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U.S. Supreme Court

United States v. Bank of the United States, 46 U.S. 5 How. 382 382 (1847)

United States v. Bank of the United States

46 U.S. (5 How.) 382


The statute of Maryland of 1785, in its terms, does not embrace a bill of exchange drawn on a foreign government.

A bill of exchange in form, drawn by one government on another, as this was, is not and cannot be governed by the law merchant, and therefore is not subject to protest and consequential damages.

This case was a continuation of the same case between the same parties, which was reported in 43 U. S. 2 How. 711.

Being sent back to the circuit court, it came up for trial in November, 1844, when the jury, under the instructions of the court, found a verdict for the defendants below, viz., the bank.

At the trial, the following bill of exceptions was filed, which brought the case again to this Court.

"Bill of Exceptions"

"Be it remembered that at the sessions of April, A.D., 1838, came the United States of America into the Circuit Court of the

Page 46 U. S. 383

United States for the Eastern District of Pennsylvania and impleaded the president, directors, and company of the Bank of the United States in a certain plea of trespass in the case, &c., in which the said plaintiffs declared (prout narr.), and the said defendants pleaded (prout pleas). And thereupon issue was joined between them."

"And afterwards, to-wit, at a session of said court held at the City of Philadelphia before the Honorable Archibald Randall, judge of the said court, on the day of November, A.D., 1844, the aforesaid issue between the said parties came to be tried by a jury of the said district, duly empanelled (prout jury), at which day came as well the plaintiff as the said defendant, by their respective attorneys, and the jurors aforesaid, empanelled to try the issues aforesaid, being also called, came and were then and there in due manner chosen and sworn or affirmed to try the said issues, and upon the trial the counsel of the said plaintiffs stated their demand to be for $170,041.18, with interest -- the balance unpaid due to the plaintiffs as holders of 66,692 shares of the capital stock of defendants of $3.50 per share, being the amount of a dividend of half-yearly profits declared by the defendants in the month of July, A.D., 1834. And to maintain the said issue on the part of the plaintiffs, proved that they were then the holders of said shares of stock, and gave in evidence a resolution of the directors of the said defendants made on 7 July, 1834 (prout), and their advertisement in one of the daily newspapers of Philadelphia (prout), and the account of the said defendants in their books with the plaintiffs for the first half-year of 1833 (prout)."

"And the defendants, to maintain the said issue on their part, gave in evidence a bill of exchange, drawn and dated at the Treasury Department of the United States, Washington, 7 February, 1833, by the Secretary of the Treasury on the Minister and Secretary of State for the Department of Finance of the Kingdom of France for 4,856,666 66/100 francs, payable at sight to the order of defendants' cashier (prout bill); and the several endorsements thereon, (prout); and a writing of the same date with the said bill, under the seal of the United States and hand of the President, dated at Washington (prout); and the presentment and refusal of payment and protest of said bill, at Paris, on 22 March, 1833 (prout); protest, and a notice thereof by defendants, through their cashier, to the said Secretary of the Treasury, in a letter of 26 April, 1833 (prout); and the return of said bill and protest to the said Secretary of the Treasury, in a letter from the said defendants' cashier dated 13 May, 1833, with an account annexed, in which letter and account demand was made of the payment of the principal of the said bill, with costs and charges of protest and interest thereon, and damages on said principal, at fifteen percent (prout letter and account); and proved the then rate of exchange to have been as

Page 46 U. S. 384

therein stated; and gave in evidence a statute of the State of Maryland (prout), passed in 1785, and an article of the commercial code of France (prout); and the correspondence (prout) between the Secretary of the Treasury and the defendants concerning said bill before and after the drawing thereof, and proved the allowance by the Secretary of the Treasury of a credit for, and payment thus made, of the principal of said bill, and further proved the presentment to the accounting officers of the Treasury, and their rejection and disallowance of a claim on the part of the defendants, for a credit of the said fifteen percent thereon, and said cost and charges of protest (prout exemplification); and the said defendants claimed on the said trial a credit for and to set off defalk., the same claims being, as they alleged, in amount equal to the claim of the plaintiffs."

"And the said plaintiffs, to rebut the aforesaid claim of the said defendants to a setoff, relied upon and gave in evidence a convention between the United States of America and France made 4 July, A.D., 1831, and ratified 2 February, A.D., 1832 (prout same), together with an act of Congress passed 13 July, 1832 (prout), by the seventh section of which it was made the duty of the Secretary of the Treasury"

"to cause the several installments, with the interest payable thereon, payable to the United States, in virtue of the said convention, to be received from the French government and transferred to the United States in such a manner as he may deem best, and the net proceeds thereof to be paid into the Treasury."

"And also a letter of Edward Livingston, Department of State, dated Washington, 8 February, 1833, to Nathaniel Niles, Esq., Paris (prout same)."

"And the counsel for the said plaintiffs requested the learned judge to charge the jury:"

" 1. That the evidence in the cause does not show a contract between the government and the bank for the sale of a bill of exchange, but an undertaking on the part of the defendants, as the agents of the plaintiff, to transfer to the United States the first installment due under the treaty with France, and that the bill was only one of the instruments for carrying the same into effect. And further, that the question of agency is for the jury to decide."

" 2. That the act of Maryland of 1785, under which the defendants claim damages, does not extend to the United States."

" 3. That the bill in question, being drawn by one government upon another, and upon a particular fund, is not a bill of exchange within the legal meaning of the terms, and is not embraced by the statute."

" 4. That the defendants, being endorsers of the bill, and not the holders or owners at the time of protest, are not entitled to the damages, since they have not paid them."

"But the court refused to instruct the jury as requested by the plaintiffs' counsel, and charged them as follows, to-wit:"

" It is admitted that if this was a suit between individuals and the

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defendant was the actual owner of a bill of exchange drawn by the plaintiff on a foreign country and protected for nonpayment, he would be entitled to the damages now claimed by the bank; but it is contended, 1st, that the evidence in this cause does not show a sale of the bill of exchange to the bank, but an agency on the part of the bank to assist in procuring the transfer of the funds to the United States. The whole of the evidence on this subject is in writing, and therefore a matter of law, and in my opinion establishes a clear and unequivocal sale by the United States and purchase and payment for the bill by the bank, and that in the endeavors to collect it there was no other agency than always exists between the owner and other parties to a bill of exchange. Again it is said that if this was a purchase of the bill by the bank, yet the defendants cannot set off this claim, because the act of Maryland of 1785 does not extend to bills drawn by the government of the United States. 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; there is no difference, except that the United States cannot be sued; and from the unavoidable use of commercial paper by the United States, they are as much interested as the community at large in maintaining this principle."

"In the present case, the United States does not sue for a debt due to it as a government, but as stockholders or co-partners for its proportion of the profits accruing on the use of its money, which it has invested in the stock of the corporation, and is to be treated in all respects like any ordinary stockholder, which would be bound to pay a debt due to the bank before it could sustain an action for its dividends."

"The remaining objections are that if the Maryland act of 1785 does embrace bills drawn by government, then this, being a bill drawn on a particular fund, is not a bill of exchange in the legal meaning of the term, and that if it is such a bill, the bank was not the holder or owner of it at the time of protest, and therefore is not entitled to the damages given by the statute."

"These questions appear to me to have been determined by the Supreme Court of the United States in the present cause in favor of the defendants; whether they were rightly determined it is not for us to inquire; that determination is binding on us, and until reviewed by itself must be considered the law of the land. If I have mistaken its views on this or erred in any other point of the cause, it will be corrected by a reexamination of the case in that Court, but a construction of its opinion, given by the jury, is only capable of being reexamined in this Court, which may lead to a new trial and lengthened litigation, to the disadvantage of all parties, as it will undoubtedly be only finally determined in the court of the

Page 46 U. S. 386

last resort. This being, then, my view of the law, in my opinion the defendants are entitled to the verdict."

And thereupon the counsel for the plaintiffs excepted. chanrobles.com-red

Page 46 U. S. 394


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