
    O’GRADY’S CASE.
    (8 Court of Claims R., 451 ;
    
       — Wallace R., —.)
    Dominick O’Grady’s Executors, appellees, v. The United States, appellants.
    
      On the defendants’ Appeal.
    
    
      The owners of captured property recover judgment in the court below under the Abandoned or captured property Act. They file a transcript with the Sewetary of the Treasury for payment as required by the Amended Court of Claims Act, (12 Stat. X., p. 755, § 7.) The Secretary refuses to pay the judgment unless the attorney will consent to a written stipulation that a deduction for the internal-revenue tax on cotton be made, subject to the future decision of the Supreme Court as to its validity. The attorney signs such stipulation, and the judgment, after deducting the tax, is paid. The claimants now bring their action of debt against the Government to recover the amount withheld. The court below decides that the Secretary has no right to malee such deduction, ' and that an action will lie against the Government for the amount withheld. Judgment for the claimants. The defendants appeal.
    
    
      I. The'Secretary of the Treasury is not invested with power to deduct from a judgment of the Court of Claims, when presented to him for payment, a tax due to the Government; nor is any executive officer of the Government. When a claim against the Government passes into judgment in a court of competent jurisdiction, it ceases to he open to revision hy any one of the Executive Departments or of all of such Departments comhiued.
    II. A judgment of the Court of Claims from which no appeal is taken is just as conclusive as a decision of the Supreme Court.
    
      The Reporters’ statement of tbe case:
    The parties agreed upon the following statement of facts:
    In this case the court finds the facts to be as agreed upon between the parties, through their respective counsel, as the case upon which the decision of the court is to be rendered, as follows:
    The claimants, on the 1st day of April, A. D. 1872, by the consideration of the Court of Claims, recovered ajudgment against the United States, under what is called “ The Abandoned or captured property Act” of March 12,1863, for the sum of $72,450, being the net proceeds of four hundred and fourteen bales of cotton captured at Mobile in April, 1865, at the rate of $175 per bale. A transcript of said judgment wras taken from the office of the clerk of this court by the attorney of the claimants, T. J. D. Fuller, and filed in the office of the Secretary of the Treasury on the 15th day of April, 1872, and payment of said judgment was demanded. Said transcript was in the words and figures following:
    “ In the Court of Claims.-
    “John Quinlin, C. Cavaroc, Michael J.' Brenan, and Joseph T. Maybury, executors of Dominick O’Grady, >3159. vs. “The United States.
    “ T. J. D. Fuller, esq., att’y of record.
    “Ata Court of Claims, held at the Capitol, in the city of Washington, first day of April, A. D. 1872, judgment was ordered to be entered up as follows:
    “ The court, upon due consideration of the premises, find in favor of the claimants, and do order, adjudge, and decree that the said John Quinlin, C. Cavoroc, Michael J. Brenan, and Joseph T. Maybury, executors of Dominick O’Grady, have and recover of and from the United States the sum of seventy-two thousand four hundred and ñfty dollars, ($72,450,) being the net proceeds of four hundred and fourteen bales of cotton, at the rate of one hundred and seventy-five dollars per bale.
    “By the court.
    “ A true copy of record.
    “ In testimony whereof I have hereunto set my hand and affixed the seal of said court at Washington this 15th day of April, A. D. 1872.
    “ JOHN RANDOLPH, AssH Cleric Court of Claims.
    
    “ Attest
    “ O. D. Drake, C. J.
    
    “ June 29,1872. Not appealed.
    “JOHN RANDOLPH,
    
      “AssH CVk C. C.”
    
    Afterward, on the 1st day of July, A. D. 1872, more than ninety days having elapsed after the time of rendition of the aforesaid judgment, payment thereof was again demanded at the Treasury of the Secretary, and the Secretary of the Treasury thereupon made the following indorsement upon the transcript of said judgment:
    “Treasury Department,
    
      Secretary’s Office, July 1,1872.
    “An examination of the accounts having been made, the net proceeds of the cotton referred to in the record and proceedings of the Court of Claims in the case of John Quinlin et al., executors of Dominick O’Grady, appear to be, as nearly as can be ascertained, the sum of sixty-eight thousand two hundred and sixty-eight dollars and sixty cents, ($68,268.60,) after the deduction of two cents per pound internal-revenue tax. And the claim is hereby referred to the First Auditor, who will report the same to the First Comptroller, as payable out of the proceeds of captured and abandoned property, reserved and set apart for that purpose by the act of March 12,1863.
    “GEO. S. BOUTWELL,
    “ Secretary of the Treasury.
    
    “ First Auditor’s Oeeioe, July 1,1872.
    “ Comptroller’s Oepice, July 1, 1872.
    “ JAMES AULD.’’
    
      The said Secretary refused to pay any part of said judgment unless the attorney of the claimants would consent to and sign a written stipulation of the tenor and effect following:
    “ In the Court of Claims.
    “Dojhinick O’Grady’s Executors) vs. VNo. 3159. “The United States. i
    “ The defendants claim the deduction of $4,181.40 as the internal-revenue tax of two cents per pound on the cotton for which judgment was given in the above-named cause, on the 1st of April, 1872.
    “ And it is hereby stipulated and agreed by the counsel representing the above claimant that-the said deduction may now be made, and that all the rights of the several parties in respect to the aforesaid tax are reserved, and remain subject to the decision of the Supreme Court without prejudice.”
    “ T. J. D. FULLEE,
    “ Attorney.
    
    “ July 1, 1872.”
    Thereupon the claimant’s attorney signed the said stipulation, the when sum of $68,268.60 was paid to the claimants, leaving said judgment unsatisfied in part, to wit, for the sum of $4,181.40 reserved and detained as the internal-revenue tax on cotton, and which the Secretary refused to pay to the claimants.
    
      Mr. Assistant Attorney-General Sill for the United States, appellants:
    The act in force at the time of the capture of this cotton imposed a tax of 2 cents a pound upon all cotton produced or sold and removed for consumption, and upon which no duty has been levied, paid, and collected, and the tax was made a lien upon the cotton until paid, in the possession of any person whomsoever. (13 Stat. L., 16.) By the Act June 30, 1864, section 177, (ib., 305,) it is enacted that “ whenever any cotton, the product of the United States, shall arrive at any port of the United States from any State in insurrection against the Government, the assessor or assistant assessor shall immediately assess the taxes due thereon,” &c., “ unless evidence of previous payment of such tax shall be produced, under such regulations as the Commissioner of Internal Revenue, by direction of the Secretary of the Treasury, shall from time to time prescribe: * * * Provided, That all cotton sold by or on account of the Government of the United States shall be free and exempt from duty at the time of and after the sale thereof.” These statutes clearly show that the cotton in question was liable to the cotton-tax. The only question that seems to have been involved below was whether-the Secretary of the Treasury could deduct the amount of the tax from a judgment against the United States. And there would seem to be no reason why he could not.
    The third section of the .Abandoned or captured property Act (12 Stat. L., 820) provides that the ‘owner of such property shall be entitled to receive the residue of the proceeds thereof, “ after the deduction of any purchase-money which may have been paid, together with the expense of transportation and sale of said property, and any other lawful expenses attending the disposition thereof.”
    It has been decided that the Government held this property as trustee for the owners. (United States v. Klein, 14 Wall., 128.) This being so, it is but a reasonable construction of the language of the above statute to hold that the payment of an excise tax due upon the property, and made a lien thereon, was a lawful expense attending the trust, which the Secretary was justified in deducting. , The deduction of the tax may be assumed to be made at the time of the payment of the proceeds of the sale of the cotton into the Treasury; and as the statute makes the amount due certain, no technical assessment of the tax was necessary. (Dollar Savings Bcmlc v. United States, 19 Wall., 246.) '
    Besides, it is not to be presumed that the statute intended that the owner should be paid the amount of the proceeds of the cotton and the Government lose its lien for the tax. The sale of the cotton by the Government would entirely destroy the lien unless one subsisted on the proceeds in the Treasury; and construing the act imposing the tax and the Abandoned or captured property Act together, full effect can be given to both by holding that the lien for the tax remains upon the proceeds in the Treasury, and the tax is to be deducted before payment thereof to the owner.
    
      
      Mr. P. Phillips and Mr. T. J. B. Fuller for the claimant, ap-pellee :
    The sole question is,-was the Secretary justified in withholding the amount for the reason stated by him, to wit, the indebtedness of the claimant to the Government for. the tax of 2 cents per pound on cotton ? We do not propose to raise the question as to the constitutionality of the cotton tax. This we have heretofore argued in the case of Farrington, in which the judgment of the court below was affirmed by a divided court. We forbear to do this, because confident that the judgment in this case can be fully sustained without involving the consideration of so grave a question. .By the third section of the Act March 3,1863, (12 Stat L., 575,) it is provided “ that, in addition to the jurisdiction now conferred by law, the court shall also have jurisdiction of all set-offs, counter-claims, claims for damages, whether liquidated or unliquidated, or other demands whatsoever, on the part of the Government, against any person making claim against the Government in said court; and upon the trial it shall hear and determine such claim and demand, both for and against the Government and claimant; and if upon the whole case it finds the claimant is indebted to the Government, it shall render judgment to that effect, and such judgment shall be final, with the right of appeal, as in other cases herein provided for.”
    The institution of the Court of Claims was 'to remove the anomaly of permitting a party to contracts, express or implied, to render an arbitrary decision in his own cause. Claims against the Government were theretofore submitted to judicial determination of functionaries whose tenure of office under the Constitution was regarded as a guarantee of independence. Thenceforward claimants under contracts, expressed or implied, had a standing in court to enforce them. But under the organizing act the court only had jurisdiction when an individual was plaintiff and the United States were defendants. There thus remained in the hands of executive agents the assertion of claims in favor of the Government. Ordinarily these could only be enforced by suits in the courts of the United States. But it often occurred that when a party had a liquidated, admitted claim against the Government, he was met on demand of its payment by the assertion of a claim due by the party to the Government;,and on a settlement of these conflicting rights, the claimant had to submit to such decision as the Government agent might make of it. This presented an evil which the institution of the court was intended to remedy; and it is submitted that, in order fully to rectify it, the amendatory act of 1863 was passed. If this view of the legislation is the correct one, that it was the object of Congress to give to parties dealing with the Government the samé protection of the judiciary as was offered to dealings between individuals, it follows that any counter-claim which the Government has against O’Grady should have been presented before the court was called to adjudge the original claim, and thus enable the claimant to contest its validity or justice and have judicial action upon the same. We submit that it is a violation of the spirit as well as the letter of the law for the Secretary to withhold his counterclaim, the character of which was fully known to him, to permit a judgment to be rendered in favor of the claimant, the finality of which is declared by statute, and then to refuse payment thereof, without the party should allow a deduction for an asserted claim on the part of the Government, the amount and validity of which should be determined by his own judgment.
    If, then, the Government had any right to the tax, it was bound to assert that right in the course of the litigation, and, having failed to do so, has thereby forfeited it.
    But did O’Grady owe to the Government the tax demanded ? The dominion which a citizen exercises over his property is absolute, saving only that he must so use it as to work no injury to others, and subject to the eminent domain of the Government, which may expropriate it for public necessity on just compensation. To secure him in the peaceable possession of this dominion is one of the chief ends for the institution of government ; and to defray the expenses of maintaining it, taxes are levied on the citizens. The right of the owner to sell his property when and where he pleases, and for what price, is the fundamental element in the value of property. His protection in so doing is the just equivalent of the tax that is paid by him. Tested by these principles, how is it that a claim can be asserted that O’Grady is indebted to the Government for the tax on his cotton ? Was he permitted to exercise any dominion over it; was be consulted as to time or place or price of sale ? On the contrary, the Government seized his cotton, deprived him of all possessory right, shipped it to its own agents, sold it on its terms, and, having deducted all expenses on it, which were enormous, provides by act that the owner shall be restored to the “ net proceeds in the Treasury.” When these “ net proceeds” are demanded, the Government then demands the tax, though the owner had been deprived of all the rights of dominion attached to its ownership.
    It will, be seen from the record that the original judgment was rendered on April 1,1872, and presented for payment on July 1, thereafter, as judgments of this court are not payable until the expiration of ninety days, during which the right of appeal exists. Now, on the 10th June, 1872, Congress enacted that, “in the settlement of judgments by the Court of Claims or the Supreme Court of the United States hereafter to be rendered for captured or abandoned cotton, or in settlement for cotton seized subsequent to the 30th June, 1865, the Secretary is directed to pay such judgments, or the amounts, as ascertained upon such settlements, in full, without deduction on account of the internal-revenue tax on cotton. (17 Stat. L., 369.) This is an express declaration of the law-making power that such deduction was unjustifiable. It is true that thé act refers to judgments “ hereafter to be rendered,” and this was rendered, as already stated, a few weeks previous. It does not fall, therefore, within the strict letter of the .statute, but it does clearly fall within its intent and meaning. Congress intended to deal with all cases which could then be controlled by it. No reason can be assigned why a different rule should be applied to a judgment on the 1st April, which was not paid and not payable at the passage of the act, and a judgment rendered subsequent thereto. At any rate we have the opinion of Congress that these taxes ought not to be demanded.
    
      
      
         The point upon which this case turns was discussed and decided by the Court of Claims in Brown’s Case, (6C.Cls. B., 171.)
    
   Mr. Justice Cliffokd

delivered the opinion of the court:

Jurisdiction was vested in the Court of Claims by the Act Fehrua/ry 24,1855, (10 Stat. L., 612,) to hear and determine all claims against the United States founded upon any law of Congress or upon any regulation of an Executive Department, or upon any contract, express or implied, with the Government of the United States, and also of all claims which may be referred to said court by either House of Congress.

Well-founded doubts were entertained whether that act conferred the power upon that court to allow the United States to file set-offs in such cases and to hear and determine such matters as usually practiced in common-law actions between private parties. Congress accordingly, in order to remove those doubts, enacted that the said court shall also have jurisdiction of all set-offs, counter-claims, or claims for damages, whether liquidated or unliquidated, or other demands whatsoever on the part of the Government against any person making claim against the United States in the said court. Since the passage of that act all doubt upon the subject is removed; and the further provision is that upon the trial of any such cause the court shall hear and determine such claim or demand both for and against the Government and the claimant. (Amended Court of Claims Act, 12 Stat. L., 765.)

Provision is also made by the Act March 12, 1863, that any person claiming to have been the owner of any abandoned or captured property described in that act may, at any time within two years after the suppression of the rebellion, prefer his claim to the proceeds thereof in the Court of Claims, and, on proof to the satisfaction of said court of his ownership of the property, of his right to the proceeds, thereof, and that he has never given any aid or comfort to the late1 rebellion, to receive the residue of such proceeds, after the deduction of any purchase-money which may have been paid, together with the expenses of transportation and any other lawful expenses attending the disposition thereof. (12 ib., 820.)

Pursuant to that act, the claimants instituted a suit in the Court of Claims against the United States to recover the net proceeds of four hundred and fourteen bales of cotton, and it appears'by therecordthat the claimants, on the 1st of April, 1872, by the consideration of that court, recovered judgment against the defendants for the sum of $72,450 as the net proceeds of the cotton described in the petition; that the petitioners, after the expiration of ninety days from the day of the rendition of the judgment, procured from the clerk’s office of the court a duly-certiñed copy of the judgment, and that they presented the same to the Secretary of the Treasury and requested payment of the amount in due form of law.

Instead of paying the judgment, the Secretary made an in-dorsement upon the transcript, to the effect that the net proceeds of the cotton, after the deduction of 2 cents per pound for internal revenue, amount to the sum of $08,268.60, and he referred the claim to the First Auditor, with directions to report the same to the First Comptroller as payable out of the proceeds of captured and abandoned property reserved and set apart for that purpose.

By the findings of the court it also appears that the defendants claimed to deduct $4,181.40 as the internal-revenue tax of 2 cents per pound on the cotton for the net proceeds of which the judgment in the cause was rendered, and that the Secretary of the Treasury refused to pay any part of the judgment unless the attorney of the claimants would consent that the deduction claimed should be made, and that the attorney accordingly signed the writing set forth in the transcript, subject to the condition that the rights of all the parties in respect to the tax shall be reserved and remain subject to the decision of the Supreme Court without prejudice.

Payment of the residue was duly made to the claimants, but the Secretary of the Treasury reserved and detained the amount claimed as the internal-revenue tax on the cotton; whereupon the claimants instituted the present suit, and the Court of Claims rendered judgment in their favor for the whole amount so reserved and detained, and from that judgment the United States appealed.

Judgment was recovered by the claimants for the whole amount of the net proceeds of the cotton in the original suit, and it is not even suggested that the United States filed any set-off or counter claim in that case, nor would it now make any difference if the claim of set-off or counter claim had been filed in that case; for if filed and rejected, the appropriate remedy of the Uiiited States was by appeal to the Supreme Court. Appeal to this court in such a case undoubtedly would lie; nor was that the only remedy left to the United States, as the Court of Claims, on motion, might grant a new trial in such a case, if it appeared that any fraud, wrong, or injustice had been done to the United States. (13 Stat. L., 75.)

But the United States did not appeal from the judgment of the Court of Claims, nor does it appear that any application in their behalf was made to that court for a new trial, as expressly authorized by an act of Congress. On the contrary, it appears that'the United States acquiesced in the judgment, and claimed to deduct from it the amount now in. controversy as due to the Government for the internal-revenue tax. Such a power is not vested in the Secretary of the Treasury nor in any other executive officer of the Government, even if it could be; and it is clear that the judgments of this court, rendered on appeal from the Court of Claims, if no such power is conferred by an act of Congress, áre beyond all doubt the final determination of the matter in controversy; and it is equally certain that the judgments of the Court of Claims, where no appeal is taken to this court, are, under existing laws, absolutely conclusive of the rights of the parties, unless a new trial is granted by that court, as provided in the before-mentioned act of Congress. (Ex parte Russell, 13 Wall., 673.)

By the Act Mwrch 3,1863, it was provided that no money shall be paid out of the Treasury for any claim passed upon by the Court of Claims till after an appropriation therefor shall he estimated for by the Secretary of the Treasury, which provision was of course as applicable to the judgments on appeal rendered by this court as to the original judgments rendered by the Court of Claims, as the subject-matter of the suit in either case is one “ passed upon by the Court of Claims.” (12 Stat. L., 768.)

Either party, by virtue of that act, was allowed to appeal to the Supreme Court, but the Supreme Court declined to take jurisdiction of such appeals, chiefly for the reason that the act practically subjected the judgments of the Supreme Court rendered in such cases to the re-examination and revision of the Secretary of the Treasury. (Gordon v. United States, 2 Wall., 561.)

Subsequently Congress repealed the provision conferring that authority upon the Secretary of the Treasury, and since that time no doubt has been entertained that it is proper that the Supreme Court should exercise jurisdiction of appeals in such cases. (14 Stat. L., 9.)

Judicial jurisdiction implies the power to hear and determine a cause j and inasmuch as the Constitution does not contemplate that there shall be more than one Supreme Court, it is quite clear that Congress cannot subject the judgments of the Supreme Court to the re-examination and revision of any other tribunal or any other Department of the Government.

Opposed to that is the suggestion that the internal-revenue tax is a lien upon the property taxed, and that the lien, when the property is sold, is transferred to the proceeds of the sale, as in the case of a maritime lien, when the res is sold and the proceeds of the sale have been paid into the registry of the court. Whether that is so or not is not a-question in this case; but suppose the question is presented, it is a sufficient answer to the suggestion that' the United States, if they desire to enforce such a right, must seek some other remedy than the one pursued in the case before the court, as it is clear that, when such a claim as that preferred by the claimants in the original petition passes into judgment in a court of competent jurisdiction, it ceases to be open, under any existing act of Congress, to revision by any one of the Executive Departments or of all such Departments combined. Demedies such as have been suggested, if seasonable, may be pursued in a proper case ; but it will be' time enough to decide the question, whether any remedy now remains when the question is properly presented.

Should it be suggested that the judgment in question was rendered in the Court of Claims, the answer to the suggestion is that the judgment of the Court of Claims from which no appeal is taken is .just as conclusive under existing laws as the judgment of the Supreme Court, until it is set aside on a motion for new trial.

Judgment affirmed.  