Although a bill of exceptions is imperfectly drawn, yet if this
Court can ascertain the substance of the facts, and the questions
on which the judge instructed the jury are apparent, it will
proceed to decide the case.
Where a collector received treasury notes in payment for duties
which were cancelled by him, but afterwards stolen or lost,
altered, and then received by him again in payment for other
duties, he is responsible to the government for the amount
thereof.
So also he is responsible, to a certain extent, where treasury
notes were received by him in payment for duties, cancelled, but
lost or purloined without his knowledge or consent before being
placed in the post office to be returned to the department.
And this is so whether the notes be considered as money or only
evidences of debt by the Treasury Department.
But the extent, above mentioned, to which his responsibility
goes is to be measured by a jury, who are to form their judgment
from the danger of the notes' getting into circulation again, the
delay and inconvenience in obtaining the proper vouchers to settle
accounts, the want of evidence at the department that the notes had
been redeemed, or from any other direct consequence of the breach
of the collector's bond.
This was a suit brought upon a collector's bond against Thomas
Gibbes Morgan, the principal, and Thomas W. Chinn, Micajah
Courtney, Josiah Barker, and John Davenport, sureties. The bond was
executed on 14 December, 1841, and recited that Morgan had been
appointed Collector of the Customs for the District of Mississippi,
in the State of Louisiana, on 25 June, 1841. It was in the usual
form, with a condition that Morgan "has truly and faithfully
executed and discharged, and shall continue truly and faithfully to
execute and discharge, all the duties of the said office." The
penalty was $120,000.
The suit was brought on 15 December, 1843, and the breach is
thus set out in the petition:
"Now these petitioners, by their attorney aforesaid, aver and
expressly charge that the condition of said bond or writing
obligatory has been broken in this, to-wit, that the said Thomas
Gibbes Morgan had not truly and faithfully executed and discharged,
nor did said Thomas Gibbes Morgan continue truly and faithfully to
execute and discharge, all the duties of the said office according
to law. That the said Thomas Gibbes Morgan did, both before and
after the time of the signing of said bond and while he was
collector as aforesaid, receive as said collector large sums of
money belonging to petitioners, which he has in part only paid to
petitioners, leaving the
Page 52 U. S. 155
balance of $274,775.17, which was received by said Morgan as
said collector, and while he was said collector, and which said
balance said Morgan has refused to pay to petitioners, and yet
retains the same in his possession, though often directed and
requested by petitioners to pay the same to them. That said Morgan
has not, since the first quarter of the year 1843, transmitted the
returns of his accounts as said collector for settlement to the
proper officer, as he is required by law to do, and for that reason
petitioners are unable to specify the items of said balance, but
they reserve the right, by amended petition or otherwise, of
furnishing a detailed statement of said Morgan's account as said
collector so soon as he shall transmit his quarterly returns as
aforesaid, by means whereof a right of action has accrued to these
petitioners to have and recover the penalty of said, bond or
writing obligatory, which, though amicably requested, said obligors
refuse to pay."
"That said petitioners also reserve the right of proceeding, by
amended petition or otherwise, against the said Thomas Gibbes
Morgan for any other or greater sum than the penalty of said bond
herein sued for, even should the same exceed the said balance of
$274,775.17, inasmuch as, from the omission and neglect of said
Morgan to furnish said quarterly returns, petitioners are unable to
finally adjust the accounts of said Morgan as said collector."
The defendants answered with a general denial, as in a plea of
nil debet.
On 27 January, 1848, the cause came on for trial in the circuit
court, and continued during that day, the 28th, and the 29th. The
record stated the empanelling of the jury, the opening of the case
by the district attorney, the fact that evidence was given on the
part of the plaintiffs and on the part of the defendants, and the
following verdict of the jury:
"Verdict in favor of the United States,
viz.: "
For the balance acknowledged . . . . $32,400.13
And commissions. . . . . . . . . . . 28,169.44
----------
Amounting to . . . . . . . . . . $60,569.57
"JOHN CASTELLANO,
Foreman"
"New Orleans, January 29, 1848"
The verdict was recorded and judgment entered up on 9 February,
1848. But the record did not show, in any part of it, what the
evidence was which was given either on the part of the plaintiffs
or defendants. The following bills of exception refer to, but do
not state it.
Page 52 U. S. 156
"And afterwards, to-wit, on 4 February, 1848, the following bill
of exceptions was filed by the United States district
attorney:"
"
THE UNITED STATES v. THOMAS GIBBES MORGAN and
others"
"In the United States Circuit Court in and for the Fifth Circuit
and District of Louisiana."
"Be it remembered that at the December term of said court, on
the trial of the above-named case, on this Saturday, 29 January, in
the year 1848, after the argument on both sides had been closed,
and before the jury had retired, the attorney of the United States
for the district aforesaid prayed the court to charge the jury as
follows, to-wit:"
" First. That T. G. Morgan, and the sureties on his official
bond, were liable in law for the sum of $99,915.27, an amount of
treasury notes received by T. G. Morgan, Collector, in payment
public dues, and lost by him or stolen from him while in his
possession after they had been marked 'cancelled' and before they
were deposited in the post office, for which purpose they had been
put up in a bundle."
"And, on the day and date aforesaid, the attorney of the United
States aforesaid further prayed the court to charge the jury --
"
" Second. That the defendant, T. G. Morgan, and the sureties on
his official bond, were liable in law for the sum of $1,074.89,
being the amount of two treasury notes of five hundred dollars
each, and the interest thereon, which notes were received in
payment of public dues by T. G. Morgan, Collector, stolen from his
office, altered, and afterwards again received by him."
"The court refused to give the above charges as required, but
charged the jury that if they believed, from the evidence before
them, that the treasury notes in controversy were received by the
defendant in payment of revenue, and that he took receipt upon the
back of them when received from the persons paying them in, and
cancelled them on the face of each according to law, and had them
put into a bundle in the usual manner for transmitting them to the
Treasury Department, and gave orders to the person who had been in
the habit of delivering them at the post office to deposit them
there for transmission, and they were lost or purloined without the
knowledge or consent of defendant, he is not answerable to the
plaintiff for them. And the court further charged the jury that if
they believed from the evidence that the two treasury notes,
amounting to $1,074.89, were part of the treasury notes so
cancelled, and intended to have been forwarded to the Treasury
Department, but had been subsequently so altered
Page 52 U. S. 157
without the knowledge or consent of the defendant, so as to make
them appear to be genuine, and he afterwards received them in
payment of duties believing them to be genuine, he is not
responsible to the plaintiff for them, but is entitled to a credit
on the account of the plaintiff for that amount."
"Wherefore, the attorney of the United States aforesaid tenders
this his bill of exceptions to the said refusal, and prays the same
may be made a part of the record."
"THEO. H. McCALEB, [L.S.]
U.S. Judge"
"And afterwards, to-wit, on 5 February, 1848 the following bill
of exceptions, taken by the counsel of the defendants, was
filed:"
"
THE UNITED STATES v. THOMAS GIBBES MORGAN and
others"
"In the United States Circuit Court in and for the Fifth Circuit
and District of Louisiana."
"Be it remembered that at the December term of said court, on
the trial of the above-named case on this Saturday, 29 January, in
the year 1848, after the defendants had introduced evidence to show
that the item charged by the said T. G. Morgan in his account for
the second quarter of the year 1842, for safekeeping and
disbursement of public moneys from 12 July, 1842, to 26 July, 1843,
being commission thereon, amounting to the sum of $28,169.44, was
reasonable and just under the circumstances, and which said item
had been disallowed by the accounting officer of the Treasury
Department, and after the argument on both sides had been closed
and before the jury had retired, the counsel for the defendants
aforesaid requested and prayed the court to charge the jury as
follows:"
" That the defendant, T. G. Morgan, when acting as collector of
the customs, not being under the law a disbursing officer, and the
payment of the drafts drawn on him by the Treasurer of the United
States not being in the course of his duties as collector, he is
entitled to a reasonable compensation for his risk and trouble in
keeping and disbursing the money."
"The court refused to give the above charge as required, but
charged the jury that under the law the defendants were not
entitled to the credit and compensation by them claimed as
aforesaid."
"Wherefore the defendants, by their counsel, tender this their
bill of exceptions to the said refusal and pray that the same may
be made a part of the record."
"THEO. H. McCALEB, [L.S.]
U.S. Judge"
Page 52 U. S. 158
The attorney for the United States sued out a writ of error, and
brought the case up to this Court.
MR. JUSTICE WOODBURY delivered the opinion of the Court.
This was an action on an official bond given to secure the
faithful performance of duty by one of the defendants as collector
of the port of New Orleans.
His appointment took place in June, 1841, and the bond was dated
in December of the same year, and the condition was averred to have
been broken in 1843 by not paying over large sums of money
collected for the United States and by not making seasonable
returns of his accounts.
The breaches were denied, and at the trial it would seem that
evidence was given in relation to them, and the jury returned a
verdict for the plaintiffs for $60,569.57.
But something like $100,000 more appear to have been claimed,
which the jury, under the instructions given by the court,
disallowed, and exceptions were thereupon filed to these
instructions.
The object and character of the exceptions are intelligible by
means of what is stated by the judge in connection with them,
though no preliminary evidence is set out on which the points of
law arose.
This mode of drawing up a bill of exceptions is defective, as
the material facts or proofs on which the instructions rest should
be inserted before the instructions in order that we may see if the
points arise on which they are given and to which exception is
taken.
Zeller's Lessee v.
Eckert, 4 How. 297,
45 U. S. 298;
Vasse v.
Smith, 6 Cranch 233,
10 U. S. 234;
44 U. S. 3 How.
555,
44 U. S. 556.
The Treasury transcript in support of the suit, and the precise
breach, and the instructions or circulars from the department as to
the mode of canceling and transmitting the notes in the present
case, should appear, so far as material, as well as the evidence
how they were in fact cancelled, and what has probably become of
them since.
Page 52 U. S. 159
But considering that we can, by way of inference from the
instructions in the form in which they were given, ascertain the
substance of the facts, and save delay in sending the case back for
a fuller and more technical bill before deciding the points of law
presented, we have concluded to state our opinion now on those
points.
And neither party can complain of this when, as here, neither
has objected to the imperfect form of this bill, and when the
questions on which the judge instructed the jury are apparent, and
are not pretended to have been abstruse or irrelevant, but related
to the gist of the matter in controversy.
Etting v.
Bank of the United States, 11 Wheat. 59.
The material facts, from what is developed in the charge, seem
to have been, that the collector received near $100,000 for duties
in treasury notes, and cancelled them; but after being put up in a
bundle to be sent to the Treasury Department, through the post
office, and orders given to the servant accustomed to deliver
packages there to deliver these, the bundle was stolen or lost.
It appeared further that two of these notes for $500 each were
soon after altered and presented to the collector in payment of
other duties, and received by him as genuine.
One of the instructions excepted to was that if these last two
notes were taken by the collector without his knowledge or consent
to their alteration, and if they appeared to be genuine, and he
believed them to be so, he was not liable for their amount and
interest.
But we all agree in opinion that this instruction was erroneous.
A collector is bound to take genuine money or notes rather than
counterfeit ones, or the government would be exposed to infinite
frauds and losses. The collector, too, need not thus suffer in a
case like this, as he is required to keep a register of all
treasury notes received, and from whom taken, and if any prove to
be counterfeit, or altered, he has a remedy in his own name, or
that of the government, for the amount on the person who paid them
in.
It is well settled likewise that an attempted payment in
counterfeit money, as cash, is in law no payment.
Ellis v.
Wild, 6 Mass. 321;
Young v. Adams, ibid. 182, 186;
Jones v. Ryder, 5 Taunton 488;
Salem Bank v.
Gloucester Bank, 17 Mass. 1, 27, 28; 2 Johns. 455; 6 D. &
E. 52. And as the collector here has given a discharge for the
duties to the amount of these notes, and has acknowledged the
receipt of payment for the duties to the government, as well as the
importer, and received or paid over nothing for them which he was
authorized to receive, he must stand chargeable for that
amount.
Page 52 U. S. 160
He was no more justified in taking cancelled treasury notes for
duties than in taking waste paper, and it was his particular duty
to see that they had not been cancelled or counterfeited; and in
the schedule of the treasury notes, which he was obliged to keep,
he had ample means of detection. Though the government might still
possess a remedy against the importer for the duties, there having
yet been no valid payment by him, yet this is no bar, if they
choose to resort to their remedy on the bond of the collector, for
his official negligence and wrong in taking for their revenue
counterfeit or cancelled notes.
The other instruction presents a question of more difficulty. It
was that the collector was not liable for the treasury notes which
he had received for duties if they had been duly cancelled after
received and were put up and ordered to be delivered at the post
office for transmission to the Treasury Department, though they
were lost or purloined without his knowledge or consent before
placed in the charge of the post office.
A majority of us think that this instruction also was erroneous.
It is manifest that, if the notes, though cancelled for security in
keeping them till transmitted, were still to be regarded for any
purpose as money, the collector must be considered as liable for
their amount till paid to the department, or actually delivered at
the post office, in conformity with the orders of the department.
It would then be a liability on his bond to pay over what money he
had received, as that manifestly had not here been done; or it
would be a liability to perform his duty as promised in his oath
and bond, and as required by law and Treasury instructions -- to
transmit or pay over the notes, and which, considering them as
money, it cannot be pretended he has done. On this it is enough, in
support of his continued responsibility, to refer to
United States v.
Prescott, 3 How. 578.
But were these notes, when lost, still money?
It is true that originally they were by law to be received as
money. Act of 12 October, 1837, 5 Stat. 202, § 6. The fact
that he is liable for the interest on these notes after received
and cancelled, and until they reach the department, appears to
favor the idea that the notes were still, for some purposes at
least, to be treated as continuing money between the collector and
the department. 5 Stat. 203, § 7.
But if this view be not clearly sustainable, and we doubt
whether, under all the circumstances, after cancelled, they can be
regarded as money, or money's worth, for the purpose of sustaining
this action, yet it is clear that they still possess some
Page 52 U. S. 161
value as vouchers, and as evidence for the Treasury Department
that they have been redeemed.
It is still clear also that, though cancelled, the Treasury
Department, unless having possession of them, is exposed to expense
and loss by their being altered, and the cancellation removed or
extracted, and their getting again into circulation, as two did
here, and being twice paid by the government.
For that reason, these notes, though cancelled, are, by law and
Treasury orders, to be transmitted to the department, and when
received there are to be credited to the collector; but not till
then, as a general rule. It the collector, therefore, fails to send
them there or to do all which is proper to get them there, by
having them put into the actual possession of some public
transmitting agent like the post office, he fails in his duty, and
it is not enough for him to say, in justification, as in this case,
and as the court below upheld, that he gave orders to the
accustomed servant to put them in the post office.
That servant was his own agent, and not the agent of the
Treasury Department. He allowed the notes to be lost or stolen
before reaching the post office. His employer must suffer by his
neglect or unfaithfulness rather than third persons. The condition
of the bond of the collector has, therefore, in this view, never
been fulfilled, and
prima facie he is technically liable
for its penalty, and is in justice, as well as law, responsible for
the amount of the injury thus caused by himself or his own
agent.
The rule of damage would be the amount of the notes -- unless it
appeared, as here, that they had been cancelled, and unless it was
shown that the government had suffered, or was likely to suffer,
damage less than their amount. How much is the real damage under
all the circumstances is a question of fact for the jury, and
should be passed on by them at another trial.
Only that amount, rather than the whole bond, need, in a liberal
view of the law and of his bond, be exacted, and that amount
neither he nor his sureties can reasonably object to paying when
he, by the neglect of himself or his agent, has caused all the
injury which he is in the end required to reimburse. And if any
equities exist to relieve him from that, none of which is seen by
us, it must be done by Congress and not the courts of law.
Anything less than this -- any less strict rule, in the public
administration of the finances, would leave everything loose or
unsettled and cause infinite embarrassments in the accounting
offices and numerous losses to the government.
The argument which has been pressed to exonerate him
Page 52 U. S. 162
even from this extent of liability rests on an erroneous
impression that he was acting as a bailee, and under the
responsibilities of only the ordinary diligence of a depositary as
to the cancelled notes, when in truth he was acting under his
commission and duties by law as collector and under the conditions
of his bond. The collector is no more to be treated as a bailee in
this case than he would be if the notes were still considered for
all purposes as money.
He did not receive them as a bailee, but as a collecting
officer. He is liable for them on his bond, and not on any original
bailment or lending.
And if the case can be likened to any species of bailment in
forwarding them by which they were lost, it is that of a common
carrier to transmit them to the Treasury, and in doing which he is
not exonerated by ordinary diligence, but must answer for losses by
larceny and even robbery. 2 Salk. 919; 8 Johns. 213; Angel on
Carriers §§ 1, 9.
Finally we decide on this last question as a matter of law this,
and this only -- namely, that the collector is liable for all the
actual damages sustained by his not returning the notes as required
by law and official circulars; or for not putting them in the post
office so as to be returned. 5 Stat. 203. But how much this damage
was is a matter of proof before the jury, fixing the real amount
likely to happen from their getting into circulation again, as two
of them did here, from delay and inconvenience in obtaining the
proper vouchers to settle accounts, from the want of evidence at
the department that the notes had been redeemed, or from any other
direct consequence of the breach of the condition of his bond, and
of his instructions under it.
Their return in the mode prescribed was by the original treasury
note law deemed important "to promote the public interests and
convenience, and secure the United States and the holders of said
notes against fraud and losses." Sec. 12 of the act of 1837, before
cited. The neglect to do this is a manifest and injurious breach of
his bond.
The judgment below, then, must, for both of these instructions
excepted to, be reversed, and the case sent back for another trial,
in conformity with the principles we have laid down.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Louisiana, and was argued by counsel. On consideration whereof, it
is now here ordered and adjudged by this Court, that the judgment
of the said circuit court in this cause be
Page 52 U. S. 163
and the same is hereby reversed, and that this cause be and the
same is hereby remanded to the said circuit court with directions
to award a
venire facias de novo.
