Source: https://supreme.justia.com/cases/federal/us/173/410/
Timestamp: 2019-04-25 17:48:55+00:00

Document:
estate, caused the judgment to be revived by writ of scire facias and asked for the appointment of a receiver. Price appeared and answered, and then the cause slept until August, 1892, when Mrs. Forrest filed a petition, stating that money was about to be paid to Price by the United States on his claim, and asking for the appointment of a receiver of the Treasury draft, and that Price be ordered to endorse it to the receiver, to the end that the amount might be received by him as an officer of the court and disposed of according to law. A receiver was appointed, gave bond, and entered on his duties. Price died in 1894. He left no will. No letters of administration were granted, but the New Jersey court appointed an administrator ad prosequendum. The bill in this case was then filed. The relief sought was the revival of the bill of 1874, that the administrator ad prosequendum be made a party, and that the other parties be enjoined from receiving the money from the Treasury and that the receiver be authorized to receive and dispose of it under the orders of the court. The heirs of Price set up their claims to it. The court held that the plaintiffs were entitled to the moneys in the Treasury, and its judgment was affirmed by the highest court in the state. Held that the receiver, and not the heir, was the person entitled to recover the money from the United States, and that the case did not come within the prohibitory provisions against assignments of claims against the United States contained in Rev.Stat. § 3477.
The ultimate question in this case is whether the plaintiffs in error, as heirs of Rodman M. Price, are entitled to receive from the United States the amount standing to the credit of the deceased on the books of the Treasury, and which represents the balance of a sum found in his lifetime, under the authority of a special act of Congress, to be due him upon an adjustment of his accounts as a purser in the Navy.
United States for the Department of the Navy. He acted in that capacity until about December, 1849, or January, 1850, when he was detached from such service and ordered to transfer all public money and property remaining in his hands to his successor or to such other disbursing officer of the Navy as might be designated by the commanding officer at the naval station at California, and immediately after such transfer to report at the City of Washington for the purpose of settling his accounts.
A. M. Van Nostrand was his successor in California as acting purser in the Navy.
About December 31, 1849, Commodore Jones, of the Navy, commanding the United States squadron at San Francisco, directed Van Nostrand to receive from Price all books, papers, office furniture, and funds on hand belonging to the purser's department at that city. Thereupon Price turned over to Van Nostrand, as acting purser of the Navy at San Francisco, $45,000, that being all the public money remaining in his hands.
"San Francisco, January 14, 1850. Received from Rodman M. Price, purser U.S. Navy, seventy-five thousand dollars, for which I hold myself responsible to the United States Treasury Department. $75,000. (Duplicate.) A.M. Van Nostrand, Acting Purser."
This money was so advanced without the approval and signature of Commodore Jones.
Van Nostrand never returned the $75,000, or any part of it, to Price, nor did he account for it to the government.
at the time that his advance of money to the former was an accommodation to the government in the then unsettled condition of California. 6 Op. Atty.Gen. 357.
"authorized and directed to adjust, upon principles of equity and justice, the accounts of Rodman M. Price, late purser in the United States Navy and acting Navy agent at San Francisco, California, crediting him with the sum paid over to and receipted for by his successor, A.M. Van Nostrand, acting purser, January 14, 1850, and pay to said Rodman M. Price, or his heirs, out of any money in the Treasury not otherwise appropriated, any sum that may be found due him upon such adjustment."
Under the authority conferred by that act, the Secretary of the Treasury in August, 1892, adjusted the accounts of Price, and in that adjustment he was credited with the sum advanced to Van Nostrand, leaving due to him from the government the sum of $76,204.08, which, of course, included the above sum of $75,000.
In order that the precise questions to be determined upon this writ of error may be clearly apprehended, we must now refer to certain matters occurring in the courts of New Jersey, both prior to and shortly after the passage of the above Act of February 23, 1891.
of all exemptions allowed by law, which she had been unable to reach by execution on the above judgment. By that bill, the administratrix also prayed discovery from Price of all property, real or personal, whether in possession or action, belonging to him, with full particulars in relation thereto, and that the same, under the order of court, be appropriated in satisfaction of such judgment; further, that a receiver be appointed in the cause to collect and take charge of the property, money, or things in action found to belong to Price, or to which he was in any way entitled, either in law or equity, with power to convert the same into money, and with such other powers as were usually granted to receivers in similar cases, and that Price be enjoined from assigning, transferring, or making any other disposition of the real estate and personal property to which he was in any wise entitled, and from receiving any moneys then due or to become due to him except where the same were held in trust or the funds held in trust proceeded from other persons than himself.
The defendants to that bill were Price and his wife and son, the latter being alleged to claim some interest in the property described in the bill. They appeared and filed an answer, Price denying that any part of the properties mentioned in the bill belonged to him, or that he had any interest in them.
officers, and drawn payable to his order, the rules of the department forbidding that it be made payable to the order of any other person, or that said sum should be paid in any other way, and that said draft or negotiable security was to be made, and the transaction closed, on the 15th day of August thereafter, and that if Price obtained said money from the United States, he would, unless restrained, put the same beyond the reach of the petitioner. The prayer of the petition was that a receiver of the draft or other negotiable security be appointed, and that Price be ordered and directed, immediately on the receipt of such draft or security, to endorse the same to the receiver, to the end that the amount thereof might be received by him as an officer of the court and disposed of according to law.
On the presentation of the petition, with affidavits in its support, the chancellor, on the 8th day of August, 1892, issued a rule, returnable at chancery chambers September 12th following, that Price show cause why the prayer of the petition should not be granted, and an injunction issue, and a receiver be appointed, pursuant to that prayer, which rule further directed that Price should be, and was thereby, restrained and enjoined from making any endorsement of the draft referred to in the petition.
A duly certified copy of that order, pursuant to directions therein, was served upon Price on the 10th day of August, 1892. Nevertheless, after that date, Price received from the Assistant Treasurer of the United States at Washington, and without permission of the court collected, four several drafts, signed by that officer, for the respective sums of $2,704.08, $13,500, $20,000, and $9,000, in all the sum of $45,204.08; leaving in the hands of the United States, of the amount due on the settlement of Price's accounts, the sum of about $31,000.
things in action and the evidence thereof, and it was made the duty of the receiver to hold such drafts subject to the further order of the court. The receiver was required to give bond in the sum of $40,000, conditioned for the faithful discharge of his duties. At the same time, Price was ordered to convey and deliver to the receiver all such property and things in action and the evidence thereof, and especially forthwith to endorse and deliver the drafts to him, and he and all agents or attorneys appointed by him were enjoined and restrained from intermeddling with the receiver in regard to said drafts, and ordered, if in possession or control thereof, to deliver them to the receiver with an endorsement to that officer or to the clerk of the court for deposit, provided the order should be void if the drafts, other than the one for $9,000, were delivered with Price's endorsement to the clerk, the proceeds to be deposited to the credit of the cause. Price was expressly enjoined from making any endorsement or appropriation of the drafts other than to the receiver or the clerk for deposit.
The receiver gave the required bond and, having entered upon the duties of his office, he caused a copy of the above order to be served upon Price and demanded compliance with its provisions.
In 1892, the particular day not being stated, the Chancery Court issued an attachment against Price for contempt of court in disobeying the order of August 8, 1892. By an order made May 18, 1894, the court held him to be guilty of such contempt, and he was directed to pay to the receiver the sum of $31,704.08, and a fine of $50 and costs, and, in default of obedience to that order, to be imprisoned in the county jail until it was complied with. 52 N.J.Eq. 16, 31. Upon appeal to the Court of Errors and Appeals, the order of the Chancery Court was affirmed. 53 N.J.Eq. 693.
18th day of May, 1894, by which Price was directed to execute two instruments in writing, which he had been previously required by the court to sign, seal, and deliver, one of them consenting that the balance from the government should be paid to the receiver, such consent to be filed with the Treasurer of the United States, and by the other assigning all his property, real and personal, and all his rights and credits.
These last two orders were served upon Price while he was sick, and he died June 8, 1894, without complying with either of them. So far as was known, he left no will, and no application had been made for the appointment of an administrator of his estate, as in case of intestacy. But letters of administration ad prosequendum were granted by the Prerogative Court of New Jersey to Allen L. McDermott.
The present bill was filed in the Chancery Court, July 5, 1894, in the name of the administratrix of Samuel Forrest and of the receiver, Borcherling. The principal defendants are the children and heirs of Rodman M. Price. The other defendants are John C. Fay and McDermott, the latter as administrator ad prosequendum.
by some lawful tribunal of the right of the receiver in the premises.
The relief asked was: 1. that the cause commenced by the bill of 1874 be revived, and the administrator ad prosequendum be adjudged a proper party thereto; 2. that the defendants the children and heirs of Rodman M. Price, together with Fay, be perpetually enjoined from making any demand upon, or application to, the United States, or from receiving any part of the money awarded to the deceased then remaining in the Treasury of the United States; 3. that the parties above named be decreed to pay to the plaintiff Borcherling, receiver, to be by him disposed of under the orders of the court, any part of the money they might have respectively received or might receive; 4. that the administrator ad prosequendum, or any executor or administrator of Price thereafter admitted as defendant in the cause, deliver to the receiver all the property of the deceased, whether in possession or action, which might come to their hands.
The heirs of Price filed pleas asserting their right to the benefit of the Act of February 23, 1891. The case was heard upon the bill and pleas, and the pleas were overruled by Chancellor McGill. The defendants were thereupon ordered to answer the bill.
Upon appeal to the Court of Errors and Appeals, the order of the Chancery Court was affirmed and the cause was remitted to that court with directions to proceed therein according to law. Price v. Forrest, 54 N.J.Eq. 669.
The heirs then filed an answer in which they denied that there was any jurisdiction in the Chancery Court to sequester the moneys in dispute in the Treasury of the United States and insisted that whatever amount remained in the Treasury as the balance due on the adjustment of the accounts of Rodman M. Price belonged, under the act of Congress, to the defendants as his heirs.
"ordered and decreed that the said defendants, and each of them, be, and they are hereby, perpetually enjoined and restrained from making any demand upon, or application to, the government of the United States, or the Secretary of the Treasury of the United States, or any officer of the said Treasury, or from receiving from the United States, or its said Secretary of the Treasury, or any officer thereof, any part of the money remaining in the Treasury of the United States at the time of filing said bill of complaint, and which was awarded to Rodman M. Price, deceased, as in the said bill stated, or now there remaining."
This judgment was affirmed by the Court of Errors and Appeals of New Jersey, 56 N.J.Eq. ___, and the judgment of affirmance is here for review.
1. The first proposition of the plaintiffs in error is that, consistently with the statutes of the United States, the defendants in error cannot take anything under the orders adjudging that Borcherling, the receiver appointed by the state court, was entitled, as between him and the heirs of Price, to receive the money remaining to his credit on the books of the Treasury.
and fully explained the transfer, assignment, or warrant of attorney to the person acknowledging the same."
It is insisted that the orders in the state court assume to transfer or assign Price's claim against the United States in violation or without regard to the requirements of that statute in that no assignment of the claim has ever been freely made, that no warrant for the payment thereof had been issued when those orders were made, and that the endorsement or assignment that Price was ordered to make did not fall within any of the established exceptions, under section 3477, such as assignments in bankruptcy and insolvency, and assignments by operation of law.
Are these propositions supported by the decisions of this Court in which it has been found necessary to construe that section?
In United States v. Gillis, 95 U. S. 407, 95 U. S. 416, the question was as to the validity of a voluntary transfer of the legal title to a claim under the Abandoned and Captured Property Act of March 12, 1863, for the proceeds of certain cotton seized by the military forces of the United States. The suit was brought by the transferee in the Court of Claims, which found in his favor. By this Court it was adjudged that he could not maintain the action. While holding that the Act of February 26, 1853, c. 81, 10 Stat. 170, from which section 3477 was taken, was of universal application and covered all claims against the United States in every tribunal in which they might be asserted, this Court stated that "there are devolutions of title by force of law, without any act of parties, or involuntary assignments compelled by law," to which the statute did not apply.
"The Act of Congress of February 26, 1853, to prevent frauds upon the Treasury of the United States, which was the subject of consideration in the Gillis case, applies only to cases of voluntary assignment of demands against the government. It does not embrace cases where there has been a transfer of title by operation of law. The passing of claims to heirs, devisees, or assignees in bankruptcy are not within the evil at which the statute aimed, nor does the construction given by this Court deny to such parties a standing in the Court of Claims."
"The language of the statute, 'all transfers and assignments of any claim upon the United States, or of any part thereof, or any interest therein,' is broad enough (if such were the purpose of Congress) to include transfers by operation of law, or by will. Yet we held it did not include a transfer by operation of law, or in bankruptcy, and we said it did not include one by will. The obvious reason of this is that there can be no purpose in such cases to harass the government by multiplying the number of persons with whom it has to deal, nor any danger of enlisting improper influences in advocacy of the claim, and that the exigencies of the party who held it justified and required the transfer that was made. In what respect does the voluntary assignment for the benefit of his creditors, which is made by an insolvent of all his effects, which must, if it be honest, include a claim against the government, differ from the assignment which is made in bankruptcy? There can here be no intent to bring improper means to bear in establishing the claim, and it is not perceived how the government can be embarrassed by such an assignment. The claim is not specifically mentioned, and is obviously included only for the just and proper purpose of appropriating the whole of his effects to the payment of all his debts. We cannot believe that such a meritorious act as this comes within the evil which Congress sought to suppress by the act of 1853. "
The doctrine of these cases has not been modified by any subsequent decision. Nor, as the argument at the bar implied, is that doctrine inconsistent with the decision subsequently rendered in St. Paul & Duluth Railroad v. United States, 112 U. S. 733. Nothing more was adjudged in that case than that a voluntary transfer, by way of mortgage, of a claim against the United States for the security of a debt, and finally completed and made absolute by a judicial sale, was within the purview of the prohibition contained in section 3477, and could not be made the basis of an action against the government in the Court of Claims. Such a voluntary assignment to secure a specific debt was held to be within the mischiefs which that section was intended to remedy. To the same class belongs Ball v. Halsell, 161 U. S. 72, 161 U. S. 79, which was the case of a voluntary transfer of part of a claim against the United States on account of the depredations of certain Indians on the property of the claimant.
of the law, and whatever remained, whether of property or money, in his hands after satisfying the judgment and the taxes, costs, or expenses of the receivership as might be ordered by the court would be held by him as trustee for those entitled thereto, and his duty would be to pay such balance into court to the credit of the cause, "to be there disposed of according to law." Revision of N.J. Laws, 1877, sec. 26, p. 394.
"I do not presume for a moment that the Chancery Court of New Jersey could issue an execution and compel payment of this money, nor could any of its powers be brought to bear to compel, without at least additional legislation by Congress, the Comptroller to pay its judgment; but while that is true, yet, on the other hand, the Comptroller, so far having awaited the adjudication of that Chancery Court, ought to abide by the result of that litigation, and await a final adjudication and certification of the amount, as to who are entitled under the laws of that state. This comes more from comity and from a disposition on the part of the Treasury officers to obey the laws of the land and to help to enforce the decrees of the courts that have jurisdiction over matters in litigation of this kind than from any actual authority that a court may have over the Comptroller to compel him to make payment. In conclusion, then, the Comptroller will not at this time act in this matter, but will say to the gentlemen that they must fight it out in the courts of New Jersey, and that this Court will follow the final decision that may be rendered there. . . . Hence this matter will be suspended until such time as the Comptroller may be put into possession of the final decree either of the New Jersey Chancery Court or such court as may have appellate jurisdiction therefrom."
Even if it be true that the final order of the state court in relation to the money in question would not impose any legal duty upon the officers of the Treasury, it does not follow that the order of court appointing the receiver would be null and void as between those who are parties to the cause and who are before the court.
in Erwin v. United States, nor a voluntary assignment by a debtor of his effects for the benefit of his creditors, as held in Goodman v. Niblack, it is difficult to see how an order of a judicial tribunal having jurisdiction of the parties appointing a receiver of a claim against the government, and ordering the claimant to assign the same to such receiver to be held subject to the order of court for the benefit of those entitled thereto, can be regarded as prohibited by that section.
2. Were the heirs of Rodman M. Price entitled upon his death, by virtue of the Act of February 23, 1891, to such balance as then remained to his credit in the Treasury of the United States on the adjustment made of his a counts under that act? If they were so entitled, then the final judgment of the Court of Errors and Appeals affirming the judgment of the Chancery Court denied to the plaintiffs in error a right specially set up and claimed by them under the above act, and therefore the jurisdiction of this Court to reexamine that final judgment cannot be doubted. Rev.Stat. § 709.
"Had Emerson become insolvent and made an assignment, would this claim, if it may be called a claim, have passed to his assignees? We think clearly it would not. Under such an assignment, what could have passed? The claim is a nonentity. Neither in law nor in equity has it any existence. A benefit was voluntarily conferred on the government, but this was not done at the request of any officer of the government or under the sanction of any law or authority, express or implied. And under such circumstances, can a claim be raised against the government which shall pass by a legal assignment or go into the hands of an administrator as assets? . . . A claim having no foundation in law, but depending entirely on the generosity of the government, constitutes no basis for the action of any legal principle. It cannot be assigned. It does not go to the administrator as assets. It does not descend to the heir. And if the government, from motives of public policy or any other considerations, shall think proper under such circumstances to make a grant of money to the heirs of the claimant, they receive it as a gift or pure donation -- a donation made, it is true, in reference to some meritorious act of their ancestor, but which did not constitute a matter of right against the government. In the present case, the government might have directed the money to be paid to the creditors of Emerson, or to any part of his heirs. Being the donor, it could, in the exercise of its discretion, make such distribution or application of its bounty as circumstances might require. And it has, under the title of an act 'for the relief of the heirs of Emerson,' directed, in the body of the act, the money to be paid to his legal representatives. That the heirs were intended by this designation is clear, and we think the payment which has been made to them under this act has been rightfully made, and that the fund cannot be considered as assets in their hands for the payment of debts. "
that the money awarded by the above act of 1831 did not replace any moneys taken by Emerson and Lorrain from their respective estates for the benefit of the government. They had only rendered meritorious personal services for the public, upon which no claim of creditors could be based, but which services Congress chose to recognize by making a gift to the heirs. This was substantially the view taken of the case of Emerson v. Hall in the recent case of Blagge v. Balch, 162 U. S. 439, 162 U. S. 458.
The case before us differs from the Emerson case by reason of circumstances which we must suppose were not overlooked by Congress when it passed the act of 1891. By advancing to Van Nostrand $75,000 to be used for the government, Price's ability to meet his obligations to creditors was to that extent diminished. As he had acted in good faith and in the belief that he was promoting the best interests of the government, the purpose of Congress was to make him whole in respect of the amount he had in good faith advanced to his successor for public use. He was then alive, and there was no occasion for Congress to think of making any provision for those who might be his heirs. We think that the legislation in question had reference to his financial condition, and there is no reason to suppose that Congress intended that the amount, if any, found due him upon the adjustment of his accounts should not constitute a part of his absolute personal estate, to be received and applied in the event of his death by his personal representative, as required by law.
all interest in that sum, but to provide against the contingency of death's occurring before the adjustment was consummated, and thus to make it certain that the right to have his accounts credited with the amount paid to Van Nostrand upon principles of "equity and justice" should not be lost by reason of such death. Under this interpretation of the act, the words "or his heirs" must be held to mean the same thing as personal representatives. We do not perceive either in the words of the act or in the circumstances attending its passage anything to justify the belief that Congress had any purpose, in the event of the death of Price, to defeat the just demands of creditors.
"The act of Congress nowhere mentions heirs at law or next of kin. Its manifest purpose is not to confer a bounty or gratuity upon anyone, but to provide for the ascertainment and payment of a debt due from the United States to a loyal citizen for property of his taken by the United States, and to enable his executor to recover, as part of his estate, proceeds received by the United States from the sale of that property. The act is 'for the relief of the estate' of Charles M. Briggs, and the only matter referred to the Court of Claims is the claim of his 'legal representatives.' The executor was the proper person to represent the estate of Briggs, and was his legal representative, and as such, he brought suit in the Court of Claims and recovered the fund now in question, and consequently held it as assets of the estate, and subject to the debts and liabilities of his testator to the defendants in error."
It is to be observed that the court in that case looked both to the body of the act and the preamble in order to ascertain the intention of Congress.
It results that the plaintiffs in error, as heirs of Rodman M. Price, were not denied by the final judgment of the state court any right secured to them by the act of 1891.
Something was said in argument which implied that Price had wrongly resisted the collection of the Forrest claim and judgment. It is proper to say that, so far as the record speaks on that subject, the course of the deceased was induced by the belief on his part that it was a claim which he was not bound in law or justice to pay. Our conclusion does not rest in any degree upon the character of that claim, but entirely upon questions of law arising out of matters that were concluded, so far as this Court is concerned, by the action of the state court, and which we have no jurisdiction to review.

References: § 3477
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 709
 v. 
 v.