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State v. Midland Ins. Co.

New Jersey Superior Court, Appellate Division

Decided: April 16, 1979.


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.

Ard and Antell. The opinion of the court was delivered by Ard, J.A.D.


[167 NJSuper Page 420]

Midland Ins. Co. (Midland) appeals a judgment entered against defendants on a recognizance of bail. The recognizance of bail was executed by Leroy Brown, Jr. as principal and Midland as surety. Leroy Brown, Jr. does not appeal.

Although the record in this case consists only of a transcript of the forfeiture hearing dated December 16, 1977, it appears that Brown was charged with breaking and entering with intent to commit larceny; threatening life; atrocious assault and battery and assault with intent to rape. Prior to trial he was released on bail in the amount of $10,000, in which Midland acted in the capacity of surety. Subsequently, Brown was tried and found guilty on all charges, immediately

[167 NJSuper Page 421]

after which the trial judge increased the bail to $25,000. Brown was thereafter remanded to the Monmouth County Correctional Institute on the same day, March 16, 1977, since he was unable to meet the additional bail requirement.

On July 8, 1977 Brown appeared for sentencing; however, for reasons not indicated in the record, his sentencing was postponed and he was remanded to the jail. Three days later Brown posted the additional $15,000,*fn1 was released and ordered to appear for sentencing on September 16, 1977. He failed to so appear.

Thereafter, the recognizance filed by Midland was ordered forfeited and on November 18, 1977 the county moved for entry of judgment pursuant to R. 1:13-3(b). A cross-motion was filed by Midland to vacate the forfeiture and to exonerate itself from any liability. Subsequently, argument was heard on the motions, and the judge, in an oral opinion, granted the county's, but denied Midland's, motion.

We have no record of what occurred at the time the trial judge raised the bail to $25,000. However, in ruling on the motions, the judge (not the trial judge) was not contradicted when he premised his decision with the statement:

Thus, it appears that defendant Brown obtained his release by supplementing the original $10,000 bond with an additional $15,000.

[167 NJSuper Page 422]

Appellant's sole argument is that the surety was discharged once defendant was remanded to the county jail and held in lieu of higher bail. We disagree.

The recognizance in question was conditioned as follows:

WHEREAS, the principal has been bound over to await final determination of the cause referred to in the caption hereinabove set out, THE CONDITION OF THIS RECOGNIZANCE is such that if the said principal shall appear before the Monmouth County Court at all stages of the proceedings until final determination of the cause , unless otherwise ordered by the Court, then this recognizance to be void otherwise to remain in full force and virtue. [Emphasis supplied]

Unquestionably, the final determination of the cause does not occur until "a dismissal on the merits, an acquittal or upon sentence after conviction. * * *" State v. Rice , 137 N.J. Super. 593, 601 (Law Div. 1975), aff'd o.b. 148 N.J. Super. 145 (App. Div. 1977). The surety is bound by the terms of its contract. As stated in Rice:

The recognizance of bail constitutes a contract, and where executed by a surety amounts to a contract between that surety and the State. State v. Gonzalez , 69 N.J. Super. 283, 291 (App. Div. 1961); 8 Am. Jur. 2d, Bail & Recognizance , § 59. As such, the traditional rules of contract law are applicable. The recognizance must be construed according to its express terms. The plain meaning may not be modified where no ambiguity exists. 8 Am. Jur. 2d, Bail & Recognizance , § 59; 8 C.J.S. Bail § 62; Cf. Midland Carpet Corp. v. Franklin Assoc. Prop. , 90 N.J. Super. 42, 46 (App. Div. 1966); U.S. Pipe & Foundry Co. v. American Arbitration Ass'n , 67 N.J. Super. 384, 393 (App. Div. 1961); Commonwealth v. Hill , 180 Pa. Super. 430, 119 A.2d 572, 573 (Super. Ct. 1956). [at 600]

Moreover, this contractual obligation of the surety is consistent with our court rules. Indeed, R. 3:26-4(a) provides in pertinent part:

(a) Deposit of Bail. A person admitted to bail shall, together with his sureties, sign and execute a recognizance before the person authorized to take bail or, if the defendant is in custody, the person in charge of the place of confinement. The recognizance shall contain the terms set forth in R. 1:13-3(b) and shall be conditioned

[167 NJSuper Page 423]

upon his appearance at all stages of the proceedings until final determination of the matter , unless otherwise ordered by the court. [Emphasis supplied]

Midland argues that its obligation was terminated at the time defendant was remanded to the county jail and was unable to post the additional $15,000 bail. In support of its contention Midland cites State v. Gonzalez , 69 N.J. Super. 283 (App. Div. 1961), where this court stated:

The general rule is that where, after giving bail, the prisoner is re-arrested on the same charge or for the same offense, the sureties are discharged, since the only consideration of the undertaking accruing to the sureties is the custody of the principal. Hence, when this consideration fails their liability ceases. 8 C.J.S. Bail § 77, p. 150. See also 6 Am. Jur., Bail and Recognizance , § 183, p. 137. Accordingly, when the bail is released by the re-arrest, nothing short of a new obligation will bind the sureties and, although the principal is subsequently released, the liability of the sureties is not revived. [at 288]

However, the court also stated that this rule of exoneration is inapplicable where "the State has taken only temporary custody expiring before the appearance date. The rationale of the distinction between the two situations is that in the latter situation the surety (absent special circumstances which are not present here) suffers no demonstrable prejudice by the temporary detention." Id. at 289. While the temporary period in Gonzalez was four days, we see no basis for distinguishing it from this case. In both instances, the surety suffered no prejudice and the principal was released prior to the appearance date. At no time did Midland formally surrender Brown. As was stated in Gonzalez:

Furthermore, Brown's temporary incarceration due to his inability to raise the additional bail at that time cannot be

[167 NJSuper Page 424]

construed as a "final determination of the matter." Consistent with R. 3:26-4(a) and the aforementioned quoted section of the recognizance, it was stated in State v. Rice, supra:

This jurisdiction has, in the past, demonstrated a tendency to hold a cognizor to his obligation until all likelihood of further prosecution has passed. * * * [137 N.J. Super. at 601; footnote omitted]

Defendant never moved to terminate its obligation. It had the option of returning Brown to custody after he deposited the additional bail, but did not. Indeed, it would appear from the record that Midland had no knowledge of defendant's remand to the county jail and his subsequent release. This is not only confirmed by its attorney's admission during the argument on the motion but also by Midland's failure to move for exoneration during the time Brown remained in jail. As noted in 8 C.J.S. Bail § 77 at 213, even when the State has taken custody of the principal, exoneration is not automatic.

See also, State v. Gonzalez, supra , 69 N.J. Super. at 289.

In our view, the better policy is to hold the surety to its obligation until the final determination is rendered unless the court discharges the obligation at an earlier point in the proceedings. In the event the surety has reason to request exoneration "prior to final determination of the cause," it must do so by formal motion. Obviously, the ultimate decision on such a request is within the discretion of the court. In the instant case, we hold that the surety was not automatically discharged by the temporary incarceration of the principal.


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