Action on a bond executed by William Carson as paymaster and
signed by A L. Duncan and John Carson as his sureties, conditioned
that William Carson, paymaster for the United States, should
perform the duties of that office within the District of Orleans.
The breach alleged was that W. C. had received large sums of money
in his official capacity in his lifetime which he had refused to
pay into the Treasury of the United States.
The bond was drawn in the names of Abner L. Duncan, John Carson,
and Thomas Duncan as sureties for William Carson, but was not
executed by Thomas Duncan. There were no witnesses to the bond, but
it was acknowledged by all the parties to it before a notary
public. The defendants, the heirs and representatives of A. L.
Duncan, in answer to a petition to compel the payment of the bond,
say that it was stipulated and understood when the bond was
executed that one Thomas Duncan should sign it, which was never
done, and the bond was never completed, and therefore A. L. Duncan
was never bound by it. They also say that as the representatives of
A. L. Duncan, they are not liable for the alleged defalcation of
William Carson, because he acted as paymaster out of the limits of
the District of Louisiana, and the deficiencies if any, occurred
without the limits of the said district.
Before the jury was sworn, the defendants offered a statement to
the court for the purpose of obtaining a special verdict on the
facts according to the provisions of the act of the Legislature of
Louisiana of 1818. The court would not suffer the same to be given
to the jury for a special finding, because it "was contrary to the
practice of the court to compel a jury to find a special
verdict."
The judge charged the jury that the bond sued upon was not to be
governed by the laws of Louisiana in force when the bond was signed
at New Orleans, but that this and all similar bonds must be
considered as having been executed at the seat of the government of
the United States, and to he governed by the principles of the
common law; that although the copy of the bond sued on, which was
certified from the Treasury Department, exhibited a scrawl instead
of a seal, yet they had a right to presume that the original bond
had been executed according to law; and that in the absence of all
proof as to the limits of the District of New Orleans, the jury was
bound to presume that the defalcation occurred within the district,
and if the paymaster acted beyond the limits of the district, it
was incumbent on the defendants to prove the fact.
Held
that there was no error in these decisions of the District Court of
Louisiana.
This is an official bond, and was given in pursuance of a law of
the United States. By this law, the conditions of the bond were
fixed, and also the
Page 32 U. S. 436
manner in which its obligations should be enforced. It was
delivered to the Treasury Department at Washington, and to the
Treasury did the paymaster and his sureties become bound to pay any
moneys in his hands. These powers exercised by the federal
government cannot be questioned. It has the power of prescribing
under its own laws what kind of security shall be given by its
agents for a faithful discharge of their public duties. And in such
cases the local law cannot affect the contract, as it is made with
the government, and in contemplation of law, at the place where its
principal powers are exercised.
It is not essential that any court, in establishing or changing
its practice, should do so by the adoption of written rules. Its
practice may be established by a uniform mode of proceeding for a
series of years, and this forms the law of the court. In this case
it appears that the Louisiana law, which regulated the practice of
the District Court of Louisiana, has not only been repealed, but
the record shows that in the year 1830, when the decision was given
in this case, there was no such practice of the court as was
adopted by the Act of Congress of 26 May, 1824. The court refused
the statement of facts to go to the jury for a special finding
because it said "such was contrary to the practice of the
court."
By the court.
"On a question of practice, it would seem that the decision of
the"
district court as to what the practice is should be conclusive.
The practice of the court cannot be better known and established
than by its own solemn adjudications on the subject.
On 22 November, 1829, the district attorney of the United States
filed, on behalf of the United States, a petition stating that on 4
March, 1807, William Carson, Abner L. Duncan and John Carson made
and executed their bond to the United States in the sum of $10,000,
by which they bound themselves, and each of them, and either of
their heirs, executors and administrators, that William Carson,
paymaster of the United States, should well and truly perform and
discharge according to law the duties of the office of paymaster of
the United States within the District of New Orleans. The petition
alleged a breach of this bond by William Carson, paymaster, in
having received, in his lifetime, large sums of money in that
capacity, which he refused to pay into the Treasury of the United
States. And also that Abner L. Duncan had died, leaving property,
and that by reason of the facts above stated, his heirs, to-wit,
John N. Duncan,
Page 32 U. S. 437
Frances Duncan, wife of Frederic Conrad, Hannah Duncan, Elizah
Duncan, and Abner Duncan, all children of the said Abner L. Duncan,
these last three named being minors, and also Frances S. Duncan,
wife of the said Abner L. Duncan, who had accepted the community of
her deceased husband, had become liable to pay, and were indebted
to the United States, jointly and severally, in the sum of $10,000.
The petition proceeded to pray that John N. Duncan and Frances S.
Duncan, and the aforesaid minors Hannah, Eliza and Abner Duncan,
their tutors and curators, be cited to answer the petition, and
that, after due proceedings had, they might have judgment against
them, jointly and severally, for the sum of $10,000, with interest
and costs. To this petition was annexed a copy of the bond, as
follows:
"Know all men by these presents that we, William Carson,
paymaster for the United States of America within the District of
New Orleans, Abner L. Duncan, John Carson, and Thomas Duncan,
Esquires, are held and firmly bound unto the said United States in
the penal sum of ten thousand dollars, money of the United States,
to be paid to the said United States of America, for which payment
well and truly to be made, we bind ourselves, and each of us, by
himself, our and either of our heirs, executors, and
administrators, firmly by these presents. Sealed with our seals,
and dated this fourth day of March, 1807. The condition of this
obligation is such that if the above-bounden William Carson,
paymaster for the United States of America, do and shall well and
truly, according to law, perform and discharge the duties of said
office of paymaster for the United States of America, within the
District of Orleans, then the above obligation to be null and void,
otherwise to remain in full force and virtue."
"WILLIAM CARSON"
"A. L. DUNCAN"
"JOHN CARSON"
The bond was acknowledged by William Carson and Abner L. Duncan,
before a notary public in New Orleans, on 4 March, 1807, and by
John Carson, before a notary public
Page 32 U. S. 438
at Harrisburg, Pennsylvania, on 21 May, 1807. The copy of the
bond was certified according to the provisions of the Act of
Congress of 3 March, 1817, entitled "an act providing for the
prompt settlement of accounts."
To the petition of the United States the heirs and
representatives of Abner L. Duncan filed an answer on 14 December,
1829, in which all the allegations in the petition were denied
except that Abner L. Duncan did sign the bond therein referred to,
but they averred that said Duncan was not, in his lifetime, nor
were the respondents, bound in law to pay the amount thereof or any
part thereof. They further averred that by and in said bond it was
stipulated and understood (when the same was signed by the said
Abner L. Duncan, as surety for said Carson) that one Thomas Duncan
should also sign the same as his co-surety, but that the said
Thomas Duncan never did sign the same, and said bond never was
completed, nor was the said Abner L. Duncan ever bound thereby.
Afterwards, on 26 May, 1830, an amended answer was filed stating
that the respondents were not liable for the alleged defalcation in
the accounts of the said Carson because said Carson acted as
paymaster out of the limits of the District of Louisiana, and the
said deficiencies, if any existed, occurred without the limits of
said district.
The cause came on for trial upon these pleadings on 29 May,
1830, and before the jury were sworn, the counsel for the
defendants offered to the court a statement of the facts for the
purpose of obtaining a special verdict on the facts under the tenth
section of the act of the Legislature of the State of Louisiana of
1817, page 32. This being opposed by the district attorney, the
court refused to admit the same or to suffer the same to be given
to the jury for a special finding, "because such was contrary to
the practice of this court and because a jury ought not to be
compelled to find a special verdict." Whereupon the counsel for the
defendants excepted to the opinion and decision of the court
therein, before the jury were sworn.
On the trial of the cause, a transcript from the Treasury
Department of the accounts of William Carson, as paymaster,
Page 32 U. S. 439
was given in evidence showing a balance due to the United States
of $6,126.11, for which sum a verdict was given and a judgment
thereon rendered in favor of the United States. On the trial, the
defendants took the following bill of exceptions:
"Be it remembered that on the trial of this cause, the judge
charged the jury that the bond sued on was not to be governed by
the laws of Louisiana, or those in force in the Territory of
Orleans, at the time said bond was signed by Abner L. Duncan, who
signed it in New Orleans, in the then said territory; but that this
and all similar bonds must be considered as having been executed at
the seat of government of the United States, and to be governed by
the principles of a common law, to-wit, the common law of England.
The judge further charged the jury that although the copy of the
bond sued on exhibited a scroll instead of a seal, yet they had a
right to presume that the original bond had been executed according
to law, to-wit, that it was sealed in the manner prescribed by the
common law, that the scroll in the copy represented the place of
the seal, as plainly as could be done without a facsimile, and that
if the fact was otherwise, it was in the power of the defendants to
have shown it. The judge also charged the jury that it was bound to
presume, in the absence of all proof as to the limits of the
District of Orleans, that the deficiency in the accounts of Carson
(hereunto annexed), the principal obligor on said bond, occurred on
account of moneys received and disbursed as paymaster of the
District of Orleans, although it was proved that side Carson had
acted as paymaster, and disbursed moneys, as such, at Fort
Stoddart, and at the Town of Washington, both in the then Territory
of Mississippi; and finally that if said Carson disbursed money in
any other district than that Orleans, it was incumbent on the
defendants to prove that fact. The judge further charged that the
possession of the bond by the Treasury Department, was
prima
facie evidence of delivery. To all of which charges the
counsel for the defendants then and there excepted before the jury
retired to consider their verdict. "
Page 32 U. S. 440
The defendants prosecuted a writ of error to this Court, and the
record presented the bill of exceptions to the ruling of the
district court, as to the claim to have a special verdict, and the
matters which the defendants' counsel offered for the jury to find
as such, and also the bill of exceptions sealed by the court on the
trial of the cause.
The case came on for argument, at the January term of this Court
in 1832, and was held under advisement. It was in part reargued at
this term.
Page 32 U. S. 445
MR. JUSTICE McLEAN delivered the opinion of the Court.
This writ of error is prosecuted to reverse a judgment of the
district court, which exercises circuit court powers, in the State
of Louisiana.
In the year 1829, an action was commenced by the United States
against the plaintiffs in error on a bond given by William Carson,
as paymaster, and signed by A. L. Duncan and John Carson, as his
sureties. The bond bears date the 4th day of March, 1807, and
contains a condition
"That if the above-bounden William Carson, paymaster for the
United States of America, do and shall well and truly, according to
law, perform
Page 32 U. S. 446
and discharge the duties of said office of paymaster, &c.,
within the District of Orleans, then the obligation to be
void."
The breach alleged in the petition was that William Carson,
paymaster, &c.,
"has not well and truly, according to law, discharged and
performed the duties of said office for the District of Orleans,
but that, on the contrary, he did, in his lifetime, receive large
sums of money, in his capacity aforesaid, which, although
frequently requested, he refused to pay into the Treasury of the
United States."
The defendants, in their answer, said that
"By and in said bond it was stipulated and understood, when the
same was signed by Abner L. Duncan as surety for said Carson, that
one Thomas Duncan should also sign the same, as his co-surety, but
that the said Thomas Duncan never did sign the same, and said bond
never was completed, nor was said A. L. Duncan ever bound
thereby."
They also aver that they are not liable for the alleged
defalcation in the accounts of said Carson because he acted as
paymaster out of the limits of the District of Louisiana, and the
said deficiencies, if any exist, occurred without the limits of
said district.
Before the jury was sworn, the defendants offered a statement to
the court for the purpose of obtaining a special verdict on the
facts in pursuance of the provisions of the tenth section of a
statute of Louisiana, passed in 1817. But the court overruled the
statement and would not suffer the same to be given to the jury for
a special finding because it was contrary to the practice of the
court to compel a jury to find a special verdict. To this decision,
an exception was taken.
A transcript of the accounts of Carson, duly certified by the
Treasury Department, was then given in evidence to the jury, and
the judge charged the jury that the bond sued on was not to be
governed by the laws of Louisiana or those in force in the
Territory of Orleans at the time said bond was signed by A. L.
Duncan, who signed it in New Orleans in the then said territory,
but that this and all similar bonds must be considered as having
been executed at the seat of government of the United States and to
be governed by the principles of the common law. That although the
copy of the bond sued on, exhibited a scroll instead of a seal, yet
they had a right to
Page 32 U. S. 447
presume that the original bond had been executed according to
law. That the jury was bound to presume, in the absence of all
proof as to the limits of the District of Orleans, that the
defalcation of Carson occurred in the District of Orleans, although
it was proved that he disbursed moneys, as paymaster, at Fort
Stoddart and at Washington, in the Territory of Mississippi, and
that if the defendant Carson had acted as paymaster beyond the
limits of the District of Orleans, it was incumbent on the
defendant to prove the fact. And the judge also charged the jury
that the possession of the bond by the Treasury Department was
prima facie evidence of delivery, to which charge,
exceptions were taken.
The jury rendered a verdict against the defendants for $6,126,
with interest, &c. This judgment the plaintiffs in error pray
may be reversed on the following grounds:
1. Because the surety, Abner L. Duncan, is not bound, as when he
executed the bond, it was agreed that it should also be signed by
Thomas Duncan.
2. Because William Carson was appointed paymaster for a certain
district, and the judgment covers defalcations, which may have
occurred out of such district.
3. The rejection by the court of the statement of facts, on
which a special verdict was prayed.
4. Because the rejectment of this statement precluded the
defendants from proving that the bond was delivered as an
escrow.
As to the first error assigned, it appears on an inspection of
the bond it was drawn in the names of Abner L. Duncan, John Carson,
and Thomas Duncan, as sureties for William Carson, but that Thomas
Duncan never signed it. There are no witnesses to the bond, but on
the day of its date it was acknowledged by William Carson and Abner
L. Duncan before a notary public at New Orleans, and on 21 May
following, John Carson acknowledged it before a notary public at
Harrisburg, in Pennsylvania.
To sustain this ground, reference is made to a decision of the
Supreme Court of Louisiana in the case of
Wells v. Dill,
reported in 1 Mart. (N.S) 592. In its decision the court said
that
Page 32 U. S. 448
"The defendant is sued on the ground that he signed, as surety,
an instrument purporting to be a bond signed by Charles Blanchard
for his faithful performance of the duties of curator to the vacant
estate of one Jared Risdon, deceased. In apposition to this action,
the defendant relies principally on the want of the signature of
another person to the instrument, whose name is mentioned in the
body of it as co-surety. The bond is drawn in the name of Charles
R. Blanchard, as principal and the defendant and Walter Turnbull as
sureties. At the bottom, the name of Blanchard and Dill are
affixed; that of Turnbull is wanting. We agree with the defendant
that under these circumstances, his signature to the obligation
does not bind him. The contract is incomplete until all the parties
contemplated to join in its execution affix their names to it, and
while in this state, cannot be enforced against any one of them.
The law presumes that the party signing did so upon the condition
that the other obligors named in the instrument should sign it, and
their failure to comply with their agreement gives him a right to
retract."
Pothier is cited by the court to sustain this principle.
There can be no doubt that under the civil law, the principle is
correctly stated by the court. It must be observed, however, that
the court said the want of Turnbull's signature was principally
relied on to invalidate the bond, so that there seems to have been
no circumstances going to refute the presumption against its
validity, arising from its face, and that the omission of the
signature was not the only ground of objection to it.
It is a principle of the common law too well settled to be
controverted that where an instrument is delivered as an escrow, or
where one surety has signed it on condition that it shall be signed
by another before its delivery, no obligation is incurred until the
condition shall happen. And if it appeared in the present case that
Abner L. Duncan signed the bond, to be delivered on condition that
Thomas Duncan should execute it, there can be no doubt the plea
should have been sustained in the court below. But the delivery of
the bond, as well as the signatures of the parties, is a question
of fact for the jury, and this Court cannot determine the legal
question arising on
Page 32 U. S. 449
such fact unless it be stated in a bill of exceptions. The
acknowledgment of the bond by Abner L. Duncan, and afterwards by
John Carson, unconditionally, and its delivery to the government,
would seem to rebut the inference drawn by the plaintiffs against
its validity, from the simple fact of its not having been signed by
Thomas Duncan. There is therefore nothing upon the face of the
record which would go to destroy the validity of this bond.
A question was raised and elaborately argued by the counsel for
the plaintiff whether this bond, having been executed at New
Orleans, was not governed, not only as to the manner of its
execution but also as to the extent of the obligations incurred
under it, by the principles of the civil law. In the case of
Cox v. United States, decided at the last term, this
question was settled. This is an official bond, and was given in
pursuance of a law of the United States. By this law, the
conditions of the bond were fixed and also the manner in which its
obligations should be enforced. It was delivered to the Treasury
Department at Washington, and to the Treasury did the paymaster and
sureties become bound to pay any moneys in his hands. These powers,
exercised by the federal government, cannot be questioned. It has
the power of prescribing, under its own laws, what kind of security
shall be given by its agents for a faithful discharge of their
public duties. And in such cases the local law cannot affect the
contract, as it is made with the government, and in contemplation
of law, at the place where its principal powers are exercised.
As there was no evidence before the jury that any part of the
defalcation of the paymaster occurred without the limits of the
district in which, as appears by the bond, he was to act, the court
below might well instruct the jury that in the absence of such
proof, it was bound to presume that the deficiency took place
within the district.
The rejection of the special verdict by the court is the ground
which seems most to be relied on for a reversal of this judgment.
In 1817 the Legislature of Louisiana enacted that
"In every case to be tried by a jury, if one of the parties
demands that
Page 32 U. S. 450
the facts set forth in the petition and answer should be
submitted to the said jury to have a special verdict thereupon,
both parties shall proceed, before the jury are sworn to make a
written statement of the facts so alleged and denied, the
pertinency of which statement shall be judged of by the counsel and
signed by the judge, and the jury shall be sworn to decide the
question of fact or facts so alleged and denied."
On 26 May, 1824, Congress passed an act entitled "an act to
regulate the practice in the courts of the United States for the
District of Louisiana," in which it is provided that
"The mode of proceeding in civil causes in the courts of the
United States that now are or hereafter may be established in the
State of Louisiana shall be comformable to the laws directing the
mode of practice in the district courts of said state, provided
that the judge of any such court of the United States may alter the
times limited or allowed for different proceedings in the state
courts and make by rule such other provisions as may be necessary
to adapt the said laws of procedure to the organization of such
court of the United States and to avoid any discrepancy, if any
such exist, between such state laws and the laws of the United
States."
This section was a virtual repeal, within the State of
Louisiana, of all previous acts of Congress which regulated the
practice of the courts of the United States and which came within
its purview. It adopted the practice of the state courts of
Louisiana, subject to such alterations as the district judge of the
United States might deem necessary, to conform to the organization
of the district court and avoid any discrepancy with the laws of
the Union.
By a code of the Louisiana Legislature, passed in 1829 called
the "Code of Procedure," the act of 1817 was repealed. This
repealing act was not before the court until the present session,
and a question is made under it whether it does not, by virtue of
the Act of Congress of 1824, change the practice of the district
court. It is insisted for the plaintiffs that it could not have
been the intention of Congress, by the act of 1824, to subject the
practice of the District Court in Louisiana to any changes which
the legislature of that state might adopt in reference to the
practice of the state courts, and the
Page 32 U. S. 451
construction which has been given to the act of 1792, which
regulates process in the courts of the United States, is relied on
as conclusive on the point. This act, by reenacting the act of
1789, adopted the "modes of process" for the district and circuit
courts, which were in use, at the time of its passage, in the
supreme courts of the respective states, but did not require, as
this Court has decided, a conformity to the changes which might be
made in the process of those courts. Nor did the act apply to those
states which were subsequently admitted into the Union. But this
defect was removed by the Act of 10 May, 1828, which placed all the
courts of the United States on the same footing in this respect
except such as are held in the State of Louisiana.
It does not appear that the District Court of Louisiana, by the
adoption of any written rule, has altered the practice which this
Court in the case of
Parsons v. Armor and
Parsons v.
Bedford, reported in 3 Peters, considered as having been
adopted by the act of 1824. But, if the questions raised in these
cases occurred after the act of 1817 was repealed by the code of
procedure in 1829, the fact was not known to the court. As the act
of 1824 adopted the practice of the state courts, before this Court
could sanction a disregard of such practice, it must appear that by
an exercise of the power of the district court or by some other
means, the practice had been altered. It is not essential that any
court, in establishing or changing its practice should do so by the
adoption of written rules. Its practice may be established by a
uniform mode of proceeding for a series of years, and this forms
the law of the court. In the case under consideration, it appears
that the Louisiana law, which regulated the practice of the
District Court of Louisiana, has not only been repealed, but the
record shows that in the year 1830, when the decision objected to
was made, there was no such practice of the court as was adopted by
the act of 1824. The court refused to suffer the statement of facts
to go to the jury for a special finding, because they said "such
was contrary to the practice of the court." On a question of
practice, under the circumstances of this case, it would seem that
the decision of the district court, as
Page 32 U. S. 452
above made, should be conclusive. How can the practice of the
court be better known or established than by its own solemn
adjudication on the subject?
In regard to the last error assigned, it is not perceived how
the refusal of the special verdict precluded the defendants from
proving that the bond was delivered as an escrow. Such evidence was
admissible under the plea or answer of the defendants, but it does
not appear that any such was offered and rejected by the court. The
judgment of the district court must be
Affirmed with costs.
This cause came on to be heard on the transcript of the record
from the District Court of the United States for the Eastern
District of Louisiana and was argued by counsel, on consideration
whereof it is ordered and adjudged by this Court that the judgment
of the said district court in this cause be and the same is hereby
affirmed with costs and damages at the rate of six percentum per
annum.
