Case ID: us-ct-cl_37/html/0113-01.html
Source: Caselaw Access Project
Author: {"author": "Peelle, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HENRY H. RUSSELL, Administrator, v. THE UNITED STATES.
    [No. 22405.
    Decided January 6, 1902.]
    
      On the Proofs.
    
    An appropriation is made by Congress to be paid to the deceased claimant. The Treasury draft is returned, not having been delivered, and the money is, eventually, covered into the Treasury under the head of “ Outstanding liabilities.” Subsequently Congress repeal the act making the appropriation. More than six years after the repeal the suit is brought.
    I. Where money appropriated by Congress is not paid to the beneficiary, but is covered into the Treasury, under Revised Statutes (§ 306), and carried to the credit of the party for whose benefit the appropriation was made, it may be regarded as an express trust subject to the qualification that the statute of limitations will begin to run as soon as the trust is openly disavowed by the trustee.
    II. An act repealing an appropriation must be regarded as a disavowal of the trust; and it must be held that the statute of limitation began to run at the date of the repealing act.
    
      
      The Teportei’s’ statement of the case.
    The following are the facts of the case as found by the court:
    I. The claimant, Henry H. Russell, a citizen of the United States and a resident of Leesburg,.in the State of Virginia, is the administrator of the estate of Joshua Everhart, deceased, late of said city and State.
    II. By the act of March 3, 1877 (19 Stat. L., 518,535), Congress made an appropriation for the payment of claims reported allowed by the Commissioners of Claims under the act of March 3,-1871 (16 Stat. L., 524), including the sum of $725 to pay the claim of Joshua Everhart, of Virginia.
    III. In pursuance of said law, on March 30,1877, the Third Auditor of the Treasury Department stated an account in favor of said Joshua Everhart, per report 42983, for the sum of $725, on which a war warrant (No. 1060, dated March 30, 1877), was drawn by the Secretary of the Treasury, countersigned by the Comptroller of the Treasury, on the Treasurer of the United States, who issued a Treasury draft (No. D 8338, dated March 30, 1877), payable to the order of said Joshua Everhart, for $725, which was duly mailed to the pajme, and, not being delivered, was returned to the Treasurer.
    IV. Said draft having remained in the Treasury Department for over three years unpaid, was deposited by the Treasurer, to be covered into the Treasury by miscellaneous repay warrant No. 966, July 9, 1880, and was carried to the credit of said Joshua Everhart, in whoso favor said draft had been issued, and into an appropriation account denominated “Outstanding liabilities,” as provided by sections 306 and 307, Revised Statutes.
    Thereafter, by act March 30, 1888 (25 Stat. L., 47-50), it was, among other things, provided:
    “That so much of the act approved March third, eighteen hundred and seventy-seven, entitled ‘An act me,king appropriation for the payment of claims reported allowed by the Commissioners of Claims under the act of Congress of March third, eighteen hundred and seventy-one,’ as appropriates the sum of seven hundred and twenty-five dollars to Joshua Everhart, be, and the same is hereby, repealed.”
    V. Said Everhart having died before the collection or payment of said draft, letters of administration on his estate were duly issued on November 12,1888, to Henry H. Russell, who, as the legal representative of said estate, presented a claim to the Secretary of the Treasury on July 6, 1900, for the payment of said draft or the amount thereof due said estate, as provided by section 308, Revised Statutes, and payment was refused by the Auditor for the Treasury Department, Report 26456.
    YI. Said draft was neither assigned nor transferred by said Everhart or by the claimant, but the'amount of said draft has remained in the Treasury Department unpaid.
    
      Mr. G/iarles O. Lancaster for the claimant.
    
      Mr. P. M. Ashford (with whom was Mr. Assistant Attorney - General Pradt) for the defendants.
   Peelle, J.,

delivered the opinion of the court:

The Congress, bjr the act of March 3,1817 (19 Stat. L., 518, 535), making appropriation for the payment of claims allowed by the Commissioners of Claims, appropriated $725 to pay the claimant’s decedent, Joshua Everhart. In due course a Treasury draft for the amount, payable to said Everhart, was issued (March 30, 1877) and mailed to him, but not being delivered was returned to the Treasurer; and after the lapse of three years was, on the 9th day of J uly, 1880, covered into the Treasury by warrant to the credit of said Everhart as an outstanding liability" under the provisions of Revised Statutes, sections 306, 307, and 308.

Those sections of Revised Statutes are as follows:

‘ ‘ Sec. 306. At the termination of each fiscal year all amounts of moneys that are represented by certificates, drafts, or cheeks issued by the Treasurer or by any disbursing officer of any department of the Government upon the Treasurer or any assistant treasurer or designated depositary of the United States or upon any national bank designated as a depositary of the United States, and which shall be represented on the books of either of such offices as standing to the credit of any disbursing officer, and which were issued to facilitate the payment of warrants, or for any other purpose in liquidation of a debt due from the United States, and which have for three years or more remained outstanding, unsatisfied, and unpaid, shall be deposited by the Treasurer, to be covered into the Treasuxy by warrant, and to be carried to the credit of the parties in whose favor such certificates,.drafts, or checks were respectively issued, or to the persons who are entitled to receive pay therefor, and into an appropriation account to be denominated ‘Outstanding liabilities.’
“Sec. 307. The certificate of the Register of the Treasury, stating that the amount of any draft issued by tfie Treasurer to facilitate the payment of a warrant directed to him for payment has remained outstanding and unpaid for three years or more, and has been deposited and covered into the Treasury in the manner prescribed by the preceding section, shall be, when attached to any such warrant, a sufficient voucher in satisfaction of any such warrant or part of any warrant, the same as if the drafts coi’rectly indorsed and fully satisfied were attached to such warrant or part of warrant. And all such moneys mentioned in this and in the preceding section shall remain as a permanent appropriation for the redemption and payment of all such outstanding and unpaid certificates, drafts, and checks.
“Sec. 308. The payee or'the bona fide holder of any draft or check, the amount of which has been deposited and covered into the Treasury pursuant to the preceding sections, shall, on presenting the same to the proper officer of the Treasury, be entitled to have it paid by the settlement of an account and the issuing of a warrant in his favor, according to the practice in other cases of authorized and liquidated claims against the United States.”

If the case stopped there, there would be no doubt about the claimant’s right to recover, but by the act of March 30, 1888 (25 Stat. L., 47, 50), it was, among other things, provided:

“That so much of the act approved March third, eighteen hundred and seventy-seven, entitled ‘An act making appropriations for the payment of claims reported allowed by the Commissioners of Claims under the act of Congress of March third, eighteen hundred and seventy-one,’ as appropriates the sum of seven hundred and twenty-five dollars to Joshua Ever-hart, be, and the same is hereby, repealed.”

Thereafter, November 12,1888, the claimant was appointed administrator of the estate of Joshua Everhart, and July 6, 1900, he presented, under the provisions of said section 308, a claim to the Secretary of the Treasury for the payment of said draft, which was refused, presumably upon the ground of the repealing act aforesaid.

More than six years after the date of said repealing act, to wit, November 20, 1900, the claimant filed his petition in this court.

The claimant’s contention is that “the act of March 3, 1877 (making appropriation), was fully executed when the draft in payment of the claim, after three years, was covered into the permanent appropriation for outstanding liabilities,” and that when so covered into the Treasury the amount thereof became a trust fund to the credit of the payee and was payable not out of the appropriation of March 3, 1877, but out of the “permanent appropriation for the redemption and payment of all such outstanding and unpaid certificates, drafts, and checks,” as provided by section 307.

The claimant grounds his right to recover on the case of United States v. Wardwell (172 U. S., 48, 53).

In that case certain checks had been drawn by army officers in 1869 upon an assistant treasurer of the United States, and not being presented for payment within three years from their date, the amounts thereof were covered into the Treasury and carried to the account of outstanding liabilities. In 1890 application was made for payment, but refused, and within six years thereafter an action was brought.

The court said, affirming the decision of this court (32 C. Cls. R., 30), that — ■

“ No time is mentioned within which he must apply for a warrant or after which the money is forfeited to the Government. The ordinary rules for the maturity of negotiable paper do not control. Congress has directed that the money already once appropriated and chequed against shall be placed in the Treasury and held subject to the call of the party for whose benefit it has been so appropriated and chequed. There is no occasion for suit until after his application for a warrant is refused. When the contract created by the promise made in section 308 is broken, then a claim for the breach of such contract first accrues, and the limitation prescribed by section 1069 begins to run.”

And, further, it was held in respect to said sections that—

While it may be that they do not provide for the creation of an express trust, liability for which, according to general rules, continues until there is-a direct repudiation thereof, yet they contain a promise by. the Government to hold the money thus covered into the Treasury for the benefit of the owner until such time as he shall call for it. This is a continuing promise, and one to which full force and efficacy should be given.”

The claimant’s contention that there were two separate appropriations in respect of the amount of the draft, i. e., one appropriating the money to pay and the other “a permanent appropriation for the redemption and payment of all such outstanding and unpaid certificates, drafts, and checks,” can not be sustained, for the reason that when the money appropriated was covered into the Treasury, as before stated, it was the act appropriating the money that thereby became for the purpose of the paj’ment of said amount “ a permanent appropriation.” That is to say, the act appropriating the money became “a permanent appropriation for the redemption and payment ” of the money so covered into the Treasury, and as such was a continuing promise to hold the money until it was called for by the owner or the trust was disavowed.

Even if the money thus held by the Government should be treated as an express trust, it would still be subject to the qualification “ that time begins to run against a trust as soon as it is openly disavowed by the trustee, insisting upon an adverse right and interest which is clearly and unequivocally made known to the cestui que trust; as when, for instance, such transactions take place between the trustee and the cestui que trust as would in case of tenants in common amount to an ouster of one of them by the other.” (Speidel v. Henrici, 120 U. S. R., 377, 386, cited with approval in the case of Riddle v. Whitehill, 135 U. S. R., 621, 634.)

The act of March 30, 1888 (supra), repealing the provision of the act of March 3, 1877, appropriating 1725 to the claimant’s decedent, was an open disavowal of the trust by the United States, of which the claimant was bound to take notice, and from that time the statute of limitations began to run, and the claimant’s petition not having been filed in this court for more than six years thereafter, the claim is barred under provision of Revised Statutes, section 1069, which is not only a statute of limitations, but is jurisdictional as well. (Finn v. United States, 123 U. S., 227, cited approvingly in the Wardwell case, supra.)

As no demand was made for the payment of the money until July, 1900, the petition was filed within six years from that date, but as under the authority cited we hold that the statute began to run from the date of the repealing- act disavowing- the trust, it will not be necessary to consider the question as to whether the claimant could have maintained an action had his petition been filed within six years from the date of the repealing act.

The petition is dismissed.