United States v. Mack

Citation295 U.S. 480,79 L.Ed. 1559,55 S.Ct. 813
Decision Date20 May 1935
Docket NumberNo. 693,693
PartiesUNITED STATES v. MACK et al
CourtUnited States Supreme Court

295 U.S. 480
55 S.Ct. 813
79 L.Ed. 1559


MACK et al.

No. 693.
Argued May 1, 1935.
Decided May 20, 1935.

Page 481

The Attorney General and Mr. William Stanley, Asst. to the Atty. Gen., for the United States.

Mr. Louis Halle, of New York City, for respondents.

Mr. Justice CARDOZO delivered the opinion of the Court.

On July 31, 1930, an American motorboat, the Wanda, had on board a cargo of intoxicating liquors. The collector of the port of New York seized the vessel and arrested the crew for an offense against the National Prohibition Act (27 USCA § 1 et seq.). Thereupon the respondent Mack, claiming to be the owner of the vessel, gave a bond as principal with the other respondent as surety in the sum of $2,200, double the value of the vessel, conditioned that the bond should be void if the vessel was returned to the custody of the collector on the day of the criminal trial to abide

Page 482

the judgment of the court. A copy of the bond is printed in the margin.1 The members of the crew were brought to

Page 483

trial on January 26, 1931, and upon a plea of guilty were sentenced. The vessel, however, was not returned by the owner, either then or at any other time, to the custody of the collector. Accordingly, on July 19, 1933, the United States of America filed its complaint against principal and surety to recover upon the bond, claiming $1,100, the value of the vessel, with interest from the date of the breach of the condition. A motion to dismiss the complaint was made in April, 1934, the defendants contending that through the repeal of the Eighteenth Amendment on December 5, 1933, liability on the bond had ended. The motion was granted by the District Court, 6 F.Supp. 839, and the Court of Appeals for the Second Circuit affirmed, 73 F.(2d) 265. A writ of certiorari brings the case here. 294 U.S. 704, 55 S.Ct. 546, 79 L.Ed. —-.

Penalties and forfeitures imposed by the National Prohibition Act for offenses committed within the territorial limits of a state fell with the adoption of the Twenty-First Amendment. United States v. Chambers, 291 U.S. 217, 54 S.Ct. 434, 78 L.Ed. 763, 89 A.L.R. 1510. Our holding to that effect was confined to criminal liabilities, and had its genesis in an ancient rule. On the other hand, contractual liabilities connected with the act continued to be enforceable with undiminished obligation, unless conditioned by their tenor, either expressly or otherwise, upon forfeitures or penalties frustrated by the amendment. The courts below have held that liability upon the bond in suit was conditioned by implication upon the possibility in law of subjecting the delinquent vessel to forfeiture and sale, and that the possibility must be unbroken down to the recovery of judgment against the delinquent obligors. In opposition to that holding the government contends that the bond is a contract to be enforced according to its terms; that liability became complete upon the breach of the express condition for the return of the delinquent vessel; and that the liability thus perfected was not extinguished or diminished by the

Page 484

loss of penal sanctions. We think the government is right.

By the provisions of the Prohibition Act, an officer who seizes a vessel or other conveyance transporting intoxicating liquors must deliver it to the owner upon the execution of 'a good and valid bond, with sufficient sureties, in a sum double the value of the property,' to be approved by the officer and to be 'conditioned to return said property to the custody of said officer on the day of trial to abide the judgment of the court.' National Prohibition Act, c. 85, 41 Stat. 305, 315, tit. 2, § 26, 27 U.S.C. § 40 (27 USCA § 40). No other condition is expressed in the statute. No other, we think, is to be implied. One of the essentials of jurisdiction in rem is that the thing shall be 'actually or constructively within the reach of the Court.' The Brig Ann, 9 Cranch, 289, 291, 3 L.Ed. 734; and see Miller v. United States, 11 Wall. 268, 294, 20 L.Ed. 135; Strong v. United States (C.C.A.) 46 F.(2d) 257, 260, 79 A.L.R. 150. If the defendants had lived up to the requirements of the bond, the court would have been in a position after the plea of guilty by the crew to proceed against the vessel forthwith and in a summary way. The Harbour Trader (C.C.A.) 42 F.(2d) 858. Without the presence of the vessel that opportunity would be lost. To give assurance that it would not be lost, the bond was exacted by the statute and delivered by the owner. In the face of all this the argument is pressed that delay has extinguished the remedy on the bond by putting an end to the possibility of going against the boat. Thus the obligation is destroyed by force of the very contingency against which it was designed to give protection. We find no adequate reason for thus rewarding an offender. If the condition had not been broken, the government would have received the value of the vessel, or at least that result would have ensued for anything to the contrary shown in this record. Principal and surety covenanted that in

Page 485

the event of such a default the bond should become payable according to its terms. They must be held to their engagement. Cf. United States v. John Barth Co., 279 U.S. 370, 49 S.Ct. 366, 73 L.Ed. 743; Gulf States Steel Co. v. United States, 287 U.S. 32, 53 S.Ct. 69, 77 L.Ed 150; United States v. Hodson, 10 Wall. 395, 409, 19 L.Ed. 937; Daniels v. Tearney, 102 U.S. 415, 26 L.Ed. 187.

We have said that the bond may not be read by a process of construction as subject to conditions not expressed upon its face. In saying that we have no thought to pass upon the quantum of a recovery thereunder. There are decisions of other courts to the effect that the bond is one of indemnity, so that only the damages actually suffered by the omission to produce the boat for surrender at the appointed time will be owing upon default. See United States v. Warnell (C.C.A.) 67 F.(2d) 831, 832; United States v. Randall (C.C.A.) 58 F.(2d) 193, 194; cf. United States v. Zerbey, 271 U.S. 332, 340, 46 S.Ct. 532, 70 L.Ed. 973. If that is so, there is always the possibility of proving in mitigation or defense that the boat and those in charge of her were innocent, and hence there was no loss. We leave those questions open. It is one thing to show that, if the boat and been on hand at the appointed time, no benefit to the government would have resulted from her presence. Cf. Taylor v. Traintor, 16 Wall. 366, 369, 21 L.Ed. 287. It is quite another thing to show that there was damage at the date of breach, and damage for which the government would have a remedy if the boat had been produced, but that, owing to changed circumstances, it would be useless to produce her now. Neither in the bond nor in the statute is there a disclosure of a willingness that the principal shall be thus permitted to take advantage of his wrong.

We are told that the bond is only a substitute for the vessel, and hence is not enforceable, unless there could be a decree in rem if the vessel were in court to-day. To speak of the bond as such a substitute is only a half truth. Un-

Page 486

doubtedly the reason for the exaction of the bond was to put the government in as good a...

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