The opinion of the court was delivered by: MARIS
I am persuaded, upon consideration of the circumstances, that the petition should be granted. Two questions which were not presented when the original sentence was imposed have now been raised and must, therefore, be considered and decided.
The first of these questions is whether the court has power to impose as a condition of probation restitution to the defendant's surety of sums which it has paid in making good the defendant's defalcations. The power of federal courts to suspend the execution of sentence and admit a defendant to probation is conferred by the federal Probation Act.
It will be seen from the last paragraph of section 1 of the act, 18 U.S.C.A. § 724, that when restitution is made a condition of probation it may only be ordered to be made to an "aggrieved party" and "for actual damages or loss caused by the offense for which conviction was had." Although the first paragraph of the section authorizes the courts to place defendants on probation "upon such terms and conditions as they may deem best," I think it clear that this general language is limited by the later specific provision so far as restitution is concerned.
The question, therefore, resolves itself into whether a surety is an "aggrieved party" within the meaning of the act, so that an order of restitution may properly be made in its favor.
I think that a surety upon a fidelity bond given by a defendant to protect against his criminal acts is in the same position. While it may well be that the surety has voluntarily for a consideration contracted to answer for the defendant's criminal default, it is nevertheless entitled to assume that its principal will not transgress the law and that even if he does he will make good his default pursuant to his obligation as principal in the bond. If he fails in both respects his surety is unquestionably "aggrieved" since it is required to make good his default. It follows that it is an "aggrieved party" within the meaning of the Probation Act since its financial loss is caused directly by the offense for which conviction was had. Consequently the court has power under the Probation Act to require the defendant as a condition of probation to make restitution to the surety for the latter's loss. Whether this restitution should be made directly to the surety or through the office of the chief probation officer of this court is a matter for the court's discretion. In the present case I direct that restitution be made by the defendant directly to the surety in such periodic installments as she is reasonably able to make, the defendant reporting to the chief probation officer the amounts paid from time to time on account of restitution. If at any time it shall appear that the defendant has failed to make such payments on account of restitution as she is reasonably able to make, the chief probation officer will at once report the facts to me.
The second question for my consideration relates to the amount of the restitution which may be required. It is said that the court does not have the power to order restitution in an amount greater than the amount involved in the particular offense for which the defendant has been indicted.Whereas great latitude is given by the act to the judge to fix such terms and conditions as to him may seem best,
his right to order restitution may only be "for actual damages or loss caused by the offense for which conviction was had." It seems to me that just as a court which is given the power to impose a fine may do so only within the limits fixed by the penal statute, so the order to make restitution must be kept within the limits set in the phrase just quoted.
In the present case the offense charged in the indictment to which the defendant pleaded guilty and "for which conviction was had" was the embezzlement and conversion of $203.99. A conviction for embezzlement and conversion of a greater sum could not have been had on this indictment. I conclude, therefore, that the condition for restitution in this case must be modified so as to relate to the embezzlement of $203.99 only, credit being given for the partial restitutional heretofore made.
My conclusion is supported by the decision of the Supreme Court of New York in People v. Funk, 117 Misc. 778, 193 N.Y.S. 202. In that case the defendant was convicted of stealing $3.30 from her employer. It was computed by the employer that the defendant had actually stolen about $1,500.00 over a period of years. The New York statute
permits the inclusion of a restitution order as a condition of probation. It reads "to make restitution or reparation to the aggrieved parties in an amount to be fixed by the court, not to exceed the actual losses or damages caused by his offense." The defendant promised to make restitution of $1,500 if she were not given a prison sentence, and the court placed her on probation on that condition. After having made a few payments she requested reconsideration of the terms of the probation. It was held that the court had no power to order restitution for more than $3.80. The court said "I take it that the words 'his offense' mean only the offense for which the defendant is on trial before the court, and cannot be stretched to cover similar offenses committed by the defendant against the same party or various parties."
An order will be entered extending the defendant's probation for a period of three years from December 30, 1939, upon condition that she make restitution directly to the National Surety Corporation of the sum of $49.49 in such ...