U.S. Supreme Court
United States v. Bank of Metropolis, 40 U.S. 15 Pet. 377 377 (1841)
United States v. Bank of Metropolis
40 U.S. (15 Pet.) 377
ERROR TO THE CIRCUIT COURT OF THE DISTRICT
OF COLUMBIA AND COUNTY OF WASHINGTON
The United States, on 25 June 1838, instituted an action of assumpsit against the President and Directors of the Bank of the Metropolis for the recovery of $27,881.50 for sundry matters properly chargeable in an account, as by an account annexed to the declaration appeared. The declaration contained the usual counts in an action of assumpsit.
The account referred to contained numerous items of deposits made in the Bank of the Metropolis from the Post Office Department, leaving a balance due to the United States of the sum stated in the declaration. The defendants pleaded the general issue.
The defense to the claim of the United States was founded on credits which amounted to $23,000, exclusive of interest, which had been presented to the accounting officers of the Treasury, and which had been refused allowance. They were for acceptances of the Post Office Department of drafts drawn upon the Post Office Department, and an overdraft by E. F. Brown, an agent of the Post Office Department. The jury found a verdict for the defendant and certified that there was due from the United States to the bank $3,371.94, with interest from March 6, 1838.
The plaintiffs, on the trial, asked the court to give certain instructions to the jury, which was refused, to which the plaintiffs excepted. These are stated in the opinion of the Court. The United States prosecuted this writ of error to the judgment of the circuit court, entered on the verdict. The case is fully stated in the arguments of the counsel, and in the opinion of the Court. chanroblesvirtualawlibrary
WAYNE, JUSTICE, delivered the opinion of the Court.
This is an action of assumpsit brought by the United States to recover the sum of $27,881.57. The defendants pleaded the general issue. On the trial of the cause, the defendants claimed credits, amounting to $23,000, exclusive of interest and costs. The items had been presented to the proper accounting officer and were not allowed. They were acceptances of the Post Office Department, of the drafts of mail contractor, and an item of $611.52, called in the record "E. F. Brown's overdraft."
The jury found for the defendants, and certified there was due to them by the United States $3,371.94, with interest from 6 March, 1838. The errors assigned are that the court refused to give to the jury the following instructions, which were asked after the evidence had been closed on both sides.
"1. That upon the evidence aforesaid, the defendants are not entitled in this action to set off against the plaintiff's demand the amount of the acceptances given in evidence by the defendants, nor the amount of the overdraft of E. F. Brown."
"2. If the jury believes from the evidence that when the acceptance of the draft of E. Porter was given by the then treasurer
of the department, there was nothing due to Porter standing on the books of the Post Office Department, and that on the department, when the acceptance fell due, there was nothing due to him, then the defendants cannot set off the amount of said acceptance against the plaintiff's claim in this action."
"3. That if the accounts of E. Porter and Reeside, as contractors with the Post Office Department, were not finally settled on the books of the Post Office Department when the present Postmaster General came into office, if was his duty to have said accounts settled, and if in such settlement there were credits claimed by them, as allowed by order of Mr. Barry, when Postmaster General, and entered on the journal, but not carried into these account in the ledger, and finally entered as credits in these accounts, which credits were for extra allowances which the said Postmaster General was not legally authorized to allow them, then it was in the power and was the duty of the present Postmaster General to disallow such items of credit."
We will consider the instructions asked in connection and upon the merits of the case, but before we conclude will express an opinion upon the form of the first. It appears that the five drafts claimed as credits were drawn on the Post Office Department by contractors for carrying the mails. That they were accepted and were discounted at the Metropolis Bank in that way of business. Porter's draft was at ninety days after date, for $10,000, payable at the Metropolis Bank to his own order, to be charged to account, and was unconditionally accepted by R. C. Mason, signing himself Treasurer of the Post Office Department. It is admitted that he was so. Reeside drew four drafts. One on 17 October, 1835, for $4,500; another on 20 October, 1835, for $1,000; a third on 23 October, 1835, for $4.500; and the fourth on 28 October, 1835, for $3,000. They were payable to his own order ninety days after date for value received, to be charged to his account for transporting the mail and addressed to the Postmaster General. The following was the form of all of them, and of the acceptances of the Postmaster General. chanroblesvirtualawlibrary
"$4,500 Washington City, October 17, 1835"
"Sir: Ninety days after date, please to pay to my own order, four thousand five hundred dollars, for value received, and charge to my account, for transporting the mail."
"Hon. AMOS KENDALL, Postmaster General"
"Accepted, on condition that his contracts be complied with."
Porter's draft was unconditionally accepted. It was discounted by the defendants upon his endorsement. The bank became the holder of it for valuable consideration, and its right to charge the United States with the amount cannot be defeated by any equities between the drawer and the Post Office Department of which the bank had not notice. When the United States, by its authorized officer, become a party to negotiable paper, they have all the rights, and incur all the responsibility of individuals who are parties to such instruments. We know of no difference except that the United States cannot be sued. But if the United States sue and a defendant holds its negotiable paper, the amount of it may be claimed as a credit if, after being presented, it has been disallowed by the accounting officers of the Treasury and if the liability of the United States upon it be not discharged by some of those causes which discharge a party to commercial paper, it should be allowed by a jury as a credit against the debt claimed by the United States. This is a privilege of the defendant for all equitable credits given by the Act or March 3, 1797. 1 Story 464. This and the liability of the United States, in the manner it has been stated, has been repeatedly declared, in effect, by this Court. It said in the case of Bank of the United States v. Dunn, 6 Pet. 51,
"The liability of parties to a bill of exchange or promissory note has been fixed on certain principles which are essential to the credit and circulation of such paper; these principles originated in the convenience of commercial transactions, and cannot now be departed from."
From the daily and unavoidable use of commercial paper by the United States, they are as much interested as the community at large can be in maintaining these principles. chanroblesvirtualawlibrary
It was held in the case of United States v. Barker, 4 W.C.C. 464, that the omission of the Secretary of the Treasury, for one day, to give notice of the dishonor of bills which were purchased by the United States discharged the drawer. And this Court said when that case was brought before it, there was no right to recover, on the account of the neglect in giving notice after the return of the bills. 25 U. S. 12 Wheat. 561. That and other cases like it show how rigidly those principles have been applied in suits on bills and promissory notes in which the United States was a party. The acceptance of Porter's draft was unconditional, and there is nothing in the evidence to discharge the acceptor. There is neither waiver, express or implied, of his liability. There was no understanding nor communication concerning it between the bank, and any officer of the Post Office Department, before it was discounted. The bank advanced the money which it was the object of the bill to obtain. It cannot be doubted the acceptance was given for that purpose. The want of consideration, then, between the drawer and the acceptor can be no defense against the right of the endorsee, who gave a valuable consideration for the bill.
It does not matter how the drawer's account stood. Whether he was a debtor or a creditor of the department; whether the bank knew one or the other. An unconditional acceptance was tendered to it for discount. It was not its duty to inquire how the account stood or for what purpose the acceptance was made. All it had to look to was the genuineness of the acceptance and the authority of the officer to give it. The rule is that a want of consideration between the drawer and acceptor is no defense against the right of a third party who has given a consideration for the bill, and this, even though the acceptor has been defrauded by the drawer; if that be not known by such third party, before he gives value for it. The evidence, then, concerning Porter's account was immaterial and irrelevant to the issue. It cannot affect the rights of the bank, and did not lessen the obligation of the department to pay the acceptance when it became due.
But the evidence does not show that anything was due by Porter when the draft was accepted, or when it came to maturity. Mason the witness, says,
"That in the interim, a sufficient
sum had been raised and carried to the credit of Porter to pay the draft, but that he had also, within the dates, been charged with the amount of a draft, drawn upon him by the postmaster at Mobile, accepted by him, which draft was payable in 1833, and that he was charged with failures and forfeitures incurred as contractor in 1833, which charges were made by order of Mr. Barry, then Postmaster General. It was certainly right to debit Porter with these charges if they were due by him, but that did not change the relative rights and obligations of the bank and the department upon his bill. If either are to lose by Porter, shall it be that party who was bound to know the state of the account before it gave an unconditional acceptance for the purpose of accommodating its own agent, or the other, who placed faith in the acceptance, advanced the money upon it which it was intended to raise, and who could not have learned what was the state of Porter's account, as it is proved that the charges which it is now said should have priority of payment over the bill, were not made against Porter until after his bill had been accepted. Certainly the loss should fall upon the first. It cannot be otherwise unless it would be affirmed that an acceptor may claim to be discharged on account of his own negligence, and that, having induced a third party to advance money upon his acceptance, he shall be permitted to intervene between himself and the endorsee of the paper, a debt due to him by the drawer. The evidence offered to invalidate this credit was done from ignorance of the legal consequences incurred by such an acceptance. In such a case, the bank rightfully looked to the United States for payment of this bill, and if Porter owes anything for forfeitures incurred as contractor or on account of the Mobile draft, the United States must look to him. There is not proof on the record, however, of anything being due by Porter on those accounts, and we do not intend to express any opinion upon his liability or the rights of the United States in respect to them, one way or the other."
What are the merits of the case upon Reeside's drafts? They were drawn on the Postmaster General at ninety days, payable to the order of the drawer, and were to be charged to his account for transporting the mail. They were "accepted on condition that his contracts be complied with." This is, of course, chanroblesvirtualawlibrary
as binding as an absolute acceptance if the condition has been performed. What is the proof of performance, and how shall this conditional acceptance be construed? Mason the witness, says,
"Reeside in fact performed the services for which he was contractor in the year 1835, and the money which he earned upon his contracts was applied, to an extent exceeding the amount due upon his drafts, to the extinguishment of balances created against him by recharging him with sums of money which had been allowed to him by Mr. Barry, the former Postmaster General, as contractor for carrying the mail, by giving him credit therefor in a general account current on the journal, but not entered in the ledger, where his account remained unsettled when the present Postmaster General came into office."
It is said this does not cover the condition of the acceptance, because Reeside stipulated by his bond to pay forfeitures and repay advances, and that he owed the department on both accounts when these acceptances were given, and that in this sense his contracts were not complied with. If this be so, in one sense the contracts would not be complied with; but is that the construction which should be put upon such a condition when the subject matter to which it relates is considered?
If one proposes making a conditional acceptance only, and commits that acceptance to writing, he should be careful to express the condition therein. He cannot use general terms and then exempt himself from liability by relying upon particular facts which have already happened, though they are connected with the condition expressed. Why? Because the particular fact is, of itself, susceptible of being made a distinct condition. This case furnishes as good an illustration of the rule as any other can do. Instead of the words being used "accepted, on condition that his contracts be complied with," could it not have been as easily said accepted on condition "that forfeitures already incurred shall be paid, and that advances made shall be refunded." This would have conveyed a very different meaning, and would have put the bank, when the drafts were offered to if for discount, on inquiry. If they had been discounted without inquiry, it would have been done at the risk that the earnings upon the contracts, and such as might be earned between the date of chanroblesvirtualawlibrary
the acceptances and the times of payment, would be enough to pay forfeitures, repay advances, and to take up the bills.
It matters not what the acceptor meant by a cautious and precise phraseology if it be not expressed as a condition. And when we are told, as we are in this case, by the person making these acceptances, that the form of words was devised expressly for that purpose, meaning for the purposes of having forfeitures paid and advances refunded, and to avoid promising to pay anything to the order of contractors, so long as anything should be due from them to the department, we think it will be admitted, that the purpose explained is larger than the condition expressed. And from the passage in the evidence just cited, how just does the rule appear which has been laid down by the court that in the case of acceptances of commercial paper, that which can be made a distinct condition must be so expressed; nor can anything out of the condition be inferred unless it be in a case where the words used are so ambiguous as to make it necessary that parol evidence should be resorted to to explain them. Then the onus of the proof would be on the acceptor, and the proof would be of no avail if the holder or any person under whom he claims took the bill without notice of such conditions and gave a valuable consideration for it. The error in this case arose from the acceptor's supposing that the defendants did know, and if they did not, they were bound, upon such an acceptance, to inquire into the stipulations and conditions of Reeside's contracts before they discounted the bills, and it is said, they did not use "due diligence to acquire information." The objection then implies that information of these forfeitures and advances could have been given, and that it was not given, when these acceptances were made. This makes it, then, a question of due diligence between the acceptor and the defendants as to his obligation to communicate what he knew, and their want of caution in not making the inquiry.
We think it will be conceded to be a general principle that one having knowledge of particular facts upon which he intends to rely to exempt him from a pecuniary obligation about to be contracted with another -- of which facts that other is ignorant, and can only learn them from the first or from documents in his keeping -- that the fact of knowledge raises the obligation upon chanroblesvirtualawlibrary
him to tell it. This would be the law in such a case, and it is in this case. Inquiry by the defendants would, at most, have resulted in obtaining what was already known to the acceptor. He held the contracts; he knew or should have known officially the state of the accounts between the contractor and the department, and when he conditionally accepted his drafts, which were to be charged to his account for transporting the mail; as his liability to pay them would occur in ninety days, it was but reasonable that he should have said in plain terms, when giving his acceptances,
"If the earnings of the contractor from this time to the maturity of the draft shall be sufficient to pay what he owes and the debt he may incur until then, then these drafts will be paid."
This would have been a condition about which there would have been no mistake.
But further, if two persons deal in relation to the executory contracts of a third (as these contracts were) and one of them, being the obligee, induces the other to advance money to the obligor upon "condition that his contracts be complied with," and he knows that forfeitures have been already incurred by the obligor for breaches of this contract, and does not say so, shall he be permitted afterwards to get rid of his liability by saying to the person making the advance,
"I cannot pay you, for when I accepted, there was already due to me from the drawer of the bill more than I accepted for. I had knowledge of it then, and so might you have had if you had made the inquiry, but you did not choose to inquire, so I will pay myself first, because my acceptance was on condition that his contracts be complied with."
Such is the case before us as it was presented by the argument, and we cannot doubt it will be thought decisive that it was the duty of the acceptor in this instance to communicate what he knew of Reeside's account if he had any conversation with the defendants before the drafts were discounted, and that it was not the duty of the defendants to inquire. It cannot be answered by saying the words of the acceptance were intended to provide for what might exist, but what was not then known, or for breaches of the contracts which had already occurred but which had not been charged with a penalty, for either would be an admission that inquiry by the defendants when the acceptances chanroblesvirtualawlibrary
were made could not have resulted in getting the information at the department.
But again, will the terms of the acceptance admit in any way of retroactive construction? The words must be taken according to the ordinary import of them. They are "accepted, on condition that his contracts be complied with." Can there be compliance with an executory contract, but in future, if breaches have already happened? Supposing no breaches to have occurred necessarily implies such as may occur in future and subsequent compliance. If both past and future breaches, then, are, so contended for to be comprehended within the condition of this acceptance, why may not the condition be extended to such as may happen after the maturity of the drafts, as well as to such as had occurred before they were accepted? A literal interpretation must lead to both, and that will not be contended for. But the argument is that the defendants should have inquired into the "stipulations of the contracts and the extent of the condition," and it is said,
"the bank would have been informed that the department expected Mr. Reeside to renew his drafts until the accumulation of his current pay would be sufficient to meet them, and had his pledge to take them up himself if earlier payment should be required."
Be it so! Can there be a plainer admission than there is in the preceding sentence, written by the acceptor, that it is necessary to go out of the condition of the acceptance to ascertain his meaning, and that his construction rests upon facts, known by himself and Mr. Reeside, which the defendants could not have known but from one or the other of them? Facts out of the condition, and which could alone become a condition by being so expressed. Again, it is taken for granted in the argument, if the defendants had inquired into the stipulations of the contracts and the bond, that they would have been informed of the forfeitures which had been incurred. But that would not follow. Before such knowledge could have been obtained, it would have been necessary to take one step further beyond the condition -- an inquiry into the accounts. Where shall such construction stop, if it be allowed at all? The law does not permit a conditional acceptance to be construed by anything extraneous to it, unless where the terms used are so ambiguous that it cannot be otherwise ascertained. chanroblesvirtualawlibrary
We will suppose, however, that the stipulations of Reeside's contract and his bond had been known to the defendants. Might they not very justifiably have concluded that his drafts were accepted to aid him with an advance to fulfill his engagements? The bond in evidence shows that a necessity for advances was contemplated. It had been the habit of the department to make them to contractors. Its exigencies, it is said, required advances to be made. The witness Mason says
"From the year 1830, the pecuniary affairs of the department were much deranged, and it was frequently unable to pay debts due by it to contractors. Under such circumstances, the department was in the practice of giving to contractors acceptances for sums less than was actually standing to their credit, unconditionally, and such acceptances were always taken up at maturity, prior to May, 1835. That occasionally, and with the special approbation of the Postmaster General, acceptances were given upon the faith of existing contracts, conditional upon the performance of the contracts which were understood to become absolute if the contractor performed the services stated in the contract."
The defendants, in the year 1835, held acceptances of the same character for more than $70,000, all of which were under protest for nonpayment but subsequently paid prior to the institution of this suit, except those in dispute in this case. The witness further says the Bank of the Metropolis and other banks in the City of Washington and elsewhere have been for many years, in the practice of discounting such acceptances. That it was often done for the accommodation of the department, often for the accommodation of the drawer, and frequently of both. This testimony brings the department of the bank in connection upon acceptances of the former for contractors, shows the course of business upon them, and aids to give a proper construction to the acceptances under consideration. When it is remembered also that these acceptances were given to renew others of the department, which were overdue, we think it cannot be doubted that the terms, "accepted, on condition that his contracts be complied with" cannot retroact to embrace forfeitures which had been incurred and to refund advances said to have been made before the date of these acceptances. The argument upon this point was made upon the false assumption chanroblesvirtualawlibrary
that there had been a communication between the Postmaster General and the defendants concerning these acceptances before they were discounted, or that there was an obligation upon the part of the defendants to make an inquiry into the state of Reeside's contracts and his fulfillment of them because the acceptances were conditional. It did not exist here, nor does it in any case of a conditional acceptance. The acceptor is bound by his contract as it is expressed, and so it may be negotiated without any further inquiry.
Having fully canvassed the argument upon the point of the obligation of the defendants to inquire into the condition of the acceptance, we turn for a moment to the case as it is shown to be the evidence. Reeside's earnings between the date of the acceptances and the time for the payment of them were not applied to pay forfeitures or refund advances. They were exhausted by recharging him with sums of money which Mr. Barry had allowed to him as contractor for carrying the mail, which were credited in the journal but not entered into the ledger. That they were not posted cannot affect Reeside's right to such allowances, and something more must appear than the testimony in this case discloses before it can be admitted that credits given by Mr. Barry were legally withdrawn by his successor. There is no evidence in this cause to impeach the fairness and legality of the allowances credited by Mr. Barry; no proof that Reeside had incurred forfeitures, or that advances had been made to him. Proofs should have been given, if it was intended to justify the recharges for the causes stated. No attempt was made to do so. The allowances, then, are credits in Reeside's account which the defendants may use to prove his performance of the conditions of the acceptance, and they do show performance, as the amount earned would have paid his drafts if it had not been diverted.
The third instruction asked the court to say, among other things, if the credits given by Mr. Barry were for extra allowances, which the said Postmaster General was not legally authorized to allow, then it was the duty of the present Postmaster General to disallow such items of credit. The successor of Mr. Barry had the same power, and no more, than his predecessor, and the power of the former did not extend to chanroblesvirtualawlibrary
the recall of credits or allowances made by Mr. Barry if he acted within the scope of official authority given by law to the head of the department. This right in an incumbent of reviewing a predecessor's decisions extends to mistakes in matters of fact arising from errors in calculation and to cases of rejected claims in which material testimony is afterwards discovered and produced. But if a credit has been given or an allowance made, as these were, by the head of a department, and it is alleged to be an illegal allowance, the judicial tribunals of the country must be resorted to to construe the law under which the allowance was made and to settle the rights between the United States and the party to whom the credit was given. It is no longer a case between the correctness of one officer's judgment and that of his successor. A third party is interested, and he cannot be deprived of a payment on a credit so given but by the intervention of a court to pass upon his right. No statute is necessary to authorize the United States to sue in such a case. The right to sue is independent of statute, and it may be done by the direction of the incumbent of the department. The Act of 2 July, 1836, entitled "an act to change the organization of the Post Office Department," is only affirmative of the antecedent right of the government to sue, and directory to the Postmaster General to cause suits to be brought in the cases mentioned in the 17th section of that act. It also excludes him from determining, finally, and case which he may suppose to arise under that section. His duty is to cause a suit to be brought. Additional allowances the Postmaster General could make, under the 43d section of the Act of March 2, 1825, 3 Story 1985, and we presume it was because allowances were supposed to have been made contrary to that law, that the 17th section of the Act of 2 July, 1836, was passed. In this last, the extent of the Postmaster General's power in respect to allowances is too plain to be mistaken.
We cannot say that either of the sections of the acts of 1825 and 1836, just alluded to, covers the allowances made by Mr. Barry to Reeside. But if the Postmaster General thought they did, and that such a defense could have availed against the rights of the bank to claim these acceptances, as credits in this suit, the same proof which would have justified a recovery in chanroblesvirtualawlibrary
an action by the United States, would have justified the rejection of them as credits when they are claimed as a setoff.
We pass to the credit claimed, and called E. F. Brown's overdraft. But why it is so called we do not know, for certainly no overdraft occurred when he checked alone upon the contingent fund of the department deposited to his credit in the bank: $7,070.24, on 30 April, 1835, was deposited to his credit; by 7 June he had drawn of that sum $3,076.97. Then the Postmaster General directed the bank not to pay Brown's checks unless they were approved by Robert Johnson the accountant of the department. It is in proof that no check of Brown's was afterwards paid without Johnson's approval. On 2 December following, the original deposit to Brown's credit was drawn out on his checks, approved by Johnson, and it was found there had been an overdraft of something over $600. We do not say that an overdraft out of the bank, by authorized officers of the United States is in any case chargeable to the United States unless it can be shown that the money overdrawn has been applied to the use of the United States, but in the present instance we think no proof of such application was necessary, and we cannot resist the conclusion that the defendants are, in equity, entitled to this credit, for the proof is that on the day that the overdraft was known, the Postmaster General wrote a letter to the cashier of the bank stating that
"The contingent fund of the department was exhausted, but the public service requires that a number of bills chargeable to that appropriation shall be paid sooner than the usual sum can be obtained from Congress; I therefore request the favor of our bank to pay such bills against the department of that character as may be presented with the certificate that the amount is allowed, signed by Robert Johnson accountant of this department."
The request was complied with, and the bank advanced, until 14 May, 1836, more than $6,000 to pay claims on the contingent fund. In this case, as in those of more humble dealings, the course of business between parties must be used, when it can apply, to explain their understanding of past transactions. Nor can the inference be resisted that when the Postmaster General chanroblesvirtualawlibrary
discovered the contingent fund had been overdrawn, and requested that other overdrafts might be made on the same account, that it was an admission of the correctness of the first. We think, then, that the United States was a debtor to the defendants for Porter's draft and Reeside's drafts and for the overdraft on the contingent fund, principal, interest and costs.
But it is said, though the credits claimed by the defendants shall be found to be due by the United States, they cannot be set off in this suit. This was the first instruction asked and refused by the court. It is urged that to allow them as credits in this suit is in effect to permit money to be taken from the Treasury otherwise than it is directed to be disbursed by law. That the money previously held by defendants had been passed to the account of the Treasurer of the United States, by direction of the Postmaster General, in conformity with the act of 2 July, 1836, 4 Story 2464. That when the defendants complied with the letter of instruction, written to them by the Postmaster General on 16 July, 1836, and transferred the money then on deposit to the credit of the department to the Treasurer of the United States for the service of the Post Office Department, and when they consented to receive future deposits according to a form sent and to transact the business according to the regulations contained in the letter of 16 July, 1836, that the defendants cannot legally charge their claims against that account, by way of setoff in this suit.
To the foregoing objections a brief but conclusive answer may be given. That is certainly the Treasury of the United States, where its money is directed by law to be kept, but if those whose duty it is to disburse appropriations made by law employ or are permitted by law to employ, either for safekeeping, or more convenient disbursement, other agencies and it shall become necessary for the United States to sue for the recovery of the fund, that the defendant in the action may claim, against the demand for which the action has been brought, any credits to which he shall prove himself entitled to, if they have been previously presented to the proper accounting officers of the Treasury and been rejected. Such is the law as it now stands. This right was early given by an act of Congress to all defendants chanroblesvirtualawlibrary
in suits brought by the United States. It has been repeatedly before this Court. The decisions upon it need for be cited. They apply to this case. The transfer of the deposit to the Treasurer of the United States; the letter of the Postmaster General directing it to be done; his regulations for keeping the account and for disbursing it, were directory to the defendants, and their compliance with such directions was an acknowledgment that the Postmaster General had the right to give them, as the conditions upon which they were to continue the depository of the fund.
But it cannot be inferred either from the Act of 2 July 1836, requiring that when the revenues of the Post Office Department have been collected, that they shall be paid, under the direction of the Postmaster General into the Treasury of the United States, or because appropriations for the service of the department shall be disbursed by the checks of the treasurer endorsed upon warrants of the Postmaster General and countersigned by the auditor for the Post Office Department under the words "registered and charged," or from the declaration in the Postmaster General's letter to the defendants that no other credit, setoff or deduction will be admitted in this account. It cannot be inferred that the defendants accepted the Postmaster General's letter as a contract to surrender the right secured to them by the statute, to claim credits in a suit brought against them by the United States, or that it imposed upon them any legal obligation not to do so.
From the previous and contemporaneous correspondence between the bank and the Postmaster General concerning these drafts it is clear such was not the apprehension of the defendant when the account was opened with the Treasurer of the United States in compliance with the Postmaster General's letter. That was done in compliance with the law, changing entirely the fiscal arrangements of the department, and for that purpose the Postmaster General was the proper organ to direct it to be done; but any condition in that letter not required by the act of Congress, under which he was acting, though officially made, is rather an evidence of what he wished to do than a conclusion that he had the power to impose it or that the defendant had consented to look to Congress for the reimbursement of the debt due them, and not to the courts of justice. When the account was changed chanroblesvirtualawlibrary
to the Treasurer of the United States, there was a large balance on deposit to the credit of the Post Office Department. The fund, however, was not the less that of the United States in the one case or the other.
The change, then, made no difference as to the ownership of the fund in their right to retain, if the defendants had any right all to retain it for their debt. They had been dealing with the executive branch of the government in a matter of money, and could not be turned to the legislature without their consent, to ask it to do as a favor what the judiciary could settle as a right. If the defendants had supposed such was to be the consequence of carrying the fund to the treasurer's account, it is manifest from the evidence in the case that it would not have been done. That they did not do so, it is to be inferred also from the evidence, arose from an indisposition to enforce a right until every effort had been made to obtain it by amicable adjustment, and from an indisposition to embarrass a department which had been severely pressed, and was then just beginning to be relieved. The Postmaster General says, in his letter of March 19. 1838, that
"excepting the refusal, in common with other banks, to pay the warrants of this department in gold and silver or an equivalent, commencing in May last, and the seizure of both a general and special deposit of moneys in the Treasury to meet alleged claims under the circumstances exhibited in the annexed papers, the Bank of Metropolis has faithfully discharged its duties as a deposit bank for this department."
The circumstances alluded to are those which have been the subject of comment in this case, and it is our opinion that they confirm the right of the defendants to the credits claimed. There was no error, then, in the court's not giving the instructions asked for, and the judgment is
It is proper for us to say, however, if the law and the merits of the case were not with the defendants, that the court might well have refused to give the first instruction from the manner in which it is asked. After the evidence had been closed on both sides, the court was asked to say,
"that upon the evidence aforesaid, the defendants are not entitled in this action to set off against the plaintiffs' demand, the amount of acceptances aforesaid, so given in evidence by the defendants, nor the amount of the overdraft of E. F. Brown."
It raises all the issues, both of chanroblesvirtualawlibrary
law and fact, in the case, and requires the court to adjudge the case for the plaintiffs. This the court could not do, as there were contested facts in the case which it was the province of the jury to decide. The court could only have said, alternatively, what was the law of the case accordingly as the jury did or did not believe the facts, and this, it will be admitted, would have been equivalent to a refusal of the instruction. When instructions are asked, they should be precise and certain to a particular intent, that the point intended to be raised may be distinctly seen by the court and that error, if one be made, may be distinctly assigned.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia, holden in and for the County of Washington, and was argued by counsel, on consideration whereof it is now here ordered and adjudged by this Court that the judgment of the said circuit court in this cause be and the same is hereby affirmed.