U.S. Supreme Court
United States v. Leary, 245 U.S. 1 (1917)
United States v. Leary
Argued October 4, 1917
Decided October 15, 1917
245 U.S. 1
Where a defendant, under indictment for defrauding the United States of money, deposited stocks with a representative by whom another person was induced to execute the defendant's bail bond on the faith of the deposit as indemnity, and neither surety nor depositary had notice of any defect in the depositor's title, the surety's equity in the deposit was superior to that of the United States, though the stocks were procured with the proceeds of the fraud.
In such case, where, after the first bond, the surety executed several renewals in removal and habeas corpus proceedings, the parties repeatedly treating the proceedings and the indemnity agreement as continuing matters, held by inference that the same understanding attached to a further bond for appearance at trial, and that the depositary's conduct in retaining only shares constituting the deposit, while settling with the defendant for others, confirmed such intention.
During the proceedings, the shares originally deposited were sold by the depositary, with others belonging to the defendant, and, of new shares purchased with the proceeds, some were selected and retained by the depositary in lieu of those first deposited. Held that the equity of the surety attached to them.
Upon an issue of fact as to whether stock claimed by plaintiff was held by defendant as indemnity for interveners, defendant's sworn answer, filed before the intervention and averring that he so held the chanroblesvirtualawlibrary
stock, was evidence for the interveners as an act, if not as a statement of facts.
Whether defendant should have an allowance as trustee is left to the trial court.
229 F.6d 0 affirmed.
The case is stated in the opinion. chanroblesvirtualawlibrary