Com. v. Stuyvesant Ins. Co.

• Citation: 366 Mass. 611,321 N.E.2d 811
• Parties: COMMONWEALTH v. The STUYVESANT INSURANCE COMPANY.
• Decision Date: 10 January 1975
• Court: United States State Supreme Judicial Court of Massachusetts

Page 811

321 N.E.2d 811

366 Mass. 611

COMMONWEALTH v. The STUYVESANT INSURANCE COMPANY.

Supreme Judicial Court of Massachusetts, Worcester.

Argued Oct. 7, 1974.

Decided Jan. 10, 1975.

Jeffrey M. Smith, Boston, for defendant.

Gerald J. Power, Asst. Dist. Atty., for the Commonwealth.

Before TAURO, C. J., and REARDON, QUIRICO, HENNESSEY and KAPLAN, JJ.

TAURO, Chief Justice.

These are seven actions brought by the Commonwealth against the defendant surety on defaulted bail bonds. At trial without a jury in the Superior Court, the judge found for the plaintiff in the full face amount of the bonds, $7,000. The case is before us on the defendant's consolidated bill of exceptions which challenges the judge's failure to grant the defendant's motion for exoneration and discharge and the judge's denial of five of the defendant's requests for rulings of law. ¹ In essence, the defendant (surety) claims that the evidence warranted rulings that the bonds were void at the time the default was entered and that the surety had surrendered its principal in exoneration and discharge of its obligations before default. We hold that the bonds were void and sustain the exceptions.

The following facts appear from the statement of agreed facts included in the bill of exceptions. William Hoar, Jr. (the principal) was named in seven separate District Court complaints. He gave bail to appear and answer each of the complaints or subsequent indictments returned against him. The surety, acting through its attorney-in-fact, executed surety bonds on the principal's behalf for all seven complaints. After the principal had been bound over to the Superior Court, the grand jury returned seven indictments against him. He appeared for arraignment in the Superior Court and pleaded not guilty. When the case was called for trial on January 14, 1970, however, the principal failed to appear. Both he and the surety were defaulted and a capias was issued for the principal's arrest.

The police apprehended the principal and arrested him on the capias. On March 2, 1970, the principal was taken before a judge of the Superior Court. The judge removed the default against the principal and the surety and ordered the principal held without bail pending the appearance of an agent for the surety. On March 4, 1970, the surety's agent appeared with the principal and informed the judge that he was surrendering the principal. The principal, the agent said, was not a good risk and had not paid the company for its services. The judge refused to 'acknowledge the surrender.' Over the agent's protest, he released the principal on the same bail. The principal was called for trial on March 20, 1970, and, once again, failed to appear. A default was entered against the principal and the surety and a capias issued. The police have been unable to locate the principal.

At trial on the defaulted bail bonds, after presentation of the evidence but before final argument, the surety filed a motion for exoneration and discharge because of the surrender of the principal, and, at the same time, submitted six requests for rulings of law. The trial judge denied the motion and the surety excepted. Stating that the evidence supported a ruling for the plaintiff and that the bonds were not void, the trial judge granted only one of the requested rulings. ² Again, the surety claimed exceptions. After the judge ordered the entry of judgment for the plaintiff, the surety filed this bill of exceptions.

The bill of exceptions presents two interlocking questions of law for our determination: (1) Were the bail bonds, which were defaulted because of the principal's second nonappearance, void before this failure to appear caused entry of the second default? (2) Did the surety's surrender to assure the defendant's appearances inder discharge and exonerate the surety from its obligation on the bonds before the principal's second nonappearance? ³ Because of the view we take of the case, we do not reach the issue of surrender.

A court admits a defendant to bail in order to assure the defendant's appearance in court. Simultaneously, the court permits the defendant to enjoy freedom from confinement while he awaits disposition of his case. United States v. Kirkman, 426 F.2d 747, 752 (4th Cir. 1970). United States v. Lee, 170 F. 613, 614, (S.D.Ohio, 1909). People v. Pugh, 9 Cal.App.3d 241, 250, 88 Cal.Rptr. 110 (1970).

In assuming the position of bail, the surety enters into a contract with the Commonwealth by which the surety guarantees that the principal will appear and answer. United States v. Davis, 202 F.2d 621, 625 (7th Cir. 1953). Miller v. Commonwealth, 192 Ky. 709, 711, 234 S.W. 307 (1921). State v. Liakas, 165 Neb. 503, 507, 86 N.W.2d 373 (1957). See Reese v. United States, 76 U.S. 13, 9 Wall. 13, 20-21, 19 L.Ed. 541 (1869). See also G.L. c. 276, § 65. If the surety fails to produce its principal at the appointed time, a default will be entered against the principal and surety and the principal's obligation and that of his surety will be forfeited. G.L. c. 276, § 71. ⁴ After the default has been entered, the Commonwealth must initiate proceedings to obtain a judgment on the forfeiture of the bonds. G.L. c. 12, § 28. See G.L. c. 276, §§ 71, 74, 75, 76. Default does not necessarily compel the surety or the principal to pay the Commonwealth the full face amount of the bonds, however. A judge may remove the default for 'good cause' (G.L. c. 276, § 36), 'remit the whole or any part of the penalty' (G.L. c. 276, § 69), or render judgment for part of the face amount of the bonds (G.L. c. 276, § 74).

When the Commonwealth releases the principal from confinement, it commits him to the exclusive custody of the surety, his bail. Commonwealth v. Brickett, 8 Pick. 138, 139 (1829). Reese v. United States, 76 U.S. 13, 9 Wall. 13, 21, 19 L.Ed. 541 (1869). Taylor v. Taintor, 83 U.S. 366, 16 Wall. 366, 371, 21 L.Ed.2d 287 (1872). Continental Cas. Co. v. United States, 314 U.S. 527, 531, 62 S.Ct. 393, 86 L.Ed. 426 (1942). People v. McReynolds, 102 Cal. 308, 311, 36 P. 590 (1894). Talbot v. New Amsterdam Cas. Co. 237 N.Y. 245, 248, 142 N.E. 600 (1923). See Way v. Wright, 5 Met. 380, 383 (1843). The surety does not exercise this custody as the Commonwealth would. The principal is not shackled, confined, or impeded in his daily movements. Indeed, the surety cannot arrogate to itself these coercive aspects of the Commonwealth's power. See Commonwealth v. Johnson, 3 Cush. 454, 459-460 (1849); Reese v. United States, 76 U.S. 13, 9 Wall. 13, 21, 19 L.Ed. 541 (1869). The notion of custody implies only that the surety legally obtains sufficient control over the principal to assure his appearances, to prevent disappearances, and to surrender the principal in discharge of the surety's obligation to the Commonwealth. See Reese, supra; Miller v. Commonwealth, 192 Ky. 709, 711-712, 234 S.W. 307 (1921). This limited custody is the basis of the surety's responsibilities. Under the terms of the suretyship agreement, the surety has custody, and must produce the principal for trial. At the same time, custody enables the surety to fulfill its undertaking with the Commonwealth. The grant of custody is a grant of power to perform the conditions of the bail bond. Stated in formal contract terms, the surety's exclusive custody is the consideration supplied by the Commonwealth for the surety's guaranty that the principal will appear and answer. ⁵ People v. McReynolds, 102 Cal. 308, 311, 36 P. 590 (1894). Bean v. County of Los Angeles, 252 Cal.App.2d 754, 758, 60 Cal.Rptr. 804 (1967). There is an implied term in the contract that the Commonwealth will not interfere with the surety's custody of the principal. Miller v. Commonwealth,192 Ky. 709, 711-712, 234 S.W. 307 (1921). State v. Liakas, 165 Neb. 503, 507-508, 86 N.E.2d 373 (1957).

Thus, when the Commonwealth interferes with the surety's custody, it breaches its contract with the surety. This breach discharges the surety from its obliwealth, supra, 192 Ky. at 712, 234 S.W. gations on the bond. Miller v. Common-307. Nichols v. United States, 22 F.2d 8, 9 (1st Cir. 1927). See Beavers v. Haubert, 198 U.S. 77, 85, 25 S.Ct. 573, 49 L.Ed. 950 (1905); Miller v. State, 158 Ala. 73, 75, 48 So. 360 (1909). Consistent with this principle, the Commonwealth's actions which render impossible the production of the principal will discharge the surety from its responsibilities and potential liability. G.L. c. 276, § 70. Way v. Wright, 5 Met. 380, 383 (1843). Taylor v. Taintor, 83 U.S. 366, 16 Wall. 366, 369-371, 21 L.Ed. 287 (1872). United States v. Egan, 394 F.2d 262, 265 (2d Cir. 1968), cert. den. sub nom. Stuyvesant Ins. Co. v. United States, 393 U.S. 838, 89 S.Ct. 116, 21 L.Ed.2d 109 (1968). State v. Liakas, 165 Neb. 503, 508, 86 N.W.2d 373 (1957). See Turner v. Bartlett, 109 Mass. 503, 505 (1872). If the Commonwealth contributes to the nonappearance of the principal and consequent default of principal and surety, it violates its undertaking and will excuse the surety from liability for the default. See United States v. Vendetti,33 F.Supp. 34 (D.Mass. 1940); People v. Meyers, 215 Cal. 115, 8 P.2d 837 (1932).

The most obvious type of interference with the surety's custody occurs when the Commonwealth arrests the principal on the charge for which he was bailed. ⁶ The Commonwealth then specifically replaces the surety as the principal's custodian. It resumes responsibility for his location (see Restatement: Security, § 206, comment b (1941)) and bears the risks of escape and nonappearance. The principal loses his freedom of movement and must endure closer confinement. Rearrest on the same charge clearly breaches the Commonwealth's contract on the bond as to custody and liberty. In these circumstances, the surety is discharged and the bail bond is considered void. People v. McReynolds, 102 Cal. 308, 36 P. 590 (1894). People v. Maldonado, 49 Misc.2d 641, 268 N.Y.S.2d 271 (1966), affd. ...