Lead Opinion
delivered the opinion of the court.
The United States sued Jay Cooke & Co., in this action, to recover back money paid them by the assistant-treasurer in New York for the purchase or redemption before maturity, under the the act of Aug. 12, 1866 (14 Stat. 31), of what purported to be eighteen 7-30 treasury notes, issued under the authority of the act of March 3,1865 (13 Stat. 468), but which it is alleged were counterfeit. Cooke & Co. insist, that if they honestly believed the notes in question were genuine, and, so believing, in good faith passed them to the assistant-treasurer, and he, under a like, belief, and with like good faith, received and paid for them, there can be no recovery, even though they may have been counterfeit.
As this.defence meets us at the threshold of the case, it is proper that it should be first considered.
It was conceded in the • argument, that, when the United States become parties to commercial paper, they incur all the responsibilities of private persons under the same circumstances. This is in accordance with the decisions of this court. The Floyd Acceptances,
It is, undoubtedly, also true, as a general rule of commercial law, that where one accepts forged paper purporting to be his own, and pays it to a holder for value, he cannot recall the payment. The operative fact in this rule is the acceptance, or more properly, perhaps, the adoption,, of the paper as genuine by its apparent, maker. Often the bare receipt of the paper accompanied by payment is equivalent to an adoption within
When, therefore, a party is entitled to something more than a mere inspection of the paper before he can be required to pass finally upon its character, — as, for example, an examination of accounts or records kept by him for the purposes of verification, — negligence sufficient to charge him with a loss cannot be claimed until this examination ought to have been completed. If, in the ordinary course of business, this might have been done before payment, it ought to have been, and payment without it will have the effect of an acceptance and adoption. But if the presentation is made at a time when, or at a place where, such an examination cannot be had, time must be allowed for that purpose; and, if the money is then paid, the parties, the one in paying and the other in receiving payment, are to be understood as agreeing that a receipt and payment under such circumstances shall not amount to an adoption, but that further inquiry may be made, and, if the paper is found to be counterfeit, it may be returned within a reasonable time. What is reasonable must in every case depend upon circumstances; but, until a reasonable time has in fact elapsed, the law will not impute negligence on account of delay.
So, too, if the paper is received and paid for by an agent, the principal is not charged unless the agent had authority to act for him in passing .upon the character of the instrument. It is the negligence of the principal that binds ; and that of the agent has no effect, except to the extent that- it is chargeable to the principal.
Such being the principles of law applicableHb this part of the case, we now proceed to examine the facts.
The Department of the Treasury is by law located at the seat of government as one of the execiitive departments, and the Secretary of the Treasury is its official head. Rev. Stat., sect. 233; 1 Stat. 65. All claims and demands against the government are to be settled and adjusted in this department (Rev. Stat., sect. 236; 3 Stat.-366), and the Treasurer of the United States is one of its officers. Rev. Stat., sect. 301; 1 Stat. 65. His duty is to receive and keep the money of the United States, and disburse it upon warrants drawn by the Secretary of the Treasury, countersigned by either comptroller, and recorded by the register, and not otherwise. Rev. Stat., sect. 305; 1 Stat. 65. ' The rooms provided in the treasury-building at the seat of government for the use of the treasurer are by law the
Thus it is seen that all claims against the United States are to be settled and adjusted “ in the Treasury Department; ” and that is located “ at the seat of government.” The assistant-treasurer in New York is a custodian of the public money,, which he may pay out or. transfer, upon the order of the proper department or officer; but he has no authority to settle and adjust, that is to sáy, to determine upon the validity of, any claim against the government. He can pay only after the adjustment has been made “ in the Treasury Department,”
By the act of April 12, 1866, the Secretary of the Treasury was authorized, at his discretion, to receive the treasury-notes issued under any act of Congress in exchange for certain bonds; or he might sell the bonds, and use the proceeds to retire the notes. 14 Stat. 81. This exchange or retirement of the notes involved an adjustment of the claim? made on their account against the government. That adjustment, as has been seen, could only be had in the Treasury Department; and the government cannot be bound by any payment made without it, through one of the assistant-treasurers, until a sufficient time has elapsed, in the regular course of business, for the transmission of the notes to the department, and an examination and verification there.
That such was the expectation of Congress, is apparent from the legislation authorizing the issue of such notes. On the 23d December, 1857, an act was passed “to authorize the issue of treasury-notes.” 11 Stat. 257. The payment or redemption of these notes was to be made to the lawful holders upon presentment at the treasury. Sect. 2. The notes were to be prepared under the direction of the Secretary of the Treasury, and to be signed in behalf of the United States by the treasurer thereof, and countersigned by the register of the treasury. Each of these officers was to keep, in books provided for that purpose, accurate accounts, showing the number, date, amount, &c., of each note signed or countersigned by himself, and also showing the notes received' and cancelled. These accounts were to be carefully preserved in the treasury.- Sect. 3. The notes were made. receivable for public dues. Sect. 6. The officer receiving the same was required to take from the holder a receipt upon the back of each note, stating distinctly the date of payment and amount allowed. He was also required to make regular and specific entries of all notes received by. him, showing the person from' whom he received each note, the number and date thereof, and the amount of principal and interest allowed thereon. These entries were to be delivered to the treasurer with the notes; and, if found correct, he was to receive credit for the amount allowed. Sect. 7. To promote the public
The act of July 17, 1861, “ to authorize a national loan, and for other purposes,” provided for an issue of 7-80 treasury-notes, and, in terms, re-enacted all the provisions of the act of Dec. 23, 1857, so far as the same were applicable and not inconsistent with what was then enacted. 12 Stat. 259, sects. 1 and 10.
The acts of June 30, 1864 (13 Stat. 218), and March 3,1865 (13 Stat. 468), which authorized further issues of the same class of notes, did not in terms re-enact the provisions of the acts of 1857 and 1861; but they did authorize and require the Secretary of the Treasury to make and issue such instructions to the officers who might receive the notes in behalf of the United States as he should deem best calculated “ to promote the public convenience and security, and to protect the United States as well as indiyiduals from fraud and loss.” 13 Stat. 221, sect. 8.
These are public laws of which all must take notice.” In the absence of any evidence showing a regulation permitting an exchange or redemption of notes at any other place than the treasury, and'after settlement and adjustment in the department, it will not be presumed that one was made. The notes in question are not made payable at any particular place: consequently they are in law payable at the treasury, and this is at ■the seat of government and in the Treasury Department. In this department the secretary represents, the government. His acts and his. omissions, within the line of his official duties, are the acts or omissions of the government itself; and in all com
Such seems to have been the understanding of the parties in the transaction wMch is now under consideration. The notes were “sold” to the assistant-treasurer, and were, by stamp upon their back at the appropriate place for their indorsement, made payable “to the order of the Secretary of the Treasury, for redemption.” The payment by the assistant-treasurer under such circumstances, for the purchase, did not. “ retire ” the notes. That upon the face of the transaction required the further order of the Secretary of the Treasury. Undoubtedly it was expected, that, in due course of business, that order would be given; but until given, or at least until it ought to have been given, it cannot .be said that the government has accepted the notes, and adopted them as genuine.
Neither has there been such delay in returning the notes to Cooke & Co., after their receipt by the assistant-treasurer, as will throw the burden of the loss upon the government. The return should have been made within a reasonable time; and what is a reasonable time is always a question for the courts when the facts are not disputed. Wiggins v. Burkham,
The amount of 7-30 notes issued by the government was many hundreds of millions of dollars. Necessarily, the accounts and records of • their issue and redemption were voluminous. Between Sept. 20 and Oct. 8, Cooke & Co. themselves sold to the assistant-treasurer - for redemption more ' than $7,500,000. Other parties were at the same time making sdles to large amounts. Time must be given for careful examination and scrutiny; and we do not think, that, under all the circumstances, any unreasonable delay occurred either in their transmission to or return from the Treasury Department.
We are all clearly of the opinion, therefore, that, if the notes were in fact counterfeit, their receipt by the assistant-treasurer and his payment therefor did not preclude the United States from receiving back the money paid. So far, there was no error in the courts below.
It was, however, contended by Cooke & Co., that if the notes were not counterfeit, but genuine notes, unlawfully and surreptitiously put in circulation, thl government was bound for their payment to a bona-fide holder, and consequently that there could be no recovery. We quite agree with- the lamented judge of the Circuit Court who had this case before him upon error to the District Court, that the evidence tending to show a fraudulent or surreptitious issue of notes printed from the genuine■ plates was exceedingly meagre, and by no means sufficient- to warrant a verdict to tlu-t effect; but the jury was not permitted to pass upon that question, as the district judge charged “that if the notes were printed in the department, and all ready for issue, yet, if they were not in fact issued, the United States could recover. The issue to bind the governmént,” said the judge, “ must be a physical act of an authorized officer.”
• It was conceded on behalf of the government, in the argument here, that, if the notes had been due when they were received and paid, this part- of the charge could not be sustained. We need not, therefore, examine that question. The
But it is insisted on the part of the government, that as the act of April 12,1866, only authorized the Secretary of the Treasury to retire, before their maturity, notes “ issued ” under the authority of some act- of Congress, he could only take up such as were actually put out.by the “physical act ” of some authorized officer of the government in pursuance of law. This, we think, is too narrow a construction of the act. At the time it was passed, the war of the rebellion was over. In the prosecution of this war, an immense debt had been contracted. To meet the pressing demands upon the credit of the government, various forms of securities had been put forth, some of which, like those now under consideration, would mature at •an early date, and sooner, perhaps, than they could be met with
This leads to a reversal of the judgment. There have been other errors assigned upon the rulings made in the progress of the trial as to the admission of evidence. These need not be specially alluded to. It is sufficient to say that we think there is no error here. The same may be said as to the ruling of the court upon the punching or cancellation of the notes. If they were counterfeit, the cancellation could do no harm; for they were worthless before. If they were genuine, they had already been cancelled by the payment.
The judgment of the Circuit Court is reversed, and the cause remanded, with instructions to reverse the judgment of the District Court, and to award a venire de novo.
Dissenting Opinion
with whom concurred Mr. Justice Field and Mr. Justice Bbadley, dissenting.
I dissent from the opinion of the court in this case,—
1.. Because I am of the opinion that the United States are not liable for forged paper under any. circumstances. •
2. Because I am of the opinion that the United States are not liable for its paper-promises fraudulently or surreptitiously put into circulation, not even if the fraudulent act was perpetrated by treasury officials.