United States v. Porter

• Decision Date: 07 April 1927
• Docket Number: No. 1296.,1296.
• Citation: 19 F.2d 541
• Parties: UNITED STATES ex rel. RAY, U. S. Atty., v. PORTER, Commissioner of Finance of Idaho.
• Court: U.S. District Court — District of Idaho

19 F.2d 541 (1927)

UNITED STATES ex rel. RAY, U. S. Atty., v. PORTER, Commissioner of Finance of Idaho.

No. 1296.

District Court, D. Idaho, S. D.

April 7, 1927.

H. E. Ray, U. S. Atty., and Sam S. Griffin, Asst. U. S. Atty., both of Boise, Idaho, for plaintiff.

John R. Becker, of Lewiston, Idaho, and Oppenheim & Lampert, of Boise, Idaho, for defendant.

CAVANAH, District Judge.

This is one of the 15 suits between the same parties, presenting substantially the same questions, which have been consolidated for trial, brought by the United States against the defendant, as commissioner of finance of the state of Idaho, to recover certain moneys claimed to have been deposited as postal and forestry funds of the United States by various local postmasters and a forestry officer of the government in certain state banks, which were closed and in some instances voluntarily assigned by their directors to the defendant and taken over by such commissioner for creditors. The motions of the defendant to dismiss the bills of plaintiff having been denied, the defendant filed his answer in each case, to which the plaintiff moved to strike upon the ground that they admit of sufficient allegations of the bills to entitle the plaintiff to recover.

As the motions are directed to the answers generally, and not to specific portions, and the answers contain certain denials of material allegations of the bills, as well as affirmative defenses, they should not be sustained, but the facts presented before all of the questions could be decided. At the oral argument and in the briefs certain questions were argued by counsel, which relate to the scope of the evidence to be taken, and my views upon them are requested. An analysis of the pleadings present sufficient conceded facts to warrant the court in disposing, upon the pleadings, of two of the questions presented:

(1) Whether the deposits by these public officials constituted the banks debtors to the United States, within the meaning of section 3466 of the Revised Statutes of the United States (Comp. Stats. § 6372), providing for the payment of the debts in full in case of insolvency. The denials and general averments in the answers are contradictory as to the manner in which these postal and forestry funds were deposited in the banks, and it will necessitate the taking of testimony in order to clarify the situation, as it is denied that these moneys belonged to or were deposited in the banks for or on behalf of the United States, or were postal or forestry funds, and at the same time by general averments it is stated that these funds were deposited in the banks in accordance with the usual course or practice of postmasters in municipalities wherein no government depositary existed, and that the claims covering them, filed by the postmasters and forestry official, recited that they were made under section 3466 and are the funds of the Post Office and Forestry Departments, and subject to preference as provided for under section 3466.

There appears upon each of these claims an indorsement of the defendant allowing them as general claims of creditors and payable to the name of the postmaster as "such postmaster." Should it appear that these moneys were actually postal and forestry receipts of the United States, and deposited in these banks by the postmasters or forestry official of the government, they would be public moneys, and it would make no difference how the account of such deposits were carried in the banks, or whether in some instances drafts of the banks were purchased with such funds and not paid, as the form of the indebtedness is immaterial. The fact that it may further appear that the moneys were deposited in the names of the postmasters, or drafts of the banks were purchased therewith and not paid, would not make the indebtedness of the banks any the less an indebtedness to the United States. United States v. Brock (D. C.) 5 F.(2d) 265. The postmasters and the forestry official were authorized to receive and deposit these public funds in the banks, and the legal effect is that they deposited the moneys as public moneys. Dugan v. United States, 3 Wheat. 180, 4 L. Ed. 362.

The controlling question, then, is: Were the moneys, when so deposited, or drafts of the banks purchased therewith, the postal and forestry funds of the government? If so, then the United States would have the right to sue for them. The language of the statute is general, and applies to all corporations and persons who may be indebted to the United States. Lewis v. United States, 92 U. S. 618, 23 L. Ed. 513. In this connection it is urged by the defendant that the remedy of the United States is against the postmasters and forestry official, and their bondsmen, and not against the defendant, who is now liquidating the affairs of the banks, as the banks are indebted to the individual postmasters and forestry official, who are in turn indebted to the United States. And further, as the claims filed by the postmasters and forestry official with the commissioner covering these deposits have been assigned to the United States, the only interest acquired by the government in them was such as the assigners had as general creditors, and are subject to all the limitations and estoppels existing against such claims at the time of the assignment.

It is conceded under the pleadings that the defendant still has in his hands sufficient funds of the banks to pay these claims in full. The thought, then, should be kept in mind that, if these deposits and funds used in the...