Source: https://supreme.justia.com/cases/federal/us/163/427/
Timestamp: 2019-04-22 10:03:54+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 163 › United States v. Realty Co.
The appropriations of money by the Act of March 2, 1895, c. 189, 28 Stat. 910, 933, to be paid to certain manufacturers and producers of sugar who had complied with the provisions of the Act of October 1, 1890, c. 1244, 26 Stat. 567, were within the power of Congress to make, and were constitutional and valid.
It is within the constitutional power of Congress to determine whether claims upon the public treasury are founded upon moral and honorable obligations, and upon principles of right and justice, and having decided such questions in the affirmative, and having appropriated public money for the payment of such claims, its decision can rarely, if ever, be the subject of review by the judicial branch of the government.
obtain payment of moneys by reason of the legislation of Congress in regard to sugar bounties. The court below in each case gave judgment for the plaintiffs therein, and the government by writ of error brings the cases here for review.
"231. That on and after July first, eighteen hundred and ninety-one, and until July first, nineteen hundred and five, there shall be paid, from any moneys in the Treasury not otherwise appropriated, under the provisions of section three thousand six hundred and eighty-nine of the Revised Statutes, to the producer of sugar, testing not less than ninety degrees by the polariscope, from beets, sorghum, or sugar cane grown within the United States, or from maple sap produced within the United States, a bounty of two cents per pound, and upon such sugar testing less than ninety degrees by the polariscope, and not less than eighty degrees, a bounty of one and three-fourths cents per pound, under such rules and regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe."
"232. The producer of said sugar to be entitled to said bounty shall have first filed prior to July first of each year with the Commissioner of Internal Revenue a notice of the place of production, with a general description of the machinery and methods to be employed by him, with an estimate of the amount of sugar proposed to be produced in the current or next ensuing year, including the number of maple trees to be tapped, and an appliance for a license to so produce, to be accompanied by a bond in a penalty, and with sureties to be approved by the Commissioner of Internal Revenue, conditioned that he will faithfully observe all rules and regulations that shall be prescribed for such manufacture and production of sugar."
the application and bond hereinbefore provided for, shall issue to the applicant a license to produce sugar from sorghum, beets or sugar cane grown within the United States, or from maple sap produced within the United States at the place and time with the machinery and by the methods described in the application; but said license shall not extend beyond one year from the date thereof."
"235. And for the payment of these bounties the Secretary of the Treasury is authorized to draw warrants on the Treasurer of the United States for such sums as shall be necessary, which sums shall be certified to him by the Commissioner of Internal Revenue, by whom the bounties shall be disbursed, and no bounty shall be allowed or paid to any person licensed as aforesaid in any one year upon any quantity of sugar less than five hundred pounds."
"Schedule E -- Sugar. 182. That so much of the act entitled 'An act to reduce revenue equalize duties, and for other purposes,' approved October first, eighteen hundred and ninety, as provides for and authorizes the issue of licenses to produce sugar, and for the payment of a bounty to the producers of sugar form beets, sorghum or sugar cane grown in the United States, or from maple sap produced within the United States be, and the same is hereby, repealed, and hereafter it shall be unlawful to issue any license to produce sugar or to pay any bounty for the production of sugar of any kind under the said act."
"Bounty on Sugar. That there shall be paid by the Secretary of the Treasury to those producers and manufacturers of sugar in the United States from maple sap, beets, sorghum or sugar cane grown or produced within the United States who complied with the provisions of the bounty law as contained in Schedule E of the Tariff Act of October first, eighteen hundred and ninety, a bounty of two cents a pound on all sugars testing not less than ninety degrees by the polariscope, and one and three-fourths cents per pound on all sugars testing less than ninety and not less than eighty degrees by the polariscope, manufactured and produced by them previous to the twenty-eighth day of August, eighteen hundred and ninety-four, and upon which no bounty has previously been paid, and for this purpose the sum of two hundred and thirty-eight thousand two hundred and eighty-nine dollars and eight cents is hereby appropriated, or so much thereof as may be necessary."
"That there shall be paid to those producers who complied with the provisions of the bounty law as contained in Schedule E of the tariff Act of October first, eighteen hundred and ninety, by filing the notice application for license, and bond therein required, prior to July first, eighteen hundred and ninety-four, and who would have been entitled to receive a license as provided for in said act, a bounty of eight-tenths of a cent per pound on the sugars actually manufactured and produced in the United States testing not less than eighty degrees by the polariscope, from beets, sorghum or sugar cane grown or produced within the United States during that part of the fiscal year ending June thirtieth, eighteen hundred and ninety-five, comprised in the period commencing August twenty-eighth, eighteen hundred and ninety-four, and ending June thirtieth, eighteen hundred and ninety-five, both days inclusive, and for this purpose the sum of five million dollars, or so much thereof as may be necessary, is hereby appropriated; provided, that no bounty shall be paid to any person engaged in refining sugars which have been imported into the United States, or produced in the United States, upon which the bounty herein provided has already been paid or applied for. "
"The bounty herein authorized to be paid shall be paid upon the presentation of such proofs of manufacture and production as shall be required in each case by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, and under such rules and regulations as shall be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury."
"And for the payment of such bounty the Secretary of the Treasury is authorized to draw warrants on the Treasury of the United States for sums as shall be necessary, which sums shall be certified to him by the Commissioner of Internal Revenue, by whom the bounty shall be disbursed, and no bounty shall be allowed or paid to any person as aforesaid upon any quantity of sugar less then five hundred pounds."
Under the provisions of the appropriation made in the last above-named act of Congress, the defendant in error in each of the above cases sues for the money claimed by it and him for the manufacture of sugar under the circumstances stated in the petition in each case. They are test cases. The Realty Company is one of a class coming under the terms of the appropriation to those who had manufactured a certain class of sugar previous to the 28th day of August, 1894, and upon which no bounty had previously been paid. The allegation in the petition of the company showed that it had, between the first day of July, 1893, and the 30th day of June, 1894, under the provisions of the act of 1890, produced and manufactured at the places stated, the amount of sugar mentioned in the petition, and that it was entitled to receive from the defendant the bounty thereon mentioned in the act, which, it was alleged, amounted to the sum of $5,576.97. The repeal of the bounty clause in the act of 1890 by the act which took effect on the 28th of August, 1894, and which prohibited the payment of bounties thereafter, prevented the company from obtaining the money on the warrant which had been issued to it prior to that date. There were comparatively few persons coming under the class in which the company stood, and the appropriation made for the payment of that class was a little less than $250,000.
The plaintiff in the other suit, Mr. Gay, is one of a class coming under the second portion of the act of 1895, he being among those who complied with the provisions of the bounty act as contained in Schedule E of the Act of October 1, 1890, by duly filing notice of application for license and bond as therein required, and who would have been entitled to receive a license as provided for in said act, and a bounty of eight-tenths of a cent per pound on the sugars actually manufactured by him according to the provisions of such act during that part of the fiscal year ending June 30, 1895, comprised in the period commencing August 28, 1894, and ending June 30, 1895, both dates inclusive. The amount of bounty claimed by Mr. Gay is between $8,000 and $9,000, and the persons forming this class are quite numerous, and the appropriation for them amounted to the sum of $5,000,000, or so much thereof as might be necessary to make the payments provided for in the act.
of Internal Revenue to compel action on their part under the act of 1890. The application was resisted by the government upon several grounds, among others, that the bounty legislation of 1890 was unconstitutional. The motion was denied upon all the grounds set up by the government, including that of unconstitutionality. Mr. Justice Shepard delivered the opinion of the court, and Mr. Justice Morris concurred with him upon all points. Mr. Chief Justice Alvey expressed no opinion upon the constitutional question, because the conclusion that Congress had power to repeal the provision giving the bounty for sugar rendered it unnecessary to pass upon the constitutionality of the original bounty clause.
In was by reason of this opinion upon the validity of the bounty legislation of 1890 that the Comptroller of the Treasury reexamined the rulings which had been previously made in approving bounty claims theretofore presented, and he had concluded to and did refer another case involving this question, then before him, to the Court of Claims for its decision, in accordance with the provisions of section 1063 of the Revised Statutes, but before that case reached the Court of Claims, the present cases had been commenced and decided in Louisiana.
The question whether the bounty provisions of the act of 1890 were constitutional was raised in the case of Field v. Clark, 143 U. S. 649. The contention in that case was that such provisions were unconstitutional, and that therefore the whole Tariff Act of 1890 was void. This Court declined to decide the question as to the constitutionality of those provisions because, as the Court held, the rest of the act would be valid even if the bounty provision were void. The question has been again presented to us in this case, and been very ably argued by counsel both for the government and the defendants in error. The question is one of the very gravest importance. It should not be decided without very mature investigation and deliberation, and only when absolutely necessary to the determination of the rights of the parties.
may be passed upon, and the actions finally decided, without our entering upon a discussion as to the validity of the bounty legislation contained in the act of 1890 and without deciding that question. For the purpose of the discussion of this case, we think it unnecessary to decide whether or not such legislation is beyond the power of Congress. We are of the opinion that in either case, the appropriations of money in the act of 1895, to be paid to certain manufacturers and producers of sugar who had complied with the act of 1890, were within the power of Congress to make, and were constitutional and valid.
its production here of an amount which, it was thought, would equal the protection the industry had theretofore enjoyed under the tariff. The act was approved by the President, and no question of its validity was made by any officer of the government having any duties to perform under it. The bounty provision was, by the terms of the act, to remain in force for fifteen years. The citizens who were engaged in the manufacture of sugar prepared to comply with the provisions of the law under which the bounty was to be payable.
for the payment of its claim to bounty; but, before actual payment from the Treasury of the United States could be obtained, the act of 1894 came into existence, with its provision directing that no further payment of bounty should thereafter be made. Of course, under the circumstances as set forth in regard to the plaintiffs in the above suits, there can be and is no question made as to the entire good faith of all parties, and the question presented to this Court is one of constitutional power simply.
Upon this assumption, it is said that no claim, legal, moral, equitable, or honorable, can be created in favor of the sugar manufacturer and against the government, and that where there is neither legal, moral, no honorable obligation to pay, Congress has no power to appropriate money.
be built up in their behalf, which the government might subsequently recognize, founded upon the belief that the act was valid, and upon the action of the officers of the government under it, because it was, or subsequently might be pronounced to be, unconstitutional?
We are of the opinion that the parties, situated as were the plaintiffs in these actions, acquired claims upon the government of an equitable, moral, or honorary nature. Could Congress legally recognize and pay them, although the act of 1890 as to its bounty provisions might be unconstitutional? It is true that, in general, an unconstitutional act of Congress is the same as if there were no act; that is, regarding it in its purely legal aspect. Being in violation of the Constitution, that instrument must govern, and no one can base any legal claim as arising out of such an act. That is a very different principle, however, from that which, we think, governs in this case. The persons for whose benefit the appropriation contained in the act of 1895 was made are not, in the view we take, asserting the existence of a legal and valid debt against the United States which is at the same time based upon an unconstitutional act of Congress. No such inconsistent and illogical position is taken. They are asserting that, by reason of the occurrences which took place before the appropriation, among which was the passage of the act of 1890, they were so placed before Congress as to authorize that body to recognize the equities of the situation, and to pay their claims, which, while they were not of a legal character, were nevertheless of so meritorious and equitable a nature as to authorize the nation, through its Congress, to appropriate money to pay them.
whether, upon the whole, the persons so situated were equitably entitled to its consideration, and to the appropriation asked for. If Congress possessed the power, in any event, to recognize equities of such a nature, we think it had enough in the case before it to uphold a favorable decision thereof. It is unnecessary to hold here that Congress has power to appropriate the public money in the Treasury to any purpose whatever which it may choose to say is in payment of a debt or for purposes of the general welfare. A decision of that question may be postponed until it arises.
There was enough in the case as presented to Congress upon which to base the assertion that there was a moral and honorable claim upon the public Treasury which that body had the constitutional right to recognize and pay.
for the payment thereof. Their recognition depends solely upon Congress, and whether it will recognize claims thus founded must be left to the discretion of that body. Payments to individuals, not of right or of a merely legal claim, but payments in the nature of a gratuity, yet having some feature of moral obligation to support them, have been made by the government by virtue of acts of Congress appropriating the public money ever since its foundation. Some of the acts were based upon considerations of pure charity. A long list of acts directing payments of the above general character is appended to the brief of one of the counsel for the defendants in error. The acts are referred to not for the purpose of asserting their validity in all cases, but as evidence of what has been the practice of Congress since the adoption of the Constitution. See also, among other cases in this Court, Emerson v. Hall, 13 Pet. 409; United States v. Price, 116 U. S. 43; Williams v. Heard, 140 U. S. 529. The last-cited case arose under an act of Congress in relation to the Alabama claims.
claims did not constitute, upon principles of international law applicable to such cases, a foundation for an award of compensation or computation of damages between the nations, and should upon such principles be wholly excluded from all consideration of the tribunal in making its award, even if there were no disagreement between the two governments as to the competency of the tribunal to decide them. This declaration was accepted by the President, and those claims were not insisted upon before the tribunal, and were not taken into consideration in making the award. Thus, it is seen that there were no legal claims of the holders of those war risks upon the government for the payment to them of any sum whatever. The award made by the tribunal, which was paid to the United States by Great Britain, was held to have been made to the United States as a nation, United States v. Weld, 127 U. S. 51, and the fund itself came into the Treasury as any public moneys of the country.
By the Act of June 5, 1882, 22 Stat. 98, c.195, the Court of Commissioners of Alabama Claims was reestablished, and the duty was imposed upon it to receive and examine claims which might be presented, putting them into classes, the second of which was "for the payment of premiums for war risks, whether paid to corporations, agents or individuals for the sailing of any Confederate cruiser." The Heards were owners of claims for "war risks," and Congress finally appropriated money to pay a portion of them Congress thus recognized as proper to be paid a class of claims which had not been taken into consideration by the Geneva tribunal, but which had been decided by that tribunal to have no basis in international law. It is a case therefore of the recognition by Congress of what it regarded as an equitable claim on the part of the owners of these war risks to be paid some portion of their claims, and the validity of the appropriation was never questioned.
Among the latest examples of payments that are not of right or of any legal claim, but which are in the nature of a gratuity depending upon equitable considerations, are the cases, just decided by this Court, of Blagge v. Balch, Brooks v.
Codman, and Foote v. Women's Board of Missions, reported as one case in 162 U. S. 439. The claims in those cases are what have been known as the "French Spoliation Claims," being based upon depredations of French cruisers upon our commerce prior to July, 1801. An appropriation for their payment was made by Congress in 1891, upon the conditions and to the class of persons named in the act. Questions arose as to the proper interpretation of the act, and as to the character of the payments provided for therein. This Court held the payments were purposely brought by Congress within the category of payments that are not of right, but which are in the nature of a gratuity, and as an act of grace, though founded upon a prior moral or honorable obligation to pay to some one who might be said in some way to represent the original sufferers. No question of the power of Congress to make such appropriation was raised by anyone.
The power to provide for claims upon the state, founded in equity and justice, has also been recognized as existing in the state governments. For example, in Guilford v. Chenango County, 13 N.Y. 143, it was held by the New York Court of Appeals that the legislature was not confined, in its appropriation of public moneys, to sums to be raised by taxation in favor of individuals to cases in which legal demands existed against the state, but that it could recognize claims founded in equity and justice, in the largest sense of these terms, or in gratitude, or in charity.
for its application, because the claim arises out of the unconstitutional provisions of the act giving bounties in 1890. It is impossible, it is said, to build even an equity out of an act of Congress which is utterly void; that, as the original act offering and paying bounties was void, it cannot become legal to pay them, because of any alleged equities of those who would suffer from their sudden discontinuance as set forth in these cases. For the reasons already given, we do not think under the circumstances surrounding these cases, that the validity of the act of 1895 can be questioned successfully.
In regard to the question whether the facts existing in any given case bring it within the description of that class of claims which Congress can and ought to recognize as founded upon equitable and moral considerations, and grounded upon principles of right and justice, we think that, generally, such question must, in its nature, be one for Congress to decide for itself. Its decision recognizing such a claim, and appropriating money for its payment, can rarely, if ever, be the subject of review by the judicial branch of the government. Upon the general principle therefore that the government of the United States, through Congress, has the right to pay the debts of the United States, and that the claims in these cases are of a nature which that body might rightfully decide to constitute a debt payable by the United States upon considerations of justice and honor, we think the act of Congress, making appropriations for the payment of such claims, was valid, without reference to the question of the validity or invalidity of the original act providing for the payment of bounties to manufacturers of sugar, as contained in the Tariff Act of 1890. The judgments in these cases are right, irrespective of how that question might be decided, or of any conclusion that might be reached upon other questions suggested at the bar.

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