United States v. Libichian

• Court: U.S. Court of Appeals — Seventh Circuit
• Writing for the Court: SPARKS, MAJOR, and TREANOR, Circuit
• Citation: United States v. Libichian, 113 F.2d 368 (7th Cir. 1940)
• Decision Date: 06 June 1940
• Docket Number: No. 7094.,7094.
• Parties: UNITED STATES v. LIBICHIAN et al.

113 F.2d 368 (1940)

UNITED STATES v. LIBICHIAN et al.

No. 7094.

Circuit Court of Appeals, Seventh Circuit.

June 6, 1940.

James R. Fleming, U. S. Atty., of Fort Wayne, Ind., and Luther M. Swygert, Asst. U. S. Atty., of Hammond, Ind., Alexander M. Campbell, Asst. U. S. Atty., of Fort Wayne, Ind. (Joseph Lawrence, Director, Bond and Spirits Division, Harry B. DeAtley, Assistant to Director, Bond and Spirits Division, Webster Spates, Chief Field Attorney, and George B. Davis, Attorney, Bond and Spirits Division, all of Washington, D. C., of counsel), for appellant.

John W. Lyddick and Sheehan & Lyddick, both of Gary, Ind., for appellees.

Before SPARKS, MAJOR, and TREANOR, Circuit Judges.

MAJOR, Circuit Judge.

This is an appeal by the United States from an order annulling and remitting a final judgment rendered on an estreated recognizance bond. The proceeding was instituted by petition predicated upon Section 601, Title 18, U.S.C.A.,¹ entitled "Remission of penalty of recognizance." The court, by interlocutory order of May 12, 1939, overruled appellant's motion to dismiss the petition, and after hearing, on June 17, 1939, entered its final order. Both orders are involved in the appeal, but there seems to be no question but that the evidence supports the allegations of the petition so that the essential question on this appeal results from the action of the court in overruling appellant's motion to dismiss.

The defendant, Libichian, was charged by indictment with a violation of the National Prohibition Act, 41 Stat. 305, 27 U.S.C.A. § 1 et seq. He and his sureties, who are the appellees, filed a recognizance bond for his appearance to answer said indictment. This bond was defaulted on November 10, 1932; a writ of scire facias issued on December 19, 1932, and, according to the return thereon, was, on January 17, 1933, served personally on the sureties but not on Libichian. No appearance and answer were made to the writ by any of the parties. On March 16, 1934, subsequent to the repeal of the National Prohibition Act, and while the scire facias proceedings were still pending unanswered, an order of nolle prosequi was entered on the Government's motion. On March 26, 1936, final judgment in the scire facias proceedings was entered against the sureties (appellees). The petition for annulment of the judgment and for remission of the penalty was filed by appellees on February 6, 1939.

The petition, in addition to the above related facts, alleged that Libichian "did not wilfully and intentionally fail to appear before the court in the said criminal cause at any time, and, that he did not abscond in any manner," and "that he was absent from the court on the day the bond was forfeited solely because and for no other reason than that he did not know, or have any knowledge, that said cause was set for appearance or trial at the time, and was not personally informed thereof, and did not, at any time, have any attorney in the matter and case." The petition also alleged that Libichian at all times subsequent to the time of his arrest, resided in Gary, Indiana and, that his first knowledge or information of the dismissal of the cause was received at a time when he made application for naturalization papers in 1937 or 1938. It was alleged that none of the sureties knew of the bond default until December, 1938, when the matter was called to their attention upon an examination of the title to their property preparatory to a transfer of the same. Libichian offered to have the dismissal of the case vacated and stand trial, and alleged the payment of all costs in the forfeiture proceeding. At the hearing it was shown without contradiction, that Libichian was unable to employ counsel and, that he expected to be notified when he was to appear for trial.

The motion to dismiss, as well as this appeal, raises two questions, (1) that appellees' petition failed to show a compliance with the Remission Statute, and (2) that the court was without jurisdiction to entertain the petition for the reason that it was presented subsequent to the expiration of the term of court at which the final judgment was entered in the forfeiture proceeding.

We shall first consider the second question. Appellant argues and cites numerous cases in support of its contention that a court is without jurisdiction to set aside, modify or correct a final judgment entered at a previous term. That this is a general rule can not be doubted — in fact, it is conceded to be such by appellees. It is argued by appellees, however, that the language of the provision in question creates an exception to this general rule. The words specifically relied on are "whenever it appears to the court." While the numerous cases called to our attention disclose some contrariety of opinion, we are convinced the weight of authority is in appellees' favor. One of the early cases is that of United States v. Traynor, D.C., 173 F. 114, 115, where the court, with reference to the precise question, said: "* * * There is nothing in this statute indicating any intention to limit the power of the court in this matter to the term at which a judgment is rendered, and, in view of the use of the broad and unrestricted term `whenever,' I think the statute must be construed as vesting discretion in the court * * *." The provision was similarly construed in United States v. Jenkins, 4 Cir., 176 F. 672, 679, 20 Ann.Cas. 1255; United States v. Smart, 8 Cir., 237 F. 978, 982; Griffin v. United States, D.C., 270 F. 263, 265; United States v. O'Leary, D.C., 275 F. 202; and Henry v. United States, 7 Cir., 288 F. 843, 32 A.L.R. 257.

Appellant stresses the case of Sun Indemnity Company v. United States, 3 Cir., 91 F.2d 120, as sustaining its side of the question. In fact, this is the only authority relied upon other than those announcing the general rule. A study of the case, however, discloses that the support afforded appellant's contention is of a dubious nature. There, scire facias issued and judgment was entered thereon without appearance by the surety. Thereafter, the case against the principal was nolle prossed. Three years later the surety petitioned to cancel the judgment. As the opinion discloses, it was the contention of the surety that the scire facias failed to state a cause of action and, that the court was therefore without jurisdiction to enter the judgment. The cause was tried upon that theory. In denying the contention, the court held that if the judgment was erroneous, it should have been attacked by direct appeal, and that the District Court was without jurisdiction to vacate at a subsequent term. There the surety attacked the validity of the judgment, while in the instant case the validity of the judgment is not under attack but rather the authority of the court to remit the judgment. It seems to us that the confused state of the authorities is due largely to the failure of courts to recognize this distinction. Where the validity of the judgment or forfeiture proceeding is attacked, it amounts to a plea in bar, and a judgment rendered in such instance is final and can be reviewed only by appeal. On the other hand, the Remission Statute recognizes the validity of the forfeiture proceeding and confers authority upon the court to relieve the surety who shows compliance therewith.

The court, in United States v. Mack, 295 U.S. 480, 55 S.Ct. 813, 79 L.Ed. 1559, appears to have recognized such distinction. After discussing the legal defenses which might be interposed, the court, referring to the Remission Statute, 295 U.S. on page 489, 55 S.Ct. on page 817, 79 L.Ed. 1559, said: "* * * At best, remission of the forfeiture is granted as an act of grace. The remedy for that reason is by motion or petition, not by answer and a plea in bar. * * *"

Our own judgment in the matter is in harmony with what appears to be the weight of authority. The provision confers jurisdiction "whenever it appears to the court," and an interpretation which limits this language solely to the term at which judgment was rendered would come near to rendering it meaningless. The statute is remedial, and to hold the court without jurisdiction, regardless of circumstances, subsequent to the adjournment of the term would thwart its purpose. We think the intention of the statute clearly is to the contrary.

In this connection, it is also argued by appellant that the statute provides only for the remission of the penalty described in the recognizance and, that it can have no application in a case such as the instant one where such penalty is merged in a final judgment. In other words, so it is argued, the penalty, after merger in the judgment, is extinguished. We do not think there is any merit in such contention. It would seem to us the situation is similar to a suit in debt evidenced by a note. It is true the note is merged in the judgment, but it is the same debt evidenced in a different manner. The penalty named in the recognizance likewise is merged in the judgment, but it is the same penalty evidenced by the judgment rather than the recognizance. That defendant's argument in this respect is not tenable also appears from the fact that such a construction would preclude the court at the same, as well as a subsequent, term from allowing relief under the Remission Statute.

We now come to the Government's contention that appellees failed to comply with the terms of the Remission Statute. The courts generally are in accord that a court has authority to grant relief under such provision only when the following conditions exist: (1) That the default of the principal must not be wilful, (2) that trial can be had, and (3) that public justice does not require the enforcement of the penalty. United States v. Capua, 7 Cir., 94 F.2d 292, 294; United States v. Nordenholz, 4 Cir., 95 F.2d 756, 758; United States v. Costello, 6 Cir., 47 F.2d 684, and Sun Indemnity Company v. United States, supra. It is equally well established by...