Dugan Clark v. United States

by Henry Brockholst Livingston

United States Supreme Court

16 U.S. 172

Dugan Clark  v.  United States

ERROR to the circuit court for the district of Maryland.

By the special verdict in this cause, it appeared, that on the 22d of December, 1801, Aquila Brown at Baltimore, drew a bill of exchange on Messrs. Van Staphorst & Co. at Amsterdam, for 60,000 guilders, payable at 60 days sight, to the order of James Clarke, the defendants' testator. James Clarke endorsed the bill to Messrs. Brown & Hackman, who afterwards endorsed it to Beale Owings, who endorsed the same to Thomas T. Tucker, Esq. treasurer of the United States, or order, and delivered it to him as treasurer as aforesaid, who received it in that capacity, and on account of the United States. It further appeared, that this bill had been purchased with money belonging to the United States, and under the order, and by an agent of the then secretary of the treasury of the United States, for the purpose of remitting the same to Europe, for the government of the United States, who, in ordering the purchase of this bill acted as one of the commissioners of the sinking fund, and as agent for that board. The bill was afterwards endorsed to Messrs. Wilhem & Jan Willink & N. & J. & R. Van Staphorst, by Thomas Tucker, treasurer of the United States, and appears by an endorsement thereon to have been registered by the proper officer, at the treasury of the United States, on the 28th of December 1801, before it was sent to Europe. The bill having been regularly presented for acceptance by the last endorsees to the drawees, who protested for non-acceptance. It was afterwards protested for non-payment, and then returned by them to the secretary of the treasury of the United States, for and on their behalf, who directed this action to be brought. Of these protests due notice was given to the drawer of the bill.

On this state of facts, the circuit court rendered judgment for the United States, to reverse which, this writ of error was brought.

Feb. 12th.

Mr. Winder and Mr. D. B. Ogden, for the plaintiffs in error, argued, 1. That the finding of the jury that Tucker endorsed the bill to Messrs. Willinks and Van Staphorst, which endorsement was filled up at the time by Tucker, and so remained at the trial and judgment below, showed the legal title to this bill out of the United States, and defeated their right to maintain the action. The transfer to the last endorsees being in full, a recovery could not be had in the name of the United States, without producing from the endorsees a receipt or re-endorsement of the bill; and the endorsement not being in blank could not be struck out at the trial, so that the court and jury were bound to believe that the title was not in the United States, but in the person to whom Tucker had endorsed the bill. If a bill be endorsed in blank, and the endorsee fills up the blank endorsement, making it payable to himself, the action cannot be brought in the name of the endorser, which, otherwise, it might.a Every endorsement subsequent to that, to the holder or plaintiff, must be struck out of the bill, before or at the trial, in order to render the evidence correspondent to the declaration.b Value received is implied in every bill or endorsement, and a transfer by endorsement or delivery, vests in the assignee a right of action on the bill against all the preceding parties to it. An endorser having paid a bill must, when he sues the acceptor, drawer or preceding endorser, prove that it was returned to him, and he paid it.c The special verdict does not find that the endorsement to Willinks, &c. was as agents; but that by the endorsement the contents of the bill were directed to be paid to them. The finding that the bill was afterwards returned by them to the secretary of the treasury of the United States, for and on behalf of the United States, is not finding that they were agents; nor can the court infer it: and if they did, still the outstanding endorsement shows the legal title in the last endorsee. It has been determined by the court that the mere possession of a promissory note by an endorsee, who had endorsed it to another, is not sufficient evidence of his right of action against his endorser, without a reassignment or receipt from the last endorsee.d 2. The United States cannot be the endorsees of a bill so as to entitle them to bring an action on it in their own name. It is essential to a bill of exchange that it should be negotiable. The government of the United States, as such, are incapable of endorsing a bill; of receiving and giving notice of non-acceptance and non-payment. It is essential to the very nature of this species of instruments that all the parties should be compelled to respond according to the several liabilities they may contract in the course of the negotiation. But the United States cannot be sued, and, consequently, cannot be made answerable as the drawers or endorsers of a bill. The national legislature is, probably, competent to provide for the case, and to designate some public officer who shall be authorized to negotiate bills for the United States. But until some statutory provision on the subject is made, the existence of such an authority in any particular officer of the government cannot be inferred. 3. But even supposing that any endorsement whatever can vest the legal title to a bill of exchange in the United States, so as to render them capable of maintaining an action on it in their own name, the endorsement to Tucker under the circumstances of this case, did not vest such a title in them. The treasurer of the United States has no authority, ex officio, to draw, or endorse, or otherwise negotiate bills. The only officers of the government who possess the power of drawing bills are the commissioners of the Sinking Fund. To them it is expressly given by law. But a power to draw or endorse bills as an agent cannot be delegated to another, unless the power of substitution be expressly given.e Besides, the agent constituted by the commissioners was the secretary of the treasury, who employed, not Tucker, but another person, to purchase the bill. Where a bill is payable to A. for the use of B., the latter has only an equitable, not a legal, interest. The right of assignment is in the former only.f Here the action ought to have been brought in the name of the trustee, and not of the cestui que trust.

The Attorney General, contra, contended, that the position on the other side as to agency in the negotiation of bills was not law. An action could not be maintained in the name of Tucker for want of interest in him. According to the doctrine on the other side, he alone is suable, as well as empowered to sue. But all the authorities show that an agent contracting on the behalf of government is not personally liable:g and the other alternative of the proposition, that he is personally capable of maintaining an action, cannot be supported. A person may become a party to a bill, not only by his own immediate act, but by procuration; by the act of his attorney or agent: and all persons may be agents for this purpose, whether capable of contracting on their own account, so as to bind themselves, or not.h An agent of the government who draws or endorses a bill will not be personally bound, even if he draws or endorses in his own name, without stating that he acts as agent.i But here Tucker subscribed the style of his office. It is sufficient to declare on a bill of exchange according to the legal intendment and effect, and an averment that the endorsement was to the party interested is satisfied by showing an endorsement to his agent.j The United States, though not natural persons engaged in commerce, may be parties to a bill of exchange. The United States are a body politic and corporate; and it has long since ceased to be necessary in a declaration on a bill of exchange to state the custom of merchants, and that the parties to it were persons within the customs. Consequently, they have the same right to sue on a bill as any other persons; and that they are not reciprocally liable to be sued, is an attribute of sovereignty. Individuals contracting with them rely on their dignity and justice. But the power of suing on their part is essential to the collection of the public revinue, to the support of government, and to the payment of the public debts.

     Feb. 19th.
      

Mr. Justice LIVINGSTON delivered the opinion of the court, and after stating the facts, proceeded as follows:

Notes