Case ID: us-ct-cl_17/html/0376-01.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

Mathew J. Laughlin v. The District of Columbia.
    
      On the Proofs.
    
    
      The facts are substantially the same as those in Adams’s Case, ante.
    I.The hoard of audit was not the successor of the hoard of public works, and notice to th.e latter was not notice to the former.
    II.The board of audit had by law full access to all the records, hooks, and papers of the hoard of public works; but it did not have the custody of them and was not hound to take official notice of every paper deposited in the mass of the archives of the District. ,
    III.Where noticeof aperson’sequities or right of property in certain certificates of indebtedness held by other persons was given to the treasurer of the board of public works, it did not operate as notice to the District nor to the hoard of audit after the hoard of public works ■ had been abolished and the treasurer legislated out of office.
    
      
      The Reporters’ statement of tbe case:
    The following are the facts of this case as found by the court:
    I. The claim a nth ad contracts with the board of public works of the District of Columbia, dated August 19 and September 19,1873, to do certain work and furnish materials in grading streets, &c., in Washington, for said District. For work done and materials furnished under said contracts the board of public works, according to its usage with contractors, caused to be issued and delivered to J. F. Murray, attorney in fact of the claimant, from time to time, certificates of accounts allowed by the auditor of the board, of which the following are copies as they now appear:
    “No. 4763.] Oeeice oe Auditor
    “Board oe Public Works,
    “ Washington, D. G., Deo. 2ith, 1873.
    “ I hereby certify- that I have this day audited and allowed the account of M. J. Laughlin, per J. F. Murray, att’y, for work, as per schedule, amounting to fifteen hundred dollars.
    “ $1,500.00.
    “ J. O. Lay, Auditor.”
    
    [Indorsed. ]
    “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.
    “M. J. Laug-hlin,
    “Per J. F. Murray, Att’y.”
    
    “ No. 4764.] Oeeice oe Auditor
    “ Board oe Public Works,
    “ Washington, T). C., Deo. 24í7¿, 1873. “I hereby certify that I have this day audited and allowed the account of M. J. Laughlin, per J. F. Murray, att’y, for work as per schedule, amounting to six thousand dollars.
    “ $6,000.00.
    “ J. O. Lay, Auditor.”
    
    [Indorsed.]
    “ 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.
    “ M. J. Laughlin,
    “ Per J. F. Murray, Att’y.” ,
    
      “ No. 4760.] Oeeice oe Auditor
    “ Board oe Public Worics,
    “ Washington, D. G., Dec. 24i7&, 1873. “I hereby certify that I have this day audited and allowed the account of M. J. Laughlin, per J. F. Murray, att’y, for work, as per schedule, amounting to five thousand dollars. “$5,000.00.
    “ J. O. Lay, Auditor.”
    * [Indorsed.]
    “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.
    “M. J. Laughlin,
    “ Per J. F. Murray, Att’P
    
    “ No. 4767.] Oeeice oe Auditor'
    “ Board oe Public Works,
    “ Washington, D. O., Dec. 24th, 1873.
    “ I hereby certify that I have this day audited and allowed the account of M. J. Laughlin, per J. F. Murray, att’y, for work, as per schedule, amounting to two thousand dollars.
    “ J. C. Lay, Auditor.”
    [Indorsed.]
    “ 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.
    “ M. J. Laughlin,
    “ Per J. F. Murray, Att’y.”
    
    And said board of public works issued to the claimant, in like manner, for work done by the Evans Concrete Company, under its contract, a certificate of which the following is a copy as it now appears:
    “No. 4426.] Oeeice oe Auditor
    “ Board oe Public Works,
    “ Washington, D. O., December KWt, 1873.
    “ I hereby certify that I have this day audited and allowed the account of Evans Concrete Co., per M. J. Laughlin, for setting curb on G- st., between 18th and 22d streets west, amounting to five hundred and ninety-seven dollars.
    “$597.00.
    “ J. C. Lay, Auditor.”
    
    Indorsed in blank: J M. J. Laughlin.
    ‘Upon the face is stamped: ] Cancelled by the board of public works.
    
      The indorsement of the name of M. J. Laughlin, per J. F. Murray, attorney, indorsed on the first four of the above certificates, and the name of M. J. Laughlin indorsed on the last of said certificates, were written thereon by those persons respectively, when the certificates were transferred as hereinafter set forth.
    The indorsement of transfer on the first four of the above certificates to N. A. Cowdrey was printed after the issue of the certificates and after the transfer of the same by the claimant, but before their redemption by the board of audit and without his knowledge.
    The cancellation on certificate No. 4426 was stamped thereon when the certificate was redeemed.
    II. The .claimant demanded payment of said certificates from the treasurer of the board of public works, but he had no funds for the payment of the same, and did not pay them to the claim an t.
    III. The claimant borrowed money on said certificates of one Rudolph Blumenburg at the rate of 33 cents on adollar of their face value, giving his notes at that rate in the ordinary commercial or mercantile form of notes, to wit: On the 20th of January, 1874, he thus hypothecated certificates Nos. 4764, 4766, and 4767, and on the 14th of February, 1874, he thus hypothecated certificates Nos. 4763 and 4426.
    Upon the delivery of said certificates to said Blumenburg, the claimant, by himself or his attorney, indorsed his name on the back thereof, as appears in Finding One.
    IY. On or about the 5th of June, 1874, a written document was given to James A. Magruder, treasurer of the board of public works, which he filed with the papers of the board, where it has ever since remained, and of which the following is a copy:
    “ Washington, D. 0., June 5th, 1874.
    
      “ Col. James A. Magruder,
    “ Treasurer B. P. W.:
    
    
      “ Sir : I do most respectfully ask of you not to pay the following auditor’s certificates, dated Dec., 1873, issued to ‘M. J. Laughlin, per J. F. Murray, attorney,’ viz: No. 4763, for $1,500; No. 4764 for $6,000; No. 4766, for $5,000; No. 4767, for $2,000.
    “Also, a certificate issued in the name of M. J. Laughlin, No. 4426, for $597.
    
      “ Very respectfully,
    “ J. F. Murray.”
    
      Previous to that date the claimant had orally notified said Magruder not to pay said certificates, bnt at what exact time does not appear.
    The claimant never brought any suit in equity in the supreme court of the District of Columbia, or elsewhere, either to enjoin the conversion of said auditor’s certificates or to establish his interest therein or title thereto.
    Y. Said certificates were redeemed as follows:
    No. 4426 by the treasurer of the board of public works. He omitted to enter the redemption on his books, and the date thereof does not appear. But it was prior to March 30, 1874, after which time he made no payments of any kind. He produced the certificate on the settlement of his accounts as treasurer, and the same was credited and allowed to him. To whom the certificate was paid by the treasurer does not appear, but it was not paid to the claimant.
    Nos. 4763,4764,4766, and 4767 were presented by N. A. Cowdrey July 16, 1874, to the board of audit for allowance under the provisions of the act of June 20, 1874, and the same were audited and certificates of the board of audit were issued in exchange therefor.
    The- certificates issued by board of audit 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. Fdwards, Mr. Montgomery Blair, and Mr. Fppa Hunton for the claimant.
    
      Mr. J. (J. Fay (with whom was the Assistant Attorney-General) for the defendant.
   Richardson, J.,

delivered the opinion of the court:

This case differs very little as to the questions of law involved from that of William H. Adams, just decided, and to the opinion of the court in that case we'refer for a fuller exposition of our views upon the principles of law which have been raised than it is necessary now to repeat. The facts concisely stated are these: The claimant had five certificates issued to him by the board of public works for work done for the District under contract, all of winch lie pledged to one Blumenburg for money borrowed. One of them was redeemed and paid by the treasurer of the board to the bearer, who presented the same with the blank indorsement of the claimant thereon. Payment must have been made before March 30,1874, as the findings show that the treasurer made no payments of any kind after that date. This'was before the date of what is now claimed to be a notice to the treasurer not to pay the same, so that this certificate was paid without objection, and the claimant must be held to have assented thereto.

The other four certificates were issued to “M. J. Laughliu, per J. F. Murray, att’y,” and were so indorsed in blank by the claimant’s attorney, when they were pledged to Blumenburg for money borrowed in January and February, 1874. Blumenburg passed them to one Cowdrey, who caused to be printed over the blank indorsement a formal assignment to him 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.”

In this form they were presented to the board of audit July 1G, 1874, and were thereafter redeemed in his favor. Certificates were issued to him for the same, and they were paid in bonds as the act of Congress provided.

That the claimant wns bound by the formal assignment written over his name, and that the board of audit was justified in treating with the holder, upon such indorsement, as having-title thereto, is well established by numerous judicial decisions, and is recognized by the Supreme Court in Cowdrey v. Vanden-burg (101 U. S. R., 572), wherein they say, “The complainants could have expressed in their indorsement the purpose of the deposit of the certificate with Blumenburg — that it was a security for a specified sum of money — and thus imparted to all subsequent purchasers or assignees that the pledger held only a qualified interest in the claim. But having indorsed their name in blank, they virtually authorized the holder to transfer or dispose of the certificate by writing an absolute assignment over their signature.” If the holder could transfer the certificate with such an indorsement he could certainly collect it by a like indorsement, so as to bar all rights of the original payee as against the debtor, who in good faith had made payment thereof.

On the 5th of June, 1874, fifteen days before the board of public works was abolished, by the act of June 20,1874, cli. 337 (1 Supplmt. to R. S., 53), a paper was delivered to the treasurer of the board, by whom it was filed in its archives, and it has ever since been on file there. The following is a copy:

“ Col. Jas. A. Magruder,
Treasurer B. P. W.:
“Sir: I do most respectfully ask of you not to pay the following auditor’s certificates, dated Dec., 1873, issued to M. J. Laughlin, per J. F. Murray, attorney, viz: No. 4763, for $1,500; No. 4764, for $6,000; No. 4766, for $5,000; No. 4767? for $2,000; also a certificate issued in the name of M. J. Laughlin, No. 4426, for $597.
“ Very .respectfully,
“ J. F. Murra y.”

It is now attempted to be maintained that this was such a notice to the District and to the board of audit of the claimant’s alleged title or claim to the certificates that the redemption of them subsequently by the board of audit so put the District in the wrong that it is now bound to pay the same to him.

In this view we cannot concur. It does not appear that the board of audit ever had actual notice of this document, or that the claimant ever made any efforts to bring his demands to the attention of the board. The board of audit was not the successor of the board of public works. It had by law “full access to all the records, books, papers, and vouchers of every kind whatsoever of the board of public works and of the District of Columbia,” but it did not have the custody of them. It was not bound to take official notice of every paper deposited among the great mass of archives of the District. At most it was authorized to examine any of them on its own motion or on motion of any party interested.

Nor does it appear that the District Commissioners had any notice of this document; and if they had such notice, actual or constructive, all they could have done was to refer the claimant to the board of audit. But' that was not necessary, because the board itself had given public notice under the law to all persons having claims against the District to present them. The claimant’s attorney had requested the treasurer of the board of public works not to pay these certificates to anybody, and. the treasurer had acceded to his request aud had uot paid them. This was all that he had requested. If the claimant still set up any right to'the certificates after Congress had established a tribunal to pass upon and allow them, he should have gone before that board and presented his claim. When he found that Blumenburg was running away with his certificates indorsed by him in blank, it was not sufficient for the claimant, in order to stop payment of them, to give notice to the first board to which they might be presented for payment, and then let the matter drop. It was for him to follow up, assert, and prove his claim to the certificates before the'board of audit, to which he knew they might be presented for redemption. This he did not do', but, on the contrary, he permitted the board to redeem them without objection from him. He stood by and did not speak when it was his duty to speak, and he must abide by the result to which his silence contributed.

Like the claimant in the Adams Case, the present claimant 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 the trust, received payment of the certificates by his assignee, and has not accounted and unsettled with the claimant.

The remedy for the claimant, if he has any, is against Blumenburg, and not against the District. The petition must be dismissed.

Nott, J., was not present when this case was argued, and took no part in the decision.