United States v. Nicholl. 12 W.

officers; that they are merely directory to those officers, and form no part of the contract with the sureties. And the last case, decides, 3. That where the act expressly directs a defaulting officer to be recalled at the expiration of six months from the time of his default, his sureties are not discharged, but remain liable for his defaults thereafter, until he is actually recalled.

If the second instruction given to the jury was intended to inform them that the defendant, as surety of Swartwout, was not legally responsible for money placed by the government in his hands, after the legal termination of his office, it was unquestionably correct; and this is the sense in which we suppose the court meant to be understood. But if it was intended to convey the idea that he was not responsible for money which came to Swartwout's hands while in office, but which he afterwards failed to account for and pay over, it was clearly incorrect.

*In deciding upon the third instruction given, as to the [510] effect and operation of Mr. Pleasanton's letter to the district attorney, it is not intended to give any intimation of what would be the opinion of this court, if it had appeared from the letter, that the government had made any arrangement with Swartwout, without the assent of his sureties, whereby the right of the government to sue upon the bond had been suspended to the first day of October, 1824, or to any subsequent time. Nothing of the kind appears from the letter. It speaks of a mortgage which had been given by Swartwout, upon property subject to a former mortgage to Mr. Coster; but it does not appear that, by the terms of the mortgage, the right to sue on the official bond was suspended; and the taking of a collateral security, without suspending the right to sue on the bond, could not bar the action on the bond. The letter speaks of an intention formed of giving time upon the mortgage, upon specified conditions and contingencies; but none of those conditions or contingencies are shown to have been complied with, or to have happened. The letter contains no contract, and gives no time per se, upon any consideration binding on the government; and that the letter did not intend to suspend the right of the United States to sue on this bond, is palpable, because it directs suit to be brought thereon immediately. As no fact connected with the letter was proved by evidence aliunde, the construction of the letter upon its face was matter of law, and the circuit court ought to have decided and instructed the jury accordingly, that nothing on the face of the letter constituted any defence to the action. There was nothing but the construction of the letter to be left to the jury, and the court ought to have informed the jury that, according to its true

M'Gill v. Bank of the United States. 12 W.

construction, it did not give time so as to bar the action against the surety.

After the observations already made, it cannot be necessary to go into any further reasoning to show that the circuit court erred in its concluding instruction, that, upon the whole matter, the law was for the defendant. It was a conclusion drawn by that court, from the premises it had assumed in the former instruction given, [*511] and the error of these premises having been shown, the error of the conclusion necessarily follows.

Some observations were made by the defendant's counsel, in argument, as to the manner in which the debits and credits in Swartwout's account had been adjusted by the accounting officers; and he seemed to suppose that credits which ought to have been applied towards the extinguishment or lessening of the debits, for money placed in his hands before the 20th of November, 1822, had been improperly applied to the transactions of Swartwout with the government after that day.

The case of The United States v. January and Patterson, 7 C. 572, is in point to show that, as to any disbursements of money after the 30th of November, 1822, for which Swartwout was entitled to credit, it was at the election of the government to apply them to either account. But there is no necessity for the application of the principle to this case; for, upon looking into the account, we find that, after crediting Swartwout with all his disbursements up until the 30th of November, 1822, there remained on that day a balance in his hands unaccounted for, much beyond the penalty of the bond; so that no injustice is done to the surety in the manner of settling the account.

Judgment reversed, and a venire facias de novo awarded.

15 P. 187.

M'GILL, and others, Plaintiffs in Error, v. THE PRESIDENT, DIRECTORS, AND COMPANY OF THE BANK OF THE UNITED STATES, Defendants in Error.

12 W. 511.

A resolution to suspend a cashier does not remove him from office; and for any defaults by him after the resolution, and before he is actually removed, his sureties are responsible. Sureties are discharged from a judgment for the penalty of their bond only on payment of the principal equitably due, and interest and costs.

THIS cause was argued by D. B. Ogden, for the plaintiff in error, and by Webster, for the defendants in error.

JOHNSON, J., delivered the opinion of the court.

M'Gill v. Bank of the United States. 12 W.

This cause comes up by writ of error from the circuit court of the United States, held for the district of Connecticut, in which the defendants here obtained a judgment against the plaintiffs, upon a penal bond, in which M'Gill was principal, the other defendants sureties. M'Gill was cashier of one of the branches of the Bank of the United States, and this bond was given in the penal sum of $50,000, conditioned for the due performance of that office.

The replication sets out a great variety of breaches, and the cause was decided below upon a special verdict, by which was found for the plaintiffs the sum of $66,548, consisting of a variety of items, upon which interest is charged severally, from the [* 513 ] date of the embezzlement or other breach to the time of finding the verdict.

on

The verdict then finds two payments, one of $20,000, made by one of the sureties, on the 16th of December, 1820; the other of $500, made by another of the sureties, on the 22d of December, 1820, which they also calculate interest to the date of the verdict, and, deducting the amount of principal and interest, strike a balance of $43,182.50.

It also finds the following facts: "That the president and directors of the Bank of the United States, on the 27th of October, 1820, at Philadelphia, passed the following resolution, to wit: Whereas it appears, by the report of a committee of the office of discount and deposit at Middletown, that Arthur W. M'Gill, cashier of that office, has been guilty of a gross breach of trust, in knowingly suffering overdrafts to be made by individuals; also by making overdrafts himself; therefore, resolved, that A. W. M'Gill, cashier of the office at Middletown, be and he is hereby suspended from office till the further pleasure of the board be known.

"On motion, resolved, that the president of the office at Middletown be authorized and requested to receive into his care, from A. W. M'Gill, the cashier, the cash, bills discounted, books, papers, and other property in said office, and to take such measures for having the duties of cashier discharged as he may deem expedient."

Which resolutions were immediately transmitted by mail to the president of the Middletown office, who received them on the morning of Sunday, the 29th of the month, but did not communicate them to M'Gill until the afternoon of the 30th, between the hours of four and five in the afternoon.

It then finds that all the breaches were incurred before the 30th, and goes on to find alternatively, so as to enable the court to give judgment, according to its views of the law, as between the parties. There appear to have been various questions argued in the court

M'Gill v. Bank of the United States. 12 W.

below, some of which were decided for the plaintiff, some [* 514] for the defendant; but * as the plaintiff below seeks an affirmance of the judgment, and has not sued out a writ of error, it follows that we confine ourselves to those points only which were decided against the plaintiff here. These were two, one of them going to the whole right to recover, the other to the application of the payments towards the discharge of the sum to be recovered.

The first of these was, whether the sureties were not discharged ipso facto from further liability, by the resolution of the parent bank, on the 27th; or if not on that day, then on the 29th, the day on which it was received at Middletown by mail. If discharged on either of those days, it would follow that the plaintiffs below could not have judgment, since the finding was up to the day following.

We are unanimously and decidedly of opinion, that the ground assumed by the defendants below cannot be maintained. What was there in the resolutions of the parent bank to discharge the obligors at all from their liability? The resolution was only to suspend, and this implies the right to restore. The cashier's salary went on, and had the board rescinded their resolution, what necessity would there have existed for a redelivery of his bond?

But there is no necessity for placing the decision on this ground, since, notwithstanding the resolution of the board is expressed in the present tense, a future operation must necessarily be given it, from a cause that could not be overcome, the distance of the parties from each other. Time became indispensable to giving notice, and the day on which the communication reached the president of the Middletown Bank was a day not to be profaned by the business of a bank. There was, then, no obligation to deliver the notice and dispossess the cashier until the 30th, and the law makes no fractions of a day.

The court below, in applying the payments, directed them to be deducted from the penalty of the bond, and then gave interest upon the balance thus resulting. This, with the exception of the interest, was the most favorable application possible for the defendants below; and the interest on the balance having been only allowed from the

date of the suit, and the sum thus ascertained falling short [515] of the penalty of the bond, we think the defendant below has nothing to complain of. It will be discovered, by reference to dates, that the payments here made preceded the institution of the suit, and, although made by the sureties, they were made severally, for any thing that appears to the contrary from the verdict. Technically, then, the judgment to be entered would have been a judgment for the penalty of the bond, and, in applying the partial

Drummond v. Prestman. 12 W.

payment, the court would have been governed by those principles which have been transferred in practice from the courts of equity to the courts of law, in deciding on what terms a party shall be released from the penalty of his bond. These always are, on payment of principal, interest, and costs. And it can constitute no objection to the application of this principle to the case of these obligors, that no interest was allowed them during the short interval between the payment and the suing out of the writ, since the breaches were incurred long before, and interest for the same period is refused to the bank. Judgment affirmed, with six per cent. interest.

12 H. 159.

RICHARD DRUMMOND, surviving partner of CHARLES DRUMMOND, v. The Executors of GEORGE PRESTMAN.

12 W. 515.

A judgment recovered on an account against the principal, is evidence of the amount due from him, in an action against a guarantor of the account.

*THIS cause was argued by the Attorney-General and [* 516 ] Meredith, for the plaintiff, and by Taney and Donaldson, for the defendant.

JOHNSON, J., delivered the opinion of the court.

This case arises on the following state of facts: Richard and Charles Drummond, being engaged in some joint mercantile adventures, which appear to have been carried on chiefly by Charles, made consignments, in the year 1803, to William Prestman, then doing business as a commission merchant in Baltimore. George Prestman, the father of William, thereupon addressed to Charles Drummond a letter of guaranty, in these terms:

"CAPTAIN Charles DrumMOND:

"Baltimore, 17th November, 1803.

"Dear Sir: My son William having mentioned to me that, in consequence of your esteem and friendship for him, you have caused and placed property of yours and your brother's in his hands for sale, and that it is probable, from time to time, you may have considerable transactions together, on my part I think proper, by this, to guarantee to you the conduct of my son, and shall hold myself liable, and do hold myself liable, for the faithful discharge of all his engagements to you, both now and in future."

*The connection in business was kept up between the [* 517 } Drum nonds and William Prestman, until Charles's death,