Without an express contract of indemnity, a surety on a
recognizance for the appearance of a person charged with committing
a criminal offense against the laws of the United States, cannot
maintain an action against the principal to recover any sums he may
have been obliged to pay by reason of forfeiture of the principal,
and he is not entitled to be subrogated to the
Page 110 U. S. 730
rights of the United States, and to enjoy the benefit of the
government priority.
Subrogating a surety on a recognizance in a criminal case to the
peculiar remedies which the government enjoys is against public
policy, and tends to subvert the object and purpose of the
recognizance.
§ 3468 Rev.Stat. conferring on sureties on bonds to the United
States who are forced to pay the obligation the priority of
recovery enjoyed by the United States does not apply to
recognizances in criminal proceedings, and does not authorize an
action in the name of the United States.
The bill was filed at the suit of the United States to obtain
payment of a recognizance for $10,000 from the property of one
Edward P. Williams, or the proceeds thereof, in the hands of Seth
B. Ryder, one of the defendants. The recognizance was entered into
on the 8th day of November, 1876, by Williams and three other
persons, conditioned that Williams
"should appear in person at Trenton, before the United States
district court there, and submit to such sentence as the said court
should order and direct. "
Williams did not appear according to the condition of the
recognizance, but absconded, and, as the bill alleges, "became a
fraudulent, absconding, concealed, and absent debtor, and at the
same time was a convicted criminal, and a fugitive from justice,"
and never has since appeared nor been found. The bill further
alleges that a
scire facias was issued, and a judgment
entered upon the recognizance, and an execution issued to the
marshal of the district against the goods and lands of the
cognizors, and that certain real estate of the sureties was levied
upon, insufficient (as alleged) to satisfy the execution; but that
no levy was made upon the goods and lands of Williams, for the
reason that they were in the possession of said Ryder, who claimed
the right to hold the same partly as assignee under a general
assignment made by Williams for the benefit of his creditors, in
July, 1876, and partly as auditor in attachment, appointed by the
Circuit Court for the County of Union, in the State of New Jersey,
under an attachment issued against Williams on the 15th of
November, 1876, and levied on the 23d of same month. The bill
alleges that Ryder has since sold the property in his possession by
order of the Circuit
Page 110 U. S. 731
Court of Union county, and has in his hands the proceeds,
amounting to several thousand dollars.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
This is an appeal from a decree dismissing a bill in equity on
demurrer.
The grounds on which relief seems to be claimed by the bill, as
far as can be gathered from the statements and the argument of
counsel, are first, that the United States is a judgment and
execution creditor whose remedy at law is exhausted, and that the
funds in the hands of Ryder are equitable assets, which ought to be
applied in satisfaction of the judgment; second, that the
recognizance operated as a lien on the real estate of Williams,
from the time of its acknowledgment and recordation; third, that
under the act of Congress in that behalf, the United States is
entitled to priority over all other creditors of Williams, he being
insolvent, and having made a general assignment of his property for
the benefit of his creditors, and his property being attached as
that of an absconding debtor; fourth, that the sureties of Williams
have, by way of subrogation, a right to the enforcement of all the
remedies which the United States is entitled to against Williams'
property, before resort can be had against them and their property,
or to indemnify them in case of their satisfying the claim of the
United States, it being conceded on the argument that the bill was
filed, and that the suit is prosecuted in the interest and
Page 110 U. S. 732
for the benefit of the sureties. The allegation on this subject
in the bill is as follows:
"And your orator further shows that the said sureties, being
aware that the said Seth B. Ryder has in his hands a large amount
of money belonging to their principal, and subject to the statutory
claim of your orator to priority, as aforesaid, have claimed, as a
right belonging to them as sureties, that your orator, before
selling their lands under said execution, should seek relief in
this court to compel the said Seth B. Ryder to apply the said fund
to the satisfaction of said execution, as he is bound to do by the
statute, giving your orator a priority upon said fund, in order
that the said moneys of their principal, in the hands of said
Ryder, may be applied to your orator's claim in exoneration of the
said sureties, so far as the same will extend."
At the coming on of the argument on this appeal, the Solicitor
General of the United States stated in open court that the
government has no interest in the suit, the amount of recognizance
having been paid by the sureties, and that the suit is prosecuted
for the benefit of the sureties only, and this statement was
admitted by the counsel for the sureties, who alone argued the
cause for the appellants.
The questions for us to decide are:
First, whether, since the recognizance has been paid by the
sureties, they are subrogated to the rights of the United
States;
Secondly, whether, if thus subrogated, they are entitled to
prosecute in the name of the United States;
Thirdly, if the first two questions are to be answered in the
affirmative, whether a case is made by the bill to entitle the
complainants to relief.
First. Are the sureties subrogated to the rights of the United
States? The general right of sureties, when paying the debt of
their principal, to be subrogated to the rights of the creditor,
whether as a mortgagee, pledgee, or holder of a judgment or
execution, or any other security, has been so often and so fully
discussed that nothing further need be added on that subject. The
recent treatise of Mr. Sheldon on the Law of Subrogation,
Page 110 U. S. 733
and the notes to
Dering v. Earl of Winchelsea, in 1
White and Tudor's Leading Cases in Equity 100, refer to the
authorities, and exhibit the general results deducible therefrom,
and in Mr. Burge's Treatise on Suretyship, the rules of the civil
law on the same subject are fully set forth. The doctrine is that a
surety paying the debt for which he is bound, is not only entitled
to all the rights and remedies of the creditor against the
principal for the whole amount, but against the other sureties for
their proportional part. This is clearly the rule where the
principal obligation is the payment of money or the performance of
a civil duty. And in England, the sureties of a debtor to the King
(as for duties, taxes, excise, &c.) have always, since Magna
Charta at least, had the right, upon paying the debt, to have the
benefit of prerogative process, such as extent, or other crown
process adapted to the case, to aid them in coercing payment from
the principal, and compelling contribution from co-sureties. Thus,
where upon a
scire facias issued against the heir and
executor of one surety, the defendant paid the debt, it was ordered
that he should stand in the place of the Crown, and have the aid of
the court to recover either the whole against the principal or a
moiety against a co-surety. Manning's Exch.Pract. 563. And where a
collector of a township [or parish] was a defaulter, and the
township was retaxed for the deficit, the same relief was given.
Macdonald, Ch. Baron, said:
"The parish stands very much in the nature of sureties, and it
is a reasonable practice that the party who has made good to the
Crown the default of the defendant should have the same remedy that
the Crown itself would have; it is, besides, unanswerable that this
is a debt upon record and still subsisting; nor can it be satisfied
by the reassessment of the parish."
Rex v. Bennett, Wightwick 1, and cases in note.
See
also Regina v. Salter, 1 Hurlst. & Nor. 274.
The last observation of the Chief Baron (that the debt of the
collector was still subsisting) was made in view of the opinion,
which long prevailed in England, that payment of the debt by the
surety extinguished it, and took away the remedies for
enforcing
Page 110 U. S. 734
it, even a judgment recovered, and thereby deprived the surety
himself of all advantages of such remedies, and left him to his
action for money paid -- a result not recognized or admitted by
most of the courts of this country, and remedied in England by the
Mercantile Law Amendment Act, 19 and 20 Vict. c. 97, by virtue of
which a payment of the debt by the surety has virtually the effect
of an assignment thereof to him. Sheldon on Subrogation §§
135-138.
The rule of subrogation in favor of sureties to prerogative
rights and remedies of the Crown seems to be confined to cases of
crown debtors, such as collectors, receivers, accountants, and
other fiscal officers, and persons bound for customs duties, excise
taxes, and other civil duties. We have not been able to find any
English case in which it has been applied, or allowed, in favor of
bail in a criminal proceeding. It has even held that the law raises
no liability on the part of the person bailed to indemnify his bail
for what they have been compelled to pay on their recognizance by
reason of his default. It is said in Highman on Bail. 204,
"If a principal do not appear and the recognizance be forfeited
and paid by the bail, yet the principal shall remain open and
liable to the law whenever he can be taken, for the penalty in the
recognizance is no other than as a bond to compel the bail to a due
observance thereof, and has no connection with the principal; they
could not sue him thereon for money paid to his use, or on his
account, for it was paid on their own account, and for their own
neglect."
In a subsequent edition, it is true, it is said to have been
settled that where a person is bail for another he is entitled to
recover all the expenses he has incurred incidental to that
situation, and the same statement is made in Petersd. Bail, 517;
but the only authority cited for the position is the case of
Fisher v. Fallows, 5 Esp. 171, which was a case of bail in
a civil proceeding, and consequently was no authority for the
proposition as applied to criminal cases.
In
Jones v. Orchard, 16 C.B. 614, an action on an
implied promise to indemnify bail in a criminal case was sustained
in regard to the costs which he was obliged to pay on default of
the principal under an act of Parliament, but it was virtually
conceded
Page 110 U. S. 735
that no such promise of indemnity would be implied for the
nonappearance of the principal, because it would be against public
policy. In the course of the argument, Jervis, C.J., said:
"As to the nonappearance of the defendant, there can, I
apprehend, be little doubt; but a very different question may arise
as to the costs, and here the recognizance was estreated only
because Orchard failed to pay the costs."
And in the final opinion he said:
"The rule [to set aside for the plaintiff] was moved on the
ground that a contract, in a criminal case, to indemnify the bail
against the consequences of a default of the principal's appearance
on the trial of the indictment, is contrary to public policy, and
therefore that the law will not presume any such contract. It is
unnecessary to decide that point on the present occasion, although
we are inclined to think the objection well founded, and that such
a contract would be contrary to public policy, inasmuch as it would
be in effect giving the public the security of one person only,
instead of two."
In the subsequent case of
Cripps v. Hartnoll, 4 B.
& S. 414, it was held by the Court of Exchequer Chamber, upon
much consideration, that an express contract to indemnify the bail
in a criminal case might be sustained, but that no such contract is
implied by law. In that case, the plaintiff had become bail for
defendant's daughter upon his promise to hold the plaintiff
harmless. The daughter making default, and the plaintiff being
obliged to pay his recognizance, sued the defendant on his promise.
The latter set up the statute of frauds, and the question was
whether the promise was or was not a collateral one; if the person
for whose appearance bail was given (the daughter of the defendant)
was in law liable to indemnify her bail, then the promise of the
father was a collateral one, and void by the statute of fraud for
not being in writing; if she was not thus liable, then the father's
promise was an original promise of indemnity, and the statute of
frauds did not apply. The case was fully argued first in the King's
Bench, 2 B. & S. 697, and afterwards in the Exchequer Chamber
on error. The King's Bench held, in deference to a former case of
Green v.
Page 110 U. S. 736
Cresswell, 10 A. & E. 453, that the daughter was
primarily liable, and that the promise of the father was
collateral. But in the Exchequer Chamber, it was pointed out that
Green v. Cresswell, was a case of bail in a civil, and not
in a criminal, proceeding, and therefore not an authority in the
case under consideration, and the court held that the daughter was
not legally liable, and that the promise was not a collateral one,
and reversed the judgment of the Court of King's Bench. Chief Baron
Pollock, after pointing out the distinction, said:
"Here, the bail was given in a criminal proceeding; and, where
the bail is given in such a proceeding, there is no contract on the
part of the person bailed to indemnify the person who became bail
for him. There is no debt, and with respect to the person who bails
there is hardly a duty, and it may very well be that the promise to
indemnify the bail in a criminal matter should be considered purely
as an indemnity, which it has been decided to be."
This decision (made in 1863) has not, so far as we are aware,
been shaken by any subsequent case in England or in this country,
and we think it is based on very satisfactory grounds. This may be
more apparent when we consider the peculiar character and objects
of bail in criminal cases as compared with the object and purpose
of bail in civil cases. The object of bail in civil cases is,
either directly or indirectly, to secure the payment of a debt or
other civil duty; while the object of bail in criminal cases is to
secure the appearance of the principal before the court for the
purposes of public justice. Payment by the bail in a civil case
discharges the obligation of the principal to his creditor, and is
only required to the extent of that obligation, whatever may be the
penalty of the bond or recognizance; while payment by the bail of
their recognizance in criminal cases, though it discharges the
bail, does not discharge the obligation of the principal to appeal
in court; that obligation still remains, and the principal may at
any time be retaken and brought into court. To enable the bail,
however, to escape the payment of their recognizance by performing
that which the recognizance bound them to do, the government will
lend them its aid in every proper way, by process and without
Page 110 U. S. 737
process, to seize the person of the principal and compel his
appearance. This is the kind of subrogation which exists in
criminal cases -- namely subrogation to the means of enforcing the
performance of the thing which the recognizance of bail is intended
to secure the performance of, and not subrogation to the peculiar
remedies which the government may have for collecting the penalty;
for this would be to aid the bail to get rid of their obligation,
and to relieve them from the motives to exert themselves in
securing the appearance of the principal. Subrogation to the latter
remedies would clearly be against public policy by subverting, as
far as it might prove effectual, the very object and purpose of the
recognizance. It would be as though the government should say to
the bail, "We will aid you to get the amount of your recognizance
from the principal, so that you may be relieved from your
obligation to surrender him to justice." If payment of the
recognizance operated as a satisfaction or composition of the
crime, then the subrogation contended for might be free from this
objection; for then the government would be satisfied in regard to
the principal matter intended to be secured.
We have been referred by the appellant's counsel to two cases in
this country which are supposed to maintain a contrary doctrine to
that of the English cases above cited. These are
Reynolds v.
Harral, 2 Strobhart 87, and
Simpson v. Roberts, 35
Ga. 183. In
Reynolds v. Harral (which was decided in
1847), it was indeed held that bail in a criminal case may maintain
an action against their principal for money paid, to indemnify them
for what they have been obliged to pay on their recognizance. But
the case stands alone, and the point was very little discussed, and
the court relied for authority upon the observation in Petersd.
Bail, already referred to, which, as we have seen, was based on a
decision at
nisi prius in a civil proceeding, and was
expressly overruled as applied to criminal cases in
Cripps v.
Hartnoll. The other case (
Simpson v. Roberts) was one
in which the principal executed a mortgage to the bail to induce
him to enter into the recognizance, and the mortgage was sustained
by the court. This decision entirely accords with that of
Cripps v. Hartnoll. Neither of
Page 110 U. S. 738
the cases cited therefore can be regarded as affecting the
authority of that case.
As to the act of Congress, which declares that sureties on bonds
given to the United States shall have the same right of priority
which the United States have by law, we do not think that it
contains anything to modify the result to which we have come. The
act referred to is now to be found in § 3468 of the Revised
Statutes, and is as follows:
"Whenever the principal in any bond given to the United States
is insolvent, or whenever such principal being deceased, his estate
and effects which come to the hands of his executor, administrator,
or assignee are insufficient for the payment of his debts, in
either of such cases any surety on the bond, or the executor,
administrator, or assignee of such surety, pays to the United
States the money due upon such bond, such surety, his executor,
administrator, or assignee shall have the like priority for the
recovery and receipt of the moneys out of the estate and effects of
such insolvent or deceased principal as is reserved to the United
States, and may bring and maintain suit upon the bond in law or
equity, in his own name, for the recovery of all moneys paid
thereon."
We do not understand that this section was intended to embrace
recognizances in criminal cases. The section is taken from, and is
substantially a reproduction of, the proviso of the 65th section of
the act to regulate the collection of duties, approved March 2,
1799. 1 Stat. 676. That section related to bonds given for the
payment of duties, and declared that, if not satisfied when due,
they should be prosecuted without delay, and in all cases of
insolvency, or where an estate in the hands of executors,
administrators, or assignees should be insufficient to pay all the
debts due from the deceased, the debt or debts due to the United
States, on any such bond or bonds, should be first satisfied, and
any executor, administrator, or assignee who should pay other debts
before paying the United States, should be personally liable, and
the proviso then declared that if the principal in any bond given
for duties on goods, wares, or merchandise imported, or other
penalty, should be insolvent, or if, being deceased, his estate
should be insufficient
Page 110 U. S. 739
to pay all his debts, and if, in either of such cases, any
surety on the said bond or bonds, or the executors, administrators
or assignees of such surety, should pay to the United States the
money due upon such bond or bonds, such surety, etc., should have
the like advantage, priority, or preference for the recovery of the
said moneys out of the estate of such insolvent, or deceased
principal, as were reserved or secured to the United States, and
should and might bring and maintain a suit or suits upon said bond
or bonds in law or equity in his, her, or their own name or names
for the recovery of all moneys paid thereon.
The only difference between § 3468 of the Revised Statutes and
this proviso is that the latter in terms relates to bonds given for
duties, while the former uses the more general terms, "whenever the
principal in any bond given to the United States is insolvent,"
&c. If it was intended by Congress to enlarge the scope of the
section so as to include other bonds than those given for duties
(as seems to be the necessary inference from the language), still,
it is restricted to "
bonds," the words are "whenever the
principal in any
bond given to the United States is
insolvent," etc., and any "surety on the bond" pays the money due
upon "such
bond," such surety shall have the like
priority, etc., and may bring and maintain a suit upon "the
bond" in his own name, &c. This cautious phraseology,
so carefully avoiding any general words of enlargement beyond the
article of "bonds" alone, seems to imply that, in extending the
peculiar privileges given to sureties, it was only intended to do
so in reference to obligations of the same general character with
those referred to in the original act; that is to say, bonds
conditioned for the payment of money, or at most, to embrace,
besides those conditioned for the performance of some civil duty,
such as the faithful discharge of the duties of an office, &c.
Had it been intended to include sureties for appearance in criminal
cases, the word "recognizance," or some other appropriate term, or
some general word adapted to the purpose, would naturally have been
used. The revisers would not have proposed, nor would Congress have
made, such a fundamental change in the law as the extension of this
provision to criminal
Page 110 U. S. 740
cases, without employing more appropriate terms for that purpose
than those which the section contains. It will not be inferred that
the legislature, in revising and consolidating the laws, intended
to change their policy, unless such intention be clearly expressed.
McDonald v. Hovey, ante, 110 U. S. 619.
Our opinion is that the right of subrogation does not exist in
this case.
But if the sureties were entitled under the act to the same
priority which the United States have, they are not entitled to use
the name of the United States in prosecuting their claim. The
statute expressly declares that they must sue in their own names.
The reason is obvious. The government has many advantages in
proceeding which are not possessed by individuals, and is not
liable to costs, and individuals prosecuting claims against other
individuals ought not to have the advantage of the name and
prestige of the United States. In the case of
United States v.
Preston, 4 Wash.C.C. 446, the surety in a duty bond, having
paid the judgment recovered on it, brought an action in the name of
the United States, for his own use, against the assignees of the
principals, and contended that he was entitled to every advantage
which the United States are entitled to in such a suit, as to sue
in the federal court, to require special bail, to demand a trial at
the return of the writ, to exclude equitable defenses, &c. The
court, by Mr. Justice Washington, held that the action could not be
brought in the name of the United States, but only in the name of
the surety himself, and that the only advantage which the law gave
to the surety was that of priority over other creditors, and not in
the form and modes of proceeding.
As it is conceded that the United States have received full
satisfaction of the recognizance on which the present suit is
based, and that this suit is not prosecuted for the benefit of the
United States, but solely for the benefit of the sureties, we are
of opinion that it cannot be sustained; but that the bill ought to
be dismissed, as well on the ground that the sureties are not
subrogated to the rights of the United States as on the ground that
they cannot sue in the name of the United States.
This conclusion does not touch the merits of the case as set
Page 110 U. S. 741
up in the bill, considered as a bill filed by the United States
on their own behalf and for their own use; but the bill itself
shows that it was filed for the benefit of the sureties, although
they may not have paid their recognizance when it was filed.
Without deciding therefore whether, on demurrer, the bill might or
might not have been sustained, considered purely as a bill filed by
the United States on their own behalf, we are satisfied that its
dismissal by the court below was right, considered as a bill filed
on behalf, and for the benefit of, the sureties. And as it is now
admitted that the United States have been satisfied and paid, and
as, for this reason, if for no other, the bill should be dismissed,
our conclusion is that
The decree of the court below should be affirmed, and it is
affirmed accordingly, but without costs -- each party to pay their
own costs on this appeal.