
    GEORGE HOWES & CO. v. THE UNITED STATES. GEORGE R. WELLS, Receiver, etc., v. THE SAME.
    [Nos. 15486, 15873.
    Decided February 11, 1889.]
    
      On the Proofs.
    
    In 1885 tlie Superior Court of San Francisco appoints Wells receiver of Howes & Company in the matter of this claim then pending before the Commissioners of Alabama Claims, surrogating him in all rights. The Commissioners refuse to allow him to intervene and the accounting officers refuse to state an account in his favor. Half of the Alabama award is paid to George Howes, tbe other half is applied to an indebtedness of Jabez Howes to the Government, with the assent of both partners.
    I. The decree of a court appointing a receiver to prosecute the claim of a judgment debtor against the United States, does not transfer the title nor confer upon him the legal right to prosecute.
    II. Claims against Great Britain, commonly known as the Alabama Claims, became by operation of the Jet 5th June, 1882 (22 Slat, L., p. 98) claims against the United States, and subject to the provisions of the Revised Statutes (§ 3477) regulating transfers and assignments.
    III. Assignments in bankruptcy, voluntary assignments of the debtor’s entire estate for the benefit of creditors, and the transfer of claims by operation of law to executors, administrators, and legatees, are valid, notwithstanding the Revised Statutes ($ 3477); butthe transfer of a specific claim to a receiver by the decree of a State court is ■ void.
    IV. It is the duty of the accounting officers in proper cases to set off one demand against another where the Government is both debtor and creditor of thesame party. (Rev. Stat.,§§236, 1756; AetZrd March, 1875, 18 Stat. L., p. 481).
    V.Where a firm is creditor of and a member debtor to the Government, and all the partners acquiesce, the accounting officers may set off the individual indebtedness of the one partner against his share of the claim.
    YI. Where one partner expressly consents to his share of a claim being set off against bis individual indebtedness to the Government, and the other accepts a draft payable to him alone for his share, the consent of the partnership is established.
    
      
      The Reporters' statement of the case :
    The following are the facts as found by the court:
    I. George Howes and Jabez Howes were merchants and co-partners in San Francisco, Cal., under the firm name of George Howes & Co., from 1853 until about September 5,1880, when said firm suspended payment and failed, and has never since resumed business. Said George Howes left California in 1874, has. since continuously resided in New York and New Jersey, and has never returned to California.
    II. They presented two petitions to the Court of Commis-(22 Stat. L., 98), one September 2,1882, and the other January sioners of Alabama Claims, created by the Act of June 5, 1882 13, 1883, making claims for certain war premiums of insurance paid by them. Said petitions were signed by Cornelius Cole, as attorney, and sworn to in California by Jabez Howes in behalf of himself and his co-complainant, absent from the State. Judgment was recovered in said cases, one February 5, 1885, for $8,667.79, and the other November 23, 1885, for $12,442.04. During the pendency of said cases before said commissioners, George E. Wells, one of the present claimants, presented his petitions and motions to be permitted to intervene as receiver of said George Howes & Co., and to have judgments entered in his favor. This was resisted by said George Howes & Co. The commissioners overruled the motion, denied the petitions, and entered judgments in favor of the company as before stated, making of record a memorandum that—
    
      “ The court does not deem the granting of the application necessary to enable the receiver to protect any rights which the judgment creditors of the claimants may have in the premises.”
    Said judgments were transmitted to the Secretary of State and by him certified to the Secretary of the Treasury, as required by the act.
    III. The facts in relation to the appointment of said receiver are as follows:
    The Nevada Bank of San Francisco, Cal., on the 28th day of January, 1882, recovered judgment against said George Howes and Jabez Howes, lately doing business under the firm name of George Howes & Co., in the Superior Court of the city and county of San Francisco, Cal., for the sum of $122,416.90, with interest and costs. Thereafter said judgment creditor filed a supplementary petition in said case before said court,. setting out that said judgment remained unsatisfied, and among other allegations, in substance, that said George and Jabez Howes had joint claims against the United States, and particularly against the fund known as the undistributed portion of the Geneva award, which they were prosecuting before the Court of Commissioners of Alabama Claims, and praying that said Howes be enjoined from disposing of said claims, and that a receiver be appointed, in aid of the ordinary process of the court, to receive, take charge of, and hold, subject 'to the order of the court, all money, drafts, notes, bills of exchange, warrants, or other vouchers growing out of or by reason of said claims, and that said receiver be subrogated to all the rights, duties, powers, and privileges of said George and Jabez in the matter of said claims.
    Thereupon said court entered of record the following decree November 6,1885:
    “That a writ of injunction issue, directed to said George Howes and Jabez Howes, and each of them, and their and each of their agents, attorneys, and employés, enjoining and restraining them and each of them from selling, assigning, transferring, or in any manner disposing of, pledging, or incumbering or of receiving payment of—
    “ That certain claim and demand heretofore, to wit, on the 2d day of September, 1882, filed by said defendants, George Howes and Jabez Howes, in the Court of Commissioners of Alabama Claims, Washington, II. O., beingcause No. 26 therein, or any part thereof or anyjudgment entered or to be entered thereon or any part thereof,
    “ That certain claim or demand heretofore, to wit, on the 13th day of January, 1883, filed by said defendants, George Howes and Jabez Howes, in said Court of Commissioners of Alabama Claims, being cause No. 5272 therein, or any part thereof, or any judgment entered or to be entered thereon or any part thereof.
    “ That George R. Wells be, and is hereby, appointed receiver of and for said defendants, George Howes and Jabez Howes and said George Howes & Co., and is subrogated to all rights, duties, powers, and privileges of said George Howes and Jabez Howes and of said George Howes & Co. in the matter of—
    “ That certain claim and demand heretofore, to wit, on the 2d day of September, 1882, filed by George Howes and Jabez Howes, and now of record in said Court of Commissioners of
    
      Alabama Claims, being cause No. 26 therein, and of and to any judgment or judgments entered or to be entered thereon.
    “ That certain claim and demand heretofore, to wit, od the 13th day of January, 1883, filed by said George Howes and Jabez Howes, and now of record in said court of Commissioners of Alabama Claims, being cause No. 5272 therein, and of and to any judgment or judgments entered or to be entered thereon.
    “And the said George E. Wells, as receiver aforesaid, is fully authorized and empowered to intervene or interplead in the matter of all or either or any of said claims and demands in said Court of Commissioners of Alabama Claims, or of any judgment or judgments entered or to be entered thereon, and to take any and all steps which he may deem necessary or expedient to recover or collect said claims, demands, or judgments, or any or either of them, or any part thereof, or to reduce the same to his possession, charge, custody, or control, and to receive payment thereof, receipt for, and satisfy the same.”
    Service of notice to said George and Jabez Howes of said petition was made upon said Jabez Howes in California, but it does not appear that any personal service was made upon said George Howes.
    . IV. On the 29th of January, 1886, said receiver filed before the First Comptroller an exemplified record of the case of the Nevada Bank Co. George. Howes & Co. in the Suprerior Court of San Francisco, including said decree, and requested that, the amount due and payable on said judgments of the Court of Commissioners of Alabama Claims be paid to him, and that the accounts be stated and a warrant drawn in his favor instead of that of George Howes and Jabez Howes. This was' controverted by said George and Jabez. The Comptroller refused to recognize said receiver, and declined to state an account in his favor.
    V. On the 31st of July, 1886, the Fifth Auditor stated an account in favor of George and Jabez Howes, firm of George-Howes & Co., upon one of said judgments for $8,667.79 as the amount of the judgment, and allowed thereon $3,053.46 as the proportion of said judgment payable under section 8 of the Act of June 5, 1882, with direction to “remit draft in care of O. Cole, attorney, San Francisco, Cal., as appears from the statement and vouchers transmitted herewith for the decision of the First Comptroller.” On the 10th of August, 1886, the Fifth Auditor stated a like account for balance of amount payable on the other judgment of the Court of Commissioners of Alabama Claims, $4,383.06 and transmitted the same to the First Comptroller with the same direction as to remitting draft.
    The First Comptroller made his decisions November 5,1886, on said statements by the auditor as follows:
    
      “ I admit and certify the above balance of $3,053.46, due from the United States, this 5th day of November, 1886, payable as above directed.
    
      “ Let one-half of this amount, $1,526.73, the share of Jabez Howes, be paid to the Treasurer U. S. for deposit to the credit of W. H. Jessup, late int. rev. stamp agent, on account of sales of int. rev. stamps. Remit draft in favor of George Howes for the remainder, $1,526.73, as above directed.
    “ I admit and certify the above balance of $4,383.06, due from the United States this 5th day of November, 1886, payable as above directed.
    
      “ Let one-half of this amount, the share of Jabez Howes, $2,191.53, be paid to the Treasurer U. S. for deposit to the credit of W. H. Jessup, late’int. rev. stamp agent, on account of sales of internal-revenue stamps. Remit draft in favor of George Howes for the remainder, $2,191.53, as above directed.”
    Jabez Howes had been one of the sureties for W. H. Jessup, late internal-revenue agent, on a bond to the United States, and in a suit on said bond judgment had been recovered by the United States against said Jabez Howes and others for $12,000. The Comptroller finding that judgment standing in favor of theUnited States against Jabez Howes and others, and these judgments in favor of George Howes & Co., and nothing appearing of record to show that the Howes were not equal partners in the firm of George Howes & Go., as he reports, he severed their interests and applied one-half the amount due said Jabez Howes towards payment of said judgment against him and others, as stated in his decision aforesaid, and ordered the other half to be paid to George Howes.
    Notice of this settlement was sent to said George and Jabez Howes by the following letter:
    “ Treasury Department,
    
      “ First Comptroller’s Oeeioe, Washington, D. G., November 5,1886.
    “ Gentlemen : I have to inform you that the following balances have been found to be due you on account of judgments (2d class) of the late Court of Commissioners of Alabama Claims, viz:
    Report No. 113817, judgment 36... $3,053.46
    Report No. 220166, judgment 5272 . 4,383.06
    “ One-balf of these amounts will be paid into the Treasury on account of the judgment against Jabez Howes as one of the sureties on the bond of W. H. Jessup, late internal-revenue stamp agent at San Francisco, California, and drafts in favor of George Howes for $1,526.73 and $2,191.50 will be sent in care of C. Cole, esq., attorney, by the Treasurer of the United States in due course of business.
    
      “ I am, very respectfully,
    “M. J. Durham,
    
      11 First Comptroller.
    
    “ Georg-e Howes and Jabez Howes,
    “ (Care of C. Cole, Fsq., Attorney),
    
    “ San Francisco, CaliforniaP
    
    VI. On the 10th of November, 1886, two drafts were drawn, in accordance with said decision, by the United States Treasurer on the Treasury of the United States, payable to the order of said George Howes, one for $2,191.50 and the other for $1,526.73, and forwarded to said O. Cole, San Francisco, Cal. On the 1st day of December, 1886, said George Howes executed two powers of attorney in his own name, appointing his true and lawful attorney for him to indorse his name on said United States Treasury drafts, and to receive and receipt for the same. Said drafts were presented to the Treasury duly indorsed by said attorney, and the full amount was paid thereon.
    VII. About February, 1887, or shortly before, Miller Griffin, one of the sureties of said Jessup on his said bond, made application to the Secretary of the Treasury to compromise the judgment against Jessup and others upon his paying the balance of principal, without interest, over and above the credits allowed by the First Comptroller, as aforesaid, on account of said Jabez Howes. In furtherance of said application said Ja-bez Howes (with Robert H. Elam and Edward K. Howes, who were interested in certain other judgments of the Court of Commissioners of Alabama Claims) executed an instrument under seal, dated on or about February 9,1887, in which is the following release:
    “We hereby agree and bind ourselves, our heirs, executors, and assigns, by these presents, to release and abandon all claims of whatsoever nature or kind we may have against the said United States of America, or any of its officers or agents, by reason of the action of the said officers of the Treasury Department in having secured and covered into the Treasury of the United States the amount of five thousand and ninety-nine -AA- dollars, deducted from the judgments rendered in our favor by the Court of Commissioners of Alabama Claims, and applied to the credit of the judgment entered against us and the said William Henry Jessup iu the case hereinbefore mentioned.”
    The sum mentioned in said release, $5,099.62, is the exact amount credited by the First Comptroller on said judgment against Jessup and others, on account of Jabez Howes, and in accordance with his decision aforesaid. On the 17th of February, 1887, the Secretary of the Treasury accepted said proposition and the compromise proposed was carried into effect.
    VIII. It does not appear that any reply was made to the letter set out in finding yi, nor that any objection was made to said settlement by the First Comptroller until this action was commenced.
    IX. On the 28th of November, 1887, said Superior Court of the city and county of San Francisco made and entered of record, in said case of the Nevada Bank of San Francisco v. George Howes and Jabez Howes, co-partners under the firm of George Howes & Co., the following additional decree:
    
      “ In the Superior Court of the city aud. county of San Francisco, State of
    California — The Nevada Bank of San Francisco (corporation), pl’ff, vs.
    George Howes and Jabez Howes, copartners, doing business under the
    firm-name and style of George Howes & Co., def’ts.
    “ George R. Wells, receiver in the above-entitled cause, having duly made and filed his verified petition herein, showing, among other things—
    “That the debts and liabilities of said firm remaining due and unpaid exceed the sum of one hundred and twenty thousand dollars;
    “That said firm recovered judgments against the United States in- the late Court of Commissioners of Alabama Claims, causes Nos. 26 aud 5272 therein, of the aggregate value of seven thousand four hundred thirty-six and -¡%„ dollars ($7,436.53)-on copartnership demands; that said sum was allotted to and paid thereon by the United States out of the fund known as the ‘undistributed portion of the Geneva award;’
    ‘ ‘ That th eU nited S tates,u nder color of a personal claim again st. Jabez Howes, one of said copartners, has sequestered, appropriated to its own use, and converted into its Treasury one-half of said sum of seven thousand four hundred thirty-six and •^0% dollars ($7,436.53), to wit, the sum of three thousaad seven hundred eighteen and T20%- dollars ($3,718.26), and said petitioner having also prayed for an order of this court authorizing and empowering him to bring suit therefor;
    “And it appearing satisfactorily to this court that said George R. Wells is the duly appointed, qualified, and acting receiver of said firm of George Howes & Co.; and further,
    “ That the prayer of said petition ought to be granted: “Now, therefore, on motion of O. M. Jennings, attorney for said receiver, ,
    
    
      aIt is ordered, That George ft. Wells, receiver of said firm of George Howes & Co., be, and he is hereby, invested and clothed with full power and authority to bring suit against the United States for said sum of three thousand seven hundred eighteen and dollars ($3,718.26) or any part thereof, or for any sum so as aforesaid appropriated or converted, or against any other person or persons, or corporation, in the Court of Claims, or in such other or any tribunal having jurisdiction thereof. Also to compromise, adjust, receive payment, receipt for, and satisfy said demand, and to take any and all measures which he may deem necessary or expedient in the premises.”
    
      Mr. James Lowndes for the claimants Howes:
    There is nothing in the record which constitutes a defense to this action. It is submitted that the judgment creditors, viz, George Howes and Jabez Howes, late copartners as George Howes & Co., are entitled to recover the sum named in the judgments, the aggregate of which is $7,436.52.
    
      Mr. J. W. Douglass for the claimant Wells :
    Had the defendant the right to offset against one-half of the judgments of the Commission the debt due to the defendant by Jabez Howes, one of the partners! to which the claimant answers, that there was no such legal right and for the following considerations:
    A set-off in legal signification means the application of a valid demand in favor of the defendant and against the claimant in satisfaction or diminution of his claim. (22 0. Cls. R., 291; Ohitty on Contracts, 741. (Story’s Equity, § 1437.)
    This very same question came up on the argument of the demurrer in the Boehm Case (20 C. Cls. R., 14.) Judge Nott, delivering the opinion, restated the old doctrine, that “ the United States can not set off or plead by way of counter-claim in this court, against a Ann consisting of three members, a judgment against two of them; and quoted, approvingly, from the opinion of C. J. Gibson (9 Serg. & B., note, 379), that “ there is no instance of a set-off of a debt due by one of several plaintiffs, because that would enable the defendant to pay his debt to the prejudice of the others.” To which may be added that other reason frequently urged against such an attempted set-off, that its allowance might give to a partner, already largely indebted to the firm on account of advances, an unfair advantage upon a final settlement of the partnership affairs. The defendant had full authority and opportunity to claim the set-off before the Commission as a defense to the claims there of Howes & Co. Not having done so, it is fair to conclude that the gentleman who represented the United States before that jurisdiction knew that the rule above discussed in relation to set-offs would be fatal to an attempt of the kind.
    I hardly suppose there can be any doubt about a receiver's right to sue in this court, as is the right of any other trustee or legal representative. If the question should be mooted, the following authorities will be found to settle it beyond cavil:
    “ Executors, administrators, guardians, or other successors to claims by operation of law have the right to sue in this court.” (Stanton v. The United States, 4 C. Cls. B., 456; Morgan v. The United States, 14 O. Cls. B., 319; Jlrioin v. The United States, 97 U. S. B, 392; Graham, administratrix, v. The United States, 21 C. Cls. B., 47. Randolph et al. v. The United States, 21 C. Cls. B., 283; 5 Wait’s, A. and D., 353 — 355; 23 Howard, 475; 4 Abbot’s W. Dig., 64; 2 Story’s Eq. J., 161, and note 4; 29 Barb., 585; 1 Selden, 341; 44 Pa., 294.)
    The following paragraphs from the “Code of Civil Procedure” of California, volume 11, page 988, sections 564 and 568, bring the present case upon that point directly within the range of the cases (N. Y. and Pa.) above cited:
    “Seo. 564. A receiver may be appointed by the court in which an action is pleading, or by the judge thereof, * * * after judgment to carry the judgment into effect, or in proceedings in aid of execution when an execution has been returned unsatisfied.’
    “Sec. 568. The receiver has, under the control of the court, power to bring and defend actions in his own name as receiver, * * * collect debts, to compound for and compromise the same,” etc.
    
      These authorities show that a receiver appointed in one State may sue in another when the home statute gives the right to sue, as in New York and California; but his right to sue in this court, whose jurisdiction is co-equal with that of all of the States, is correspondingly firm and undeniable.
    The attempt of Howés & Co. to get possession of the fund in controversy by that action in this court, being, flagrant violation of the restraining order made in the Bank Case in San Francisco, as shown by the record filed by the defendant in this case, will not be suffered by this court as a matter of comity towards that court, as well as in view of the general principle obtaining between parties and receivers, under such circumstances, as shown by the following authorities: 5 Wait’s A. and D., 354, with cases there cited; Kerr on Receivers, 165 toÍ70; 46 Vt.,792; Kerr on R., 166; 20 Wis., 165.
    
      Mr. Héber J. May (with whom was Mr. Assistant Attorney-General Howard) for the defendants :
    So far as George Howes & Co. are concerned, an adjustment and settlement was made and accepted by the partners of the firm. George and Jabez Howes composed the firm, anditwill not do for them to come into court now and say what they did as individuals will not bind them as a copartnership. They received the benefit of the settlement, and are estopped by their own acts from obtaining a second payment of the same claim. They approved and ratified the settlement of the accounting officers, and common decency and honesty should have prevailed against the institution of this suit by Howes & Co., who were fully cognizant of all the facts.
    As to the claim of Wells, receiver, we think the points of the defense may be summed up as follows :
    (1) The question of set-off is not material to the issue in the claim of Wells, receiver.
    (2) If the receiver can recover at all, it must be upon the strength of the alleged notice and protest.
    (3) This he can not do, because no liability could be fixed upon the United States by reason of such notice or protest, or by reason of the action of the accounting officers of the Treasury in disregarding and ignoring the same in protecting the interests of the United States.
    (4) No act of the receiver, whether by notice and protest or otherwise, in the Treasury, could control the accounting officers in the adjustment of the claims of Howes & Go., from acting as they did, for the reason that they acted in the exercise of a judgment and discretion which was beyond the jurisdiction of the Superior Court of San Francisco, and consequently beyond the control of its receiver.
    (5) The claim of the United States to the moneys due Jabez Howes was paramount to that of any other claim under the statutes, and it was the duty of the First Comptroller and the Secretary of the Treasury to withhold and apply so much of it as was necessary to the discharge of Howes indebtednesses.
   Richardson, Ch. J.,

delivered the opinion of the court:

. Two adverse claimants bring their separate actions to recover the money which became payable at the Treasury upon judgments recovered in the Court of Commissioners of Alabama Claims. They are, on the one side, George Howes & Co., the judgment creditors, and on the other George R. Wells, receiver.

In 1882 the Nevada Bank of San Francisco recovered judgment against George Howes & Co. in the Superior Court of the city and county of San Francisco for a large amount. The judgment remaining unsatisfied, the creditor bank filed a supplementary petition in said case praying for the appointment of a receiver of the claims of George Howes & Co. against the United States for their undistributed portion of the Geneva award money, which they were prosecuting before the Court of Commissioners of Alabama Claims. Upon this petition the court enterd a decree November 6,1885, set out in finding in, appointing said Wells receiver, and subrogating him to all rights, duties, powers, and privileges of said Howes & Co. in the matter of the two claims against the United States pending before said commissioners, and authorizing him to intervene or interplead before said commissioners, and to take all steps to recover and collect said claims and to reduce the same into possession.

The receiver thereupon moved in the Court of Commissioners of Alabama Claims for leave to intervene and to have judgments in said claims entered in his favor, but the court overruled the motion and gave judgment in favor of George Howes & Co.

When the Comptroller of the Treasury was about to state accounts on the judgments, the receiver appeared before him also and asked to intervene as the rightful claimant, and to have the accounts stated in his favor, but the Comptroller refused to recognize any rights on his part, and stated the accounts in favor of the Howes. Before both the Comptroller and the Court of Commissioners of Alabama Claims the Howes appeared and resisted the motions of the receiver. The same issue between the parties, which has twice been decided elsewhere, is again raised here, and we are now required to pass upon it.

In our opinion the decrees of the Superior Court of the city and county of San Francisco, November 6, 1885, set out in finding in, and November 28, 1887, set out in finding ix, did not operate to so transfer the claims of George Howes & Co. against the United States to the receiver as to confer upon him the legal right to bave the account stated in his favor by the Comptroller, and does not give him the right to present and prosecute those claims in this court.

It was not until the passage of the Act of June 5,1882 (22 Stat. L., 98), that individuals had any legal claim or rights to share in the money acquired by the Geneva award under treaty stipulations, except those recognized by the previous Act of June 23, 1874 (ch. 459), which did not include the claims of George Howes & Co.

By the act of 1882 the United States created and made provision for ascertaining and paying a class of claims which included those of the Howes, and it was after the passage of this act that the proceedings in the Superior Court of the city and county of San Francisco for the appointment of a receiver were commenced. The act, in legal effect, had made such claims demands against the United States, of which this conrt had jurisdiction, as was held in the case of Weld & Go. (23 C. Cls. R., 126), affirmed on appeal (127 U. S. R., 51), and they had become subject to the stringent provisions of the following section of the Kevised Statutes:

uSbc. 3477. All transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor, and all powers of attorney, orders, or other authorities for receiving payment of any such claim, or of any part or share thereof, shall be absolutely null and void, unless they are freely made and executed in tbe presence of at least two attesting witnesses, after the allowance of such, a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof.

“ Such transfers, assignments, and powers of attorney must recite the warrant for payment, and must be acknowledged by the person making them before an officer having authority to take acknowledgments of deeds, and shall be certified by the officer; and it must appear by the certificate that the officer at the time of the acknowledgment, read and fully explained the transfer, assignment, or warrant of attorney to the person acknowledging the same.”

In the case of Lopez (24 C. Cls. R., 84) we expressed our views in relation to the effect of that section upon voluntary assignments, orders, and powers of attorneys made by persons having claims against the Government, and while we held that the accounting officers of the Treasury; in their discretion and for the convenience of parties, were at liberty to recognize the same when unrevoked and uncontroverted and to state accounts in favor of the assignees, we also held that the latter had no rights which made it obligatory upon those officers thus to state accounts, that the United States could not be involved in controversies between private parties, and that assignees by voluntary assignments had no rights which could be enforced in this court.

There are certain exceptions to the broad interpretation suggested by the language of the statutes which have been recognized by judicial decisions. Assignments by proceedings in bankruptcy, voluntary assignments by debtors of all their estates, and the passing of claims by operation of law to executors, administrators, and legatees have been held not to be void under the law. (Burke’s Case, 13 C. Cls. R., 231; Erwin’s Case, 13 C. Cls. R., 49, affirmed on appeal, 97 U. S. R., 392; Goodwin v. Niblack, 102 U. S. R., 556; St. Paul and Duluth Railroad Company Case, 18 C. Cls. R., 418, affirmed, 112 U. S. R., 733.)

In the St. Paul and Duluth Railroad Case, Davis (Bancroft), J., speaking for this court, after reviewing the Supreme Oourt decisions, draws the following conclusions therefrom :

u From these cases we deduce the general principle that in all proceedings to which the United States are a party the courts are to maintain the statute in its integrity, as voiding all assignments of claims against the United States made before the issuing of a warrant for payment, except such as are made in a general transfer of tbe claimant’s property by operation of law, or by a voluntary transfer of all tbe claimant’s property honestly made by bim for tbe benefit of all his creditors. That is tbe extent to which tbe Supreme Court has thus far, in tbe interest of equity and good conscience, lent itself to modifications of the stringent provisions of tbe law.”

In tbe case of Goodman v. Niblack, Mr. Justice Miller delivered tbe opinion of tbe Supreme Court, from which we make tbe following extract, which is preceded in the opinion by tbe statement that the court bad held that the statute <jid not include a transfer in bankruptcy:

“In what respect does the voluntary assignment for tbe benefit of his creditors, which is made by an insolvent debtor of all Ms effects, which must, if it be honest, include a claim against the Government, differ from tbe assignment which is made in bankruptcy ? There can here be no intent to bring improper means to bear in establishing the claim, and it is not perceived how the Government can be embarrassed by such an assignment. The claim is not specifically mentioned, and is obviously included only for the just «and proper purpose of appropriating the whole of his effects to the payment of all his debts.”

From these quotations it will be seen that the courts recognize as exceptions to the operation of the statute only those assignments made necessary by the actual death of the creditor, those provided for under general laws in case of his civil death as tó all his estate by proceedings in bankruptcy, and those, in analogy to the latter, made by voluntary transfer of all his property for the benefit of all his creditors. The Supreme Court, in its opinion in the case of Goodman v. Niblack, emphasizes the element that such a voluntary transfer by the creditor is an assignment of all Ms effects by printing those words in italics.

One of the obvious benefits to the United States to be derived from the statute making assignment of claims void was the right of the officers of the Government to have the original creditor or, in ease of death or general assignment of his estate, his successor to all his business affairs to deal with in settling accounts, unembarrassed by controversies between him and his creditors. The value of that right is clearly shown in this very case. After appointment of this receiver, the Government made a settlement with Jabez Howes, one of the original claimants, by which he released his share in the claims now in suit and ratified and confirmed the action of the accounting officers in crediting one-half on a judgment debt against him and others in favor of the United States; and this was done to assist in effecting a settlement and discharge of the latter judgment. This release would not have been valid if the transfer by the California court were sustained and the Secretary of the Treasury were bound to recognize it.

The claimant, Wells, was not appointed receiver of all the partnership estate of George Howes & Co., nor of any of the separate estate of the partners. He was appointed receiver only of these particular claims against the United States, and the court undertook to transfer to him those claims alone by a decree of subrogation, with authority to intervene or interplead in the Court of Commissioners of Alabama Claims and to bring suit against the Unitea States in the Court of Claims.

This proceeding was in the nature of an equitable attachment of a claim against the United States in favor of a single creditor, and the transfer of the claim to a receiver for the benefit of such creditor alone.

If attachments, subrogations, and assignments, such as those relied upon by the claimant, Wells, as receiver, should be upheld, the Government would not only be deprived of the right to settle with those claimants to whom it was originally indebted, whose estates became thus attached, but might also be involved in controversies between such claimants and their creditors as well as between conflicting attaching creditors in different courts, contrary to the spirit if not the letter of the law, passed to prevent frauds upon the Treasury of the United States.

Should the practice of making such attachments become common, as it no doubt would if sustained, the business and responsibilities of the accounting officers would be largely extended and the liability of frauds upon the Treasury by errors and otherwise would be greatly increased. For example, in the present case the parties appeared before the Comptroller, and the claimants, Howes & Co., controverted the legality of the appointment of the receiver on the ground that one of the partners, George Howes, was not served with notice of the suit in California, and further they contended that the right of the receiver to intervene and prosecute this claim had been submitted to the Court of Commissioners of Alabama Claims and there decided against him, and the matter was therefore res judicata.

To the decree of the California court giving authority to the receiver to bring his action in the Court of Claims we give no force, as the laws of Congress alone determine who may bring actions in this court.

It is not within our province to consider whether or not the California court may punish the Howes for contempt of court in disobeying its orders, if it can reach them personally, nor whether or not the proceeds arising from these claims might not be held under its decrees if they should be reached by valid process of the court. We express no opinion on these questions.

The petition of George B. Wells, receiver, is dismissed.

This brings us to the consideration of the claim of George Howes & Co. '

When the Fifth Auditor stated accounts upon the judgments of the Court of Commissioners of Alabama claims in favor of George Howes & Co., and they had reached the First Comptroller for his decision thereon, that officer finding a judgment in favor of the United States against Jabez Howes and others for a large sum, and nothing to show that George Howes and Jabez Howes were not equal partners in the firm of George Howes & Co., he severed their interests, and applied one half the amount due on the judgments of the Court of Commissioners of Alabama Claims to be credited to Jabez Howes, on said judgment against him, and the other half to be paid to George Howes by draft in his favor. .

A full statement of that settlement was sent by the Comptroller to the attorney of record of said George Howes & Co., and soon after drafts for the amounts allowed to George Howes, payable to his order, were also forwarded to said attorney. Those drafts were collected by an attorney in fact, appointed by said George Howes, who indorsed them as authorized by his power of attorney. No objection seems to have been made to that settlement by George Howes & Co. or either of the partners until this action was commenced. .

It is among the general duties of the Treasury Department, through the accounting officers, to settle all claims and demands by and against the United States, and in proper cases to set off one against the other when the Government is both debtor and creditor of tbe same party. (Taggart’s Case, 17 C. Cls. R.,323; Bonnafon, 14 C. Cls. R., 489, Rev. Stat., §§ 236, 1766; Act of March 3, 1875, ch. 149, Sup. Rev. Stat., 185.).

In our view of tbe case it is not necessary bere to pass upon tbe question wbetber or not tbe debt of one partner to tbe United States can be set off against the debt of tbe United States to a firm of which he is one of tbe members, nor wbetber or not tbe Comptroller stated tbe accounts involved in this ease in exact accord with the principles of law applicable to such cases when in controversy There is no doubt that such set-off may be valid and binding when the partners all acquiesce and agree to it, and we think they have done so in tbe present case.

The two partners tacitly assented to tbe settlement when they received notice of the statement of tbe account, and made no objection to it. George Howes, one of the partners, further assented when be accepted and collected tbe drafts, made payable to him alone, for bis divided share. Had be then objected and returned tbe drafts or money the Comptroller might have refused to consummate tbe settlement, and might have left tbe claimants to test the right of set-off in an action at law. But he chose to abide by the settlement until be secured his share of the money, and then repudiate it. Subsequently Jabez Howes ratified and confirmed the settlement and, by an instrument under seal, released all his interest in the claim to th e United States, and the Secretary of the Treasury considered that release in the settlement and compromise of another debt to the United States in which Jabez Howes and others were debtors.

So we have the assent to the settlement of both partner together, and of each partner separately, as well as the fact that each accepted its benefits.

Having successfully resisted the claim of the receiver, who-was seeking to obtain the money for one of the creditors of the firm, and having ratified the settlement and payments made at the Treasury, the copartners now join hands and prosecute this suit to compel the United States to pay the money over again to them jointly.

In our opinion they have no claim in law or equity, and their petition must be dismissed.

Nott, J., was not present when this case was argued and took no part in the decision.  