Smith v. United States, 30 U.S. (5 Pet.) 292 (1831)

Postmaster-General v. Early, 12 Wheat. 136 ; and Dox v. Postmaster^otal, 1 pet. 318; and in other cases, are conclusive to show, that the [p. 190] sureties cannot avail themselves of the delay of the accounting officers of the treasury to settle the accounts of those who have received public money, as officers under the government of the United States.

At the trial, exceptions were taken to the evidence offered, which being [p. 191] overruled, the following bill was tendered and signed. ‘ The plaintiffs to maintain the issue on their part, read to the jury, a dulj certified copy of the bond sued on, and offered to read, as evidence, a paper purporting to be a transcript from the books and proceedings of the treasury department, containing an account, headed, Alpha Kingsley, late district paymaster, in account with the United States. In which account, he was charged, as late district paymaster, with moneys advanced to him, for pay, subsistence, forage, bounties and premiums, and contingent expenses of the army ; and credited with disbursements made, under the same heads of expenditures, and showing a large amount of items suspended and disallowed. By this account, it appeared, that the same had been settled by the third auditor of the treasury, and it showed a balance due to the United States of $48,492.53. The account was duly certified to the second comptroller of the treasury ; who admitted and certified the above balance, on the 23d day of April 1823.”

bound policy requires, that the accounts of disbursing officers should be [p. 192] adjusted at the proper department, with as much despatch as is practicable. This is alike due to the public, and to persons who are held responsible as sureties. To the individual who has received advances of money, no lapse of time nor change of circumstances can weaken the claim of the government for reimbursement. But there may be some cases of hardship, where, after a great lapse of time, and the insolvency of the principal, the amount of the defalcation is sought to be recovered from the sureties. The law on this subject is founded upon considerations of public policy. While various acts of limitation apply to the concerns of individuals, none of them operate against the government. On this point, there is no difference of opinion among the federal or state courts.

This certificate has literally been made in the case under consideration ; and the question arises, whether it is a sufficient authentication of the transcript, from the “ books and proceedings of the treasury.” A majority of the members of the court think, that the certificate is a substantial compliance with the requisitions of the statute. They connect the certificate of the auditor with the statement in the bill of exceptions, that a “ paper, purporting to be a copy from the books and proceedings of the treasury,” was offered in evidence ; and consider, that although the auditor states, that “ the foregoing transcripts are true copies of the originals on file, in his office,” the certificate can only relate to the transcript offered in evidence, and that it sufficiently authenticates it. This construction is strengthened, in their opinion, by another statement in the bill of exceptions: “ that a duly certified copy of the bond sued on, was offered to be read as evidence.” Three of the judges think, that the certificate, from the language used, can only relate to the transcript which contained a copy of the bond. That it can only authenticate copies of papers, the originals of which remain on file. They consider that the books of the department cannot be said to be on file, nor are copies from the books copies from the originals. All moneys advanced or paid by the government are charged in the books of the treasury, and a transcript from these charges may be said to be copies from the oiiginal, but the credits entered are copied into the books from the vouchers rendered, and these vouchers remain on file. A transcript from the books, t erefore, it is believed, cannot be said to be copies from the originals on [p. 194] file. That it is a copy from the books, which is made evidence, and not a copy of the paper, though it be on file, on which the rough draft of the settlement may have been entered. They consider that the statement in the bill of exceptions, that the transcript offered in evidence purported to be a “ copy from the books and proceedings of the treasury,” as merely descriptive of the paper, and cannot cure the defect in *the certificate.

This cause came on to be heard, on the transcript of the record, fronl the district court of the United States for the district of Missouri, and was argued by counsel : On consideration whereof, it is ordered and adjudge [p. 195] by this court, that the judgment of the said district court in this cause be and the same is hereby reversed, and that this cause be and the same is hereby remanded to the said district court for further proceedings to be had therein, as to law and justice may appertain, and in conformity to the opinion of this court.

Mann Page, the second, having made his will, died in 1803, leaving a [p. 196] large estate, real and personal, the whole being charged with the payment of his debts. The words in the will are, “ I do hereby subject all my estate, both real and personal, to the payment of my debts, and full power is given to my executors, to sell and convey all or any part thereof, which in their discretion they shall deem it most expedient to dispose of for that purpose.” To his-wife he gave a life-estate in a part of his farm called Mansfield ; and the residue of it, he bequeathed, in fee-simple, to his two sons Robert and Mann. He devised three several parcels of real estate, and, with the exception of his plate, all his personal property, to his executors, to be “ by them applied, in the first place, to the payment of his debts, and the balance, if any, to be divided among his three sons.” His daughters wrere provided for in the will, and the support and education of his children were charged upon his whole estate.

In the first is stated the ground, on wrhich the plaintiffs insist that the principal and interest of the debt secured by the deed of trust ought not to be introduced into the account, and was done by Patton, under direction of his counsel, in 1810, but ought to be excluded from the account, because it had been excluded in the administration account kept by Patton in his book. The fifteenth contains an objection to the manner in which interest is charged, and alleges in support of that objection, that the administrator received and mixed the money of the estate with his own. The account, with the exceptions, was recommitted, in June 1813, and commissioner Nicholson made a report, in the year 1815, crediting the interest on the debt due by the deed of trust, reporting the principal still due, and Patton indebted as administrator 375¿. 13s. Sci. In November 1815, an order was made for directing payments by the receiver, and further accounts. A report was made in pursuance of this order, stating Patton to be creditor as administrator to the amount of 571. 12s. 5 J. In 1820, another order was made in both causes, [p. 198] 808 SUPREME COURT [Jaify

But it is insisted, that the doctrine of election does not apply to this case ; that as administrator, Patton had a right to retain the amount of his own debt, out of the personal assets, and that it was extinguished, so soon as personal assets to that amount came into his hands ; that this effect is produced by operation of law, and requires no sanction or election by the administrator. His right being thus fixed, it is contended, that he cannot waive it to the injury of his sureties. This point is urged with earnestness and ability by the defendant’s counsel, and a number of authorities are referred to in support of it. Toller’s Law of Executors 295 ; 1 Com. D;g. 476; 3 Bac. Abr. 10; 3 Bl. Com. 18 ; 1 Salk. 299, are cited. Blackstone ■Lays down the doctrine of retainer, as “ a remedy by mere operation of law, [p. 200] and grounded upon this reason, that the executor cannot, without an apparent absurdity, commence a suit against himself; but having the whole in his hands, so much as is sufficient to answer his demand is, by operation of law, *3121 aPP^e<^ to particular purpose.” *This doctrine is sanctioned in

On these authorities, it is contended, that the debt of Patton was extinguished, as early as the year 1804, he having received personal assets to the amount of it, at that time ; and that the payment of these assets, m [p. 201] discharge of other debts, does not prevent this legal consequence. If the debt be once extinguished, it is urged, that no act of Patton could revive it. He could not make a contract with himself, nor could he, by any agreement with the devisees, renew the old obligation. It will be observed, that all the decisions referred to were made in suits prosecuted by executors, or their legal representatives, to recover debts which, as executors, they had a right to retain. That in such cases, the right of action is gone, cannot be disputed. The executor cannot sue himself, and for this reason, he is authorized to retain the amount of his debt out of the assets in his hands. The right of action, being once extinguished, cannot be revived either by the executor or his legal representatives. On this point, the authorities are decisive; and, although some difference of opinion seems to have been entertained as to the extinguishment of the debt, yet it is, in effect, extinguished, as the legal right to enforce the payment of it is gone. On this principle were the adjudications made which have been cited. The question under consideration does not arise on a suit prosecuted by Patton for the recovery of his debt. If it did, the application and force of the ^'authorities would be conclusive. In such a case, his debt would be r*o1zt considered as extinguished, by the extinguishment of the right of action.

Under this view of the case, to destroy the right of retainer in the administrator, it is only necessary to show, that he had in his possession legal assets sufficient to pay his debt, and that there were no other debts due by the estate of higher dignity. These facts being established, if the principle be correct, as effectually destroy the existence of the debt and the *right [p. 202] of retainer, as if the debt had been paid. It can be of no importance, how the legal assets were applied. Being in the hands of the administrator, the law applies them in discharge of his debt, it is contended, in defiance of his own acts and intentions ; if this be not the case, if the administrator may postpone the payment of his own debt, a day or a month, and give a preference in payments to other demands, he may extend the time at his discretion : and if he may discharge his own debt, after paying other debts of equal amount, and of no higher degree, out of the legal assets, he may continue to give the preference to other claims, and eventually discharge his debt out of any moneys which may come into his hands as representative of the estate.

The moneysarising from the sale of the Mansfield estate were applied in payment of debts under the orders of the court of chancery. The decree, in 1811, directed Robert Patton and others to be paid “ in the order of prioiities of their liens.” These, and other facts connected with it, show that the e [p. 203] due on the deed of trust was referred to, which constituted a lien on the estate. In the year 1812, Patton reported to the court, that he had retained, out of the moneys in his hands as receiver, the balance due to him. This payment was sanctioned by the court. It appears, then, that a court of chancery has sanctioned the payments which have given rise to this controversy. On a full investigation of the administration account, they direct the payments to be made out of the equitable fund. Had that court considered the claim of Patton as satisfied, by failing to apply in its discharge the moneys arising from the sale’ of the personal property, the payments would not have been decreed.

Johnson, Justice. {Dissenting.)—As I understand the decision just delivered, it affirms a principle to which I certainly cannot yield my assent. As the will charges the real estate, as well with the maintenance and education of the children, as the payment of debts, and there does not appear to have been, at any time, in the administrator’s hands, a sum sufficient to pay off his whole debt, I am satisfied, that it is not a case of extinguishment; and that the payments made to the maintenance and education of the children, and the satisfaction of debts of an inferior order, are not to be imputed to the administrator as payments upon his own bond. They were voluntary payments, it is true, but they were made in pursuance of the will. But as to all other sums arising out of the personalty, and which were not applied to either of those purposes, but in fact sunk and wasted in the administrator’s hands, I am clearly of the opinion, that they are to be imputed to him as payments on his own bond ; and that, pro tanto, he could not be permitted to apply the proceeds of the real estate to the satisfaction of his debt; it was, in fact, a repayment on a debt which he knew to be satisfied. And as to the amount paid, respectively, to the maintenance and education of the children, having an interest in the proceeds of the realty ; I have no idea, that they can be permitted to come upon the sureties of the administrator, for the amount so paid on their account. Indeed, upon the whole, it appears to me, to be one of those cases of common misfortune in which the court ought to leave the parties as it finds them. If the personal assets were, in fact, in existence, it would be a different case ; and there might be an equity in the heirs, now to *come upon the assets for indemnity ; supposing that they might originally have compelled the administrator L to apply the personalty in relief of the real estate ; but when the assets are [p. 204] in fact wasted, I cannot conceive that a court of equity would ever compel the sureties to pay up the administration bond for the relief of the heirs. Their liability is legally confined to the demands of creditors and distributees alone ; and I can see no equity in subjecting them, directly or indirectly, to the general equity of the heirs, in stretching that liability beyond its strict legal limits.