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prisoner (Lord) had no rights, vested or contingent, at more than two years before the statute was passed. the time the amendment was passed, which it did or 10 Cal. 305. could take away. And Mr. Austin says that, from a Though this rule of construction is evidently just legal point of view, there are no rights but those which and sound, yet it may leave existing rights of action are the creatures of positive law. The proposition we unprovided with any limitation whatever. Thus, if maintain (and which is founded on principle and sup- the statute supersedes or repeals a former statute on ported by authority) is this: That a statute extending the same subject, or if no limitation had been preri. the time within which actions may be brought or in- ously prescribed, causes of which have previously acdictments may be found, and providing that they may crued, are left without any limitation. Still we see be brought or found within a certain time after the not how this circumstance affects the soundness of cause of action shall accrue, or after the offense shall be the rule. committed, is to be construed as applying to rights of But the contrary rule was adopted and applied by action which have accrued,or to offenses which have been the District Court of Philadelphia in Com. v. Hutchincommitted, before the statute was passed, and which son, 2 Pars. 453, where a statute providing that from and were not then barred by any previous limitation; and after the passage of this act no indictment shall be that, in such case, the statute does not operate retro- found, unless within five years from the time at which spectively, but prospectively, and affects existing rights the offense shall have been committed," was held to apor offenses only from the time of its passage.
ply to offenses committed more than five years before But where a statute reduces the limitatiori, and pro- the statute took effect. “The expressions employed are vides that certain actions must be brought within a broad and comprehensive, and would seem to embrace specified time " after the cause thereof shall accrue," all cases where the offense had been perpetrated before or, “shall have accrued,” it is not to be construed the passage of the act, as well as after. It is simply (though the language may admit of that construction) | prohibiting the officers of justice from acting in such to apply to rights of action which have previously ac- cases." If the same rule of construction applicable crued; for if such a construction were adopted, many to statutes of limitation in civil cases is applicable to rights of action would become absolutely barred statutes of limitation in criminal cases (and we perthe moment the statute took effect, and, as to those, ceive no good reason why the same rule should not would be unconstitutional, and, therefore, void, as govern both cases), then this decision cannot be susimpairing the obligation of contracts, in taking away tained upon that rule, for the rights of the people all remedy to enforce them. Thus, if the original against criminal offenders became immediately barred. limitation was five years, and a subsequent statute However, if the decision is correct, it is an authority reduced it to three, all rights of action which have in our favor. accrued more than three years before the statute was Another and different rule of construction of statpassed would be cut off Immediately. So, also, if no utes shortening the time within which actions must be limitation was previously prescribed. Construing such brought, is to construe them as running against exista statute to run against existing rights of action from ing causes of action from the time the statute took effect, the time the right sball have accrued, would be giving notwithstanding the statute provides that suits thereon to it a retrospective operation, which would work in- must be instituted “within two years next after the jurious consequences. A rule of construction which cause or right of action shall have accrued, and not would lead to such consequences will not, therefore, after.” This rule was adopted and applied in Sohn v. be adopted, when its language will admit of a different Waterson, 17 Wall. 596. With much stronger reason construction. This rule protects the party in whom should this rule apply to statutes lengthening the limithe right is vested, and was adopted and applied in tation. The importance of this decision, the high authe following cases: Ridgeley v. Steamboat Reindeer, thority of the court rendering it, and the fact that 27 Mo. 442; Hull v. Minor, 2 Root, 223; Thompson v. the principle enunciated and established is decisive of Alexander, 11 Ill. 54; Watkins v. Haight, 18 Johns. the present case, require a liberal quotation from the 138; Sayre v. Wisner, 8 Wend. 661; Williamson v. opinion delivered by that distinguished jurist, Judge Field, 2 Sandf. Ch. 569; Didier v. Davison, 2 Barb. Bradley. * The plaintiff contends that the statute Ch. 477; Calkins v. Calkins, 2 Barb. 355. (It should be cannot apply to actions which accrued more than two noticed, however, that the N. Y. Rev. Stats. expressly years before its passage, because it would cut them off provide that the limitations therein prescribed shall and defeat them altogether, and would thus impair not apply to any cases where the right of action shall the obligation of contracts. A literal interpretation have accrued before 1830.) Boyd v. Barrenger, 23 Miss. of the statute would have this effect. But it is evident 269; Garrett v. Beaumont, 24 id. 379; and Murray v. that the legislature could not have had any such inGibson, 15 How. (U. S.) 421, Daniel, J., saying: “ As a tention. * The court below held that the act was general rule for the interpretation of statutes, it may prospective in its operation, and affected existing be laid down that they never should be allowed a re- causes of action only from the time of its passage. troactive operation where this is not required by ex- This seems to us a reasonable construction and one press command or by necessary and unavoidable im- that prevents the legislative intent from being frusplication. Without such command or implication trated * It is a rule of construction that all statthey speak and operate upon the future only. Espe- utes are to be considered prospective, unless the lancially should this rule of interpretation prevail, when guage is express to the contrary, or there is a necesthe effect and operation of a law are designed, apart sary implication to that effect. The plaintiff contends from the intrinsic merits of the rights of parties, that the application of this rule to the statute in questo restrict the assertion of those rights."
tion would have the effect of restricting its application And where a statute provided that certain actions to actions accruing after the passage of the act. But shall be brought within two years from the time the this is not a necessary conclusion. A statute of limiright “has accrued or shall acorue,” it was held un- tations may undoubtedly have effect upon actions constitutional as to a cause of action which acorude which have already accrued as well as upon actions
which accrue after its passage. Whether it does so or not will depend upon the language of the act, and the apparent intent of the legislature to be gathered therefrom. When a statute declares generally that no action, or no action of a certain class, shall be brought, except within a certain limited time after it shall have accrued, the language of the statute would make it apply to past actions as well as to those arising in the future. But if an action accrued more than the limited time before the statute was passed, a literal interpretation of the statute would have the effect of ab. solutely barring such action at once. It will be presumed that such was not the intent of the legislature. Such an intent would be unconstitutional. To avoid such a result, and to give the statute a construction that will enable it to stand, courts have given it a prospective operation. In doing this, three different modes have been adopted by different courts. One is to make the statute apply only to causes of action arising after its passage. But as this construction leaves all actions existing at the passage of the act, without any limitation at all (which, it is presumed, could not have been intended), another rule adopted is, to construe the statute as applying to such existing actions only as have already run out a portion of the statutory time, but which still have a reasonable one left for prosecution before the statutory time expireswhich reasonable time is to be estimated by the court -leaving all other actions accruing prior to the statute unaffected by it. (4 Wisc. 18; 15 id. 55; 7 Ind. 91; but see 31 id. 221.) The latter rule does not seem to be founded on any better principle than the former. It still leaves a large class of actions entirely unprovided with any limitation whatever, or, as to them, is unconstitutional, and is a more arbitrary rule than the first. A third construction is that which was adopted by the court below in this case, and which we regard as much more sound than either of the others. It was substantially adopted by this court in Ross v. Duval, 13 Pet. 62; and Levis v. Lewis, 7 How. 778. In those cases certain statutes of limitation had originally excepted from their operation non-residents of the State, but this exception had been afterward repealed; and this court held that the non-resident parties had the full statutory time to bring their actions after the repealing acts were passed, although such actions may have accrued at an earlier period. • The question is,' says Chief Justice Taney (speaking in the latter case) from what time is this limitation to be calculated? Upon principle, it would seem to be clear, that it must commence when the cause of action is first subjected to the operation of the statute, unless the legislature has otherwise provided.''
"" Speaking of Murray v. Gibson, 15 How. 4:21, he says: “But that decision was made in express deference to those of the State court, which were regarded as authoritative. In the present case we are not bound by any decisive construction of the State court on this point." (See, also, Lawrence v. Trustees, 2 Denio, 582 (Vice-Chancellor Hoffman); 7 Ind.468, and dicta in 8 Wend. 661, and 10 Cal. 308, supra.) It may admit of some doubt whether the principle adopted was correctly applied to the statute in that case. We might say (with Vice-Chancellor Sandford in 2 Sandf. Ch. 569) that the statute says nothing of two years from the time it goes into effect; its language is plain and positive, “after the cause of action shall have accrued, and not after.” However this may be, it needs no argument to show that the principle of that decision is applicable to the statute in
this case, and is decisive. If the same rule of construction should be adopted in construing statutes of limitation, extending the time within which indictments may be found (and we see no good reason why it should not be) then we have a few additional authorities directly in favor of our proposition.
In Ogden v. Blackledge, 2 Cranch, 272, the limitation was seven years, but before that period had run against the plaintiff's demand, the statute was repealed, and suit was commenced fifteen years after the right of action accrued, and it was held that the statute “ having been repealed by the act of 1789, at which time seven years had not elapsed,” was no defense. This case was followed in Winston v. McCormick, Smith's R. (Ind.), 8, where the contract was made while the act of 1838, which limited the bringing of an action to five years, was in force, but that act was repealed by the act of 1843, before five years had elapsed, which extended the time to six years. The defendant relied on a proviso in the repealing act. But that learued and able judge, Blackford, said that “the effect of the proviso is only to save from the consequences of the repeal certain rights actually existing when the repeal took place. It does not appear that at the time of the repeal the defendant had any defense. If the defense did not exist when the act of 1838 was repealed, the defendant had no existing right to be affected by the repeal. Had the five years expired before the repeal of the act of 1838, that might be said to have operated upon the case, and the defendant then would have had a defense, which the subsequent repeal of the act would not have taken away. This point was decided in McKinney v. Springer, 8 Blackf. 506. But this is a different case.
The defendant, in order to show his construction of the statutes to be right, says that suits on contracts made previous to the act of limitations of 1843, are unlimited unless the old act governs them; the act of 1843 being prospective only. But we do not agree to this. The language of the act of 1843 on the subject is not uuiform. In one place it is 'after the cause of action shall accrue;' in another, after the accruing of the cause of action'; in others, after the cause of action shall have accrued.' We suppose the legislature intended to embrace all cases, both before and after the taking effect of the act, except such as are within the decision of McKinney v. Springer. * * This suit having been commenced after the act of 1843 was in force, which prescribes six years as a bar, the plea relying on the lapse of five years next before the suit was commenced, cannot be sustained. Were the statute of limitations a part of the contract, then this plea would be valid; but the law is otherwise. The statute affects the remedy only; and that statute governs cases like this which happens to be in force when the suit is brought." Approved in Pritchard v. Spencer, 2 Ind. 487. S. P. applied, in 3 id. 362, to a statute shortening the limi. tation, and thereby cutting off an existing right of action. The decisions in that State are not harmonious (see 7 Ind. 91, 468; 31 id. 221); but they do not affect the decision above quoted.
Royce v. Hurd, 24 Vt. 620, holds that a statute affecting non-resident defendants "against whom there is or may be any cause of action” from the operation of the statute of limitations, applied to all subsisting cause of action not barred at the time of its passage.
Couch v. McKee, 1 Eng. (Ark.) 484, merely holds that an amendment to a statute extending the limita.
tion from three to five years did not apply to rights of of construction belongs to all acts of amnesty and action previously barred.
grace, but because the very existence of the statute is In Calvert v. Lowell, 5 Eng. 147, the right to sue a recognition and ratification by the legislature of the accrued in 1841, and the limitation was three years; but fact that time, while it gradually wears out proofs of in 1844, before three years had elapsed, a statute was innocence, has assigned to it fixed and positive periods enacted providing that as to “causes of action which in which it destroys proofs of guilt.” But the learned shall accrue," the limitation shall be five years, but judge misapprehends Mr. Wharton, for it is evident, did not expressly repeal the former statute. Action not only from the language of the text, but also from brought in 1847. Plaintiff claimed five years from 1844, note b, to “legislative attempts to institute prosecubut the court decided that his case was governed by tions for offenses which prior statutes have canceled." the former statute, which had not been repealed. The proposition that the legislature, by passing a
In Stone v. Flower, 47 N. Y. 566, a statute provided statute of limitation, surrenders its right to alter that that “The time of absence from this State of any statute is (to use a mild expression) absurd. such person during his term of service in the war) and That portion of the original statute prescribing a while engaged therein, shall not be taken as part of limitation of three years was so far abrogated by the the period limited,” etc. Held, that the time of amendment of 1873. Consequently, if the statute as absence of a person in such service, prior to its pas- amended is not applicable to offenses previously comsage, is not excluded in calculating the time limited mitted, they are left without any limitation whatever! for the commencement of an action previously accrued. Thus, the arguments used by defendant's counsel In Ex parte Lane, 3 Metc. 213, a statute provided that operate like a boomerang. no certificate of discharge should be granted if a The statute does not read “after the offense shall be debtor shall, within six months before filing his peti- committed,” but “after the commission of the tion, make an assignment to preferred creditors, and offense." it was held to apply to debtors who had filed their The conclusions we reach are: petition before the passing of the statute. “The 1. That a statute extending the time within which statute is not to be considered a retrospective act, dis- actions may be brought, and providing that they may turbing vested rights; but as altogether prospective in be brought within a specified time after the cause of its operations, although it might depend, in some action shall accrue or shall have accrued, is to be concases, on acts done before it took effect.” And see, also, strued as applying to causes of action which have Moore v. Mansert, 49 N. Y. 332.
accrued before the statute went into effect, and which Dash v. Van Kleeck, 7 Johns. 477, merely holds that, were not then barred by any previous limitation; and where a defense to an action of tort existing by the that, in such case, the statute does not operate retrocommon law is taken away by statute, and the spectively, but prospectively, and affects existing statute is repealed, the defense is not available against rights of action only from the time of its passage. an action pending at the time of the repeal.
Especially is this so, when the statute is an amendThe following named cases were cited by defendant's ment of a former statute. counsel, but none of them arose under the statute of 2. That upon principle the same rule of construction limitation: Wood v. Oakley, 11 Pai. 400; People v. is applicable to statutes of limitation in criminal cases. Carnal, 6 N. Y. 463; Ely v. Horton, 15 id. 595 ; 3. That if the statute as amended in 1873 is not appliSanford v. Bennett, 24 id. 20; Prince v. U. S., 2 cable to offenses committed before its passage, those Gall. 204; Carroll v. Carroll, 16 How.(U.S.) 275; Couch are left unprovided with any limitation, the original v. Jeffries, 4 Burr. 2460; Gilmore v. Sleuter, 2 Mod. 310. statute being so far abrogated.
Now let us present the views of Judge Mullin. He 4. That at the time the amendment was passed the bases his decision on the following extract from Whart. defendant had no rights, vested or contingent, which Crim. Law, VI, § 444 a. “A mistake is sometimes it did or could take away. made in applying to statutes of limitations in criminal These propositious are founded on principle and suits the construction that has been given to statutes fortified by authority. " What rights are taken away? of limitation in civil suits. The two classes of statutes, Is the defendant deprived of his defense upon the however, are essentially different. In civil suits the merits? The pretense of the defendant does not merit statute is interposed by the legislature as an impartial the name of right. It relates to the remedy." arbiter between two contending parties. In the con
F. P. M. struction of the statute, therefore, there is no intendment to be made in favor of either party. Neither PROXIMATE AND REMOTE CAUSE-SETTING grants the right to the other; there is, therefore, no
FIRE TO BUILDINGS. grantor against whom arise the ordinary presumptions.
SUPREME COURT OF PENNSYLVANIA-NOVEMBER But it is otherwise when a statute of limitation is
19, 1877. granted by the State. Here the State is the grantor,
Hoag V. LAKE SHORE AND MICHIGAN SOUTHERN surrendering by act of grace its right to prosecute, and
RAILWAY COMPANY. declaring the offense to be no longer the subject of prose
A land-slide took place on defendant's railroad, after cution. The statute is not a statute of process, to be which a train of cars loaded with oil came along. The scantily and grudgingly applied, but, on the contrary,
engineer did not see the slide and ran into it, whereby
the train was wrecked and the oil set on fire. The declaring that after a certain time oblivion shall be burning oil ran into a creek alongside the railroad, cast over the offense; that the offender shall be at
floated down the current several hundred feet, and set
fire to and destroyed plaintiff's property. Held, that liberty to return to his country, and resume his immu- the negligence of the engineer in not seeing the slide nities as a citizen, and that from henceforth he may
was the remote and not the proximate cause of the in
jury to plaintiff's property, and defendant was not cease to preserve the proofs of his innocence, for the liable. proofs of his guilt are blotted out. Hence it is that CTION by plaintiffs, trading as Hoag & Alger, for statutes of limitation are to be liberally construed in damage to their property, caused by the neglifavor of the defendant, not only because such liberality gence of defendant. The facts appear in the opin.
ion. The court below directed a verdiot for defend- constitute a succession of events so linked together ant, and plaintiffs took a writ of error to this court. that they become a natural whole, or whether the Charles W. Mackay, for plaintiffs.
chain of events is so broken that they become indeMcCalmont & Osborn, for defendant.
pendent, and the final result cannot be said to be the Paxson, J. This was an action on the case to re- natural and probable consequence of the primary cover compensation for certain property destroyed by cause, the negligence of the defendants.” The case of fire, caused as was alleged by the negligence of the de- Raydure v. Knight was meagerly presented; the charge fendants. The facts, as far as they are essential to of the court was not sent up, and a majority of the elucidate the point in controversy, are as follows: court were of opinion that no sufficient cause for reThe plaintiffs were the occupiers of a piece of land versing the judgment had been shown.* I am unable situate within the limits of Oil City, on the western to see any special bearing this case has upon the quesbank of Oil Creek. The railroad of defendants is tion before us. The doctrine laid down in The Railconstructed along said creek over the land of the road Company v. Hope, and to be gathered incidentally plaintiffs, and at the base of a high hill. On the after- perhaps from Raydure v. Knight, is, that the question poon of April 5, 1873, during a rain storm, there was a of proximate cause is to be decided by the jury upon small slide of earth and rock from the hill-side, down all the facts in the case; that they are to ascertain the to and upon the railroad. About ten minutes prior relation of one fact to another and how far there is a to the accident one of the defendant's engines had continuation of the causation by which the result is passed over the road in safety; at that time no slide linked to the cause by an unbroken chain of events, had occurred. This engine was followed in a few each one of which is the natural, foreseen and necessary minutes by another engine, drawing a train of cars result of such cause. But it has never been held that loaded with crude oil in bulk. The latter engine ran when the facts of a case have been ascertained, the into the slide, was thrown off the track, ran on about court may not apply the law to the facts. This is done 100 to 150 feet, when the tender, which was in front of daily upon special verdicts and reserved points. Thus the engine, was overturned into Oil Creek; the engine in The Railroad Company v. Kerr, 12 P. F. S. 353, a itself was partly overturned; two or three oil cars be- case bearing a striking analogy to this, the court subcame piled up on the track and burst. The oil took mitted the question of negligence to the jury, but refire, was carried down the creek, then swollen by the served the question of proximate cause upon the unrain, for several hundred feet, set fire to the property disputed facts of the case. Of course, this could not of the plaintiffs, and partly consumed it. The ques. have been done if the facts were in dispute. A tion of negligence in defendants' engineer in not see. reserved point must be based upon facts admitted in ing the obstruction and stopping his train before the cause or found by the jury. In questions of negreaching it is not raised upon this record, and need ligence it has been repeatedly held that certain facts not be discussed. The only question for our consid- when established amount to negligence per se. Raileration is whether the negligence of the defendants' road Company v. Stinger, 28 P. F. S. 219; McCully v. servants was the proximate cause of the injury to the Clarke, 4 Wright, 399; Penna. Railroad Company v. plaintiffs' property. The answer to the plaintiffs' third Bennett, 9 P. F. S. 259, while in Raydure v. Knight, point, embraced in the second specification of error, supra, the court below in answer to the defendant's raises this question distinctly. The court was asked second point instructed the jury that if certain facts to say: “That, if the jury believe from the evidence were believed by them, the negligence complained of that the accident complained of was the result of neg- was the proximate cause of the injury to plaintiff's ligence on the part of the defendants, and that, by property. This ruling was affirmed by this court. I reason of such negligence, the oil, ignited by the en- do not understand the decision in The Railroad Comgine attached to the train, ran immediately down to pany v. Hope to be in conflict with this view. It reOil Creek, where it was carried by the current in the mains to apply this principle to the case before us. space of a few minutes to the property of the plain. There is not a particle of conflict in the evidence so tiffs, when it set fire to and destroyed said property, far as it affects the question of proximate cause. This the plaintiffs are entitled to recover, provided they was doubtless the reason why the plaintiffs assumed did not in any manner contribute to said accident." the facts in their third point. They would not have The court answered this point in the negative, and been justified in doing so had not the facts been adthen instructed the jury that as a matter of law upon mitted, nor is it likely the learned judge would have the facts in the case the plaintiffs were not entitled to answered it. We may, therefore, regard the plaintiffs' recover, which instruction is assigned here for error. third point as a prayer for instructions upon the un
It was strongly urged that the court erred in with disputed facts of the case. Can it be doubted that the drawing the case from the jury, and the recent cases court had the right to give a binding instruction? We of Pennsylvania Railroad Company v. Hope, 30 P. F. S.
think not. 373, and Raydure v. Knight, 2 Weekly Notes, 713, were But one question remains; was the negligence of cited as supporting this view. In the case first cited the defendants' servants, in not seeing the landslide it was said by the Chief Justice in delivering the opin- and stopping the train before reaching it, the proxiion of the court: “We agree with the court below mate cause of the destruction of the plaintiffs' propthat the question of proximity was one of fact par-erty? We need not enter into an extended discussion ticularly for the jury. How near or remote each of the delicate questions suggested by this inquiry. fact is to its next succeeding fact in the con- That has been done so fully in two of the cases cited catenation of circumstances from the prime cause as to render it unnecessary. A man's responsibility to the end of the succession of facts which is imme- for his negligence and that of his servants must end diately linked to the injury, necessarily must be de- somewhere. There is a possibility of carrying an adtermined by the jury. These facts or circumstances mittedly correct principle too far. It may be extendconstitute the case and depend upon the evidence. ed so as to reach the reductio ad absurdum so far as it
olbnainong of life
difficulty may be avoided by adhering to the principle substantially recognized in The Railroad Company v. Kerr, and The Railroad Company v. Hope, supra, that in determining what is proximate cause, the true rule is, that the injury must be the natural and probable consequence of the negligence, such a consequence as, under the surrounding circumstances of the case, might and ought to have been foreseen by the wrong-doer as likely to flow from his act. This is not a limitation of the maxim causa proxima non remota spectatur; it only affects its application. There may be cases to which such a rule would not apply, but this certainly is not one. It would be unreasonable to hold that the engineer of the train could have anticipated the burning of the plaintiffs' property as a consequence likely to flow from his negligence in not looking out and seeing the landslide. The obstruotion itself was unexpected. An engine had passed along within ten minutes with a clear track. But the obstruction was there, and the tender struck it. The probable consequences of the collision, such as the engineer would have a right to expect, would be the throwing the engine and a portion of the train off the track. Was he to anticipate the bursting of the oil tanks, the oil taking fire,the burning oil running into andlbeing carried down the stream, and the sudden rising of the waters of the stream, by means of which, in part at least, the burning oil set fire to the plaintiffs' buildings? This would be a severe rule to apply, and might have made the defendants responsible for the destruction of property for miles down Oil Creek. The water was an intervening agent, that carried the fire, just as the air carried the sparks in the case of The Railroud Company v. Kerr. It is manifest that the negligence was the remote and not the proximate cause of the injury to the plaintiffs' building. The learned judge ruled the case upon sound principles, and his judgment is affirmed.
He embezzled a large amount of money belonging to the United States by lending it to Mellen, Ward & Co. As the time for the examination of the funds in the sub-treasury approached, Mellen, Ward & Co, endeavored to tide Hartwell over the crisis and to conceal his guilt and their own by the devices out of which this controversy has arisen. They had sold to the Merchants' National Bank of Boston a large amount of gold certificates with the understanding that they might buy back the like amount by paying what the bank had paid, and interest at the rate of six per cent per annum. Carter, one of the firm, arranged with Smith, the cashier of the plaintiff, to buy from the Merchants' Bank gold certificates to the amount of $120,000, and to pay for them with the checks of Mellen, Ward & Co., certified to be good by Smith as such cashier, and then to deposit the certificates in the subtreasury, where they were to remain until the ensuing day. A receipt was to be taken from the proper subtreasury officer. The certificates were bought, paid for, and deposited accordingly. Hartwell received them from Smith in the presence of Carter and made out the receipt to Mellen, Ward & Co. or order. Smith inquired why the receipt was to them. Carter there. upon indorsed it by the firm name to Smith as cashier, and Smith took it without further remark.
Subsequently, pursuant to a like arrangement between the same parties, Smith, as such cashier, made a further purchase of gold and gold certificates from the Merchants' Bank, and converted the gold into gold certificates. The aggregate of the certificates thus procured was $60,000. Thereafter Smith, as such cashier, at the instance of Carter, made a further purchase of gold certificates from another bank to the amount of $100,000. All these certificates, amounting to $160,000, were also deposited by Smith in the sub-treasury in the presence of Carter, and a receipt taken and indorsed as before to Smith as cashier. The receipts specified that the certificates deposited were "to be exchanged for gold certificates or its equivalent on demand.” Only $60,000 of the last deposit is claimed by the appellee. The residue is not involved in this controversy. The total claimed is $480,000. All these things occurred on the 28th of February, 1867. On the following day Smith presented the receipts at the sub-treasury, and payment was refused. The certificates were all canceled and sent to the proper officer at Washington. The gold which they represented has since remained in the treasury of the United States. Carter gave Smith plausible reasons, not necessary to be repeated, for desiring to make the deposits. The Court of Claims found these facts: (Carter) submitted his plan to Hartwell, which was as follows: He proposed to buy gold certificates in New York, bring them to Boston, and borrow money upon them of the Merchants’ Bank, and he then proposed to get Smith, the cashier of the State Bank, to pay for these certificates and leave them with Hartwell during the examination. Hartwell made no objection to this plan, but he thought Smith would not do it. The plan was carried into effect by Carter, as hereinbefore set forth, but Hartwell had no agency in carrying it out, except to receive the moneys and gold certificates paid to him on the 28th of February as aforesaid, and he had no actual knowledge of the proceedings taken by Carter on that day to obtain said gold certificates. When Carter and Smith deposited the $420,000 of gold certificates in the sub-treasury as aforesaid, Smith did not know Hartwell, nor did Hartwell know Smith, or
WHEN THE GOVERNMENT IS BOUND BY THE
FRAUDULENT ACTS OF ITS AGENT.
SUPREME COURT OF THE UNITED STATES, OCTO
BER TERM, 18777.
UNITED STATES V, STATE NATIONAL BANK OF Boston.
When the money or property of an innocent person has
gone into the coffers of the nation by means of a fraud to which its agent was a party, such money or property cannot be held by the United States against the claim
of the wronged or injured party: A firm had borrowed money, belonging to the government,
from the cashier of its sub-treasury: In order to enable the cashier to cover up his violation of duty, and in pursuance of an agreement, one of the firm procured a bank officer to purchase gold certificates, which were to be deposited in the sub-treasury, to remain until the subsequent day. The bank officer did so, and a receipt for the certificates was given by the cashier to C, who indorsed it to the bank officer. The receipt entitled its owner to receive gold certificates for those deposited, or their equivalent, on demand. The bank officer had no knowledge of the plan of the firm and the cashier, and the transaction he entered into was a usual one. Held, that the government obtained no title to the certificates, but was liable to return their value to the bank.