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DECISIONS

OF

THE FIRST COMPTROLLER (WILLIAM LAWRENCE) IN THE DEPART.

MENT OF THE TREASURY OF THE UNITED STATES.

1885.

IN THE MATTER OF THE RIGHT OR DUTY OF THE TREASURY DEPARTMENT, TO WITHHOLD PAYMENT OF A JUDGMENT, OR ANY PART THEREOF, AGAINST THE UNITED STATES IN THE COURT OF COMMISSIONERS OF ALABAMA CLAIMS, OR TO DELIVER TO AN ATTORNEY, WHO IS NOT THE ATTORNEY OF RECORD, THE DRAFT ISSUED TO MAKE PAYMENT OF SAID JUDGMENT, FOR THE PURPOSE OF SECURING PAYMENT OF COMPENSATION ALLEGED TO BE DUE TO SUCH ATTORNEY FOR SERV. ICES IN RELATION TO THE CLAIM ON WHICH SAID JUDGMENT WAS FOUNDED.-MANNING'S CASE.

1. The Secretary of the Treasury is authorized to prescribe regulations not inconsist

ent with law, for the performance of the business of the Treasury Department. 2. The payment of claims against the United States is a part of the business of the

Treasury Department, and is, therefore, a proper subject for regulations. 3. The regulations provide, that, in cases of judgments certified for payment to the

Treasury Department, “by any commission created by Congress, the persons certified by said

commission as the attorneys of record shall be entitled to receive the drafts [issued to make payment) in such cases"; that the “accounting officers will decide what persons as attorneys or claimants are entitled to receive drafts under the rules of the Department”; and that the right

is reserved “in all cases, to make such special orders as may be proper." 4. A contract, by which a client agrees to “allow” to his attorney (to whom he has given a power of attorney to prosecute specified claims)

on the

claims mentioned in said power of attorney nine per cent. on the amount finally awarded and paid on said

claims," as compensation for the services of said attorney, does not operate as an assignment of any part of a judgment recovered against the United States on such claims, even if the attorney fully performs his

contract. 5. Such contract, when fully performed by the attorney, merely gives a right of ac

tion thereon to recover the agreed compensation. 6. The distributees of a decedent cannot assign a claim due to the intestate at the

time of his death. Such clim is assets of the estate of the decedent, and passes

to his legal representatives. 7. Whether section 3477 of the Revised Statutes applies to assignments of claims of

which the Court of Commissioners of Alabama Claims has jurisdiction, quære 6 LAWR-1

1

*

8. An attorney who prosecutes a claim against the United States to judgment has no

lien thereon, on the draft issued to make payment thereof, or on the money to be paid ; and this rule applies to judgments rendered by the Court of Cominis

sioners of Alabama Claims. 9. As a general rule the Treasury Department, in making payments to claimants,

can recoguize only those having the legal title to claims. 10. When a statute creates a right, and provides the means of enforcing it, the remedy

Bo provided is in such case exclusive. 11. But when a right exists by contract at common law, and an affirmative statute,

with no negative implied, provides a special remedy for enforcing such right, the latter is cumulative, and either the common law or the special statutory

remedy may be pursued. 12. A contract to pay an attorney at law a per-centum, or a specific sum of money, out

of the proceeds of a claim, for his services in securing payment thereof, is valid. July 21, 1881, Eliza Mauran, as administratrix de bonis non of Suchet Mauran, second, deceased, recovered judgment (No. 2373) against the United States in the Court of Commissioners of Alabama Claims for $91,500.96, on a petition filed in said Court, January 4, 1883. See acts of June 23, 1874 (18 Stat., 245), June 5, 1882 (22 Stat., 98), and June 3, 1884 (23 Stat., 33). Said judgment was rendered on a claim growing out of the capture of the ship “Marshall,” by the Confederate cruisers, " V. H. Ivy" and "Music.".

The transcript of the judgments of said Court, certified by the Clerk thereof to the Secretary of State, and transmitted by him to the Secretary of the Treasury, in pursuance of the act of June 3, 1884 (23 Stat., 34), shows that C. T., and T. H. Russell, of Boston, are the attorneys of record for the plaintiff in the above mentioned judgment. Said claim was adjusted by the Fifth Anditor (Report No. 102,620), and was, August 8, 1884, certified by the First Comptroller for payment to the judg. ment creditor, with the direction that the draft issued in payment be delivered in care of the attorneys of record.

J. F. Manning requested the First Comptroller to direct the draft issued in payment of said judgment to be delivered to him (Manning) on the following grounds:

That, on the 16th of April, 1878, the then administrator of Suchet Mauran, second, deceased, and the heirs of said decedent, appointed him, the said Manning, their attorney, by written power of attorney, as follows:

“We, Abby W. K. Mauran, Clinton Mauran, Helen Mauran, Frederick L. Mauran (Abby Mauran and Eliza Mauran), by the said Abby W.

* May 17, 1861, the cruisers, “V. H. Ivy” and “Music,” in the service of the Confederate States of America as private armed vessels, each having on board a commission, or letters of marque and general reprisals, granted by the President of said States against the United States of America, its ships and vessels, and those of its citizens, captured in the Gulf of Mexico the ship, "Marshall,” then owned by Suchet Mauran, second, a citizen of the United States and a resident of Rhode Island; and said ship was, by decree of the District Court of the Confederate States for the District of Louisiana, condemned to the use of the captors, and subsequently burned by Confederate authority. Said Suchet Mauran, second, died intestato, July 23, 1873.

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K. Mauran, guardian, * * bave made, constituted, and appointed Jerome F. Manning, *** our attorney, irrevocable, by all lawful ways and means to demand, prosecute, secure, collect and receive from the Government of the United States, or any Court thereof, or any other Tribunal, Corporation or body, any, and all claim, or claims arising out of the capture and destruction of the Ship Marshall or cargo therein, by the Confederate cruisers ·V. H. Joy' (Ivy) and the Music;' or arising out of the payment of increased insurance or so-called war-pre. miums; to any Insurance Company, or insurer, and we A. W. K., C., H., F. L., A., and E. Mauran do hereby authorize the said J. F. Manning, to receive whatever may be awarded on said claim, or paid on account thereof, and give in

our name proper acquittance therefor, and to do any other lawful act that may be necessary to secure the payment of said claims or any part thereof, hereby ratifying all that be, the said attorney, may lawfully do in the premises.

That, on the same date, a written contract was made between said parties and Manning, by which it was agreed that said parties should 66 allow" to Manning on the claim or claims mentioned in said power of attorney nine per cent. on the amount finally awarded and paid on said claim or claims"; that any defect in the execution of the power and contract is aided by a parol ratification by the legal representatives of deceased ; that, at the date of said contract, there was no act of Congress authorizing or providing a mode of securing payment in said class of cases; that said Manning, by his services, secured the legisla. tion under which payment may be made; that, on the 13th of January, 1883, he filed a petition in the Court of Commissioners of Alabama Claims in the name of the proper legal representative of the decedent, but that such legal representative and said heirs refused to permit him to prosecute said action; and that he has rendered valuable services, partly performed the contract, and tendered performance of the residue, of all which all parties in interest had due notice, and, so, he is entitled to the custody of the draft as a means of securing payment for his services.

Robert Christy, and E. E. Holman, in behalf of Manning, made oral arguments, and submitted a brief, as follows:

I. Contracts for contingent fees are valid (Wylie v. Coxe, 15 How., 415; Wright v. Tebbitts, 91 U. S., 252 ; McPherson_v. Cox, 96 U. S., 405; the Hektograph Company v. Fourl et al., 11 Federal Reporter, 844 ; Dodge et al. v. Schell, 12 Id., 515; 15 National Bankruptcy Register, 358; In re Scoggin, 5 Sawyer, 549). These cases also show that an attorney has a lien in such case as this, and that, when there has been a substitution of attorneys, the lien of the prior attorney must prevail, and must be first paid out of the judgment (Overton, Liens, 72, notes, 73; Creighton v. Ingersoll, 20 Barb., 541). The case of Bachman v. Lawson (109 U. S., 659) is in point. Parties may agree that a lien may attach after service done (Overton, Liens, 265).

II. The interest of Mr. Manning attached to, and vested in, the claim upon which said judgment was rendered, after the passage of the act of Congress providing for the payment of the claim, and is not, therefore, obnoxious to the objection that claims of this nature were not as.

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signable (Phelps v. McDonald, 99 U. S., 298; Horey v. McDonald, 109 U.S, 150).

The right of lien of Mr. Manning is to be determined by the law of the District of Columbia, and in this bearing before the First Comptroller is to be determined by the law or rules or practice of the Department (Overton, Liens, 87, 88; Bank et al. v. Culver, 54 N. H., 327; Lave v. Ingram, 3 Vt., 158). One of ese cases is where an attorney, who, with his client, resided in Vermont, brought suit in New Hampshire to enforce bis lien for fees and disbursements made by him at the expense of his client in Vermont. This suit was against a fund in the hands of trustees in New Hampshire, and his claim was sustained upon the ground of. comity.

The attorney may apply to the court for a rule to show cause why a fund should not be appropriated for the payment of his fees, and the rule will be granted, if the services have been performed (Overton, Liens, 91).

The attorney on motion is entitled to an order to compel the sheriff to pay over funds by him collected, the attorney being regarded as a meritorious assiguee of part interest in any judgment or any fund arising from it (Id., 93). See note 4, p. 93, ex parte Plitt, 2 Wall. Jr., 453; Wood v. Verry, 4 Gray, 357.

In reference to the original act prohibiting assignments of claims against the United States, approved February 26th, 1853, it will be found by its title and terms that it was only intended to affect the assignment as against the United States. But the contract of assignment is not disturbed in its integrity, and may be enforced in any court or tribunal having jurisdiction over the rem and the parties, as the Secre. tary of the Treasury in the present case and his adviser.

The title of the act is, "An act to prevent frauds upon the Treasury of the United States," and we are very confident that neither the Secretary of the Treasury, nor his legal advisers, will wrest it, as the contestant insists, into “An act to facilitate frauds upon attorneys and counselors at law."

III. It has been the uniform policy of the Government to recognize all parties interested in a claim, and, so far as possible, give them full opportunity to establish their respective right before the executive departments. See opinions of the Attorneys-General U. S., 1789-1840 (p. 106 (99), House Ex. Doc., No. 55, 2d sess., 31 Cong.).

Letter of C. A. Rodney, July 22 (20), 1807 (41 Op. Att.-Gen., 162).

IV. It has been, likewise, the settled policy of the administrative branch of the Government to withbold delivery of warrant and postpone payment in all cases in which substantial controversies exist, and to permit and require contending parties to submit questions to the judicial branch of the Government for determination; and such judicial determination will be respected by the departmental officers.

" Final adjustment of the claim under the act ought to be suspended until an investigation and decision can be had in a court of equity."

(Letter of William Wirt to Joseph Anderson, 1st Comptroller of the Treasury, July 31 (27, 31), 1824. Opinions Attorneys General, 1789– 1840, p. 509 (445, 417], House Ex. Doc., 2d Sess., 31 Cong.; Id., 1 Op. Att. Gen., 681, 685).

V. The departmental officers have a clear right, as it is a manifest duty, to inquire after the rights of the contesting parties, and to secure them in their legal and equitable interests. It is as much the duty, therefore, of the Secretary of the Treasury to prevent injustice being done, as it is that of the Chancellor. See Circular 32. Section 9 of the

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act of June 5, 1882, makes the Secretary of the Treasury a party to the distribution of the judgments; therefore, it is within his power, as it is his clear duty, to extend to all parties having rights in the premises full protection.

As to the authority of the Secretary of the Treasury in a proper case to exercise these equitable powers, we need only call attention to rule 4 of the “Circular Regulations of the Treasury Department, October 10, 1876,” which reads:

“The Secretary reserves the right, in all cases, to make such special orders as may be proper.”

VI. Whenever the rightful ownership of a Government bond or other claim against the United States is in dispute between rival claimants, a bill of interpleader may be filed by the United States to determiné the question. There may, perhaps, as to such bonds and claims, be some cases in which controverted questions of ownership arise, when accounting officers will withhold action until the rival claimants, by a proceed. ing in court, obtain a decree to determine that right inter se.

(3 Lawrence, Compt. Dec., Introd., XXXIV). VII. The prohibition contained in the act approved June 23, 1874,

establishing the Court of Commissioners of Alabama Claims, against recognition of liens, assignments, transfers for services ren. dered about any claim, other than services rendered by counsel appear. ing for claimant before said Court, was not continued nor revived by the act approved June 5, 1882.

The agreement for fees was a substantial assignment of 9 per cent. of the claim, and, it being made prior to the act of June 5, 1882, carried with it the amount due thereunder, to the assignee, J. F. Manning, in accordance with the doctripe established by the Court of Commissioners of Alabama Claims at Washington.

Frost v. Child (26 Wall., 441), and Goodman v. Niblack (102 U.S., 560), are not in point.

Section nine of the act of June 5, 1882, vests a large discretion in the Secretary of the Treasury, and permits him to prescribe the manner in which judgments rendered under that act may be paid.

Section fourteen, act of June 23, 1874, provides that payments of the judgments shall be made, not to the counsel or attorney of claimant prosecuting the case before the commissioners, but to “the persons, respectively, in whose favor the same shall have been made, or to their legal representatives.” When Manning presents himself with his legally drawn and executed powers of attorney and agreements, unrevoked, and fully executed upon his part, he certainly comes within this description, and is the legal representative of the claimant. This language does not refer to the executors of an estate, nor to the administrator, for they answer to the description of claimants, and must so appear upon the record. When we refer to executors or administrators, we describe them as the personal representatives or legal personal representatives (See Bouvier, Law Dictionary). He (Manning) comes fully empowered to receive what has been awarded, and to give proper acquittances and receipts therefor.

“Shall the draft be delivered to C. T. and T. H. Russell, the only attorneys of record ?" We fail to find any authority in the acts of Con. gress above cited to deliver to the mere attorney of record who presents no authority to receive the same, but we do furnish full authority for its delivery to Mr. Manning.

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