1. Where notes purporting to be 7-30 Treasury notes, endorsed by
the holders thereof "to the order of the Secretary of the Treasury
for redemption," were purchased, before their maturity, under the
authority of the Act of Aug. 12, 1866, 14 Stat. 31, by an assistant
treasurer of the United States,
held that the payment by
him therefor did not, without the further order of the Secretary of
the Treasury, retire them. Until such order be given, or until it
ought to have been given, the government does not accept the notes
as genuine.
2. Where such notes, endorsed as aforesaid, and sold and
delivered at different times between Sept. 20 and Oct. 8 at the
office of the sub-Treasury of the United States in New York, were
returned Oct. 12 by the Treasury Department, as spurious, to the
assistant treasurer in that city, who had purchased or redeemed
them with the money of the United States, and due notice was given
the following day to the party from whom he had received them,
held that there was no such delay in returning the notes
as would preclude the United States from recovering the money paid
therefor.
3. The ruling of the district judge that though the notes may be
printed in the department from the genuine plates, and may be all
ready to issue, yet if they are not in fact issued by an officer
thereunto authorized, they do not come within the statute of Aug.
12, 1866, and the United States are not bound to redeem them,
held to be error.
The case was as follows:
On the 3d of March, 1865, Congress authorized the Secretary of
the Treasury to borrow, on the credit of the United States, not
exceeding six hundred millions of dollars, and to issue therefor
bonds or Treasury notes of the United States, bearing interest not
exceeding seven and three-tenths percentum per
Page 91 U. S. 390
annum, payable semiannually. 13 Stat. 468. Such notes were not
made a legal tender. Under this act, Treasury notes to a large
amount were issued by the Secretary of the Treasury, payable three
years after date.
On the 12th of August, 1866, Congress, by another act,
authorized the Secretary of the Treasury, at his discretion, to
receive any Treasury notes or other obligations issued under any
act of Congress, whether bearing interest or not, in exchange for
any description of bonds authorized by the previous act of March 3,
1865, and also to dispose of any description of bonds authorized by
such previous act . . . for lawful money of the United States, or
for any Treasury notes . . . which had been, or which might be,
issued under any act of Congress, the proceeds thereof to be used
only for retiring Treasury notes or other obligations issued under
any act of Congress; but nothing therein contained to be construed
to authorize any increase of the public debt. 14 Stat. 31.
On each of several days, from and including Sept. 20 and Oct. 8,
1867, the defendants below (the plaintiffs in error) presented
large amounts of Treasury notes purporting to be issued under the
Act of 1865, dated June 15, 1865, and payable three years after
date to the Assistant Treasurer of the United States at the City of
New York, who purchased the amount and description of notes at the
prices and premium mentioned in bills of sale made by the
plaintiffs in error, and paid them therefor with the money of the
United States. Such bills of sale were in the following form:
"Sold Hon. H. H. Van Dyck, of the United States, No. 700, by Jay
Cooke & Co., corner of Wall and Nassau Streets, Sept. 20:"
$400,000, June 7 3/10, 107 . . . . . . . . . . $428,000
97 days. . . . . . . . 7,760
$100,000, July " 107 . . . . . . . . . . 107,000
67 days. . . . . . . . 1,340
--------
$544,100
Before the delivery of the notes, the plaintiffs in error, by a
stamp, which, for their convenience, they were permitted to employ
in lieu of their written signature, printed on the back
Page 91 U. S. 391
of each the words, "Pay to the Secretary of the Treasury for
redemption -- Jay Cooke & Co."
The notes were forwarded to the Secretary of the Treasury at
Washington, and on examination there, eighteen thereof, of one
thousand dollars each, were pronounced not to be genuine Treasury
notes issued by the government of the United States, and were
thereupon returned to the assistant treasurer at New York, who, on
the 13th of October, 1867, duly notified the plaintiffs in error,
and required them to refund the money paid for the counterfeit
notes, or substitute other notes for them. On the refusal of the
plaintiffs in error to comply with this requirement, this suit was
brought.
The declaration contained special counts describing the cause of
action as an indebtedness by the defendants to the plaintiff for
money had and received by the defendants to and for the use of the
United States, and of their property, which money was obtained by
the defendants upon occasion of their delivering to the plaintiff
what purported to be obligations of the United States known as
seven-thirty Treasury notes, which were by the defendants, when
they delivered them to the officer of the sub-Treasury, professed
to be, and by the plaintiffs and their officer aforesaid were then
supposed to be, valid, genuine notes; and by the defendants'
representations and inducements the same were received as valid,
genuine notes by the plaintiffs and their officer aforesaid at the
sub-Treasury of the United States aforesaid, at the City of New
York.
That the said notes were in fact counterfeit, and had never been
executed or issued by the United States, but had been forged and
falsely made and uttered, and were no obligations of the United
States, and were by their officers aforesaid received as aforesaid
under the belief created by the representations and inducements
aforesaid that the notes were good, and formed an adequate
consideration for the money received by the defendants, which money
was retained by them from the plaintiffs after discovery that the
said notes were counterfeit, whereof prompt notice was given to the
defendants, that, being so indebted, the defendants promised
&c. There were also other counts in general
indebitatus
assumpsit for money had and received.
Page 91 U. S. 392
The defendants pleaded
non-assumpsit.
Upon the trial, exceptions were taken by the defendants to the
ruling of the district judge in the admission and exclusion of
evidence, and also to certain portions of his charge to the
jury.
A verdict was rendered in the district court in favor of the
United States for the amount paid to the defendants, with interest
thereon -- $23,630.88.
The judgment of the district court was affirmed by the circuit
court: whereupon the defendants below sued out this writ of
error.
The alleged errors on here were as follows:
First, that the district court erred in refusing to
charge the jury in accordance with the prayer of the defendants
below.
1. If the defendants honestly believed the notes in question to
be genuine obligations issued by the United States, and, so
believing, passed them in good faith to Mr. Van Dyck, the Assistant
Treasurer of the United States, and the latter, under the like
belief and in good faith, received the notes and paid for them, the
plaintiffs are not entitled to recover, although the notes may not
have been genuine obligations issued by the United States.
2. That in determining whether the eighteen notes in question
are genuine obligations, the jury are entitled to take into
consideration the fact that said notes were supposed to be genuine
by the assistant treasurer in New York, and passed through his
hands and the hands of other officials connected with the Treasury
Department.
3. That the burden of proving that the eighteen notes in
question, "C 1" to "C 18," are not genuine obligations of the
United States, rests upon the plaintiffs, and if the evidence be
insufficient to establish the fact that such notes are not genuine
obligations as aforesaid, the defendants are entitled to a
verdict.
Second, that the court erred in ruling, during the
progress of the trial and in the charge, that defendants below were
not entitled to a verdict unless the notes in question were
actually issued under an act of Congress, and that the Act of
issuing such notes was a physical act; and that although the notes
were printed in the department from the genuine plates, and
might
Page 91 U. S. 393
be all ready to issue, still, if they were not in fact so
issued, the defendants below were not entitled to a verdict.
Third, that the court erred in admitting in evidence
the "K" notes which were claimed by the government to be genuine,
and in admitting in evidence the coupons alleged to have been
attached to said notes, and to have been paid by the United
States.
Fourth, the court erred in admitting the following
evidence on the part of the United States:
Questions to Casilear. George W. Casilear,
Superintendent of Engraving and Transferring in the Treasury
Department, proved that the work on the genuine "7-30" notes was
made up under his supervision, and that the plates were engraved in
the Treasury building under his superintendence, and that he did
some of the engraving of the plates, and he pointed out the
particular portions of his work, but the plates were not
produced.
He was asked these questions:
"1. Q. From your observation of these notes, and your knowledge
of the genuine plates, were these notes, 'C 1' to 'C 18,' printed
from those plates?"
Question objected to. Objection overruled.
"2. Q. Were those eighteen notes, 'C 1' to 'C 18,' printed or
not from any plate referred to by you as having been got up by you
under your supervision in the Treasury Department, from which 7-30
notes of the second series used by the government were printed, so
far as you know?"
Same objection. Overruled.
"A. They were not."
Questions to Cooper. David M. Cooper, a witness for the
plaintiffs, testified that he engraved the original die from which
the seals used on the alleged genuine notes were produced by what
is termed the transfer process, and was asked these questions:
"3. Q. Could that die, which you engraved, have produced that
seal on the counterfeit?"
Objected to. Objection overruled.
"A. It could not. "
Page 91 U. S. 394
"4. Q. Did you ever know of a note, like those marked 'C,' to be
printed from the plate from which the notes marked 'K' were
taken?"
An exception was taken to this question, which was overruled,
and the witness answered in the negative.
Fifth, That the court erred in overruling and excluding the
following questions put by the defendants below:
Question to Holmes. Plaintiffs below read from the
letter book of Jay Cooke & Co. twelve letters, copies of all of
which, except one which was illegible, are inserted among the
exhibits at the end of the case, which letters were received as
admissions by Jay Cooke & Co. that these identical notes had
been transferred by them to the assistant treasurer.
The defendants thereupon offered to prove, by Philip W. Holmes,
that he wrote or drafted and sent all these letters, acting on the
information derived from the sub-treasurer that the statement in
reference to the notes being counterfeit was correct, and without
knowing about the identity of them. This was objected to and the
objection sustained.
The eighteen notes claimed to be counterfeit were introduced in
evidence by the United States and marked "C 1" to "C 18."
Questions to Ryerson. U. C. Ryerson, called as a
witness by defendants below, testified that he was in the transfer
department of the "National Note Bureau," of which S. M. Clark was
at the head for three years, from February, 1863, to 1866.
The witness was asked:
"Q. Do you discover any discrepancies or differences between
these two notes, which, in your experience, may not have been
caused by a defect in the transfer?"
The question was overruled.
"Q. Look at these two notes, 'C' and 'K.' Can you state from
your experience in the department, and from your knowledge of the
plates there used to print the second series of seven-thirty notes,
whether or not these two classes of notes -- 'C' and 'K' -- were
printed from the same plate in different conditions, occasioned by
a reentry?"
Question excluded by the court.
Page 91 U. S. 395
Questions to Tichener, witness for defendants. He
testified that he was a geometrical lathe operator, and familiar
with other branches of engraving.
"Q. Does it not sometimes occur, that, in the process of
burnishing a roll, a portion of the work on the roll becomes
obliterated and erased, or in other respects changed?"
"Q. Can you, after an examination of these specimen notes 'C'
(the notes alleged to be counterfeit) and 'K' (valid notes), and,
if so, state whether they were printed from the same plate in
different conditions, caused by reentering?"
Questions excluded by the court.
Page 91 U. S. 396
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
The United States sued Jay Cooke & Co., in this action, to
recover back money paid them by the assistant treasurer in New York
for the purchase or redemption before maturity, under the Act of
Aug. 12, 1866, 14 Stat. 31, of what purported to be eighteen 7-30
Treasury notes, issued under the authority of the Act of March 3,
1865, 13 Stat. 468, but which it is alleged were counterfeit. Cooke
& Co. insist that if they honestly believed the notes in
question were genuine, and, so believing, in good faith passed them
to the assistant treasurer, and he, under a like belief, and with
like good faith, received and paid for them, there can be no
recovery, even though they may have been counterfeit.
As this defense meets us at the threshold of the case, it is
proper that it should be first considered.
It was conceded in the argument that when the United States
become parties to commercial paper, they incur all the
responsibilities of private persons under the same circumstances.
This is in accordance with the decisions of this Court.
The Floyd
Acceptances, 7 Wall. 557;
United
States v. Bank of Metropolis, 15 Pet. 377. As was
well said in the last case,
"From the daily and unavoidable use of commercial paper by the
United States, they are as much interested as the community at
large can be in maintaining these principles."
It was also conceded that genuine Treasury notes, like those now
in question, were, before their maturity, part of the negotiable
commercial paper of the country. We so held at the last term in
Vermilye & Co. v. Express
Co., 21 Wall. 138.
It is undoubtedly also true as a general rule of commercial law
that where one accepts forged paper purporting to be his own and
pays it to a holder for value, he cannot recall the payment. The
operative fact in this rule is the acceptance, or more properly
perhaps the adoption, of the paper as genuine by its apparent
maker. Often the bare receipt of the paper accompanies by payment
is equivalent to an adoption within
Page 91 U. S. 397
the meaning of the rule, because, as every man is presumed to
know his own signature and ought to detect its forgery by simple
inspection, the examination which he can give when the demand upon
him is made is all that the law considers necessary for his
protection. He must repudiate as soon as he ought to have
discovered the forgery; otherwise he will be regarded as accepting
the paper. Unnecessary delay under such circumstances is
unreasonable; and unreasonable delay is negligence which throws the
burden of the loss upon him who is guilty of it, rather than upon
one who is not. The rule is thus well stated in
Gloucester Bank
v. Salem Bank, 17 Mass. 45:
"The party receiving such notes must examine them as soon as he
has opportunity, and return them immediately; if he does not, he is
negligent, and negligence will defeat his action."
When, therefore, a party is entitled to something more than a
mere inspection of the paper before he can be required to pass
finally upon its character -- as for example an examination of
accounts or records kept by him for the purposes of verification --
negligence sufficient to charge him with a loss cannot be claimed
until this examination ought to have been completed. If, in the
ordinary course of business, this might have been done before
payment, it ought to have been, and payment without it will have
the effect of an acceptance and adoption. But if the presentation
is made at a time when or at a place where such an examination
cannot be had, time must be allowed for that purpose, and if the
money is then paid, the parties, the one in paying and the other in
receiving payment, are to be understood as agreeing that a receipt
and payment under such circumstances shall not amount to an
adoption, but that further inquiry may be made and, if the paper is
found to be counterfeit, it may be returned within a reasonable
time. What is reasonable must in every case depend upon
circumstances, but until a reasonable time has in fact elapsed, the
law will not impute negligence on account of delay.
So too if the paper is received and paid for by an agent, the
principal is not charged unless the agent had authority to act for
him in passing upon the character of the instrument. It is the
negligence of the principal that binds, and that of the agent has
no effect except to the extent that it is chargeable to the
principal.
Page 91 U. S. 398
Laches is not imputable to the government, in its character as
sovereign, by those subject to its dominion.
United
States v. Kilpatrick, 9 Wheat. 735;
Gibbons v. United
States, 8 Wall. 269. Still a government may suffer
loss through the negligence of its officers. If it comes down from
its position of sovereignty, and enters the domain of commerce, it
submits itself to the same laws that govern individuals there.
Thus, if it becomes the holder of a bill of exchange, it must use
the same diligence to charge the drawers and endorsers that is
required of individuals, and if it fails in this, its claim upon
the parties is lost.
United States v.
Barker, 12 Wheat. 559. Generally, in respect to all
the commercial business of the government, if an officer specially
charged with the performance of any duty and authorized to
represent the government in that behalf, neglects that duty and
loss ensues, the government must bear the consequences of his
neglect. But this cannot happen until the officer specially charged
with the duty, if there be one, has acted or ought to have acted.
As the government can only act through its officers, it may select
for its work whomsoever it will, but it must have some
representative authorized to act in all the emergencies of its
commercial transactions. If it fail in this, it fails in the
performance of its own duties and must be charged with the
consequences that follow such omissions in the commercial
world.
Such being the principles of law applicable to this part of the
case, we now proceed to examine the facts.
The Department of the Treasury is by law located at the seat of
government as one of the executive departments, and the Secretary
of the Treasury is its official head. Rev.Stat., sec. 233; 1 Stat.
65. All claims and demands against the government are to be settled
and adjusted in this department, Rev.Stat., sec. 236; 3 Stat. 366,
and the Treasurer of the United States is one of its officers.
Rev.Stat., sec. 301; 1 Stat. 65. His duty is to receive and keep
the money of the United States and disburse it upon warrants drawn
by the Secretary of the Treasury, countersigned by either
comptroller, and recorded by the register, and not otherwise.
Rev.Stat., sec. 305; 1 Stat. 65. The rooms provided in the Treasury
building at the seat of government for the use of the treasurer are
by law the
Page 91 U. S. 399
Treasury of the United States. Rev.Stat., sec. 3591; 9 Stat. 59.
Assistant treasurers are authorized and have been appointed to
serve at New York and other cities. Rev.Stat., sec. 3595; 9 Stat.
60. The rooms assigned by law to be occupied by them are
appropriated to their use and for the safekeeping of the public
money deposited with them. Rev.Stat., sec. 3598; 9 Stat. 59. The
assistant treasurers are to have the charge and care of the rooms
&c., assigned to them, and to perform the duties required of
them relating to the receipt, safekeeping, and disbursement of the
public money. Rev.Stat., sec. 3599; 9 Stat. 59. All collectors and
receivers of public money of every description within the City of
New York and required, as often as may be directed by the Secretary
of the Treasury, to pay over to the assistant treasurer in that
city all public money collected by them or in their hands.
Rev.Stat., sec. 3615; 9 Stat. 61. The Treasurer of the United
States, and all assistant treasurers, are required to keep all
public money placed in their possession till the same is ordered by
the proper department or officer of the government to be
transferred or paid out, and when such orders are received,
faithfully and promptly to comply with the same, and to perform all
other duties as fiscal agents of the government that may be imposed
by any law or by any regulation of the Treasury Department made in
conformity to law. Rev.Stat., sec. 3639; 9 Stat. 60. All money paid
into the Treasury of the United States is subject to the draft of
the treasurer, and, for the purpose of payment on the public
account, the treasurer is authorized to draw on any of the
depositaries as he may think most conducive to the public interest
and the convenience of the public creditors. Rev.Stat., sec. 3644;
9 Stat. 61.
Thus it is seen that all claims against the United States are to
be settled and adjusted "in the Treasury Department," and that is
located "at the seat of government." The assistant treasurer in New
York is a custodian of the public money, which he may pay out or
transfer upon the order of the proper department or officer; but he
has no authority to settle and adjust -- that is to say, to
determine upon the validity of -- any claim against the government.
He can pay only after the adjustment has been made "in the Treasury
Department,"
Page 91 U. S. 400
and then upon drafts drawn for that purpose by the
treasurer.
By the Act of April 12, 1866, the Secretary of the Treasury was
authorized, at his discretion, to receive the Treasury notes issued
under any act of Congress in exchange for certain bonds; or he
might sell the bonds and use the proceeds to retire the notes. 14
Stat. 31. This exchange or retirement of the notes involved an
adjustment of the claims made on their account against the
government. That adjustment, as has been seen, could only be had in
the Treasury Department, and the government cannot be bound by any
payment made without it, through one of the assistant treasurers,
until a sufficient time has elapsed in the regular course of
business for the transmission of the notes to the department and an
examination and verification there.
That such was the expectation Congress is apparent from the
legislation authorizing the issue of such notes. On the 23d
December, 1857, an act was passed "to authorize the issue of
Treasury notes." 11 Stat. 257. The payment or redemption of these
notes was to be made to the lawful holders upon presentment at the
Treasury. Sec. 2. The notes were to be prepared under the direction
of the Secretary of the Treasury, and to be signed in behalf of the
United States by the treasurer thereof, and countersigned by the
Register of the Treasury. Each of these officers was to keep, in
books provided for that purpose, accurate accounts showing the
number, date, amount &c., of each note signed or countersigned
by himself, and also showing the notes received and cancelled.
These accounts were to be carefully preserved in the Treasury. Sec.
3. The notes were made receivable for public dues. Sec. 6. The
officer receiving the same was required to take from the holder a
receipt upon the back of each note, stating distinctly the date of
payment and amount allowed. He was also required to make regular
and specific entries of all notes received by him, showing the
person from whom he received each note, the number and date
thereof, and the amount of principal and interest allowed thereon.
These entries were to be delivered to the treasurer with the notes,
and, if found correct, he was to receive credit for the amount
allowed. Sec. 7. To promote the public
Page 91 U. S. 401
convenience and security, and protect the United States as well
as individuals from fraud and loss, the Secretary of the Treasury
was authorized to make and issue such instructions as he should
deem best to the officers required to receive the notes in behalf
of, and as agents in any capacity for, the United States, as to the
custody, disposal, cancelling, and return of the notes received,
and as to the accounts and returns to be made to the Treasury
Department of such receipts. Sec. 8. The Secretary of the Treasury
was directed to cause such notes to be paid when they fell due, and
he was authorized to purchase them at par for the amount of the
principal and interest due at the time of the purchase. Sec. 9.
The Act of July 17, 1861, "to authorize a national loan, and for
other purposes," provided for an issue of 7-30 Treasury notes, and
in terms reenacted all the provisions of the Act of Dec. 23, 1857,
so far as the same were applicable and not inconsistent with what
was then enacted. 12 Stat. 259, secs. 1 and 10.
The Acts of June 30, 1864, 13 Stat. 218, and March 3, 1865, 13
Stat. 468, which authorized further issues of the same class of
notes, did not in terms reenact the provisions of the acts of 1857
and 1861, but they did authorize and require the Secretary of the
Treasury to make and issue such instructions to the officers who
might receive the notes in behalf of the United States as he should
deem best calculated "to promote the public convenience and
security, and to protect the United States as well as individuals
from fraud and loss." 13 Stat. 221, sec. 8.
These are public laws of which all must take notice. In the
absence of any evidence showing regulation permitting an exchange
or redemption of notes at any other place than the Treasury, and
after settlement and adjustment in the department, it will not be
presumed that one was made. The notes in question are not made
payable at any particular place; consequently they are in law
payable at the Treasury, and this is at the seat of government and
in the Treasury Department. In this department the Secretary
represents the government. His acts and his omissions, within the
line of his official duties, are the acts or omissions of the
government itself, and in all commercial
Page 91 U. S. 402
transactions his official negligence will be deemed to be the
negligence of the government. He is specially charged with the duty
of retiring these Treasury notes by exchange, payment, or purchase,
and he is the only agent authorized to act for the government in
that behalf. All who deal with the government in respect to these
notes are presumed to know his exclusive authority, for it is
public law. Until such time, therefore, as he has acted or in due
course of business ought to have acted, there can have been no such
laches as will charge the government. He is presumed to act
officially only in his department. His attention can only be
demanded after the presentation of the notes at that place. It was
there that the accounts and records of the issues and redemptions
under the early laws were by statute required to be kept; and that
is the appropriate place for keeping such similar records as the
Secretary of the Treasury may by regulation prescribe, under the
later laws, to protect against fraud and loss.
Such seems to have been the understanding of the parties in the
transaction which is now consideration. The notes were "sold" to
the assistant treasurer, and were, by stamp upon their back at the
appropriate place for their endorsement, made payable "to the order
of the Secretary of the Treasury, for redemption." The payment by
the assistant treasurer under such circumstances, for the purchase,
did not "retire" the notes. That upon the face of the transaction
required the further order of the Secretary of the Treasury.
Undoubtedly it was expected that in due course of business, that
order would be given, but until given, or at least until it ought
to have been given, it cannot be said that the government has
accepted the notes and adopted them as genuine.
Neither has there been such delay in returning the notes to
Cooke & Co., after their receipt by the assistant treasurer, as
will throw the burden of the loss upon the government. The return
should have been made within a reasonable time, and what is a
reasonable time is always a question for the courts when the facts
are not disputed.
Wiggins v.
Burkham, 10 Wall. 133. Here there is no dispute.
The notes were delivered to the assistant treasurer on different
days between Sept. 20 and Oct. 8. The first suspicion in Washington
in regard to their
Page 91 U. S. 403
character was Oct. 5, when a note was found, of which, upon
inspection of the record, a duplicate was already in. All the notes
were found and returned to New York Oct. 12, and the next day Cooke
& Co. were notified.
The amount of 7-30 notes issued by the government was many
hundreds of millions of dollars. Necessarily, the accounts and
records of their issue and redemption were voluminous. Between
Sept. 20 and Oct. 8, Cooke & Co. themselves sold to the
assistant treasurer for redemption more than $7,500,000. Other
parties were at the same time making sales to large amounts. Time
must be given for careful examination and scrutiny, and we do not
think that under all the circumstances, any unreasonable delay
occurred either in their transmission to or return from the
Treasury Department.
We are all clearly of the opinion therefore, that if the notes
were in fact counterfeit, their receipt by the assistant treasurer
and his payment therefor did not preclude the United States from
receiving back the money paid. So far, there was no error in the
courts below.
It was however contended by Cooke & Co. that if the notes
were not counterfeit, but genuine notes unlawfully and
surreptitiously put in circulation, the government was bound for
their payment to a
bona-fide holder, and consequently that
there could be no recovery. We quite agree with the lamented judge
of the circuit court who had this case before him upon error to the
district court that the evidence tending to show a fraudulent or
surreptitious issue of notes printed from the genuine plates was
exceedingly meager, and by no means sufficient to warrant a verdict
to that effect; but the jury was not permitted to pass upon that
question, as the district judge charged
"that if the notes were printed in the department, and all ready
for issue, yet if they were not in fact issued, the United States
could recover. The issue to bind the government,"
said the judge, "must be a physical act of an authorized
officer."
It was conceded on behalf of the government in the argument here
that if the notes had been due when they were received and paid,
this part of the charge could not be sustained. We need not,
therefore, examine that question. The
Page 91 U. S. 404
notes were perfect and complete as soon as printed. They did not
require the signature of any officer. As soon as they had received
the impression of all the plates and dies necessary to perfect
their form, they were ready for circulation and use. In this
respect they did not differ from the coins of the mint when fully
stamped and prepared for issue. Coin is the money of commerce, and
circulates from hand to hand as such. These notes represent the
promises of the government to pay money, and were intended to
circulate and take the place of money, to some extent, for
commercial purposes. Although not made legal tender as between
individuals, they were, for their then face value, exclusive of
interest, as between the government and its creditors. 13 Stat.
221, sec. 8. They were issued under the authority of "an act to
provide ways and means for the support of the government" (13 Stat.
218, title) in its great peril, and they bore the "imprint of the
seal of the Treasury Department as further evidence of lawful
issue."
Id., 220, sec. 6. Their aggregate amount was very
large, and they were of all convenient denominations, not less than
ten dollars.
Id., 218, sec. 2. The people were appealed
to, through their patriotism, to accept and give them circulation.
They entered largely, and at once, into the commerce of the country
and passed readily from hand to hand as or in lieu of money. After
the close of the war they became, in a sense, too valuable for
circulation, and were on that account to a large extent withdrawn
and held for investment.
But it is insisted on the part of the government that as the Act
of April 12, 1866, only authorized the Secretary of the Treasury to
retire, before their maturity, notes "issued" under the authority
of some act of Congress, he could only take up such as were
actually put out by the "physical act" of some authorized officer
of the government in pursuance of law. This, we think, is too
narrow a construction of the act. At the time it was passed, the
war of the rebellion was over. In the prosecution of this war an
immense debt had been contracted. To meet the pressing demands upon
the credit of the government, various forms of securities had been
put forth, some of which, like those now under consideration, would
mature at an early date, and sooner, perhaps, than they could be
met without
Page 91 U. S. 405
the negotiation of new loans. In view of this possible
contingency, Congress seems to have been desirous of meeting its
obligations of this class whenever they could be exchanged for or
retired with the proceeds of the sale of certain specified bonds
having a longer time to run. The object evidently was to get rid of
this species of debt, and we think the act may be fairly construed
to authorize the retirement of all notes of this class outstanding
which the government would be required to meet at maturity.
This leads to a reversal of the judgment. There have been other
errors assigned upon the rulings made in the progress of the trial
as to the admission of evidence. These need not be specially
alluded to. It is sufficient to say that we think there is no error
here. The same may be said as to the ruling of the court upon the
punching or cancellation of the notes. If they were counterfeit,
the cancellation could do no harm, for they were worthless before.
If they were genuine, they had already been cancelled by the
payment.
The judgment of the circuit court is reversed and the cause
remanded with instructions to reverse the judgment of the district
court and to award a venire de novo.
MR. JUSTICE MILLER did not sit on the argument of this cause,
and took no part in the decision.
MR. JUSTICE CLIFFORD, with whom concurred MR. JUSTICE FIELD and
MR. JUSTICE BRADLEY, dissenting.
I dissent from the opinion of the court in this case:
1. Because I am of the opinion that the United States are not
liable for forged paper under any circumstances.
2. Because I am of the opinion that the United States are not
liable for its paper promises fraudulently or surreptitiously put
into circulation, not even if the fraudulent act was perpetrated by
Treasury officials.
