Ward v. United States (77 U.S. 593)

APPEAL from the Court of Claims; the case being thus:

The Continental Congress, on the 3d day of October, 1776, being in want of five millions of dollars to prosecute the war, resolved to borrow it on what were called loan-office certificates, and to establish a loan office in each State for the convenience of the lenders of money. The resolution directed the appointment by the authority of the State of a commissioner of loans, whose duty it was to receive the certificates from the Treasurer of the United States, and to deliver them for such sums of money as he should be able to borrow. The faith of the government was pledged to redeem these certificates when countersigned by this officer.

In continuation of its policy on this subject, Congress, on the 15th of January and the 22d of February, 1777, provided for a further issue of this class of securities on the basis of the resolutions of the preceding October. Accordingly, certificates in proper form, duly signed by the designated Federal officer, were transmitted to the different loan offices of the country to be given in exchange for money, when countersigned by the loan officer of the State. Some of these certificates were sent to the loan office of Georgia, and among them forty-three, now in the possession of one Ward, as treasurer of a company called the Ohio Company, an old land company composed originally largely of Revolutionary soldiers, and which forty-three certificates made the foundation of the claim in the court below. His petition alleged that they were duly issued and in possession of a bon a fide holder on December 23d, 1781, and about 1787 came into the possession of the Ohio Company, and he now claimed payment from the United States; representing apparently the Ohio Company, the real owner in the matter.

The Court of Claims decided at first in favor of the claim, but the matter was referred back by Congress for a further consideration.

On this second hearing the court found as matter of fact thus:

'2. That it was unknown and could not be ascertained who was the commissioner for the State of Georgia, or whether any such commissioner had been appointed and authorized to countersign such loan certificates; that at the time of the transaction there was no formal loan office in Georgia, and that a large part of the State was in the possession of the public enemy.

'3. That the said loan certificates were not signed by any duly authorized commissioner for the State of Georgia, but that they bore a certificate in the words following, to wit:

"Countersigned: By order of J. A. Treutlin, Esq., Governor of Georgia.

E. DAVIS, JR.'

'4. That there was no evidence to show that E. Davis, Jr., was a commissioner for Georgia, or that he was ever reputed to be such, or that he was authorized to countersign such loan certificates by the State of by the governor of Georgia, or that these are the veritable signatures of E. Davis, Jr.

'5. That interest on certain loan certificates, similar to those in action, was paid by the Treasury Department up to the 23d December, 1781, and that on twenty-nine of the certificates in action interest for four years has also been paid by the defendants, and duly noted and indorsed thereupon, and that no objection to these or similar loan certificates, or to the authority of E. Davis, Jr., to act as commissioner, was taken by the defendants until the year 1792.

'6. That no direct consideration or value ever passed to the defendants from the claimant or from any other person for the said loan.'

In regard to the question about which the Court of Claims certified that no evidence showed it, to wit, whether E. Davis, Jr., was commissioner of loans for the State, &c., it appeared that the questions had been considered in 1792 by Mr. Hamilton, then Secretary of the Treasury, and that in a report dated the 28th of March, 1792, and published at the time, he stated as the result of 'diligent inquiry' on the subject, that he had been unable to obtain evidence either of the appointment of E. Davis to the office of commissioner of loans for Georgia, or that he was ever known or reputed to have acted in that capacity; and that there was no evidence that the paper which he put in circulation had been issued for any purpose of the United States. With this report papers were transmitted to Congress tending to justify his conclusion, and to show that the certificates were placed in the hands of Davis by the executive council of Georgia, to purchase goods for the State. These papers consisted of an affidavit of John Wereat, auditor of Georgia, and a long time resident there, denying that Davis, whom he well knew, was at any time commissioner of loans; of letters from Richard Wyllzhyr, commissioner of loans of the State in 1791, giving his opinion to the same effect, and a communication from Samuel Steick, of Governor Houston's staff, that the certificates were issued on State account.

The payment of interest Secretary Hamilton conceived to have been unauthorized, and made by mistake of one of the treasurers, a certain Hillegas. He notes that such mistakes had occurred, and that there were examples of payment on both forged and counterfeit certificates; a payment which he observes 'could not confer validity upon a claim originally destitute of it, though it might occasion hardship to individuals, who, on the faith of that payment, might have been induced to become possessors of these certificates for a valuable consideration.' There was, however, no intimation that such was the case with regard to these certificates.

In 1795 the same certificates apparently were presented by one Tracy 'for Benjamin Talmadge,' who sought to have them funded, but, in consequence of the objections previously made to them by Mr. Hamilton, they were rejected.

According to a statement of Ward, found among the public documents, the certificates were presented to the treasury in 1792 by Mr. Talmadge (who was treasurer of the Ohio Company from 1791 until 1825), and remained there until 1812. In that year having, according to this statement of Ward, been sold by Mr. Talmadge, treasurer of the company, at public auction, and bought by one John Delafield (though still according to Ward's statement considered the property of the Ohio Company), the certificates were withdrawn from the treasury, and Congress was asked to pay them, on the petition of Delafield, who states in his petition that he owned them, and wished them funded for his benefit.

Before the committee of Congress which had charge of the subject, and of which Mr. Talmadge was chairman, many letters and documents were produced; letters from Major Hugh McCall, a revolutionary officer of Georgia, and others, to show that the claim was well founded; among them a letter giving a history of the two persons already named (Wereat and Steick), who had certified in the papers accompanying Mr. Hamilton's report, in a way which made against the claims; Major McCall's letters tending to prove that Wereat and Steick were uninformed of the passing events during Governor Treutlin's administration; also a certificate of Sheftall, Esq., stating that E. Davis did in the latter part of 1777 receive an appointment from Governor Treutlin 'similar to that of commissioner of loans,' and countersign certificates. Divers well-known persons testified that Mr. Sheftall's integrity was great, and his knowledge of events in the revolutionary war was supposed to be superior to that of any person living; that he had 'an unusually strong memory,' and that they would consider him in 1816 quite competent to speak about the matter in question.

The committee, of which Mr. Talmadge was chairman, reported in successive sessions of the Fourteenth Congress in favor of the payment. But Congress did not pay the claim.

On the case as found by them the Court of Claims decided as matter of law:

'1. That no cause of action would arise upon the said loan certificates unless the same were duly countersigned by a commissioner for the State of Georgia.

'2. That in the absence of other evidence the indorsements of E. Davis, Jr., did not raise a legal presumption that E. Davis, Jr., was a commissioner for the State of Georgia, or that he was authorized to countersign such certificates, or that the signatures are the veritable signatures of the said E. Davis, Jr.

'3. That the payment and cancellation of certain similar loan certificates and the payment of interest for four years upon certain of the loan certificates in action did not raise a legal presumption that E. Davis, Jr., was a commissioner for the State of Georgia, or authorized to countersign such loan certificates, and do not estop or conclude the defendants from controverting such authority and signature.'

The claimant now brought the case here.

Mr. Stanbery and Mr. T. Ewing, Jr., for the appellant:

This claim is old, but not by the fault of the claimant; for until 1855 there was no forum provided by the United States to hear and decide it. Meanwhile, as is matter of historical knowledge, all the executive records in Georgia were destroyed by fire, in 1780. And 'the papers of the State of Georgia, on which a settlement was made by the United States with that State,' were burned in August, 1814, with other records of the United States Treasury.

Evidence of contemporaries abundant to prove the claim perished before the United States provided a court to hear or perpetuate it. The time of the issue was not favorable to strict method in governmental transactions, and they were very loosely conducted. These certificates were executed and sent to Georgia while the Continental government was on the wing from Philadelphia to Lancaster, and thence to Yorktown. The date was left blank, and apparently also the name of the payee, to be filled up by the State agent, and they were charged in the first instance to nobody. The State was at that time invaded and this fund was sent to enable the local government and forces to make head against the enemy, which soon after overran the rest of Georgia, took its capital, and drove its executive officers from the State.

In a report to the House of Representatives, in 1797, the Honorable Dwight Foote, chairman of the committee on claims, said:

'It will be recollected that at the commencement of the war the United States were destitute of money, and during a long period of years afterwards were obliged to rely principally on credit in all of their important operations. Having at that time no settled National government, a regular system for conducting public business, especially money transactions depending on credit, was not to be expected. Great numbers of individuals were necessarily invested with the power of binding the public by their contracts. Almost every officer of the army, whether in the commissary department or otherwise, in different stages of the war, had it in his power to contract debts legally or equitably binding on the United States.'

In view of these circumstances, this case should be judged without unfriendly presumptions from the absence of evidence which perished by time or fire before a court was allowed to hear or perpetuate it, or from that apparent want of method in the transaction which came of the exigencies of the Revolution, to promote which these certificates were expended.

But the positive recognition of the claim is great. The payment of interest for four years, which was of course indorsed on the certificate, gave them a currency which was above all reproach. They were payable to bearer. The report of 1792, doubtless prepared by a clerk, bears the signature of Alexander Hamilton, and the shadow of his great name seems to have thenceforth obscured the case. But that report was largely founded on the testimony of Wereat and Steick, whose knowledge, the far better information of Mr. Sheftall shows to have been bad, in regard to the relation which E. Davis, Jr., bore to these certificates; and in this tribunal no name, however high, and no error, however ancient or often repeated, if finally refuted, should stop the course of justice.

Mr. Talbot, for the United States, relied largely upon the report of Mr. Hamilton, whose knowledge was contemporary knowledge, and who above all statesmen of the day would have paid any claim against the United States which was not plainly unfounded. There was no evidence whatever that he suffered his clerks to make reports for him on subjects involving the credit and good faith of the United States.

Mr. Justice DAVIS delivered the opinion of the court.