced by suit, and if the Supreme
Court had been vested with power to render judgment against the
surety on the appeal bond, as is the case in some of the states, no
reason would seem to exist why the bond should not bear interest
from the date of judgment in the Supreme Court against the surety
as well as against the principal. But as Ives only guaranteed the
payment of damages, and it was a duty imposed on the principal to
pay the entire judgment, the moderate rule has been applied of
requiring interest from the time that demand of payment was made by
suit -- a rule now so generally established in similar cases by
state courts of high authority that this Court could not violate it
without manifest impropriety.
Of course we are dealing with an appeal bond, and do not intend
to go beyond the case before us. It is therefore ordered that the
judgment rendered by the circuit court be
Affirmed.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Rhode Island, and was argued by counsel. On consideration whereof
it is now here ordered and adjudged by this Court that the judgment
of the said circuit court in this cause be and the same is hereby
affirmed with costs and damages at the rate of six percentum per
annum.
