Case ID: us-ct-cl_17/html/0351-01.html
Source: Caselaw Access Project
Author: {"author": "Richardson, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William H. Adams v. The District of Columbia.
    
      On the Proofs.
    
    
      A contractor receives from theboard of public worlcs certificates of indebtedness instead of cash. Re hypothecates them with one Blumenburg, who fraudulently disposes of them. The transfer to B. is by delivery and indorsement in blanh. The contractor gives notice to the treasurer of the board, but neglects to notify the board of audit, or to prefer a claim for the indebtedness. The holders present the certificates, and the board audits them and they are subsequently paid.
    
    I.The certificates of indebtedness issued by the former hoard of public works were mere acknowledgments of indebtedness, and were not negotiable so as to enable the holder to bring an action at law in his own name, or to prevent the maker from setting up any defense against the original payee which occurred before notice of assignment.
    II.The certificates were assignable so as to transfer all the property of the payee therein to the assignee, who may bring his action at law to his own use in the name of the payee, or may maintain a bill in equity thereon in his o svn name.
    III. Where the originalpayee indorsed such certificates in blank and pledged them for money borrowed, and the pledgee fraudulently, as against the assignor, transferred them to another, and the District paid them without notice of the equities of the payee, it is not bound to pay again.
    IV. When one sets afloat upon the business community a chose in action, payable in terms to himself, with his signature indorsed thereon in blank, and it drifts beyond his reach and is paid to the holder by the maker without knowledge of equities existing between the payee and the holder, he has no cause of action against the maker.
    V. The nature and functions of the board of audit and its relations to the District of Columbia examined and stated.
    
      The Reporters’ statement of the ease:
    The following are the facts of this case as found by the court:
    I. The claimant had a contract with the board of public works of the District of Columbia to do certain work and furnish the materials for the building of a sewer for said District. For work done and materials furnished under said contract the board of public works, according to its usage with contractors, caused to be issued and delivered to him from time to time certificates of accounts allowed by the auditor of the board, of which the following are copies with the indorsements as they now appear:
    “No. 2955.] Oeeice oe Auditor
    “Board oe Public Works,
    “ Washington, D. G., September 16th, 1873.
    “I hereby certify that I have this day audited and allowed the account of Wm. H. Adams for sewer on R. I. ave. bet. R st. N. & 12th st. west, amounting to fifteen hundred and seventy-six dollars.
    “ $1,570.
    “ J. C. Lay, Auditor.
    
    [Indorsed. ]
    “ WASHINGTON, D. 0., -, 187-.
    “ Received from James A. Magruder, treasurer of the board of public works of the District of Columbia,-.— dollars, for
    “Wm. EL Adams.
    [On the face is stamped. ] v
    “ Cancelled by board of public works.
    “ No. 3442.] Oeeice oe Auditor
    “Boaud oe Public Works,
    “ Washington, D. G., October 16, 1873.
    “ I hereby certify that I have this day audited and allowed the account of Wm. H. Adams for sewer on R. I. ave., from R to 12th st. N. W., amounting to two thousand dollars.
    “ $2,000.
    “ J. O. Lay, Auditor.
    
    [Indorsed. ]
    “ Washington, D. C.,-, 187-.
    “Received from James A. Magruder, treasurer of the board of public works of the District of Columbia,-dollars foi'
    “Wm. H. Adams.
    [Across the face is written.]
    “This certificate will be paid on or before the 15 Nov., 1873, sewer certificates bearing eight per cent, interest.
    “James A. Magruder,
    
      “Treas. Board of Public Worlcs.
    
    [On the face is stamped.]
    “Cancelled by board of public works.
    
      “No. 3443.] • Ofeioe of- Auditor
    “Board of Public Works,
    “ Washington, B. 0., October 16, 1873.
    “I hereby certify that I have this day audited and allowed the account of Wm. H. Adams for sewer on R. I. ave., from R to 12th st. N. W., amounting to three hundred and twenty dollars.
    “$320.
    “ J. O. Lay, Auditor.
    
    [Indorsed.]
    “Washington, D. 0.,-, 187-.
    “Received from James A. Magruder, treasurer of the board of public works of the District of Columbia, -dollars, for
    “WM. B. Adams.
    [On the face is stamped.]
    “ Cancelled by board of public works.
    “No. 3441.] Office of Auditor
    “Board of Public Works,
    “ Washington, B. G., October 16, 1873.
    “I hereby certify that I have this day audited and allowed the account of Wm. B. Adams for sewer on R. I. ave., from R to 12th N. W., amounting to one thousand dollars.
    “$1,000.
    “ J. C. Lay, Auditor,
    
    [Indorsed.]
    “Received from James A. .Magruder, treasurer of the board of public works of the District of Columbia,-dollars, for
    “Wm. B. Adams.
    [On the face is stanvped.]
    “ Cancelled by board of audit, Oct. 7, 1874.
    “No. 4177.] Office of Auditor
    “Board of Public Works,
    “ Washington, B. O., Becember 1st, 1873.
    “ I hereby certify that I have this day audited and allowed the account of Wm. B. Adams, for work on B s., from 6th to 14th sts. west, amounting to five thousand dollars.
    “$5,000.
    “J. C. Lay. Auditor.
    
    
      [Indorsed in print.]
    “ For value received, the within debt is assigned and transferred to N. A. Cowdrey, who is authorized to collect the same to his own use.
    “Wi. H. Adams.
    [On the face is stamped.]
    “Cancelled by the board of audit, Oct. 7, 1874.”
    The indorsements of the receipts in blank on Nos. 2955,3442, 3443, and 3441 were printed thereon before issue of the certificates.
    The indorsement of the name of William H. Adams on each of the five certificates was written by him before or at the time of the transfer from him as hereinafter set forth.
    The indorsement of transfer on No. 4177 was printed over the name of Adams after the issue of the certificate to him and after the transfer of the same by him, but before its redemption by the board of audit, and without his knowledge.
    The cancellation stamped on the face of each certificate was placed there when the certificate was redeemed and paid. The writing on the face of No. 3242 was made at the time of its date by the treasurer by whom it was signed.
    II. During the progress of his work for the District the claimant' received nearly $600,000 worth (face value) of such certificates in various amounts. The board of public works not being-in funds to pay the same when issued or when demanded, the claimant was accustomed to sell or hypothecate them to raise money to carry on his work and to pay his creditors. S.ome he sold outright and some he borrowed money upon. Whenever he did either lie indorsed them in blank, in the manner in which the certificates herein sued on are indorsed by him; and he transferred them, thus indorsed, by delivery.
    III. On the 17th of November, 1873, the claimant borrowed of Rudolph Blumenburg '$1,000, and on the 20th of said month $500 more, for which he gave his note at ninety days, due February 23, 1874, and secured the same by deposit of said certificates Nos. 2955, 3441, and 3443 as collateral.
    On the 8th of December, 1873, claimant borrowed of said Blumenburg $2,000, for which he gave his note at thirty days, due January 10, 1874, and secured the same by deposit of said certificate No. 4177 as collateral.
    
      Upon delivery of said certificates to Blutnenburg the claimant indorsed each one in blank by writing his name across the back in like manner as he had been accustomed to indorse like certificates when sold by him.
    The following is the form of note (in blank) given by the claimant to said Blumenburg as aforesaid:
    “$ .] . Washington, D. C.,- — , 187-.
    “-, promise to pay to-or order - dollars, without defalcation, for value received, with interest from date until paid, at the rate of — per cent, per annum, payable-, having deposited with .said-as collateral security-, and authorized said - -his heirs or assigns, to sell the same or any part thereof, at public or private sale, on the non-performance of this promise, without notice. u__n
    
    IV. On or about March 24,1874, the claimant delivered to J. A. Magruder, treasurer of the board of public works, a written paper of which the following is a copy:
    “ Washington, D. 0., March 24, ’74.
    “I, William H. Adams, of the city of Washington, District of Columbia, do hereby enter this my solemn protest against the payment of the following securities of the board of public works of the District of Columbia, the same being my property, and fraudulently disposed of by one Budolph Blumenburg, in whose hands they had been placed as security for certain loans, viz:
    Auditor’s certificates numbered 3443.. $320
    Do. 2955. 1,576
    Do. 3442. 2,000
    Do. 4177..„.. 5,000
    Sewer bonds numbered 2057 to 2072, for $500 each.... 8,000
    Do. bonds numbered 2037 to 2040, for 500 each. 2,000
    $18,896
    “Witness my hand and seal the day and year first above written.
    “Wm, H. Adams.
    “ Witness:
    “J. J. Jones.”
    This paper is not found among the archives of the District, or of the board of public works, or of the board of audit, and it does not appear what Mr. Magruder did with it.
    
      The claimant never brought suit in equity in the supreme court'of the District of Columbia, or elsewhere, against any of the parties holding said certificates, either to enjoin the payment or redemption of the certificates, or to establish his title or right thereto.
    An accountant of the board of audit made up a list of what he called “contested certificates,” and that list was used by the board, but it does not appear whether or not the certificates now in suit were noted thereon, or when it was made up.
    Said certificates were redeemed as follows:
    No. 2955, dated September 16, 1873, by the treasurer of the board of public works November 30,1873.
    No. 3442, dated October 16, 1873, by the treasurer of the board of public works October 30, 1873.
    No. 3443, dated October 16, 1873, by the treasurer of the board of public works November 30, 1873.
    By the method used by the treasurer in keeping his accounts, all payments, whether in cash, bonds, or other securities, were entered on his cash book and treated as cash. To whom the above certificates were paid does not appear, but they were not paid to the claimant.
    No. 3441, dated October 16,1873, was presented to the board of audit by Frank D. Orme, July 16, 1874, and was by that board audited and their certificate was issued in exchange therefor, and has been converted into bonds under the act authorizing their issue.
    No. 4177, dated December 1,1873, was presented to the board of audit by N. A. Cowdrey, July 16,1874, and was by that board audited, and their certificates were issued in exchange therefor, and they have been converted into bonds under the act authorizing their issue.
    Neither said Blumenburg nor any assignee of his has accounted with the claimant for the proceeds of said certificates transferred to him, nor returned the notes of said claimant for which the certificates were transferred as collateral security.
    
      Mr. V. B. Bdioards, Mr. Montgomery Blair, and Mr. JEppa Hunton for the claimant:
    There is no commercial character attached to these certificates, nor could the District of Columbia have issued any of a commercial character, there being no law authorizing it. (Police Jury v. Britton, 15 Wall., 566.)
    
      Tbe exchanging of one security for another is no payment.
    The District of Columbia could claim no more right or title to the certificates from Blumenburg than Blumenburg himself had. (55 Barber, 59; 24 Indiana, 62; Norton x. Bose, 2 Wash., 233.)
    The District of Columbia is liable to claimant without notice. (101 Otto, 573; 5 Ohio, 202; Story on Bailments, § 273.)
    The District of Columbia had notice of the contest about the ownership of the certificates and is liable. (Goiodry v. Vandenberg, 101U. S. B,, 572,102, U. S. R., 545; 16 O. Ols. R., 593; Gone v. Baldwin, 12 Pick., 546; Mauray x. Lytner, 2 Johns. R., 442, 479; Daniel on Negotiable Instruments, § 789; Mathews v. Poythsess, 4 Geo., 287; Gro ff x. Gastleman, 5 Ran., 207; Hart, i&c., x. Deivey, &e., 2 Paige, 202; Gone x. Baldwin, 12 Pick., 546; Story on Bailments.)
    The liability of the District of Columbia arose by virtue of the contract, and not the certificates of the auditor of the board of public works, and no transfer of the certificate passed any interest to the transferee. [Simno v. Bank, 7 Rob., N. Y., 479.)
    A chose in action cannot be sold until after notice, or a bill in equity filed. (55 Barber, N. Y., 59; 52 Penn. St., 498;' 45 Barber, N. Y., 560.)
    Within the doctrine of the Supreme Court in Oowdrey x. Vandenberg, 101 U. S. R., 572, the District is liable. Murray x. Lytburne, 2 Jonhs. R., 452; Lovingston x. Bean, 2 Johns. R., 479; Groff x. Gastleman, 5 Ran., 207; Gone v.- Baldwin, 12 Pick., 546; Daniel’s Negotiable Instruments, § 789.
    These authorities and others that might be cited establish the doctrine that ho who acquires possession of a chose in action for value with notice of an equity in another holds it subject to that equity. This doctrine was very strongly announced by this court in the case of 16 C. Ols. R., 593; .102 U. S. R., 545.
    
      Mr. J. G. Fay and Mr. Assistant Attorney-General Simons for the defendant:
    The case is apparently similar to that of the Neuchatel Gonypany (16. C. Gis. R., 593), and the only proper question for argument is as to the existence of a valid distinction in favor of this one.
    Possession, as this court has held, would be prima facie evidence of title, but Orine and Cowdrey bad, in addition, more or less formal evidence of assignment. Presumptively tbey were bona fide holders, as there was nothing in the form of indorsement to indicate defect in the title. The burden was on the claimant, then, to show why they should suffer rather than himself from the unlimited power with which he had apparently clothed Blumenburg, and this involves, according to the decisions, the proof of nothing less than bad faith. (Scybel v. National Currency Bank, 54 N. Y., 288, and cases there cited.)
    Ordinarily such questions have arisen in connection with the ■title of a purchaser, but here we submit the case is more favorable to the defense, in that it is the action of a debtor in paying his debt which is attacked.
    Originally, at common law, a debtor would not be forced into relations with a stranger by assignment of the creditor. Exceptions as to negotiable paper and in equity were introduced, and finally the rule at law was relaxed so as to permit recognition of assignments to a limited extent. (Welch v. Mancleville, 1 Wheat., 233.) The debtor may be compelled to take notice of a transfer of the whole title, absolutely, but we submit that he is not obliged to take notice of the various dispositions short of that which the creditor may see fit to make of the debt. The reason is obvious, since it imposes on the debtor relations and obligations which he never contemplated or consented to, involving serious inconvenience and risk. (Mandeville v. Welch, 5 Wheat., 277.) It demands of him not merely the determining of the validity of the form of transfer, but in a case like this the decision at his peril of conflicting claims.
    It seems a legitimate inference from these premises that an assignment absolute in form cannot be binding on the debtor at the option of the assignor alone, and that after notice of transfer to the debtor it should be irrevocable as affecting the . debtor’s liability to him without the debtor’s assent. It should be clearly shown, at all events, that so serious an invasion of the debtor’s rights as the contrary doctrine involves is warranted by the law.
    Assuming that a binding notice could have been given to either board under the circumstances set forth, the alleged notice was clearly ineffective. It should have been so explicit as to convict the debtor of bad faith in disregarding it. Besides specifying the particular certificates, it should have stated the circumstances of the alleged pledge with such detail as to enable the debtor to decide the question of title when the certificates should be presented. How far short of this the written and alleged verbal notices fall must be apparent. The written one amounts to nothing but a request to withhold payment from the admitted pledgee on a charge of fraudulent disposition, Avhich it was not negligent, much less in bad faith, to disregard when subsequently a formally valid assignment was presented; the verbal one is of even less value. •
   Richardson, J.,

delivered the opinion of the court:

The claimant, who had done a large amount of work for the District of Columbia, upon contracts made with the board of public works, being unable to obtain payment in cash, took . from the board at different times and for different sums numerous certificates of indebtedness, in the following form:

“ No. — .] OEEICE OP AUDITOR BOARD OP PUBLIC WORKS,
u Washington, D. G.,-, 1873.
I hereby certify that I have this day audited and allowed the account of-, for work, amounting to-dollars.
“$-.
“ J. O. Lay, Auditor.”

These certificates he was accustomed to sell in the market or to borrow money upon, according to his convenience or necessities. When either sold, or hypothecated as security for the payment of his notes for money borrowed, he invariably transferred them by delivery, with his name written across the back in blank indorsement.

Among the certificates thus received by the claimant, and so transferred by him, are the five upon which this actionis brought. Four of these, Nos. 2955, 3441, 3443, and 4177, he pledged to one Blumenburg, in November and December, 1873, as security for money borrowed on his own notes payable at a future time. As to the other, No. 4342, it does not appear to whom it was transferred, or whether it was sold or pledged, or by whom it was collected from the District, except that it was not paid to the claimant.

Three of the certificates, Nos. 2955, 3441, and 3443, were redeemed and paid by the board of public works before any controversy bad arisen in relation to them between the parties, so far as the findings disclose.

Subsequently, on the 24th of March, 1874, the claimant delivered to the treasurer of the board of public works the following written paper:

“Washing-ton, D. 0., March 24, ’74.
“I, William H. Adams, of the city of Washington, District of Columbia, do hereby enter this my solemn protest against the payment of the following securities of the board of public works of the District of Columbia, the same being my property, and fraudulently disposed of by one Budolph Blumenburg, in whose hands they had been placed as security for certain loans, viz:
Auditor’s certificates numbered 3443 . $320
Do. 2955 . 1,576
Do. 3442 . -2,000
Do. 4177 . 5,000
“Witness my hand and seal the day and year first above written.
“ War. H. Adabts.
“ Witness:
“ J. J. Jones.”

This was not filed with the board, and what became of it does not appear.

By the act of June 20, 1874, eh. 337 (1 Supplmt. B. S., 53), the board of public works was abolished, and went out of existence on that day. By the same act a board of audit was established, consisting of the First and Second Comptrollers of the Treasury of the United States, “ to examine and audit for settlement all the unfunded or floating debt of the District of Columbia and of the board of public works therein specified * *; secondly, the debt purporting tobe evidenced and ascertained by certificates of the auditor of the board of public works.” The board was required to issue to each claimant a certificate stating the amount found due and on what account. These last mentioned certificates were made exchangeable for District of Columbia 3.65 bonds, so called, authorized by the act. Notice for the presentation of claims was to be given by the board, and no claim was to be ■ audited or allowed unless presented within ninety days after the first publication of such notice. This limitation of time was twice extended, and the board was finally abolished March 14, 1876. (FenclalVs Case, 16 O. 01s. R., 118.)

On July 16, 1874, certificates Nos. 3441 and 4177 were presented. to the board of^audit; the former by Frank D. Orme and the latter by N. A. Cowdrey, were audited by the board of audit, and certificates, exchangeable for bonds provided for in the act, were issued to them respectively. The original certificate (No. 3441) presented by Orine remained indorsed by the claimant in blank. The orginal certificate (No. 4177) presented by Cowdrey had printed over the claimant’s name a formal transfer to Cowdrey for value received.

Each of the certificates (except the last, No. 4177) had a receipt in blank printed thereon when issued, and that remains not filled up.

It does not appear that the attention of the board of audit was ever called to the paper or notice given by claimant to the late treasurer of the board of public works, or that they ever knew of its existence; nor does it appear that the board was informed of any controversy about these particular certificates, although one of its accountants had at some time made some kind of a list of controverted certificates, and the board used the same, but whether the certificates now in suit were noted thereon the findings do not show. And it does not appear whether or not the claimant resisted the payment of any of said certificates by the board or appeared before it to assert any claim of his own thereto.

Neither Blumenburg nor any assignee of his has accounted with the claimant for the proceeds of said certificates nor returned the notes for which they were pledged.

Such is the case of the claimant, and he insists that the defendants are liable to him for the full value of said certificates on the ground that, under the circumstances, the holder of them had no right to collect them, and that the defendants paid them in their own wrong. Several questions of law are involved in this issue which we must determine.

The certificates of the board of public works, or of the auditor of the board, were merely acknowledgments of indebtedness to to the claimants, without a promise to pay the amount to him or his order, and were therefore not negotiable so as to-admit the holder, other than the party named therein, to bring an action at law thereon in his own name, or so as to prevent the maker from setting up any defense thereto against the original owner which accrued before notice of any assignment. And yet such choses in action are assignable so as to transfer to the assignee all the property of the assignor therein. The assignee may bring an action at law for his own use in the name of the assignor, and in some States he may so set out his interest, in his pleadings; and he could always set up his assignment in a court of equity by a bill in his own name. The cases are numerous in which the doctrine has been upheld that the maker of such certificates, or debtors in such choses in action, are justified in paying the same to assignees or may be compelled to pay to them against the objection of the original creditor where the assignment was without fraud and for value received. (Litch-field v. Smith, 17 Maine, 327; Dennis v. Twitchell, 10 Met., 180; Tally v. Freedman’s Savings Bank, &c., 93 U. S., 321, affirming same case, 1 McArthur, 522; McNeil v. Tenth National Bank, 16 N. Y., 325; Cowdrey v. Vandenburg, 101 U. S., 572; Neu-chatel Co. Case, 16 C. Cls. R., 593; Drake on Attachment, §§ 609-614.)

It is not denied that the claimant negotiated and assigned in pledge the certificates here in suit for a valuable consideration, and that he indorsed them in blank and delivered them to Blumenburg, his assignee. As was said by Mr. Justice Field in Cowdrey v. Vandenburgh (101 U. S., 576), “ the claimant could have expressed in his indorsement the purpose of the deposit •of the certificate with Blumenburg — that it was security for a specified sum of money — and thus imparted notice to all subsequent assignees that the pledgee held only a qualified interest in the claim.” This he did not do. On the contrary, he chose to put his name on the back of each certificate in blank, thus giving implied notice to any and all persons who should deal with Blumenburg, that he placed his trust in the holder of the certificate without restriction or limitation, and was satisfied to allow him the powertodeal with the blank indorsements, as such indorsements are usually dealt with in commercial and business affairs, by filling up a transfer or passing the certificate to another assignee to be filled up in like manner, or to collect payment upon the authority thereof.

Thus Blumenburg, having possession of these certificates (four of them), with claimant’s blank indorsement thereon, and having a special property therein on account of the loans he had made upon them, presented or caused to be presented, September 16 and October 16, 1873, two of them, Nos. 2955 and 3443, to the treasurer of the board of public works for redemption and payment. The treasurer paid them to the bearer, who produced and surrendered them with the claimant’s blank indorsement thereon, without objection from anybody and without notice of any controversy existing in relation thereto.

Certificate No. 3442, which was not among those pledged to Blumenburg, was paid in like manner by the treasurer October 16,1873, to the bearer, who produced and surrendered the same, with the claimant’s blank indorsement thereon, and without objection or notice of controversy. The claimant has not proted, as the finding shows, that he did not part with this certificate for full value or that he has any equitable or other claim to it in any form.

The demand of the claimant to recover payment of those three certificates after the District had paid them to the bearer with the claimant’s blank indorsement thereon and without objection has not even a shadow of right in law or equity to rest upon.

As to certificate No. 3441, which was audited and allowed ' October 16,1874, by the board of audit, to one Frank D. Orine, who was the bearer of it and who presented it with the claimant’s blank indorsement thereon, no objection to its payment seems to have been made. This was not one of those the payment of which was protested against, in the paper delivered to Magruder, the treasurer of the board of public work's, March 24, 1874; and no notice, express or implied, to the board of audit is found. So we may regard this certificate as having been paid without objection from the claimant.

As to certificate No. 4177, the claimant presents other grounds on which he seeks to charge the defendants with its payment to ■ him, qffcer they had paid it to one Cowdrey. He alleges that the printed indorsement over his name, in these words, “for value received, the within debt is assigned and transferred to N. A. Cowdrey, who is authorized to collect the same to his own use,” was placed there without his consent and fraudulently. But whether that was so or not, he does not show that the board of audit or the defendants knew or had any reason to suppose the fact so to be. He had himself led them to regard the matter otherwise, for he had put the certificate in the hands of his ebosen assignee with the indorsement of his name thereon. The words printed above his signature had all the appearance of being authorized by him, and the assignment was certainly so regular in form, and so proper to be found over the signature, that the board of audit had no reason to suspect any fraud. As was further said by Mr. Justice Field in Cowdrey v. Yandenburg, above cited, the claimant having indorsed his name ■ in blank, “ virtually authorized the holder to transfer or dispose of the certificate by writing an absolute assignment over his signature.”

"When one sets afloat upon the business community a chose in action, payable to him, with his signature indorsed in blank on the back of it as though he had parted with his interest therein, and thus gives implied authority to the holder to fill up a transfer, he cannot complain if it drifts beyond his reach and out of his power to recall. He must take the consequences .of his own act. He puts his rights in the control of the bearer of the chose in action, and he must look to the persons with whom he deals for a misuse of the trust, if any, which he has conferred upon them. Innocent parties purchasing for full value, or the debtor paying in the ordinary course of business to the holder in such case, are not to be charged with a secret trust which the original creditor did not disclose before such, purchase or payment. As was still further said by Mr. Justice Field in Cowdrey v. Yandenburg, before cited:

“The principle is well settled that when the owner of property in any form clothes another with the apparent title or power of disposition, and third parties are thereby induced to deal with him, they shall be protected.”

But the claimant alleges that the board of audit and the defendants were notified of his claim of right and title to said certificate No. 4177 before allowance of the same to Cowdrey. This brings us to a consideration of the powers and duties of the board of audit, its relation to the District, and how far the latter as a quasi corporation was bound to take notice of the claimant’s controversies with parties to whom he had assigned his certificates, and what notice, if any, he gave to it.

The board of audit was a imculiar body, sui generis. While it was not a court nor exactly a board of arbitration, and had not the corporate powers and duties of the District, and was not the successor of the board of public w.orks, nor of any other branch of the former government of tbe District, yet it was clothed, with great powers to examine and audit claims against the District, to issue for such as it allowed certificates which were to be redeemed by the sinking-fund commissioners in bonds, and the District officers had no control over it, and were powerless to defend the District against its acts. The circumstances under which this board was created are well known. The District had become involved in immense indebtedness for the great works undertaken with a view to the improvement of the capital of the nation on a grand scale far beyond the appropriations made therefor. The treasury of the District was without funds to meet the demands upon it, payment had stopped. and District securities were discredited in tbe market, and were sold or hypothecated with difficulty and at ruinous discounts.

At this juncture Congress, with its almost absolute power over this District, unrestrained by any local constitution as are the State legislatures within their jurisdiction, and very little by the Federal Constitution, came in and abolished the board of public works and all other branches of the government. It placed the corporate powers in commissioners, and established the board of audit for a limited period, to examine and allow all claims against the District which should be presented and proved, and whose certificates of allowance were to be redeemed and paid in bonds of the District to be issued by a board of sinking-fund commissioners. It was an entirely independent dody. The District as a corporation, by its Commissioners, had no control over the board, could not prevent its auditing, settling, and redeeming any claims which might be presented, and could not itself pay any.

The board of audit gave public notice to creditors of the District to present their claims, and ninety days were allowed by law for that purpose, and that time was further extended.

Of all this the claimant had actual or constructive notice. He had been a contractor with the board of public works and had tafeen its certificates of indebtedness to the extent of nearly $600,000, and he was bound to know the measure of relief which Congress, by a public act, had presented to the creditors of the District. He knew that the certificates which he had indorsed in blank were outstanding and might be presented to this board for redemption. It was his duty to see to it that the board of audit was put in possession of the facts upon which he relied as an objection to the redemption of the certificates in favor of the bearer, who, he knew, had prima facie title to them. But he never gave the board any notice whatever that he claimed them, or that he objected to the payment of them to Blumenburg or his assignees, so far as the findings show.

The paper, now alleged by him to be notice, which he left with Magruder, was not addressed to anybody, was not filed with the District archives, and never came to the possession of the board. Neither the District Commissioners nor any other officers or the District are shown to have had any notice of it, except Magruder, who had ceased to be treasurer of the board of public works, and the board itself had been abolished.

It was the duty of the claimant to assert and prove his title to the certificates to the board of audit when or before they were presented for redemption.

The findings show that it does not appear whether or not he went before the board and presented his claims to the certificates or not. If he did present them, they were rejected by the board by payment to other parties, and so we have no jurisdiction of the matter, since Congress has provided that this court shall have no jurisdiction to consider claims rejected by the board of audit. If he did not appear and object to the payment of the certificates to other parties, when he might and ought to have done so, he is guilty of laches, and must be held to have allowed their payment in that manner without objection. In either case he has no cause of action.

On the whole the claimant’s case is really this and nothing more. He put his confidence in Blumenburg, intrusted him with power over his certificates by blank indorsements on the back of them, and borrowed money upon them. Blumenburg, it is alleged, abused his confidence, betrayed his trust, received payment of the certificates by himself or his assignees, and has not accounted and settled with the claimant. To him this was a great misfortune, but we can see no ground, in law or equity, why the District of Columbia should indemnify him for losses which thus came upon him through his own misplaced confidence in another.

The petition must be dismissed.

Nott, J., was not present at the trial of this case, and took no part in the decision.