Case Name: STOWS CASE. Louis Stow v. The United States
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1869-12
Citations: 5 Ct. Cl. 362
Docket Number: 
Parties: STOWS CASE. Louis Stow v. The United States.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 5
Pages: 362–371

Head Matter:
STOWS CASE. Louis Stow v. The United States.
On the Proofs.
The claimant is a cleric for W., who is a fraudulent contractor, with whom the defendants have refused to deal. The claimant agrees in his own name, xvitk the defendants, to sell them grain, and is alone Imown to the Quax-termaster Department; hut W. furnishes the graixi and receives the money, allowing to the claimant a comxnission for his sex-vices axid tliexise of his name. A balance due on the sale being ixi dispute, the claimant gives to W., at his x-equest, a power of attox-ney ixi blaxilc to collect the balance, with authority to release and x-eceipt for it; the power does not fulfil the requirements of the Act February 26, 1853, (10 Stat. L., p. 1707.) W. fills the blaxilc xuith the naxne of an attox-ney of this coxix-t, axid dix-eets hixnfio bring axi action in the cloAxnaxit’s xiaxiie. The petition avex-s that the suit is “for the use and benefit” of W.; it recites that he furnished the grain in the claimant’s xiaxne, axid is verified by the attox-ney. After suit is bx-ouglit, the claixna/nt px-etends to have “ a partial interest in the claim,” but xiever disclaims the suit, axid allows ‘it to go on. Before judgment, axid dux-ixig vacation, it is settled by the defendants giving to the National Baxilc of the Metropolis a credit on a preexisting indebtedness, axid by the banlc giving a similar ex-edit to W. The attox-ney of x-ecox-d endox-ses the Treasux-y draft dx-axvn ixi settlement, but xio stipulation to discontinué the suit is given. At the xiext tex-m, the claimant proaux-es an order axxiendixig the petition “ so far as relates to one W. and liis alleged interest therein and to conform to the facts as they now stand.” He then brings the case to trial anil insists on his right to recover in his own behalf.
I. Where the defendants deal with one who is hut an agent though acting in his own name, and concealing the fact that he represents a fraudulent contractor, they are not estopped from going behind the agent and settling with the principal, although the principal may he precluded from taking advantage of his concealed attempt to deal with the defendants.
II. A power of attorney for the collection of a claim against the government, not executed in the presence of “ two attesting witnesses afiei' the allowance of such claim, the ascei'tainmeni of the amovmt clue, and the issuing of a warrant for the payment thereof,” is void under Act 26th February, 1853. (10 Stat. L., p. 170.)
III. The government, being the defendant in the Court of Claims, is at liberty to deal with a claimant’s attorney, pendente lite, and settle the suit. The settlement must stand, and if any question exist, it is between attorney and client.
IY. A claimant by allowing a suit to be brought in his own name for the “ use and benefit ” of another, by assisting in its prosecution, and virtually standing by and seeing it settled, is estopped from alleging his own adverse interest against a settlement made before his new position was assumed.
V. A claimant in whose name a suit was brought for the use and benefit of another, by coming in and filing an amended petition on his own behalf, ratifies and adopts all that has been done before. He takes the suit cum onare, and subject to all the acts and stipulations of the former attorney.
Mr. Wm. Johnston for tbe claimant:
Stow hacl been a contractor with the Quartermaster’s Department, as the witness Howland thinks, to the extent of a million and a half of dollars. Stow’s last contract, out bf which this controversy arises, was made with Captain Stoddard, Assistant Quartermaster, for the delivery at Alexandria, Virginia, of a large quantity of grain, and bore date October 10,1863. Under this contract Stow had delivered grain, as afterward appeared, to the value of $1S7,011 88, when Captain Stoddard was put under arrest, and all his contracts, including that with Stow, rescinded. Stow then presented his account for settlement at the appropriate Department, and after a full examination he was allowed and awarded $187,011 88. This award was sent to the Secretary of War that he might draw a requisition on the Secretary of the Treasury for the amount, and, according to a usage of the Department, was referred for examination to the Quartermaster G-eueral. Tbe Quartermaster G-eneral reduced tbe award of tbe Auditor and Comptroller to $154,856 03, and for this sum, on bis recommendation, a requisition was drawn by tbe Secretary of War in favor of Lewis Stow, present, and. to this extent be received bis money. No error was discovered by tbe Quartermaster General in tbe calculations of tbe accounting officers. Tbe difference between them was simply this: They made tbeir award strictly according to tbe contract; be made bis recommendation according to what be thought the grain delivered was worth. Stow persisted in his claim for the balance of $32,155 85, and the Secretary of War persisted in his refusal to draw tbe requisition, until Congress, by an act 'approved March 30,1868, made his duty in such cases peremptory. The Secretary of War then, on the 7th day of September, 1868, in obedience to the act of March 30, 1868, drew a requisition on the Secretary of the Treasury in favor of “Louis Stow, present,” for the sum of $32,155 85. Upon this requisition of tbe Secretary of War the Secretary of the Treasury drew a warrant in favor of u Louis Stow, present,” for the sunn of $32,155 85. This has never been paid to Stow, or to any one authorized by Stow to receive it, and tbe Treasurer refuses to pay it, and, without; authority from Stow, has passed it. to the credit of the National Bank of the Metropolis. Before this action was brought the plaintiff made a formal demand of the Treasurer for the warrant and for the money due thereon, and was refused, and the money is still in the Treasury.
The manner in which this business was accomplished -was this:
The National Bank of the Metropolis was largely in default to the Treasury, and the Treasurer desired, as far as possible, to secure a part of this indebtedness. One A. M. White was largely indebted to the National Bank of the Metropolis, and the bank desired, as far as possible, to secure a. part of this indebtedness. Two attorneys employed by the National Bank of the Metropolis came in and appeared both for and against Stow; produce an old power of attorney, for the collection of Stow’s claim, and nothing more, executed in blank, as to the name of the attorney, long before the National Bank of the Metropolis had an existence, and about six months before the law was passed authorizing it to exist, and assuming to derive authority from this paper, first, as Stow’s attorney, assigned his warrant to tbe National Bank' of tbe Metropolis, and. tben as tbe bank’s attorneys, indorsed it tó F. E. Spinner, Treasurer United States, for tbe credit of tbe National Bank of tbe Metropolis. White was credited witb tbe amount on tbe boobs of tbe bank. Tbe bank is credited witb tbe amount on tbe books of tbe Treasury, and Stow, who earned tbe money at first, and wbo spent so rnucb time, labor, and money to secure it, is left ■out in tbe cold.
As to tbis old power, it is is enough to say it was not freely made and executed in tbe presence of two attesting witnesses. It was not made after the allowance of tbe claim; it was not añade after tbe ascertainment of tbe amount due; it was not made after tbe issuing of tbe warrant for the payment thereof; and theréfore tbe power, tbe assignment and tbe transfer were absolutely null and void.
It is clear that no one except Louis Stow was ever known to tbe Government in tbe matter under consideration. Stow alone, in bis own name, made the contract witb tbe quartermaster for tbe delivery of tbe grain. In Stow’s name alone the warrant was drawn by tbe Secretary of tbe Treasury for tbis balance of ■$32,155 85. And Stow alone bad a right to receive tbe money on this warrant.
Tbe law requires tbe petition to be verified by the oath of tbe claimant, or, in bis absence, by that of bis attorney. Mr. Fuller was in no sense Stow’s attorney. His name was inserted in tbe old power to make him tbe attorney in fact of Stow. Tbe power was filed, and Mr. Fuller verified tbe petition by bis oath.
As to partnership, neither Stow nor White ever pretended there was a partnership between them, and no one witness ■gives us tbe slightest bint of that sort.
There is not a shadow of proof that Stow bad any knowledge of tbe so-called payment by tbe Treasurer, but it is admitted and proven on all bands that be bad no knowledge of it.
As to Mr. Attorney General’s fourth point, it suggests a new ■chapter in finance somewhat wanting in gratitude to tbe most faithful servant tbe Treasury ever had. Tbe government takes $32,155 85 from a citizen and keeps it, and when be asks for biá money in a court of justice, be is advised to bring suit against tbe Treasurer.
Mr. R. J. Atlcinson for claimant:
Tlie following propositions will be considered:
I. As to the jurisdiction and powers of the Third Auditor aud Second Comptroller of the Treasury.
(Under this head that learned counsel cited as follows, statutes: 3 Stat. L., p. 3GG ; Act September 2, 1789, 1 Stat. L., p. 65 ; Act May 8,1792, id., 279.)
II. As to the liability of the United States for payment of a balance decided to be due, on settlement and adjustment of an account or claim by the accounting officers of the treasury, in the performance of their official duties, as prescribed by law.
In illustration and support of this point the learned counsel cited the report of Mr. Guthrie on the' finances, December 3,. 1855, and the following- authorities:
United States v. Jones, (8’Peters B., 383;) United States v. Arredondo, (G Peters B., pp. 729, 730;) Kendall v. United States, (12 Peters, 624;) Garrióle and Ramsay’s Case, (2 C. Gis. B., p. 142;) Gilberts. The United States, (1 C. Cls. B., 108;) Kellogg v. United States, (1 0. Ols. B., p. 310;) Banlc of Golmnbia v. Patterson’s administrator, .(7 Cranoh, 295;) Buelcell v. Marsh, (17 Howard, p. 344.)
III. As to the j>ower of attorney, and the assignment or transfer to the credit of the National Bank of the Metropolis, made at the treasury.
A case involving the precise question was submitted by the Secretary of the Navy to the Attorney-General, who, on July 5, 1866, gave his opinion. — (Yol. 11, Opinions of Attorneys-General, p. 520.)
But there is an act of Congress, approved February 26,1853, that solves all doubts, and settles the question beyond dispute:
“That all transfers and assignments, hereafter made, of any claim upon the United States, or any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor, and all powers of attorney, orders, or other authorities, for receiving payment of any such claim, or any part or share thereof, shall be absolutely null and void, unless the same shall be freely made and executed in the presence of at least two attesting witnesses, after the allowance of such claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof.” — (Stat B.? vol. 10, p. 170.)
The power being illegal and. void, no act done in pursuance of it, even if fully authorized therein, can be valid in law. This question has been decided by this court. In the case of Martin et als., assignees, v. The United. States, Chief Justice Casey, in delivering the opinion of the court, said:
“ The act affects the assignment itself made in contravention of its provisions.
u It takes from it every vestige of virtue, the last spark of vitality, and leaves it totally defunct. No court, any more than an executive functionary, can animate or breathe into it the breath of life; the lato says it shall he void; who can say it shall he valid?” — {3 O. Cls. R., 64.)
Judge Loring, dissenting from the opinion that the act applied to cases in litigation before the Court of Claims, holding that it applied only at the Treasury, said:
“ It is certain that -under this act of 1853, an assignment made as the act prescribes, viz., by a capable and understanding assignor, in the presence of two witnesses, and certified by a magistrate, and made after the claim has been allowed at the Treasury, the amount due ascertained, and a warrant for its payment, issued, is the only assignment of a claim that an officer of the Treasury can admit or recognize, and that if he admits cmy other he violates the statute.” (See also Sines v. United States, 1 C. Cls., R,., 12; Cooper v. United States, idem, 87; Pierce v. United States, idem., 270; Bamsdel v. United States, 2 id., 508; Adams v. United States, 3 id., 312,)
The Assistant Attorney General for the defendants:
I. In proof of. White’s real, and Stow’s nominal, ownership, the argument in’ defence refers to — 1. The course of business under the contract. 2. The coarse of proceedings to recover, the money due on the contract. 3. To Stow’g express admissions.
II. Should the court be of opinion that Stow had any interest in the contract, such interest will be considered merely as that of a partner, White being the other partner, and, accordingly, authorized to receive or transfer payment of the whole sum.
III. The payment made by the Treasurer was made with Stow’s knowledge and consent, and he cannot now compel a second payment; tbis, whether the power of attorney was or not a valid power as required by statute.
IY. Supposing- these defences of fact to fail, the defendants maintain that, for this supposed wrong-, the proper remedy is not by suit in the Court of Claims against the United States, but by direct proceedings against the Treasurer, as against an officer refusing to perform, when lawfully required, a strictly ministerial duty. (September 2, 1789, section 4, vol. 1, p. 66. Kendall v. United States, 12 Peters, 524.)

Opinion:
Nott, J.,
delivered the opinion of the court:
This is an action brought to recover $32,154 85, being a balance due and unpaid on an account stated by the Third Auditor, approved and certified by the Second Comptroller. The original contract between the parties was for the sale of ll,739,864pounds of pure oats and 11,516,748 pounds of mixed grain; all of which was delivered to Quartermaster Stoddard, at Alexandria, Yir-ginia, in October, November, and December, 1863.
The case presents the curious anomaly of the Treasurer of the United States settling a cause of action pendente lite at one end of the avenue, while the claimant continues to prosecute the action and the Attorney General of the United States to defend it, at the other.
The facts stated in the order of their happening are these:
One White was a fraudulent contractor, (as is alleged by the claimant,) and the claimant was his clerk. The defendants having imprisoned White, and having refused to deal with him, the claimant in his own name offered to furnish the grain referred to, and his proposal was accepted. The claimant alone was known to the Quartermaster's Department and the vouchers and drafts were issued to him; but White furnished the grain and received the money, allowing to the claimant a commission for his services and the use of his name.
The defendants having refused to pay the money due on the contract of sale, the claimant, on the 14th of January, 1864, at the request of White, executed a power of attorney in blank authorizing the blank attorney ufor me and in my name to collect and receive any and all moneys due and coming due to me," die., die., u and to malee, execute, and deliver to any officer or person authorized by the said Government to pay said moneys a good and sufficient release, acgmttal, or receipt for the same, or for any part that may he paid to my said attorneys, and generality to do any and all things necessary in the premises." &c.
This power of attorney was not executed before two witnesses, but was acknowledged before and witnessed by a notary public.
The defendants thereafter paid on the account $154,856 03, which was paid over by the claimant to White, leaving due the balance sought to be recovered now.
White next inserted in the power of attorne3' the names of " Theodore M. Davis, of Neto Yorlc City, and Thomas J. D. Fuller, of Washington, D. 0., as attorney in fact of National JBanlc of Metropolis, of Washington, D. G., to he my true and laioful attorneys," t&c. He then instructed Mr. Fuller, who was an attorney and counselor at law, to bring an action in this court against the defendants. Mr. Fuller had no authority from the claimant other than the power of attorney. This action was brought, nevertheless, in the name of the claimant.
The petition averred that the suit was brought u for the use cmd benefit of A. M. White," and recited that it was " White who furnished the grain delivered to the United States in the name of your petitioner."
After the suit was brought, but before the settlement of the cause of action previously alluded to, the claim ant twice called on the attorney of record. He requested to see the power of attorney, and his counsel, Mr. Atkinson, informed Mr. Fuller that the claimant " claimed a partial interest inthe claim." Buttheclaim-ant never disclaimed the suit, nor forbade it being prosecuted for the use and benefit of White, and on the contrary allowed it to go on, never pretending more than a partial interest in the cause of action.
The case came on to be heard the 23d April, 1868. The claimant, Stow, had retained Mr. Robert J. Atkinson as counsel, and he appeared and cooperated with the attorney of record. No objection was taken by the claimant or his counsel to the bringing of the action, nor was Mr. Fuller's right to appear questioned. The case went off on a suggestion by the court as to the insufficiency of the evidence, and was continued over thé term.
During the vacation following, the cause of action was settled in this way: The National Bank of the Metropolis being-indebted to the defendants, and White being indebted to the bank, a war warrant was drawn on tbe 7tb September, 1868, on tbe Treasurer of tbe United States for tbe balance of tbe account, payable to "Louis Stow, present, or order," wbicbwas thus indorsed:
"Pay to tbe order of tbe National Bank of tbe Metropolis, Washington, D. C.
"LOUIS STOW,
"By T. J. D. FULLEE & THEO. M. DAYIS,
uAs his attorney-in-fact, and as attorney-in-fact of the
"National Banlc of the Metropolis of Washington, JD. G.
"Also tbe National Bank of tbe Metropolis of Washington, D. 0., by Tbeo. M. Davis, its attorney-in-fact, and as attorney of A. M. White, annexed.
"T. J. D. FULLEE, Attorney.
"THEO. M. DAYIS, Attorney as aforesaid.
"Pay to tbe order of F. E. Spinner, Treasurer United States, for tbe credit of the National Bank of tbe Metropolis, Washington, D. 0.
" National Bank of tbe Metropolis of Washington, D. 0.,
" By THEO. M. DAYIS, its attorney-inf act."
On tbe 9th September a draft was drawn in favor of " F. F. ¿¡pinner, Treasurer United States, assignee." Tbe amount thereof was credited to tbe National Bank of tbe Metropolis, and. charged to Louis Stow by tbe defendants ; by tbe bank it was credited to White.
At tbe opening of tbe December term of this court after tbe settlement, Mr. Fuller appeared and informed tbe court that tbe case bad been settled by tbe parties be represented, and for whom be bad brought tbe suit, and suggested that tbe cause should be stricken from tbe docket. On the 7th December, Mr. Atkinson, as counsel for tbe claimant, procured an order granting leave to amend the petition, " so far as relates to the suggestions contained therein relative to one A. M. White, mid his alleged interest therein, mid also to conform to the facts as they now stand." The amended petition was then filed, and tbe case has now come up for bearing thereon. At tbe first trial tbe only question was as to tbe sufficiency of tbe account stated by the Third Auditor and Second Comptroller; at tbe second, tbe only question is as to tlae conclusiveness of tbe settlement with White. Dp on all of these facts we are of the following opinion:
The claimant was the nominal contractor with the defendants, but White was the real party in interest. White might be estopped from taking advantage of his concealed attempt to deal with the defendants, but the defendants are not precluded from going behind the agent and settling with the principal.
The power of attorney, considered as an assignment or transfer of the claim, was void under the Act 26th February, 1853, (10 Stat. L., p. 170,) because it was not executed in the presence of " two attesting witnesses after the allowance of such claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereofP But it was a sufficient authority to Mr. Fuller to bring the action, and the defendants were at liberty to deal with the claimant's attorney pendente lite and settle the suit. The settlement must stand; if any question exist, it is a question between attorney and client.
By allowing this suit, brought for " the use and benefit" of White, to proceed ¡ by his silence to his attorney of record and to the defendants; by his employing counsel to assist in prosecuting it as it originally stood, the claimant is estopped from alleging his own adverse interest against a settlement made before his new position was assumed and his present petition was filed. He virtually stood by and saw the suit settled, and his own act " stoppeth or closeth up his mouth to allege or plead the truth." (Co. Litfc., 352 a.)
By coming in and filing his amended petition in this the original action, the claimant ratified and adopted all that had been done before. In taking advantage of the suit brought for the use and benefit of another, instead of.bringing a suit of his own, he takes it cum onere and subject to all the acts and stipulations of his former attorney.
The judgment of the court is that the petition be dismissed.