
    Ezekiel Dunnegan v. The United States.
    
      On the Proofs.
    
    
      An aelion in trespass vi ot armis is brought against Blocker, previously a depniy collector, for acts committed while in office but not alleged to have been colore officii. The suit is removedlo the United States circuit. Judgment for the plaintiff. The circuit judge ginesa “certificate of probable cause.” ffeither the district attorney, nor any department, bureau, officer, nor agent of the government has notice or knowledge of these proceedings. Subsequently the Commissioner of Internal Revenue makes, and the Secretary of the Treasury approves, an allowance for the payment of the judgment.
    
    I.The certificate of probable causé authorized by the Revised Statutes (§ 989) in suits against revenue officers, operating as a stay of execution and relieving the officers from liability, is in effect a judgment against the government.
    II.Where the government has had no notice, actual or constructive, and no opportunity to defend, it is not concluded by the certificate of probable cause.
    III. Statutes cannot always go into details of practice. They declare the rights of parties and leave them to be enforced according to established rules. The statute authorizing certi fieates of probable cause in favor of revenue officers does not in terms require notice to be given to the government, but by the principles of the com mon law and the practice of all courts the party to be charged is entitled to an opportunity of being heard.
    
    IV. The Revised Statutes ($ 3220) authorize the Commissioner of Internal Revenue and the Secretary of the Treasury “ to repay” “all damages and costsrecovered” against certain revenue officers. The Commissioner and Secretary when acting under this section are not bound by the judgment recovered against 'the officer, nor are they precluded from acting because no notice was given to the government which would enable it to defend in the court where the judgment was rendered.
    V.The term “repay” in the statute (§ 3220) does not imply that tho officer must pay the judgment before the Commissioner can act. The statute is for the protection of the officer, and the “ damages and costs recovered” against him maybe allowed by the Commissioner directly to the judgment creditor.
    .VI. The Commissioner’s certificate allowing a claim.for “damages and costs recovered” against a revenue officer is not invalidated because the claim is styled therein as one “for the refunding of taxes erroneously assessed.” Both are authorized by the same section (§ 3220).
    
      
      The Reporters’ statement of tlie case:
    The following are the facts of this case as found by the court:
    I. In the month of February, 1871, James Atkins was collector of internal revenue for-the then fourth district of Georgia, duly appointed according to.law, and one Charles B. Blocker was his special deputy collector, appointed by the collector*
    Said Blocker ceased to be deputy collector March 31, 1871, and said Atkins ceased to be collector February 27, 1872.
    That on the 7th day of September, 1874, claimant commenced a suit in the superior court of Fulton County, Georgia, against the said James Atkins, Charles B. Blocker, and one William Jennings for an alleged trespass vi et armis committed by'them on claimant’s distillery and other property in Hall County, Georgia, and within the northern judicial district of said State.
    Said Blocker and Jennings waived process and entered their appearance on the day the petition was filed; Atkins was brought in by summons.
    There are five counts in the petition, each charging tlie defendants in the suit with committing a trespass* February 14,1871, “maliciously and without any reasonable or probable cause.”
    Issue was joined as to all said parties by their private attorneys, and such proceedings were thereafter had that said cause was removed to the United States district court for the northern district of Georgia.
    September 28, 1877*by consent of plaintiff, the case was dismissed as to William Jennings.
    Thereafter the cause was tried in said court by a jury, and on the 29th day of September, 1877, a verdict was rendered in favor of the said defendant Atkins, and against said Charles. B. Blocker, for the sum of $750,'upon which, on the same-day, judgment was rendered against said Blocker for the said sum of $750 and costs, making together the sum of $833.70, and in favor of said Atkins for costs.
    A motion for a new trial was made by said Blocker on the 18th day of October, 1877, which was overruled on the 19th day of June, 1880; and bn the 23d day of J une, 1880, on the ex parte oral application of the defendant Blocker, a certificate of probable cause was given by the judge, as follows, to wit:
    “ It is hereby certified that there was probable cause for the acts done by the defendant, Charles B. Blocker, deputy collector of internal revenue, on which, said suit was founded, and for which the judgment against said Blocker for the sum of seven hundred and fifty dollars and costs was recovered.
    “In open court, this 23d day of June, A. D. 1880.
    “ W. B. Woods, Judge”
    
    II. August 4, 18S0, E. N. Brayles, attorney for. Dunnegan, filed a copy of the record with the collector of internal revenue at Atlanta, Ga., and requested that the same might be fori warded to the Commissioner for payment. He stated that one-half the judgment belonged to him for fees. The collector forwarded the record as requested, and thereupon the following action was had:
    “Treasury Department,
    “Office of Internal Bevenue,
    “ Washington, January 27, 1881.
    “Hon. John Si-ierman,
    “ Secretary of the Treasury:
    
    “Sir: I have the honor to transmit herewith for your consideration and advisement the claim of Ezekiel Duunegan for the refunding of $833.70.
    “This is the amount of a judgment and costs rendered in favor of Dunnegan in a suit for damages against C. B. Blocker, a deputy collector in the old fourth district of Georgia. The judgment was rendered September 29, 1877. The final argument for a new trial was made and motion overruled June 19, 1880.
    “ Hon. W. B. Woods, judge United States circuit court northern district of Georgia, before whom the case was tried, gave defendant, Blocker, a certificate of probable cause June 23, 1880.
    “I propose to allow the claim for the full amount of judgment and costs, to wit, $833.70.
    “ Kespectfully,
    “Green B. Baum,
    “ Commissioner.
    
    “Treasury Department,
    “Office of the Secretary,
    “ Washington, D. G.,' January 29, 1881.
    “Hon. Green B. Baum,
    
      “ Commissioner of Internal Bevenue :
    
    “Sir: Tour letter of the 27th instant is received, transmitting for my consideration and advisement the claim of Ezekiel Dunnagan for the refunding of a judgment and costs for $833.70, renderednihis favor arid against O. B. Blocker, a deputy collect- or in tlie old fourth district of Georgia, on September 29,1877, in the United States circuit court, northern district of Georgia, It appears that the case was tried before Judge W. B. Woods, then United States circuit judge, and that afterwards, on June 19,1880, he overruled a motion for a new trial, after argument by counsel, and that he gave said Blocker, the defendant, a certificate of probable cause. •
    “In view of these facts, I approve the allowance and payment to the claimant of the full amount of the judgment and costs, viz, $833.70, as proposed by you.
    “Very respectfully,
    “ I-I. F. French, .
    “ Acting Secretary.”
    “No. 770.
    
      “A schedule of claims for the refunding of taxes erroneously assessed and paid, which have been examined and allowed.
    
      
    
    “ I certify that the foregoing claims for the refunding of taxes erroneously assessed and paid have been examined and allowed.
    “Green B. Baum,
    “ Commissioner.
    
    “Opeice Internal Beyenue,
    
      “Feb. 5th, 1881.”
    The claim was disallowed by the First Comptroller for reasons given at length and filed in his office.
    III. No notice of thependeney of said suit, or of the motion for certificate of probable cause, was ever, at any time, given by said parties, or either of them, to the Secretary of the Treasury, the Solicitor of the Treasury, the Commissioner of Internal Bevenue, the Attorney-General, or the United States attorney for said northern district of Georgia; nor were either of said officers or departments ever requested by said parties, or either of them, to defend said cause, and they, nor either of them, had any knowledge of said cause till after judgment therein and after the issuing of the certificate of probable cause.
    Said defendants employed their own individual attorneys to, and who did, defend said cause on their behalf, and neither the United States attorney nor any other United States officer or agent appeared for or on belialf of the government or the defendants.
    . No notice of the seizure of the property described in the petition in said cause, and for which the said judgment was rendered, was given to the United States attorney for said district at any time by said parties, or either of them, and said attorney had no knowledge of the said seizure.
    That Henry P. Farrow was the United States attorney for the northern district of Georgia from March 5,1872, to January 1, .1881, and during that time resided at Atlanta, Ga.
    On December 29,1864, the Commissioner of Internal Kevenue instructed the revenue officers as follows:
    
      11 It is thought advisable to keep in this office a record or docket of the various suits that may be brought in the United States courts, or State courts of record, by or against the government, or its officers, under the internal-revenue laws.
    
      u You are therefore requested, as soon as any such suit is commenced in your collection district, to report the same to this office, stating the names of the parties, the court, the term of the court in which it is brought, the cause of action, and all information necessary,” &c.
    ' Mr. George L. Douglas, for the claimant..
    
      Mr. A. D. Robinson (with whom' was the Assistant Attorney-General) for the defendants:
    The government is not liable, under section 989 of the Be vised Statutes, to pay any judgment against Charles B. Blocker, because at the time of the commission of the acts complained of, and for which judgment was rendered against him, he was nota “ collector or other officer of the revenue.” (Herndon’s Case, 15 O. 01s. B., 446.) The collector alone is responsible for such acts (13 Stat. L., 225, § 9010; Tlev. Stat., § 3148.) And the record shows that the collector was not held, but a verdict was rendered in his favor.
    Again, there is no appropriation out of which this claim can be paid; and claimant cannot, therefore, recover under this section. Congress must be applied to for an appropriation. It is not necessary, under this section, to make any application to the Commissioner; and therefore his allowance of the claim is not conclusive upon the government, as in some other cases.
    The government is not liable under section 3220, because—
    It authorizes the Commissioner to do what in other acts he is forbidden to do; that is, pay any claim. There is only one of tbe tilings there prescribed that the Commissioner has any power to do, and that is to remit 'a tax assessed but not’ collected. He has no power to pay back or refund anything.
    This section is a substantial rescript of section 44 of the Act of June 30, 1864, as amended by section 8 of the Act of July 13, 1866 (14 Stat. L., Ill), at which time the Commissioner had the funds with which “ to refund and pay back,” which now he has not, and was evidently passed without consideration of that question. In all the reported cases of motions for certificate of probable cause that I have found, there was a notice of the motion given. (See United States V. Brig Henry, 4 Blatch., 359; Faber v. Barney, 6 id., 305; Cox v. Barney, 14 id., 289; United States v. Recorder, 2 id., 119.)
    ■ Would it not have been a conclusive answer to the motion in this cause if it had been made to appear to the court, that no notice of or opportunity to defend the suit had been given -to the government or any of its officers by either party? The effect of a certificate of probable cause was so provided “with a view to the further protection of the officers of the revenue in the reasonable and proper discharge of their responsible duties.” (Conkling’s Treatise, 5th ed., 501.) And it will not be seriously questioned but that an officer can waive his rights against the government. If so, he may do so expressly, or his acts may be such as to estop him from making any claim in a particular case. By giving no notice, and employing his own private counsel, is he not thus estopped ? What stronger proof of waiver can there be except an express one ? The Treasury official and the United States attorney.had good right to assume after the instructions of December 29, 1864, that they would receive due notice of all suits and proceedings against the-governmeut, or any of its officers, and particularly those in which the government would be expected to pay in case of recovery.
    One not a party to an action, nor notified of its pendency, is not. bound by a judgment in such action. [Hale v. Finch, 3-Morrison’s Transcript of Opinions of Supreme Court, p. 214— opinion December 5,1881.)
    The general principle involved is well stated as follows :
    “Where the principal refuses to defend a suit brought against his agent, if the agent’s course in defending it is a prudent and reasonable one, the principal will be liable to him for the costs thus sustained.” (Sedgwick on theMeasureof Damages, 7thed, vol. 2, p. 89, note a, and case cited.)
   Scoeield, J.,

delivered tlie opinion of the court:

This suit is brought to recover i the amount of a judgment rendered in the United States circuit court, northern district of Georgia, the payment of which, under the advice of the Secretary of the Treasury, was authorized by the Commissioner of Internal lie venue, but disallowed by the First Comptroller.

The following is a brief summary of the findings of facts :

An action in trespass vi et armis against James Atkins, C. B. Blocker, and William Jennings, first cpmmenced by the claimant September 7, 1874, in the State court .of Georgia, was removed November, 1875, to theUnited States circuit court. The trespass was alleged to have been committed February 14,1871. At that time Atkins was collector of internal revenue and Blocker a deputy'collector. Atkins ceased to be collector February 27,1872, and Blocker to be deputy March 31,1871. September 28,1877, the case was dismissed as to Jennings.

The suit against Atkins and Blocker went to trial before a jury September 29,1877.' On the same day verdict was rendered in favor of Atkins but against Blocker for $750 and costs. Thereupon judgment was entered by the court in favor of claimant and against Blocker for $750 and costs, and in favor of Atkins and against claimant for costs.

A motion by Blocker for a new trial, made October 18,1877, was overruled June 19, 1880.

A certificate of the judge that “ there was probable cause for the acts done by Blocker ” was filed June 23, 1880.

No department, bureau, officer, or agent of the government had any notice or knowledge of these judicial proceedings. The demand of payment was the first notice of the suit.

A copy of the record, forwarded by the plaintiff's attorney, who claimed to be half owner of the judgment, on a conditional fee, through the collector, to tlie Commissioner of Internal Revenue, was by him, in accordance with regulations, laid before the Secretary for advice. January 29, 1881, the Secretary “approved the allowance and payment of judgment and costs, $833.70.” February 5, 1881, the Commissioner, calling it “a claim for a refund of taxes erroneously assessed,” certified that he “ had examined and allowed the claim.”

March 26, 1881, the claim was rejected by the First Comptroller.

There are two sections of the Revised Statutes, to wit, 3220 and 989, in which provision is made for the settlement of judgments against revenue officers. The first relates only to officers of internal revenue; the second to officers of customs revenue, and perhaps of internal revenue also. However that may be, the proceedings under the two sections are quite different. By section 989, the judge is authorized to certify “ probable cause,” and thus stay execution against the defendant. The judgment, by virtue of these proceedings, having been assumed by the government, is laid before the accounting officers for examination and payment. . But under section 3220 no authority is given to the court to certify probable cause or stay execution. The judgment goes, first, to the Commissioner, under advice of the Secretary, for readjudication and allowance; then, if allowed, to the accounting officers for examination and payment.

Between these two sections this case has become somewhat confused. The judge and the lawyers on both sides in the circuit court seem to have considered it under section 989, for the court granted the certificate on motion of the defendant’s attorney, and under this section the demand upon the Treasury for payment was specifically made by the attorney for the plaintiff. '

On the other hand, in the Treasury Department the allowance by the Commissioner, with the advice of the Secretary, was made under section 3220.

In this court the counsel for the claimant holds that he is entitled to recover under either section — under 989 upon the judgment of the circuit court, or under 3220 upon the allowance of the Commissioner. We will consider the question under both sections.

First, as to section 989 :

A judgment and certificate, under this' section, properly obtained, undoubtedly creates under the law an obligation against the government in the nature of a contract. Such a judgment is as binding upon the accounting officers and the United States as a judgment of this court. If, for irregularity or other cause, payment is refused, this court has jurisdiction to entertain a suit. (8 O. Ols. B., 451; appealed and affirmed; 20 Wall., 641; 10 C. Cls. B., 134; 98 U. S. B., 565.) Accepting jurisdiction under these authorities, we come next to inquire if this is a judgment which the United States, under section 989, is obligated to pay.

It appears by the findings of fact that the government had no notice, direct or indirect, of the proceedings in court. Neither of the defendants in the suit at its beginning, nor at any time during its pendency, held any official relation with the United States. Atkins went out of office two and a half years, and Blocker three and a half years, before suit was brought. It does not appear that Jennings was ever in office. So there was even no constructive notice. The United States district attorney resided in the same city where the records were kept and the courts held. He was required by law to defend all such suits without charge to the defendants. He was also required to make report of all suits both to the Department of Justice and the Commissioner of Internal Revenue. The collector, who had his office in the same city, was also required to report to the department all such suits; but neither of these officers received notice by either of the defendants of proceedings against them, nor did they derive knowledge of them in in any other way. Both Atkins and Blocker, having been in the service, doubtless knew the law, but, for some unknown reason, they preferred to employ private counsel at their own expense. Not only were these officers ignorant of what was going on in the premises, but no department, bureau, officer,or agent of the government received any notice. If the district attorney had read the record and declaration in this case, he would only have learned that the defendants were charged with committing a “ malicious trespass without any reasonable or probable cause.”

The question is fairly presented whether the government ought to be compelled through the decision of this court to pay a judgment rendered in a suit between private citizens, but in which the judge has certified “ probable cause,” without notice or opportunity to defend. Notice, it is true, is not required in express words by the statute, but it is by the principles of common law and by the practice of all courts of justice. The statutes cannot always go into details of practice. Most frequently they declare only the rights of parties and leave them to be enforced in the courts according to established rules. The certificate of probable cause operates as a perpetual stay of execution. By thus relieving the defendants from liability, in effect and practically, a judgment is rendered against the United ' States. (Sherman’s Case, 98 U. S. R., 565.) It should not be . forgotten that State courts as well as United States courts all over the Union have jurisdiction of such cases. The waiver of notice would be an invitation to collusion and fraud. In this very case some things appear suggestive of relations not common to litigants. The plaintiff kindly forbore his suit for more than three years and a half,-and then gave it to an attorney on shares. Blocker immediately waived process and entered an amicable appearance. While, as ex-collector and ex-deputy, both the defendants, particularly the former, must have known that by giving a hint to the local officials the government would immediately furnish them the best of counsel without charge, they chose, with unexampled delicacy, having been off the payroll for several years, to employ private counsel at their own expense rather than worry these officials with their troubles or accept assistance without compensation. The case is taken to the United States court, in part by the agreement of parties. The jury found Atkins was not liable, although the law (Bev. Stat., § 3148) distinctly declares that the collector shall beheld responsible for every act done by the deputy in the performance of his official duty. This finding, unexplained, proves that the trespass was not committed by Blocker while acting as deputy, but, as the declaration alleges, “maliciously and without any reasonable and probable cause.” A motion for a new trial is made, without filing reasons, and overruled several years after, without objection. .Some days thereafter the defendant takes opportunity to move for a certificate of probable cause. The plaintiff assents with suspicious readiness. There being no one present, to question its propriety, the certificate, possibly, may have been inadvertently given. We recount these circumstances not to prejudice this suit, but to prove the propriety of a rule, whereby all suspicion of collusion will be avoided.

Believing that opportunity tobe heard should be a condition precedent to liability, we hold in this case that the government, having had no notice, actual or constructive, ol the proceedings in the court, is not concluded by its judgment. ’

Two other objections are raised to the validity of the judgment and certificate; It is said the words “collector, or other officers of the revenue,” do not relate to officers of internal revenue, but to officers of customs revenue only. Therefore the certificate of probable cause was not authorized under that section. Campbell v. James (18 Blatch. 196) is cited to sustain this limitation.

It is claimed also that a deputy collector does not come within the protecting provision of this section, because he is not an “ officer of the revenue.” It requires an appointment by the President, or head of a department, it is said, to make an “officer.” Without the advice or consent of anybody the collector appoints as many deputies as he pleases, but he is held responsible for everything done by them while acting as deputies, while the President and heads of departments are never held responsible for the acts of their “ officers.” Landrum’s Case (16 C. Ols. It., 82) is cited in support of this construction.

Having decided the case under section 989 on the question of notice, the court does not feel bound to pass upon these additional objections.

Hitherto we have been considering the liability of the government under section 989, growing out of the judgment and proceedings of the circuit court. When we come to consider it under section 3220, an entirely different question is presented. Here we encounter the decision of an intervening tribunal. The Commissioner of Internal Revenue, under the advice of the Secretary, has taken jurisdiction of the claim, and decided it in favor of the claimant. We are now to pass, not upon the court decision, except, perhaps, incidentally, but upon the decision of the Secretary and Commissioner. Here we can inquire only whether these officers had jurisdiction of the case, and whether their decision is free'from fraud or mistake. (Kaufman’s Case 11 C. Cls. R., 659; 96 U. S. R., 570, 571; Real Estate Savings Bank’s Case, 16 C. Cls. R., 335; Barnett’s Case, id., 335. The last two cases cited have been affirmed on appeal. See post.)

Section 3220 provides that “ the Commissioner of Internal Revenue, subject to regulations prescribed by the Secretary of the Treasury, is authorized to repay * * * all damages and costs recovered against * * * any deputy collector in any suit brought against him by reason of anything done in the due performance of his official duty.” The regulations provide that “when the amount exceeds $250, the claim with the evidence in its support shall, before decision, be submitted to the Secretary for his consideration and advisement. It cannot be denied that these officers have ample authority under this clause of the law to consider and allow the payment of this judgment. Their action upon it is fully set out in the findings. They decidecl that the judgment and costs should be paid. There is no allegation of fraud, but several supposed mistakes are presented for our decision.

The question of notice, discussed in connection with the judicial proceedings under section 989, is again presented. It requires but little consideration in this connection. It is conceded that the decision of the' circuit court under section 989, when regular, is conclusive upon the accounting officers of the government. Unless, therefore, notice of proceedings in court is required, no hearing is given anywhere. Not so under section 3220. The accounting officers have nothing to do with the judgment until it has been readjudicated and allowed by the Commissioner and Secretary. Nor are these latter officers bound by it. It is fully in their discretion to allow or disallow payment. With them the verdict of the jury and the certificate of the judge amount only to persuasive evidence. They can go behind them both and inquire into all the facts, circumstances, and allegations that may assist in coming to a correct conclusion. They may refuse to allow the claim because no hearing was given to the government in court, or they may waive that and consider its merits. With this unlimited power of review it cannot be said that the government has not had a day in court. We can correct mistakes and investigate frauds committed by these officers, but we cannot readjudicate matters specially confided to their discretion.

It is objected, further, that the payment is allowed in favor of the plaintiff in the judgment instead of the defendant. Is this a mistake? .The language of the law is, “authorized * * * to repay * * * all damages and costs recovered against” the officers named. This particular clause of the section does not specify to whom the repayment shall be made. If it had said “ pay all damages and costs,” the meaning could not have been doubtful. The payment would be made to the plaintiff beyond doubt. The word “repay” is often used as synonymous with “restore.” In that sense it would have authorized the loss to be restored to the party who had suffered it: to the defendant if he had paid it, and. to the iffaintiffif the loss still rested'on him. The repayment, it is said, is for the protection of the officer — not the aggrieved citizen. True, but that fact does not favor the proposed construction. A deputy collector is not supposed to be rich, while the damages recovered may be very large. To require him first to pay the money, raised perhaps by a loau or sacrifice of property, would be j>oor protection. He might not be able to raise it at all, and in that event his property would be sold on execution, and in many of the States he could be imprisoned. In reply, it is said execution would be stayed by the certificate of probable cause. It should be remembered, however, that under section 3220 no certificate is required or authorized. But if it were, it can hardly be supposed Congress intended to originate such proceedings to work out such dishonest results. We are therefore of the opinion that the only practical and honest construction that can be given to this clause of the law is, that the “damages recovered” shall be paid to the defendant, if he has satisfied the judgment; if not, to the plaintiff. This construction is in accordance with the uniform practice of the department since the law was passed.

A third supposed mistake consists in this: In certifying that the “damages recovered” in favor of the claimant “had been examined and allowed,” the Commissioner, both in the heading, in the statement of amount, and in the concluding certificate, calls it a “claim for the refunding of taxes erroneously assessed.” By the whole of section 3220 the Commissioner is authorized to do divers things: “remit taxes assessed,” “refund taxes collected,” “repay damages,” “refund penalties,” &c. In doing all these things it has been found convenient to use only one form of printed blank. This may not be a good style of bookkeeping; but, if the certificate of allowance given by the Coin-missioner is in all cases accompanied on its way through the accounting offices by the evidence and a full statement of facts upon which it is founded, we can see no legal objection to it. To disguise an allowance of “ damages recovered” as a “refund of taxes erroneously collected” would constitute a very grave mistake. But that is not the purpose nor effect of this practice. We do not feel called upon to overturn a long-established mode of procedure in the Treasury Department. Such reforms may be safely left to the Secretary of the department. This construction agrees with the former rulings of this court. In Woollier’s Case (13 O. Cls. B., 365) it was said “the forms of proceedings by the Commissioner are not within the control of claimants, and they should not lose their rights by any errors or imperfections therein made by him, or with his concurrence. It is sufficient if tlie Commissioner acts within the scope of his authority and jurisdiction, whatever forms he may adopt.” In this case, the correspondence between the Secretary and Commissioner which fully described the claim, as well as the record of the judgment, was attached to and accompanied the certificate of allowance. So no one could have been deceived.

The judgment of the court is, that the claimant recover from the defendants the sum of $833.70.

Nott, J., was absent when the decision was announced, but was present at the hearing and concurred in the judgment.  