Majority — DANIEL J.
Syllabus
.■ There Was a suit brought in the Circuit Court of the United States for the southern district of Mississippi, against a sheriff and his sureties upon the sheriff’s . official bond, in which judgment was given for the defendant. Being brought to this court by writ of error, the judgment was reversed, and a mandate, went down, directing the Circuit Court to enter judgment for the plaintiffs. (See 2 Howard, 28 .)delivered the opinion of the court.
The controversy between these parties, although.in its progress it has- been much complicated and- involved, yet, as to the principle by which its true character is defined, and by which its decision should be controlled, is simple enough. That principle is the extent of the pecuniary, responsibility sustained by the surety in an official bond for the conduct of ' his principal.
To a correct comprehension of the position of the parties to •this cause, some length of detail as to the facts and pleadings ' it contains, is necessary. '
The appellee, together with one Grissom, having in the year 1887 bound himself in the penalty of f15,000, as surety to the official bond of Richard J. Bland, sheriff of Claiborne county, in the State of Mississippi,, a suit was instituted in the name .of the Govérnor of the State upon, that bond, for the use of .the .appellants, in the Circuit-Court of the United States for the southern district of Mississippi, charging a breach of the’ condition of that bond by Bland, in having released from jail one McNider, against.whom the appellants .had, recovered a judgment in thé Circuit Court aforesaid, and whom, after being charged in exécution in that court, the marshal had committed
“In the case before us, the surety had been compelled to pay the whole amount of his bond by process from the State courts before the present defendants obtained their judgment against him, but after the. institution of their suit. This would -have been a good defence to the action, if pleaded puis darrein con- tinuance, The complainant' tendered, his plea at the prbper time, and was refused the benefit of it-, not because it was' adjudged insufficient as a defence, but because the court consid-"* ered they had no discretion to. allow it,- The mandate from this court was probably made without reference to the possible - consequences which might flow from it. At all events, it operated. unjustly by precluding the plaintiff from an opportunity' of making a just and legal .defen.ee to the action. The pay-' ,- ment was -made whilst the cause was pending here. The party was guilty of noiacA&sibut lost the benefit of his defence by an accident oyer which he had no control.- He is therefore in -the same condition as if the ;defence .bad arisen after judgment, .which- would entitle him to relief by audita, querela, or bill in equity. "We-are therefore of the'opinion', that the complainant was entitled to the relief prayed fpr in'the bill, and that the. decree of the court below should be reversed.”.
The cause was thereupon remanded, to the Circuit Court for further proceedings to bé had therein, in conformity with the above opinion. (Vid. 9 How., 313 , 314, Humphreys v. Leggett et al.) On the filing of the mandate in this latter case, the defendants (the present appellants) being ruled by the Circuit Court to answer, the bill for the inju notion, admit by their answer the recovery of their judgment against Humphreys as
The respondent claims the benefit of that judgment, but alleges that he has collected nothing under it from either Hoopes or Moóre, each of whom became insolvent prior,, to 1840, and still continued insolvent. That the judgment of the Planters’ Bank against Campbell Pierson and Moore, for $3,702.66, had always been unproductive and worthless,' and that nothing had been, or would be received therefrom, by reason of the insolvency of the defendants in that judgment.That in a suit pending' in the Superior Court of Chancery of the State of -Mississippi; upon a creditor’s bill,-the respondent has exhibited the former judgment of the Planters’ Bank for $10,855.93, as a claim against the estate of H. Carpenter & Co., find the commissioner has reported it as a valid claim for that amount, with interest thereon from November 1st, 1840. That this report having been excepted to, and remaining still a subject of contest, the Court of Chancery had in the mean time, out- of the funds of. the estate, ordered the payment to the appellee of the amount bf the said, judgment or claim for $10,855.93 with interest, amounting in the whole to $18;852.75, upon his entering into bond with security to refund that amount in the event that it should be disallowed by the court.. With “this" answer denying his having been indemnified,' were exhibited as parts thereof,' the deed of trust from Bland, the amount of fees collected under the assignment from Bland, and
With reference to the defence essayed by the defendant in the suit of McNutt v. Bland, after the filing of the mandate of this court in that cause, the opinion of this court in the ease of Humphreys v. Leggett et al. would seem to be conclusive, both as to the period, at which the defence was proffered, and the legitimacy and sufficiency of the defence, if substantiated by proof. The facts tendered in defence coming into existence after the issues previously made up, were not on that ac
, In judging of.thé character or sufficiency of the defence alleged for the exemption of the appellee, there should be taken as a guide the rule, which is perhaps without an. exception, that sureties are never held responsible beyond the clear, and absolute terms and meaning of their undertakings. Presumptions or equities are never allowed to enlarge or in any degree to change.their legal obligations. This rule is thus forcibly put by Chancellor Kent in the 3d Commentaries, p. 124, where he says: “When'the contract of a guarantor or surety is duly-ascertained and-understood by. a fair and liberal'construction of the instrument, the principle is well settled, that the case must be brought strictly within the terms of -the guaranty, and the liability of the surety cannot be extended by implication.”' It will be seen that, to a certain éxtent,-even the creditor whose claim the surety has under the terms of his obligation been compelled to satisfy, may be required to co-operate in effecting the indemnity of the latter. Thus it is-said, -on the same page of the work just quoted, that “the claim against a surety is strietissimi juris; and it is a well-settled principle, that a surety who pays the debt of his principal, will in a -clear case, in equity be substituted in the place of the creditor to all the liens held by him to secure the payment of his debt; and the creditor is bound to preserve them, ^unimpaired when he intends to look to the ' •surety.” For this doctrine are cited numerous English and American authorities.
In the case of Graves v. McCall, ( 1 Wash. Rep., 364 ,) it is said by the Court of Appeals of Virginia, “that a court of equity will not charge a surety farther than he is bound at law but if a surely bound at law cannot be charged there for
In the case of the United States v. White et al., (1 Wash. Cir. Ct. Rep., 417,) it is ruled by Washington, Justice, “that a surety can never be bound beyond the (seope of his engagement, and therefore,a'surety for the faithful service, of B as clerk to C, who afterwards enters into partnership with D, is hot liable for unfaithful conduct to C,and I).” The same law has been explicitly and repeatedly ruled by this court, as will be seen in the cases of Miller v. Stewart, ( 9 Wheat., 680 ;) of McGill v. The Bank of the United States, ( 12 Wheat., 511 ;) and the United States v. Boyd et al., ( 15 Pet., 187 .)
The principle which limits the liability of the surety by the penalty of his bond,'inheres, intrinsically in the character of his engagement.- He does not undertake to perform?»the acts or duties' stipulated by his principal, and would not be permitted to control-their performance; and could not, where his pi’incipal was a public- officer, legally assume the functions of that principal. The undertaking of .the surety is essentially a pledge to make good the misfeasance or non-feasance of his principal to an amount co-extensive 'with the penalty of "his bond.- In addition to this interpretation resulting from the character of the obligation of the .surety, the statute of Mississippi, which necessarily enters into and controls all contracts made, under its authority, expressly limits the responsibility of a. surety in a sheriff’s bond to the amount of the penalty of that bond. (Vide Hut. Miss. Co., p. 441, art. 3, sec. 1.) Indeed, it has scarcely been contested in argument in this case, that the extent of the surety’s liability upon the sheriff’s bond was measured'by the amoúnt'df the penalty. Tim great effort of Counsel has been to show in this case that satisfaction of the' penalty of the bond has not been honestly made, but has been fraudulently evaded.
1. By the provisions of the deed of trust for the indemnity of the appellee, and in. the application of the property thereby conveyed, and by the subsequent assignment of fees to a large amount, exceeding.-together in value the-judgments of the Planters’ Bank against the sheriff and his surety.'
The force of these positions will now be considered.
"Whilst it may. be conceded that a fraudulent combination between the officer and his surety, for the purpose of shielding the property of both or either from just responsibility, and in contemplation of delinquency in the former, would have the effect of vitiating any compact or instrument made -with such a design, it.is undeniable that an open and honest effort of a, principal to protect his surety against casualties incident, to a responsibility about to be assumed for him, cannot be obnoxious to objection.; and it is equally clear, that the simple fact of the existence of such an effort, unattended by any known indicium off fraud, and unassailed by plain or probable direct proofs, can warrant no just impeachment óf such an effort, which may. be praiseworthy and just with reference to its object-, and calculated to .promote'the performance of services to‘ the public "which otherwise could not be undertaken. The practice of providing such an indemnity for. sureties is known to be usual and frequent, and it would be difficult to imagine an objection, either legal or moral,, to' its Application to the' extent to which the surety had been made answerable upon his bond., Thé right of a debtor in. the first instance to apply his payments wherever his funds are not specifically bound, is universally admitted. The judgment of the Circuit Court in the case of McNutt v. Bland having been against, the plaintiff, and the deed by Bland for the indemnity of the." appellee having been executed for a bona fide consideration pending' the proceedings on the writ of error to the Circuit .Court, and. no final judgment of that court having been entered to this day, there was no specific, lien- on the property of Bland which prevented its appropriation in exoneration of his surety, or which .forbade any payments or assignments by him in discharge of his liability. A strong illustration of this position may be seen in the case of the United States v. Cochran, decided by Marshall, Chief Justice, and reported in the 2d vol. of Brockenbrough’s Reports, p. 274. It is one of that class in which priority is
“Robert Cochran, collector at the port of 'Wilmington, N. C., being very largely indebted to the United States, made a ■ deed of his property for their benefit. Previous to the exception of this deed'he deposited $10,000, the amount of the bond executed to the United' States for the faithful performance of his duty, in a trunk, which was placed in the bank, and ab..'sconded. From'Baltimore he addressed a letter to his sureties, requesting the . trunk to be taken out, and the money to be applied tó their exoneration. The money was received at the Treasury, and the bond given up: It being afterwards discovered that this was the money of the collector, and not of the sureties, this, suit is brought to compel the sureties to pay the amount of the bond, considering the money received as. constituting no equitable discharge as to them. * * * The act of Congress does not transfer the property itself to the ,United States, but subjects it tp their debts in the first instance. The assignee holds it .as,the debtor would bold it, liable to the claim of the United States, and if he converts it to his own use, or puts it out of the. ■reach of the United States;, he is undoubtedly responsible for its value. * * * But the power of the debtor to. apply his payments is co-extensive with, that of the creditor. This principle has, it is believed, never beeu denied. If it be, .correct, then the power of Mr. Cochran td apply this sum of money in discharge of the boiid, and in exoneration of the sureties to it, is co-extensive with that of the United States to. make the same application of.it. If then Mr. Cochran 'Sad without any assignment of his'property paid this money into the Treasury, -With a direction that it should be applied to the bond, hé would have exercised a right which the law gives tp every debtor. * * *' ; Úoes the transfer of this money to' the sureties change the law of the case ? We think not. It has been very properly argued that the act of Congress gives to the debt due to the United States priority over debts, due to individuals, but not tp one part of the debt due to the United Státés over any other part of it; nor does it vest the property absolutely in the United ^States, though it
gives them the right to pursue it for the' purpose of appropriating it in payment. It would seem to follow, that the right to apply payments whilst the money is in the hands of the debtors, is not affected by the act of Congress, but remains as it would, stand independent of that act. If then the sureties had declared to the Treasury Department that the money was received from Mr. Cochran, to be paid in discharge of their bond,. and had*tendered it in payment thereof, we think the- tender would have beeñ valid, and might have been pleaded in a suit on the bond.”
This was a case where there was a legal priority in the creditor, where there existed a,-quasi lien, or a restriction upon the power of the debtor to dispose of his property, so as to exempt it or its value from the claim of the creditor. In the case undlr consideration^ no such restriction existed ;■ no' lien by judgment or other specific claim upon the property conveyed in trust to"Stamps; and no evidence having been adduced of a fraudulent purpose in making that conveyance, no valid objection is perceived to an application of tlie proceeds of that conveyance towards the -indemnity of the surety; and these proceeds,' together with the amount of the sheriff’s fee bills collected, it is- shown by the testimony, are far short , of the penalty of the bond discharged by the surety.
The right to any surplus which, "upon a settlement between the appellee and Bland or his representatives',_may remain in the hands of the former, we regard as not involved in nor pertinent to this controversy,, which relates regularly and exclusively to the question whether the appellee, as the surety for Bland, has fulfilled the exigency of his bond-by a satisfaction of the penalty.
In answer to the objection which haá' been urged, and founded on the alleged sacrifice of the property of the appellee in the sale under the judgments of the Planters’ Bank,- it may be remarked, that the relevancy or force of such an' objection is not perceived. The questions here are these,'and these only, viz: whether the penalty of the bond executed by the appellee has been satisfied, of whether there remains still a-portion of that penalty of which the appellants can claim the benefit?
The decree of the. Circuit Court is therefore affirmed, with costs.