Case Name: Mills W. Sausser, for the use of L. J. Workhum, v. The United States
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1875-12
Citations: 11 Ct. Cl. 538
Docket Number: 
Parties: Mills W. Sausser, for the use of L. J. Workhum, v. The United States.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 11
Pages: 538–565

Head Matter:
SAUSSER’S CASE.
Mills W. Sausser, for the use of L. J. Workhum, v. The United States.
On the Proofs.
A statute authorizes the Commissioner of Internal Revenue to prescribe a meter to be attached to distilleries at the cost of the distiller, and to be a condition to distilling. The Commissioner prescribes the Tice meter, andprovides by regulations that the distiller shall deposit the price with the collector of the district, mid that the meter shall then be ordered by the Commissioner from the manufacturer. Under these regulations a distiller is notified that if he does not pay for and attach two meters, previously ordered, his distillei'y will be closed. Se pays for them,'and the money is transmitted to the manufacture!', but the met&'s are found to be defective and are never used. Subsequently, the Internal Revenue Department abandons the use of meters. The claimant brings suit to recover back the price of the two meters, on the ground that he was compelled to purchase them by the Government, and that they were defeoiive and worthless.
I. The use of the Tice meter, after it was prescribed by the Commissioner of Internal Revenue, under the internal-revenue statutes, was one of the terms or conditions upon which a distiller might engage in the business of distilling.
II. Though the kind of meter prescribed by the Commissioner of Internal Revenue for distilleries proved to be worthless for the purpose for which it was prescribed, the detection of frauds, and was abandoned, nevertheless there was no failure of consideration for the price paid for one of them, inasmuch as it enabled the distiller to carry on his work of distilling as effectually as though it were a perfect instrument.
III. Though a particular distillery-meter was found to be defective and worthless after the internal-revenue officers had transmitted the distiller’s money to the manufacturer, pursuant to the regulations in such cases, yet the Government is not liable for it. The Government did not warrant such meters, and the purpose of the regulations was to assist distillers in procuring the prescribed meter without their being subjected to extortionate charges by the manufacturers. The Government made no warranty of the meter which it ordered at a distiller’s request, express or implied.
The Reporters’ statement of the case :
This was supposed to be a test case intended to bring up the questions of the Government’s liability for Tice meters purchased through its agency and pursuant to its requirements, both on account of the general inadequacy of all such meters and a special defect in the particular meter furnished to the claimant. As a great number of cases are said to exist where one or the other of these questions is involved, the findings of the court are given in full. The court found:
1. In August, 1868, and thereafter, the claimant, Sausser, was carrying on the business of a distiller of spirits, in the town of Cumminsville, Hamilton County, Ohio, in a distillery transferred to him, at that time, by one Thomas McGehan, who was previously engaged in the same business therein.
2. On the 16th of September, 1868, the Commissioner of Internal Revenue, according to the provisions of the act of July 20, 1868, entitled “An act imposing taxes on distilled spirits and tobacco, and for other purposes,” (15 Stat. L., 125,) adopted and prescribed for use in distilleries “ the spirit-meter, invented by Mr. Isaac P. Tice,” and gave notice thereof by a circular, of which the following is a copy:
“Treasury Department,
“ Oeeice op Internal Revenue,
“ Washington, September 16,1868.
“ Notice is hereby given that the Commissioner of Internal Revenue has adopted and prescribed for use in distilleries the spirit-meter invented by Mr. Isaac P. TiCe, of New York, being the same that was adopted and prescribed by the honorable Secretary of the Treasury on the 19th of April, 1867, under section 15 of the act of March 2, 1867, and subsequently recommended for use by the commission appointed under the joint resolution of Congress approved February 3,1868.
“ Section 3 of the act, of July 20,1868, provides that whenever the Commissioner of Internal Revenue shall adopt and prescribe for use any meter, every owner, agent, or superintendent of a distillery must furnish and attach, at his own expense, such meter for use at his distillery, and furnish all pipes, materials, labor, and facilities necessary to complete such attachment, in accordance with the regulations of the Commissioner of Internal Bevenue, who is also authorized to order and require such changes of or additions to the distilling-apparatus, connecting-pipes, pumps, or cisterns, or any machinery connected with or used in or on the distillery premises, and prescribe such fastenings, locks, and seals as he may deem necessary.
“ The system which has been adopted involves the use of two meters: The first with double counters at the end of the worm through which the entire product of the still will pass, the quantity of high wines being indicated upon one set of registers, and the quantity of low wines upon another. Thef second meter will be placed upon the doubler in such position as to register the quantity of low wines carried back to the doubler for redis-tillation. If the still is provided with such attachments that no low wines are discharged, and the distiller is prepared to report as taxable the entire product of the still, the second meter will not be required.
“ These meters are constructed of six different sizes, the prices and capacities being as follows:
“ Sample-meter A. $200
“Sample-meter B. 250
“ Meter No. 1. — Single counter.^. 450
“ Double counter. 500
“ Capacity, one and a half gallons per minute.
-Single counter- “ Meter No. 2.— o o o
“Double counter.. o c
. “Capacity, three gallons per minute.
“Meter No. 3. — Single counter. o O CO
“ Double counter o lO CO
“ Capacity, six gallons per minute.
“Meter No. 4. — Single counter. 1,000
“Double counter. 1,050
■ “ Capacity, eighteen gallons per minute.
“ The small meters, A and B, are intended more especially for application to small copper stills, and the capacity above given must be understood to be the maximum capacity per minute of each of the meters.
“ The meter adopted, being the invention of Mr. Tice, and secured to him by letters-patent, can only be made by him or under his license; and in order to guard against an unreasonable price being demanded of those who are bound by law to purchase it, the prices of the several sizes, under an arrangement made between Mr. Tice and the Government, have been determined by a committee, consisting of William T. Duvall, of Georgetown, D. C.; William P. Trowbridge, of Kew York-; and S. J. Knowles, of Massachusetts, all practical and skillful machinists, two of whom were designated by the Government and one by Mr. Tice, and the sums hereinbefore named are the prices agreed upon by them for the meters delivered at the place of manufacture, as stated in the report of that committee.
“ Mr. Tice reports that he has now on hand, finished and ready for delivery, one hundred and seventeen meters, with thirty-six others in an advanced state, which will soon be ready for delivery, and has no doubt that he will be able to deliver meters as fast as they may be ordered, and as fast as distillers shall become authorized to run under the new law.
‘‘ Under the provisions of section 3, distillers are required to procure and attach such meters, and in making their applications therefor they must state the capacity of the still in cubic feet, and its utmost possible produciug-capacity per minute;that is, the greatest possible quantity of spirits that will pass from the worm in that time. The producing-capacity here referred to must not be confined to high wines merely, but must show the entire quantity of spirits, whether high or low wines, which can or will pass from the worm in the time specified. The attention of distillers is especially called to this point, as the discharge from the worm is not uniform ; and if the meter is not of sufficient capacity to measure and pass the largest quantity which the worm will discharge, it will be flooded, and its operation thereby stopped until the meter is opened and the valve again placed in working order.
“ The application must also show the cubic contents of the doubler, the outside diameter of the worm at its lower extremity, the height and diameter of the tank in which it is placed, and the material of which the still, doubler, and tank are constructed. The diameter of the main pipe leading from the still to the doubler, as well as of the charging and discharging and blow-off pipes, including the pipe used for discharging the doubler, must also be given. There is also required a description of the foundations upon which the still, doubler, and condenser are respectively supported. If the still is provided with collapse-valves, their number and diameter must also be stated.
“This application will be made on form 7, as heretofore prescribed, which will be furnished by the collectors of the several districts. At the time of making the application the applicant will furnish to the collector of his district a certificate of deposit in a United States depository for the amount of the price of the meter or meters, payable to the order of Mr. Tice, and the collector will certify upon such application that he has received such certificate, and forward the application to this office for transmission to Mr. Tice. And the applicant should also state the means of access to the distillery, whether by railroad, steamboat, or canal, and with what points the distillery is connected by either of these modes of communication. If there is any person carrying on the trade of coppersmith in the immediate vicinity, the collector will state the fact; and if not, he will state the distance to the nearest point at which the services of such artisan can be procured. Upon the delivery of the meter to the distiller, the collector will at once transmit the certificate of deposit to Mr. Tice, at his address, 314 Third avenue, New York City.
“Meters will be attached under the joint supervision of the manufacturer, or his agent, and of an assistant assessor, who will be specially detailed for that purpose by the assessor of the district, who will report the name of such assistant to this office.
“The expenses of transportation and attachment of the meters, and of any changes required to be made in the distillery, are to be paid by the distiller.
“ So long as meters are ready for delivery, distillers must procure and attach them. Should any distiller refuse to procure and attach a meter, it will be the duty of the collector to close the distillery, and forthwith institute the proper proceedings for its condemnation and. the enforcement of the penalties as provided by law.
“ Immediately upon the receipt of these instructions, collectors will report to this office the number and location of all the distilleries in operation in their ■ respective districts, with the names of the owners; and thereafter, when any distiller shall commence business, the fact will be immediately reported to this office.
“ Distillers of apples, peaches, and grapes, exclusively, will not be required to furnish and attach meters to their distilleries.
“E. A. DOLLIES,
“ Commissioner.”
3. On the 30th of March, 1869, the Commissioner issued certain “ regulations and instructions relative to Tice meters,” which, so far as material to this case, were as follows:
“Regulations and instructions relative to Tioe meters.
“Treasury Department,
“ Office Internal Beyenue,
“ Washington, March 30,1869.
“I. — AS TO PROCURING- AND ATTACHING METERS.
“ On the 16th of September, 1868, the Commissioner of Internal Bevenue adopted and prescribed for use in distilleries the spirit-meter invented by Mr. Isaac P. Tice, of New York, being the same that was adopted and prescribed by the Hon. Secretary of the Treasury, on the 19th of April, 1867, under section 15 of the act of March 2,1867, and subsequently recommended for use by the commission appointed under the joint resolution of Congress approved February 3, 1868.
“Section 3 of the act of July 20,1868, provides that whenever the Commissioner of Internal Bevenue shall adopt and prescribe for use any meter, every owner, agent, or superintendent of a distillery must furnish and attach, at his own expense, such meter for use at his distillery, and furnish all pipes, materials, labor, and facilities necessary to complete such attachment in accordance with the regulations of the Commissioner of Internal Bevenue, who is also authorized to order and require such changes of or additions to the distilling-apparatus, connecting-pipes, pumps, or cisterns, or any machinery connected with or used in or on the distillery premises, and prescribe such fastenings, locks, and seals as he may deem necessary.
“ The system which has been adopted involves the use of two meters: the first will be attached to the end of the worm and will register the entire product of the still; the second will be placed upon the doubler in such position as to register the quantity of low wines carried back to the doubler for redistil-latioD. If the still is provided with such attachments that no low wines are discharged, and the distiller is prepared to report as taxable the entire product of the still, the second meter will not be required.
“These meters are constructed of six different sizes, the prices and capacities being as follows:
“ Sample-meter A..... $200
“ Capacity, four gallons per minute. “ Sample-meter B.v... 250
“Capacity, eight gallons per minute.
“ These are intended for attachment to small copper stills.
“ Meter No. 2. 600
“ Capacity, three gallons per minute.
“ Meter No. 3. 800
“ Capacity, six gallons per minute.
“ Meter No. 4. 1,000
“Capacity, eighteen gallons per minute.
“The capacity above given must be understood to be the maximum capacity per minute of each of the meters. Meter No. 1 is not now made, having been found too small for practical use; a larger size, No. 5, having a capacity of about 30 gallons per minute, is now being constructed, the price and exact capacity of which will be announced hereafter.
“The meter adopted being the invention of Mr. Tice, and secured to him by letters-patent, can only be made by him or under his license; and in order to guard against an unreasonable price being demanded of those who are bound by law to purchase it, the prices of the several sizes, under an arrangement made between Mr. Tice and the Government, were determined by a committee consisting of Wm. T. Duvall, of Georgetown, D. O., Wm. P. Trowbridge, of New York, and S. J. Knowles, of Massachusetts, all practical and skillful machinists, two of whom were designated by the Government and one by Mr. Tice, and the sums hereinbefore named are the prices agreed upon by them for the meters delivered at the place of manufacture, as stated in the report of that committee.
“Under the provisions of section.3 of the act of July 20, 1868, distillers are required to procure and attach such meters, and in making their applications therefor they must state the capacity of the still in cubic feet, and its utmost possible producing-capacity per minute — that is, the greatest possible quantity of spirits that will pass from the worm in that time. The producing-capacity here referred to must not be confined to high wines merely, but must show the entire quantity of spirits, whether high or low wines, which can or will pass from the worm in the time specified. The attention of distillers is especially called to this point, as the discharge from the worm is not uniform, and if the meter is not of sufficient capacity to measure and pass the largest quantity which the worm will discharge, it will be flooded, and its operation thereby stopped until the meter is opened and the valve again placed in working order.
“The application must also show the cubic contents of the doubler, the outside diameter of the worm at its lower extremity, the height and diameter of the tank in which it is placed, and the material of which the still, doubler, and tank are constructed. The diameter of the main pipe leading from the still to the doubler, as well as of the charging and discharging and blow-off pipes, including the pipe used for discharging the doubler, must also be given. There is also required a description of the foundations upon which the still, doubler, and condenser are respectively supported. If the still is provided with collapse-valves, their number and diameter must also be stated.
“ This application will be made on form 7, as heretofore prescribed, which will be furnished by the collectors of the several districts. At the time of making the application the applicant will furnish to the collector of his district a certificate of deposit in a United States depository for the amount of the price of the meter or meters, payable to the order of Mr. Tice, and the collector will certify upon such application that he has received such certificate, and forward the application to this office for transmission to Mr. Tice. And the applicant should also state the means of access to the distillery, whether by railroad, steamboat, or canal, and with what points the distillery is connected by either of these modes of communication. • If there is any person carrying on the trade of coppersmith in the imme-mediate vicinity, the collector will state the fact; and if not,, he will state the distance to the nearest point at which the services of such, artisan eau be procured. Upon the receipt of the bill of lading, the collector will at once transmit the certificate of deposit to Mr. Tice, at his address, 314 Third avenue, New York City.
“The expenses of transportation and attachment of the meters, and of any changes required to be made in the distillery, are to be paid by the distiller.
“The distillers must furnish all lumber and other materials necessary for the attachment of the meter, and such workmen and assistants as may be required. The attachment will be made in such manner as to interfere as little as possible with' the operation of the distillery; but in case the distiller neglects promptly to provide the materials and assistance required, or in any way attempts to delay or defeat the attachment, it will be the duty of the collector of the district to close the distillery until the meters are attached.
“Where meters are being attached to several neighboring distilleries at the same time, the expenses incurred by Mr. Tice and his employés will be apportioned among the several distilleries according to the time employed in each.
“ Distillers of apples, peaches, and grapes, exclusively, are exempted from the provisions of law requiring distillers to procure and attach meters.
“Examination of the applications on file has shown that the meters applied for by distillers are in many cases of too small capacity for the distillery.
“It is well known that, in steam-distilleries especially, stoppages frequently occur for a short time, when the accumulated force of the stream drives over the alcoholic vapor, which is rapidly condensed and discharged from the worm with great force, in some cases accompanied by mash; and the question for the distiller to determine under this regulation is, what is the greatest quantity which will be discharged from the worm ■under such circumstances ? If the meter is not sufficient to pass the product of the worm under any and all circumstances, it will be flooded, the discharge-valve closed, and its operations .stopped, the spirit filling the meter and flowing back into the worm. The effect will of course be the same as if the distiller should effectually close the outlet of the worm while the still is in operation.
“ If the distiller applies for a meter of too small capacity, its attachment will be attended with the result above stated, unless prevented by shutting off the steam in time. The cost of the delay and other expenses attending such an accident may be much more than the difference in the cost of the meters, aside from the fact that the distiller in such case would be compelled to procure a larger meter to prevent a recurrence of such accident.
“ By the third paragraph of circular No. 69, distillers were required to procure and attach two meters in all cases, except where the still is provided with such attachments that no low wines are discharged, and the distiller is prepared to report as taxable the entire product of his still. In most of the applications but one meter is called for, although there is in the distillery a separation of low and high wines. If the two meters are attached, the distiller will be charged with the amount shown by the meter attached to the worm, deducting therefrom the amount of low wines shown by the other meter to have been returned to the doubler.
“Distillers should be at once required to revise their applications for meters, and, where the meters are too small, or only one is applied for when two are required, the applications should be at once corrected. If not so done, it will be understood that the distillers propose to stand upon their applications as made, and that they will take the entire responsibility as to the meters ordered by them being of sufficient capacity; and, where only one meter is applied for, that they assent to being taxed for the low as well as the high wines. All revenue officers will govern themselves accordingly. The manufacturer of the meters will be instructed to forward the meters of the sizes applied for, and to attach the same; and if any trouble arises on this account, the distiller, having been furnished with the precise size he asked for, will have no reason to complain of any one but himself.
“Meters will now be delivered as fast as the corrected applications are received, and the manufacturer will proceed with their attachment as fast as possible. Collectors should at once notify all distillers who have not made application, to do so immediately, and will report to the Commissioner the names of such as refuse or neglect to make such application. Whenever a certificate of deposit is forwarded to Mr. Tice, the collector will report the fact to this office, giving the amount, and name of the distiller who made the deposit.
“Where collectors deposit their collections in a depository bank, the meter deposits will be made in such bank ; bnt where they are required to deposit collections with an assistant treasurer or designated depositary, the meter deposits will be made in some responsible bank.
“A daily report must be made by the store keeper in charge of each distillery to the assessor of the district, setting forth the indications shown by the meter at the hour of 12 midnight, or at the time when the distillery ceases to operate for the day. And each assistant assessor who has a distillery in his division will examine each meter whenever he visits the distillery, and report to his assessor the indications of the meter as above directed. And assessors, in making their monthly computation on form No. 89, will use the information thus given in determining the production. Where but one meter is attached, they will charge the distiller with the full product of the worm, making no deduction for low wines returned to the still or doubler.
“ In distilleries where the product of the first distillation is singlings only, no meter will be required for the singling still; but each doubling still will require one or two meters, depending upon the fact whether there is. a separation of the low wines.
“ It must be understood, however, that there must be close connections between the singling and doubling stills in all cases, so that no access can be had by the distiller to the low wines at any point during their passage from the singling to the doubling still.
“ Collectors will furnish distillers promptly with a copy of these instructions, and if no corrections of the applications are made, will at once notify this office.
“ Where distillers continue to run, after the issue of these instructions, without making prompt applications for a meter, the names of such distillers will be at once reported to this office.
“ Under the provisions of the law the distiller is required to furnish and attach meters at his own expense, and also to furnish all pipes, materials, labor, and facilities necessary to complete such attachment. The first duty of a distiller is, of course, to procure a meter. The manufacturer is not required to furnish the meters on credit, and ought not to be expected to.do so. When he ships a meter to a distiller, in accordance with the application, the manufacturer is entitled to the pay for it. The law does not require the manufacturer to attach it, but, on the contrary, requires the distiller ,to attach at his own expense. Wherever changes are required in a distillery to facilitate the attachment, such changes must be made by the distiller. In order that the attachment may be made correctly and the meters properly adjusted, the manufacturer or some of his own workmen are required to superintend the attachment. When the distiller is notified by the manufacturer or his agents what changes are necessary, and what materials or assistance are required, he should furnish them promptly. It will be the duty of collectors to see that they do so, and in case of any unreasonable delay, to close the distilleries until the attachment is completed.
“ Wherever it is practicable an officer detailed .by the Commissioner will supervise the attachment, and when no such detail is made the assessor will detail one of his assistants for that purpose. When the attachment of a meter is completed, it must be promptly reported to this office by such officer or assistant assessor. The presence of such officer, however, will not be understood as relieving either the collector or assessor of the district from the responsibility properly belonging to them.
“A strict compliance with these instructions will be required of all officers of internal revenue. Whenever the manufacturer or his agents commence the attachment of meters in any district, the officers of such district are required to afford them every aid in their power, in order that the work may be completed as soon as possible. If there is any delay on the part of the distiller, or if any obstacles are interposed by him, or the manufacturer or his workmen fail to do their duty, prompt report must be made to this office.
“All must understand that the requirements of the law,in relation to meters and their attachment will be rigidly enforced. *******
“C. DELANO,
“ Commissioner
4. On tbe 6th of April, 1868, Thomas McGehan, while carry-ingonbusinessat said distillery,deposited with S. J. McGroarty, then collector of internal revenue for the second district of Ohio, through the deputy collector, $1,500 to secure the payment of meters to be attached to said distillery, in pursuance of the provisions of section 15 of the act of March 2, 1867, entitled “An act to amend existing laws relating to internal revenue, and for other purposes,” (14 Stat. L., 481,) and the circular of the Secretary of the Treasury of April 26,1867, adopting and prescribing for use the Tice meter, which was subsequently prescribed and adopted by the Commissioner of Internal Revenue as hereinbefore set forth. A receipt for said deposit was given to said McGehan, who, for a valuable consideration, transferred the same to the claimant, Sausser, with said distillery. The following is a copy of said receipt, with the indorsement thereon:
“United States Internal Revenue,
“Collector’s Oeeice, 2d District, Ohio,
Cincinnati, April 6th, 1868.
“Received of Tho’s McGehan the sum of fifteen hundred dollars, said amount deposited with me to secure the payment of meter, to be attached to his distillery, in the town of Cumminsville, county of Hamilton, State of Ohio.
“NORMAN O’DONNELL,
“Dep. Coll.”
“(Indorsed:) No. 4775. S. J. McGroarty, collector of internal revenue, 2d district of Ohio. Dated Cincinnati, 186’. Subject :
“Cincinnati, Sep. 1, ’68.
“Transfer to Mills W. Sausser, distiller.
“THOMAS MCGEHAN.”
The meters for which said deposit was made were not delivered while said McGroarty continued to be collector, nor while said McGehan carried on his business as distiller.
5. In April, 1869, or near that time, Richard B. Pulían succeeded Mr. McGroarty as collector of internal revenue for the second district of Ohio, and soon after his appointment two Tice meters, Nos. 3. and 4, arrived for the use of said distillery. Said Pulían thereupon demanded of said claimant, Saus-ser, payment for said meters to the amount of $1,800, the price fixed by said circular of the Commissioner of Internal Revenue. The claimant produced said receipt of the former collector for $1,500, claimed that he had thereby paid for meters which he had never received, and requested that said payment and receipt might be accepted in part payment of said $1,800. This the collector declined to allow, and notified Sausser that if payment were not made he would be compelled to close his distillery. Efforts were made by Mr. Sausser and Collector Pulían to obtain said $1,500 of McGroarty, but without success, and Sausser named a future day when he agreed to pay the $1,800 demanded of him, whether he collected the $1,500 of McGroarty or not. On said day so named, to wit, June 5,1869, said Sausser paid to said Pulían the said $1,800, and said Pul-ían transmitted the same to Mr. Tice, as required by circular and regulations of the Commissioner of Internal Revenue.
6. Said Collector McGroarty never forwarded said $1,500, so deposited with him, to Mr. Tice, but misappropriated the same and never accounted therefor. Subsequently, an action was brought in this court by said Sausser, as assignee of McGehan, against the United States upon said receipt, and therein said Sausser recovered judgment for said $1,500 paid by his assignor, McGehan, as aforesaid, and the same has been satisfied. (See Sausser v. United States, 9 C. Cls. R., 338.)
7. Said meters were left at the distillery, but were not attached, as required by the regulations, until some time in 1870, when the larger one was so attached. Both meters were defective in their construction, and neither was ever adjusted for use, and no assessments for spirits or taxes on spirits were ever determined thereby. They were finally taken down to get them out of the way, having been found to be unfit for the purposes intended. Subsequently, the use of the Tice meter was discontinued by a circular issued by the Commissioner of Internal Revenue, of which the following is a copy:
[“Circular No. 96.]
“Discontinuing the use of the Tice spirit-meter.
“ Treasury Department,
“Office of internal Revenue,
“ Washington, June 8,1871.
“ Under authority conferred by sections 2 and 3 of the act of July 20,1868, the Commissioner of Internal Revenue, in circular No. 69, dated September 16, 1868, and, again, in regulations, Series 5, No. 5, dated June 7, 1870, adopted and prescribed for use in distilleries spirit-meters invented by Mr. Isaac Tice, the same having been adopted and prescribed by the Hon. Secretary of the Treasury on the 19th day of April, 1867, and subsequently recommended for use by the commission appointed under the joint resolution of Congress approved February 3, 1868.
“ It having been ascertained by experience that these meters, as a class, do not fully answer the purpose for which they were intended, their use is hereby discontinued, and all existing orders prescribing the same are hereby revoked. All meters attached to distilleries may be detached.
“ The meters being the property of distillers, they will be permitted to dispose of them as they may desire.
“A. PLBASONTON,
“Commissioner."
Mr. 0. S. Lovell and Mr. Lewis Abraham for the claimant:
A contract between the Government and a private party is not deemed to be specially affected by the subsequent enactment of a general law. The U nited States as a contractor are not responsible for the United States as a lawgiver. (Deming's. Case, 1 C. Cls. B., p. 190.) This rule is extended in Jones & Brown's Case, same vol., 383.
Valid contracts cannot be impaired by legislation. (Gelpelce v. City of Dubuque, 1 Wall., 175; Ravemeyers v. City of Dubuque, 3 Wall., 294; Thompson v. Lee County, 3 Wall., 327.)
Even if it had any such effect, a new contract was made September 16, 1868, between the Government and the inventor, in which the United States instructs him to go on with the construction of the meters; to make the 117 now [then] finished, ready for delivery; to finish up the 36 now [then] in process of manufacture, and to manufacture 500 more, virtually recognizing and carrying out the contract between the manufacturer and the Government of 17th April, 1867 ; at least recognizing the obligation to execute the incompleted portions thereof. It is a proper presumption and legal inference that of the two parcels of 117 and 36 sets, those ordered by the Government for claimant’s assignor were included. The sixth paragraph of the contract of September 16, 1868, shows that there was to: be a test after attachment, and that the tests and attachments were to be made under Government supervision.
To recapitulate some of the conditions that had to be fulfilled before the distillers’ money should have been applied or appropriated so as to totally divest him thereof: The Government had to furnish meters; the meters had to be inspected and tested before shipment; an assistant assessor had to be detailed to supervise their attachment; the meters to be inspected and tested after attachment. The Government, as voluntary bailee, stood between the manufacturer, their contracting agent, and the collector, their financial agent, both of whom it controlled. The Government became thus a warrantor for the safe delivery of perfect instruments, which had to be fit for the intended use. The meters had to be attached to the distillery-apparatus.
After attachment and test they had to be used, and to be used “for the prevention and detection of frauds by distillers of spirits,” or “for ascertaining the quantity, gravity, and producing-capacity of any mash, wort, or beer used or to be used in the production of spirits, and the strength and quantity of spirits subject to tax.” (See acts of Congress March 2,1867, July 20, 1868.)
If there had been any inspection, test, or proof of the meters before shipment, the burden of proof is on the Government to show it. It is not furnished.
If there had been any assistant assessor detailed to attach the meters in question, the burden of proof is on the Government to state the name of said assistant assessor. Letter above cited acknowledges that the official records fail to show that' any was detailed. The fact is not of record. So as to the fact of inspection, attachment, and adjustment; so as to the report of said assistant assessor as to proving said meters (according to regulations) after attachment and adjustment; so as toa copy of his report regarding said attachment, adjustment, and proof. “Nothing of this character” is obtained from the records of this office.
The Government has misappropriated the distillers’ money, if they have paid it to the manufacturer or made any disposi tion of it before proper tests, and attachments, and reports thereon.
There never was or could have been any complete delivery of the meters to the distiller until (having been previously inspected and tested) they were attached, adjusted, and again tested, for even then their acceptance could have been declined.
In Cooper’s Case, (1 0. Cls. R., p. 28,) it was held that the sale of unserviceable stores was not valid where inspection was required under the regulations, and no inspection had been made. In Grant’s Case (7 Wall., 331) it was held that, notwithstanding an inspection and approval in New York before shipment, the property did not thereby change ownership. The inspection does not work a change of title.
It is insisted that the test, inspections, adjustments, attachments, &c., under the official supervision set forth, and the reports thereon, all must have been accomplished before there was or could have been complete delivery, or even technical or constructive delivery. Dumping on the highway is not such a delivery as the regulations promised.
Neither claimant nor his assignor ever had any dealings with the manufacturer; they had no occasion or right to do so. The Government stepped in between them — made the arrangement; claimant had no contract or arrangemennt with him. The paramount duties incumbent under such a voluntary trusteeship need not be suggested to the court. They have been passed on already. “The Government chose to accept the responsibility.” (9 0. 01s. R., p. 341.) It is contended that this implied trust is of a twofold nature, coming within the two classes laid down in 2 Story’s Equity Jurisprudence, p. 548.
“ 1. It stands upon the presumed intention of the parties. 2. It is forced upon the conscience of the party by operation of law.” That the trust herein raised imposes duties. “In a general sense, a trustee is bound by his implied obligation to perform all those acts which are necessary and proper for the due execution of the trust which he has undertaken.” (2 Story’s Eq. Jur., 635.)
It was never intended that the money deposited with the collector was an unconditional payment. It was merely “ to secure the payment of meters” (subsequently) “to be attached.” It was merely “ adequate security for the payment of the necessary expense.” It was merely “ a guarantee of the good faith with which the application is made,” “and to secure the contractor prompt payment upon the completion of the work.” Here is an official contract and promise as to how the deposits are to be treated, and it is insisted that, until the completion of the work, said earnest-money should have remained in the Government’s hands strictly in trust. Shipment did not constitute a delivery that could change the deposit into a payment. The Government held itself out as a stakeholder, and thereby guaranteed the distillers that, until the work was completed in detail, they would hold the earnest-money. If the fund has been diverted from its proper channel, or parted with without reference to this promise to the distiller, it is simply to be treated “like the misappropriation of any other funds committed to official custody, and the party who deposited it in pursuance of law is not chargeable with official negligence or malfeasance.” (8 C. (Jls. R., p. 341.)
When the original deposit was made, April 6, 1868, the meters intended for the distillery were not only not received, but not manufactured. Manifestly it was no payment then. In obedience to the compulsory requirement, and resting on the announcement that the Government and the manufacturer had entered into an agreement by which he was to furnish to the Government the meters at a price fixed, in a manner determined by a plan agreed upon between them, the only parties to that contract, and resting and relying on the announcement that the deposit would be held “ until such time as the meter was attached,” tested, &c., to his distillery, the earnest-deposit in lawful money of the United States was handed to the Government’s agent, lawfully and duly authorized, empowered, and instructed to receive it. Therefore the money was not a definite unconditional payment, but a deposit as security for the future delivery of the meters attached, tested, <&c.
It would be difficult to present a stronger case, where money was to be held intact, subject to the full and final completion of all the conditions precedent and subsequent, promised and contracted for, when it was exacted by a power whose demands and processes it was impossible to resist. Good faith insisted on by one party obligates good faith on the other.
The condition is not in any way changed because of the delay that followed in the shipment of the meters, or their arrival at the collector’s office after an unexpected length of,time. Claim ant did not contribute to this delay. The obligation of the Government was not lessened thereby, nor could the nature of the application or the character of the original or subsequent payment be changed thereby. As long as the trust existed it was a trust fund, and the money had to be held conditionally. This position was eventually admitted by the Government, and when Commissioner Delano examined into the matter, he took steps to protect the Government, as trustee, against loss by any misappropriation of the fund they held as bailees.
Exhibits B and C show how compulsory it was on the distiller to make the deposit. He would not only “ not be allowed to continue in operation, but if he did continue in operation, it will be the duty of the collector to take immediate measures for a condemnation of the distillery and. the enforcement of the penalties, as provided by section 25 of the act of March 2, 1867.” The consequences of refusal would be, in the language of the section of that act as follows: “ In addition to other fines and penalties now [then] by law provided, forfeit, for every such neglect or refusal, all the spirits made by or for him, and all the vessels used in making the same, and the stills, boilers, and other vessels used in distillation, and all materials fit for use in distillation, found on the premises, together with the sum of five hundred dollars for such offense, to be recovered with costs of suit, and shall be deemed guilty of a misdemeanor and be subject to imprisonment for a term not exceeding one year; which said spirits, with the vessels used in making the same, and all said materials, may be seized by the collector and held by him until a decision shall be had according to law.” The proceedings to enforce the forfeiture had to be commenced within twenty days after seizure. Proceedings t'o enforce the forfeiture were in the nature of proceedings in rem in the circuit or district court of the United States or any court of competent jurisdiction. All such payments are under moral duress. The parties do not stand on equal footing. It may be called statutory duress, if the term is admissible. The authorities have been uniform and consistent that money so paid is involuntary, and may be paid back.
Claimant has a right to demand specific performance of the contract, because “ if a man has performed a valuable part of an agreement, and is in no default for not performing the residue, it is reasonable that he should have a specific execution on. the other part of his contract, or at least should recover back whatever he has paid.” (Story’s Eq. Jur., sec. 772.)
For so much of the negligence or breach that may be the fault of the Government’s officer, let them look to his bond. They are well protected by statute. For so much that may be the fault of its contractor, presumably, it has protected itself so that recovery can be had by the ordinary remedy. Neither of these parties can be pursued by claimant. No right of action has accrued to him against either of them, and none ever can. There is no mutuality of contract between them. He is necessarily remanded to the principal, and he relies on the opinion often expressed by this court: “ That the rule regarding the effect of contracts, when the United States are a party, is the same as between man and man.” (1 C. Ols. R.; Broolcs7s Case, 2 O. Ols. R., 180; Smoofs Oase, 8 O. Ols. R., 96.)
The United States has no prerogative to claim one law on contracts as creditors and another as debtors. (Thorndikes Case, 2 Mason, 20.)
The United States, as a body-politic, are bound by the acts of her agen ts acting within proper sphere. (United States v. JUille-gas, 3 Wall. O. 0., 70.) They are responsible even on contracts made by the head of a Department. (Gideon v. United States, 19 Law Rep., 89.) The meter being “a creation of Oongress” as shown, the Government must be looked to as sponsor.
Mr. Alexander Johnston (with whom was the Assistant Attorney-General) for the defendants:
First. The petition fails to set forth a sufficient cause of action. The cause of action, if any, rests on the provisions of a specified statute, of regulations presumably authorized in connection therewith, and of official acts in the premises. The statute first gives the Commissioner of Internal Revenue power, ■ for a specified end, to adopt and prescribe for use, among other means, such spirit-meters “ as he may deem necessary.” It of course invests him with a discretionary and not a ministerial function. This authority he exercised September 16,1868, giving due notice that he had adopted and prescribed for use by distillers the Ticé spirit-meter; and whether his action was well or ill considered is not for adjudication here.
The statute next declares what in such case shall be the duty of the distiller. He must “ furnish and attach at his own expense” the prescribed meters; furnishing, also, everything needed to complete the attachment in accordance with the regulations of the Commissioner. Neither the Commissioner nor any other official had power, by regulation or otherwise, to remit or vary this obligation. The foregoing extracts from the regulations show that the Commissioner was careful to notify distillers of their duty in the premises. There is no pretense that there is anything in the regulations in the nature of an undertaking, express or implied, that the meters of Tice should be well constructed, of good material and workmanship, merchantable or useful for the purposes contemplated by the law, and if there were, it would be void for want of authority. The case turns, therefore, on the point whether Congress, in requiring the claimant for public ends to procure and pay for such meters as the Commissioner in his discretion should prescribe for use, impliedly bound the defendants to respond in damages for any personal detriment to him from an injudicious exercise of such discretion. That there is no such implication in this or any like statute seems too plain for argument.
Second. If the action is legally possible, it is nob sustained in fact. Assuming the theory of the action correct, the claimant is bound to show that the meters purchased by him and used in his distillery were useless or inefficient for che prevention and detection of frauds. To do this, it is not enough to show bad construction, of bad material and workmanship, and that they were unmerchantable, which are the defects alleged in the petition. These are matters affecting the particular apparatus, for which the purchaser thereof and not the Commissioner is responsible. The obligation of the latter can extend no further than to the adoption in general of a meter capable in practice as well as in theory of accomplishing the required end, and in this we submit no failure is shown.
There are but two witnesses produced for claimant whose testimony needs to be alluded to on this'point: Twitchell and Milward. The former examined one of the meters while unattached, and never saw a Tice meter in operation. The court evidently disregarded his testimony in remanding the case for further evidence on this point; and Milward was examined to supply the deficiency. His testimony seems directed to show that the indications of the meter varied so much from the re-. suits of ordinary measurements by gauging, as to make it unreliable as a basis for taxation. Admitting that, it is aside from the issue, which is on its efficiency as a means for preventing and detecting frauds. For that purpose no close approximation to gaugements is needed. Nevertheless, there is abundant information on that point accessible in the extended series of experiments instituted by the Department to test the sufficiency of the Tice meters in that, regard, which are detailed in Executive Document H. R., 272, (Gallagher’s report.) These statistics are certainly entitled to greater consideration than Milward’s statements.
But the claimant further refers, in pleading, to statements of the Commissioner, in regulations, series 5, No. 5, of June 7, 1870, and in circular No. 96, of June 8,1871, which are also produced in evidence.
The statements in the regulations are far from sustaining the claimant’s case. Those of the circular are incorrectly recited in the petition.; the language being that the meters did not fully answer the purpose for which they were intended. The opinion of the Commissioner, or his conclusion as to what had been ascertained, cannot be accepted, however, as evidence, especially as it does not appear to have been rendered prior to the existence of the alleged cause of action.

Opinion:
Richabdson, J.,
delivered the opinion of the court:
By the Aet July 20,1868, ch. 186, secs. 1 and 2, (15 Stat. L., 125,) Congress imposed a tax of 50 cents on each proof-gallon of distilled spirits, to be paid by the distiller, owner, or person having possession thereof, before removal from distillery-warehouse, and declared that proof-spirit should be held and taken to be that alcoholic liquor which contains one-half its volume of alcohol of a specific gravity of .7939 at 60° Fahrenheit, aud authorized the Commissioner of Internal Revenue, "for the prevention and detection of frauds by distillers of spirits, to adopt and prescribe for use such hydrometers, saccharometers, weighing and gauging instruments, meters, or other means for ascertaining the quantity, gravity, and producing-capacity of any mash, wort, or beer used, or to be used, in the production of distilled spirits, and the strength and quantity of spirits subject to tax," as he might deem necessary; and also authorized him to " prescribe rales aud regulations to secure a uniform aud correct system of inspection, weighing, marking, and gauging of spirits."
By the third section it was further provided " that whenever the Commissioner of Internal Bevenue shall adopt and prescribe for use any meter, meters, or meter-safes, it shall be the duty of every owner, agent, or superintendent of a distillery to furnish and attach, at his own expense, such meter, meters, or meter-safes as may have been prescribed for use at his distillery, and to furnish all the pipes, materials, labor, aud facilities necessary to complete such attachment in accordance with the regulations of the Commissioner."
On the 16th of September, 1868, the Commissioner gave notice, by a general circular, that, under the provisions of the act of July 20,1868, he had "adopted and prescribed for use in distilleries the spirit-meter invented by Mr. Isaac P. Tice, of New York, being the same that was adopted and prescribed by the honorable Secretary of the Treasury on the 19th of April, 1867, under section 15 of the act of March 2, 1867, and subsequently recommended for use by the commission appointed under the joint resolution of Congress; " aud on the 30th of March, 1869, he promulgated the rules and regulations which he had prescribed in relation to said meter and the use of the same in distilleries.
The invention of this meter had been patented by Mr. Tice, and, as no meters could be made except by him or under his authority, he had a monopoly, by which he could have made distillers pay unreasonable and exorbitant prices for the instruments, which they were obliged by law and the rules of the Commissioner to purchase and use, and which he alone could supply.
For not procuring a meter the penalty upon a distiller was severe; and by the regulations it was made the duty of the collector to close the distillery, and forthwith to institute the proper proceedings for its condemnation and the enforcement of the penalties prescribed by law.
To protect distillers from extortion or the payment of exorbitant or unreasonable prices for what the Commissioner had obliged them to purchase, he entered into an arrangement with Mr. Tice, by which the latter agreed to furnish the different-sized meters at the prices specified. This arrangement and tbe reasons therefor were fully stated in the Commissioner's circular and in the rules and regulations promulgated by him. It was also prescribed therein that the distiller, in making application to the internal-revenue collector of his district for a meter, should at the same time furnish to the collector a certificate of deposit in a United States depository for the amount of the price of the same, payable to the order of Mr. Ticej that the collector should certify on such application that he had received such certificate, should forward the application to the Office of Internal Eevenue at Washington for transmission to the manufacturer, and, upon the delivery of the meter to the distiller, should at once transmit the certificate of deposit to Mr. Tice, at his address, 314 Third avenue, New York City.
Under a previous law of Congress (the act of March 2,1867, section 15) the Secretary of the Treasury had adapted and prescribed this same Tice meter for use by distillers, with rules and regulations similar to those subsequently promulgated by the Commissioner of Internal Eevenue under the act of 1868; and Thomas McGehan, who was carrying on business at his distillery in Cumminsville, Ohio, on the 6th of April, 1868, deposited with S. J. McGroarty, then collector of internal revenue for the district, $1,500 to secure the payment of a meter for his said distillery, but never received the same while he remained in business.
In August, 1868, McGehan sold out his business to the claimant, Sausser, and transferred to him the distillery, with the receipt given by McGroarty, through his deputy, for the $1,500.
In April, 1868, Eichard B. Pulían succeeded McGroarty as collector, and soon after his appointment two Tice meters arrived at the distillery for delivery. Pulían demanded of the claimant payment of these meters to the amount of $1,800, which was the correct price therefor named in the Commissioner's circular and regulations. Sausser thereupon produced the receipt of the former collector for $1,500, and demanded that said receipt and payment might be accepted and allowed to him in part payment for the amount demanded. This Mr. Pulían declined to do, and notified the claimant that if payment were not made he would be compelled to close the distillery. McGroarty never sent the money received by him to Mr. Tice, nor to the office of the Commissioner of Internal Eevenue, but misappropriated the same. Efforts made by Pulían and Sausser to induce McGroarty to refund the deposit-money proved unavailing, and on the 5th of June, 1869, the claimant paid the $1,800 to Pulían, who transmitted the same to Mr. Tice, as required by the regulations.
Subsequently Sausser brought an action against the United States upon the receipt of McGroarty, and therein recovered judgment for the $1,500 deposited with him, and that judgment has been paid. (9 O. Ols. R., p. 338.)
Both of these meters were defective in their construction, and, although some time afterward attached to the distillery, were never adjusted for use, no assessments for spirits or taxes on spirits were ever determined by them, and they were taken down to get them out of the way. In June, 1871, the use of the Tice meter was discontinued throughout the country, the Commissioner of Internal Revenue on that day having issued a circular setting forth that " it having been ascertained by experience that these meters, as a class, do not fully answer the purpose for which they were intended, their use is hereby discontinued, and all existing orders prescribing the same are revoked. All meters attached to distilleries may be detached. The meters being the property of distillers, they will be permitted to dispose of them as they may desire."
The petitioner now brings this action to recover from the United States the $1,800 paid to the collector of internal revenue- and forwarded to Mr. Tice, the manufacturer, on the ground of a failure of consideration, or upon an implied contract which he claims the defendants made, by their rules, to supply merchantable and perfect meters, adapted to the purposes mentioned in the law and regulations, and adequate therefor.
In our opinion the claimant has no cause of action. These meters were adopted and prescribed for use for the sole benefit of the United States " for the prevention and detection of fraud by distillers of spirits," and it was never contemplated by the law, or the rules of the Commissioner, that an article should be supplied which would necessarily be of any special service to the distiller, or of any merchantable value to him. It was made the dirty of the Commissioner by law to determine what instruments, whether " hydrometers, saccharometers, weighing or gauging instruments, or meters," he should deem necessary to be used by distillers to protect the United States against fraud in the collection of the revenues. And the same law made it the duty of distillers to procure, attach, and use whatever meter the Commissioner should, adopt and prescribe.
When the Commissioner had adopted and prescribed for use the Tice meter, distillers were as much bound to procure, attach, adjust, and use that particular instrument as they were to give the bond or pay the taxes imposed upon them by law. The use of that meter was one of the terms or conditions upon which a distiller might engage in business, and without it he was liable to penalties, and his distillery might be closed. It was immaterial whether the Commissioner erred in his judgment or not; his decision was final and conclusive. A distillery with a much better and more correct apparatus attached and in use would not thereby be equipped according to the requirements of law. But with the Tice meter the distiller was authorized to carry-on his business, however useless the instrument might be for the purposes intended by the Commissioner. It was the misfortune and to the injury of the defendants alone if they prescribed an apparatus which proved to be of no benefit to them, and the distiller lost nothing thereby. To him there was- no failure of consideration by reason of the prescribed meter not fully answering the purpose for which it was intended. So-far as he was interested therein, it served his purpose; the purchase and use of it entitled him to continue his business.
That a promise to distillers that meters would be adopted! and prescribed which should be adequate to the purposes intended is not implied by the law or the regulation is too-obvious to require serious consideration, since the purposes intended were to prevent frauds from being committed by the distillers themselves and to detect them when committed, and the adequacy of the instrument for those purposes was immaterial to honest distillers and would not be desired by others.
Nor can the claimant recover of the defendants because the particular meters received by him were defective in their construction, could never be used, and were of no' merchantable value. It was the duty of the distiller, by law and the regulations, to procure the meters and have them attached and adjusted for use at his own expense. The defendants never undertook to have their officers obtain, inspect, deliver, and receive payment.for the meters required. The provisions in the regulations, by which distillers might apply to the collector of internal revenue and deposit with him a bank-certificate for tbe money necessary for the payment of meters, were made for the purchasers'' benefit exclusively, and to protect them against extortion or unreasonable prices. But this did not prevent the claimant from dealing directly with Mr. Tice, if he saw fit, nor from making other and different arrangements as to the price of the meters and the terms and manner of payment. It will be seen that by the regulations the defendants, although taking applications therefor through' their officers, were not to furnish the meters themselves nor to receive payment for them when delivered. The application was to be, or might be, forwarded through the office of the Commissioner, but not the deposit-money, which was to be placed in a bank by the distiller, and a certificate therefor taken out payable only to Mr. Tice, or his order. This certificate was to be delivered to and retained by the collector until Mr. Tice should forward the meters, when it was to be forthwith sent to him. The money was never to be drawn .by or come into the hands of the collector. The certificate of deposit was to be held for a specific purpose, to wit, to insure <the delivery of the meters, and, when they were delivered and the certificate was forwarded to Mr. Tice, the collector's duty was fully performed. Under the former regulations and circular of the Secretary of the Treasury the rule was different as to the money paid by distillers, and the collectors were authorized and directed to receive and retain the money itself in their own hands until the delivery of the meters, when it was to be forwarded to Mr. Tice. For reasons which do not appear, the collector in this case followed the instructions of the former rules instead of those then in force, and accepted money in lieu of a certificate of deposit; but as he promptly forwarded the money to Mr. Tice, that fact is immaterial and no question arises upon it. Payment was made to the owner of the meters, and whether by certificate .of deposit or money the result is the same.
The meters were thus purchased of Mr. Tice, and not of the defendants, and the latter made no express or implied warranty that all the meters which Mr. Tice would furnish would be perfect and in good condition. The remedy for any defect in the instruments was. against the vendor, by whom they were undoubtedly warranted to be in good order and condition. But the defendants made no express warranty, either as principals or as surety for Mr. Tice, and as they were never the owners of the meters, nor the vendors of the same, no implied warranty can be inferred.
The only objection which the claimant made against paying $1,800 for the two meters furnished him was, that he had already deposited $1,500 with the former collector, towards payment, and he only asked that the amount sp deposited might be allowed him. That objection has now been removed by his recovery of the amount from the defendants in an action heretofore determined. The protest which he sets up was limited to that objection, and even that was not pressed when he finally made payment of the $1,800 demanded of him.
But we do not rest the decision upon the defects of the protest, but upon the grounds that there was no warranty on the part of the defendants, either expressed or implied, and that the defendants are not liable for the money received by their collector of internal revenue for Mr. Tice, and duly forwarded to him according to his duty.
The judgment of the court is that the claimant's petition be dismissed.