
    Edward R. Ryan v. The United States. Wood D. Loudon v. The same.
    
      On the Proofs.
    
    
      Deputy collectors of internal revenue are duly appointed and commissioned, and discharge the duties of the office. But the collector neglects to report their ■names to the Commissioner, and no allowance for their salariesismade. In the next fiscal year the Secretary of the Treasury malees an allowance for the omitted salaries. Payment is refused by the accounting officers on the ground that the Secretary could not malee a retroactive order for services rendered in the previous fiscal year.
    
    I.The Secretary of the Treasury is authorized to make allowances for the salaries of deputy collectors of internal revenue by the Act 1st 'March, 1879 (20 Stat. L., 329, § 12).
    II.An allowance for the salary of a deputy collector, made by the Secretary of the Treasury, uniiuxieached for fraud or mistake, is binding upon the government and upon the courts.
    III.The power of the Secretary to make such allowances is unlimited as to time, unless it be limited by the proviso attached to $ 13, Act 1st March, 1879 (20 Stat. L.,329), which prohibits certain allowances “if more than one year has elapsed since the close of the fiscal year in which the services wei-e rendered."
    
    IY. The proviso attached to § 13, Act 1st March, 1879 (20 Stat. L., 329), cannot be applied to anything contained in that section. It must be regarded as independent legislation, applicable only to the provisions of § 12.
    Tbe Reporters’ statement of tbe case:
    Tbe following are tbe facts of this case as found by tbe court:
    I. July 3,1879, tbe collector of internal revenue for tbe second district of New York was notified by letter, from tbe office of the Commissioner of Internal Eevenue, that tbe Secretary of tbe Treasury bad made an allowance for tbe salaries of his deputies for tbe fiscal year ending June 30, 1880. Said notice specified the number of deputies and tbe salaries which would be allowed each, and directed tbe collector to make tbe term of bis employments conform strictly with those of tbe said allowance, and to promptly report tbe names of bis deputies to tbe Commissioner of Internal Eevenue.
    
      II. Tlie said collector reported tlie names of those deputies who were to be paid from the allowance of which he was notified July 3, 1879, but did not include in such report the names of either of claimants, and during the fiscal year ending June 30, 1880, no allowance was made by the Secretary of the Treasury for the payment of claimants as deputy collectors for July and August, 1879.
    III. Prior to July 1,1879, Wood D. Loudon and Edward B. Byan, the claimants, were duly employed as deputy collectors of internal revenue in the second district of New York, and regularly paid for their services. The allowance for their compensation ceased on that date, and was resumed again September 1, 1879.
    During the intervening two months of July and August they retained their commissions and continued their services as deputies, and each of them received returns for a considerable amount of taxes during this period, and partially worked up other cases in which returns were subsequently received.
    IV. In view of these facts, the Commissioner of Internal Bevenue made the following recommendation for special allowance:
    “Treasury Department,
    “Oeeice op Internal Beyenue,
    “ 'Washington, January 27, 1881.
    “Hon. John Sherman,
    “ Secretary of the Treasury:
    
    “Sir: I have the honor to recommend that an additional allowance of five hundred and five dollars and iorty-four cents ($505.44) be granted to the collector of internal revenue for the 2nd district of New York, to enable him to pay for the services of two (2) deputies, rendered in the months of July and August, 1879, at the rate of fifteen hundred dollars ($1,500) each per annum.
    “Prior to July 1st, 1879, said deputies were employed and paid as such for their services in working up old cases of legacy and succession taxes. The allowance for their compensation ceased on that date, and was resumed again September 1st, 1879.
    “During the intervening two (2) months of July and August they retained their commissions and continued their services as deputies, and each of them received returns for a considerable amount of taxes during this period, and partially worked up other cases in which returns were subsequently received,
    “In view of these facts, it is deemed but just that said deputies should, be compensated for their services rendered, and for which purpose the recommendation herein is made.
    “ Bespectfully,
    “Green B. Baum,
    “ Commissioner.”
    
    [Indorsement.]
    “Treasury Department,
    “ Jcm’y 31,1881.
    “ The special allowance herein recommended is hereby granted, provided satisfactory vouchers are furnished.
    ’ “This letter is respectfully returned to the Commissioner of Internal Bevenue.
    “H. F. French,
    
      “Acting Secretary.”
    
    “Treasury Department,
    “Oeeice oe Internal Bevenue,
    “ Washington, February 2, 1881.
    “M. B. Blake, Esq.,
    “ Collector 2nd Dist. New Yorlc, N. Y.:
    
    “ Sir : In compliance with a recommendation from this office, the Secretary of the Treasury has granted to the collector of internal revenue for the 2nd district of New York an additional allowance of five hundred and five dollars and fourty-four cents ($505.44) to enable him to pay for the services of two deputies (Wood D. Loudon and Edward B. Byan) rendered in the months of July and August, 1879, at the rate of one thousand five hundred dollars ($1,500) each per annum.
    “Upon receipt hereof you will please forward a supplemental disbursing account covering the above allowance, supported by the vouchers of Deputies Loudon and Byan, scheduled pn Form 63.
    “ Said account will be duly forwarded to the accounting officers for settlement.
    “ Bespectfully,
    “H. O. Bogers,
    
      “Deputy Commissioner.”
    
    
      Y. The amount of this allowance has never been paid either to the collector or to the deputies.
    
      Mr. George L. Douglas for the claimant:
    In Herndon’s Case (15 C. 01s. B., 446) it was decided that “ prior to the act of March 1,1879, there-was no privity of contract between the United States and deputy collectors for the payment of their salaries,” and that an action for salary withheld could not be maintained by a deputy against tbe United States. Under tbe former, law sucb action could only be maintained by the collector. (Landram’s Case, 1C O. Ols. R.)
    But by Act March 1, 1879 (20 Stat. L., 329), collectors were brought into direct financial relations with tbe Treasury; and it was under this act that tbe allowance for the present claimants was made. It is difficult to discover any reason to justify a refusal of payments. Tbe action of tbe Commissioner and tbe Secretary appears to have conformed strictly to tbe terms of tbe law; valuable services bad been rendered by tbe deputies; and tbe allowancewas made merely to discharge a subsisting equitable obligation.
    It will be observed that tbe allowance was granted expressly “to pay for tbe services of two deputies, rendered in tbe months of July and August, 1879, at tbe rate of $1,500 each per annum.” And, to avoid any doubt as to tbe particular deputies for whom it was intended, they are expressly named in tbe department letter notifying the collector of tbe allowance.
    Tbe collector, in these matters, it will be observed, is merely tbe disbursing officer of tbe Treasury. If tbe terms of the allowance give rise to any doubt upon this point, they must be construed in connection with tbe statute under which tbe allowance was made. Reading tbe allowance in tbe light of tbe statute, there would seem to be no room for doubt that tbe legal right to the amount due rests in tbe claimants.
    
      Mr. George O. Wing (with whom was tbe Assistant Attorney-General) for tbe defendant:
    Tbe power conferred by tbe act of March 1,1879 (20 Stat. L., 329), can only be exercised in connection with other laws. Unless another statute has provided money, an allowance would be ineffective.
    Tbe purpose and meaning with which tbe appropriation acts were passed may righ*tly be applied to tbe act of 1879, dependent upon them; so, too, as that act is in tbe nature of one limiting-disbursements and employment by collectors, tbe courseprescribed by laws respecting disbursement and employment by other officers can be resorted to to reach the intention in this case.
    Appropriations are made on tbe general principle that liabilities are known before tbe money is applied for to Congress. A doubtful rig-lit to use sucli appropriation should be governed by the same principle.
    The Commissioner of Internal Revenue, especially, of all other bureau officers, is required to submit, at the commencement of each regular session, an estimate, by collection districts, of the expense of his branch of the public service (Rev. Stat., § 3671).
    Since 1820 the heads of departments have submitted estimates (Rev. Stat., § 3670) for all appropriations.
    The book of estimates thus formed is the basis upon which the various bills are drawn, and these adopt and follow the divisions and specifications presented by the department. The tendency of Congress has been to reduce, whenever possible, the number of appropriations in gross or for general purposes, and to particularize minutely the sole objects for which money is to be used.
    A comparison of the earlier and later bills will show how extensively this mode has been adopted. It is now so marked a feature of appropriation acts that it exhibits a general legislative purpose to provide money only for objects which can be and have been known-in advance. This purpose is carried out in the few, but amide provisions of law directly respecting disbursements.
    All sums must be applied solely to the object for which they are appropriated (Rev. Stat., § 3678) and only to liabilities arising in one fiscal year (Rev. Stat., § 3690).
    Section 3679 tends to draw out full estimates, for it prevents the settlement of any claim by other money than that expressly provided.
    So, section 3683, Rev. Stat., concerning contingent funds. These are for the expenses of the departments, incidentally arising, and which cannot, therefore, be specifically anticipated and stated in the estimates. Congress must, therefore, place a gross sum under the control of the head of each department.
    Section 3683, however, forbids its use for the purchase of any article which has not been procured by a written order, and thus expressly excludes anypaymentsupported by a subsequent sanction. The wisdom and necessity of adhering to and extending this policy is apparent-. The annual charges upon the government are so vast, of such varied nature, and can be'affected by so many officials of every degree of capacity and integrity, that it is important, as a principle, that discretion be limited and the uses of public money be confined as strictly as practicable.
    
      The very fund against which these claims were brought seems to have been.marked by Congress as one which should not be used except for what were legal claims during the fiscal year to which it relates.
    Its estimate is very detailed, being by collection districts (Rey. Stat., § 3671), Ipit it is peculiarly advisable and practicable to define all its liabilities beforehand, since it is one of the largest of the annual appropriations, and that portion for deputy service is as cajiable of being accurately estimated as is the amount of clerical salaries in the Commissioner’s office itself. This appropriation having, by origin and nature, such a character, the power to use it should conform.
    During the fiscal year 1879-’80 these claims were, at most, merely equitable ones; there was-no agreement until January 31,1881, to pay salaries during July and August, 1879. How, then, can the Secretary, in 1881, allow for and pay account of that which was not “a contract properly made” in 1879 (Rev. Stat., § 3690?) Such construction would permit the Secretary to do for employés of his subordinates what he cannot for his own employés.
    Collectors can appoint deputies without limit and without notice even to the Treasury. If these be kept but in formal service they can present an equitable claim which, as to record, will readily come within this precedent, and should be allowed accordingly. But there is no statutory method of legalizing the claim of one directly engaged by the head of a department. Service may be accepted, as has been since July in the Census Office, but, however equitable, it cannot be converted into an obligation upon the government. Congress alone is to assume and compensate service which has been rendered without authority.
   Scoeibld, J.,

delivered the opinion of the court:

These two cases were tried and submitted together. The findings of fact and questions of law arising thereon are in all respects alike.

Some.time prior to July 1,1879, the two claimants were duly appointed and commissioned as deputy collectors of the second district of New York. Under these commissions, during the following months of July and August, they continued to perform the duties of deputies. The collector, however, neglected to report their names to the Commissioner, and at that time no allowance for salary was made. September 1,1879, on proper application, an allowance for future salary being made, their names were placed upon the Commissioner’s roll, and from that time forward their salaries were regularly paid. No notice was then taken of their services during July and August. But January 31, 1881, the attention of the Secretary being called .to the subject by the Commissioner, an allowance of salary for each claimant, at the rate of $1,500 per year for the two months theretofore omitted, was made. To recover these allowances these suits are brought.

The authority under which the Secretary acted in making these allowances is contained in section 12 of the Act of Congress of March 1, 1879 (20 Stat. L., 329), and is in these words:

“ Each-collector of internal revenue shall be authorized to appoint, by an instrument in writing-under his hand, as many deputies as he may think proper, to be compensated for their services by such allowances as shall be made by the Secretary of the Treasury, upon the recommendation of the Commissioner of Internal Revenue. Allowances shall also be made in like manner for salary and office expenses of collectors, all of which shall be in lieu of the salary and commissions heretofore provided by law.”

It is not denied that the Secretary is herein clothed with abundant power to make an allowance, nor that his action, unimpeached for fraud or mistake, is binding alike upon the defendants and the courts. Nor is it alleged that if the decision were subject to revision any of the facts and conditions necessary to its justification would be found wanting.- The deputies were duly appointed, faithfully performed their duties, and the allowance was recommended by the Commissioner. But it is said that this power, however clearly given, can only be exercised within the current fiscal year, and therefore an allowance made January 31,1881, for services performed in 1879, is without authority and void. The statute itself contains no such limitation, nor can any such inference be drawn ffom its phraseology. No law nor decision pointing to such a conclusion, so-tar as the salary of deputies is concerned, has been cited.

Unless the proviso to section 13 applies to the provisions of section 12, the Secretary’s authority to make allowances does. not appear to have any positive limit in time. That proviso reads as follows:

“Provided, That the Secretary of the Treasury, on the recommendation of the Commissioner of Internal Eevenue, be authorized to make such further allowances from time to time as may be reasonable in cases in which, from the territorial extent of the district or from the amount of internal duties collected, it may seem just to make such allowances, but no such allowance shall be made if more than one year Iras elapsed since the close of the fiscal year in which the services were rendered.”

To what allowances hitherto made by the Commissioner and Secretary does this important proviso authorize them to make additions? Certainly they are not mentioned in the foregoing portion of the section. Therein payments are directed t > be made to collectors for stationery, blank books, advertising, and postage, when vouchers therefor itemized and sworn to uare rendered to and approved by the proper officers of the Treasury.” Of course that means the accounting officers. It was so understood in the Treasury Department at the first, and the practice has-ever since followed that construction. ' It has the sanction of the present First Comptroller, as- well as his immediate predecessor. None of the collector’s bills for stationery, blank books, advertising, and postage are sent to the Secretary for approval, while every other item of expense in the collector’s office, however small, is first sent to the Secretary for allowance.

No torture of language can make this proviso apply to anything contained in section 13. That section provides for the allowance and payment of four comparatively small bills by the accounting officers; the proviso to large allowances made by the Secretary, upon the recommendation of the Commissioner. The proviso must therefore be regarded as independent legislation, applicable only to the provisions of section 12. It has been suggested that even then it would relate to allowances for collectors only, not to deputies. There is nothing in its language or context to thus limit its application. It applies with much greater reason to allowances for deputies. These allowances are much the largest, and considering the “extent of territorjr” and the “amount of collections” as the proviso requires, the additional service, capacity, and labor needed would be derived mostly from deputies.

If this construction of the law is sustained, the Secretary’s authority to make these allowances is derived from section 12, enlarged, but limited as to time, by the proviso to section-13 ; otherwise it is derived from section 12 without limit as to time.' The allowances in controversy were made in less than one year after the close of the current fiscal year, so that in either case the cláimants are entitled to recover.

In the case of Edward R. Ryan v. The United States, the judgment of the courtis that the claimant recover of the defendants the sum of $252.72.

In the case of Wood D. London v. The United States, the judgment of the court is that the claimant recover of the defendants the sum of $252.72.  