Case: LAWRENCE G. BOGGS v. THE UNITED STATES
Abbreviation: Boggs v. United States
Decision Date: 1909-02-15
Docket Number: No. 26099a
Citation: 44 Ct. Cl. 367
Volume: 44
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: LAWRENCE G. BOGGS v. THE UNITED STATES.
Judges: 
Pages: 367–387

Head Matter:
LAWRENCE G. BOGGS v. THE UNITED STATES.
[No. 26099a.
Decided February 15, 1909.]
On the Proofs.
The clerk of a pay director in the Navy abstracts $10,000 of government funds. The money is taken from time to time and the thefts concealed by falsifying the accounts. The pay director now seeks relief under the disbursing officers’ act from responsibility for the loss. The question in the case is whether the funds were abstracted and the thefts concealed without fault or negligence on his part.
I.In a suit by a disbursing officer seeking relief from responsibility for lost funds under Revised Statutes, section 1059, the jurisdiction of' the court is acquired not by a reference by the Secretary of the Treasury under section 1063, but by the claimant appearing and filing his petition for relief.
II.Where there is an action at law by the Government against a disbursing officer upon his bond, it is well settled that his liability is as great as that óf a common carrier, and in some respects greater. The cases reviewed.
III.The Disbursing Officers' Act (Rev. Stat., §§ 1059, 1062) was intended to give disbursing officers a right to relief which they did not possess before.
IV.The intent of the law now is that the legal liability of disbursing officers remains unchanged, but that the Court of Claims sitting as a court of equitj'- can award specific redress in .exceptional cases, i. e., where the officer can establish the fact that his official conduct was faultless.
V.In these cases there exists a presumption of liability and the burden of proof rests upon the officer.
VI.Where a disbursing officer did not verify the monthly statements and his omission enabled his clerk to use the receipts belonging to one. quarter so as to show a false balance existing at the beginning of another quarter, it can not be held that the loss was “ without fault or negligence on the part of such officer; ” and the fact that the Navy Regulations require pay officers to be responsible for the character and fitness of the clerks they nominate, and that the claimant retained a clerk of his successor and relied upon recommendations of character does not relieve him from responsibility where he is himself negligent.
VII.A disbursing officer who gives receipts and accepts cash from his predecessor assumes responsibility for the correctness of the balances transferred to him, and if he does not verify them is responsible for any resulting loss.
The Reporters'1 statement of the case:
The following are the facts of the case as found by the court: ‘
I. The claimant entered the regular United States naval service September 24, 1869, after over five years’ previous service as paymaster’s clerk, and’has since then served continuously in the Pay Corps of the Navy until the present time. He was appointed a pay inspector November 12,1899, and a pay director September 28, 1902.
He was ordered to relieve Pay Inspector Wright as paymaster of the New York Navy-Yard on September 1, 1900, having previously served in that position twenty-one months'. He assumed the duties and responsibilities of that office on September 11, 1900, and continued on such duty until June 30, 1903, when he was assigned to duty as purchasing paymaster in charge of the navy pay office at New York City, where he has since remained.
II. The sum of $10,000 has been, disallowed in the claimant’s accounts as pay director, United States Navy, in charge of the paymaster’s office of the New York Navy-Yard, by the Auditor for the Navy Department, being the difference between the amount claimed on his money statement for the fourth quarter of 1903, $233,862.20, as expended for officers’ pay, and the amount actually expended, $223,862.20, from government funds for which claimant was responsible.
III. The average amount of the annual disbursements by the claimant at the New York Navy-Yard approximated $3,725,000. He paid between 4,000 and 5,000‘employees in the yard on semimonthly rolls, and about 300 officers. The average payment to the officers was about $70,000 a month.
Claimant was under bond to the United States in the sum of $25,000 for the faithful discharge of his duties.
IY. When claimant entered on duty as paymaster of the New York yard, the paymaster’s clerk, who performed the duties of chief clerk or cashier of the paymaster’s office, was one Thomas Costelloe, who had been appointed to that position on the 10th of December, 1892, upon the nomination of Pay Inspector Burtis, a predecessor of the claimant.
Costelloe first enlisted in the navy as a landsman October 29, 1866, and served thereafter as a ship’s and paymaster’s writer, pay yeoman, paymaster’s clerk aboard ship and ashore, inspector of provisions and clothing at League Island and the New York navy-yards, and clerk to the commandant at the latter yard. His services in the navy had been practically continuous before his appointment as paymaster’s clerk in 1892 since 1866. He served thereafter successively and continuously under his last appointment as paymaster’s clerk, discharging the duties of chief clerk and cashier at said New York yard under Pay Inspector Burtis, under the claimant for his first tour of duty there of twenty-one months, under Pay Inspector Wright, claimant’s immediate predecessor in this office, and under the claimant during his whole period of service as paymaster of the New York Navy-Yard, and during the service of his successor until January 9, 1904, when the discovery detailed in Finding XXIY was made. His appointment was revoked May 11, 1904, for reasons appearing in the findings hereafter. The retention of Costelloe as paymaster’s clerk by the claimant when he took charge of the paymaster’s office at said navy-yard was voluntary.
Claimant knew nothing of Costelloe’s private life or personal habits, nor did he then or thereafter investigate that subject or make any inquiries whatever as to his associates. His knowledge of Costelloe was confined exclusively to his previous official relations with him at said yard. Costelloe’s reputation among those with whom his official duties brought him in contact was good; he was attentive to his duties and seldom, if ever, absent during office hours. His salary was $1,600 per annum.
V. Claimant gave his entire time during the usual working hours to the business of his office. He employed himself in the general supervision of the accounts and office work, in signing all checks, in making and signing requisitions, in procuring and bringing over to the yard from the subtreas-' ury in New York the necessary funds.
There were six other employees in the office under claimant’s direction, and the business of the office was large.
The disbursements made by claimant consisted of two general classes: (1) Payment of salaries of the laboring force and of all employees of each department of the yard on what were known as the “ Yard rolls,” and (2) payments of salaries of the officers on the active and retired list known as the “ Officers’ roll.”
During claimant’s term of service in said yard, said Cos-telloe had general supervision of all the cash and the official cashbook and superintended the putting up and paying out of the moneys and the making up of the returns.
VI. The following conditions in regard to the payment of the “ Yard rolls ” had existed at the New York Navy-Yard long prior to claimant’s service and during the service of his successor, Pay Director Colhoun.
The laboring force of the navy-yard was paid twice each month on rolls made up in the respective administrative branches of the yard and forwarded by the several heads thereof to the paymaster. The preparation of these rolls in the various departments took several days after the period had expired for which the payments were to be made, and several days after that were required for the payments to be arranged by the paymaster. The rolls due on the 1st of the month were not paid until about the 9th or 10th, and the rolls due on the 15th were not paid until about the 24th or 25th. Polls due on the 15th were charged in the expenditures of the paymaster as of the date when actually paid — to wit, the 24th or 25th — and the payments due on the last of each month were charged as if made on the last of each month next preceding the actual payment, although actually paid on the 9th or 10th of the succeeding month. The accounts of each month were kept open after its close to enable these payments to be entered therein.
The paymaster assumed no responsibility for the correctness of the rolls other than to prove the extensions and footings of the columns, after which they were approved by the commandant of the yard. The denominations of the currency necessary to pay the rolls were then taken off by the paymaster, which also gave the net sum required to be drawn for that purpose. The money was then drawn from the New York subtreasury by the paymaster and turned over to the chief clerk, who, with the assistance of the clerical force of the office, placed the proper amount due each man in a separate envelope, which had previously been made out for the correct amount from the pay roll. The fact that there was nothing over or nothing short after the distribution of the money in the individual envelopes proved that the rolls had been correctly put up.
VII. The following conditions in regard to the payment of officers had also existed at the New York Navy-Yard long prior to claimant’s service there, and continued during his entire service and that of his successor until the discovery set forth in Finding NXIV.
There were two classes of officers paid by claimant: (1) Officers on duty in the yard, and (2) officers not on duty in said yard, including those on the retired list. There were also two methods of paying officers, namely, by check or in cash. In order to get their pay, officers not on duty at the yard would send to the paymaster before the end of the month receipts in duplicate upon an official form long in use at that office, signed in blank, with no amount thereon. Sometimes the receipts would be dated and the place of residence of the officer placed thereon, and sometimes they would be signed entirely in blank. The following is a specimen of such a receipt:
Exhibit No. 4 — J. H. G.
(The address to which the check is to be sent should be filled in with the date.)
These receipts were handed to the clerk who kept the officers’ pay roll, known as the roll or entry clerk, who would fill out either the original or duplicate, with the date and correct amount due, and a check therefor would be prepared by another clerk, signed by the paymaster, and mailed to the proper officer. This receipt, with others, would be entered by Costelloe in the official cashbook in a lump sum under the column “ Officers.” It would also be charged up separately by the roll clerk against the individual account of the officer by name on the pay roll and checked in pencil on the roll and in red ink on the receipt when thus charged. If the officer did not sign the pay roll in person at any time during the quarter for which payment was made, the completed receipt was attached to the paymaster’s account as a voucher and sent to the Treasury Department; otherwise the receipts, original and duplicate, were retained in the paymaster’s office at New York. The receipts so remaining in the office were not destroyed, but were kept in the office safe until they accumulated, and then stored in a storeroom, being all the time in the custody of the chief clerk or cashier.
Officers were paid whenever they desired to be paid, if anything was due them, no payment being refused at any time to one having pay due. An officer applying in person for pay might receive it in cash or by check as he preferred, but the usual custom was to make such payments in cash. Upon making known the amount he desired to draw, the roll clerk would date and properly fill out one receipt for the correct amount. The officer would sign this and present it to the cashier, who would then pay him the money. The officer at the same time generally availed himself of the opportunity and signed the pay roll for his salary for the whole of the current quarter. The chief clerk or cashier would thereafter charge up in a lump sum in the cashbook, under the column “ Officers,” the aggregate amount paid during the day to all officers, making no distiilction between cash and check payments. The receipts were subsequently handed to the roll clerk and charged by him against the individual account of each officer under the proper month on the pay roll, after which each was checked by him on the roll and receipt when entered as above described. About 32 per cent of the monthly payments to officers were made in cash and the balance by check. No officer could draw any money for any purpose, whether he signed the roll at the time or not, without also signing a separate receipt therefor.
VIII. The Navy Regulations of 1900, in force at the time of the claimant’s service as paymaster of the New York Navy-Yard aforesaid, required the rendition by him of reports as follows:
“ 1488. (1) Every pay officer who receives public money which he is not authorized to retain as salary, pay, or emolument shall render his accounts quarterly.
“ (2) Such accounts, with the necessary vouchers, etc., shall be mailed or otherwise sent to the Auditor for the Navy Department within twenty days after the period to which they relate.
“ (3) The Secretary of the Treasury being empowered to make orders in particular cases relaxing the requirement of mailing or otherwise sending the accounts within the prescribed time, and to waive delinquency, in such cases only in which there is, or is likely to-be,"a manifest physical difficulty in complying with the requirement, pay officers should, when it is impossible to comply, make such explanations in the letter transmitting their accounts as will enable the accounting officers to determine as to' their delinquency.
“ 1590. Purchasing pay officers and pay officers of shore stations shall transmit to the Auditor for the Navy Department quarterly, and when detached from duty, an account current of all moneys received, expended, and remaining on hand under each appropriation, accompanied by an abstract and by all rolls, vouchers, and other papers necessary to substantiate the account.
“ 1592. A duplicate of the account current shall be forwarded quarterly to the Navy Department for the Paymaster-General of the Navy.
“ 1594. (1) Purchasing pay officers and pay officers of shore stations shall transmit to the Auditor for the Navy Department and to the Bureau of Supplies and Accounts a monthly money statement of all moneys received, expended, and remaining on hand under each appropriation, and to the office of the Secretary and to each bureau of the Navy Department, except the Bureau of Supplies and Accounts, a similar statement for appropriations pertaining to them.
“ (2) The statements for the office of the Secretary and for the Auditor for the Navy Department shall be accompanied by an abstract of all payments under ‘ Pay, miscellaneous.’ These returns must be made out and forwarded within ten days after the expiration of each month, unless otherwise directed by the Secretary of the Treasury.”
Claimant appears to have rendered all such accounts during his term of service at said yard.
IX. Claimant caused tbe cash, to be balanced once each week. The monthly money statement required by the Navy Regulations was made on the 15th of each month for the preceding month from the total charges shown by the cashbook. This monthly statement was not verified by comparison with the total cash on hand. The payments to officers in the first few days of the current month were shown by receipts as heretofore described in Finding VII, and such sums were treated as cash on hand at the close of the preceding month.
X. Costelloe, the chief clerk and cashier aforesaid, embezzled government funds to the amount of $10,000, for which claimant was responsible.
This peculation was covered up by the manipulation of officers’ pay receipts hereinbefore described and by false balancing entries at the beginning and end of each quarter in the following manner:
At the beginning of each quarter Costelloe selected a number of genuine receipts (equal to his whole shortage) which had already been paid, charged in the cashbook as an item of amounts paid to officers and separately entered on the pay roll for the preceding month against each officer’s individual account. After erasing the true dates on these receipts, being the dates upon which they had been actually paid and entered, he would redate them all with the same false date, generally within the first ten days of the opening month of the new quarter, and recharge them a second time in the cashbook as having been again paid to the same officers upon the false date. For this false entry on the cashbook there would be no corresponding entry on the pay roll, and the respective totals for the month and the quarter would not balance, the difference being the amount of the whole shortage. In order to conceal the false entry charged in the first month of the quarter, Costelloe reduced the true entries in the cashbook in the last month of the same quarter by an amount equal to his entire shortage, and the totals of the cashbook and pay rolls for the quarter would thus be made to agree. They did not agree for the first or the last month of any quarter throughout the term of claimant’s tour of duty as paymaster of said yard, the difference being set out in the following table:
Comparisons of the totals of Pay Director Boggs’s cashbook from September, 1900, to April, 1903.a
•September, 1900 & December, 1900.. -January, 1901_ March, 1901. April, 1901. June, 1901. July, 1901. •September, 1901. October, 1901.... December, 1901.. January, 1902.... March, 1902. April, 1902. June, 1902 . July, 1902. September, 1902 . October, 1902.... December, 1902.. January, 1903.... March,'1903. .April, 1903. Month. Money paid as per officers’ roll. $69,208.72 70.820.24 65.916.24 65,138.60 64,584.63 70,184.76 65,255.86 73.859.41 68,693.30 77,662.65 65,308.03 72,342.68 64,521.20 67.786.41 66,971.88 '72,115.85 66,161.59 78,348.19 66,050.14 hi,322.02 68,438.12 Amounts entered as paid as per cashbook. $72,753.13 68.289.62 70,189.08 60,950.76 69.202.63 64,757.36 70,293.56 69,055.71 74,000.96 72,464.99 70,716.90-66,778.81 69,445.95 61.523.85 73,946.03 65,263.10 74,272.92 70.136.86 74,147.28 73,332.88 78,438.12 Difference. $3,544.41 2,630.62 4.272.84 4.187.84 4,617.90 5,427.40 5,037.70 4,839.70 5,307.66' 5,097.66 5.408.87 5.563.87 4.924.75 6,262.56 7,974.15 6.852.75 8.111.33 8.211.33 8,097.14 7,899.14 10,000.00
a April, 1903, was the last month containing false entries.
6 Pay Director Boggs relieved Pay Director Wright September, 1900, and that month was included in the former's returns for the second quarter, 1901.
(Ree., p. 28.)
XI. By custom prevailing in the navy, when one pay officer relieves another as paymaster of a yard the one relieved is not actually detached until after her has paid the yard rolls for the last half of the preceding month, usually about the '9th or the 10th. The balances are then made up and the transfer of public funds from the one paymaster to the other takes place. During this time, a period of from-ten to fifteen days, the relieving paymaster has no funds in hand, so that all payments on officers’ rolls are made for him by the outgoing paymaster, as the officers’ rolls in the latter’s accounts have been closed at the end of the preceding month. The receipts of the officers for these payments are turned over to the relieving or incoming paymaster as so much cash to be charged on his rolls, and the relieving officer receipts to the outgoing officer for them as well as all other cash balances transferred.
XII. In the interval between claimant’s assignment as paymaster of the New York Navy-Yard, September 1, 1900, and the date his responsibilities began, September 11, 1900, the accounts of his predecessor, Pay Director Wright, were made up and balanced by Costelloe, and, he also made the necessary pa'yments for claimant during that time on the officers’ rolls.
Claimant receipted to Wright on September 11, 1900, for the balance of funds on hand, notwithstanding Costelloe had previously made a false entry in the cashbook of $3,244.32, and had changed the dates from August 31 to September 4, 1900, on ten receipts for the same amount which had already been paid by Wright to said officers in the month of August, and entered and checked on the rolls for August in said Wright’s accounts to the amount of $2,987.86. Nine of said receipts showed upon their faces that they had been paid by check, and all of them showed that they had been once entered on the rolls. It is not established by the evidence that the amount of $2,987.86, entered and checked on the rolls for August in said Wright’s accounts, was actually taken by Costelloe at the time he made the false entry in the cashbook of $3,244.32 and at the time when he had changed the dates from August 31 to September 4, 1900, on the receipts herein-before mentioned. Claimant accepted said receipts as vouchers for payment made to officers in his behalf by Wright in September, and included them in the receipt which he gave to Wright to cover all balances transferred to him.
Costelloe concealed, the amounts subsequently embezzled by false entries in the cashbook and the use of altered or spoliated receipts in the same manner as hereinbefore described thfoughout the claimant’s whole tour of duty, until the preparation of claimant’s final accounts for transmission to the auditor, as hereafter more fully set forth.
Piad claimant verified the genuineness of said receipts by comparison with the pay roll before receipting to Wright, their altered or spoliated character would have been disclosed.
XIII. On January 10, 1903, Costelloe made a false entry in the cashbook under pay of officers of $8,066.95, and fraudulently changed the dates on 23 officers’ receipts to support said false entry in the same manner as heretofore described, from December 31, 1902, to January 9 and 10, 1903, respectively. Said receipts had been previously paid and entered on the December roll and bore evidence of that fact by the entry clerk’s check mark upon their face. They were not entered on the January roll.
XIV. The claimant was required to give a new bond of $25,000, owing to his promotion to the next higher grade, which was approved January 2, 1903. Before he could obtain public funds under his new rank he was obliged to settle his accounts to December 31, 1902, and turn in all balances to the subtreasury at New York.
When the new funds became available the claimant was absent on board duty in Washington, and he accordingly forwarded a check for the necessary amount to a brother pay officer at the New York yard, who drew the money and turned it over, by 'his direction, to Costelloe. "When the claimant returned to the navy-yard, about January 12, 1903, he examined the cashbook and vouchers and his attention was directly drawn to the fraudulent receipts described in Finding XIII by the number of them and by the fact that he observed the original dates thereon had been erased, which was the first and only instance in which he had ever known it to be done.
Costelloe explained that said erasures had been made because he had no funds with which to pay the receipts and therefore he had changed the dates to that on which the funds were received. The claimant accepted Costelloe’s explanation and made no further investigation of the matter.
Among the said altered receipts was the claimant’s own receipt for $859.95, which he drew in January on account of December and which had been checked and entered by the roll clerk on the December pay roll.
XV. On April 3, 1903, Costelloe made another false entry in the cashbook of $8,086.47, to conceal which he fraudulently changed the dates of 24 officers’ receipts from Marcln 31, 1903, to April 1, 1903. Fifteen of said receipts had previously been paid by check, and all of them bore the roll clerk’s mark, showing they had been entered on the roll. They were not entered on the April roll.
XYI. On April 30, 1903, Costelloe added the further sum of $1,913.53 to the amount of his embezzlement to conceal which he falsely increased the true entry in the cashbook on that day from $47,813.34 to $49,726.87, thereby making his shortage an even $10,000. It does not appear whether he used fraudulent vouchers or not to support this charge. No further false entries were made during that quarter in the cashbook.
XVII. The specific use of the altered or spoliated vouchers hereinbefore referred to are typical instances of the methods used by Costelloe to conceal his transactions throughout claimant’s whole tour of duty as paymaster of said yard.
XVIII. The official cashbook was the official record from which the statements'required by the Navy Regulations to be transmitted weekly and monthly were prepared. The last office balance as shown by the cashbook was the balance from which the general inspector of the Pay Corps began in inspecting claimant’s accounts. Upon the accuracy of the official cashbook the correctness of all the accounts depended.
XIX. Costelloe had exclusive charge of the official cashbook and made all the entries therein. No person in the office, except claimant, was ever permitted to see it or lend assistance. Costelloe paid the officers almost entirely and made out all the statements required by the regulations.
XX. The monthly statements rendered by the claimant in accordance with the regulations for the first and last month of each quarter of his service at said yard were false in the same amounts as the differences between the monthly totals of the pay rolls and the totals of the cashbook.
XXI. Claimant made no attempt when he entered upon his duties nor at any time during his tour of duty as paymaster of said navy-yard by an examination made by himself or with the assistance of other persons to verify the ■accuracy of the entries made by Costélloe in the cashbook for any single month, nor did the claimant make any attempt at any time during his period of duty as paymaster of said yard to verify the genuineness of the receipts from which said entries purported to have been made by any examination of his own or by any examination made by or with the assistance of other persons.
As the rolls were footed up and checked each month directly from genuine receipts entered on the roll by the clerk and the total handed to Costelloe to enable him to prepare his monthly money statements, a comparison of the totals ■of the cashbook and the pay rolls each month would have shown any difference that might exist. It was the custom at said yard for the paymaster to make such comparison, and it^was the invariable rule in the naval service at yards where large numbers of officers were paid to foot up the officers’ receipts monthly from the roll and thus check the expenditures charged in the cashbook.
XXII. At the end of each quarter the aggregate of the pay rolls for three months was compared with the aggregate of the cashbook for a similar time. This did not verify the genuineness of the monthly entries in the cashbook, and as this verification occurred after the 10th of the first month of each quarter it did not include receipts for amounts purporting to have been paid to officers during the first ten days of the opening month of each quarter, for which ten days there was no verification of the accounts at all.
XXIII. Claimant was relieved from duty at the paymaster’s office at the navy-yard on July 14, 1903, and began his duty at the navy pay office in New York July 31, 1903. The preparation of his final accounts had been intrusted to Costelloe as chief clerk. They were completed on the 24th day of August, 1903, and were brought over for signature of claimant by a clerk in the office of claimant’s successor as paymaster of the navy-yard. The cashbook was not sent with the accounts nor the vouchers from which they were posted. Claimant signed the accounts without having compared them with the cashbook at any time during that quarter and returned them to Costelloe, by whom they were transmitted to the auditor.
XXIY. The accounts so transmitted as aforesaid lacked $10,000 of aggregating the amount for which claimant should have accounted. In January, 1904, an officer in another department of the New York Navy-Yard found a discrepancy in certain returns for sales of condemned public property. This discovery led to an immediate examination of claimant’s accounts, at his request, by the auditor, when it was found that the footing of the recapitulation of the rolls had been falsely raised from $223,923.60, as first written, to $233,923.60 by adding a curl to the top of the second figure 2, thereby changing it into a 3 in such a manner that it was instantly perceived. Whether this change was made before or after the claimant signed the accounts does not appear. Had claimant compared the accounts with the cashbook or added up the recapituation of the rolls he would have detected the shortage.
XXY. Costelloe was arrested, indicted on a number of charges, pleaded, guilty on one indictment in the United States Circuit Court for the Eastern District of New York for an offense during the administration of claimant’s successor, and was sentenced to the penitentiary for five years and to pay a fine of five thousand dollars.
XXYI. At the time when Costelloe’s peculations were discovered the claimant was on duty as purchasing paymaster in charge of the navy pay office at New York City. The claimant was continued in this position by the Navy Department until retired from active service by operation of law.
Upon the discovery of Costelloe’s peculations a court of inquiry was ordered by the Secretary of the Navy.
This claim was on the 26th day of August, 1904, referred to this court by the Secretary of the Treasury on the recommendation of the Auditor for the Navy Department on the' claimant’s application.
Claimant voluntarily appeared and filed his petition herein and prosecuted said cause.
Mr. George A. King for the claimant. Messrs. Geo. A. and Wm. B. King were on the briefs.
Mr. Frederick De C. Faust (with whom was Mr. Assistant Attorney-General John Q. Thompson) for the defendants.

Opinion:
HowRT, Judge,
delivered the opinion of the court:
This is a suit by a pay director in the navy for relief under "Revised Statutes, sections 1059, 1062, from responsibility for the loss of $10,000 of government funds for which the officer was responsible and for which sum plaintiff has been charged in his official accounts by the accounting officers of the Treasury. The shortage occurred while the plaintiff was on duty as paymaster of the New York Navy-Yard through the defalcation of one Thomas Costelloe, who was at that time chief clerk and cashier in the employ of the paymaster.
The statutes under which the relief is sought give the court jurisdiction to hear and determine, Revised Statutes, section 1059, .
" The claim of any paymaster, quartermaster, commissary of subsistence, • or other disbursing officer of the United States, or his administrators or executors, for relief from responsibility on account of capture or otherwise, while in the line of his duty, of government funds, vouchers, records, or papers in his charge, and for which such officer was and is held responsible."
Revised Statutes, section 1062, provide that:
" Whenever the Court of Claims ascertains the facts of any loss by any paymaster, quartermaster, commissary of subsistence, or other disbursing officer, in the cases herein-before provided, to have been without fault or negligence on the part of such officer, it shall make a decree setting forth the amount thereof, and upon such decree the proper accounting officers of the Treasury shall allow to such officer the amount so decreed, as a credit in the settlement of his accounts."
It will be noted from the foregoing recitals that the court has acquired jurisdiction not under the reference by the Secretary of the Treasury under section 1063 of the Revised Statutes, 'but because plaintiff has voluntarily appeared and filed his petition for relief under statutes which confer the jurisdiction upon the court to give the necessary relief if the plaintiff shows he is entitled to relief. The jurisdiction is thus acquired independent of any reference by the Secretary of the Treasury.
In direct actions on bonds of public officers by reason of neglect or breach of duty numerous cases have been before the court of last resort. There have been cases where public money has been destroyed by fire, shipwreck, earthquakes, and other overruling causes. In United States v. Prescott (3 How., 578), the defense was that the money sued for had been feloniously stolen without fault or negligence on the part of a receiver of public money, and where the receiver contended that he was liable only as a depositary for hire unless his liability was enlarged by the special contract to keep safely, which it was further contended was not the case. The court held that the law of bailment did not apply to such a case, and that every depositary received his office with full knowledge of its responsibilities, and in case of loss could not complain. In United States v. Morgan (11 How., 154), the bond of a collector was conditioned that he " continue truly and faithfully, to execute and discharge all the duties of the said office." The court characterized as an erroneous impression that the collector was acting as a bailee. In United States v. Dashiel (4 Wall., 182) the defense to the bond of a paymaster in the army for not accounting was that without any want of proper care and vigilance moneys had been stolen from him. But it was said that the theft or robbery, if satisfactorily proved, was not good. Substantially the same question arose in United States v. Keehler (9 Wall., 83), which was an action on a bond of a postmaster. The court reaffirmed the doctrine of the preceding cases, holding that the express contract measured the liability to pay. In Boyden v. United States (13 Wall., 17), the defense was that the receiver had been by irresistible force robbed of public money. Evidence tending to prove that the receiver had been suddenly beset in his office, thrown down, bound, and the public money in his possession violently taken from the officer was rejected as constituting no defense to suit on the officer's bond. In Bevans v. United States (13 Wall., 56) the suit was upon a bond of a receiver. The court reaffirmed the rule announced in Prescott's case, and declared that the obligation of the bond was not less stringent than that of a common, carrier, and in some respects greater. A question reserved from the decision in Bevan's case arose in United States v. Thomas (15 Wall., 337). That was an action on the bond of a depositary, and the special defense was that the moneys were seized by the Confederate authorities against the will and consent of the officer by the exercise of force which he was unable to resist. The court said that no ordinary excuse could be allowed for the nonproduction of money committed to disbursing officers' hands, as they were special bailees subject to special obligations, and added that the decisions had not gone to the length of making officers liable in cases of overruling necessity. The court was of opinion that the Thomas case did not materially modify the previous decisions. In the late case of Smythe v. United States (188 U. S., 156), the import of the authorities was reviewed at great length, and it was held that there was a breach of the bond where treasury notes were charred, burned, and destroyed by fire without negligence on the part of the officer, his agents,- or employees.
But this is a suit under statutes which provide for a decree and of which the Supreme Court has said:
" By a very curious provision the Court of Claims is authorized to establish a defense to a claim which claim the Government can only establish judicially in some other court." (United States v. Clark, 96 U. S., 37.)
Cases have arisen from time to time in this court where relief has sometimes been granted and sometimes refused. (Glenn v. United States, 4 C. Cls. R., 506; Whittelsey v. United States, 5 C. Cls. R., 452; Malone v. United States, 5 C. Cls. R., 486; Howell v. United States, 7 C. Cls. R., 512; Hobbs v. United States, 17 C. Cls. R., 189; Stevens v. United States, 41 C. Cls. R., 344; and Penrose v. United States, 42 C. Cls. R., 34.)
It is, we think, a sound proposition that the statutes under which the court, on the petition of the plaintiff, has acquired jurisdiction were intended to-give disbursing officers a greater right to relief than they already possessed before these acts were passed.
They were passed to relieve innocent disbursing officers from the rigors of the law and the consequent judgment of courts of law, by allowing them to go into a court of equity,. and, by establishing the fact that they were faultless, obtain a " decree " which would require the accounting officers to allow to such officer credit in the settlement of his accounts. The provisions in question are predicated upon the act of 1866, which did not lessen the legal liability of disbursing officers, nor give them generally greater legal rights than they possessed. The Court of Claims alone, acting as a court of equity, can administer the equitable provisions under which relief is here asked and award the specific redress authorized by the statute in and, only in exceptional cases. That is, where the officer has established the fact that his conduct has really been faultless. Before relief can be granted it must appear with reasonable degree of certainty from all the proof and circumstances of the case that the officer entrusted with public money has exercised watchfulness over the funds and such degree of care as fairly and equitably entitle him to a decree exonerating him from the obligation of his bond.
From the foregoing statement it is apparent that the responsibility of the court in this class of cases is very great. It is equally apparent that the court can not well undertake to formulate any general rule declaring what acts may carry exemption from liability. Each case must depend • upon those conditions and circumstances which necessarily arise out of the proof when presented. As, however, redress can only be had in exceptional cases there is at the outset a presumption of liability, and the burden of proof must rest upon the officer who has sustained the loss.
We pass then to the special contention of the plaintiff and to the circumstances involved in the contention that the confidence reposed by other, and higher officers of the Government in the clerk who made away with the funds for whose safe-keeping plaintiff became responsible justified this pay director in retaining the same clerk when the former paymaster was relieved and the present plaintiff took charge; that board duties called the plaintiff away from time to time to tlie seat of government, which made it necessary for him to leave all the cash and accounts in charge of the clerk, and that on account of the magnitude of the transactions of the office plaintiff must be excused from proving the correctness of the entries in the cashbook at the end of each month.
It appears from the findings that plaintiff did not verify the monthly money statement officially required of him to be made on the 15th of each month for the preceding month from the total charges shown by the cashbook with the total cash on hand. There was an omission on his part to make the necessary comparison of the monthly money statement with the cash in hand. This omission enabled the clerk in charge of the books to select at the beginning of each quarter a number of genuine receipts which had already been paid and charged in the cashbook as an item of amounts paid to officers and separately entered on the pay roll for the preceding month against each officer's individual account; and after erasing the true dates on these receipts, redating them all with the same false date, generally within the first ten days of the opening month of the new quarter, and recharging them a second time in the cashbook as having been again paid to the same officers upon the false date. For such false entry on the cashbook there would be no corresponding entry on the pay roll and the respective totals for the month and the quarter would not balance. The difference was the amount of the whole shortage. In order to conceal the false entry charged in the first month of the quarter the clerk would reduce the true entries in the cashbook in the last month of the same quarter by an amount equal to his entire shortage, and the totals of the cashbook and pay rolls for the quarter would thus be made to agree. They did not agree for the first or the last month of any quarter throughout the entire term of plaintiff's tour of duty as paymaster. The difference aggregated $10,000.
It would be utterly inconsistent with the statutes which require plaintiff to give a bond to account for the funds, for this court now to hold that the obligation of the bond became satisfied by the confidence which the plaintiff put in his clerk and bookkeeper. It is no answer to say that other and higher officers reposed confidence in the same clerk and yet lost no public money by his peculations. Plaintiff was not justified in accepting their estimate of him to the extent of not keep ing continually in touch with the accounts and of informing himself of their correctness notwithstanding the good character of his subordinate. To hold that an opportunity should be given to the clerk to falsify public accounts without requiring a bond from him at the outset, or keeping watch upon the entries on every roll as well as upon every book made necessary to disclose the true state of the amount of actual money on hand at any given time to the officer who had made himself responsible as well as to disclose the correctness of the amounts being charged to the Government would, in effect, leave the clerk alone liable to account for the public money without the emoluments of the office. The findings show that the plaintiff accepted explanations of erasures and made no further investigations, and among the altered receipts was the plaintiff's own receipt for $859.95, which he drew in one month, but which had been checked and entered by the roll clerk on the pay roll of another month.
The fact that the navy regulations required pay officers to be responsible for the character and fitness of the clerks they nominate and to submit certificates showing the character and fitness of these persons did not relieve plaintiff from responsibility for the embezzlement of the clerk retained in office by him, even though the plaintiff took the clerk over from his predecessor. The navy regulation ivas not intended to relieve the officer from responsibility, but rather to throw around him all the safeguards considered by the department proper, not only for the benefit of the Government but for the protection of the pay director himself. But whatever the intention, such a regulation did not have the effect of so superseding the obligation imposed by law, arising out of the ordinary conditions of the bond which the paymaster was required to give, as to relieve the paymaster from accountability.
Public policy imposes upon every depositary the duty of exercising the highest degree of vigilance, and it is no excuse that duties elsewhere took the claimant away from his post leaving all the cash and accounts in charge of a mere clerk without any supervision or such inspection of the books and funds as would reasonably insure the safe-keeping of everything in the absence of the responsible head. Nor do the findings establish that duties at the seat of government look the plaintiff away from his regular post enough to prevent him from giving his personal attention to the accounts and determining the true state of the business of the office..
The findings establish that when the plaintiff relieved his predecessor he gave receipts to cover the funds then on hand. Section 1559 of the regulations provides that: "In all cases of transfers of funds or supplies the receiving officer must state in the receipt given that he holds himself accountable to the United States for the sum or quantity received." (U. S. Navy Regulations, 1900, p. 348; ib., p. 314, par. 1478.) Considering that it was the fault and neglect of the plaintiff to fail to carefully verify the accuracy of the official cashbook and the receipts of the officers which Costelloe was carrying over as vouchers for cash payments from month to month and from quarter to quarter, and that plaintiff accepted receipts from his predecessor as cash, the court is of opinion that plaintiff assumed responsibility for the correctness of the balances transferred to him. It is not established by the evidence that the amount of $2,987.86 entered and checked on the rolls for August in the accounts of plaintiff's predecessor was actually taken by Costelloe at t^e time he made the false entry in the cashbook of $3,244.32 and at the time when he had changed the dates from August 31 to September 4, 1900, on the receipts. As plaintiff accepted the receipts as genuine vouchers for payments made to officers and included them in the receipt which he gave to his predecessor to cover the balances transferred to him,, the court must assume in the absence of positive proof that the officers' receipts represented money. At all events, plaintiff assumed the responsibility for the genuineness of the-vouchers which came to him from his predecessor and he became responsible to account to the Government for the. amount, and the court so adjudges.
The petition for relief is denied and is, therefore, dismissed.