The United States instituted a suit to recover a balance charged
on the books of the Treasury Department against the defendant, who
was a clerk in the Navy Department upon a fixed annual salary, and
acted as agent for the payment of moneys due to the navy
pensioners, the privateer pensioners, and for navy disbursements,
for the payment of which funds were placed in his hands by the
government. He had received an annual compensation for his
services in due payment of the navy pensioners, and for fifteen
years he had received, in preceding accounts, commissions of one
percent on the moneys paid by him for
navy disbursements. He claimed these commissions at the
Treasury, and the claim bad been there rejected by the accounting
officers, and if allowed the
same, he was not now indebted to the government. The United
States, on the trial of the case in the circuit court, denied the
right of the defendant to these commissions, as they had not been
allowed to him by any department of the government, and asserted
that the jury had not power to allow them on the trial.
The rejection of the claim to commissions by the Treasury
Department formed no objection to the admission of it as evidence
of offset before the
Page 32 U. S. 2
jury. Had the claim never been presented to the department, it
could not have been admitted as evidence by the court. But as it
had been made out in form and presented to the proper accounting
officers and had been rejected, the circuit court did right in
submitting it to the jury if the claim was considered as
equitable.
This Court will not sanction a limitation of the power of the
circuit court in cases of this kind to the admission of evidence to
the jury on a trial only to such items of offset against the claims
of the government as were strictly legal and which the accounting
officer of the Treasury should have allowed. It is admitted that a
claim which requires legislative sanction is not a proper offset
either before the Treasury officers or the court. But there may be
cases in which the services having been rendered, a compensation
may be made within the discretion of the head of the department,
and in such cases the court and jury will do not what an auditor
was authorized to do, but what the head of the department should
have done in sanctioning an equitable allowance.
The Act of 27 March, 1804, by which the President of the United
States was authorized to attach to the navy yard at Washington a
captain of the navy for the performance of certain duties, was
correctly construed by the head of the Navy Department, until 1829,
allowing to the defendant commissions on the sums paid by him as
the special agent of the Navy Department in making the
disbursements.
By an act passed 10 July, 1832, Congress authorized appointment
of a separate and permanent navy agent at Washington and directed
the performance of the duties "not only for the navy yard in the
City of Washington, but for the Navy Department under the direction
of the Secretary of the Navy in the payment of such accounts and
claims as the Secretary may direct." These duties would not have
been so specially stated in this act if they had been considered by
Congress as coming within the ordinary duties of an agent for the
navy yard at
Washington under the act of 1504. But independent of this
consideration, it is enough to know that the duties in question
were discharged by the defendant under the construction given to
the law by the Secretary of the Navy.
It will not be contended that one secretary of a department has
not the same power as another to give a construction to an act
which relates to the business of his department.
A practical knowledge of any one of the great departments of the
government must convince every person that the head of a
department, in the distribution of its duties and responsibilities,
is often compelled to exercise his discretion. He is limited in the
exercise of his powers by the law, but it does not follow that he
must show a statutory provision for everything he does. No
government could be administered on such principles. To attempt to
regulate by law the minute movements of every part of the
complicated machinery of government would evince a most
unpardonable ignorance of the subject. Whilst the great outlines of
its movements may be marked out and limitations imposed on the
exercise of its powers, there are numberless things which must be
done
Page 32 U. S. 3
that can neither be anticipated nor defined and which are
essential to the proper action of the government. Hence, of
necessity, usages have been established in every part 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 law, but it is evidence of the
construction given to it, and must be considered binding on past
transactions.
That the duties in question were discharged by the defendant
during office hours can form no objection to the compensation
claimed. They were required of him by the head of the department,
and being a subordinate, he had no discretion to decline the labor
and responsibility thus imposed. But seeing that his responsibility
would be greatly increased, and perhaps his labor, the Secretary of
the Navy increases his compensation, as in justice he was bound to
do.
This action of assumpsit has been brought, by the government to
recover from the defendant the exact sum which in equity it is
admitted he is entitled to receive for valuable services rendered
to the public in a subordinate capacity under the express sanction
of the head of the Navy Department. This sum of money happens to be
in the hands of the defendant, and the question is whether he
shall, under the circumstances, be required to surrender it to the
government and then petition Congress on the subject. A simple
statement of the case would seem to render proper a very different
course.
It would he a novel principle to refuse payment to the
subordinates of a department because their chief, under whose
direction they had faithfully served the public, had given an
erroneous construction to the law.
The Secretary of the Navy, in authorizing the defendant to make
the disbursements on which the claim for compensation is founded,
did not transcend those powers which, under the circumstances of
the cases. he might well exercise.
This section was brought on 14 August, 1829, in the circuit
court by the United States to recover from the defendant the sum of
$988.94, alleged to have been found due on a settlement of his
accounts by the accounting officers of the Treasury Department. The
case was tried in May, 1831, and a verdict and judgment rendered
for the defendant, to reverse which judgment the United States
prosecuted this writ of error.
Before the verdict was given, the district attorney of the
Page 32 U. S. 4
United States filed the following bill of exceptions. After
stating that the United States gave in evidence an account against
the defendant, settled at the Treasury, upon which they claimed
from the defendant a balance of $988.94 with interest from August
3, 1829, the bill of exceptions proceeded:
"The defendant then examined a witness, to prove that the said
defendant was a clerk in the Navy Department, at an annual salary
of $1,400, and while he was so acting, he was engaged and acted as
the agent for the payment of the money due to the navy pensioners,
the privateer pensioners, and acted also as a special agent for the
navy disbursements, and the moneys which were applied to the use of
those objects were placed in his hands by the government, to be
disbursed by him. That he was allowed for his services in the
payment of pensions, the annual sum of $250, but he has no
knowledge that any annual sum was ever allowed him for his services
as a special agent for the navy disbursements. The witness stated
that he was also a clerk in the Navy Department, and was in the
habit of stating the defendant's accounts as special agent, and he
knows that a commission of one percent was always allowed him, to
his knowledge, for ten or fifteen years past, until the settlement
of the present account, upon his disbursements as special agent for
the navy disbursements. The witness further stated that the
services of this special agent in these disbursements were similar
to those performed by other navy agents, such as the navy agent of
Boston, &c. That they amounted, during the period that he acted
as agent as aforesaid, to from fifty to one hundred thousand
dollars a year; that the defendant gave no bond or security, to his
knowledge, for the performance of these duties."
"The defendant then gave in evidence to the jury the certificate
of B. W. Crowninshield, then Secretary of the Navy, of 3 May, 1817,
and his account against the United States, allowed by Smith
Thompson, then Secretary of the Navy."
"Navy Department, May 3, 1817"
" George McDaniel, as agent of the navy pension fund, upon
Page 32 U. S. 5
all expenditures by him heretofore made, is entitled to the same
commissions as have been allowed to other agents."
"B. W. CROWNINSHIELD"
"
Secretary of the Navy"
" The navy pension fund to George McDaniel:"
" For compensation as clerk of the navy pension accounts from 1
July to the 31 December, 1818, inclusive, at the rate of two
hundred and fifty dollars per annum, $125.00."
" Respectfully submitted,"
"G. MACDANIEL"
" Upon which account are the following endorsements: 'To be
allowed,'"
"SMITH THOMPSON"
"Received payments in account,"
"G. MACDANIEL"
"The defendant set up against the claim made against him by the
United States in this case a charge for a commission of one percent
as special agent of the Navy Department on the expenditure of
$11,789.20, amounting to $117.89, and a like commission of $692.30,
upon the expenditure of $69,229.92, which commissions had been
disallowed by the Navy Department, and if now disallowed upon this
trial, would leave the defendant indebted to the United States in
the sum of $810.19, exclusive of the other items of claim made
against him in this case."
"The witness who gave testimony for the defendant proved that
the services performed by the defendant as special agent as
aforesaid were performed during office hours, and occupied from
one-third to one-fourth of his time."
"The defendant further proved that witness had had occasion in
the discharge of his duties in the Fourth Auditor's office to
examine the accounts of defendant, and reported the accounts in
question; that the same commission was claimed by defendant in
these accounts as had been charged and allowed in all his previous
accounts, so far as witness had examined them; that
Page 32 U. S. 6
the service had then been rendered and the moneys disbursed when
the exception was taken; that witness knows that the accounts of
public disbursements, including all these allowances of commissions
upon disbursements, are annually submitted to Congress and
inspected by a committee specially appointed for that purpose; that
said committee attends at the different offices, where the books
are open for their inspection; that the accounts embracing
defendant's claims and allowances are regularly so submitted and
inspected, and that no objection, as witness has ever heard, was
taken by any committee or any individual to such allowances until
defendant's final account, after leaving office, was settled by the
Fourth Auditor. Defendant promptly paid over all the moneys in his
hands when the amount was adjusted, reserving only the sums claimed
by him, which appear in the accounts exhibited, and if they are
allowed him, he has no public money in his hands. Defendant further
offered in evidence a report from the Secretary of the Treasury to
Congress, 1 March, 1831. Doc. 126, H.R. 21st Cong. 2d Sess."
"Upon the evidence so given to the jury, the counsel for the
United States prayed the court to instruct the jury that if it
should believe the same to be true, that still the defendant had no
right by law to the commissions which he claims in this case, and
that, as the sum so charged as aforesaid, as commissions had never
been allowed to him by any department of the government, it was not
competent for the jury to allow them upon this trial. Which
instruction the court refused to give, to which refusal the United
States by its attorney excepted."
The account exhibited on the trial by the district attorney of
the United States, by which the balance alleged to be due was
shown, was as follows:
To balance due the United States per his account current,
rendered on 5 June, 1829 . . . . . . . . . . . . . . . . . . $
688.33
This sum disallowed, as per reconciling statement of his
navy expenditure account herewith. . . . . . . . . . . . . .
228.14
Commission on $69,229.92, paid over to the Treasurer of the
United States, at one percent as debited in his account
as late special agent of the Navy Department, marked A.
Recorded on 5 June, 1829. Not allowed . . . . . . . . . . .
692.32
Page 32 U. S. 7
Compensation as agent for paying pensions from March to
31 May, 1829. Not allowed . . . . . . . . . . . . . . . . .
62.50
Error in statement No. 141 (previous report), in payments
of Fall's pension. . . . . . . . . . . . . . . . . . . . . .
6.00
---------
$1,677.29
By this sum deposited to the credit of the Treasurer of the
United States, 3 August 1829 . . . . . . . . . . . . . . . .
688.33
---------
Balance due the United States, by statement examined by
Comptroller, 12 August, 1829 . . . . . . . . . . . . . . . . $
988.96
"THOMAS H. GILLIES,
Act. 4th Aud."
Page 32 U. S. 10
MR. CHIEF JUSTICE McLEAN delivered the opinion of the Court.
The action was brought by the government to recover from the
defendant a balance charged against him on the books of the
Treasury Department amounting to the sum of $998.94. In his
defense, the defendant proved that he was a clerk in the Navy
Department, upon an annual salary of $1,400, and that he also acted
as the agent for the payment for the moneys due to the navy
pensioners, the privateer pensioners, and for the navy
disbursements. That the moneys
Page 32 U. S. 11
applied to the use of these objects, were placed in his hands by
the government. That he received the annual sum of $250 for his
services in the payment of pensioners, but that for ten or fifteen
years he received one percent on moneys paid by him for navy
disbursements. That these disbursements amounted from the sum of
fifty to a hundred thousand dollars a year, and that no security
was required from him. He claimed the usual allowance of one
percent upon certain sums of money disbursed by him, which had been
rejected by the Treasury officers, but which, if allowed, would
show that he was not indebted to the government.
Upon this state of facts, the attorney for the United States
prayed the court to instruct the jury that if it should believe the
same to be true, that still the defendant had no right by law to
the commissions which he claims, as the sum charged had never been
allowed to him by any department of the government, and that it was
not in the power of the jury to allow the commissions on the trial.
But the court refused to give the instructions, and a bill of
exceptions was taken.
Two questions are made by the bill of exceptions, for the
decision of this Court. 1. Whether the defendant has a right to
compensation for the services charged? 2. Whether, if such right
existed, it should have been allowed on the trial, as the proper
department had decided against it?
As to the second ground, it may be proper to remark that the
rejection of the claim of the defendant by the Treasury Department
formed no objection to the admission of it by the court as evidence
of setoff to the jury. Had the claim never been presented on the
department for allowance, it would not have been admitted as
evidence by the court. But as it had been made out in form, and
presented to the proper accounting officer and was rejected, the
circuit court did right in submitting it to the jury if the claim
was considered to be equitable.
On the part of the government it is contended that, in a case
like the present, the court, in admitting evidence of setoff
against the claim of the government, is limited not only to
Page 32 U. S. 12
such items as were exhibited to the auditor, but to such as were
strictly legal and which he should have allowed. This limitation on
the power of the court cannot be sanctioned. It is admitted, that a
claim which requires legislative sanction is not a proper setoff
either before the Treasury officers or the court. But there may be
cases in which, the service having been rendered, a compensation
may be made within the discretion of the head of the department,
and in such cases the court and jury will do not what an auditor
was authorized to do, but what the head of the department should
have done in sanctioning an equitable allowance.
It being clear that the circuit court did not err in allowing
the setoff of the defendant if he had a right to compensation for
the services rendered, the validity of this right will be the next
point for inquiry. On the part of the government it is contended
that the head of a department may vary the duties of the clerks in
his department so as to give dispatch and regularity to the general
business of the office, but that by such changes no clerk or other
officer of the department has a right to an increase of
compensation. That it appears in the present case there was no
increase of labor as to time, as the services for which
compensation is charged were rendered during office hours. And it
is also insisted that the duties discharged belonged to another
officer of the government, and that it is not competent for any
officer of the government, even the President himself, to take from
one officer certain duties which the law has devolved upon him and
require another to discharge them.
By the Act of 27 March, 1804, the President was authorized
to
"attach to the navy yard at Washington City, and to frigates and
other vessels laid up in ordinary in the eastern branch, a captain
of the navy, who shall have the general care and superintendence of
the same and shall perform the duties of agent to the Navy
Department."
Under this law, the Attorney General contends, it was the duty
of the commandant at the navy yard to make the disbursements which
were made by the defendant, and consequently no compensation for
such services can be allowed to the defendant.
Page 32 U. S. 13
Whatever may now be the construction of this act as it regards
the duties of the commandant, it appears he was not required to
make the disbursements which were made by the defendant, and
consequently they could not have been considered at that time as
forming a part of the duties of commandant of the navy yard.
By the Act of 10 July, 1832, Congress authorized the appointment
of a separate and permanent agent at Washington, who shall be
entitled
"to the same compensation, and under the same responsibilities,
and to be governed by the same laws and regulations which now are
or may hereafter be adopted for other navy agents,"
and it is made his
"duty to act as agent not only for the navy yard in the City of
Washington, but for the Navy Department, under the direction of the
secretary thereof, in the payment of such accounts and claims as
the secretary may direct."
By this act, that part of the act of 1804 which required the
commandant of the navy yard at the City of Washington to act as
agent is repealed.
Until the defendant was removed from office in 1829, he
continued to discharge the duties as special agent for the navy
disbursements. But after that period, it is stated that, a new
construction of the act of 1804 being given, those duties were
required to be performed by the commandant of the navy yard, who
continued to discharge them until an agent was appointed under the
act of the last session. Until this time, the act of 1804 seems
never to have been construed by the head of the Navy Department as
providing for the special services performed by the defendant, and
it would seem from the provision of the late act, which requires
the agent to act not only for the navy yard, but for the Navy
Department and to "pay such accounts and claims as the Secretary
may direct," that the former construction was correct, and the
Court is of this opinion. These duties would not have been so
specially stated in the act of last session if they had been
considered by Congress as coming within the ordinary duties of an
agent for the navy yard. But independent of this consideration, it
is enough to know that the
Page 32 U. S. 14
duties in question were discharged by the defendant under the
construction given to the law by the Secretary of the Navy.
It will not be contended that one Secretary has not the same
power as another to give a construction to an act which relates to
the business of the department. And no case could better illustrate
the propriety and justice of this rule than the one now under
consideration. The defendant having acted as agent for navy
disbursements for a great number of years under different
Secretaries, and having uniformly received one percent on the sums
paid as his compensation, he continues to discharge the duties and
receive the compensation until a new head of the department gives a
different construction of the act of 1804, by which these duties
are transferred to the commandant of the navy yard. By this new
construction, whether right or wrong, no injustice is done to the
defendant, provided he shall be paid for services rendered under
the former construction of the same act. But such compensation has
been refused him.
It is insisted that as there was no law which authorized the
appointment of the defendant, his services can constitute no legal
claim for compensation, though it might authorize the equitable
interposition of the legislature. That usage, without law or
against law, can never lay the foundation of a legal claim, and
none other can be set off against a demand by the government. A
practical knowledge of the action of any one of the great
departments of the government must convince every person that the
head of a department, in the distribution of its duties and
responsibilities, is often compelled to exercise his discretion. He
is limited in the exercise of his powers by the law, but it does
not follow that he must show statutory provision for everything he
does. No government could be administered on such principles. To
attempt to regulate by law the minute movements of every part of
the complicated machinery of government would evince a most
unpardonable ignorance on the subject. Whilst the great outlines of
its movements may be marked out and limitations imposed on the
exercise of its powers, there are numberless things which must be
done that
Page 32 U. S. 15
can neither be anticipated nor defined and which are essential
to the proper action of the government. Hence of necessity 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 law, but it is
evidence of the construction given to it, and must be considered
binding on past transactions.
That the duties in question were discharged by the defendant
during office hours, can form no objection to the compensation
claimed. They were required of him by the head of the department,
and being a subordinate, he had no discretion to decline the labor
and responsibility thus imposed. But seeing that his responsibility
would be greatly increased, and perhaps his labor, the Secretary of
the Navy increases his compensation, as in justice he was bound to
do. In discharging the ordinary duties of clerk, the compensation
of the defendant was fixed at $1,400, but when the duties of agent
for navy disbursements were superadded to those of clerk, there is
an adequate augmentation of pay given to him. Is there anything
unreasonable or unjust in this?
But it is said there was no law authorizing such an officer to
be appointed. That the duties performed by the defendant were
necessary for the public service has not been denied, nor it is
pretended that the commissions allowed him were higher than the
amount paid for similar services elsewhere. The payments by him
were legal, and being made under the immediate direction of the
Secretary of the Navy, errors were avoided which might have
occurred under other circumstances. It must be admitted that there
was no law authorizing the appointment of the defendant, nor was it
considered necessary that there should be a special statutory
provision on the subject. For the convenience of the officers of
the navy and others who were engaged in the service of the
department, certain disbursements became necessary, and as no
law
Page 32 U. S. 16
specially authorized the appointment of an agent for this
purpose, they were required to be made by a clerk. In this manner
were these payments made for fifteen years, under different
Secretaries of the Navy, and the same rate of compensation as now
claimed was allowed. The charge was sanctioned by the accounting
officers of the Treasury Department, and no objection was ever made
to it by the committees of Congress who annually inspected the
books of the department. It would seem, therefore, whether the
claim of the defendant be weighed in reference to the services
performed or to the long sanction which has been given to them by
the Navy and Treasury Departments, its justice is unquestionable.
The government does not deny the performance of the services by the
defendant, nor that they do in equity entitle him to compensation,
but as his appointment was without legal authority, it is insisted
he can obtain compensation only by application to Congress.
An action of assumpsit has been brought by the government to
recover from the defendant the exact sum which, in equity, it is
admitted he is entitled to receive for valuable services rendered
to the public in a subordinate capacity under the express sanction
of the head of the Navy Department. This sum of money happens to be
in the hands of the defendant, and the question is whether he shall
under the circumstances be required to surrender it to the
government and then petition Congress on the subject. A simple
statement of the case would seem to render proper a very different
course.
If some legal provision be necessary to sanction the payment of
the compensation charged, application should be made to Congress by
the head of the department who required the service and promised
the compensation. But no such provision is necessary. For more than
fifteen years, the claim has been paid for similar services, and it
is now too late to withhold it for services actually rendered. It
would be a novel principle to refuse payment to the subordinates of
a department because their chief, under whose direction they had
faithfully served the public, had mistaken his own powers and had
given an
Page 32 U. S. 17
erroneous construction of the law. But the case under
consideration is stronger than this. It is not a case where payment
for services is demanded, but where the government seeks to recover
money from the defendant to which he is equitably entitled for
services rendered. This Court cannot see any right, either legal or
equitable, in the government to the sum of money for the recovery
of which this action was brought. It thinks that the Secretary of
the Navy, in authorizing the defendant to make the disbursements,
on which the claim for compensation is founded, did not transcend
those powers which, under the circumstances of the case, he might
well exercise. And it therefore thinks that the circuit court did
not err in refusing to give the instructions to the jury as prayed
by the attorney of the United States. The judgment of the circuit
court is therefore
Affirmed.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia holden in and for the County of Washington and was argued
by counsel, on consideration whereof it is ordered and adjudged by
this Court that the judgment of the said circuit court in this
cause be and the same is hereby affirmed.