Court Opinion

ID: 8268303
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:15:24.273788+00
Date Added: 2024-06-11T16:43:26.384912
License: Public Domain

The opinion of the court was delivered by
Lippincott, J.
The first insistment of the defendants below, and appellants in this court, is that as heirs-at-law of Rodman M. Price, deceased, they are entitled, under the act of congress of 1891, to the balance of the moneys in the treasury of the United States, amounting to about $22,000, as admitted by the pleas in this suit; that congress, by this act, was bestowing a gratuity and was at liberty to select its beneficiaries, and that in so doing it directed certain specific persons to whom it should go, and that by the directions of this statute, in his lifetime, it was a gratuity to Price, and, in case of his death before payment, then with the same qualities the gift devolved upon the persons who, at the time of his death, were his heirs.
The facts set forth in the pleas, giving rise to the act of congress, effectually dispose of this insistment, and, in the consideration of the pleas, the act must be construed to some extent with reference to those facts, especially so far as there may exist in the statute any reference to them.
The facts in these pleas exhibit a great pertinacity on the part of Mr. Price, continued through a lifetime almost, in pressing his claim for money believed by him to be due from the government of the United States. They were moneys which, indisputably, were paid out for the benefit of the United States, so admitted upon all sides and in all proceedings, but which, because of the want of the technical approval of his superior officer before the advance was made by him, became unallowable in the adjustment and settlement of his accounts with the government, but the justice of which, as a due to him, was distinctly recognized in the act of congress directing its adjustment and payment, either in whole or in part, upon principles of equity and justice.
*681The act of congress directs the secretary of the treasury
■“to adjust, upon principles of equity and justice, the accounts of Eodman M. Price, late purser in the United States navy, and acting navy agent at San Francisco, crediting him with the sum paid over to and receipted for by his successor, January 14, 1850, and to pay to said Eodman M. Price or his heirs, out of any money in the treasury not otherwise appropriated, any sum that may he found due to him upon such adjustment.”
It was upon these “principles of equity and justice” that the secretary of the treasury of the United States adjusted his accounts as an officer of the United States having accounts with the government.
A reading of this statute at once indicates that congress was not dealing with one upon whom a mere gift for honorable services was to be conferred. It was dealing with a claim of one who had expended his private moneys for the benefit of the government in an emergency which demanded or justified this expenditure. Under this act, couched in the language in which it is, it cannot, as it seems to me, be contended that the government of the United States was conferring upon Price a bounty. It was restitution to him of moneys which he had advanced, and which he believed, at the time the advance was made, would be at once repaid, in the settlement of his accounts as a disbursing officer of the United States navy. I think that the act of 1891 was based upon the idea that the claim was a moral and equitable obligation, if not a legal one, on the part of the government, for money “found to be due him,” upon an adjustment of his accounts, according to.principles of “equity and justice,” and not upon any considerations that a gift or gratuity was being conferred upon him.
The learned chancellor, in his opinion in Forrest v. Price, 7 Rich. Ch. Rep. 16, 26, after reviewing the facts in that case, which are precisely the same in substance as those set forth in the pleas herein, says: “I do not find in this situation even the bounty of a grateful government partaking of the character of a pension or reward for a meritorious deed, but simply the restitution of property which had once belonged to the defendant as assets for the liquidation of his pecuniary obligations; and I fail to under*682stand how, upon its restoration to the defendant, it can be held to assume a new character.” In that case this question was elaborately discussed by the chancellor, and his views of the nature of the obligation of the government of the United States, which was the foundation of this statute, can be fully approved.
So far as the devolution of this money is concerned, upon the facts set up in the pleas and the situation as there expressed, the statute of 1891 cannot well bear any other construction than that the payment was intended to benefit the estate of Price, and to be within the reach of his creditors. The, heirs of Price were in no sense personally intended to be the beneficiaries of the United States by way of gift or gratuity to them as such. The language of the act could only be fulfilled by a payment to Price. If it could be called a gift it occurred at the passage of the act, and the act in no sense intended that the heirs.of Price were to be included in the gratuity. But the reason of the act is such as to reveal the intention of congress to recognize an obligation on the párt of the government, and upon its ascertainment to pay it to Price or his representatives in the same manner as a debt is paid to anyone. In his accounts with the government upon such ascertainment, he was credited with the amount found to be due. The act in its terms speaks of the application of the principles of equity and justice in the adjustment of his accounts as “late purser of the United States navy and acting naval agent at San Francisco.” The meaning of this statute is to be gathered from the construction of the whole statute in view of the circumstances which led to its enactment and the object to be accomplished.
The chancellor, in his opinion in the case in 7 Dick. Ch. Rep. 16, to which reference has been made, says : “ But it affirmatively appears that the money of which the statute authorizes payment, though not a legal claim, is not a pure governmental bounty. The provision in the act for the relief of the defendant Price, that payment should be made to him or his heirs, has been urged as indicative of the legislative intention that the payment was not intended to benefit creditors. I do not so understand the act. The expression ‘or his heirs' was undoubtedly a provision *683against death before the day of payment, and there can be no substantial doubt that it is used in the sense of personal representatives, the thing dealt with being personalty, and appears in the act to secure the moneys to his estate in the event of his death before they are paid.”
The same holding was made by the comptroller of the United States in his written opinion on this question, of date of July 11th, 1894, in the determination that the word “or” in the words “or his heirs” should be construed to mean “and.” Whilst this is the fair interpretation of this statute, taken as a whole, yet it seems to me to be immaterial whether such meaning be given to the word “ or ” or not, for it must be that a fair and reasonable construction of this act, that the moneys were to be paid to Price in his lifetime, and after his death, to his heirs-at-law, and these words “ his heirs ” are simply words of succession and description of his estate in the money, and they are in this statute as representative of his estate only. Holcomb v. Lake, 1 Dutch. 605 ; S. C., 4 Zab. 688; Den v. English, 2 Harr. 280 ; Den v. Allaire, Spenc. 19 ; Engelfried v. Woelpart, 1 Yeates 41, 56 ; Winterfield v. Stauss, 24 Wis. 394.
These cases illustrate the construction of the word “ or” into “ and,” to give effect to the fair intention of the legislator. The many cases cited in 17 Am. & Eng. Encycl. L., tit. “ Or,” 218— 222, fully illustrate the instances of this construction.
It will be noticed that in the case of Emerson v. Hall, 13 Pet. 409, which is a case relied on by the defendants, the gift under the statute was, by the express terms of the act of congress, payable to the legal representative of Emerson and Lorraine, respectively, and the title of the act was “An act for the relief of Beverly Chew, and the heirs of William Emerson, deceased, and the heirs of Edward Lorraine, deceased.” 6 U. S. Stat. 464 The body of the act expressly directs that it shall be paid to their “legal representatives.” An examination of the case shows that the moneys could' never, under the law, be paid to Emerson and Lorraine, and that, as to their heirs, it was a gratuity conferred upon them by congress. The court in that case held that the act evinced a purpose of congress to make a *684gift to these heirs; that there was no debt of the government, and that the act was simply a bounty, and that under statute, the money had reached its proper destination when it was withheld from the creditors of Emerson; and this is founded in the fact that the institution by Emerson and Lorraine as officers of the United States navy of the proceedings of condemnation of the slave-trading vessel, and the slaves therein captured, was one purely voluntary on their part, and not at all in the line of their duty towards the government.
The advance of money by Price was a benefit to the government, and necessary to be made for the expenditures of the United States navy.
This fund and the part remaining unpaid, therefore, became a part of the general estate of Price, and thus was liable for his debts, to be distributed according to the laws of the State of New Jersey, the place of his domicil at the time of his death.
Another question has been made as to the jurisdiction of the court of chancery over the parties and the subject-matter involved. The pleas set up the claim of the defendants to this fund in preference to the creditors of Price, and the bill avers and the pleas admit that the defendants are endeavoring to secure payment of this fund to. them, and to hinder, delay and finally obstruct the complainants from recovering the same, to be appropriated to the payment of the debts of Price. It must be remembered that the suit is not against the United States nor directly against the fund, but it is a proceeding against the parties, and operating upon them to compel them to an assent to the proper distribution of the fund according to the laws of the domicil of the intestate, and to give effect to the assignment by operation of law to the receiver for this purpose. The decree of the court cannot operate upon the fund to any greater extent than may be permitted by the authorities of the United States treasury, but that furnishes no reason, if the proper parties are before the court, why the court should not decide upon the issues raised by the pleadings. Besides, the previous discussion and decision of the merits of this matter fully answer the insistments of the defendants. The defendants have applied to the officials *685of the treasury to have this money paid over to them as the heirs of Price. The comptroller of the treasury has refused this application, and awaits the decision of the court of chancery, which has assumed jurisdiction of the case as between the defendants and the complainants representing the judgment creditor of Price.
So far as this suit is concerned, as soon as the United States treasury passed to his credit, in the accounting, the moneys, the sum thereof became a debt due to him or a legal obligation in his favor, and which he had the legal right at once to reduce to his possession, and which possession he could not deny in a suit against him by the receiver. This money was held by Price without authority to controvert the proposition that, in law, he had assigned it to the receiver. If the money were in private hands instead of in the hands of the government, the receiver could bring suit for it, and neither Price nor his personal representatives could deny that it had been legally assigned to the receiver and had passed to him, and as to the balance of the $23,000 still remaining to his credit in the United States treasury, it is not the right of the defendants, as his personal representatives, to deny that it has been legally assigned to the receiver. The effect of the statute was to render this money to the estate of Price, and the defendants in suit here set up a distinct claim to it, and the court can treat them as if they were in its possession in order to compel them to assign it to the receiver, or to give effect to the assignment to him by operation of law. Harrison v. Maxwell, 15 Vr. 319; Wilkinson v. Rutherford, 20 [¶] Vr. 245; Williams v. Heard, 140 U. S. 529.
And the heirs-at-law, under their claim to these moneys, are just as much subject to the jurisdiction of this court as Price would have been in his lifetime. The discussion and the principles laid down, and the conclusion to which the learned chancellor arrived in the suit of Forrest v. Price, 7 Dick. Ch. Rep. 16, in these respects are distinctly approved.
These conclusions would seem to dispose of the case. But it may be well to expressly notice a further insistment by the defendants, and that is that the receiver appointed by the proceed*686ings under the original bill can have no standing to take and receive these moneys; that any assignment of a claim made contrary to the provisions of section 3477 of the revised statutes of the United States, which requires the assignment to be clothed with certain formalities, is void. Whilst this is true as to assignments of claims between the parties made under that statute, the receiver appointed in this suit in equity takes title from Price or the defendants by operation of law, assisted by such actual assignment as may be decreed by the court, and of such assignments the statute to which reference is made is not prohibitive. The receiver is an officer, an assignee, receiving his power from a court of competent authority and jurisdiction, and the title of Price or the defendants is vested in him by operation of law, to take, have and possess the property and things in action of Price to satisfy the judgment and decrees of the court from which he derives his authority. It is entirely within the power of the court of chancery, in order to render effective its decree of appropriation of the fund to the payment of debts, to order the defendants to actually make and execute a formal assignment to fully accomplish the object of the decree.
These classes of assignments to claims against the government of the United States have been upheld and sustained whenever the questiou has been fairly before the court of claims or in the supreme court of the United States.
Thus, full effect is given as well to assignments ordered by courts of competent jurisdiction, as to those assignments which result by operation of law by reason of the appointment of a receiver for the purposes contemplated by the present suit.
Under the authorities a receiver appointed by a court of competent jurisdiction will be sustained in asserting the same title to choses in action which might, as against the government, be asserted by assignees in bankruptcy under deeds of general assignment.
It may be well, in the light of authority, to consider the effect of section 3477 of the revised statutes of the United States, so long as it is contended under it that the court is without any jurisdiction to compel the defendants to execute an assignment or to give effect to any assignment by operation of law.
*687The statute is entitled “An act to prevent fraud upon the treasurer of the United States,” approved February 26th, 1853 (10 U. S. Stat. 170), and is in the following language:
“All transfers and assignments 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 thereto, and all powers of attorney, orders or other authorities for receiving payment of any such claims or any part or share thereof, shall be absolutely null and void unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof. Such transfers, assignments and powers of attorney must recite the warrant for payment and must be acknowledged by the person making it before an officer having authority to take acknowledgment of deeds, and shall be certified by the officer; and it must appear by the certificate that the officer, at the time of the acknowledgment, read and fully explained the transfer, assignment or warrant of attorney to the person acknowledging the same.”
Tbe true meaning and purpose of congress in this enactment was passed upon by Mr. Justice Woods in Hobbs v. McLean, 117 U. S. 576, who says that tbe object of the statute was “ that the government might not be harassed by multiplying the number of persons with whom it has to deal and might always know with whom it was dealing until the contract was completed and settlement made.”
In the case of United States v. Gillis, 95 U. S. 416, Mr. Justice Strong distinctly recognized that certain claims under this statute were assignable and might be sued in the court of claims in the name of the assignee, without undertaking to determine what claims might be assigned, and says: “ That there may be such claims is clearly stated in the act of 1853, and their devolutions of title, by force of law, without any act of parties or voluntary assignments, compelled by law, which may have been in view.”
In the case of Erwin v. United States, 97 U. S. 392, the court said : “ The act of congress of February 26th, 1853, to prevent frauds upon the treasury of the United States, which was the subject of consideration in the Gillis Case, applies only to cases of voluntary assignments of demands against the government, *688and does not embrace cases where there has been a transfer of title by operation of law. The passing of claims of heirs, devisees or assignees in bankruptcy is not within the evil at which the statute aimed, nor does the construction given by this court deny to such parties a standing in the court of claims.”
The supreme court of the United States has sustained partial payments made at the treasury to an assignee. McKnight v. United States, 98 U. S. 179.
It has been held that a general assignment made for the benefit of creditors, including all rights, credits, effects and property of every description, covered what might be due to the assignor under a contract with the government for carrying the mail.
In Goodman v. Niblack, 102 U. S. 556, Mr. Justice Miller, in view of the language of the opinion in Spofford v. Kirk, 97 U. S. 484, says: “ We held it did not include a transfer by operation of law, or in bankruptcy, and we said it did not include one by will. The obvious reason of this is that there can be no purpose in such cases to harass the government by multiplying the number of persons with whom it has to deal, nor any danger of enlisting improper influences in advocacy of the claim, and that the exigencies of the party who held it justified and required the transfer that was made. In what respect does the voluntary assignment for the benefit of his creditors, which is made by an insolvent debtor of all his effects, which must, if it be honest, include a claim against the government, differ from the assignment which is made in bankruptcy? There can here be no intent to bring improper means to bear in establishing the claim, and it is not perceived how the government can be .embarrassed by such an assignment. The claim is not specifically mentioned, and is obviously included only for the just and proper purpose of appropriating the whole of his effects to the payment of all his debts. We cannot believe that such a meritorious act as this comes within the evil which congress sought to suppress by the act of 1853.”
Assignments of moneys due from the treasury department to receivers appointed under supplementary proceedings for the benefit of a creditor, have been upheld by the court of claims. I *689think it may be said that the cases show that they have been uniformly sustained by that court as well as by the supreme court of the United States. Redfield, Receiver, v. United States, 27 Ct. of Cl. 393. In this latter case the plaintiff was a receiver,, appointed by the supreme court of the State of New York, city and county of New York. He also had the additional claim of being the assignee of all demands against the United States on the part of one Mitchell, the assignment being executed by Mitchell for the purpose of enabling the claimant to more effectually perform the duties of his receivership under his appointment by the supreme court of New York. Mr. Justice Weldon, delivering the opinion in the court .of claims, says: “ It may be that the personal assignment by Mitchell to claimant, it being for the indebtedness of the United States only, would not have the effect to transfer the claim to him, but his appointment as receiver under the order of the court has, in our opinion, that effect. It was held in the case of Erwin v. United States, 97 U S. 392, that the act of congress of February 26th, 1853, to prevent frauds upon the treasury of the United States, which was the subject of consideration in the Gillis Case, applies only to the voluntary assignment of demands against the government. It does not embrace cases where there has been a transfer of title by operation of law. The passing of claims to heirs and devisees, or assignees in bankruptcy, is not within the evils at which the statute aimed; nor does the construction given by this court deny to such parties a standing in the court of claims.”
The conclusion reached from these authorities is that the statute does not prohibit assignments in bankruptcy, nor general assignments for the benefit of creditors, nor assignments decreed by a court of competent jurisdiction, between parties, for the benefit of the creditors of the person or estate of the claimant; nor assignments by operation of law, as now recognized and enforced by the various courts of competent jurisdiction in the several states of the Union. Besides, this interpretation of the statute is entirely consonant and in furtherance of justice. The only case relied upon by defendants is that of *690St. Paul and Duluth Railroad Co. v. United States, 112 U. S. 733. An examination of the case will show that all that was decided in that case was that the voluntary transfer of a claim against the United States for compensation to a railroad company for carrying the mail, made to another company by way •of mortgage, does not fall within the exceptions of the statute, such as an assignment by operation of law or a voluntary assignment for the benefit of creditors. The court said in that case, in effect, that the fact that the mortgage was foreclosed by judicial action, did not constitute an assignment by operation of law. This case is no authority to sustain the point that the receiver of the property and things in action of a debtor, for appropriation to the payment of debts, deriving his authority from a court of competent jurisdiction, does not take, by virtue ■of an assignment by operation of law, a claim against the United States.
The conclusion reached is that the order of the chancellor, overruling the pleas, must be affirmed, with costs.
For affirmance — The Chief-Justice, Depue, Gummere, Lippincott, Ludlow, Magie, Van Syokel, Brown, Sims, Talman — 10.
For reversal — None.