Source: https://www.legalcrystal.com/case/90800/national-bank-commerce-vs-downie
Timestamp: 2016-12-07 12:31:06
Document Index: 603755063

Matched Legal Cases: ['§ 3477', '§ 3477', '§ 3477', '§ 3477', '§ 3477', '§ 3477', '§ 3477', '§ 3477']

National Bank of Commerce Vs Downie - Citation 90800 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize National Bank of Commerce Vs. Downie - Court Judgment	LegalCrystal Citationlegalcrystal.com/90800CourtUS Supreme CourtDecided OnNov-28-1910Case Number218 U.S. 345AppellantNational Bank of CommerceRespondentDownieExcerpt:.....syllabus
the prohibition of § 3477, rev.stat., against assignment of claims against the united states which have not been allowed and warrant issued therefor is of universal application. it covers all unallowed claims and all voluntary assignments thereof, including assignments made in good faith, as security for advances in course of business, of undisputed claims on contracts being performed by the assignor, and
that assignments of such claims so made by a bankrupt are null and void not only as against the united states, but also as against other creditors, and the claims pass by operation of law to the trustee in bankruptcy.
section 3477, rev.stat., does not embrace the transfer of unallowed claims against the united states when the transfer is by operation..... Judgment:
There is no dispute as to the facts out of which the present controversy has arisen. Substantially the facts are these: on the sixteenth day of April, 1907, the appellee Downie was appointed receiver of the property of Gamwell & Wheeler, partners, who had previously, on the same day, been adjudged bankrupts. Subsequently he was elected and qualified as permanent trustee, and by order of the court, June 20th, 1907, was authorized to collect all moneys due the bankrupts
from the United States or any of its departments.
Gamwell & Wheeler, as a firm, held sixteen unallowed claims
aggregating $33,517.48, the first one being dated December 10th, 1906, and the last February 15th, 1907. The National Bank of Commerce of Seattle was a creditor of that firm in the sum of $37,149.85. These claims were all assigned by Gamwell & Wheeler to the above bank. The Seattle National Bank was likewise a creditor of the firm and to the extent of $22,582.19, with interest, and that firm held certain unallowed claims against the United States, sixty-one in number, and amounting to $38,509.32. The first of the latter claims was dated September 25th, 1906, and the last April 4th, 1907. They were all assigned by Gamwell & Wheeler to the last-named bank.
The words of that section are so clear and explicit that there cannot be, we think, any reasonable ground to doubt the purpose of this legislation. Its essential features are not new, as can be seen by an examination of the Act of Congress of July 29th, 1846, "in relation to the payment of claims" on the United States, and the Act of February 26th, 1853, "to prevent frauds upon the Treasury of the United States." 9 Stat. 41, c. 66; 10 Stat. 170, c. 81. Turning to § 3477, we find Congress had in mind not only all transfers and assignments of any claim on the United States, or part of a claim or
the transfer or assignment be absolute or unconditional, and
whatever was the consideration of the transfer or assignment,
but all powers of attorney, orders, or other authorities for receiving payment of any such claim, or
of any part or share thereof.
All such transfers, assignments, powers of attorney, order, or authorities are declared to be "absolutely null and void" except there be a compliance with the conditions fully set out in the statute. None of those conditions was complied with in these cases.
, it appears that suit was brought in the Court of Claims by the assignee of an unallowed claim on the United States, and the question arose whether the assignee could maintain a suit in his name for the proceeds of the claim. The Court of Claims sustained the assignee's right to sue, but this Court, upon careful examination of the Act of 1853, reenacted in § 3477 of the Revised Statutes, reversed the judgment, and directed the petition of the assignee to be dismissed. It was contended in that case that the Act of 1853 had reference only to claims asserted before the Treasury Department. But that view was rejected. After observing that the comprehensive provisions of the statute excluded any exceptions to the rule presented, the Court said:
"We think, therefore, the Act of 1853 is of universal application, and covers all claims against the United States
in every tribunal in which they may be asserted.
And such, we think, was the understanding of Congress when the Revised Statutes were enacted. In the revision, the Act of 1853 was included and reenacted."
Among the earlier cases on the general subject is
97 U. S. 488
-490, frequently referred to in later decisions and always followed.
of certain acceptances which, upon their face, provided for payment to be made out of any moneys received from the United States on the claim of one Kirk
The assignee or holder of the acceptances paid value for them, and acted in entire good faith. The question was whether an assignment of a claim against the United States, made before the claim had been allowed, and before a warrant had been issued for its payment, had
any validity, either in law or in equity.
The court of original jurisdiction dismissed Spofford's bill, and the judgment was affirmed here. Mr. Justice Strong, speaking for this Court, referred to § 3477 of the Revised Statutes, and, among other things, said:
"It would seem to be impossible to use language more comprehensive than this. It embraces alike legal and equitable assignments. It includes powers of attorney, orders, or other authorities for receiving payment of any such claim, or any part or share thereof. It strikes at every derivative interest, in whatever form acquired, and
incapacitates every claimant upon the government from creating an interest in the claim in any other than himself.
After referring to the fact that the court had not been called upon to decide in the
case whether the assignment there involved was invalid as between the assignor and the assignee, the opinion proceeds:
"But if, after the claim in this case was allowed and a warrant for its payment was issued in the claimant's name, as it must have been, he had gone to the Treasury for his money, it is clear that
no assignment he might have made, or order he might have given, before the allowance would have stood in the way of his receiving the whole sum allowed.
The United States must have treated as a nullity any rights to the claim asserted by others. It is hard to see how a transfer of a debt can be of no force as between the transferee and the debtor, and yet effective as between the creditor and his assignee to transmit an ownership of the debt, or create a lien upon it. Yet if
that might be -- and we do not propose now to affirm or deny it -- the question remains whether the act of Congress was not intended to render all claims against the government
inalienable alike in law and in equity, for every purpose and between all parties.
The intention of Congress must be discovered in the act itself. . . . We cannot say, when the statute declares all transfers and assignments of the whole of a claim, or any part or interest therein, and all orders, powers of attorney, or other authority for receiving payment of the claim, or any part thereof, shall be absolutely null and void, that they are only partially null and void, that they are valid and effective as between the parties thereto, and only invalid when set up against the government. It follows that, in our opinion, the accepted orders under which the appellant claims gave him no interest in the claim of the drawer against the United States, and no lien upon the fund arising out of the claim. His bill was therefore rightly dismissed."
, the Court held that a voluntary transfer by mortgage, for the security of a debt, and finally completed and made absolute by a judicial sale, was within the prohibition of § 3477, Mr. Justice Matthews, speaking for the Court, saying that, "if the statute does not apply to such cases, it would be difficult to draw a line of exclusion which leaves any place for the operation of the prohibition."
The latest adjudication by this Court, construing § 3477 of the Revised Statutes, is that of
200 U. S. 13
. That case involved, among other things, the validity of the clause in a written contract relating to compensation to be made to an attorney employed to prosecute a claim against the United States. The contract provided that the payment of such compensation
After referring to the words of § 3477, and citing previous cases in which the scope and meaning of that section were considered (which cases are given in the margin
"If regard be had to the words as well as to the meaning of the statute, as declared in former cases, it would seem clear that the contract in question was, in some important particulars, null and void upon its face. We have in mind that clause making the payment of the attorney's compensation a
upon the claim asserted against the government, and upon any draft, money, or evidence of indebtedness issued thereon. In giving that lien from the outset, before the allowance of the claim, and before any services had been rendered by the attorney, the contract, in effect, gave him an interest or share in the claim itself, and in any evidence of indebtedness issued by the government on account of it. In effect or by its operation, it transferred or assigned to the attorney in advance of the allowance of the claim such an interest as would secure the payment of the fee stipulated to be paid. All this was contrary to the statute, for its obvious purpose, in part, was to forbid anyone who was a stranger to the original transaction to come between the claimant and the government prior to the allowance of a claim, and who, in asserting his own interest or share in the claim, pending its examination, might embarrass the conduct of the business on the part of the officers of the government.
In this connection, it must be said that this Court has held that the statute in question does not embrace the transfer of a claim against the United States where the transfer has been by operation of law, not merely as the result of a voluntary assignment by the claimant. In
, this Court, speaking by Mr. Justice Field, after referring to the Act of 1853, embodied now in § 3477 of the Revised Statutes, to prevent frauds upon the Treasury, said that it
This construction of the statute was recognized as settled law in
146 U. S. 311
still in law the owners of these claims on the United States,
and all interest therein passed under the Bankrupt Act to their general creditors, to be disposed of as directed by the Bankrupt Act, just as if there had been no attempt to transfer them to the banks. Any other holding will effect a repeal of the statute by mere judicial construction, in disregard of the plain, unequivocal intent of Congress, as indicated by the statute.
Freedman's Sav. Co. v. Shepherd,