United States v. Ryder

• Citation: 4 S.Ct. 196,110 U.S. 729,28 L.Ed. 308
• Parties: UNITED STATES v. RYDER and others
• Decision Date: 10 March 1884
• Court: United States Supreme Court

110 U.S. 729

4 S.Ct. 196

28 L.Ed. 308

UNITED STATES v. RYDER and others.

March 10, 1884.

The bill was filed at the suit of the United States to obtain payment of a recognizance for $10,000 from the property of one Edward P. Williams, or the proceeds thereof, in the hands of Seth B. Ryder, one of the defendants. The recognizance was entered into on the eighth day of November, 1876, by Williams and three other persons, conditioned that Williams 'should appear in person at Trenton, before the United States district court there, and submit to such sentence as the said court should order and direct.'

Williams did not appear according to the condition of the recognizance, but absconded, and, as the bill alleges, 'became a fraudulent, absconding, concealed, and absent debtor, and at the same time was a convicted criminal, and a fugitive from justice,' and never has since appeared nor been found. The bill further alleges that a scire facias was issued, and a judgment entered upon the recognizance, and an execution issued to the marshal of the district against the goods and lands of the cognizors; and that certain real estate of the sureties was levied upon, insufficient (as alleged) to satisfy the execution; but that no levy was made upon the goods and lands of Williams, for the reason that they were in the possession of said Ryder, who claimed the right to hold the same partly as assignee under a general assignment made by Williams for the benefit of his creditors, in July, 1876, and partly as auditor in attachment, appointed by the circuit court for the county of Union, in the state of New Jersey, under an attachment issued against Williams on the fifteenth of November, 1876, and levied on the twenty-third of same month. The bill alleges that Ryder has since sold the property in his possession by order of the Circuit Court of Union county, and has in his hands the proceeds, amounting to several thousand dollars.

J. H. Ashton, for appellant.

John R. Emery, for appellees.

BRADLEY, J.

This is an appeal from a decree dismissing a bill in equity on demurrer.

The grounds on which relief seems to be claimed by the bill, as far as can be gathered from the statements and the argument of counsel, are,—First, that the United States is a judgment and execution creditor, whose remedy at law is exhausted, and that the funds in the bands of Ryder are equitable assets, which ought to be applied in satisfaction of the judgment; second, that the recognizance operated as a lien on the real estate of Williams, from the time of its acknowledgment and recordation; third, that under the act of congress, in that behalf, the United States is entitled to priority over all other creditors of Williams, he being insolvent, and having made a general assignment of his property for the benefit of his creditors, and his property being attached as that of an absconding debtor; fourth, that the sureties of Williams have, by way of subrogation, a right to the enforcement of all the remedies which the United States is entitled to against Williams' property, before resort can be had against them and their property, or to indemnify them in case of their satisfying the claim of the United States, it being conceded on the argument that the bill was filed, and that the suit is prosecuted in the interest and for the benefit of the sureties. The allegation on this subject in the bill is as follows: 'And your orator further shows that the said sureties, being aware that the said Seth B. Ryder has in his hands a large amount of money belonging to their principal, and subject to the statutory claim of your orator to priority, as aforesaid, have claimed, as a right belonging to them as sureties, that your orator, before selling their lands under said execution, should seek relief in this court to compel the said Seth B. Ryder to apply the said fund to the satisfaction of said execution, as he is bound to do by the statute, giving your orator a priority upon said fund, in order that the said moneys of their principal, in the hands of said Ryder, may be applied to your orator's claim in exoneration of the said sureties, so far as the same will extend.'

At the coming on of the argument on this appeal, the solicitor general of the United States stated, in open court, that the government has no interest in the suit, the amount of recognizance having been paid by the sureties, and that the suit is prosecuted for the benefit of the sureties only; and this statement was admitted by the counsel for the sureties, who alone argued the cause for the appellants. The questions for us to decide are,—First, whether, since the recognizance has been paid by the sureties, they are subrogated to the rights of the United States; secondly, whether, if thus subrogated, they are entitled to prosecute in the name of the United States; thirdly, if the first two questions are to be answered in the affirmative, whether a case is made by the bill to entitle the complainants to relief.

First. Are the sureties subrogated to the rights of the United States? The general right of sureties, when paying the debt of their principal, to be subrogated to the rights of the creditor, whether as a mortgagee, pledgee, or holder of a judgment or execution, or any other security, has been so often and so fully discussed that nothing further need be added on that subject. The recent treatise of Mr. Sheldon on the Law of Sub- rogation, and the notes to Dering v. Earl of Winchelsea, in 1 White & T. Lead. Cas. Eq. 100, refer to the authorities, and exhibit the general results deducible therefrom; and in Mr. Burge's Treatise on Suretyship the rules of the civil law on the same subject are fully set forth. The doctrine is, that a surety paying the debt for which he is bound, is not only entitled to all the rights and remedies of the creditor against the principal for the whole amount, but against the other sureties for their proportional part. This is clearly the rule where the principal obligation is the payment of money or the performance of a civil duty. And in England the sureties of a debtor to the king (as for duties, taxes, excise, etc.) have always, since Magna Charta at least, had the right, upon paying the debt, to have the benefit of prerogative process, such as extent, or other crown process adapted to the case, to aid them in coercing payment from the principal, and compelling contribution from co-sureties. Thus, where upon a scire facias issued against the heir and executor of one surety, the defendant paid the debt, it was ordered that he should stand in the place of the crown, and have the aid of the court to recover either the whole against the principal or a moiety against a co-surety. Man. Exch. Pr. 563. And where a collector of a township [or parish] was a defaulter, and the township was retaxed for the deficit, the same relief was given. MACDONALD, C. B., said: 'The parish stands very much in the nature of sureties; and it is a reasonable practice that the party who has made good to the crown the default of the defendant should have the same remedy that the crown itself would have; it is, besides, unanswerable that this is a debt upon record and still subsisting; nor can it be satisfied by the reassessment of the parish.' Rex v. Bennett, Wightwick, 1, and cases in note. See also Regina v. Salter, 1 Hurl. & N. 274. The last observation of the chief baron (that the debt of the collector was still subsisting) was made in view of the opinion, which long prevailed in England, that payment of the debt by the surety extinguished it, and took away the remedies for en- forcing it, even a judgment recovered, and thereby deprived the surety himself of all advantages of such remedies, and left him to his action for money paid,—a result not recognized or admitted by most of the courts of this country, and remedied in England by the mercantile law amendment act, (19 & 20 Vict. c. 97,) by virtue of which a payment of the debt by the surety has virtually the effect of an assignment thereof to him. Sheld. Subrog. §§ 135-138.

The rule of subrogation in favor of sureties to prerogative rights and remedies of the crown seems to be confined to cases of crown debtors, such as collectors, receivers, accountants, and other fiscal officers, and persons bound for customs duties, excise taxes, and other civil duties. We have not been able to find any English case in which it has been applied, or allowed, in favor of bail in a criminal proceeding. It has even held that the law raises no liability on the part of the person bailed to indemnify his bail for what they have been compelled to pay on their recognizance by reason of his default. It is said in Highm. Bail. 204, 'if a principal do not appear, and the recognizance be forfeited, and paid by the bail, yet the principal shall remain open and liable to the law whenever he can be taken, for the penalty in the recognizance is no other than as a bond to compel the bail to a due observance thereof, and has no connection with the principal; they could not sue him thereon for money paid to his use, or on his account, for it was paid on their own account, and for their own neglect.' In a subsequent edition, it is true, it is said to have been settled that where a person is bail for another he is entitled to recover all the expenses he has incurred incidental to that situation; and the same statement is made in Petersd. Bail, 517; but the only authority cited for...