Bank of the United States v. Bank of Washington
31 U.S. 8 (1832)

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U.S. Supreme Court

Bank of the United States v. Bank of Washington, 31 U.S. 6 Pet. 8 8 (1832)

Bank of the United States v. Bank of Washington

31 U.S. (6 Pet.) 8

Syllabus

The defendants in an execution paid to the agents of the plaintiff the amount of the debt and gave a verbal notice that it was their intention to sue out a writ of error to reverse the judgment. This was afterwards done, and the judgment was reversed. The agents of the plaintiff paid over to him forthwith the amount received, and the defendants instituted a suit against the agents to recover the sum paid to them. Held that they could not recover.

It is a settled rule of law that upon an erroneous judgment, if there be a regular execution, the party may justify under it until the judgment is reversed, for an erroneous judgment is the act of the court.

On the reversal of an erroneous judgment, the law raises an obligation in the party to the record who has received the benefit of the judgment to make restitution to the other party for what he has lost, and the mode of proceeding to effect this object, may be regulated according to circumstances. Sometimes it is done by a writ of restitution, without a scire facias, when the record shows the money has been paid, and there is a certainty as to what has been lost. In other cases, a scire facias may be necessary to ascertain what is to be restored. But as it respects third persons, whatever has been done under the judgment whilst it remained in fall force is valid and binding.

Where money is wrongfully and illegally exacted, it is received without any legal right or authority to receive it, and the law at the very time of payment creates the obligation to refund it. A notice to recover back the money does not even in such cases create the right to recover it back; that results from the illegal exaction of it, and the notice may serve to rebut the inference that it was a voluntary payment or made through mistake.

The action was assumpsit in the circuit court, and was instituted by the Bank of Washington against the Bank of the United States for money had and received, to recover the sum of $881.18, with interest. The case was submitted to that court on the following case agreed.

In this case, Triplett & Neale recovered a judgment at Alexandria court at April term, 1824, against the Bank of Washington, which was afterwards taken to the Supreme Court by writ of error and there reversed, as appears by the record of the same in the Supreme Court, and the proceedings in that court in the matter of the writ of error, Bank of Washington

Page 31 U. S. 9

v. Triplett & Neale, decided at January term, 1828 of the Supreme Court. 26 U. S. 1 Pet. 25.

The Bank of Washington, on 2 June, 1824, had petitioned for the allowance of a writ of error in the said case, and presented such petition to one of the judges of the Supreme Court, by whom it was refused, and afterwards the said petition was presented to the Chief Justice of the United States, by whom the writ was allowed on 15 March, 1825, and the same was accordingly issued as by the record; on 30 August, 1824, Triplett & Neale sued out execution on said judgment, and immediately sent the same enclosed in a letter to Richard Smith, cashier of the Office of Discount and Deposit of the Bank of the United States at Washington, with an endorsement thereon in writing, who wrote another endorsement thereon, as appears from the said execution and the endorsement thereon, in the words following:

"Triplett & Neale v. Bank of Washington"

"Use and benefit of the Office of Discount and Deposit of the United States, Washington City."

"CHARLES NEALE"

"Pay to Mr. Brooke Mackall Rd. SMITH, Cashier"

"Received $881.18."

"B. MACKALL"

Brooke Mackall, the runner in the said office, and the person mentioned in the last of said endorsements, presented the said execution, &c., to the Bank of Washington, and there, on 9 September, 1824, received the sum of $881.81, and signed the receipt thereon. And at the time of signing the same, William A. Bradley, then cashier of the Bank of Washington, verbally gave notice to said Mackall that it was the intention of said Bank of Washington to appeal to the Supreme Court, and that the said Office of Discount and Deposit would be expected, in case of a reversal of the judgment, to refund the amount. The said Mackall received the said sum as the amount of principal and interest accrued on said judgment, as appears by his receipts on the said execution, which sum he delivered to said Smith, who entered it to the credit of C. Neale, one of the firm of Triplett & Neale, on the proper books of the said office. Before the delivery of the said execution to the said Smith as aforesaid, C. Neale, one of the

Page 31 U. S. 10

said firm of Triplett & Neale, had promised said Smith to appropriate the money, expected to be recovered from the Bank of Washington in said suit, to reduce certain accommodation discounts which he, the said Neale, had running in said bank, upon notes drawn by him and endorsed by endorsers as sureties for the due payment thereof, which discounts were still running upon such notes at the time and times the said execution was so delivered, and when the money was paid as aforesaid. The said Smith received the said execution with the said Neale's said endorsement thereon, as he understood and considered, for collection, and when collected, he deposited the same in bank to said Neale's credit generally, and would have sent the same to him at Alexandria, if he had requested him to do so, or would have paid his check for the amount, and immediately on the receipt of said money as aforesaid, said Smith wrote a letter to the said Neale in the words following to-wit:

"OFFICE OF THE BANK OF THE UNITED STATES"

"Washington, September 9, 1824"

"CHRISTOPHER NEALE, Esq."

"Dear Sir: I have received the sum of eight hundred and $881.18 from the Bank of Washington, in payment of your judgment against it, and have placed the same to your credit. Be good enough to give me specific directions of the way in which you wish it applied."

"Rd. Smith, Cashier"

To which letter the said Neale returned the following answer:

Dear Sir: In reply to your esteemed favor, I have to request that you will apply the money received from the Bank of Washington to the reduction of the notes endorsed by John H. Ladd & Co. and John A. Stewart, equally, after paying Thomas Swann and Walter Jones $100 between them, or $50 each, as their fees.

"C. Neale"

"10 September 1824"

The said Smith applied the said money pursuant to the directions of the last mentioned letter. It was submitted to the court upon the foregoing case agreed whether the plaintiffs were entitled to recover of the defendants the money with interest so received and applied by said Smith as aforesaid; if the court decide in the affirmative, judgment to be entered for

Page 31 U. S. 11

the plaintiffs for the sum of $881.18, with interest from 9 September, 1824, till paid, and costs; otherwise for the defendants with costs, &c. (any objections to the competence of the evidence to be considered by the court).

The circuit court gave judgment for the plaintiffs, and the defendants prosecuted this writ of error.

Page 31 U. S. 15

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