Court Opinion

ID: 9639391
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:15:25.638229+00
Date Added: 2024-06-11T18:10:17.311243
License: Public Domain

PARKER, Circuit Judge
(dissenting).
In my view of this case, the bond sued on is in no sense a mere offer, revocable by the death of the offeror. It is a solemn contract, which was entered into pursuant to law in order that a bank might be designated by order of court as official depository of bankruptcy funds. 11 U.S.C.A. § 101. As a result of the giving of the bond, 1he bank was created an official depository and was eligible to receive deposits of bankruptcy funds as such. I cannot conceive that liability under the bond terminated, while this official status of the bank continued, merely because of the death of the bondsman. The bond is but a promise under seal and upon B sufficient consideration to pay to the United States the amount therein stipulated. It is well settled that a promise to pay money survives the death of the promisor; and 1 know of no principle upon which the promisor may be absolved merely because the promise is upon a condition and the breach of the condition occurs after his death. Death terminates the power of a deceased to act and revokes any authority or license he may have given; but his estate is liable upon a binding contract existing at the time of his death, even though the liability may depend upon future contingencies.
I can see no difference, in principle between such a case and that presented by any other bond required for the creation of an official status such as that of collector, guardian, administrator, sheriff, or clerk- of the *143court. In the case of such bonds, the rule is perfectly well settled that the estate of a deceased surety is liable for breaches and defalcations occurring after his death. 21 R.C.L. 982; 24 C.J. 290. Thus, such liability has been enforced upon the bond of a Collector of Internal Revenue, Pond v. United States (C.C.A. 9th) 111 F. 989, 997; upon the bond of an administrator, Hecht v. Skaggs, 53 Ark. 291, 13 S.W. 930, 22 Am. St.Rep. 192; upon the bond of a deputy sheriff, Green v. Young, 8 Greenl. (Me.) 14, 22 Am.Dec. 218; upon the bond of a clerk of the court, Snyder v. State, 5 Wyo. 318, 40 P. 441, 63 Am.St.Rep. 60; upon the bond of a guardian, Moore v. Wallis, 18 Ala. 458; upon the bond of a cashier of a bank, Shackamaxon Bank v. Yard, 150 Pa. 351, 24 A. 635, 30 Am.St.Rep. 807, 810; and upon the bond of an agent for an insurance company, Royal Ins. Co. v. Davies, 40 Iowa, 469, 20 Am.Rep. 581. The reason for the rule was well stated more than a hundred years ago by Judge Weston, speaking for the Supreme Judicial Court of Maine, in Green v. Young, supra, where the deputy sheriff’s bond, like the bond before us, did not run for a fixed period. Said he: “The intestate undertook •that the principal in the bond should discharge the duties of the office, to which he was appointed. For what period P So long as he continued in office, under that appointment. The breach found then, is within the very letter of the condition. The counsel for the defendant sets up, as a limitation of ;the liability of the intestate, that it is confined to breaches accruing in his lifetime. This limitation is not to be found in the instrument ; and if it is sustained, it must arise by construction of law from the nature of the undertaking. We have examined with care the cases cited for the defendant, but can find nothing to justify the limitation for which he contends. The plaintiff had a right to repose upon the solvency and sufficiency •of the surety. If his security in regard to future breaches ceases upon the death of •the surety, he might suffer, however vigilant. He might incur severe responsibilities, arising from subsequent breaches, before he •could be advised of the death of the surety. If the defendant, representing the intestate, is not liable in this case, the death of a surety ■upon a sheriff’s bond, and upon the bonds •of the treasurer of the state, of a county or town, of cashiers of banks, and of many oth•er officers who are required to give bonds, would exonerate his estate from subsequent breaches, and throw the whole responsibility upon surviving sureties.”
It is suggested that the bond here is distinguishable from official bonds because it does not run for a fixed period. Neither, for that matter, did the bonds in a number of the cases cited; but I think that this is a distinction without a difference. The condition of the bond is that the bank shall well and faithfully discharge and perform all duties pertaining to it as depository of funds. For what period ? So long as the bank shall continue as a depository or until liability shall be terminated upon substitution of another bond under order of court. Id cerium est quod certum reddi potest. The idea that, because the period of liability is not limited in the bond, the bondsman may terminate liability at any time he sees fit, does not appeal to me as sound. He has made it possible for the bank to be appointed a depository by going on its bond. An order of court has solemnly approved the bond and designated the bank as depository. And I do not think that he can be relieved of the obligation thus solemnly assumed, except by an act of court of equal solemnity, i. e. by an order terminating the status of the bank or approving another bond. As said by the Circuit Court of Appeals of the Seventh Circuit in Continental Casualty Co. v. United States, 68 F.(2d) 577, 582, “Such suretyship is not to be lightly entered into, and when undertaken is not to be lightly terminated.” In that case it was held that the surety could not terminate his liability under the bond merely by giving notice to the judge and to the bank.
But whatever be the right of the bondsmen to terminate liability by notice, which would lead to the requirement of another bond if the official status of the bank is to be continued, I do not see how such liability may be terminated merely by death without notice, which permits the continuance of the official status that the bond was given to safeguard. The liability under the bond was assumed that the official status of the bank might be created; and it seems unreasonable to me to give a construction to the bond which makes it possible for the liability thereunder to be terminated, without action by the court, while the official status of the bank, which was dependent upon that liability, is continued.