Mary Leary v. United States

• Decision Date: 13 May 1912
• Docket Number: No. 598,598
• Citation: 32 S.Ct. 599,56 L.Ed. 889,224 U.S. 567
• Parties: MARY C. LEARY, Administratrix of James d. Leary, Deceased, Appt., v. UNITED STATES
• Court: U.S. Supreme Court

224 U.S. 567

32 S.Ct. 599

56 L.Ed. 889

MARY C. LEARY, Administratrix of James d. Leary, Deceased, Appt.,

v UNITED STATES.

No. 598.

Argued April 29 and 30, 1912.

Decided May 13, 1912.

Messrs. J. T. Coleman, David McClure, and A. E. Strode for appellant.

[Argument of Counsel from page 568 intentionally omitted] Solicitor General Lehmann and Mr. Marion Erwin, Special Assistant to the Attorney General, for appellee.

[Argument of Counsel from pages 569-573 intentionally omitted] Mr. Justice Holmes delivered the opinion of the court:

This is a petition for leave to intervene in a suit brought by the United States to charge the defendant Kellogg with a trust in respect of funds alleged to have been received by him from Greene, and to have been obtained from the plaintiff by Greene through his participation in the well-known Carter frauds. The funds specially referred to were certain shares of railroad stock standing in Kellogg's name, but held in trust for Greene. The nature of the alleged frauds can be gathered from United States v. Carter, 217 U. S. 286, 54 L. ed. 769, 30 Sup. Ct. Rep. 515, 19 Ann. Cas. 594. See Greene v. Henkel, 183 U. S. 249, 46 L. ed. 177, 22 Sup. Ct. Rep. 218. The bill of intervention alleges the indictment of Greene, and that the plaintiff's deceased became surety upon Greene's bail bond 'upon the understanding and condition that the securities held in trust or on deposit' by Kellogg from Greene, being the above-mantioned railroad stock, should remain in Kellogg's hands as security and indemnity to Leary for signing the bond. It goes on to allege Greene's failure to appear, a forfeiture of the bond, a suit upon it brought September 10, 1903, and a judgment for the United States against the intervener on January 6, 1908. Finally the bill sets forth that the United States not only has got an injunction pendente lite forbidding Kellogg to deliver the fund to the intervener to be used in partial liquidation of the judgment against her, but is pressing the collection of the judgment and that the United States has no equity unless subject to that which the intervener claims.

This suit was begun on December 19, 1903. The evidence had been taken and it was ready for final hearing when the petition for leave to intervene was filed, April 18, 1908. But the action on the bond seems to have been contested, and no judgment was entered until January 6, 1908, as we have said. The circuit court intimated an opinion that the bill of intervention was defective for want of an allegation that Leary, at the time of his agreement, did not know the facts alleged in the principal bill to raise a trust for the government, and also that, so far as appears, it might be brought upon a supposed implied contract, whereas no such undertaking of indemnity would be implied by the law, citing United States v. Ryder, 110 U. S. 729, 28 L. ed. 308, 4 Sup. Ct. Rep. 196. But observing that the petition might be amended in these respects, it held that amendment would be unavailing, as the contract was against public policy and void. 163 Fed. 442. The circuit court of appeals, without deciding upon this last point, affirmed the decree on the above-mentioned ground that Leary's knowledge was not negatived, and also on that of laches, apparent and unexplained. 107 C. C. A. 27, 184 Fed. 433.

The result is that the petitioner is denied her chance to be heard for want of amendments which the court that might have allowed them told her that it was no use to make, as it was going to decide against her, whatever she did. Even if the court would have allowed them, which is a speculation, it is holding a party to very technical rules to say that while one case was being dealt with below, he ought to have contemplated having to meet a different one above. But we need not consider that matter, as we are of opinion that the bill, without amendment, showed a sufficient right to intervene.

We lay on one side the suggestion that the intervention goes only upon an implied contract in its proper sense of an obligation raised by the law, irrespective of any real promise. That would seem to us a perverted interpretation of the words 'upon the understanding and condition,' even if the contract were only a general one to indemnify; but a contract that certain specific stock in the hands of a trustee should be held as...