
    *The Auditor of Public Accounts v. Dugger and Foley.
    November, 1831.
    (Absent Brooke, J.)
    Tobacco Warehouses — Effect Where Amount of Duties Insufficient to Pay Officers’ Salaries — Liability of Commonwealth When Tobacco Burned. — Though a tobacco warehouse established by law, shall not yield a sufficient amount of duties, to nay the inspectors’salaries and rents to the proprietor, for three years in succession, yet such warehouse is not thereby ipso facto discontinued, under the 3rd section of the statute, 2 Rev. Code, ch. 220, and if inspectors continue to be duly appointed, and so the inspection be in fact kept up. and such warehouse be burnt, the commonwealth is liable to make 'good the loss to the owners of tobacco there inspected and deposited within the year preceding the loss, under the 67th section of the statute.
    Claim against Commonwealth — Doubtful—Interest.—A claim against the commonwealth is presented to the auditor, which though just is yet doubtful, and therefore the auditor disallows it; and an appeal is taken from the auditor toa court of justice, which adjudges the claim against the commonwealth; Held, in such case, the court ought not to allow interest.
    Same — Interest—Quaere.—Whether, in any case of a claim adjudged against the commonwealth, interest should be given?
    Dugger and Foley, having each had seven hogsheads of tobacco in Westbrook warehouse, Petersburg, and the warehouse, with their tobacco in it, having been destroyed by fire, presented their respective claims against the commonwealth, for the value of their tobacco so destroyed, to the auditor of public accounts. The auditor disallowed both claims in toto; and they took an appeal to the superiour court of chancery of Richmond, according to the statute, 2 Rev. Code, ch. Í74, § 6, p. 2._
    
      The claims were founded on the 67th section of the tobacco inspection law, 2 Rev. Code, ch. 220, p. 166, 7. The auditor disallowed them, mainly upon the ground, — ■ that, at the time the warehouse was burnt, it was not an existing public warehouse established by law, but ought to be regarded as a warehouse discontinued under the 3rd section of the statute, Id. p. 137.
    
    *In the court of chancery, the two claims were presented together, and proceeded in as one cause, and the facts were agreed, as follows: Westbrook warehouse had been, for a great many years, a public warehouse established by law for the inspection of tobacco. But, for more than three successive years before it was burnt, the duties received from it had not amounted to a sum sufficient to pay the inspectors’ salaries and the rents of the warehouse. Nevertheless, during those three years, and in the year when the fire happened, the inspectors had been regularly and annually recommended by the county court of Din-widdie, and commissioned by the executive, and no proceedings had ever been had or commenced for discontinuing the inspection. Dugger had seven hogsheads in the warehouse when it was burnt, which had been inspected there; but of these five had been inspected, and the inspectors’ receipts for them bore date, more than a year before the fire; the other two had been inspected within the year. Foley had seven hogsheads in the warehouse, all of which had been inspected there, within the year preceding the fire, and was burnt with it.
    The chancellor directed a commissioner to ascertain the value of the tobaccos. He reported that Dugger’s five hogsheads that had lain in the warehouse more than a year, was worth 561 dollars, and his two hogsheads inspected within the year, 120 dollars — and Foley’s seven hogsheads, all inspected within the year, 642 dollars —at the time they *were destroyed by the fire. Whereupon, the chancellor decreed, that the auditor should give his warrants upon the treasury, to Dugger for 120 dollars, and to Foley for 642 dollars, with interest thereon from the date of the loss. From which decree, the attorney general took an appeal to this court.
    And in the argument to the cause here, he insisted, 1. That the commonwealth was not bound to make good this loss: that the warehouse having failed for three successive years, to yield an amount of duties sufficient to pay the inspectors’ salaries and the rents to the proprietor, the inspection was ipso facto discontinued by operation of law ; that this must necessarily be the construction of the 3rd section of the statute, since no particular method of proceeding was provided to discontinue an inspection, in sucha case; that as, therefore, the inspection had been kept up in violation of law, and as only the surplus of duties imposed on tobacco inspected, over and above the inspectors’ salaries and the rents, was paid into the treasury, and was the only premium which the commonwealth received for the insurance of tobacco, it was unreasonable and unjust that it should be held to insurance in this case, in which it received no premium. 2. That the decree was erroneous in giving interest. The commonwealth ought in no case to pay interest. It provided funds for the payment of all its debts. If claims against the treasury, presented to the auditor, were plainly just (as in most cases they were) the officers of the treasury allowed, and paid them, on demand. If the claims were doubtful, it was the auditor’s duty to reject them; in which case, the laws gave the claimant a most summary remedy, by appeal to the courts of justice to decide the question of right. The commonwealth was obliged to confide the liquidation of claims to its officers, and to rely on their judgment and discretion. It was impossible to impute it as a default to the commonwealth, that it should not pay what the proper officer, the auditor, thought an unjust demand; *and the auditor, having' no motive to commit the injustice of rejecting claims concerning which there was no reasonable doubt, must be presumed, whenever he disallowed a claim, to act fairly according to the duty of his office. There had been cases, indeed, in which interest had been adjudged against the commonwealth ; but there had been cases also, in which it had been denied to the claimant; and he believed it would be found, that, whenever the point had been made, interest had been denied. In Hilley’s case, 1 Heigh, 525, the point was made, and interest was denied by the court, according to the opinion of Green, J., Id. 528. In the state of that case, in the report p. 526, it was stated, that the judgment of the circuit court was “for five years full pay with interest from the 22ud April 1783but that was a mistake: the judgment of the circuit court was for the five years full pay without interest; and this was the judgment that this court affirmed. As to the case at bar, it could hardly be denied, that the claim was doubtful at least, and very doubtful, in principle; neither was the value of the article ascertained; it was not only a disputable, but an unliquidated, demand : therefore, however right it might be to allow interest in cases differently circumstanced, it ought not to be allowed here. Kerr v. Hove, 1 Wash. 172; M’Connico &c. v. Curzen, 2 Call, 358. At any rate, the interest ought not to have been carried back beyond the date of the demand made at the auditor’s office.
    
      Macfarland for the appellees, contended, 1. That the 3rd section of the statute was merely directory to those officers of government, upon whom it depended to continue or discontinue a particular inspection; namely, to the justices of the county court whose duty it was to recommend, and to the executive whose duty it was to commission, inspectors, only at such inspections as ought to be continued, and to omit the recommendation and appointment of inspectors for warehouses that ought no longer to be continued. This *was the method .provided by law for discontinuing inspections, when the duties ceased to yield enough to defray the charges. It was impossible to hold, that the planter, seeing an inspection existing de facto, was bound1 to examine the state of the accounts returned to the treasury, of the duties collected for three years before he brought his tobacco for inspection, to see whether the inspection was properly kept up or not. 2. As to the claim of interest, he said it was material to consider the nature of the claim, and of the duty which the commonwealth had taken upon himself. The law required the planter to carry his tobacco, intended for exportation, to some public warehouse for inspection, and to leave it there in the care of the inspectors, who were officers of the public, not bailees of the planter; and the commonwealth, levying a duty upon all tobaccos inspected, professedly to provide a fund to indemnify the planters against losses bj' fire, undertook to insure the property. It was tantamount to a contract of assurance; the planters paid the premium, in paying the duties; and% it was well known, that the fund thus provided, had greatly exceeded what was necessary for the avowed object, and that these duties had been made a source of revenue for general purposes. The commonwealth, then, was bound to insure the planter; to indemnify him against loss by fire. Whatever was the true measure of his loss, that was the measure of justice to be meted to him. Then, plainly, his loss was the value of his property at the time it was destroyed, with interest from that time till retribution was made to him: the interest which the principal would have yielded, was as much a part of the loss as the principal. If the proper officer of the government, charged with the duty of adjusting such claims, should think a particular claim doubtful, and disallow it, and drive the creditor of the public into the courts of justice; the officer might be blameless in this, but yet he acted for the benefit of the commonwealth ; and if he should reject a claim as doubtful, which turned out to be just, the public, whose agent he was, and not the injured creditor, ought to *bear the consequences of his mistake: the public ought to pay, not the creditor to lose, the interest. As well might any ordinary insurance company refuse to pay interest on losses, which its agents refused, whether with or without reason, to adjust and pay. As to these claims being un-liquidated, they were no otherwise so than that the market value of the tobaccos at the time of loss, was to be ascertained by evidence; which was the case in every instance of the kind; and, if that were to justify the auditor in disallowing these claims, and should be held to exempt the commonwealth from the duty of paying interest on such claims during years of litigation, the planters, who were compelled to bring their property to the public warehouse, to leave it there, and trust to the insurance of it by the public, would, in every case, be only partially indemnified. It was, however, the duty of the auditor to ascertain and adjust the loss, as well as to give his warrant upon the treasurer for the payment of'it.
    
      
      Claim against Commonwealth — Doubtful-Interest.— On this question the principal case is cited in footnote to Skipwith v. Clinch, 2 Call 263; Stearns v. Mason, 24 Gratt. 494. See monographic note on “Interest” appended to Fred v. Dixon, 27 Gratt. 541.
    
    
      
       3. provides, that "in case any warehouse now or hereafter to he established, shall not, in the space of three succeeding- years, receive a sufficient quantity of tobacco to pay the inspectors’ salaries and rents of the warehouses, the inspection of tobacco at such warehouses, respectively, shall be thenceforth discontinued, unless the same shall be supported at private expense."
      § 67, provides, that “if any warehouse, already or herel>y or hereaiter to he established, shall happen to be burnt, the loss sustained thereby for tobacco either there inspected or stored, shall be made good and paid to the several persons injured, by the commonwealth, and no inspector or inspectors shall be held accountable ior the same in consequence of any receipt by him or them given; provided. that if the receipt given be of an older date than twelve months" — -“such tobacco shall not be paid for by the public, but the owner or proprietor thereof shall bear the loss.” — Note in Original Edition.
    
    
      
       tTpon looting- into the original record, Tfmd that the attorney general was right: there was the mís-tate he pointed out. In the state of Lilly's case, in my report of It. — Note in Original Edition.
    
   CARR, J.

These claims are founded on the 67th section of the tobacco inspection law; and, as it is agreed that the tobaccos for which the chancellor has given the ap-pellees a decree, were in the warehouse and consumed with it, there could be no doubt as to the liability of the commonwealth to pay for them, but for the 3rd section of the act: It is agreed, that for the three successive years preceding the fire, this house had not received tobacco enough .to pay the warehouse rents and salaries of the inspectors; yet that no step had been taken to discontinue the inspection, but on the -contrarj', that for those years inspectors had been regularly recommended by the county court, and commissioned by the executive. Under this state of things, the attorney general insisted, that the inspection was ipso facto discontinued by the law, and could not be kept up by the improper conduct of the county court in recommending inspectors, or of the executive in commissioning them. But I cannot think so. It has long been the policy of the commonwealth *to take into her own hands the regulation of this staple; and many are the laws, and various the duties and penalties imposed, all having for their object, the improvement of that article, and the benefit and security of those who make and those who deal in it. A number of public warehouses are erected, to some one of which all tobacco must be carried. There it is to be inspected by officers, appointed, commissioned and paid by the public, and there it is to remain, the inspectors giving receipts describing each-hogshead, and binding themselves to deliver it to the owner or his order when demanded for exportation ; with many other regulations which it is needless to enumerate. The 3d section, which enacts that warehouses not receiving tobacco enough to pay the rent and salaries of the officers, shall be discontinued, is made for the benefit of the commonwealth, that she may not be burdened, in such cases, with the payment of these expenses. The returns directed to be annually made, both to the county courts and the executive, enabled these bodies to ascertain at any time, when under this 3rd section, a warehouse was to be put down; and the regular way to effect this, was to omit the appointment of inspectors. This would at once give notice to the planters, that there was no longer an inspection at the place, and they would take their tobacco elsewhere. But so long as thejr found the inspection in full operation, the officers attending and doing business as usual, they had occasion to look no further, and would never dream of going to the county court to find out whether the receipts of the warehouse paid the expenses. I think, therefore, that wherever the inspection was kept up by the commonwealth, she was bound to pay the planter for any tobacco deposited there, and lost by fire, if it had 'not been stored more than twelve months.

The question of interest remains to be considered. It has been several times discussed, whether the commonwealth is liable to pay interest on claims against her; but, as a general doctrine, I do not think it has been decided exactly on what footing she stands in this respect. In the *case of Com. v. Lilley, interest was refused, not on general grounds, but because of the intrinsic difficulty of the questions, which was thought to excuse the government from the imputation of any wrongful delay in refusing to satisfy the claims, without a judicial decision. As there are only three judges present, I think it safest to pass by the general question for the present, and to decide this point on the particular circumstances of this case. And I am of opinion, that they are such as justified the auditor in referring this matter to the decision of the courts; and, consequently, that no interest ought to be given.

CABELL, J., concurred.

TUCKER, P.

Two questions are presented for the consideration of the court in this case: 1. Is the commonwealth responsible for the demand of the petitioners? and if it be so, 2. Is the commonwealth bound to pay interest upon the sum which may be found to be due?

The demand arises under the 67th section of the tobacco inspection law; and the commonwealth’s exemption from liability is claimed under the 3rd section of the same law. Upon the agreed state of the facts of the case, I am clearly of opinion, that the commonwealth is liable for the tobacco of the claimants. The provision of the law does not, in my conception, operate ipso facto a discontinuance of the warehouse. It is merely directory to the functionaries of the government. So long as they continued to appoint inspectors of the warehouse, so long were the tobacco planters justified in looking upon the establishment as a public establishment. The discontinuance of the warehouse was to depend upon the state of the accounts; upon a comparison between the disbursements and receipts ; a comparison which it was the, duty either of the county court or of the executive (both of which were in possession of the returns) to make, before each annual appointment of inspectors. It could not have been the design of the act, that every tobacco *owner should, before his deposit in a warehouse established by law, go to the records of the county court, or to those of the government in Richmond, a.nd examine into the state of accounts. Such a regulation would have been attended with embarrassments not to be long endured, and the loss, as the owners of tobacco are compelled, nolens volens, to deposit it in some public warehouse, previous to exportation.

The question relating to interest is more important, and not so clear. It is contended, that the commonwealth engages by the statute, that she will make good the loss of tobacco sustained by the owner; that she discharges the inspectors and assumes their responsibility; and that as the inspectors would have been liable to interest, the commonwealth must be so. Bul I am of opinion, that, whatever may be the general principle, interest ought not to be aL, lowed in this case.

Decree reversed, as to so much thereof as allowed interest, and affirmed as to the residue.  