United States v. MacDaniel - 32 U.S. 1 (1833)
U.S. Supreme Court
United States v. MacDaniel, 32 U.S. 7 Pet. 1 1 (1833)
United States v. MacDaniel
32 U.S. (7 Pet.) 1
The United States instituted a suit to recover a balance charged on the books of the Treasury Department against the defendant, who was a clerk in the Navy Department upon a fixed annual salary, and acted as agent for the payment of moneys due to the navy pensioners, the privateer pensioners, and for navy disbursements, for the payment of which funds were placed in his hands by the
government. He had received an annual compensation for his services in due payment of the navy pensioners, and for fifteen years he had received, in preceding accounts, commissions of one percent on the moneys paid by him for
navy disbursements. He claimed these commissions at the Treasury, and the claim bad been there rejected by the accounting officers, and if allowed the
same, he was not now indebted to the government. The United States, on the trial of the case in the circuit court, denied the right of the defendant to these commissions, as they had not been allowed to him by any department of the government, and asserted that the jury had not power to allow them on the trial.
The rejection of the claim to commissions by the Treasury Department formed no objection to the admission of it as evidence of offset before the
jury. Had the claim never been presented to the department, it could not have been admitted as evidence by the court. But as it had been made out in form and presented to the proper accounting officers and had been rejected, the circuit court did right in submitting it to the jury if the claim was considered as equitable.
This Court will not sanction a limitation of the power of the circuit court in cases of this kind to the admission of evidence to the jury on a trial only to such items of offset against the claims of the government as were strictly legal and which the accounting officer of the Treasury should have allowed. It is admitted that a claim which requires legislative sanction is not a proper offset either before the Treasury officers or the court. But there may be cases in which the services having been rendered, a compensation may be made within the discretion of the head of the department, and in such cases the court and jury will do not what an auditor was authorized to do, but what the head of the department should have done in sanctioning an equitable allowance.
The Act of 27 March, 1804, by which the President of the United States was authorized to attach to the navy yard at Washington a captain of the navy for the performance of certain duties, was correctly construed by the head of the Navy Department, until 1829, allowing to the defendant commissions on the sums paid by him as the special agent of the Navy Department in making the disbursements.
By an act passed 10 July, 1832, Congress authorized appointment of a separate and permanent navy agent at Washington and directed the performance of the duties "not only for the navy yard in the City of Washington, but for the Navy Department under the direction of the Secretary of the Navy in the payment of such accounts and claims as the Secretary may direct." These duties would not have been so specially stated in this act if they had been considered by Congress as coming within the ordinary duties of an agent for the navy yard at
Washington under the act of 1504. But independent of this consideration, it is enough to know that the duties in question were discharged by the defendant under the construction given to the law by the Secretary of the Navy.
It will not be contended that one secretary of a department has not the same power as another to give a construction to an act which relates to the business of his department.
A practical knowledge of any one of the great departments of the government must convince every person that the head of a department, in the distribution of its duties and responsibilities, is often compelled to exercise his discretion. He is limited in the exercise of his powers by the law, but it does not follow that he must show a statutory provision for everything he does. No government could be administered on such principles. To attempt to regulate by law the minute movements of every part of the complicated machinery of government would evince a most unpardonable ignorance of the subject. Whilst the great outlines of its movements may be marked out and limitations imposed on the exercise of its powers, there are numberless things which must be done
that can neither be anticipated nor defined and which are essential to the proper action of the government. Hence, of necessity, usages have been established in every part of the government which have become a kind of common law, and regulate the rights and duties of those who act within their respective limits, and no change of such usages can have a retrospective effect, but must be limited to the future.
Usage cannot alter the law, but it is evidence of the construction given to it, and must be considered binding on past transactions.
That the duties in question were discharged by the defendant during office hours can form no objection to the compensation claimed. They were required of him by the head of the department, and being a subordinate, he had no discretion to decline the labor and responsibility thus imposed. But seeing that his responsibility would be greatly increased, and perhaps his labor, the Secretary of the Navy increases his compensation, as in justice he was bound to do.
This action of assumpsit has been brought, by the government to recover from the defendant the exact sum which in equity it is admitted he is entitled to receive for valuable services rendered to the public in a subordinate capacity under the express sanction of the head of the Navy Department. This sum of money happens to be in the hands of the defendant, and the question is whether he shall, under the circumstances, be required to surrender it to the government and then petition Congress on the subject. A simple statement of the case would seem to render proper a very different course.
It would he a novel principle to refuse payment to the subordinates of a department because their chief, under whose direction they had faithfully served the public, had given an erroneous construction to the law.
The Secretary of the Navy, in authorizing the defendant to make the disbursements on which the claim for compensation is founded, did not transcend those powers which, under the circumstances of the cases. he might well exercise.
This section was brought on 14 August, 1829, in the circuit court by the United States to recover from the defendant the sum of $988.94, alleged to have been found due on a settlement of his accounts by the accounting officers of the Treasury Department. The case was tried in May, 1831, and a verdict and judgment rendered for the defendant, to reverse which judgment the United States prosecuted this writ of error.
Before the verdict was given, the district attorney of the
United States filed the following bill of exceptions. After stating that the United States gave in evidence an account against the defendant, settled at the Treasury, upon which they claimed from the defendant a balance of $988.94 with interest from August 3, 1829, the bill of exceptions proceeded:
"The defendant then examined a witness, to prove that the said defendant was a clerk in the Navy Department, at an annual salary of $1,400, and while he was so acting, he was engaged and acted as the agent for the payment of the money due to the navy pensioners, the privateer pensioners, and acted also as a special agent for the navy disbursements, and the moneys which were applied to the use of those objects were placed in his hands by the government, to be disbursed by him. That he was allowed for his services in the payment of pensions, the annual sum of $250, but he has no knowledge that any annual sum was ever allowed him for his services as a special agent for the navy disbursements. The witness stated that he was also a clerk in the Navy Department, and was in the habit of stating the defendant's accounts as special agent, and he knows that a commission of one percent was always allowed him, to his knowledge, for ten or fifteen years past, until the settlement of the present account, upon his disbursements as special agent for the navy disbursements. The witness further stated that the services of this special agent in these disbursements were similar to those performed by other navy agents, such as the navy agent of Boston, &c. That they amounted, during the period that he acted as agent as aforesaid, to from fifty to one hundred thousand dollars a year; that the defendant gave no bond or security, to his knowledge, for the performance of these duties."
"The defendant then gave in evidence to the jury the certificate of B. W. Crowninshield, then Secretary of the Navy, of 3 May, 1817, and his account against the United States, allowed by Smith Thompson, then Secretary of the Navy."
"Navy Department, May 3, 1817"
" George McDaniel, as agent of the navy pension fund, upon
all expenditures by him heretofore made, is entitled to the same commissions as have been allowed to other agents."
"B. W. CROWNINSHIELD"
"Secretary of the Navy"
" The navy pension fund to George McDaniel:"
" For compensation as clerk of the navy pension accounts from 1 July to the 31 December, 1818, inclusive, at the rate of two hundred and fifty dollars per annum, $125.00."
" Respectfully submitted,"
" Upon which account are the following endorsements: 'To be allowed,'"
"Received payments in account,"
"The defendant set up against the claim made against him by the United States in this case a charge for a commission of one percent as special agent of the Navy Department on the expenditure of $11,789.20, amounting to $117.89, and a like commission of $692.30, upon the expenditure of $69,229.92, which commissions had been disallowed by the Navy Department, and if now disallowed upon this trial, would leave the defendant indebted to the United States in the sum of $810.19, exclusive of the other items of claim made against him in this case."
"The witness who gave testimony for the defendant proved that the services performed by the defendant as special agent as aforesaid were performed during office hours, and occupied from one-third to one-fourth of his time."
"The defendant further proved that witness had had occasion in the discharge of his duties in the Fourth Auditor's office to examine the accounts of defendant, and reported the accounts in question; that the same commission was claimed by defendant in these accounts as had been charged and allowed in all his previous accounts, so far as witness had examined them; that
the service had then been rendered and the moneys disbursed when the exception was taken; that witness knows that the accounts of public disbursements, including all these allowances of commissions upon disbursements, are annually submitted to Congress and inspected by a committee specially appointed for that purpose; that said committee attends at the different offices, where the books are open for their inspection; that the accounts embracing defendant's claims and allowances are regularly so submitted and inspected, and that no objection, as witness has ever heard, was taken by any committee or any individual to such allowances until defendant's final account, after leaving office, was settled by the Fourth Auditor. Defendant promptly paid over all the moneys in his hands when the amount was adjusted, reserving only the sums claimed by him, which appear in the accounts exhibited, and if they are allowed him, he has no public money in his hands. Defendant further offered in evidence a report from the Secretary of the Treasury to Congress, 1 March, 1831. Doc. 126, H.R. 21st Cong. 2d Sess."
"Upon the evidence so given to the jury, the counsel for the United States prayed the court to instruct the jury that if it should believe the same to be true, that still the defendant had no right by law to the commissions which he claims in this case, and that, as the sum so charged as aforesaid, as commissions had never been allowed to him by any department of the government, it was not competent for the jury to allow them upon this trial. Which instruction the court refused to give, to which refusal the United States by its attorney excepted."
The account exhibited on the trial by the district attorney of the United States, by which the balance alleged to be due was shown, was as follows:
To balance due the United States per his account current,
rendered on 5 June, 1829 . . . . . . . . . . . . . . . . . . $ 688.33
This sum disallowed, as per reconciling statement of his
navy expenditure account herewith. . . . . . . . . . . . . . 228.14
Commission on $69,229.92, paid over to the Treasurer of the
United States, at one percent as debited in his account
as late special agent of the Navy Department, marked A.
Recorded on 5 June, 1829. Not allowed . . . . . . . . . . . 692.32
Compensation as agent for paying pensions from March to
31 May, 1829. Not allowed . . . . . . . . . . . . . . . . . 62.50
Error in statement No. 141 (previous report), in payments
of Fall's pension. . . . . . . . . . . . . . . . . . . . . . 6.00
By this sum deposited to the credit of the Treasurer of the
United States, 3 August 1829 . . . . . . . . . . . . . . . . 688.33
Balance due the United States, by statement examined by
Comptroller, 12 August, 1829 . . . . . . . . . . . . . . . . $ 988.96
"THOMAS H. GILLIES, Act. 4th Aud."