United States v. West ( 1896 )

Mr. Justice Morris

delivered the opinion of the Court:

1. The defendant West has not appealed from the judgment against him, and there seems to have been no ground for him to do so. So far as he is concerned, therefore, the adjudication is complete and must stand. And the appeal by the United States is only as to the defendants Thompson and Webb, the sureties.

2. The pleadings and proofs in the case are not entirely consistent. The only plea is one of set-off, which amounts in this connection to a plea of confession and avoidance, which ordinarily should transfer the burden of proof from the plaintiffs to the defendants. Yet the trial seems to have proceeded as though the general issue also had been pleaded ; and we do not think that at this stage of the case that should be regarded as error — especially inasmuch as on default by the defendants the plaintiffs would have been required to make proof of the actual amount due tinder the bond.

3. It is claimed on behalf of the appellants, that as the set-off went to the jury as to the principal, it should have been permitted to go to them as to the sureties. But it is not apparent what injury has been suffered by the appellants hereby. The matter of set-off has been decided in their favor; and there is nothing left of it.

4. We understand the substantial ground, on which the court below took the case from the jury as to the sureties, to be, that the testimony showed conclusively that the sureties, had been discharged from liability by the action of the Treasury Department in extending the appointment of West beyond the time for which they had contracted, and carrying the balance due from him under his first or original appointment to the credit of his second appointment. And the propriety of that ruling is the question now before- US;

The bond in question specifies no time for which it is to be in force ; nor does the order of appointment of December 12, 1891, which is the appointment to which it refers, specify either the period of time for which the special disbursing agent-was appointed, or the duties which he was to perform as such disbursing agent. But we cannot suppose that the appointment was to be of indefinite duration and without limit as to time, or that the duties were to be of an indefinite character and to include any and all duties of a fiscal character that might be assigned to such special disbursing agent in the future. The fact .that he was appointed as a special disbursing agent, under a law providing for special disbursing agents, necessarily implies that he had been appointed for a definite and ascertained duty; and as to the precise nature of that duty and the time limited for its duration, we are not left in ignorance. It is conceded that the appointment of December 12, 18gI, was in aid of the previous appointment of December 7, 1891, and to enable West, as special disbursing agent, to disburse the money of the United States in his hands as such to himself as special agent. The proof of his appointment as special agent under the act of 1890, although objected to on other grounds on' behalf of the plaintiff, was property admissible to show the special purpose for which be had been appointed special disbursing agent, and about which the order of December 12, 1891, was silent.

The bond, the order of December 12, and the order of .December 7, are, therefore, all to be considered together as parts of one transaction. And being considered together, they necessarily imply that the sureties on the bond contracted that West, as special disbursing agent, would faithfully disburse the money of the United States entrusted to him as such, for the use of himself as special agent for the period of about three months, from December 7, 1891, to March 8, 1892. This was, beyond question, the extent of their legal liability, and the extent to which they intended to contract; and if there had been no extension or continuation of West’s appointment as special agent after March 8, 1892, and West had then been called to account for the balance found to be due from him, it cannot admit of serious argument that the sureties would then be bound. And this position is not controverted by either party. At all events, we regard the position as beyond controversy.

■ From this it’ necessarily results that the sureties in this case are liable for the defalcation of their principal on his .first account as stated by the accounting officers of the Treasury, unless by the subsequent transaction they have been relieved, from such liability. And it necessarily follows, also, that the sureties are not liable for the defalcation of West under his second or extended employment, for the reason that they did not contract with reference thereto. It is well settled law — too well settled to require any citation of authorities in support of it — that, if the duties of the principal on a bond are increased or enlarged beyond the limit for which the bond was given, or if the time for their performance has been extended, or if in any other manner the conditions of the bond have been altered, without the knowledge and consent of the sureties, the sureties will not be bound for any default of the principal under the new con ■ ditions. And if, as in the present case, the bond was given for the faithful performance of the duty of the principal in one employment, it cannot be extended by construction to cover another employment, although of the same kind, and although the second employment be designated as an extension or continuation of the first.

But the liability of the sureties under the principal’s first employment in this case for the sum of ,$276.68 found to be due from him, with respect to that employment, is not discharged or in any manner affected by his second employment, unless that sum was transferred or in some way credited to him under the second appointment, or the United States, in some way, by the second appointment and their dealings with West in connection with that employment, precluded themselves from enforcing any right against him or against his sureties under his first employment.

The fact that, in his second accounting with the Treasury Department, after the termination of the second employment, the defendant, West, charged himself with the sum of $263.56 — the Auditor made it $276.68 — as a balance against himself from his first account, does not show that this sum had been transferred to him by the Department for the credit of his second employment. It would rather tend to show the contrary. For if it is to be inferred that there was any such transfer or credit given to him, the amount would have been that which the accounting officers had stated ($276.68), and not what he (West) claimed the balance to be ($263.56). Nor does the fact that the accounting officers of the Treasury bring into their second account a balance due from the first account, show or tend to show that West was authorized to use this balance for the use and benefit of his second employment. This is only a matter ' of bookkeeping. The accounting officers, by the form of their accounting, could not have intended to show that there was any such transfer or credit. The amount is not stated as a credit for the second employment, but as a balance due from the first.

Moreover, the plain inference from the record is that no such credit was given. The account of West under his first employment, although stated by the First Auditor of the Treasury under date of April 15, 1892, was not finally stated by the Commissioner of Customs, to whom it, was required by law to be sent for his decision thereon, until April 21, 1892. West had received his second appointment on March 16, 1892, and on the same day an advance of $1,000 from the Treasury Department on account of this second appointment ; and we are to presume that he had gone out of the country, in pursuance of it, and had practically concluded his duties thereunder, before his account under the first appointment was stated, and before there was any balance ascertained that could be transferred to him for the second employment.

Unless, therefore, we are to assume that it was not competent for the United States to give to the defendant, West, a second employment, while his accounts under a previous1 employment remained unsettled in the Treasury Department, and to advance money to him for the purpose of such second employment, which to all intents and purposes must be regarded as a separate, distinct and independent employment, while there was actually a balance in his hands from' the previous employment, yet officially unascertained, without thereby releasing the sureties upon the bond given by him for the faithful performance of his duties under the first employment, we are unable to see any ground upon which the theory of a release can be based ; and this ground is too untenable for serious consideration.

We are of opinion that the sureties upon the bond in this case were liable for thq default of their principal under his first appointment, but not for any subsequent default by him. And we must, therefore, conclude that it was error in the court below to direct a verdict in their favor with respect to the whole amount claimed.

For that error, the judgment in favor of the sureties must be reversed, with costs; and the cause must be remanded to the court below, with direction to award a new trial.