National Surety Corporation v. United States

• Citation: 143 F.2d 831
• Decision Date: 18 July 1944
• Docket Number: No. 10684.,10684.
• Parties: NATIONAL SURETY CORPORATION v. UNITED STATES.
• Court: U.S. Court of Appeals — Fifth Circuit

143 F.2d 831 (1944)

NATIONAL SURETY CORPORATION v. UNITED STATES.

No. 10684.

Circuit Court of Appeals, Fifth Circuit.

June 20, 1944.

Rehearing Denied July 18, 1944.

COPYRIGHT MATERIAL OMITTED

Delbert M. Tibbetts, of New York City, N.Y., and Johns Webb Graham, of Houston, Tex., for appellant.

J. K. Smith, Asst. U. S. Atty., of Houston, Tex., for appellee.

Before HUTCHESON, McCORD, and WALLER, Circuit Judges.

HUTCHESON, Circuit Judge.

This is another suit against a surety on a bond¹ given to secure the payment of a fine imposed under the provisions of Sec. 20(a), Immigration Act of 1924,² for failure to detain on board an alien seaman after being required to do so. Tried on a stipulation,³ admitting the order to detain and the failure to do so, it would seem that without more ado, the judgment against the surety should be affirmed on the authority of Indemnity Ins. Co. v. United States, 5 Cir., 74 F.2d 22, 23. Here, as there, "The case is at last one of a simple suit on a bond, the conditions of which have been breached." Here, as there, "It is quite plain that the statute requiring the detention of aliens is clear and absolute in its terms, requiring and admitting of little construction." Here, as there, "The statute unequivocally subjects a vessel to the payment of $1,000 for each alien seaman whom the master has failed to detain on board after he has been served with a detention order by the immigration officer in charge, or someone acting for him. Lloyd Royal Belge Societe Anonyme v. Elting, D. C., 55 F.2d 340." We said there:

"The statute makes no provision for, it does not contemplate, inquiry into the grounds of the order. * * * The only question for determination under it is whether the order was served and there has been failure to detain. * * * Under no compulsion to do so, and with full knowledge of the claimed duress * * *, the protest of the master being noted at the foot of the bond, appellant signed as surety. Because of the making and tender of the bond, the vessel was released. Under these estopping circumstances, appellant has a heavy burden to point out some illegality or invalidity nullifying the obligation it assumed." 74 F.2d 22, 24.

Appellant, recognizing that this is so, points, as differentiating this case from that one, to the stipulation on which this case was decided, that, (a) the seaman established to the satisfaction of the Boarding Officer at the port of arrival his full compliance with the five entry requirements, of Rule 7, Subd. (E), Par. 6, Immigration Rules & Regulations,⁴ and (b) he was not detained because of breach of any of them, but solely because he failed to have an identifying travel document in the nature of a passport as required by Executive Order 8429, June 5, 1940,⁵ and had he had such an identifying travel document in the nature of a passport, he would have been permitted to enter. It points, too, as a further differentiation to the provision in the bond here absent from the bond in that case that sums "paid as fines * * * under this bond" may be paid by the principal "under protest and without prejudice to any and all legal rights of recovering" same by appropriate action or proceedings. Citing United States v. Columbus Marine Corp., 2 Cir., 62 F.2d 795; Durning v. McDonnell, 2 Cir., 86 F.2d 91; Bank Line, Ltd. v. United States, 2 Cir., 96 F.2d 52; Rio Cape Lines v. United States, 89 Ct. Cl. 307; Compagnie Generale Transatlantique v. Elting, 298 U.S. 217, 56 S.Ct. 770, 80 L.Ed. 1151, it insists that the suit on the bond may be defended on the same grounds which would support a recovery back of amounts paid under it. So defending, it urges: that the order was inoperative because the Acts on which it was based had been superseded by the Immigration Act of May 26, 1924; that neither that Act nor the Immigration regulations adopted pursuant to it authorized detention for the reasons given here, and the detention order was, therefore, invalid and that being invalid, it could not support the fine, the fine was illegal, and there was no liability on the bond.

We agree with appellant that the general rule of law which governs the liability of sureties upon bonds is that the surety is not liable unless the principal is, and, therefore, may plead any defense available to the principal. But to this rule there are recognized exceptions. The surety is not excused where the principal when sued takes advantage of a matter of defense which is altogether of a personal character or where the extinction of the principal's obligation arises from a cause which originates in the law. 21 R.C.L. 974. In Indemnity Insurance Co. v. United States, supra, we decided nothing to the contrary of this. What we decided there and what we reaffirm here is that the fact that the bond was given to release the ship and that there was to that extent duress practiced on the master was not, it could not be, set up by the surety as a defense to the bond, because, having voluntarily assumed the obligation of the bond to pay the amount of the fine assessed and not paid, the surety could not escape the obligation except by showing that the terms of the bond or action taken under it burdened it beyond what was legally demandable of it. We reaffirm what we said in that case. The statute makes no provision for, it does not contemplate inquiry into the grounds of the order. The only question for determination under it is whether the order was served and there has been failure to detain. It is admitted here that the order was served on the master, that he did not detain as ordered, and that the bond was voluntarily entered into by the surety. The statute under which the bond was executed provides, without qualification, that "the owner * * * or master * * * who fails to detain on board any alien seaman * * * until the immigration officer * * * has inspected such seaman * * * or who fails to detain such seaman on board after such inspection * * * if required * * * to do so, shall pay * * * the sum of $1,000 for each alien seaman in respect of whom such failure occurs." It further forbids clearance pending the determination of the liability of the payment of such fine except upon a deposit or the giving of a bond to secure its payment. As will be noted, this statute does not at all limit the authority of the Immigration Officer to require the detention of a seaman on board. It flatly fixes a fine for failure to detain when ordered to do so. The cases appellant cites hold merely that the giving and service of the order are essential, and that whether it was given and served may be inquired into. They do not hold that the grounds of the order for detention may be. Par. 6, Subd. (e) of the Immigration Rules upon which appellant relies as exclusively fixing the conditions under which a seaman may enter is not an enabling act. It does not grant rights of entry. It merely sets out five conditions for entry, which must at all times be complied with, and obligates immigration officials to order detentions in all cases of non-compliance with these provisions. It does not prevent detention for other reasons not named.

If, however, we could agree with appellant that the grounds of the detention order may be inquired into, we could not agree that it would stand in any better case. For we think it quite clear that the authority conferred on the president by the 1918 Act, 22 U.S.C.A. § 223 et seq., and continued by the Act of March 2, 1921,⁶ fully supports the Executive Order under the authority of which the detention was ordered, and that it was the duty of the Immigration Service to carry out the order and detain on board any seaman not in compliance with it. That the Act of 1921 did extend the powers granted by the Act of 1918, has been affirmed in many cases,⁷ and doubted in none except in Johnson v. Keating, 1 Cir., 17 F.2d 50, and there it was as to immigrants thus entering permanently. It is true that the cases hold that regulations made under its authority must not be inconsistent with the provisions of the Immigration Act of 1924, but the order in question is not inconsistent with that act. If the immigration authorities had by regulation adopted the order, it would be beyond question that the detention would be valid. There can be equally no question that without adopting the order as a rule or regulation, the Immigration Authorities were obligated to enforce it.

In addition to this main point, appellant makes two subordinate points, neither of which is well taken. One of these is that the order to detain was issued not by the Immigration Officer at the port of arrival or the Secretary of Labor but by a boarding officer. We met that question and determined it adversely to appellant in the Indemnity case, supra. The authorities are clear both that it was competent for the boarding officer to act for the Immigration Officer in charge, Lloyd Royal Belge Societe v. Elting, 2 Cir., 61 F.2d 745, and that, having accepted the order as valid and having made the bond upon the assumption that it was, the surety may not now contend that it was not. Indemnity Ins. Co. v. United States, supra; National Surety Co. v. Holtzman, 4 Cir., 43 F.2d 544; United States v. Columbus Marine Corp., 2 Cir., 62 F.2d 795. Another subordinate point made is that the order was not promulgated until after the seaman had sailed and to give it effect against him would be to give it a retroactive effect not intended, and Transatlantica Italiana v. Elting, 2 Cir., 66 F.2d 495 is cited in support. But this will not at all do, for here no effort is being made to fine the ship or the seaman because of his shipping without having the required visa. The fine was assessed not because he departed for the United States without it, but because, without having it, he was allowed to escape ship and enter the United States after his detention...