Three cheques were drawn in June, 1869, by authorized army
officers upon the Assistant Treasurer of the United States in New
York in favor of Wardwell and in payment of his lawful claims
against the United States. These cheques, while in his possession,
were lost or destroyed, presumably in a depredation made on his
house by hostile Indians in 1872. Not having been presented for
payment, the amount of these cheques was covered into the Treasury
in pursuance of the statutes of the United States, and was carried
to the account of "outstanding liabilities." Wardwell having died,
his administratrix applied to the Treasury for payment of the
cheques by the issue of Treasury warrants under the authority
conferred by Rev.Stat. §§ 306, 307, 308. This payment
being refused, this suit was brought in the Court of Claims in
April, 1896, and the statute of limitations was set up as a
defense.
Held that the promise by the government contained
in the statute to hold money so paid into the Treasury was a
continuing promise available to plaintiff at any
Page 172 U. S. 49
time she saw fit, to which full force should be given; that
there was no cause for a suit until after refusal of an application
for a warrant, and that then, for the first time, a claim for the
breach of the contract accrued and the limitations prescribed by
Rev.Stat. § 1069 began to run.
This is an appeal from the Court of Claims. The facts as found
by that court are that in June, 1869, three checks were drawn in
favor of William v. B. Wardwell, one by Major W. B. Rochester,
Paymaster, United States Army, and two by Major M. I. Ludington,
Quartermaster, United States Army, all drawn on the Assistant
Treasurer of the United States in New York, and in payment of
lawful claims of Wardwell against the United States. Subsequently
to the issue of the checks, and while still in the possession and
ownership of Wardwell, they were lost or destroyed, probably in a
depredation committed on his house by Indians in the year 1872.
None of the checks having been presented for payment, the amounts
thereof were covered into the Treasury of the United States and
carried to the account of "Outstanding Liabilities" in pursuance of
the Act of May 2, 1866, now sections 306 and following of the
Revised Statutes, the entry on the books of the Treasury (as shown
by a report made by the Secretary of the Treasury to the House of
Representatives) being as follows:
--------------------------------------------------------------------
Balance Due Balance Due from
Name Period United States from United States
--------------------------------------------------------------------
W. v. B. Wardwell 1872 . . . . $461.87
William V. B. Wardwell 1872 . . . . 500.00
Do. 1872 . . . . 1,017.39
--------------------------------------------------------------------
No part of the same has ever been paid. Wardwell is dead, and
the claimant is his duly appointed and acting administratrix. As
such she, in 1890, applied to the Treasury Department for payment
of the checks by the issue of Treasury warrants, and at the same
time filed a bond of indemnity, with sufficient sureties, for
double the amounts thereof, to secure the United States against a
possible second demand for payment. The first Comptroller of the
Treasury declined to permit
Page 172 U. S. 50
the settlement of a new account or the issue of warrants in
favor of the claimant. Thereafter, and on April 10, 1896, she
commenced this suit. As a conclusion of law, the court found that
the statute of limitations did not begin to run until the 14th day
of April, 1890, the time when the accounting officers of the
Treasury refused to recognize the claimant's demand, and that she
was entitled to recover the amount of the three checks, and on the
11th day of January, 1897, entered judgment for that amount. From
such judgment the United States appealed to this Court.
Section 1069, Rev.Statutes, provides:
"Every claim against the United States cognizable by the Court
of Claims shall be forever barred unless the petition setting forth
a statement thereof is filed in the court, or transmitted to it by
the secretary of the Senate or the clerk of the House of
Representatives as provided by law, within six years after the
claim first accrues,
provided that the claims of married
women first accrued during marriage, of persons under the age of
twenty-one years first accrued during minority, and of idiots,
lunatics, insane persons, and persons beyond the seas at the time
the claim accrued, entitled to the claim, shall not be barred if
the petition be filed in the court or transmitted, as aforesaid,
within three years after the disability has ceased; but no other
disability than those enumerated shall prevent any claim from being
barred, nor shall any of the said disabilities operate
cumulatively."
The Act of May 2, 1866, is entitled
"An act to facilitate the settlement of the accounts of the
Treasurer of the United States, and to secure certain moneys to the
people of the United States, or to persons to whom they are due,
and who are entitled to receive the same."
14 Stat. 41.
This was carried into the Revised Statutes as sections 306 and
following. Section 306, 307, and 308 read:
"SEC. 306. At the termination of each fiscal year, all amounts
of moneys that are represented by certificates, drafts or checks,
issued by the treasurer, or by any disbursing officer of any
department of the government, upon the Treasurer or any Assistant
Treasurer or designated depositary of the United
Page 172 U. S. 51
States, or upon any national bank designated as a depositary of
the United States, and which shall be represented on the books of
either of such offices as standing to the credit of any disbursing
officer, and which were issued to facilitate the payment of
warrants, or for any other purpose in liquidation of a debt due
from the United States, and which have for three years or more
remained outstanding, unsatisfied, and unpaid shall be deposited by
the Treasurer, to be covered into the Treasury by warrant and to be
carried to the credit of the parties in whose favor such
certificates, drafts or checks were respectively issued or to the
persons who are entitled to receive pay therefor, and into an
appropriation account to be denominated 'Outstanding
Liabilities.'"
"SEC. 307. The certificate of the Register of the Treasury
stating that the amount of any draft issued by the Treasurer to
facilitate the payment of a warrant directed to him for payment has
remained outstanding and unpaid for three years or more, and has
been deposited and covered into the Treasury in the manner
prescribed by the preceding section, shall be, when attached to any
such warrant, a sufficient voucher in satisfaction of any such
warrant or part of any warrant, the same as if the drafts correctly
endorsed and fully satisfied were attached to such warrant or part
of warrant. And all such moneys mentioned in this and in the
preceding section shall remain as a permanent appropriation for the
redemption and payment of all such outstanding and unpaid
certificates, drafts and checks."
"SEC. 308. The payee or the
bona fide holder of any
draft or check, the amount of which has been deposited and covered
into the Treasury pursuant to the preceding sections, shall, on
presenting the same to the proper officer of the Treasury, be
entitled to have it paid by the settlement of an account and the
issuing of a warrant in his favor, according to the practice in
other cases of authorized and liquidated claims against the United
States. "
Page 172 U. S. 52
MR. JUSTICE BREWER, after stating the facts in the foregoing
language, delivered the opinion of the Court.
Section 1069, Rev.Stat., is not merely a statute of limitations,
but also jurisdictional in its nature, and limiting the cases of
which the Court of Claims can take cognizance.
Finn v. United
States, 123 U. S. 227.
Counsel for the government contend that the claim against the
United States first accrued in 1869, when the checks were issued,
or, if not then, at least in 1872, when they were lost or
destroyed, and therefore, this being twenty-four years before the
commencement of this suit, that the claim was barred. If there were
nothing to be considered but the single section referred to, it
would be difficult to escape this conclusion of counsel.
It is further contended that sections 306, 307, and 308 relate
to what is simply a matter of bookkeeping, and do not in any manner
change the scope of the liability of the government. But we are of
the opinion that they mean something more. While it may be that
they do not provide for the creation of an express trust, liability
for which, according to general rules, continues until there is a
direct repudiation thereof, yet they contain a promise by the
government to hold the money thus covered into the Treasury for the
benefit of the owner until such time as he shall call for it. This
is a continuing promise, and one to which full force and efficacy
should be given. If bookkeeping was the only matter sought to be
provided for, there were no need of section 308. That prescribes
payment, and payment in a particular way. The payee does not simply
surrender his check and receive money. But, "on presenting the same
to the proper officer," he is "entitled to have it paid by the
settlement of an account and the issuing of a warrant in his
favor." This may be mere machinery for payment, but it is machinery
not used or required until after the money has been "covered into
the
Page 172 U. S. 53
Treasury by warrant," and "carried to the credit" of the payee.
The right given is the right to surrender the check and receive a
warrant on the Treasury. It will also be noticed that the purpose
of the act of 1866 was, as expressed in its title, not merely to
"facilitate the settlement of the accounts of the Treasurer of the
United States," not merely to perfect a system of bookkeeping, but
also "to secure certain moneys . . . to persons to whom they are
due, and who are entitled to receive the same." And the deposit by
the Treasurer is not of a gross amount, to be applied to any claims
that may arise, but of the amount due for certain specified checks
and drafts. In other words, the purpose of the government by this
statute is to secure to each party who holds government paper the
amount thereof, to place it in the Treasury to his credit, and to
prescribe a method by which whenever he wishes he can obtain it. No
time is mentioned within which he must apply for a warrant or after
which the money is forfeited to the government. The ordinary rules
for the maturity of negotiable paper do not control. Congress has
directed that the money already once appropriated and checked
against shall be placed in the Treasury and held subject to the
call of the party for whose benefit it has been so appropriated and
checked. There is no occasion for suit until after his application
for a warrant is refused. When the contract created by the promise
made in section 308 is broken, then a claim for the breach of such
contract first accrues, and the limitation prescribed by section
1069 begins to run. There is thus no conflict with that section.
Its full force is not impaired.
In this connection, it may be not amiss to notice those
authorities in which it is held that, upon the ordinary deposit of
money with a bank, no action will lie until a demand has been made,
by check or otherwise, and that hence the statute of limitations
will not begin to run until after a refusal to pay on such demand.
In
Downes v. Phoenix Bank of Charlestown, 6 Hill 297, 300,
Bronson, J., delivered the opinion of the court, and, after
referring to the ordinary rule that where there is a promise to pay
on demand, the bringing of an action is a sufficient demand, and
criticizing it as illogical, added:
Page 172 U. S. 54
"The rule ought not to be extended to cases which do not fall
precisely within it. Here, the contract to be implied from the
usual course of the business is that the banker shall keep the
money until it is called for. Although it is not strictly a
bailment, it partakes in some degree of that character."
See also Johnson v. Farmers' Bank, 1 Harrington (Del.)
117;
Watson v. Phoenix Bank, 8 Met. (Mass.) 217-221.
In
Dickinson v. Savings Bank, 152 Mass. 49, it was held
that the statute of limitations would not begin to run in favor of
the bank and against a depositor until there had been something
equivalent to a refusal on the part of the bank to pay or a denial
of liability.
In
Girard Bank v. Penn Township Bank, 39 Penn.St. 92,
98, 99, the holder of a certified check was the plaintiff, and, the
check having been outstanding more than six years, the statute of
limitations was pleaded, but the plea was not sustained, the court,
by Strong, J., saying, in respect to the case of an ordinary
deposit:
"Were this a suit against the Bank of Penn Township by the
original depositor, the statute of limitations would be interposed
in vain, not so much because a bank is a technical trustee for its
depositors as for the reason that the liability assumed by
receiving a deposit is to pay when actual demand shall be made. The
engagement of a bank with its depositor is not to pay absolutely
and immediately, but when payment shall be required at the banking
house. It becomes a mere custodian, and is not in default or liable
to respond in damages until demand has been made and payment
refused. Such are the terms of the contract implied in the
transaction of receiving money on deposit, terms necessary alike to
the depositor and the banker. And it is only because such is the
contract that the bank is not under the obligation of a common
debtor to go after its customer and return the deposit wherever he
may be found. Hence it follows that no right of action exists, and
the statute of limitations does not begin to run, until the demand
stipulated for in the contract has been duly made."
And the rule thus announced in respect to ordinary deposits was
held to pally in case of a certified check:
Page 172 U. S. 55
"When a check payable to bearer, or order, is presented with a
view of its being marked 'Good,' and is so certified, the sum
mentioned in it must necessarily cease to stand to the credit of
the depositor. It thenceforth passes to the credit of the holder of
the check, and is specifically appropriated to pay it when
presented, and as the purpose of having it so certified is not to
obtain payment, but to continue with the bank the custody of the
money, the holder can have no greater rights than those of any
other depositor. Certainly he has no right of action until payment
has been actually demanded and refused."
In Morse on Banks and Banking, page 40, 2d ed., the author
says:
"We have already seen that it is a contract specially modified
by the clear legal understanding that the money shall be
forthcoming to meet the order of the creditor whenever that order
shall be properly presented for payment. It follows, therefore,
that this demand for payment is an integral and essential part of
the undertaking, it may be said, even of the debt itself. In short,
the agreement of the bank with the depositor, as distinct and valid
as if written and executed under the seal of each of the parties,
is only to pay upon demand. Accordingly, until there has been such
demand and a refusal thereto, or until some act of the depositor,
or some act of the bank made known to the depositor, has dispensed
with such demand and refusal, the statute ought not to begin to run
nor should any presumption of payment be allowed to arise."
It is not meant to be asserted that the authorities are
unanimous on this question; on the contrary, there is a diversity
of opinion. It is sufficient for the purposes of this case to
notice that the rule finds support in the decisions of many courts
of the highest standing. It is not inconsistent with the
proposition laid down by this Court in
Marine
Bank v. Fulton Bank, 2 Wall. 252, and often
reaffirmed;
Phoenix Bank v. Risley, 111 U.
S. 125, and cases cited in opinion -- to the effect that
the relation between a bank and its depositor is that of debtor and
creditor, and nothing more, for that proposition throws
Page 172 U. S. 56
no light upon the question when the debt of the debtor becomes
due and when the statute of limitations begins to run. Neither is
it pretended that the relation of the United States to this
petitioner was that of bank and depositor, but the reasoning of the
authorities cited strengthens the conclusion that when Congress
declared that this money should be covered into the Treasury to the
credit of the plaintiff, and that she should, on presentation of
the checks to the proper officer of the Treasury, be entitled to a
settlement of an account and the issue of a warrant, it was the
intention to recognize a continuing obligation -- one which was
available to the plaintiff at any time she saw fit; that it was a
promise which was not broken until after demand and refusal.
But authority more in point is not wanting to sustain these
views. The Direct Tax Act of August 5, 1861, c. 45, 12 Stat. 292,
provided in the thirty-sixth section that in case of a sale of real
estate, and a surplus remaining after satisfying the tax, costs,
etc., such surplus should be paid to the owner, or, if he be not
found,
"then such surplus shall be deposited in the Treasury of the
United States, to be there held for the use of the owner, or his
legal representatives, until he or they shall make application
therefor to the Secretary of the Treasury, who, upon such
application, shall, by warrant on the Treasury, cause the same to
be paid to the applicant."
In
United States v. Taylor, 104 U.
S. 216, the owner did not apply for the surplus until
more than six years had elapsed from the closing up of the sale and
the deposit of the money in the Treasury, and it was held that
section 1069 did not bar his action, the court observing (p.
104 U. S.
221):
"This section limits no time within which application must be
made for the proceeds of the sale. The Secretary of the Treasury
was not authorized to fix such a limit. It was his duty, whenever
the owner of the land or his legal representatives should apply for
the money, to draw a warrant therefor without regard to the period
which had elapsed since the sale. The fact that six or any other
number of years had passed did not authorize him to refuse payment.
The person entitled to the money could allow it to remain in the
Treasury for an indefinite
Page 172 U. S. 57
period without losing his right to demand and receive it. It
follows that if he was not required to demand it within six years,
he was not required to sue for it within that time."
"A construction consistent with good faith on the part of the
United States should be given to these statutes. It would certainly
not be fair dealing for the government to say to the owner that the
surplus proceeds should be held in the Treasury for an indefinite
period for his use or that of his legal representatives, and then,
upon suit brought to recover them, to plead in bar that the demand
therefor had not been made within six years."
"The general rule is that, when a trustee unequivocally
repudiates the trust and claims to hold the estate as his own, and
such repudiation and claim are brought to the knowledge of the
cestui que trust in such manner that he is called upon to
assert his rights, the statute of limitations will begin to run
against him from the time such knowledge is brought home to him,
and not before."
"
* * * *"
"In analogy to this rule, the right of the owner of the land to
recover the money which the government held for him as his trustee
did not become a claim on which suit could be brought, and such as
was cognizable by the Court of Claims, until demand therefor had
been made at the Treasury. Upon such demand, the claim first
accrued."
This was reaffirmed in
United States v. Cooper,
120 U. S. 124.
Counsel distinguish those cases from this in that there, the money
came into the Treasury subject to an express trust created by the
act of Congress, which directed that it be there held for the
benefit of the owner, while here, in the first instance, there was
a written promise by the government -- a promise for which an
appropriation had been made and upon which a cause of action
existed. But while there is a difference, we do not think it
sufficient to create a different rule or measure of liability.
There is no new deposit when a check is certified, but, as shown by
the opinion in
Girard Bank v. Bank of Penn Township,
supra, this fact works no change in
Page 172 U. S. 58
the rule. Whether the money to satisfy this liability was paid
in by some third party or already held by the Treasurer, whether
there was or not any prior liability on the part of the government
-- in each case there was a declaration by Congress that the money
thus received or covered into the Treasury should there be held for
the benefit of and subject to the call of the owner, and no time
was specified within which such call must be made. This was a
distinct and separate promise, creating a new liability, and the
claim accrued when this new liability matured. It matured when the
claimant presented her checks, and, calling for warrants, was
refused them.
The judgment is
Affirmed.
