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Government Drafts.

States are a party, are subject to the law merchant. The rule on this point is distinctly stated in the case of The United States v. The Bank of the Metropolis, as follows:

"When the United States, by its authorized officer, become a party to negotiable paper, they have all the rights and incur all the responsibility of individuals who are parties to such instruments. We know of no difference, except that the United States cannot be sued. But if the United States sue, and a defendant holds its negotiable paper, the amount of it may be claimed as a credit, if, after being presented, it has been disallowed by the accounting offices of the Treasury, and if the liability of the United States upon it be not discharged by some of those causes which discharge a party to commercial paper, it should be allowed by a jury as a credit against the debt claimed by the United States.

* *


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. (xv Peters 377, 392.)

The same principle is enunciated in various other cases. (See The United States v. Barker, xii Wheat. 559; S. C. iv Wash. C. C. R. 464; The United States v. Dunn, vi Peters 51.)

In each of these reported cases, the general rule of the law merchant, as to notice on drafts, is applied with rigor to paper to which the Government is a party; and the rule is laid down as defining the rights, not less than the duties, of the Government.

Indeed, the diversified and numerous business contracts, to which the United States are a party, are governed by the same established rules, which govern contracts between other parties: with exception of the general fact, that action cannot be brought against the United States. Meanwhile, the United States are frequently placed in the legal condition of a defendant, as in the case of credits claimed by an alleged debtor of the Government. And their subjection to ordinary doctrines of law, as to both rights and obligations, is apparent in the daily action of the Court of Claims.

But, does the general doctrine apply to the case of bills

Government Drafts.

drawn by agents of the Government on other agents, or on depositaries, of the Government?

I reply that all the dealings of the United States are by and between the agents of the Government. The United States are not a natural person. They act only by agents. They draw by the instrumentality of agents. They draw on other agents, the collectors or depositaries of the moneys of the United States. To say that drafts by and upon agents of the United States shall not be subject to the general law, as respects notice or other incidents of a bill, is to say that those incidents do not apply to the dealings of the Government. But we have already seen the general doctrine to be settled, namely, that the ordinary rules of law do apply to these transactions of the Govern


It is said that it is so obviously for the interest of the holder to return a dishonored bill of the Government's, that it may be assumed he will do this of course, without his being required to give notice. But is it not equally, nay more, the interest of a merchant to return the dishonored bill of another merchant? Clearly. Yet the general law requires notice; and for a very good reason, namely, to guard against loss to the drawer, by the negligence of the holder.

Lord Ellenborough observes that notice to a drawer of the dishonor of his draft is "peculiarly requisite" in those cases "where the drawer has a fluctuating balance in the hands of the drawee." (Blackham v. Doren, ii Camp. 503). This reasoning is directly applicable to drafts on collecting agents of the Government.

But may there not be exceptions to the rule of law as adjudged by the courts,-exceptions in particular cases, or in particular branches of the Government? Undoubtedly there may.

You state that it appears, by the certificate of the Chief Clerk of the Treasurer of the United States, that the drafts of the Treasurer on the several local depositaries are always paid when returned unpaid by the depositary, and this without regard to time, and without question of notice, such drafts, however

Government Drafts.

situated, being still considered as outstanding obligations of the Government.

The drawer, it is clear, may dispense with notice, either specially or generally. The United States may do this in a defined class, either by regulation of the Treasury Department, or by uniform and long-continued practice, which, in such a matter, is evidence of, or equivalent to, a regulation. Of course, assuming the statement made of the practice in the Treasurer's office to be correct, it must be taken that the drafts of the Treasurer are one class of exceptions to the rule that the law merchant applies to the bills of the Government.

Do the drafts on the local draft post offices, which the Postmaster General issues to contractors, for the double object of paying such contractors and of absorbing the collections in such post offices, and which drafts it is, by the tenor of their contract, the duty of mail contractors to collect and account for to the Department,-do these drafts, which it is a part of the contractor's contract duty to collect,-constitute another class of exceptions to the general rule? That is a question of fact, to be determined by proper testimony from the Post Office or Treasury Department. No evidence of the practice of the Post Office Department in this respect appears in the case stated by you; and without such evidence it is impossible for me to express any definite opinion upon the particular subject, that is of the applicability or non-applicability of the general rule of law concerning notice to this class of the drafts of the Govern


II. The second question is whether the general rule of law as to notice applies to the single case of George Whitman?

In order to answer this question, it needs to be determined, in the outset, whether the class of drafts, of which the present is one, has been excepted as a class from the general law. Or rather, it needs first to determine how that was at the time the draft was drawn.

Regulations of the executive departments enter, in many respects, into the general law, and essentially modify it. Established practice may be received as evidence of regulation, even if no written regulation be shown to exist. And such regula

Government Drafts.

tion, in such practice, if proved, would apply to the class of drafts of which the present draft is one, and of course to the present draft. But that is a question of fact, as to which, as already suggested, no sufficient evidence, affirmative or negative, appears in the case stated.

On the one hand, it appears that this particular claim has been rejected by successive Auditors of the Post Office Department on the precise ground of laches of the holder in respect of notice which implies that notice of dishonor had not been dispensed with by regulation or practice of the Department.

On the other hand, there is a regulation of the Post Office Department of the year 1839, (subsequent to the present transaction), which prescribes that, unless such drafts, if dishonored, be returned within the next ensuing quarter, they will not be renewed; and another regulation of the Department, (or letter of the Postmaster General of the same effect), dispensing with formal protest of dishonored drafts.

These two facts are certainly of great force, and strongly tend to raise the implication at least, that legal notice of dishonor was not previously required, in drafts of this class, by any regulation or practice of the Department.

It is inconvenient, however, to pronounce upon the existence or non-existence of an alleged or supposed practice, without more explicit and exhaustive proofs than the case affords. The evidence of any alleged usage requires to be direct because it is in derogation of the general law, and may be founded on mistake, (Donnell v. Columbian Insurance Company, i Sum. 366, 377.) It also requires to be complete, because otherwise it fails to constitute the supposed proof, (Parrott v. Thacher, ix Pick. 426.)

But that such a practice, if proved to exist, will be entitled to consideration, cannot be denied. "Of necessity," say the court, in the case of the United States v. MacDaniel, "usages have been established in every department of the Government, which have become a kind of common law, and regulate the rights and duties of those who act within their respective limits. And no change of such usages can have a retrospective effect, but must be limited to the future. Usage cannot alter the

Responsibility of Sureties.

law, but it is evidence of the construction given to it, and must be considered binding on past transactions." (vii Peters 1, 14.)

If then, the decision of this case depends, as it possibly may, on the mere legal question of the necessity of notice, and the latter depends on the question of fact of executive practice, it seems to me that this precise point needs to be more thoroughly investigated in that executive department where the transaction arose, namely, the General Post Office. What is the practice of that Department in regard to collection drafts issued to mail contractors? Is it the usage, or not, in that branch of the public service, to make the question of the renewal of a dishonored draft turn upon the diligence or the laches of the mail contractor holding it? If there be loss by reason of what would be laches in the law, on whom does the usage devolve the loss? I cannot pronounce, for the case, an exceptional rule of law founded on assumed executive practice, without having direct attestation in this respect as to what is the practice of the Department.

I am, very respectfully,

Messrs. J. M. BRODHEAD, and




The sureties of a public officer are not liable to the United States for moneys improvidently advanced to such party by the Government after he shall have ceased to hold office.


July 10, 1856.

SIR: I have received your communication of the 3d instant, inquiring whether, in my opinion, the sureties of a Sub-Indian Agent may be held responsible in law for public money advanced to him, which he has failed to account for, but which was advanced after his removal from office.

I am not aware of any ground of law in which they can be held so liable, assuming the bond in question to be in the usual

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