Reeside v. Knox

The opinion of the Court was delivered by Gibson, C. J. The first and more important point is disposed of in the opinion of the court in West v. Simmons; and I shall confine myself to the question, whether the affidavit disclosed an effective defence, or, to express it differently, whether the instrument filed as the cause of action, is a valid bill of exchange. If it be not, the defendant below is not liable. It is certainly not an insuperable objection to a bill, in every case, that the government is a party to it. In Dugan v. The United States, (3 Wheat. 172,) it was held that the government might recover as the holder; and the principle seems to have been conceded in The United States v. Barker’s Administatrix, (4 Wash. C. C. Rep. 468.) Neither would an objection lie to the form of the bill in the present instance, were the drawee an individual; for the direction to charge the drawer’s account, is only an indication of the means of reimbursement. I lay that circumstance, and the conditional acceptance of the treasurer, out of the question, and consider the bill as if it were drawn and accepted absolutely. Now an indispensable element in the constitution of these instruments, is an absolute and entire freedom from contingency of payment depending on the happening of an event, or the solvency of a fund. But in contemplation of law, is not every bill on government drawn on a fund, whether it be so expressed or not 1 It is a matter of public notoriety, that government accepts for no more, and is bound for no more, whatever be the form of acceptance, than it has in its hands; and that it treats a bill drawn on it as no more than an assignment or order of transfer. In the present instance, the condi [239] tion expressed in the treasurer’s acceptance, indicated no more than the law would have implied without it. The officer, being a public agent, would not have been liable on an 'absolute acceptance; and the government itself would nqt ffiaye been liable, for it gave him no authority to bind it. The public officers may, doubtless, draw or receive bills to facilitate the business of their departments; but they would transcend their power, did they attempt to pledge the responsibility of the government -as-.-a merchant or banker in the money market. Though it may doubtless draw bills for its convenience, it is not a dealer iñ exchange ;t nor does it incur collateral responsibilities for its creditors. Its acceptance is no more than a recognition of the instrument as á transfer of credit, or an assign-’ ment of the funds in its hands ; and it mingles in the transactions of its creditors no further. But the payee iñ a valid bill of exchange,' has no concern with the question of fund's. He takes an absolute order for payment; and if he sees, proper to take a conditional acceptance - of it, that is a subsequent- matter of his own arrangement. An ordinary drawee accepts sometimes without funds, but the government never’. Now in the composition of a bill of exchange, there must be a drawer, a drawee, and a payee, capable, on the face of the bill, of contracting personally; for these instruments are based on personal credit, and not on the credit of a fund. But either of these may be actually disabled by infancy or coverture, without impairing the existence of the bill as an instrument, or affecting the mutual recourse of the other parties ; and the reáson is, that it would injure the circulation' of negociable paper, were an inquiry into such facts necessary to be made by one who takes it in the course of his business for what it purpprts to be. But in the case of the government, which never enters into transactions as an; individual, the payee is bound to take' notice of its course. The event on which payment is to depend, is one of public notoriety, which has frequently beén held an extrinsic cause of certainty, sufficient to remove an intrinsic uncertainty from the face of the bill, and which must be equally operative to introduce one. Had the order been payable, in terms, at the drawer’s fulfilment of his contract, no one would have asserted it to be a valid bill of exchange : and yet no one would have been misled, in respect to its legal effect, by the want of such terms. He who takes a bill on a public department, expects it to be paid no otherwise than out of the funds of the drawer. The public agent is never liable on his acceptance ; and the government itself enters into no contract of suretyship. It is impossible, then, to say that the legal effect of a bill, without these terms, but coupled with the notoriety of the course of public transactions, is different from the legal"effect of a bill which contains them. Though I have found no case like the present, it seems entirely clear that the order was not negociable; and it might admit of a doubt, whether the defendant could be called on before the [240] plaintiff had filed a cause of action. But an affidavit was actually-made, and the judgment was certainly irregular. Judgment reversed.