Union Insurance Co. v. Hoge. conditions and guards that were deemed essential to the security of persons applying for insurance, leaving the details and interior regulations to be arranged and determined by the company in their charter. Large powers were conferred, in general terms, as in the 10th section, "to declare in the charters" "the mode and manner in which the corporate powers given under and by virtue of this act are to be exercised;" and again, in the 12th section, the company "shall have power to make such by-laws" "as may be deemed necessary for the government of its officers and conduct of its affairs." And, besides these general powers, inasmuch as the com * pany is incorporated for the express purpose of insurance [66] of property against fire, in the absence of any prescribed mode of payment of premiums, the power to prescribe it by the company is necessarily implied; otherwise, the object for which it was created would be defeated. This question has been indirectly before several of the courts of New York, and in all of them, so far as any opinion has been expressed, as I understand, it has been in favor of the validity of these policies. The practical construction of this act of 1849 by the public officers of the State, including the attorney general, who were required to supervise the preliminary steps made necessary to the organization of the company, and to certify that it had conformed to the provisions of the act, and the latter officers especially, that the charter was in accordance with it, is deserving of consideration. Under the construction thus given, numerous companies have been organized with charters like the present, providing for cash premiums, or premium notes, at the election of the insured, and an extensive business of insurance carried on in New York and several of the sister States; and, although this practical construction cannot be admitted as controlling, it is not to be overlooked, and perhaps should be regarded as decisive in a case of doubt, or where the error is not plain. The judgment of the court below is affirmed. Mr. Justice DANIEL dissents, on ground of want of jurisdiction. Vol. ii-43 Leggett v. Humphreys. THOMAS LEGGETT and others, Appellants, v. BENJAMIN G. HUMPH REYS. 21 H. 66. SURETY-OFFICIAL BOND. 1. Where a surety in an official bond has paid, under judgments rendered on it, the amount of the penalty, he is responsible for no more. 2. Where, pending an appeal from a judgment in his favor on such bond in one court, he is sued in another court, and compelled to pay the full penalty of the bond, this payment is a good defense to the first action, where the judgment is reversed and sent back for a new trial. 3. If he has used due diligence to avail himself by plea of this defense, and failed, he can come into equity for relief, and the judgment will be enjoined. 4. The fact that the principal in the bond had placed in his hands means sufficient to indemnify him for the payment so made, does not interfere with his right to equitable relief under the circumstances. THIS is an appeal from the circuit court of the United States for the southern district of Mississippi. The case has been before this court twice before, and is reported in 2 Howard, 28; 15 Curtis, 16; and 9 How. 297; 18 Curtis, 151. The case as here now before the court is stated in the opinion. Mr. Bradley and Mr. Johnson, for appellants. Mr. Carlisle and Mr. Badger, for defendant. [ * 69 ] * Mr. Justice DANIEL delivered the opinion of the court. The controversy between these parties, although in its progress it has been much complicated and involved, yet, as to the principle by which its true character is defined, and by which its decision should be controlled, is simple enough. That principle is the extent of the pecuniary responsibility sustained by the surety in an official bond for the conduct of his principal. To a correct comprehension of the position of the parties to this cause, some length of detail as to the facts and pleadings it contains, is necessary. The appellee, together with one Grissom, having in the year 1837, bound himself in the penalty of $15,000, as surety to the official bond of Richard J. Bland, sheriff of Claiborne county, in the State of Mississippi, a suit was instituted in the name of the governor of the State upon that bond, for the use of the appellants, in the circuit court of the United States for the southern district of Mississippi, charging a breach of the condition of that bond by Bland, in having released from jail one McNider, against whom the appellants had recovered a judgment in the circuit court aforesaid, Leggett v. Humphreys. and whom, after being charged in execution in that court, the marshal had committed to the custody of Bland, [*70 ] the sheriff. Under certain provisions of the statutes of Mississippi, it was pleaded in defense to this action, that McNider being insolvent and unable to pay his prison fees, the appellants, who were non-residents, had failed to pay those fees, or, as required by the law of the State, to give security for their payment, or to appoint an agent within the county on whom demand for the prison fees could be made; and that in consequence of such failure, McNider had, by a regular judicial order, been discharged from jail as an insolvent debtor. Upon a demurrer to the plaintiff's replications to these pleas, the circuit court gave judgment with costs in favor of the sheriff and the appellee, Humphreys, the suit having been previously discontinued as to the other surety, Grissom. This judgment was upon a writ of error reversed by this court, and the cause was remanded to the circuit court with instructions (Bland, the sheriff, pending the cause here, having died) to enter a judgment against the appellee, as surety, for the sum of $3,910.78, besides the costs. (Vide McNutt v. Bland et al., 2 Howard, 28.) In the interval between the emanation of the writ of error and the reversal of the judgment of the circuit court, two judgments were, on motion, obtained in the State court against the sheriff and Humphreys as his surety, by the Planters' Bank of Mississippi, one for the sum of $12,325.22, and the other for $2,674.75, making an aggregate amount exceeding the penalty of the bond in which the appellee was surety; and the property of that surety was levied upon and sold under execution, and the proceeds applied in full satisfaction of the amount of the penalty. Upon the receipt in the circuit court of the mandate of this court, the appellee, as surety as aforesaid, moved the circuit court for leave to plead puis darrein continuance, the judgments, levy, and satisfaction above mentioned, in fulfillment of his bond and of his liability for the sheriff; but the circuit court refused leave to plead these facts in discharge or satisfaction of the penalty, and, in literal obedience to the mandate of this court, rendered judgment against the appellee, as surety for the sum herein before mentioned. The appellee, Humphreys, then exhibited his bill on the equity side of the circuit court, alleging the aforegoing *facts, and [ *71 ] averring, moreover, that no notice or process of any kind had ever been served upon him in the suit of McNutt v. Bland et al., but that the return of the officer of service as to the appellee was absolutely false. Upon these allegations, an injunction to the judgment at law was granted by the circuit court, but subse Leggett v. Humphreys. quently, upon a demurrer to the bill by the appellants, the injunction was dissolved and the bill dismissed. From this decree of dismission an appeal was taken to this court, who, after a hearing, expressed the following conclusions, viz: "In the case before us, the surety had been compelled to pay the whole amount of his bond by process from the State courts before the present defendants obtained their judgment against him, but after the institution of their suit. This would have been a good defense to the action, if pleaded puis darrein continuance. The complainant tendered his plea at the proper time, and was refused the benefit of it, not because it was adjudged insufficient as a defense, but because the court considered they had no discretion to allow it. The mandate from this court was probably made without reference to the possible consequences which might flow from it. At all events, it operated unjustly by precluding the plaintiff from an opportunity of making a just and legal defense to the action. The payment was made whilst the cause was pending here. The party was guilty of no laches, but lost the benefit of his defense by an accident over which he had no control. He is therefore in the same condition as if the defense had arisen after judgment, which would entitle him to relief by audita querela, or bill in equity. We are therefore of the opinion that the complainant was entitled to the relief prayed for in the bill, and that the decree of the court below should be reversed." * The cause was thereupon remanded to the circuit court for further proceedings to be had therein, in conformity with the above opinion. (Vide 9 How. 313, 314, Humphreys v. Leggett et al.) On the filing of the mandate in this latter case, the defendants (the present appellants) being ruled by the circuit court to answer the bill for the injunction, admit by their answer the recovery of their [72] judgment against Humphreys as surety for Bland. They acknowledge their belief of the judgments in the State court against the sheriff and his surety, and the levy under those judgments, and the return of satisfaction upon the executions by the proper officer, but allege that the judgments were fraudulently suffered in order to defeat the appellants; that no money was paid under the pretended sale, and that the property was retained by Humphreys. In an amended answer, filed by leave of the court, the appellants alleged that Bland, the sheriff, had transferred the judgments in the State court, for $10,524, to Humphreys, who, under that assignment, had received the sum of $18,000; that he had not discharged the penalty of the sheriff's bond, and from various sources had received funds exceeding all his liabilities aris Leggett v. Humphreys. ing therefrom. Subsequently, viz, in 1851, the appellants, by a cross bill against the appellee, charged that Bland, to indemnify the appellee as surety in the bond of 1837, had assigned certain debts and other subjects of property, real and personal, to an amount more than equal to the penalty of that bond, that among these subjects were the fee bills due to Bland, as sheriff, to a large amount, and also the judgments set forth in the original bill as having been recovered in the State courts; and that these judgments had been discharged by Humphreys by notes purchased by him at the depreciation of fifty cents in the dollar. To this cross bill a demurrer was interposed by Humphreys, but, upon being ruled by the court to answer, he admitted that in March, 1840, Bland conveyed, in a deed of that date, to Volney Stamps, the property mentioned in that deed, in trust to indemnify the appellee as surety in the official bond of Bland, of November, 1837, and to indemnify the same appellee and one Flowers, as sureties for Bland on his official bond of 1839, and to save them harmless against all loss and damage, and all money paid, or charge or expense to be incurred, in consequence of being sureties in the said official bonds. He admits that so much of the property as could be found has been sold by the trustee, and that from the proceeds of sale, after deducting the expenses of sale, respondent has received three-fourths, amounting to $3,825, and the said Flowers one-fourth, amounting to $1,275, which make the whole amount that has * been [ *73 ] realized from the trust fund. He admits that in 1840, for his further indemnity, Bland assigned to him all the fees then due to the former as sheriff of Claiborne county, but alleges that from this source there has been received an aggregate amount of only $3,288.17, as shown by the statements of the persons employed in the collection of those fees, filed as exhibits with the answer. The respondent further admits, that after the recovery by the Planters' Bank of the $12,325.22 against said Bland and respondent, which recovery was founded on an original judgment of the said bank against P. Hoopes, J. H. Moore, and John M. Carpenter, the said Bland claiming to be the owner of that judgment, did assign all his rights and interests therein to respondent, for his indemnity, as he had to pay the penalty of the bond. The respondent claims the benefit of that judgment, but alleges that he has collected nothing under it from either Hoopes or Moore, each of whom became insolvent prior to 1840, and still continued insolvent. That the judgment of the Planters' Bank against Campbell, Pierson, and Moore, for $3,702.66, had always been unproductive and worthless, and that nothing had been or would be received |