District of Columbia v. Cornell

This was an appeal from a judgment of the court of claims against the District of Columbia for $7,750, and interest on certificates of indebtedness, commonly called 'sewer certificates,' issued by the board of public works of the district, in the following form, with coupons attached:

Registered: GEO. E. BAKER, Comptroller.

DISTRICT OF COLUMBIA.

No. 1380.

WASHINGTON, July 1st, 1873.

This certifies that for work done under direction of the board of public works, and chargeable to the private property adjoining and benefited thereby, there is due to the bearer, five hundred dollars, payable July 1st, 1876, with eight per centum interest, payable semi-annually, as per coupons attached. Issued in accordance with act of legislative assembly. Secured by pledge to the commissioners of the sinking fund of assessments made in accordance with act approved June 26, 1873, against private property benefited by improvements, and receivable in payment of such assessments.

BOARD OF PUBLIC WORKS.

By JAMES A. MAGRUDER, Treasurer.

Countersigned: HORACE J. FROST,

For Commissioners of Sinking Fund.

Last six months' interest payable with certificate.

The material facts, as found by the court of claims, were as follows: On July 1, 1873, such certificates, to the amount of about $2,000,000, were issued by the board of public works under an act of the legislative assembly of the District of Columbia approved June 26, 1873, and were paid out to contractors, jobbers, and laborers, and soon became greatly depreciated in value, and were bought and sold by brokers and speculators. After the creation of the board of audit by the act of congress of June 20, 1874, c. 337, § 6, most of these certificates, including those in question, were presented to that board, and redeemed as provided in that act. 18 St. 119. The certificates so redeemed were canceled by stamping across the face in ink, with a ribbon stamp, the words, 'Canceled by the Board of Audit.' They were then inclosed in jackets, tied up in bundles of 50, in numerical order, and placed on a shelf under the counter in a room in the treasury department, occupied by several clerks employed by the board. The fact of redemption was entered in a registry book. After the redemption and cancellation of the certificates, and while they were in the custody of the board of audit, as above stated, they were stolen, in February or March, 1876, by one George H. Farnham, who was then a clerk in the employ of the board, and occupying a desk behind the counter under which the certificates were deposited, but whose duties were not connected with the redemption or care of the certificates. By the use of detersive soap Farnham entirely removed from a large portion of the certificates the marks of cancellation. From other certificates, on which some ink-marks still appeared, he cut off the coupons, and pasted them over the partially effaced marks. In this condition no signs or marks of cancellation or redemption were visible on the certificates, but some of them still had a soiled or stained appearance. The stolen certificates were sold by Farnham to brokers in Washington, and by them to one Ritchie, and by him to the claimant, and all the purchasers bought them for value, in good faith, and without notice that they had been redeemed or cancelled; and the certificates were then in the same condition, in respect of their appearance as to indicating signs or evidences of cancellation or redemption, as they were at the time they were first negotiated by Farnham, and as they are now. The judgment of the court o claims in favor of the claimant was for the amount of such certificates as were shown to have been so purchased by him before their maturity. 20 Ct. Cl. 229.

Atty. Gen. Howard, for the District of Columbia.

S. Shellabarger and J. M. Wilson, for appellee.

Mr. Justice GRAY, after stating the facts as above, delivered the opinion of the court.