Case ID: us-ct-cl_7/html/0421-01.html
Source: Caselaw Access Project
Author: {"author": "LorinGt, J., Nott, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Abraham Morrell v. The United States.
    
      On the Proofs.
    
    
      The United States assume to a certain extent the ~bonds of the republic of Texas. A ■n umber belonging to the claimant, and payable to his order, are lost or stolen 
      
      without indorsement. Eight of than are presented to the Treasury, hut being disputed by the claimant, and not properly indorsed, were rejected. Subsequently three of them are paid by mistake. The claimant now brings his action upon them. Certain other Texan bonds are paid by the Government in paper money. The claimant, before payment and during the adjustment of his account, claims payment in gold of the Comptroller. Be is told that the Secretary of the Treasury alone can decide the question. At the time of payment he re-asserts his right to be paid in coin; but not till after payment does he address the Secretary. Be also gives a release under seal which is deposited in the Treasury before payment.
    
    I. An action may l)o maintained against tlie United States ui>on bonds of the Republic of Texas (assumed in part'by the United States) which have been lost or stolen before indorsement and have been paid by the Treasury through mistake without the indorsement of the payee.
    II. Upon the question whether a party who accepts paper money at the Treasury in payment of bonds of the Republic of Texas which should be paid in gold can afterward maintain an action for the difference, the court is equally divided.
    
      Mr. T. J. D. Fuller for the claimant:
    Tlie foundation of this suit rests upon an INDEBTEDNESS of the United States to the plaintiff'.
    It is not a claim against the United States, in the common or ordinary acceptation of the term claim. The plaintiff seeks the recovery of a portion of the “ public debt,” or “ funded debt,” as it is "generally termed, due and owing to him. It was originally a portion of the public funded debt of the republic of Texas, and for the payment of which its sources of revenue were specially pledged, when the Bepublic of Texas became merged in that of tbe United States, with its army, navy, and all its sources of revenue, and its debt was assumed by the United States; the public debt of Texas did not thereby lose its national character, but became a part of the public debt of the United States. Its debt, like its territory, became incorporated with that of the United States, and now stands upon the same footing.
    It is an ascertained liquidated debt, of the highest possible character known to the law.
    It imports the verity of a judgment, and possesses those attributes that are inherent in that class of obligations called i£ sacred,” for the payment of which the national faith and national honor have been pledged, down to as late a period as the act of Congress approved March 18, 1869, entitled “ An act to strengthen the public credit.”
    The opinion of the First Comptroller is, that the claimant is a public creditor, and on that ground recommended and reported his debt should be paid in coin, or its equivalent; The Secretary of the Treasury overruled the Comptroller.
    The cause of action rests upon two items : the bonds due to plaintiff and unpaid, and the difference between gold and currency in the payment of bonds admitted to be duet-lie plaintiff and paid to him April 29,1870.
    Of the bonds paid, that the plaintiff was the holder and entitled to the contents was an admitted fact. The establishment of the debt and the liqndation of it are distinct and divisible questions.
    Our xiosition is, the plaintiff was a public creditor, and his ■debt a public debt. From these two propositions it follows he should be paid in gold or its equivalent, for that is the contract.
    In the settlement made April 29, 1870, the three bonds, Nos. 9,13, and 1C, were included in the first computation. Upon an examination of all the settlements made (over one thousand) with Texas creditors, it was discovered that these three bonds had been paid by mistake, and after the caveat of the claimant, had been filed in the Treasury, in 185G, to the executors of Lee, of Baltimore.
    Because they had been paid, (without reference to whom they were paid,) they were stricken from the settlement, and marked upon the schedule as “ redeemedP
    
    To obtain the contents of these three bonds, and interest for ten years, is one part of the object of this suit.
    The plaintiff had been guilty of no laches; he had done everything which a vigilant public creditor could do. He had filed in the Treasury, seasonably, evidence of his debt, together with his release, and acceptance of the conditions imposed. By an oversight, three of the bonds were paid to a person not entitled to receive them, and manifestly, when it was not the intention of the United States to pay, upon a forged indorsement of the plaintiff’s name upon the bonds.
    Payment by the United States to a wrong person is no payment, or discharge, of the debt; no more than payment by the maker of a note upon the forged indorsement is a payment of tbe note.' (See Chitty on Bills, p. 149, note k; Salem Bank v.. Gloucester Bank, 17 Mass., p. 1.)
    The fact is clearly established that the plaintiff’s name was. forged upon the bonds, and that they had previously been-stolen from him.
    It is also established that the first knowledge the plaintiff' had of the existence of these three bonds being in the Treasury was communicated to him by the defendants in April, 1870.
    At this time was a presentment of the bonds, and a right of action accrued after demand and refusal of payment.
    The United States pay at its Treasury upon presentment and demand of payment. No cause of action accrues until such presentment and demand are made. (Boquel v. Curtis, 1 Sumner’s Rep., p. 478; Lee v. Cajnn, 2 Or. 0. 0., p. 112.)
    
      Mr. Alexander Johnston (with whom was the Assistant Attorney-General) for the defendants:
    This petitioner alleges that, on or about February 5, 1840, there was delivered to him by the authorities of the State of' Texas, of which he was a creditor, twenty-five bonds, ($500 each,) payable in gold and silver coin, with interest in ten jmars from date, upon presentation, to the order of the petitioner, and not otherwise.
    Further, that the United States, having subsequently agreed to pay these bonds according to their tenor, have neglected and refused to pay in any part, three of these bonds; and on April 29,1870, paid fourteen other of these bonds in lawful currency of the United States, upon which payment he claims as the difference between gold and currency at the rates current on the day of that payment, the sum of $1,617.30, but whether-in coin or currency, he does not set forth.
    He further claims the'whole sum due on the three other bonds, which, as he alleges, the United States had paid to another-person, upon a forged indorsement.
    To this claim the defense is as follows :
    First, as to the bonds paid, (in currency.)
    I. if, by their terms, said bonds were originally payable in gold and silver coin, still, they were bonds for the payment of money, lawful money, and were thus payable in whatever was.. lawful money at the time of payment. {The Gase of Mixed Money, Davis’s (Irish) Reports, p. 48; Haw v. Marsteller, 2 ('raneb, p. 10 ; Bacon’s Abr., Tender, &c., B 2, p. 317 ; Wood v. Bullens, 0 Allen, (Mass.) p. 516; Hastings v. Johnson, 2 Nevada, p. 190; Buchegger v. Shultz, 13 Michigan, p. 420; Henderson v. McPihe, 35 Missouri, p. 259; Rhodes v. Bronson, 34 New York; Shollenberger v. Brinton, and other cases, 52 Pennsylvania,' pp. 41,83,105; 16 Iowa, p. 243; 38 Missouri, pp. 458,138; Higgins v. Bear River, &c., 27 California, p. 153.)
    Accordingly the obligation of these bonds was fulfilled by the payment thereof in any currency, at the time of payment, lawful in the United States.
    It might be otherwise if existing law required them to be paid in a particular description of money, as, for instance, duties on imports are payable only in coin. But there is no such provision of law.
    If. The claimant is estopped by his own action.
    
      (a.) The Treasury Department tendered to the claimant Uidted States Treasury notes in payment thereof; and as thus tendered the claimant accepted the same. This constitutes full payment and satisfaction of the claim under the award.
    This point has no reference to the particular material of payment out of-which arise some other points of defense now to be stated.
    (/>.) The agent of the United States in this transaction was instructed by his principal (in the provisions of the act of February 25,1862) to pay these' notes as lawful money, at their value as fixed by law, in full payment of the sum due the claimant, and not otherwise; and of these instructions the claimant had notice. With this notice he received payment in such notes, and must be held to have received them as they were offered.
    (c.) The books show no ease where the creditor, objecting to the kind of money offered, yet receiving it, is thereafterward allowed to prove its depreciated value somewhere in comparison with some other hind, even of money, in maintenance of an action for the sum which such a calculation would show unpaid.
    III. The claimant is not in proper manner seeking his remedy.
    In the view most favorable to this claim, the case is that of a creditor receiving for and on account of Ms credit the negotiable promissory notes of Ms debtor, and thereafter bringing-action for the original debt as still unpaid. To maintain his action he must show the debtor safe from all liability to pay the notes. (Kearslake v. Morgan, 5 D. and E. Term Reports, p. 513; Griffith v. Owen, 13 M. and W., p. 58; Pries v. Price, 16 ib., p. 232; Mercer v. Cheese, 5 Man. and Grang.j p. 804; Champion et al. v. Terry, 3 Brod. and Bing., p. 295; Davis v. Dodd, 4 Taunt., p. 002; Dangerfield v. Wilby, 4 Esp., p. 159; 1lawden v. Mendinábel, 10 Moore, p. 477; Keene et al. v. Dnfresne, 3 S. and R., p. 233; Miller v. Dumsden, 10 Illinois, p. 161; Holmes v. De Camp, 1 Johns., p. 34; Pintard v. Taeldngton, 10 Johns., p. 104.)
    This claim, however, far from fulfilling these requirements of the common law in like cases between private persons, falls within the rule laid down in Alexander v. Byers, (19 Indiana, p. 301,) where the defendant was allowed to plead that the plaintiff to whom money unauthorized, though actually current, was paid, passed the same at par to other persons who returned it to the defendant, and that the latter redeemed the same.
    In connection with this part of the argument, it is respectfully submitted that the Court of Claims cannot, either directly or indirectly, entertain jurisdiction of an action of assumpsit brought on any of these Treasury notes against the United States as promisor. Such jurisdiction would give them power to compel the United States to resume specie payments forthwith.
    
    IY. Measures of damages.
    The obligation of the claimant to return the promissory notes to the promisor in order to maintain his action is an essential part of the law of this case, and is to be regarded in the assessment of damages, if anywhere. The bonds were for the payment of a sum of money; even if of a particular description, still of money; and for the non-payment of money the only remedy known to the law is a judgment that the same be now paid. Consequently, if, in this case, the claimant was entitled to payment of money of a particular 'description, and nonimyment be proved, the judgment of this court must be that he now recover the sum named and described in the bonds. Thus upon a return of the notes ho might, in this' view of the law, be entitled to a judgment for the amount due upon the bond in gold. If now the actual return of the notes and their tender here in court can be dispensed with as a formality, still their value as of the time they should be returned is to be accounted for, and the judgment is to be for the difference between gold and sucb notes as of tbe date of judgment.
    Second. As to botb claims.
    V. If tbe petitioner seeks to obtain a judgment for gold and silver coin, then this is to be said against tbe rendering of sucb a. judgment, namely: '
    
    This petitioner seeks to obtain from this court a judgment with debt or damage to be collected in a particular description of money. Thus to express debt or damage is, in general, not only not practiced by tbe courts, but also is unauthorized by law, and even forbidden by statute. (Act of April 2,1792, section 20,1 Stat. L., p. 250.)
    That provision of ancient law in tbe United States requires all accounts and all judgments to be expressed in simply “ tbe money of account of the United States;” that is, “in dollars or units” and parts of a dollar, without additional words of description. It has no reference to actual coin or coinage, for it mentions “mills,” that never were coined; and it fails to mention any coin above dollars; and thus if it were a provision relating to actual coin, it would exclude our gold coins from being legal tender. (See Wood v. Ballons, 6 Allen, p. 51G; Hastings v. Johnson, 2 Nevada, p. 197 ; Henderson v. McBike, 35 Missouri, X>. 259; Bodes v. Bronson, 3-i New York, p. 652; 38 Missouri, p. 200; Higgins v. Bear Biver, &c., 27 California, p. 153.)
    VI. If it seeks to obtain a judgment for a sum in Treasury notes, which by estimation of this court may be found to be the equivalent of another certain sum iu gold and silver coin, then it is attempting to estimate Treasury notes at another value than that fixed ui>on them by law, which this court has no authority to do. (See act of February 25, 1862,12 Stat. L., p. 315; see, also, Butler w Honcitz, 7 Wall., 238.)
    VII. Another proposition in defense,- and one of the last imX)ortance is, that this court has no jurisdiction to enforce the X>ayment of any portion of the public debt, (that term being used in its strict sense.) In the word “ contract,” as used in the act of February 24, 1855, and in that of March 3, 1863, it was not intended by Congress to include contracts such as are expressed in the terms of what are known in the statutes as bonds of tbe United States, or what are designated as United States Treasury notes. Nor does the expression “ act of Cong'ress” in those statutes refer to acts of Congress which authorize the creation of portions of the public debt.
    It will hardly be contended that, iu a suit brought in a district or circuit court by the United States ag'ainst a private individual, such defendant could file in set-off one of such bonds or notes, or one of the bonds now in question j and the reason is, that the nation, from the beginning, has never intended by the issuing of such bonds or notes, or by assuming the obligations of any other bonds, to make itself legally liable, as a private debtor is liable, to judicial proceedings in enforcement of their payment. Nor was the essential character of the United States, as a debtor under such evidences of the public debt, altered by the statutes which have established and fixed the jurisdiction of this court.
   LorinGt, J.,

delivered the opinion of the court:

The petitioner, prior to 1840, was a creditor of the ¡State of Texas, and held twenty-five bonds, $500 each, payable with interest at 10 per cent, in gold or silver. The interest was payable 15th of June and December, and the principal was redeemable at the pleasure of the Government after the 30th of June, 1840. By Joint Resolution MaroJilst, 1845, (5 Stat. L., p. 797,) Congress consented to the erection of Texas into a State for admission into the Union; and, by section 2, the State of Texas, when admitted, after ceding to the United States all property and means pertaining to public defense, was to retain all its other property and dues to pay its debts and liabilities, which in no event were to become a charge on the United States.

By Act December 20th, 1845, (9 Stat. L., p. 1,) the laws of the United States were extended over Texas.

By act of September 9, 1850, fixing the boundaries of the State of Texas, and proposing a cession of territory by her to the United States, they proposed to pay Texas ten millions of dollars, of which only five millions were to be paid until the creditors of Texas holding her bonds, &e., should file releases of all claims against the United States.

Texas assented to the proposal. By act of February 28,1855, entitled “ An act to provide for the payment of such creditors of the late republic of Texas as are comprehended in the act of Congress, September 9,1850,” it was enacted that, in lieu of the five millions of dollars payable to Texas by act of September 9,1830, there should be paid to the creditors of Texas who held such bonds seven millions seven hundred and fifty thousand dollars, to be apportioned among them pro rata.

That about the year 18-13 the said bonds of the petitioner were lost or stolen from his possession, and he alleges he filed a caveat with the Treasurer of the United States and the treasurer of Texas. There is no legal evidence that the caveat was filed in the Treasury of the United States. Mr. Jones, chief clerk in the Treasury, was told by a former Auditor, Mr. ■Whittlesey, that the caveat had been filed, but it has been searched for and cannot be found.

In June, 1850, an account between the United States and Edward 0. Boynton, as the holder of eight of the bonds payaable to Mr. Morrell, was adjusted at the Treasury, and the amount due on these bonds was $0,150.38 ; but payment was refused for want of evidence of the indorsement, which was “Abram Morrell, per (pro) Charles L. Carless and P. JSdmundsP The money was placed in the hands of a third person to await proof of ownership, Mr. Morrell having pronounced the indorsement a forgery.

In 1869 and 1870 Mr. Morrell applied at the Treasury for the settlement of his bonds, lost and unpreseuted, and on examination it was found that three of the bonds, viz, Nos. 9, 18, and 16, had been paid in 1S56 to the executors of Josiah Lee.

An account was then settled with Mr. Morrell, in which the three bonds specified, viz, Nos. 9,13, and 16, were not included; and $10,782.87, as the pro-rata dividend on $14,022.85, was paid to Mr. Morrell in currency on the 29th of April, 1870.

Before the said payment was made, ,Mr. Morrell delivered to the Treasury Department a release under seal. It was then •contemplated by the parties that all the bonds specified in said release were to be paid pro rata.

Previous to the examination and settlement in the month of February, 1870, Mr. Morrell applied by letter to tbe Secretary of the Treasury for the payment of his bonds. And during the adjustment of his account he claimed of the Comptroller, and of his chief clerk, who transacted the business with him at tbe Treasury, that the bonds should be paid in gold or silver; and be was told by them that that question must be decided by the Secretary; and after Mr. Morrell learned that he was to be paid in currency, be earnestly asserted that be was entitled to gold. After the payment of Mr. Morrell in currency, as above stated, he wrote a letter to the Secretary, dated May 9,1870, in which he claimed the difference between coin and currency upon the payment made to him April 29,1870. The Secretary rejected the claim.

Mr. Morrell now claims—

1st. The difference between gold or silver and currency on $10,782.87 on April 29, 1870, when the difference was 115§- to HO J-

2d. The amount of the three bonds, Nos. 9,-13,16, with interest from June 15,1840, in gold or silver coin.

And on the facts stated the court find that the claimant is entitled to recover from the United States, in gold or silver coin, the sum of $3,199.16, being the amount due him on the three bonds, Nos. 9,13, and 16, above specified, copies of which are hereto annexed, and judgment is to be rendered therefor.

And the court find, as a conclusion of law, that the United States, by their omission and refusal at the settlement made April 29,1870, to pay said bonds specified as Nos. 9,13, and 16, discharged and excepted them from said release.

As to the claim for the difference between gold or silver and currency on the amount paid April 29, 1870, the four judges who heard the case, divided ; and as to that claim the petition is dismissed.

Nott, J.,

concurring:

This case, I think, is not ruled by the decision in Tyers, (5 O.. ills. B., p. 509,) for the following reasons:

Here there was no protest before payment addressed to the proper officer of the Government; the payment was received by the party in person, and not by an agent acting beyond the scope of his authority; there was no receipt given at the time of payment reserving the claim for payment in gold; and there was a release given which is supported by the payment made in the kind of money which the claimant consented to receive.

As to the claimant’s right to recover for the three bonds which have not been paid to him, I concur with the opinion, of the court.