81 F. 684 | 6th Cir. | 1897
Tliis suit was brought in the United States circuit court for the Korthern division of the Western district of Michigan against the plaintiff in error Thomas D. Meads and the sureties on his official bond as receiver of public moneys at Marquette, Mich., for the land district of Marqnette. Meads was appointed receiver for this land district June 5, 1890, and continued in office until March, 1894; and this suit is for the balance of money received by Meads during that term of office, and not paid out or otherwise legally accounted for. The money in question was received from persons proposing to make pre-emption and homestead entries, and the sum consisted in part of the purchase price of the public land, and in part of the fees of receiver and register, and entry fees. It is not necessary for the purpose of the questions here presented to distinguish between the sums paid as purchase price and those paid as fees. Among the various rules aud regulations promulgated by the secretary of the interior and the commissioner of the general land office is rule 53, which reads as follows:
“Tlie local officers will thereafter take no further action affecting the disposal of the land in contest until instructed by the commissioner. In all cases, however, where a contest lias been brought against an entry or filing oil tlie public lands, and trial has taken place, the entryman may, if ho so desires, in accordance with the provisions of the law under which he claims, and the rules of tlie department, submit final proof, and complete tlie same, with the exception of the payment of the purchase money or commissions as the case may be. Said final proof will be retained in the local land office, and should the"entry finally be adjudged valid, said final proof, if satisfactory, will be accepted upon the payment of tlie purchase money or commissions, and final certificate will issue, without any further action upon the part of the einryman, except the furnishing of a nonalienation affidavit by the entryman, or, in case of Ms death, by his legal representatives. In such case, the party making tlie proof, at the time of submitting the same, will be required to pay the fetes for reducing the testimony to writing. All provisions of the rules of practice, inconsistent with the above changes and modifications are hereby rescinded.”
It will be observed Unit tliis rule is applicable to the case where contest arose in regard to the superior right in relation to the land of a particular entry, and was intended apparently to direct the procedure by the local officers pending such contest, an,d until its final settlement in the usual and proper way. The argument is that this particular regulation requires just what the previous regulations and their interpretation by the commissioner and the secretary required, and no more, and nothing different. It further appears that, with three or four unimportant exceptions, a contest arose in regard to the proposed entries on which the purchase price and fees were paid to the receiver, which constitute the items of the account now sued on. It is agreed that the sums were paid to the receiver, and the only defense made to the suit is that these payments, under rule 53, were made to the receiver in advance of the time when by that rule they could properly be made, and that the sums were not therefore paid to the receiver in the line of Ms duty and officially, but were paid to him in violation of rule 53. and that he received them as an individual, and as an agent of the party proposing to make pre-emption or homestead entries, and not as the agent or officer of the government, and that
“The condition, of the foregoing obligation is such that whereas, the president of the United States has appointed the said Thomas D. Meads to he receiver of public moneys at Marquette, Michigan, by commission dated June '5. 1890, and said Thomas D. Meads has accepted said appointment: now. therefore, if the said Thomas D. Meads shall at1 all times during his holding and remaining in said office carefully discharge the duties thereof, and faithfully disburse all public moneys, and honestly account, without fraud, or delay, for the same, and for all public funds and property which shall or may come into his hands, then the above obligation to be void and of no effect; otherwise to remain in full force and virtue.”
The amount sued for was $2,868.56, and the court below directed a verdict in favor of tbe government, upon which judgment was pronounced, and the case is brought here on writ of error.
Just what is the true intention and effect of the various rules promulgated by the land department upon this subject, as construed by the decisions of that department, has been the subject of much discussion at the bar; but, in the view we take of the case, we are relieved from the-task of examining the regulations and decisions in detail with a view to reconcile the apparent conflict in such rules and decisions. As suggested, the contention of the plaintiff in error is that rule 53 determines the right and duty of the receiver, and thereby affects the obligation of the sureties on the official bond, and that the money was not due and payable to the receiver at the time when received, and the sureties are therefore released. This contention presents the question of the true nature and effect of a regulation such as rule 53 on the obligation of the bond, but we merely mention the question now, and will return to it in 'the further progress of the opinion.
It will be observed that the plaintiff in error assumes that this regulation has all the force and effect of a positive enactment of congress, and it is obvious that the importance thus claimed for the regulation is necessary, in order that the plaintiff in error may make any headway with his contention. Treating rule 53, then, as having all of the effect which the contention thus assumes, we are unable to agree that it follows as a result that, the sureties are released from liability on the bond for these sums of money. The bond is executed pursuant to section 2236 of the Revised Statutes. The general provisions as to the time when payments may be made by homestead and pre-emption claimants will he found in sections 2267 and 2301 of the Revised Statutes. It is not suggested in the pleadings or in argument by the plaintiffs in error that the payments were prematurely made to the receiver, except by reason of the limitation contained in rule 53. The general enactments of congress upon the subject expressly provide that such payments shall be made by persons proposing to acquire rights in the public lands, and the manner of disbursing and otherwise accounting for public money so received is provided by general law. The entryman or homesteader, as the case may be, does mot make payment of the purchase price or fees required under the au
“In the cave of Com. v. Holmes, 25 Grat. 771. this conn held, upon abundant authority, that the regulations prescribed by law for the settlement of such accounts at stated periods, being- intended for the benefit of the government, to secure punctuality and promptness in its officers, were directory merely, and did not enter into and form part of the sureties’ eonírac-f, so as to prevent the legislature from altering or extending the times of settlement at pleasure without the sureties’ assent: and therefore, and from the nature of the. officers’ obligation and duties, and of rite condition of the bond, such an extension did not operate as a discharge of the surety. We reaffirm that principle, and are of opinion that the sureties in this ease are not discharged from Imbfhy for the official acis of their principal by reason of the extension of time for settlement, granted to him.”
“It is said that the laws require that settlements should be made at short and stated periods, and that the sureties have a right to look to this as their securit5'-. But these provisions of the law are created by the government for its own security and protection; and to regulate the conduct of its officers. They are merety directory to such officers, and constitute no part of the contract with the surety. The surety may place confidence in the agents of the government, and rely on their fidelity in office; but he has of this the same means qf judgment as the government itself, and the latter does not undertake to guaranty such fidelity. No case has been cited at the bar in support of the doctrine, except that of People v. Jansen, 7 Johns. 332. In respect to that case, it may be observed that it is distinguishable from the present in some of its leading circumstances. But, if it were not, we are not prepared to yield to its authority. It is encountered by other authorities which have been cited at the bar; and the total silence in the English books, in a case of so frequent occurrence, affords strong reason to believe that it never has been supposed that laches would be fatal in the case of the government where it would not affect private persons. Without going more at large into this question, we are of opinion that the mere laches of the public officers constitutes no ground of discharge in the present case.”
See, also, U. S. v. Van Zandt, 11 Wheat. 184; U. S. v. Nicholl, 12 Wheat. 505; U. S. v. Boyd, 15 Pet. 187.
These cases proceed upon the distinction between statutes which merely regulate in detail the mode and time of payment and those which determine the right to receive and the duty to pay. The one class of statutory provisions create the duty to pay, with the right to receive, and the duty to disburse; and such provisions are mandatory and essential, and determine the right and obligation, while provisions of the other class are directory, and affect merely the mode of exercising the right and discharging the duty. It was decided in Dollar Sav. Bank v. U. S., 19 Wall. 227, that the provision of law as to the proper mode of assessment and- collection of taxes did not affect the right to demand and the duty to pay the taxes imposed by general law, and that an ordinary action of debt would lie to collect such taxes without any assessment whatever. So in King v. U. S., 99 U. S. 229, the collector had received from the treasurer of the Toledo, Wabash & Western Railway Company the sum of $24,923.87, as a tax on interest paid on mortgage bonds of tbe company. Ko return had been made to the assessor, sworn to as required by law, and tbe defense was that this sum was paid to the collector, not upon any return made to the assessor, or any assessment made by him or tbe commissioner of internal revenue for such taxes, and that it was a voluntary deposit of the money in the hands of the collector at Toledo by tbe company, and not received by the collector in bis official character; that it was-not his duty to receive it for the government, under these circumstances; and that his act in receiving the same was unofficial. The point was that Chase, the collector, had no legal authority, as collector of internal revenue, to receive the money. In regard to- this defense the court said:
“There can be no question that Ohase understood bimseif as receiving the money for the government, and in payment of the taxes due. Nor is there any question that the treasurer of the railroad company intended it as pay*689 ment to Chase in his official character as collector, ancl supposed he had jwld the taxes by. so doing; for Chase gave him three separate receipts, in which the taxes for each of the years we have mentioned are set out, and also llie months of the year In which they accrued, which he signed officially as collector, and declared in each receipt that it was in full of the account.” “ ‘The answer,’ said the court, ‘made to this by counsel, is that the debt was not due, or at least not payable, until the assessor had received and acted on the return made by the corporation. There is nothing in the statute which says this, in terms. If it be sound, it must be an implication, and we do not see how such an implication can arise. That such an assessment was not made long before was owing to the neglect of the company to make proper returns. Did that neglect make the taxes which should have been paid a year before any less a debt from that time? And can it be said they were not due at the lime the statute says they should be paid, because the company failed to make the report which it was its duty to make?’ If there could be any doubt upon this point, it was set at rest by the decision of this court in Dollar Sav. Bank v. U. S., 19 Wall. 227, where the same objection was taken to a suit to recover this tax. The court held explicitly that the obligation to pay the tax did not depend on an assessment made by any officer whatever, but that, the facts being established on which the tax rested, the law made the assessment, and an action of debt could be maintained to recover it, though no officer had made an assessment. So that, both on principle and authority, we are of opinion that the judgment for the sum received by the collector and no I paid over, with interest, is right, and must be affirmed. See, also, U. S. v. Ferrary, 93 U. S. 625.”
So in Miller v. Moore, 3 Humph. 189, it was held, on motion against the sheriff, as tax collector, for unpaid taxes, not necessary for ilie plaintiff to show that the just let's had returned proper tax lists as required by law, and that the taxes had been properly assessed its required. Tiie court ruled that it was enough that authority was placed in the sheriff's hands to collect, and that he did in tact collect, the taxes. Bo in McLean v. Tennessee, 8 Heisk. 22, it was decided upon full consideration that certain sections of the Code of Tennessee which prohibited any officer from receiving or filing a bond not approved in the particular inode pointed out by the statute did not affect the obligation of the sureties on a bond accepted in violation of the statute, and under which the official in fact acted. It was said that these and similar provisions were for the further security of the public, and did not release the sureties, and in the same case it was held that a void levy of taxes which the taxpayers might have resisted was no defense against judgment on the bond for the taxes in fact paid by the people. The opinion proceeded upon the ground that taxes were justly clue, and the obligation to pay at a proper time and in proper mode existe-d, and the fact that these taxi's were received by the official without valid levy constituted no defense. Bo it was held (hat the failure of che county clerk to keep a revenue docket as required by law did not affect the right of the county to proceed by motion for judgment on the bond. And in Fuller v. Calkins, 22 Iowa, 301, in a suit against the deputy tax coll.ecter of internal revenue, the defense was that (lie money received was for taxes on incomes not: levied, and not dm1' until after the payment of the same to the deputy. This defense was overraled, and it was adjudged that although paid by the taxpayers before due, or before formally levied, yet, being received by the deputy collector as taxes, it came into his hands by virtue of his office, and he
“The substance of the whole matter, however, Is that, though the collector may not have been legally bound to receive this money at the time, yet he did receive it, and, as we are bound to presume, executed the usual and proper receipts, and entered the proper memorandum on the tax list at the time, or so soon as the same was placed in his hands. By so doing he was in no just sense the mere custodian or trustee of the taxpayers, holding the funds for their use, and alone liable to them, or individually to the government, for the faithful application of the funds. This was public money, funds in his hands by virtue of his office, revenue which he was bound to account for and pay over, and by the very terms of the bond the sureties were liable therefor. As was said in Warren Co. v. Ward, 21 Iowa, 84, the officer was perhaps not bound to take the money, but he did, accepting it as collector, and he is therefore bound for it as money received by virtue of his office.”
A tax collector and Ms sureties are liable for penalties collected, and no question as to tbe legality of collecting tbe penalties can, be made either by tbe collector or bis sureties. Wilson v. State, 1 Lea, 317. It bas been repeatedly beld that a collector and bis sureties on his official bond are liable for taxes collected on a void assessment, and so it is no defense to tbe collector and bis sureties that tbe law imposing tbe particular tax collected is unconstitutional. So beld in regard to tbe dog tax, tbe statute imposing which was afterwards declared unconstitutional. Chandler v. State, Id. 296.
Upon tbe question bow far the acts of an officer are to be regarded as official, and to which tbe liability of tbe surety on Ms official bond extends, the ruling in tbe foregoing cases is strongly supported by analogy in decisions in respect of the liability of officers in tbe execution of court process. In Lammon v. Feusier, 111 U. S. 17, 4 Sup. Ct. 286, tbe marshal, having in bis band a writ of attachment on mesne process against property of Feusier, levied upon tbe goods of plaintiff in tbe action, who was a stranger to, and not named in, tbe process of attachment. Tbe defense was that, as the writ commanded seizure of tbe property of tbe person named, tbe sheriff, in taking tbe property of a stranger, was not acting in the line oí duty, and the sureties were not liable. Tbe court, however, said that taking property of a person not named in the writ, or property exempt from attachment, was a breach of official duty, equally with tbe neglect to take attachable property of the person actually named. There has, it is Uue, been much difference of opinion in the courts of tbe several states upon this question, but, as pointed out in Lammon v. Feusier, tbe great preponderance of authority is in favor of tbe proposition that such act is official, and renders the sureties liable. In that case tbe supreme court of tbe United States expressly approved State v. Jennings, 4 Ohio St. 423, and City of Lowell v. Parker, 10 Metc. (Mass.) 309. In State v. Jennings tbe court said:
“The reason for this is that the trespass is not the act of a mere individual, but is perpetrated colore officii. If an officer, under color of a fi. fa., seizes property of the debtor that is exempt from execution, no one, I imagine, would deny that he had thei’eby broken the condition of his bond.”
And tbe court further said:
“True, it may sometimes be more difficult to ascertain the ownership of the goods than to know whether a particular piece of property is exempt from*691 execution; Imt this is not always the ease, and, if it were, it would not justify us in restricting to litigants the indemnity afforded by the official bond, thus leaving the rest of the community with no other indemnity against official misconduct than the responsibility of the officer might furnish.”
In City of Lowell v. Parker, a constable, being authorized by statute to serve only writs of attachment in which the damages were laid at no mow11 ban $70, took property upon a writ: in which the damages were laid at a much greater sum. The argument: was that the constable had no more authority to make the seizure than if he had acted without any writ whatever, but the court overruled this objection, and said:
“He was an officer, had authority to attach goods on mesne process on a suitable writ, professed to have such process, and thereupon took the plaintiff's goods; that is, the goods of Bean, for whose use and benefit this action is brought, and who therefore may be called the plaintiff. He therefore took the goods colore officii, and. though he had no sufficient warrant for taking them, yet he is responsible to third persons, because such taking was a breach of his official duty.”
Rule 58, then, regarded as having the effect of a duly-enacted law, would be merely directory as to the time when tbe official should or should not receive payments of a sum which was being paid, and which lie was receiving by virtue of law independently of rule 58; and the ‘•ule would not, under any just interpretation, affect tlie surefy’s liability on the bond.
Judge Beverens, who presided at the trial, stated his view of the question as follows:
“Payment of the price by the entry man is part of the transaction whereby he is to acquire title to the land. Rules prescribed by the department (o the local land offices are for convenience in the transaction of business. Such is rule requiring- payment before aclion on proofs by those officers, — a rule designed to prevent vain proceedings there resulting from a subsequent failure to pay the purchase price. The money may properly be paid at any time while ¡he proceedings for the purpose are in fieri, unless some statute or rule prohibits it. and none such has been shown to me. I have no doubt that if the money were, not paid at the time of the application, but, upon notification from ihe land office that the proofs were held sufficient, it should then be paid, ■ he proceeding would be perfectly valid, and the purchaser would have the right to a title. It is a matter of order only. The receiver is the agent of the covermnent to make the sale. If an intending purchaser of la.nd should, with ids proposition to buy, pay the price asked by the owner to the agent of the latter appointed to make the sale, the agent would be accountable to liis principal for the money, as between them. If the transaction should fail, — as. for instance, on account of defect in the owner’s title, — the principal would be hound to make restitution. The agent would not be liable to the purchaser. If was known that he was acting as agent. He was not selling his own land, nor dealing with a matter .of personal concern io himself. There are very cogent reasons for applying this rule of agency to such circumstances as these. My conclusion, therefore, is that, at whatever stage of the proceedings the money is paid by the applicant to the receiver upon his intended purchase, the receiver is bound to render an account thereof to the department. It is not his money. He does not receive it as the agent of (lie applicant. Ho lias no such dual status. If the money was properly payable at the time of the. application, it would make no difference whether ihe government exacted payment then, or was willing to waive payment until the proceeding should ripen.”
With this we fully agree. As was pointed out by the learned circuit judge, (he rule of Ihe department does, not in bums prohibit pay
We may now return to consider for a moment the real character and effect of rule 53 promulgated by an executive department of the general government, and we are very clear that rule 53 was an administrative regulation or order intended to prescribe suitable business methods of doing the work required of officers in the department. In its effect it raises a question of discipline and procedure between the head of the department and the subordinate officers or agents, and, while disobedience of the regulation might furnish sufficient and just ground for discharging an employé, it was not competent by such regulation as this to enlarge or restrict the rights or obligations growing out of the execution of the bond in question as determined by law. The department itself is a mere creature and administrative instrument under law's duly enacted by congress, and would be without power by such regulation to change the liability of the sureties or the rights of the government on a bond like this, executed for the purpose of securing the faithful discharge of trusts imposed by law, and not by this or similar regulations. Official bonds like that here involved are required for the purpose of protecting the public having business relations with the government through officers and agents, and also for the purpose of securing the government against fraud and insolvency on the part of its agents intrusted with collecting and accounting for public revenue; and if it be once conceded that the obligation of such bonds may be changed, and sureties thereby released, by mere department regulations, it is obvious enough that there would be a complete practical failure in the purpose for which such bonds are required and executed, as these department regulations would, in the nature of the case, vary to meet the differing views of heads of departments coming in and going out with changes of administration. In Quinn v. Chapman, 111 U. S. 445, 4 Sup. Ct. 508, it appeared that there was a rule in the land office forbidding the filing of a declaratory statement based upon a pre-emption right subsequent to the commencement of a contest between other parties for the same land, but the court held that the existence of such rule was no valid ground for rejecting a claim which w'as otherwise legally or equitably good under the general laws of congress., So in Westervelt v. Mohrenstecher, 22 C. C. A. 93, 76 Fed. 119, the action was upon the bond of the cashier of a national bank. The national bank act expressly provided that the cashier of a national bank should hold his office subject to the pleasure of the board of directors. The bank, by a by-law, provided, however, that the cashier .should hold his office for one year, and should be elected annually; and the defense made by the sureties on the bond was that the default did not occur during the year for which they were sureties on the bond of the cashier, and that they were liable on the bond for the term of one year only. This contention was overruled, and it was adjudged that the by-laws were nugatory, being in conflict with the laws of congress on that subject, and that it was not competent by a by-law to modify or change the law of congress; that under the law of congress a cashier was appointed and held office subject to removal by the board of directors, and that the term of his
“A preliminary objection Is made to bis liability for the loss of a part of the sums on the ground that it was collected from assessments made and never in the treasury. It was; however, money properly paid into his hands as a special disbursing agent, and was public money while there, because the United Slates was responsible for its proper disposition, whatever that might ultimately be. His bond expressly bound him to account for all public moneys coming into his hands. The main question is whether the designation of the banks by the board of trustees as places of deposit relieved Hay from the loss. This must be answered in the negative. Hay was a disbursing officer of the Tinted States, and was forbidden by sections 3630. 3620, Rev. St., to deposit me public money in his possession in any other place than with assistant ireasurers of the United States, or in seine place designated as a depositoiy by the secretary of the treasury. The regulation of the secretary of the interior provided for the designation by the town-site board of a bank for the deposit of moneys in the hands of their secretary and disbursing agent must be construed in the light of the foregoing sections. The power of de,signa lion by the board is limited, therefore, to banks which are lawful depositories of public moneys within the statute. It is not claimed that either the Xorman bank or the (Juthrie bank was such a depository, 'file result is that Hay is nor exonerated from liability on his bond arising from the failure of these banks,”
And the t lew thus expressed was approved by the att orney general.
In U. S. v. Symonds, 120 U. S. 49, 7 Sup. Ct. 412, Mr. Justice Harlan, speaking for (he court, said:
“The authority of the secretary to issue orders, regulations, and instructions, with the approval of the president, in reference to matters connected with the naval establishment, is subject to the condition, necessarily implied, that they must be consistent with the statutes which have been enacted by congress in reference to the navy, lie may, with the approval of the president, establish regulations in execution of, or supplementary to, but not in conflict with, the statutes defining his powers or conferring rights upon others. The contrary has never been held by this court. What we now say is entirely consistent*694 with Gratiot v. U. S., 4 How. 80, and Ex parte Reed, 100 U. S. 13, upon which the government relies. Referring in the first case to certain army regulations, and in the other to certain navy regulations, which had been approved by congress, the court observed that they had the force of law. See, also, Smith v. Whitney, 116 U. S. 181, 6 Sup. Ct. 570. In neither case, however, was it held that such regulations, when in conflict with the acts of congress, could be upheld.”
See, also, U. S. v. Eaton, 144 U. S. 677, 12 Sup. Ct. 764.
It is very true that these regulations duly promulgated by the department have the force of law, in a limited and just sense, especially when authorized or approved by congress. It is to be borne in mind, however, in considering the effect of such orders, that the power, authority, and purpose of the particular departments are well defined by the legislation of congress, and the department is organized for the purpose of giving practical effect in detail to such legislation, and for that purpose the department is vested with power to make all needful rules and regulations within the limits of the authority and purpose thus manifested by congress. In what was thus said it is implied that the general laws of congress with respect to the rights of the public in dealing with these official agencies, as well as the obligations arising out of the execution of these bonds, and the rights of the government thereunder, cannot be changed by mere department regulation. The recognition of such power and of such effect in a department order would, for reasons just indicated, as well as others, be dangerous to the government. There is no claim or suggestion, and, indeed, could not be, upon the record, that the sureties at any time had any knowledge of rule 53, or that anything was done or omitted to be done by them upon the faith of said rule. There is therefore no equitable feature in the position of the sureties by reason of which they should' be favored by any nice or doubtful interpretation. Upon what has thus been said, and without further elaboration, it is sufficient to announce that the judgment of the circuit court was, in our opinion, clearly correct, and the same is affirmed.
