Opinion ID: 86254
Heading Depth: 1
Heading Rank: 1

Heading: Preliminary references:

Text: 19 1. The form of the collector's bonds is prescribed by law, and expressly assumes the past as well as prospective accountability of the collector. Act 1799, 3 U. S. Laws, 237. 20 2. The law obliged one collector, once in every three months, and oftener if required, to transmit his accounts, for settlement, to the officers of the Treasury. Act 1799, sec. 21, 3 U. S. Laws, 157; Act 1820, May 15, sec. 2, 6 U. S. Laws, 521. 21 The law also bound him, as a disbursing officer, to the same duty. Act 1823, Jan. 31, sec. 2, 7 U. S. Laws, 113. 22 3. The law required the officers of the Treasury Department to examine the accounts submitted, and to state and certify the balances thereof. Act 1817, March 3, sec. 4, 8, and 9, 6 U. S. Laws, 199; and also the references under the preceding proposition. 23 4. The accounts rendered quarterly to the Treasury, there examined, corrected, and returned to the collector, are binding upon both parties as to all the items embraced in the accounts and included in the adjustment at the Treasury. 24 II. The balances in the quarterly accounts are to be taken as cash funds, or cash on hand; if so, every consideration, equitable as well as legal, requires them to be treated as the primary fund for subsequent payments, and these payments to be applied accordingly. 25 III. If the quarterly balances are presumed to be arrears, or defaulting balances, nevertheless the mutual rendering of accounts between the collector and the Treasury Department, to each other, was an appropriation of the payments to the charges, in the order of time in which they stand in those accounts. 26 IV. The sureties in posterior bonds of collectors of the customs have no equity to be taken into view, even in respect to an appropriation of payments, by mere implication of law. 27 V. If the sureties on such posterior bonds should be deemed to have an equity against an application of payments, made after the date of their bonds, and during the period covered by it, to an antecedent balance, such application might have the effect to discharge such sureties; the United States cannot, for such a cause, without the consent of the anterior sureties, recall such application, made by accounts rendered, adjusted, and settled, according to law and long usage, and binding as between the United States and the collector. 28 VI. The re-statement of the account from 1830 to 1834, made at the Treasury in 1839, after the rendering and the settling, at the time of the quarterly accounts, was without authority of law, if it was to affect any previous appropriation of payments; if it was not, it was immaterial and irrelevant. It was in every view without authority of law. 29 Legar e , for plaintiffs. 30
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32 1. The act of 3d March, 1797, 1 Story, 464, declares that a transcript of the account shall be evidence. It is objected that this is not such, because the account is re-stated. But if an account has been once stated, why not state it again? Accounting officers are not judges. Need not re-state, unless some error. Time does not discharge sureties. United States v. Kirkpatrick, 9 Wheat. Government is not estopped if new evidence be discovered. 1 Domat, Public Law, title 6. An error may be corrected in a patent. Grant v. Raymond, 6 Peters, 241. Where a contract requires to be severed, court will sever it, as with rent. Co. Litt. 742, 215, A; Litt. sec. 244; 1 Roll's Abr. Apportionment, D. So in partnership cases. 3 Bro. Ch. Cases, 4, 44. 33 As to the second point. 34 If the opposite doctrine be correct, neither set of securities is responsible, because there is no default in the second term, and the first is paid. 1 Mer. 529, 572. If the debtor does not apply the payment himself, the court will apply it where the security is most precarious. 6 Cranch, 27. Civil law stated in 1 Poth. on Obligations, 338, ed. of 1826. The creditor may make the application. 4 Cranch, 317. A leading case is in 7 Cranch, 572, but Justice Story dissents from it in 5 Mason's Rep. 82. Securities only liable for what was actually received during the term. 12 Wheat. 509. The responsibility must be severed. 1 Gilpin, 125. Lord , for defendants: 35 Custom has been to apply payments as to time, unless something peculiar in the case. Bond of second sureties retrospective; law required it to be so. Sureties must have looked to this, backward as well as forward. Quarterly settlements are required by law. Act of 1799, c. 128, s. 21; May, 1820, c. 625, s. 2; Jan. 1823, c. 138. 36 Collector is obliged to retain money for various purposes; for example, to pay debentures, &c. The quarterly accounts are settlements, and bind the parties. Act of March 3, 1817, makes it the duty of the government to settle them. Onus is on the government. 1 McLean's Rep. 493; 9 Cranch, 230, 237. Presumption is that the accounting officers knew what the collector ought to keep on hand, and allowed him to retain it, aided by his reappointment. Suppose that it was a debt from Swartwout: has it been paid? Rule is, that oldest debt is paid first, unless there be some equity. First, the debtor directs; if he does not, the creditor does; if neither does, the court makes the application. 6 Cranch, 9; 9 Wheat. 720; 4 Mason, 333. In December, 1834, this application was made. Oldest debt most likely to be lost, and policy of government is to throw balances on last securities. Debtor may make the application. 7 Cranch, 575; 9 Wheat. 720; 1 Mer. 604; 3 Sumn. 109; Gilpin, 125; 1 McLean, 493. The collector owed no debt until the government called for its money. Even if money had been borrowed from second surety and paid to government, the payment would have been good. The transcript is not a paper according to law, because the law meant a copy of what was done, not to make out something new. 37 Wright , on same side. 38 Debtor has a right to make the application. 2 Vern. 606. If he does not, the creditor may, but he must say before any controversy. 5 Taunt. 596. Either party having declared their intention is bound by it, and cannot change it without the consent of the other. 4 Cranch, 315. If neither party make the application, courts will consult the interests of creditor as well as debtor, because they will apply it to a debt not bearing interest or not secured, rather than to one bearing interest or secured. In a running account the oldest credits are applied to the oldest debts, and so on, in order of time. 9 Wheat. 720; 2 Strange, 1194; 9 Mod. 427; 4 Mason, 33; 2 Marsh. 319; 1 Mer. 572-611; 2 Barn. and Ald. 39; 3 Bingh. 71; 1 Wash. 128; 2 Brod. and Bingh. 7; 1 Stark. 122; 12 Wheat. 505; 1 Mason, 323; Stiles, 239; Ambl. 55; 5 Mason, 82; 3 East, 484; 1 Bingh. 452; 2 Barn. and Cres. 265; 2 Maule and Selw. 18; 9 Cranch, 212; 1 Gilpin, 125, 106; Theobald, 221; 1 Law Library, 131. The power of the creditor and debtor over payments is the same where there are sureties as where there are none. 4 Mason, 333; 3 Bingh. 71; 9 Cranch, 212. The case in 1 Gilpin, 125, is not justified by either the case in Cranch or the case in Mason. in 1 McLean, 493, the officer was not a disbursing officer, and the bond was not retrospective. Case in 5 Peters, 373, not applicable. 39 Payments in this case were in fact and in law applied to extinguishment of former balances. Law required accounts to be settled quarterly. Every quarter Swartwout made the application, and it must bind him. So the government officers, also, by bringing down fresh balances. 3 E ast, 484; 9 Peters, 12; 1 Mason, 323; 14 East, 239; 8 Wend. 403. 40 Suppose a new person had been appointed who had debited himself with the balance, and the government had assented to it; would not this have discharged principal and surety? and how is it changed if the same man be reappointed? 41 Legar e , for plaintiffs, in reply. 42 The question is not now, whether a balance can be shown, but merely whether the evidence is legal; a cash balance is prima facie evidence of a debt. Every term of office is a separate responsibility, as to principal and sureties. No matter how the accounts are kept; the law of 1820 cuts through and severs them. Act of 1840, commonly called the Sub-treasury Act, declares the appropriation of public money a felony, and such an appropriation to pay an old debt is the basis of this defence. In 9 Wheat. the bond was given during an executive appointment. The sureties must see that their principals settle every four years. Swartwout was a bailiff or agent, not a debtor. 15 Peters, 432. See 1 Jac. anc Walk. 247. An agent who keeps the money in bank is presumed to be using it for his own benefit. 11 Peters, 61. A debtor paying a debt out of his own money has a right to apply it, but not paying it out of another man's money. He held the money of the government as a mere bailiff, and had no right to do any thing with it but hand it over. 43