United States v. Johnston
Annotate this Case
124 U.S. 236 (1888)
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U.S. Supreme Court
United States v. Johnston, 124 U.S. 236 (1888)
United States v. Johnston
Argued December 15-16, 1887
Decided January 9, 1888
124 U.S. 236
The entire administration of the system devised by Congress for the collection of captured and abandoned property during the war was committed by the acts regulating it to the Secretary of the Treasury, subject to the President's approval of the rules and regulations relating thereto prescribed by him, and with no other restriction than that the expenses charged upon the proceeds of sales be proper and necessary and he approved by him, and his approval of an account of expenses incurred on account of any particular lot of such property made before the passage of the Joint Resolution of March 31, 1868, 15 Stat. 251, is conclusive evidence that they were proper and necessary, unless it appears that
their allowance was procured by fraud or that they were incurred in violation of an act of Congress or of public policy.
The Joint Resolution of Congress of March 31, 1868, 15 Stat. 251, affords evidence that the practice of the Secretary of the Treasury prior to that date not to cover into the Treasury the sums received from the sale of captured and abandoned property, but to retain them in the hands of the Treasurer in order to pay them out from time to time on the order of the Secretary, was known to Congress and was acquiesced in by it as to what had been previously done, and all this brings the practice within the well settled rule that the contemporaneous construction of a statute by those charged with its execution, especially when it has long prevailed, is entitled to great weight and should not be disregarded or overturned except for cogent reasons and unless it be clear that such construction is erroneous.
Settled accounts in the Treasury Department, where the United States have acted on the settlement and paid the balance therein found due, cannot be opened or set aside years afterwards merely because some of the prescribed steps in the accounting which it was the duty of a head of a department to see had been taken had been in fact omitted, or on account of technical irregularities, when the remedy of the party against the United States is barred by the statute of limitation, and the remedies of the United States are intact owing to its not being subject to an act of limitation.
The following was the case as stated by the Court:
This writ of error brings up for review a judgment for the defendant in error in an action brought against him on the twenty-ninth day of April, 1879, for the value of certain cotton which came to his hands as an assistant special agent of the Treasury Department in the year 1865, and which, it is alleged, he has not accounted for to the plaintiff, but converted to his own use. The defendant became such agent on the eighth of May, 1865, under a written appointment by the Secretary of the Treasury. He was charged with the duty of receiving and collecting such cotton in the Counties of Lowndes, Monroe, Oktibbeha, and Noxubee, in the State of Mississippi, as had been purchased by or was held on account of the so-called Confederate States government, and of forwarding the same to agents of the department as Memphis or Mobile, as in his judgment was best for the government. His commission was accompanied by a letter of instructions requiring him, with as little delay as possible, to ship the
cotton received or collected to William W. Orme, supervising special agent at Mobile,
"sending forward with each lot an account of expenses (which will be paid by them), together with a full record of the cotton shipped, etc., as required by the fourth regulation concerning captured, abandoned, and confiscable personal property."
He was informed that his compensation would be thereafter fixed, and would depend in great measure upon the result of his efforts, but that it should be reasonable and liberal for the services performed. The defendant, in his answer, denied that he had omitted to account for any cotton received or collected by him as such agent. For further defense, he alleged that after the times mentioned in the complaint, and on or about March 15, 1866, a just, true, and full accounting of his acts as such agent was had with the United States, upon which he surrendered all papers, documents, and vouchers in his hands relating to his agency; that upon such accounting, the sum of $33,972.59 was awarded to him, of which $2,186.69 represented his per diem allowance and the balance his commissions; that said per diem allowance was paid on the fifteenth of May, 1866, and said commissions on the fifteenth of January, 1868, and that he was thereupon fully released, acquitted, and discharged from liability of every kind to the government. By agreement of the parties, the issues were heard and determined in the first instance by Hon. William G. Choate, as referee, who made a report of his special findings of fact and law, accompanied by an elaborate opinion in support of the conclusion that the defendant was entitled to a judgment dismissing the complaint on the merits. The case was subsequently tried by the court, the parties, by written stipulation filed, having waived a jury. The court adopted the special findings of fact made by the referee as its own findings and dismissed the complaint.
The several lots of cotton in question were delivered to one Stewart, of Mobile, in the latter part of the year 1865. The circumstances under which they were delivered were, according to the findings of fact, as follows:
The cotton in the counties constituting defendant's district was stored at various
points more or less remote from the Mobile and Ohio Railroad, much of it in very bad condition, requiring rebaling or new covering and ropes. In consequence of many impediments, arising from the unsettled state of the country, to the successful execution by the defendant of his duties by agents of his own selection, he obtained special authority from the Secretary of the Treasury to make contracts with responsible persons for collecting cotton, putting it in shipping order, and delivering it at the railroad, the contractors to be paid in kind at the time of delivery or in money after he cotton had been sold and the proceeds realized by the government. The first lots of cotton were shipped to Dexter, the supervising agent at Mobile. Afterwards the defendant was directed by the Secretary to ship, and he did ship, the cotton directly through his own agents at Mobile to Simeon Draper at New York, who had been appointed as the general agent of the Treasury Department to sell all the cotton collected in the South. Defendant's first agents at Mobile were Weaver and Stark, but on August 14, 1865, he appointed one Cuny. The government did not furnish money to pay the expenses attending the collection, transportation, and shipping. But Cuny undertook with the defendant to settle all bills for railroad freights, the weighing and pressing of the cotton, and other incidental expenses connected therewith up to the time of shipment to New York, and he also agreed with the defendant to furnish the means necessary to cover such expenses. He arranged with Stewart at Mobile to provide means for these purposes, the latter to be reimbursed from time to time by government cotton at the market value. Stewart accordingly made large advances to Cuny between September 4, 1865, and January 26, 1866. These advances included $9,307.21 of expenses which Dexter, supervising special agent for the Treasury Department for the district in which Mobile was situated, incurred on cotton from Johnston's district, and which expenses Dexter insisted should be paid by the defendant. The latter at first declined to pay that bill, but subsequently, upon the advice of Mellen, a general agent of the Treasury Department, he sold cotton to meet it. Under the arrangement between
Cuny and Stewart, the latter received between October 17, 1865, and December 16, 1865, different lots of cotton, aggregating 483 bales, which is the cotton now in question, and gave credit therefor at its market value in his account with Cuny for advances. The total value of this cotton was $82,300.24. Stewart paid the internal revenue tax of two cents per pound -- $3,486.64 -- on all except the last 100 bales, leaving $79,813.60 as the net value of the cotton. The first of these transfers to Stewart was without the knowledge of the defendant, but he subsequently approved or acquiesced in what Cuny did. This disposition of the 483 bales was without authority from the plaintiff, except as to the part used in meeting Dexter's bill.
The following additional facts were found by the court below:
"August 18, 1865, the Secretary of the Treasury issued a general letter of instructions directing all cotton to be forwarded to Simeon Draper at New York for sale, and that all money required by supervising agents to defray expenses should be sent upon their estimates therefor made to the Secretary on the first of each month. In September, 1865, Mr. Johnston had made an arrangement to draw against Simeon Draper at New York for the expenses on the cotton incurred at Mobile, including the cost of transportation to Mobile, and such drafts were drawn accordingly to the amount of upwards of $150,000 between the twenty-ninth of November, 1865, and the thirty-first of January, 1866. The drafts included one dollar a bale commission, which defendant paid to Cuny on the cotton shipped by him after the drafts were paid. To carry out his instructions that these drafts should be accompanied by vouchers showing the details of the expenses drawn for, the receipted bills of the railroad company paid by Cuny through the advances made by Stewart, and other bills so paid, were surrendered, and duplicate receipts were taken to conform to the shipments to Draper, against which drafts were drawn, and these duplicate vouchers accompanied the drafts. The same expenses which had thus been paid out of the cotton transferred to Stewart, to the amount of about $68,000, were included
in the drafts upon Draper, and by him paid to Johnston, so that as to these 483 bales, the defendant had been a second time paid by the government to that extent, the expenses for the payment of which they had been transferred to Stewart."
On the eleventh of January, 1866, the Secretary of the Treasury, by letter, called upon the defendant to make up and forward a full statement of his transactions, and sometime in the month of February, 1866, the defendant and his chief clerk, Dr. Vaughan, went to Washington with their books and papers and an account current or summary statement which had been made up at Columbus purporting to show the whole amount of cotton collected by the defendant and the disposition thereof. They were referred, by the subordinate in the Secretary's office in charge of the captured and abandoned property division, to the Commissioner of Customs, who at that time, under direction of the Secretary, had charge of the examination and passing of similar accounts. Meanwhile, however, certain charges against the defendant had been received in the Treasury Department from the War Department, and the Secretary directed that these charges should be answered before the defendant's account was passed upon, and a special reference of these charges was made by the Secretary for examination to a clerk in his office named Parker, since deceased. These charges were satisfactorily answered, and the examination of his accounts by the commissioner of customs followed. Some objections were made to the form of the account of cotton collected, and a new account was made up upon blanks furnished by the office of that part of the transactions. In the account current or summary statement made up at Columbus, the 483 bales of cotton in question were stated as follows:
" Sold by R. H. Cuny, to pay bills of Dexter and others, 483''"
"At the suggestion of the examining officer in the Commissioner's office, a new summary statement was made up by Dr. Vaughan, dividing this item into two, namely: "
Sold by consent of General Agent Mellen, by R. H. Cuny,
to pay Dexter's bill of expenses, . . . . . . . . . . . . 55
Sold and proceeds paid to officers and garrisons to
secure protection to cotton in their charge, and
to repel thieves. . . . . . . . . . . . . . . . . . . . . 428
"The only vouchers now remaining on file in the Treasury Department in support of this last item are two affidavits, one by the defendant and the other by Dr. Vaughan, the defendant's clerk and chief assistant, sworn to at Washington during the pendency of this examination, showing payments to military officers for extra vigilance in guarding the cotton, protecting it against thieves and raids, copies of which are hereto annexed, marked 'Schedules C and D.' The number of bales assigned to the item of Dexter's bill does not conform to any particular lot of cotton, part of the 483 bales transferred to Stewart, but is substantially correct, as representing, upon an average of the net proceeds of the cotton, the amount of Dexter's bill."
"There was exhibited to the officers appointed by the Secretary to examine his accounts some proofs of large expenditures of money, which, together with the payments to military officers, they held to be sufficient to justify them in passing this item. These expenses, aside from the payments to military officers, aggregated about $68,000, and the military payments about $29,000. These expenses, other than the military payments, were properly and necessarily incurred by the defendant in the discharge of his duty as assistant special agent in the care and protection of the cotton after its delivery by the contractors, and all these payments, including the military payments, were made necessary by the unsettled state of the country, the great accumulation of the cotton which the railroad company was unable to transport, the danger of theft and robbery, and the interference of other agents or persons claiming to be agents of the Treasury Department and of military officers. The military payments included $10,000 paid out for Colonel Young, which, however, was not proved to have been received by him, and which the defendant collected from the
contractors. These military payments were all made in the bona fide belief that they were necessary to protect the interest of the United States in the cotton, to secure increased vigilance, or to prevent connivance with parties interfering with or attempting to interfere with the cotton."
"The result of the examination of the account in the Office of the Commissioner of Customs was that the Commissioner wrote to the defendant a letter dated the fifteenth March, 1866, as follows:"
" Your property accounts as assistant special agent of the Treasury at Columbus, Mississippi, from May 8, 1865, to March 15, 1866, have this day been examined in this office and passed, there being no difference."
"Upon the receipt of this letter, the defendant wrote to the Secretary, communicating to him the contents of the letter received from the Commissioner of Customs and stating that he had presented to Mr. Parker written answer to the military charges, and that Mr. Parker expressed himself entirely satisfied, and that he would so report to the Secretary, and requested an instruction to Mr. Draper at New York to pay him his commissions allowed under the regulations on the sales of such cotton as Mr. Draper had received of his collecting, when the Secretary should receive a report from Mr. Parker."
"To this the Secretary replied under the same date, March 15, 1866, as follows:"
" I have received your letter of this date advising me that the Commissioner of Customs had favorably reported on your property account and that your explanation of charges made by certain military officers against you has shown them to be without substantial foundation, and asking me to instruct the cotton agent at New York to pay you the commissions allowed by the regulations of August the 18th last on the sales of such property of your collection as he has received. It affords me great pleasure to receive so gratifying a statement in regard to your affairs, and I have accordingly this day instructed the Commissioner of Customs to issue a requisition for your per diem compensation at the rate of $6 per day from the date of your appointment and for such mileage as you may be entitled to at the rate of ten cents per mile. At present, no payments on account of commissions or
percentage are made to any of the agents of the department, and I deem it inexpedient to make an exception to this rule in any case till sufficient time has elapsed to enable me to examine and understand the whole matter connected with the collection and forwarding of government cotton. Just now my time is too much occupied with other matters of vital importance to afford me an opportunity to give your case that consideration which justice to yourself, no less than to the Department, requires."
"On the same day the Secretary, by letter, instructed the Commissioner of Customs as follows:"
" The compensation of Harrison Johnston, assistant special agent to this department, whose appointment is dated May 8, 1865, has been fixed at $6 per day, with an allowance to cover traveling expenses of 10 cents per mile for all distances actually traveled by him, and commissions on the cotton collected by him at the same rate as is allowed to other assistant agents, in accordance with general letter of instructions dated August 18, 1865. You are accordingly hereby authorized to issue a requisition in the usual form for his per diem allowance at that rate to date and for such mileage as he may be entitled to. For the present, no payments on commissions or percentage account are made to any agents."
"On the sixteenth March, 1866, the defendant was directed by the Secretary to answer certain charges made in letters received by the department from General Agent Mellen, to which the defendant replied in a letter to the Secretary on the same day containing the following passage:"
" I had the honor on yesterday to request you to instruct Mr. Draper to pay me my commissions, basing that request on the assurance that my answers to all charges were satisfactory, and my property account correct, not knowing then of these letters from Mr. Mellen. I now beg leave to withdraw the request until you are fully satisfied of my every official act."
"No further direct action was taken by the Secretary with reference to these changes of General Agent Mellen, or the defendant's reply thereto."
"On the sixth September, 1866, the defendant wrote to the
Secretary of the Treasury:"
" If there are no longer any reasons for withholding the commissions due me from the sale of cotton collected by me and forwarded to Mr. Draper, I will thank you for an order upon Mr. Draper to pay over to me commissions due me under regulations of August 18, 1865."
"To which the Secretary replied on the seventeenth September, 1866:"
" The numerous undecided claims upon the cotton collected by you make it inexpedient to award you at present the promised commissions on the net proceeds of sale of the amount of your collections."
"On the eighth January, 1867, the Secretary wrote the Commissioner of Customs as follows:"
" Hereafter, in the adjustment of accounts of agents of the Department who have been engaged in the collection of captured and abandoned property, you will make no requisition in favor of any of them for any balance that may be found due until the details of such account have been referred to me and you have received further instructions relative thereto."
"On the ninth March, 1867, the Secretary wrote to the Commissioner of Customs as follows:"
" As the various supervising and assistant special agents lately in office are claiming the amounts to which they deem themselves entitled as commissions on the proceeds of property collected by them under my general letter of instructions of August 18, 1865, you will please report to me the names of those whose property accounts, as well as money accounts, have been satisfactorily adjusted."
"To which the Commissioner replied on the twelfth March as follows:"
" In reply to your inquiry of the ninth inst., received this A.M., asking for the names of those agents whose property accounts have been examined and adjusted, I have to report that up to the present only money accounts have been adjusted."
"On the 13th March, 1867, the Secretary wrote to the Commissioner of Customs as follows:"
" Referring to your reply of yesterday to my inquiry of the ninth inst. relative to the property accounts of supervising and assistant special agents, I now request that you will transmit them to the First Auditor for immediate examination and adjustment. "
"On the 4th June, 1867, the defendant wrote the Secretary as follows:"
" I desire to be informed whether all claims for proceeds of cotton from my district have been adjusted, and whether there is any further objection to the payment of my commissions as assistant special agent of the Treasury Department."
"To which, on the 12th June, 1867, the Assistant Secretary of the Treasury replied:"
" The Secretary directs me to say that nothing can be done in the matter until the accounts of the New York agency and the various property accounts of the supervising special agents are collected and settled, which he has ordered to be done as speedily as practicable."
"On the 15th of January, 1868, the Secretary wrote to the Commissioner of Customs as follows:"
" You are hereby authorized and instructed to issue a requisition on F. E. Spinner, Treasurer, and U.S. Special Agent, in favor of Harrison Johnston, late assistant special agent, for the sum of $26,785.90, being the balance in full found due to him for commissions on the net proceeds of cotton collected by him, and sold in New York on government account, in accordance with my letter of August 18, 1865. The total amount earned by him under that letter is $31,785.90, on which he has had previously an advance of $5,000. The present requisition is for the balance. This requisition followed an adjustment of the balance at that sum communicated to the Secretary by the Commissioner of Customs in a letter dated January 15, 1868, and requesting a remittance to cover the same, and this amount was thereupon paid to Mr. Johnston."
"On the sixteenth of August, 1868, the First Auditor addressed to the Commissioner of Customs a letter containing a detailed statement of the defendant's property account, stating that he had examined and adjusted the same, charging him with 30,610 bales collected, and crediting him with the cotton shipped to Draper, paid to contractors in kind, and various other items of credit, as in the previous account rendered by the defendant, and passed by the Commissioner of Customs, and included the following credits: "
By cotton sold to pay expenses . . . . . . . . 55 bales
" " " and proceeds paid military
officers for protecting cotton
from being burned and stolen
by raiders . . . . . . . . . . . 428 bales
"At the foot of this account so stated the Commissioner added:"
" Admitted and certified. N. SARGENT"
Commissioner of Customs
"On the twenty-seventh of February, 1869, the Commissioner of Customs wrote the defendant as follows:"
" Your account as Assistant Special Agent of the Treasury Department at Columbus, Mississippi, on account of captured and abandoned property, for cotton received and disposed of, has been adjusted and closed on the books of the department."