1. Section 181 of the Act of June 30, 1864, c. 173, entitled "An
Act to provide internal revenue to support the government, to pay
interest on the public debt, and for other purposes," does not
require that when, pursuant to its provisions, adhesive and other
stamps are furnished to the manufacturer on credit, the bond to
secure the payment therefor shall be executed to the Treasurer of
the United States.
2. Even if taken without the authority of a statute, a bond
payable to the United States, with a condition that the
manufacturer shall pay such sums as he shall owe the United States
for adhesive stamps, would be binding at common law, and an action
might be maintained thereon.
3. Under such a bond, any competent evidence to establish the
manufacturer's indebtedness for stamps is admissible, whether they
were from time to time furnished by the Commissioner of Internal
Revenue or the Assistant Treasurer of the United States.
This was an action at law, brought by the United States in the
Circuit Court for the District of California against William H.
Jessup as principal, and Jabez Howes and others, sureties on his
bond, dated Nov. 3, 1869, payable to the United States, in the sum
of $10,000 and conditioned as follows:
"The condition of the foregoing obligation is such that whereas
the said William Henry Jessup is a manufacturer of friction or
other matches, cigar lights, or wax tapers, and whereas, under the
provisions of the 161st section of an act entitled 'An act to
provide
Page 106 U. S. 148
internal revenue to support the government, to pay interest on
the public debt, and for other purposes,' approved June 30, 1864,
the Commissioner of Internal Revenue is authorized, from time to
time, to furnish, supply, and deliver to any manufacturer of
friction or other matches, cigar lights, or wax tapers a suitable
quantity of adhesive or other stamps, such as may be prescribed for
use in such cases, without prepayment therefor, on a credit not
exceeding sixty days, requiring in advance such security as he may
judge necessary to secure payment therefor to the Treasury of the
United States within the time prescribed for such payment, and
whereas adhesive stamps have been delivered, or hereafter may be
delivered, to said William Henry Jessup by virtue of said
authority, now therefore if the said William Henry Jessup shall
make a faithful return whenever so required of the moneys received
by him for such adhesive stamps as have been or may hereafter be
delivered to him, and of all quantities or amounts thereof
undisposed of, whenever required so to do, and shall do and perform
all other acts of him required to be done in the premises according
to law and regulations, shall well and truly pay or cause to be
paid to the Treasurer of the United States for the use of the
United States all and every such sum or sums of money as the said
William Henry Jessup may owe to the United States for adhesive
stamps which have been or shall be delivered to him, or which have
been or shall be forwarded to him, according to his request or
order, within the time prescribed for payment for the same
according to law, and shall and will pay or cause to be paid to the
said treasurer, for the use aforesaid, each and every sum of money
as shall become due or payable to the United States at the time and
on the days each sum shall respectively become due or payable, then
the above obligation to be void and of no effect; otherwise to be
and remain in full force and virtue."
Section 161 of the Act of June 30, 1864, c. 173, entitled "An
act to provide internal revenue to support the government, to pay
interest on the public debt, and for other purposes," provides as
follows:
"That the Commissioner of Internal Revenue may from time to time
furnish, supply, and deliver to any manufacturer of friction or
other matches, cigar lights, or wax tapers a suitable quantity of
adhesive or other stamps, such as may be prescribed for use in such
cases, without prepayment therefor, on a credit not exceeding sixty
days, requiring in advance such security as he may judge necessary
to secure payment
Page 106 U. S. 149
therefor to the Treasurer of the United States within the time
prescribed for such payment. And upon all bonds or other securities
taken by said commissioner under the provisions of this act suits
may be maintained by said treasurer in the circuit or district
court of the United States in the several districts where any
persons giving said bonds or other securities reside or may be
found, in any appropriate form of action."
While these provisions of the law were in force, Jessup, a
manufacturer of friction matches in San Francisco, California,
desiring to avail himself of the privilege of obtaining internal
revenue stamps on a credit of sixty days, gave to the United States
the bond in suit.
The declaration assigned for breach of the bond that Jessup had
received from the United States adhesive stamps amounting to the
sum of $8,000, which he had neither accounted for nor paid.
The defendants answered, admitting the execution of the bond but
denying generally the other averments of the complaint and averring
performance, and set up by way of separate answer and defense that
under the law and regulations and the condition of the bond
mentioned in the complaint, all stamps of whatsoever kind or
denomination delivered to Jessup were to be so delivered to him
upon a credit not exceeding sixty days; that after the delivery and
execution of said bond and before the pretended liability mentioned
in said complaint had accrued, to wit, on the 18th day of April,
A.D. 1870, the said United States, or some of its officers, made a
new contract with the said Jessup, without the knowledge or consent
of the defendants Jabez Howes, Robert Henry Elam, and Edward
Kallerain Howes (the sureties on said bond), or either of them,
whereby the credits for stamps supplied and delivered to Jessup
were extended indefinitely and beyond said term of sixty days. The
answer further avers that if Jessup has become indebted to the
United States for stamps furnished, supplied, or delivered to him,
such indebtedness had accrued since the making of and under said
new contract and not otherwise.
The parties waived a jury and submitted the cause to the court
upon the issues of fact as well as of law. The court found all the
issues of fact for the United States and rendered judgment in their
favor for the sum of $7,272, with interest.
To reverse that judgment this writ of error is brought.
Page 106 U. S. 150
MR. JUSTICE WOODS, after stating the case, delivered the opinion
of the Court.
The answer of the defendants admits the execution of the bond
which is the basis of the suit. The finding by the court below in
favor of the United States of all the issues of fact raised by the
pleadings establishes beyond the reach of controversy that Jessup
did not perform the condition of his bond; that he did not pay to
the United States the sum due for revenue stamps advanced to him,
and that the United States, or some of its officers, did not make a
new contract with him, without the knowledge or consent of his
sureties, whereby credits for stamps furnished him were extended
indefinitely and beyond the said term of sixty days. The findings
of the court also show that Jessup was indebted to the United
States for stamps received by him, the payment of which was secured
by his bond, in the sum for which judgment was rendered against his
sureties.
The findings have eliminated from the case some of the questions
discussed by the counsel for plaintiffs in error. The facts found
by the circuit court are not open to review in this Court, and we
can only consider questions of law arising upon the trial and duly
presented by bill of exceptions or errors of law apparent on the
face of the pleadings.
Insurance Company v.
Folsom, 18 Wall. 237;
Cooper v.
Omohundro, 19 Wall. 65.
These questions we shall now consider. It appears from the bill
of exceptions that counsel for defendants moved to dismiss the
action on the ground that the bond in suit was given to the United
States, and not to the Treasurer of the United States, as provided
by sec. 161 of the Act of June 30, 1864, c. 173, as amended.
The first of these grounds is based on the assumption that the
section referred to requires the bond to be given to the Treasurer
of the United States, and not the United States, and as the bond in
suit is payable to the United States, that it
Page 106 U. S. 151
is absolutely void, the contention of the plaintiff in error
being that the United States cannot take a valid bond except when
and in the terms directed by the statute. But the bond is not
required to be made payable to the treasurer. It may be payable
directly to the United States, and conditioned that payment for
stamps advanced shall be made to the treasurer and not depart from
any express provision of the law.
But conceding the section to mean that the bond shall be payable
to the Treasurer, still we are of opinion that a bond in which the
United States is the obligee, and which is conditioned that payment
for stamps advanced shall be made to the treasurer, is a valid and
binding obligation.
In
United States v.
Tingey, 5 Pet. 115, the question was made how far a
bond voluntarily given to the United States and not prescribed by
law is a valid instrument, and binding upon the parties -- in other
words, whether the United States have in their political capacity a
right to enter into a contract or to take a bond in cases not
previously provided for by some law. And the Court declared:
"Upon full consideration of this subject, we are of opinion that
the United States have such a capacity to enter into contracts. It
is, in our opinion, an incident to the general right of
sovereignty, and the United States, being a body politic may,
within the sphere of the constitutional powers embodied in it,
enter into contracts not prohibited by law and appropriate to the
just exercise of these powers."
To the same effect is
United States v.
Bradley, 10 Pet. 343.
In
United States v.
Hodson, 10 Pet. 395, is was held in substance that
when a distiller's bond was given under sec. 53 of the act now in
question, which required the bond to be conditioned for the
performance of several particular acts which it specifically
stated, and the agent of the government took the bond conditioned
not in the specific way directed by the statute, but for the
parties' compliance with all the provisions of the act and such
other acts as were then or might thereafter be in that behalf
enacted, the bond was binding on the parties.
United States v.
Linn, 10 Wall. 395, was an action against a
receiver of public moneys and his sureties. The statute required
the receiver to give bond for the faithful discharge of his
trust.
Page 106 U. S. 152
The instrument given and sued on was without seal, and therefore
not the security required by the statute. The Court nevertheless
held it to be a valid and binding obligation.
These authorities show that the United States can, without the
authority of any statute, make a valid contract, and that when the
form of a contract is prescribed by the statute, a departure from
its directions will not render the contract invalid. The bond is a
good bond at common law. The circuit court was therefore right in
overruling the motion of the defendants to dismiss the suit on the
ground that the bond was given to the United States, and not to the
Treasurer of the United States.
This conclusion disposes also of the second ground upon which
the motion to dismiss was based, for if the United States can,
without the authority of any statute, take a valid bond payable to
the United States, they can maintain a suit upon it in their own
name. It would be absurd to hold a bond to be valid on which a suit
in the name of the obligee could not be maintained.
The objection to the admissibility of the bond in evidence,
which the bill of exceptions shows was taken on the ground that the
condition of the bond did not conform strictly to the condition
prescribed by the statute, falls for the same reasons and upon the
same authorities.
It further appeared from the bill of exceptions that on the
trial of the case, the United States, to prove the breach of the
condition of the bond by Jessup, offered in evidence the account
kept by the Treasurer of the United States at San Francisco, from
which it appeared that on January 1, 1876, there was due from
Jessup to the United States, for adhesive stamps advanced to him by
the treasurer, the sum of $8,000. The court admitted the account in
evidence notwithstanding the objection of defendants, and this is
now assigned for error.
The first ground of objection urged to the admissibility of this
evidence was that the account appeared to be for stamps supplied by
the Assistant Treasurer, and the law under which the bond was given
contemplated that the stamps should be furnished by the
Commissioner of Internal Revenue.
But the penalty of the bond was payable directly to the
Page 106 U. S. 153
United States, and its condition was that Jessup should pay or
cause to be paid to the Treasurer of the United States, for the use
of the United States, all and every such sum or sums as he might
owe the United States for adhesive stamps. This being a valid bond,
any evidence which tended to show that Jessup was indebted to the
United States for adhesive stamps was competent, and it was quite
immaterial whether the stamps were furnished by the Assistant
Treasurer or by the Commissioner of Internal Revenue.
The account was objected to on the further ground that it
appeared on its face that the credits were continuously for a
greater period than sixty days, and therefore that the account was
not within the statute, and was incompetent and irrelevant to the
issue in the action. The contention of the plaintiffs in error is
that the operation of the bond extended to but one credit of sixty
days; that by the security for stamps advanced on credit required
by sec. 161 is meant a new security for each and every advance of
stamps, and that manufacturers needing stamps from time to time
must give security as often as a lot of stamps is advanced, and
consequently that the bond in suit was security only for the first
advance of stamps, and that all subsequent advances were made
entirely without security. But the language of the condition of the
bond clearly excludes any such construction. The condition is that
Jessup shall pay such sum or sums of money as he may owe to the
United States for adhesive stamps which have been or shall be
delivered to him or which have been or shall be forwarded to him
according to his request or order within the time prescribed for
payment for the same, and shall and will pay or cause to be paid to
the said treasurer, for the use aforesaid, each and every such sum
of money as shall become due or payable to the United States at the
time and on the days such sums shall respectively become due and
payable. The idea that the bond secured the payment of but one sum
of money due for stamps purchased at one time on a single credit of
sixty days finds no support in the language of the bond. The
payment of sums due at different times for stamps purchased at
different times is expressly secured in the condition of the
bond.
The bond in this respect conforms to the statute, which
Page 106 U. S. 154
authorizes the Commissioner of Internal Revenue from time to
time to supply and deliver to any manufacturer of friction matches
a suitable quantity of adhesive or other stamps, without prepayment
therefor, on a credit not exceeding sixty days. What we have said
covers all the errors assigned.
We find no error in the record.
Judgment affirmed.
