Cary v. CurtisAnnotate this Case
44 U.S. 236 (1845)
U.S. Supreme Court
Cary v. Curtis, 44 U.S. 3 How. 236 236 (1845)
Cary v. Curtis
44 U.S. (3 How.) 236
ON CERTIFICATE OF DIVISION IN OPINION BETWEEN THE JUDGES OF THE CIRCUIT
COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
Since the passage of the Act of Congress of March 3, 1839, chap. 82, sec. 2, which requires collectors of the customs to place to the credit of the Treasurer of the United States all money which they receive for unascertained duties or for duties paid under protest, an action of assumpsit for money had and received will not lie against the collector for the return of such duties so received by him.
In what other modes the claimant can have access to the courts of justice this Court is not called upon in this case to decide.
This action was brought in the circuit court to recover money paid to Curtis as collector of the port of New York for duties. The declaration contained the common money counts, and the defendant pleaded the general issue. The cause was tried at November term, 1842.
The jury found for the plaintiffs, subject to the opinion of the court, among other things,
1. That the plaintiffs paid the sum of $181.75 to the defendants, on the 3d July, 1841, for duties on the goods imported as being raw silk.
2. That the goods on which the duties were demanded and paid, were not raw silk, but a manufactured article.
3. That the money so paid was under a written protest, made at the time of payment.
4. That the money had been paid into the Treasury by the defendant, in the month of July, 1841, and before the commencement of this suit.
Upon the argument of this cause, after verdict, several questions arose -- among others, the following, viz.:
Whether or not the 2d section of the Act of Congress, approved on 3 March, 1839, entitled "An act making appropriations for the civil and diplomatic expenses of government for the year 1839," was a bar to the action?
On this question the opinions of the judges were opposed. Whereupon, on motion of the plaintiffs by their counsel, it was ordered, that the foregoing state of the pleadings and facts, which is made under the direction of the judges, be certified under the seal of this Court, according to the statute in such case made and provided, to the Supreme Court of the United States, to the end, that the question on which the said disagreement has happened may be finally decided.
MR. JUSTICE DANIEL delivered the opinion of the Court.
In order to arrive at the answer which should be given to the question certified upon this record, the objects first to be sought for are the intention and meaning of Congress in the enactment of the 2d section of the Act of March 3, 1839, under which the question sent here has been raised. The positive language of the statute, it is true, must control every other rule of interpretation, yet even this may be better understood by recurrence to the known public practice as to matters in pari materia, and by the rules of law as previously expounded by the courts, and as applied to and as having influenced that practice. The law as laid down by this Court with
respect to collectors of the revenue, in the case of Elliott v. Swartwout, 10 Pet. 137, and again incidentally in the case of Bend v. Hoyt, 13 Pet. 263, is precisely that which is applicable to agents in private transactions between man and man, viz., that a voluntary payment to an agent without notice of objection will not subject the agent who shall have paid over to his principal, but that payment with notice, or with a protest against the legality of the demand, may create a liability on the part of the agent who shall pay over to his principal in despite of such notice or protest. Such was the law as announced from this Court, and Congress must be presumed to have been cognizant of its existence; and as the peculiar power ordained by the Constitution to prescribe rules of right and of action for all officers as well as others falling within the legitimate scope of federal legislation, they must be supposed to have been equally cognizant of the effects and tendencies of this Court's decisions upon the collection of the public revenue. With this knowledge necessarily presumed for them, Congress enact the 2d section of the act of 1839. It should not be overlooked, for it is very material in seeking for the views of Congress in this enactment, that the Court, in the case of Elliott v. Swartwout, in its reasoning upon the second point submitted to them, say, that the claimant by giving notice to the collector would "put him on his guard," by requiring him not to pay over the money. They farther say that the collector would, by the same means, be placed in a situation to claim an indemnity. The precise mode in which this protection of the collector was to be accomplished, or his indemnity secured, it is true, the court has not explicitly declared; but it is thought to be no forced construction of their language to explain it as sanctioning a right of retainer in the collector of the funds received by him for the government; for what shield so effectual could he interpose between himself and the cost and hazards of frequent litigation? Indeed, this would appear, according to the opinion of the court, that very protection which justice and necessity would equally warrant. In practice, this retainer has, with or without warrant, been resorted to.
And now let us look to the language of the act of 1839, chap. 82, § 2.
"That from and after the passage of this act, all money paid to any collector of the customs, or to any person acting as such, for unascertained duties, or for duties paid under protest against the rate or amount of duties charged, shall be placed to the credit of the Treasurer of the United States, kept and disposed of as all other money paid for duties is required by law, or by regulation of the Treasury Department, to be placed to the credit of the Treasurer, kept and disposed of, and it shall not be held by said collector or person acting as such, to await any ascertainment of duties, or the result of any litigation in relation to the rate or amount of duty legally chargeable and collectible in any case where money is so paid; but whenever it shall be shown to the satisfaction of the Secretary of the
Treasury, that in any case of unascertained duties, or duties paid under protest, more money has been paid to the collector, or to the person acting as such, than the law requires should have been paid, it shall be his duty to draw his warrant upon the Treasurer in favor of the person or persons entitled to the overpayment, directing the said Treasurer to refund the same out of any money in the Treasury not otherwise appropriated."
What is the plain and obvious import of this provision, taking it independently and as a whole? It is that all moneys thereafter paid to any collector for unascertained duties, or duties paid under protest, (i.e., with notice of objection by the payer) shall, notwithstanding such notice, be placed to the credit of the Treasurer, kept and disposed of as all other money paid for duties is required by law to be kept and disposed of -- that is, they shall be paid over by the collector, received by the Treasurer, and disbursed by him in conformity with appropriations by law precisely as if no notice or protest had been given or made, and shall not be retained by the collector (and consequently not withdrawn from the uses of the government) to await any ascertainment of duties, or the result of any litigation relative to the rate or amount of duties, in any case in which money is so paid.
This section of the act of Congress, considered independently and as apart from the facts and circumstances which are known to have preceded it and may fairly be supposed to have induced its enactment, must be understood as leaving with the collector no lien upon or discretion over the sums received by him on account of the duties described therein; but as converting him into the mere bearer of those sums to the Treasury of the United States, through the presiding officer of which department they were to be disposed of in conformity with the law. Looking then to the immediate operation of this section upon the conclusions either directly announced or as implied in the decision of Elliott v. Swartwout, how are those conclusions affected by it? They must be influenced by consequences like the following: that whereas by the decision above mentioned it is assumed that by notice to the collector, or by protest against payment, a personal liability for the duties actually paid, attaches upon, and that for his protection a correspondent right of retainer is created on his part; it is thereby made known (i.e. by the statute) that under no circumstances in future should the revenue be retained in the hands of the collector; that he should in no instance be regarded by those making payments to him as having a lien upon it, because he is announced to be the mere instrument or vehicle to convey the duties paid into his hands into the Treasury; that it is the Secretary of the Treasury alone in whom the rights of the government and of the claimant are to be tested, and that whosoever shall pay to a collector any money for duties must do so subject to the consequences herein declared. Such, from 3 March, 1839, was the public law of the United States; it
operated as notice to everyone; it applied, of course, to every citizen as well as to officers concerned in the regulations of the revenue; and as it removed the implications on which the decision of Elliott v. Swartwout materially rested, that case cannot correctly control a question arising under a different state of the law, and under a condition of the parties also essentially different.
It will not be irrelevant here to advert to other obvious and cogent reasons by which Congress may have been impelled to the enactment in question; reasons which, it is thought, will aid in furnishing a solution of their object. Uniformity of imports and excises is required by the Constitution. Regularity and certainty in the payment of the revenue must be admitted by everyone as of primary importance: they may be said almost to constitute the basis of good faith in the transactions of the government; to be essential to its practical existence. Within the extended limits of this country are numerous collection districts; many officers must be entrusted with the collection of the revenue, and persons much more numerous, with every variety of interest and purpose, are daily required to make payments at the ports of entry. To permit the receipts at the customs to depend on constructions as numerous as are the agents employed, as various as might be the designs of those who are interested, or to require that those receipts shall await a settlement of every dispute or objection that might spring from so many conflicting views, would be greatly to disturb, if not to prevent, the uniformity prescribed by the Constitution, and by the same means to withhold from the government the means of fulfilling its important engagements. In the view of mischiefs so serious, and with the intention of preventing or remedying them, nothing would seem more probable or more reasonable, we might add more necessary, than that the government should endeavor to devise a plan by which, as far as practicable, to retain its fiscal operations within its own control, thereby insuring that uniformity in practice, enjoined by the theory of the Constitution, and that punctuality which is indispensable to the benefit of all. Such a plan has Congress devised in the act in question. We have no doubts of the objects or the import of that act; we cannot doubt that it constitutes the Secretary of the Treasury the source whence instructions are to flow; that it controls both the position and the conduct of collectors of the revenue; that it has denied to them every right or authority to retain any portion of the revenue for purposes of contestation or indemnity; has ordered and declared those collectors to be the mere organs of receipt and transfer, and has made the head of the Treasury Department the tribunal for the examination of claims for duties said to have been improperly paid.
It has been urged that the clause of the act of 1839 declaring that the money received shall not be held by any collector to await any ascertainment of duties, or the result of any litigation in relation
to the rate or amount of duties legally chargeable and collectible in any case where money is so paid; shows that Congress did not mean to deprive the party of his action of assumpsit against the collector; that litigation of that description was still contemplated, and that the only object of the law was to place the money in dispute in the possession of the Treasurer, to await a decision, instead of leaving it in the hands of the collector. The Court cannot assent to this construction. It will be remembered that the two principal cases in which collectors have claimed the right to retain, have been those of unascertained duties, and of suits brought, or threatened to be brought, for the recovery of duties paid under protest. It is matter of history that the alleged right to retain on these two accounts, had led to great abuses, and to much loss to the public; and it is to these two subjects, therefore, that the act of Congress particularly addresses itself. It begins by declaring that all money received on these accounts shall be paid into the Treasury; and then, in order to show that the collector is not the person with whom any claims for this money are to be adjusted, or who is to be held responsible for it, the act proceeds to declare that the money shall not remain in his hands even if the protest is followed by a suit; that notwithstanding suit may be brought against him, he shall still pay the money into the Treasury, and that the controversy shall be adjusted with the Secretary. Congress supposed, probably, that a party might choose to sue the collector, as has been done in this instance, but it does not by any means follow, that it was intended to make him liable in the suit, or to give the party the right of recovery against him. The words used go to show, that neither a protest which is mentioned in the first part of the section, nor a suit which is mentioned in the clause of which we are speaking, shall be a pretext or excuse for retaining the money.
Suppose the words in relation to a litigation had been omitted, and the law had said, that the collector should not retain the money for any ascertainment of duties, but that the Secretary of the Treasury in that case, as well as in the case of duties paid under protest, should adjust the claim and pay what was really due. The omission supposed would have strongly implied that, if there was litigation, he might retain, and it might be said with much show of reason, that by forbidding him to retain for unascertained duties, but not forbidding him to retain in case of litigation for duties paid under protest, implied that he could not retain for the former but might for the latter. We hold it not a logical mode of reasoning where the omission of words would evidently lead to a particular conclusion, to argue that their insertion can do the same thing. Besides, the litigation spoken of, and which is said to lead to this result, is a litigation for duties paid under protest, and not for overpayments of unascertained duties. If these words were intended to sanction suits against collectors for the former, why are litigations
for the latter not also countenanced? Independently of this statute, the collector might have been sued for overpayments on unascertained duties as well as for duties paid under protest. And it can hardly be reconciled with reason or consistency that Congress designed to preserve the right of suit in the one case, and to deny it in the other. Yet if these words have the force contended for by the defendant in error, they give the right of action against the collector for duties paid under protest only, leaving the party who has overpaid unascertained and estimated duties, no remedy but that of resorting to the Secretary of the Treasury.
It would be difficult to assign any good reason for such a diversity; we think none such was intended, that none such in reality exists, that the law intends merely to declare that if the protest is followed by a suit, the duties in that case as well as in the other, shall be paid into the Treasury and shall not remain in the hands of the collector to abide the result of the suit. The conclusion to which we have come upon this statute is greatly strengthened by the Act of Congress of May 31, 1844, ch. 31, which, in suits brought by the United States for the enforcement of the revenue laws or for the collection of duties due or alleged to be due on merchandise imported, authorizes a writ of error from this Court to the circuit courts without regard to the sum in controversy. The object of this law undoubtedly was to obtain uniformity of decision in regard to the duties imposed. Prior to the act of 1839, there were often differences of opinion in the circuits in the construction of the laws, and in instances too in which the amount in controversy was too small to enable either party to bring them here for revisal by writ of error. It can hardly then be imagined that when Congress was taking measures expressly to secure uniformity of decision and practice in relation to the amount of duties imposed by law, they would have confined the writ of error to cases brought by the United States, when they were of small amount, and refused it in suits against collectors in similar controversies if they supposed that such suits could still be maintained. Indeed it has heretofore been in this latter form that the amount of duties claimed has been far more frequently contested, than by suits brought by the United States. And if this form of trying the question had not been intended to be taken away by the act of 1839, there could have been no reason for excluding it from the act of 1844. For the purposes obviously designed by this law, it would have been much more important to the public to have allowed the writ of error in suits against collectors than in suits instituted by the United States, supposing suits of the former description to be still maintainable, and the omission of such a remedy strongly implies that the legislature supposed such suits could be no longer maintained.
It is contended, however, that the language and the purposes of Congress, if really what we hold them to be declared in the statute
of 1839, cannot be sustained, because they would be repugnant to the Constitution, inasmuch as they would debar the citizen of his right to resort to the courts of justice. The supremacy of the Constitution over all officers and authorities, both of the federal and state governments, and the sanctity of the rights guaranteed by it, none will question. These are concessa on all sides. The objection above referred to admits of the most satisfactory refutation. This may be found in the following positions, familiar in this and in most other governments, viz., that the government, as a general rule, claims an exemption from being sued in its own courts. That although, as being charged with the administration of the laws, it will resort to those courts as means of securing this great end, it will not permit itself to be impleaded therein, save in instances forming conceded and express exceptions. Secondly, in the doctrines so often ruled in this Court that the judicial power of the United States, although it has its origin in the Constitution, is (except in enumerated instances, applicable exclusively to this Court) dependent for its distribution and organization, and for the modes of its exercise, entirely upon the action of Congress, who possess the sole power of creating the tribunals (inferior to the supreme court) for the exercise of the judicial power, and of investing them with jurisdiction either limited, concurrent, or exclusive, and of withholding jurisdiction from them in the exact degrees and character which to Congress may seem proper for the public good. To deny this position would be to elevate the judicial over the legislative branch of the government, and to give to the former powers limited by its own discretion merely. It follows, then, that the courts created by statute must look to the statute as the warrant for their authority, certainly they cannot go beyond the statute, and assert an authority with which they may not be invested by it, or which may be clearly denied to them. This argument is in no wise impaired by admitting that the judicial power shall extend to all cases arising under the Constitution and laws of the United States. Perfectly consistent with such an admission is the truth, that the organization of the judicial power, the definition and distribution of the subjects of jurisdiction in the federal tribunals, and the modes of their action and authority, have been, and of right must be, the work of the legislature. The existence of the Judicial Act itself, with its several supplements, furnishes proof unanswerable on this point. The courts of the United States are all limited in their nature and Constitution, and have not the powers inherent in courts existing by prescription or by the common law.
In devising a system for imposing and collecting the public revenue, it was competent for Congress to designate the officer of the government in whom the rights of that government should be represented in any conflict which might arise, and to prescribe the manner of trial. It is not imagined, that by so doing Congress is justly chargeable with usurpation, or that the citizen is thereby deprived
of his rights. There is nothing arbitrary in such arrangements; they are general in their character; are the result of principles inherent in the government; are defined and promulgated as the public law. A more striking example of the powers exerted by the government, in relation to its fiscal concerns, than is seen in the act of 1839, is the power of distress and sale, authorized by the Act of Congress of May 15, 1820, 3 Story 1791, upon adjustments of accounts by the first comptroller of the Treasury. This very strong and summary proceeding has now been in practice for nearly a quarter of a century, without its regularity having been questioned, so far as is known to the court. The courts of the United States can take cognizance only of subjects assigned to them expressly or by necessary implication; a fortiori, they can take no cognizance of matters that by law are either denied to them or expressly referred ad aliud examen.
But whilst it has been deemed proper, in examining the question referred to by the circuit court, to clear it of embarrassments with which, from its supposed connection with the Constitution, it is thought to be environed, this Court feel satisfied that such embarrassments exist in imagination only and not in reality; that the case and the question now before them present no interference with the Constitution in anyone of its provisions, and may be, and should be disposed of upon the plainest principles of common right. In testing these propositions it is proper to recur to the case of Elliott and Swartwout, and again to bring to view the grounds on which that case was ruled. It was unquestionably decided upon principles which may be admitted in ordinary cases of agency, which expressly recognize the right -- nay, the duty -- of the agent to retain, and make his omission so to retain an ingredient in the gravamen or breach of duty, whence his liability and his promise are implied by the law. The language of the Court, 35 U. S. 10 Pet. 154, is this:
"There can be no hardship in requiring the party to give notice to the collector that he considers the duty claimed illegal, and put him on his guard by requiring him not to pay over the money. The collector would then be placed in a situation to claim an indemnity from the government. But if the party is entirely silent, and no intimation is given of an intention to seek repayment of the money, there can be no ground upon which the collector can retain the money, or call upon the government to indemnify him against a suit."
Here then the right and the duty of retainer are sanctioned in the officer; without them, the notice spoken of would be nugatory -- a vain act, which the law never requires. And this right and this duty in the officer, and this injunction of notice to him, must all be understood and are propounded in this decision as principles or precepts of the law, with the knowledge of which each of the parties must stand affected.
The action of assumpsit for money had and received, it is said by Ld. Mansfield, Burr. 1012, Moses v. Macfarlen, will lie in general whenever the defendant has received money which is the property
of the plaintiff, and which the defendant is obliged by the ties of natural justice and equity to refund. And by Buller, Justice, in Stratton v. Rastall, 2 T.R. 370,
"that this action has been of late years extended on the principle of its being considered like a bill in equity. And therefore, in order to recover money in this form of action the party must show that he has equity and conscience on his side, and could recover in a court of equity."
These are the general grounds of the action as given from high authority. There must be room for implication as between the parties to the action, and the recovery must be ex aequo et bono, or it can never be. If the action is to depend on the principles laid down by these judges, and especially by Buller, a case of hardship merely could scarcely be founded upon them; much less could one of injustice or oppression, nor even one which arose from irregularity or indiscretion in the plaintiff's own conduct. So far as the liability of agents in this form of action appears to have been considered, the general rule certainly is that the action should be brought against the principal and not against a known agent, who is discharged from liability to a bona fide payment over to his principal, unless anterior to making payment over he shall have had notice from the plaintiff of his right and of his intention to claim the money. The absence of notice will be an exculpation of the agent in every instance. And with regard to the effect of the notice in fixing liability upon the agent, that effect is dependent on the known powers of the agent and the character of his agency. If, for instance, the agent was known to be a mere carrier or vehicle to transfer to his employer the amount received, payment to the agent with such knowledge, although accompanied with a denial of the justice of the demand, would seem to exclude every idea of an agreement express or implied on the part of the agent to refund; and could furnish no ground for this action against the agent who should pay over the fund received to his principal. This doctrine is believed to be sanctioned by the cases of Greenaway v. Hurd, 4 T.R. 553, of Coles v. Wright, 4 Taunt. 198, and of Tope v. Hockin, 7 Barn. & Co. 101. 'Tis true that the case in Taunt. and that from Barn. & C. were not instances of payment under protest; but the case from 4 T.R. has this common feature with that before us, that it was an action against an excise officer for duties said to have been illegally collected, in which the plaintiff denied the legality of the demand, though he subsequently paid it. But all three of these cases concur in condemning the harshness of a rule which would subject an agent, who is mere channel of conveyance or delivery of the amount which might pass through his hands. Neither of these cases was affected by a positive statutory mandate requiring the agent to make payment over to his principal.
Another principle held to be fundamental to this action is this: that there must exist a privity between the plaintiff and defendant; something on which an obligation, an engagement, a promise from
the latter to the former can be implied; for if such implication be excluded from the relation between the parties by positive law, or by inevitable legal intendment, every foundation for the promise and of the action upon it is destroyed, for none can be presumed or permitted to promise what either law or reason does not warrant or may actually forbid. Thus, where bankers received bills from their foreign correspondents, with directions to pay the amount to the plaintiff, but on being applied to by him refused to do so, although they afterwards received the amount of these bills; it was held that an action for money had and received would not lie to recover it from them, there being no privity between them and the plaintiff. Lord Ellenborough observed, the defendants might hold for the benefit of the remitter, until by some engagement entered into by themselves with the persons who were the objects of the remittance, they had precluded themselves from so doing; but here, so far from there being such an engagement, they repudiated it altogether. Williams v. Everett, 14 East 582. Again, where J., an attorney, who was accustomed to receive dues for the plaintiff, went from home, leaving B., his clerk, at the office; B., in the absence of his master, received money on account of the above dues for the client, which he was authorized to do, and gave a receipt "B., for Mr. J." J. was in bad circumstances when he left home, and never returned. B. afterwards refused to pay the money to the client, and on an action for money had and received against him, it was held not to lie, for the defendant received the money as the agent of his master, and was accountable to him for it; the master, on the other hand, being answerable to the client for the money received by the clerk, there was no privity of contract between the present plaintiff and the defendant. Stevens v. Badcock, 3 Barn. & A. 354. So in the case of Sims v. Brittain, 4 id. 375. A., B., and others, were part owners of a ship in the service of the East India Company; B. was managing owner, and employed C. as his agent, and C. kept a separate account on his books with B. as such managing owner. In order to obtain payment of a sum of money from the East India Company on account of the ship, it was necessary that the receipt should be signed by one or more of the owners besides the managing owner, and upon a receipt being signed by B. and by another of the owners, C. received
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