Case: Dugan et al., Executors of Clark, v. The United States
Abbreviation: Dugan v. United States
Decision Date: 1818-02-19
Docket Number: 
Citation: 3 Wheat. 172
Volume: 16
Reporter: United States Reports
Court: Supreme Court of the United States
Jurisdiction: United States
Parties: Dugan et al., Executors of Clark, v. The United States.
Judges: 
Pages: 172–183

Head Matter:
(Common Law.)
Dugan et al., Executors of Clark, v. The United States.
"Where a bill of exchange was endorsed to T. X. X., treasurer of the United States, who received it in the capacity, and for account of the United Slates, and the bill -had been purchased by-tho Secretary of the Treasury (as one of the commissioners of the.sinking fund, and as agent of that board) with the money of the United States, and was afterwards endorsedfby T. T. T-, treasurer of the United States, to W, & S,, and by them presented to the drawees for acceptance, and p oloitod for non-acceptance and non-payment, and sent back by W. & S. to the secretary ofthe treasuryjjjefd,that the endorsement' to T.'T. T. passed such1 an interest to the United States as enabled them to maintain an actoin on tho bill against tho first endorser.
Qatcre, whether when a bill is endorsed to an agent, for the use' of his principal, an action bn tho bill can be maintained by the principal, in his own name?
However this may be between private parties, the United States ' ought to be permitted to sue in their own name, whenever it appears, not'only on the face pf the instrument, but-from all the evi1 denee, that they alone are interested in tho subject matter of the controversy.
Held, that the United States- might 'recover in the present action, without producing from W, &‘S. a receipt or a re-endorsement of the hili; that W. & S. were to be presumed to have acted as the agents or bankers of the United States; and that all the interest which W. & S. ever had in the bill, was devested by the act of returning it to the party from whom it was received.
If a parson who endorses a bill to another, whether for value, or for the purpose of eolleetion, comes again to tho possession thereof, ho is to be regarded, unless tho contrary appears in evidence, as a bond fide holder and proprietor of such bill, and is entitled to recover thereon,. notwithstanding there may bo on if one or more endorsements in full; subsequent to tho endorsement to him, without producing, any receipt or.endorsement, back to him from either of such endórseos, whose names he may strike from the bill or not as he thinks proper.
Error, to the circuit court for the district of Maryland.
By the special verdict in this cause, it appeared, that on the 22d of December, J8U1, Aquila Brcwn at Baltimore1, drew a bill of exchange on Messrs. Van Staphorst & Co. at Amsterdam, for 60,000 guilders, payable-at 60 days sight,-to the .order of James Clarke, the defendants’ testator. James Clarke endorsed the bill to Messrs. Brown & Hackman, who afterwards endorsed it to Beale Owings, who endorsed the same to Thomas >jv Tucker, Esq. treasurer of the United Slates, or. order, and delivered it to him as treasurer as aforesaid, who received it in that capacity, and on account of the United States. It further appeared, that this bill had beén purchased with money belonging. to the United' Sates, and under the order, and by an agent of the then secretary of the treasury of the United States, for the purpose of remitting the same to Europe, for the government of the United States, who, in ordering the purchase of this bill acted as one of the commissioners of the sinking fund, and as-agent for that board. The bill was afterwards . fendorsed to Messrs.' Wilhem & Jan Willink & N. & J. & R. Van Staphorst, by Thomas Tuc.ker, treasurer of the United States, and appears by an endorsement thereon to have been registered by the proper officer, at'the treasury of the United States, on the 28th of December 1801, befaré it was sent to Europe. The bill having been regularly presented for acceptance by the last endorsees to the drawees, who protested for non-acceptance. It was afterwards protested for .non-payment, and then returned by them to the secretary of the treasury of the United States, for and on their behalf, who directed this action to be brought. Of these protests due notice was given to the drawer of the bill.
On this state offacts* the circuit court rendered judg- . ment for the United States, to reverse which, this Writ, of error was brought.
Mr. Winder and Mr. D. jS, Ogden, for the plaintiffs. in error,
argued, .1. That the finding of the. jury that Tucker endorsed the bill to Messrs. Wiilinks and yan Staphorst, which endorsement was filled up at the time by Tucker, and so remained at the "trial and judgipent helow, showed the legal title to.this bill out of, the Uuited States, and defeated their right to maintain the action. The transfer to the last endorsees being in full, a recovery could not be had in the name of the United States, without producing from the endorsees a receipt or re-éndorsement of the bill; and the endorsement not being in blank could not' be struck'out at 'the trial* so that the court, and jury w.ere bound to believe that the title was not in the United States, but in the pérson to whom Tucker, had endorsed the bill. If a bill be endorsed in blank, and the endorsee fills up the blank endorsement,, making it payable to himself, the action cannot be brought in the name of the endorser, whieh, otherwise, it might. Every endorsement - subsequent to that, to the holder or plaintiff, must be struck out of the bill, before or at'the trial, in order to render the evidence correspondent to the declaration. Value received is implied in every bill or endorsement, and a transfer by endorsement or delivery, vests in the assignee a right of action on the bill against ¿11 the preceding parties to it. An endorser having paid a bill must, when he sues the acceptor, drawer or preceding endorser, prove that it was returned to him, and he naid it. The special verdict does not find that the endorsement to Willinks, &c. was as agents; but that by the endorsement the contents of the bill were directed to be paid to them. The finding .that the bill was afterwards returned by them to the secretary of the treasury of the United States, for and ' on behalf of the United States, is not findingthat they were agents; nor can the court infer it: and if they did, still the outstanding en^ dórsement shows the legal title in the last endorsee. It has been determined by the court that the mere possession of a promissory note by an endorsee, who had endorsed it to another, is not sufficient evidence of his right'of action against his endorser, without a reassignment or receipt from the last endorsee. 2. The' United States cannot be the endorsees of.a bill so as to entitle them to bring an action on it i.n their own name.' It is essential to a bill of exchange that it should be •negotiable. The government of the United States, as such, are incapable of endorsing a bill; of receiving anfl giving notice of non-acceptance and non-payment. It is' essential to the very nature of this species of instruments that all the parties should be compelled to respond according to the several liabilities they may contract in the . course of the negotiation. But the United States cannot be sued, and, consequently, cannot be made answerable .as the drawers or endorsers of a bill. ■ The national legislature is, probably, competent. to provide for the case, and-to designate some" public, officer who shall be authorized to nego tiate bills for the United States. But until some statutory provision on the- subject is made, the existence'of such an authority in any particular officer of the gov«rnment. cannot be inferred. 3. But even supposing that any endorsement whatever can vest the, legal title to a. bill of exchange in the United States, so as to render them capable of maintaining an action on it in their ówn name, the endorsement to Tucker under the circumstances of this casé, did not vest such a title in them. The treasurer of the United States, has no authority, ex officio, to draw, or endorse, or Otherwise negotiate bills; . The only officers of the government who possess the power of drawing bills are the commissioners of the Sinking Fund. To them it is expressly given by law. But a power to draw or endorse bills as an agent cannot be delegated to another, unless the power of substitution.be expressly given. . Besides,- the agent constituted by the commissioners was the secretary of the treasury, who employed,, not Tucker, but another person, to purchase the bill. Where a bill is payable to A. for the use of B., the latter has only an equitable, riot a legal, interest. The right of assignméní is in the former only. Here the action ought to have béen brought in the name of the trustee, and hot of the cestui que trust.
The Attorney General, contra,
contended., that the position on the other side as to agency in the negotiation of bills was. not law. An action could not be maintained in the name of Tucker for want of interest in him.. According to the doctrine on the other side, he alone.is suable, as. well as empowered to sue. But all authorities, show that an agent contracting on the behalf of government is not personally liable: and the other alternative of the proposition, that he is personally capable of maintaining an action, cannot be supported. A-person may become a party to a bill, not only by his own immediate act, but by procuration; by the act of his attorney or agent: and all persons may be agents for this purpose, whether capable of contracting on their own account, so as. to bind themselves, or not. An agent of the government who draws or endorses a bill will not he personally bound, even *if he draws or endorses in his own name, without stating that he acts as agent. But here. Tucker' subscribed the stylé of his office. It is .sufficient to declare on a bill of exchange according to the legal intendment and effect, and.-an averment that the endorsement was to the party interested-is satisfied by showing an endorsement tp his agent. The United States, though not natural persons engaged in commerce, may be parlies to a bill of exchange. The United States are a body politic and corporate; and it has long since.ceased to be necessa ry in a declaration on a bill'of exchange to state the custom of merchants, and that' the parties to it were persons within the customs. Consequently,-they have the same right to sue on a bill as any other persons; and that they are not reciprocally liable to be sued, is an attribute of. ^sovereignty. Individuals contracting-with them rely on their dignity and justice. But the power of suing on their part is essential to the collection of the public revinue, to the support of government, and to the payment of the public debts.
Feb 19th.
Chitty on Bills, 148. American ed. of 1817.
Chitty on Bills, 378. American ed. of 1817.
Mendez v. Cameron, 1 Ld. Raym. 742.
Welch v. Lindo, 7 Cranch, 159.
Chitty on Bills, 39. American ed. of 1817.
Id. 139. Price v. Stephens, 3 Mass. Rep. 225.
Macbeth v. Haldimand, 1 T. R. 172. Unwin v. Wolseley, Id. 674. Myrtle v. Beaver, 1 East, 135. Rice v. Chute, Id. 579. Hodgson v. Dexter, 1 Cranch, 363. Jones v. Le Tombe, 3 Dall. 384. Brown v. Austin, 1 Mass. Rep. 208. Sheffield v. Watson, 3 Caines' Rep. 69. Freemen v. Otis, 9 Mass. Rep. 272.
Chitty on Bills, 34. Am. ed. of 1817.
Id. 40.
Id. 365. 367. App. 528, 538.

Opinion:
Mr. Justice Livingston
delivered the opinion of the r ' / . r court, and after stating the facts,- -proceeded, as follows: ,
The first question which will be disposed of, although not the first in the order Of argument, will be, whether the endorsement, of this - hill to Mr. Tucker,, under the peculiar circumstances attending the transaction did not'pass such an interest to the United States, as to enable them, to sue in their own name.' In deciding this point, it will be taken for granted, that no doubt can arise bn the special verdict as to the party really interested in this bill. , It was purchased with the money of the United States. It was' endorsed, to their treasurer; it was registered at their treasury; ! was forwarded by their secretary of the treasury, to whom it was returned, after.it had been dishonoured, for and m behalf, as the. jury expressly , find, of.thé United States.' Indeed, without ¿denying the bill to he the property of the United States it is supposed that the.ac tion should have been in the.name of Mr. Tucker, their-treasurer, and not in the name of the cesluy que trust.. .If it be admitted, as it must be, that a- party may in some casés declare according to the legal intendment of an instrument, it is not easy to' conceive a cáse where such an intendment can be stronger, than in the case before the court, but it is supposed that before any such intendment cad be made, it must appear that Mr. Tucker acted under gome law, and that his conduct throughout comported with his duties as therein prescribed. It is sufficient for the present purpose that'he appears to have acted in his official character, and .in conjunction with othér officers of the treasury. The court is not bound to presume that he acted otherwise than according to lavs!, or those rules which had been established by the proper departments of government for the transaction-of business df this nature,.- If it generally true, that when a bill is endorsed to the °f another for the use of his principal, an]action be maintained, in the name of such principal (on ' r • ' . which point no opinion is given,) 'the government should . , , ° •' form an exception to such rule, and the u. Statps be permitted to s-ue in their own name, whenever it appears, not onty on the face of the instrument, but from all the evidence, that they.alone were interested in the subject mat- & ter of the controversy. - There is a fitness that the.public by its o.wn officers should cóndüct all actions in which interested, and in' its own name; and the in. conveniences to which • individuals -may be exposed , J - this way, if any, are -light, when weighed against those which would result from its being, always forced to bring an action in the name of an agent, Not only the death or bankruptcy of an agent may ereáte difficulties, but set-offs naay be interposed against the individual who is plaintiff, unless the court will take notice of the interest of the United States jand'-if they can do this to prevent a set-off, which courts of law have done, why not at once permit an action to be instituted in the name of.the United States? An .intimation was thrown out that the United Statés had no right to sue in any casé, without an act.of congress- for the.purpose. On this-,point the court entertains no doubt. In all cases of contract with the United States, they,must have a right to enforce the performance of such- contract, or to recover damages for their violation, by actions in their own name, unless a different - mode of suit be prescribed by law,, which is not pretended to -be the case here. It would-be strange to deny to them a right which is secured to every citizen of the United States.
^ ther when the use of principal, an action thereon «an be main-' sained by the owuramei1118 mayVeasfatween private parties, the United States their own that-they are alone interestediotho jeat matter.
It is next said by-'the plaintiff in error, that if the endorsement to Mr. Tucker, as treasurerof the United States,-passed such an interest to the latter, as to enable them to sue in their own name, yet such title, was devested by Mr. Tucker's, endorsing the bill to the Messrs. Will-inks and Yan Staphorst, which endorsement appeared on the bill at the trial., and is still on 'it.
The argument .on this point is, that the transfer to the last endorsees being in full, a recovery-cannot be' had in the name of the United States, without produc' . ing from them a receipt, or a re-indorsement of the bill, and that this éndorsment not being in blank could not be obliterated at the trial, so that the court and jury were bound to believe., that the title to this bill was not in the United States but in, the gentleman to whom Mr. Tucker had endorsed it.
Theendorse,r of a'bill, who iato^tíiejjosiotob« regard hofde/and less the contrary appears, and may recover thereon, notwithstanding there may be onepr more endorsements in full, subsequent to the endorsement to him, without producing any receipt or endorsement back to him, from either of such endorsees, and without striking, their names from the bill.
Thfe mere returning of this bill, with the protest for' non-acceptance and non-payment by-the Messrs. Willinks and Van Staphorst to the Secretary of the Treasury of the United States,, for their accoun t* is presump-. tive evidence of the former having acted only as agents or as bankers of the United States. When ' that is not the case, it is not usual to send á'bill back to the last endorser, but to some third person, who may give notice of its being dishonoured and apply for payment to such endorser,, as well as to every other party to the bill. In the case of an agency, then so-fully established,it would be yain to expect either a receipt or are-éndorsement of the bill. The first could not - be giv ' en consistent with the tri-th of the fact, and the latter might well be refused by a cautious person who had no interest whatever in the, transaction. ' In such case, therefore,- a court may well say that all the title which the last endorsees ever had in the -bill,-which was a mere right to colléct it for the United States, was devested by the single act of returning it' to the party of whom it was received. But if this agency in the Messrs. Willinks and Ván Stophorst were not -estab-. lished, the opinión of the court' would be the same; ^er an examination of the- cases on this subject, (which cannot, all of them, be reconciled,) the court is'of opinion, that if any person who endorses a bill of' exchange to another, whether for value, or. for the purpose of collection, shall come to the possession thereof ^ , again, he shall be regarded, unless the contrary appear in .evidence, as the bona fide holder and proprietor of such bill, and shall be entitled' to recover, notwithstanding there may: be on it. one or. more endorsements in full, subsequent to the one to him, without produc-1 ing any receipt or endorsement back from either of such endorsees^ whose names he may strike from the bill, or not, as he may think proper.
Judgment affirmed.