State Nat Bank of Boston v. United States

• Decision Date: 13 April 1885
• Citation: 5 S.Ct. 888,29 L.Ed. 149,114 U.S. 401
• Parties: STATE NAT. BANK OF BOSTON v. UNITED STATES
• Court: U.S. Supreme Court

114 U.S. 401

5 S.Ct. 888

29 L.Ed. 149

STATE NAT. BANK OF BOSTON v. UNITED STATES.

April 13, 1885.

The appellant brought this action in the court of claims to recover from the United States the sum of $125,000, with interest from March 1, 1867. The petition having been dismissed, the question upon this appeal is as to the liability of the United States to any judgment in behalf of the appellant. The facts found by the court of claims, and upon which the correctness of the judgment below must depend, are as follows:

The appellant, in February and March, 1867, was a national banking association, having its place of business in the city of Boston, Massachusetts; and there was in that city a firm of brokers under the style of 'Mellen, Ward & Co.,' the junior member of which was Edward Carter. At the same time, George D. Whittle was the chief clerk in the office of the assistant treasurer of the United States, in Boston, having its general management, and Julius F. Hartwell was disbursing clerk or paying teller. Prior to the twenty-eight day of February, 1867, Mellen, Ward & Co., acting through Carter, succeeded in inducing Hartwell to take out of the sub-treasury, at various times, and to place in Carter's hands, large amounts of money belonging to the United States, until, first and last, the sum so abstracted aggregated a million to a million and a quarter dollars. This money was used by Mellen, Ward & Co. in stock speculations. About the middle of February, 1867, the amount so obtained by Carter being then very lare, Hartwell informed him that in the use of the public money the were guilty of a crime. This, it is found by the court below, was the first information Carter had of the criminal character of these transactions.

Between the middle of February and the first of March, 1867, several conversations were held between Carter and Hartwell, in which in former expressed his purpose to make the latter's money right for the examination of the sub-treasury, which was expected to take place on the first of March, upon Hartwell's solemn assurance that he would let him have the money out of the sub-treasury again on the second of March, after the examination should be over, when Carter would repay the parties the moneys he had obtained, and, selling all the stocks and securities his firm held, replace as much as possible of the money in the sub-treasury, so as to reduce the loss to the smallest possible amount. Carter promised Hartwell that he would return all the money before the first of April, not again to come out of the sub-treasury. During the period within which those conversations between Carter and Hartwell occurred, the latter knew in a general way the extent of the resources of Mellen, Ward & Co., and how they were using the money he had let Carter have.

On the twenty-eighth of February, Carter returned to Hartwell all the money the latter had let him have, except the sum of $157,000, which the former promised to return to him the next morning. Among the funds so returned were United States gold certificates to the amount of $580,000. On the afternoon of the same day, Hartwell made known to Whittle that he had been loaning to Carter the funds of the government, and that all had been returned except about $150,000. He told Whittle that the money had been paid out to Carter, from time to time, to assist in stock speculations; that it was paid back again to tide over the monthly examination; that he had promised Carter that the money should be repaid to him the following day; and had told him that he would ask Whittle's consent that the money go back to him again. Whittle told Hartwell that it was an impossibility to let the money go back to Carter, and that any deficiency must be paid in before 10 o'clock the next morning.

About 9 o'clock A. M., of the first of March, Hartwell called on Carter at Mellen, Ward & Co.'s office and asked him if he had that money. Carter told him he did not then have it, but could give it to him before 10 o'clock, and asked Hartwell if he could not take a draft on New York, stating to him that Mellen, Ward & Co. would have a very large amount of New York funds to dispose of as soon as Hartwell returned to them the gold certificates aforesaid. Hartwell said he would take the New York funds, and the interview then ended. It does not appear that up to this time Carter had any knowledge or intimation of Hartwell's disclosures to Whittle; nor does it appear that Carter informed Hartwell as to how he intended or expected to get the draft on New York. At the close of this interview, Hartwell returned from Mellen, Ward & Co.'s office to the sub-treasury. About half past 9 o'clock of the same morning, Carter went to the banking house of plaintiff and obtained from Charles H. Smith, its cashier, his draft, as cashier, on the Manhattan Company, New York, in favor of Mellen, Ward & Co., for $125,000, which draft was in the words and figures following, to-wit:

'THE STATE NATIONAL BANK OF BOSTON,

BOSTON, March 1, 1867.

'Pay to the order of Mellen, Ward & Co., one hundred and twenty-five thousand dollars.

'No. 215.

C. H. SMITH, Cashier.

'To the cashier of the Manhattan Company, New York.'

The facts and circumstances connected with his obtaining that draft were as follows: Carter asked Smith for the bank's draft on New York for $125,000, promising to give him immediately, in return, Mellen, Ward & Co.'s draft on New York for the same amount, with $100,000 in United States gold certificates attached, or else the Adams Express Company's receipt for that amount in gold. Upon the faith of this promise, Smith drew and delivered to Carter the draft aforesaid. In this interview between Smith and Carter nothing was said by the latter about there being any deficiency in the sub-treasury for which he was responsible; nor that he desired to use the draft to help make good a deficiency there; nor what his purpose was in obtaining it; nor does it appear that Smith had, at any time before or during this interview, any knowledge or intimation of the transactions between Carter and Hartwell. Within 15 or 20 minutes after Carter received from Smith the draft for $125,000, the...