Maloney v. Nelson

42 N.Y.S. 418
Appellate Division of the Supreme Court of the State of New York·Decided December 11, 1896·Published·Cited by 3 cases

Opinion

RUMSEY, J.

The action was brought against the appellant, with other defendants, to foreclose a mortgage, and upon the trial the plaintiff succeeded. From the judgment entered after that trial, the defendant Nelson, who gave the mortgage, appeals. For the purpose of sustaining his contention upon the appeal, he makes several objections, which will be considered in their order.

In the first place, he says that the contract was void as against public policy. Thé facts are that, just before the giving of the bond and mortgage, one O’Brien had been arrested for a felony, and held to bail in the sum of $10,000. The defendant Nelson intended to go upon his bond, but it was necessary to procure another surety, and, by way of inducing him to do so, Nelson offered to give him this bond and mortgage as indemnity for any liability which he might incur, whereupon he became one of the bail for O’Brien, and then this bond and mortgage was given by Nelson. The indemnity bond recited that Maloney had signed the bail bond for O’Brien as one surety in the penal sum of $10,000, with the usual conditions for the appearance of O’Brien, and then continued: “Now, therefore, if there shall be no default in said bond or recognizance so signed by said Maloney, then this obligation to be void, and otherwise to remain in full force and virtue.” The bond and mortgage, therefore, as it will be seen, was made by one surety upon the undertaking of bail to indemnify the other surety against the failure of the principal to appear. The claim of the defendant is that such a contract is void as against public policy. His contention is, substantially, that the object for which bail is required is to assure the appearance of the prisoner to answer to the charge against him; that by accepting the custody of the prisoner he is transferred from the state to the sureties upon the recognizance, who, because of the pecuniary liability resulting from his escape, have a direct personal interest in securing his appearance; that this personal interest is diminished or taken away if they are permitted to indemnify themselves against the loss resulting from his failure to appear, and therefore such an indemnity impairs the effect of the contract which they have made. A contract is said not to be enforceable because it is against public policy, either because it is directly in violation of some provisions of law, or because the courts can see that its necessary result is to undermine public morals, to endanger the public health or public safety, to prevent competition at judicial sales, or to improperly influence legislation or the action of public officers for the administration of [420]*420justice, or to nullify the policy of the law. Unless something of this kind can be necessarily predicated of a. contract, it does not interfere with the broad liberty which every person has to make such agreement as he sees fit, and a contract thus made will be enforced by the courts. The question whether such a contract as this one is void has been presented to the courts of England in several reported cases, but in only one of them was it a necessary point to be decided in the case. In the case of Jones v. Orchard, 16 C. B. 614, the court consider the question somewhat; but leave it undecided, saying simply that, while they were inclined to consider the point well taken, it was not necessary to come to a decision upon it. In Cripps v. Hartnell, 4 Best & S. 414, the action was upon a contract of a third person to indemnify the surety upon a bail bond. The question decided was simply that such a< contract was not void by the statute of frauds, and the plaintiff was permitted to recover upon the contract, without any reference to the question whether it was void as against public policy. .In Herman v. Jeuchner, 15 Q. B. Div. 561, the plaintiff had been required to give bond in the penalty of £50 sterling, with a surety, for his good behavior for two years. In order to induce defendant to give security for him, plaintiff deposited with the defendant the penalty of the bond. He afterwards sued to recover the penalty back again, and the defense was that the agreement was void as against public policy, and for that reason the court would not aid either of the parties, and so permit the plaintiff to recover back the money which he had deposited in part performance of the illegal contract. The court adopted this view of the case, and refused to permit the plaintiff to recover. The ground upon which the case was decided seems to be that the object of the law in requiring a surety upon a recognizance was to obtain the personal responsibility of the surety, and to require him to exercise it at the peril of pecuniary loss if he did not; and that his obtaining an indemnity removed the inducement for his personal vigilance, and therefore deprived tl.e state of the security which it was intended to have for the performance of the law by the principal. In this country the point has been taken in several cases, but in none of them does it seem to have been decided, or even necessary to the decision of the case. In U. S. v. Simmons, 47 Fed. 577, the judge refused to approve of a bail bond, where it appeared that the sureties had been indemnified by the accused and others, for the reason that such a contract of indemnity was illegal, giving substantially the sqme reason as that suggested above. In U. S. v. Ryder, 110 U. S. 729, 4 Sup. Ct. 196, the question was discussed, but not decided, because a decision upon that point was not necessary. It Avas, however, suggested there that a contract of indemnity by the principal to the surety was illegal. In Anderson v. Spence, 72 Ind. 315, the only point decided was that a contract of indemnity, made by a party other than the accused, was not within the statute of frauds, and therefore that a parol contract was valid. The question seems to have been presented in Simpson v. Robert, 35 Ga. 180, and it was decided there that the contract was valid.

[421]*421No decision upon the subject is to be found in the courts of this state. In view of the fact that contracts for the indemnity of sureties upon bail bonds have been frequently enforced in the courts, the fact that their validity has not been successfully attacked is of itself strong evidence that they have been presumed to be legal. In fact, there is no case holding that a contract made by a third party to indemnify a surety upon a recognizance is illegal, but all such contracts have been sustained. The only case in which there has been a suggestion that such contracts are invalid is where they have been made by the principal himself. It is not perceived that there is any valid distinction in principle between a contract made by the accused and one made by somebody else for his benefit, but, nevertheless, that distinction seems to exist in the books, and to result in contracts on the one hand being held valid, and on the other hand being disapproved. In this state, however, it is quite clear that there is no public policy which condemns such contracts. The legislature have regulated by statute the giving of bail in criminal cases, and, if the sureties were not to be permitted to indemnify themselves, it is quite probable that the legislature would have said so. Not only have they not said so, but it is not necessary to be inferred from the present condition of the law that the contract of bail need not depend upon the personal responsibility of the surety, because the legislature permit bail to be given not only by a recognizance signed by sureties in the old manner, but also by the deposit of money by the accused.

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Maloney v. Nelson, 42 N.Y.S. 418 (N.Y. Ct. App. 1896).

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