Effect of

lation

sum

of the Revised Statutes, seeks to have finally adjudicated by the Court of Claims, nor to claims described in that section, in respect of which the Department, upon its own motion, and whether the claimant consents or not, desires from that court a report under the Bowman act, of facts and law for its guidance and action. It refers only to claims which the head of an Executive Department, with the expressed consent of the claimant, may send to the Court of Claims in order to obtain a report of facts and law which the Department may regard as only advisory. It no doubt often happened that the head of a Department did not desire action by the Court of Claims in relation to a particular claim, but, in order to meet the wishes of the claimant, was willing to have a finding by that court which was not followed by a judgment, nor by any report for the guidance and action of the Department. So that section 1063 of the Revised Statutes, the second section of the Bowman act, and the twelfth section of the Tucker act may be regarded as parts of one general system, covering different states of case, and standing together without conflict in any essential particular. . . .

Touching the suggestion that the twelfth section of the Tucker act entirely superseded the second section of the Bowman act, it may be further observed that the Tucker act repeals only such previous statutes as were inconsistent with its provisions. There is no inconsistency between the sections just named; one, as we have said, the second section of the Bowman act, relating to claims involving controverted questions of fact or law, which an Executive Department may transmit to the Court of Claims without consulting the wishes of the claimant, in order to obtain a report of facts and law for its guidance and action; the other, the twelfth section of the Tucker act, relating to claims of the same class transmitted to that court with the expressed consent of the claimant, in order to obtain a report of facts and law that would be only advisory in its character.1

On this phase of the question, that is to say, the relation of section 1063 of the Revised Statutes to the Bowman and to the Tucker act, and the relation of each to the other, the learned Justice thus states, on behalf of the court:

First. Any claim made agat an Executive Department, involving disputed the legis- facts or controverted question f law, where the amount in controversy exceeds three thousand dollars, or where the decision will affect a class of cases, or furnish marized. a precedent for the future action of any Executive Department in the adjustment of a class of cases, without regard to the amount involved in the particular case, or where any authority, right, privilege, or exemption is claimed or denied under the Constitution of the United States,' may be transmitted to the Court of Claims by the head of such Department under section 1063 of the Revised Statutes for final adjudication; provided, such claim be not barred by limitation, and be one of which, by reason of its subject-matter and character, that court could take judicial cognizance at the voluntary suit of the claimant.

Second. Any claim embraced by section 1063 of the Revised Statutes, without regard to its amount, and whether the claimant consents or not, may be transmitted under the Bowman act to the Court of Claims by the head of the Executive Department in which it is pending, for a report to such department of facts and conclusions of law for 'its guidance and action '.

Third. Any claim embraced by that section may, in the discretion of the Executive Department in which it is pending, and with the expressed consent of the plaintiff, be transmitted to the Court of Claims, under the Tucker act, without regard to the amount involved, for a report, merely advisory in its character, of facts or conclusions of law.

Fourth. In every case, involving a claim of money, transmitted by the head of an Executive Department to the Court of Claims under the Bowman act, a final

judgment or decree may be rendered when it appears to the satisfaction of the court, upon the facts established, that the case is one of which the court, at the time such claim was filed in the department, could have taken jurisdiction, at the voluntary suit of the claimant, for purposes of final adjudication.i

the Court

to give

As the claim of the State of New York exceeded $3,000 and was certified to the JurisdicCourt of Claims under section 1063 of the Revised Statutes, as one involving controverted tion of questions of law, the court had, by the express terms of the statute, jurisdiction to proceed to a final judgement, unless, as claimed by counsel for the United States, the claim was barred by the statute of limitations at the time of its transmission to the Court of Claims by the Secretary of the Treasury.

final

judge

ment af

firmed.

tion.

The question of limitation as one of fact need not detain us, otherwise than to Question ascertain the point of departure from which the period of six years, with which suit of limitamust be brought in the court, begins to run. Mr. Justice Harlan, on behalf of his brethren, overruled the bar of the statute, and in so doing relied upon three cases, from which he quoted. The first was the case of Finn v. United States (123 U.S. 227, Prece232), decided in 1887, from which he quoted the following passage:

The general rule that limitation does not operate by its own force as a bar, but is a defence, and that the party making such defence must plead the statute if he wishes the benefit of its provisions, has no application to suits in the Court of Claims against the United States. An individual may waive such a defence, either expressly or by failing to plead the statute; but the Government has not expressly or by implication conferred authority upon any of its officers to waive the limitation imposed by statute upon suits against the United States in the Court of Claims. Since the Government is not liable to be sued, as of right, by any claimant, and since it has assented to a judgment being rendered against it only in certain classes of cases, brought within a prescribed period after the cause of action accrued, a judgment in the Court of Claims for the amount of a claim which the record or evidence shows to be barred by the statute, would be erroneous.2

Accepting this as the general principle, the question is to determine when the claim accrued, so that it might be presented, because the statute could not equitably operate as a bar before the claimant had had an opportunity of having his claim considered by the court:

The second case, that of United States v. Lippitt (100 U.S. 663, 668, 669), decided in 1879, ascertains this date, and from this case, in which Mr. Justice Harlan rendered the opinion, the learned Justice quoted the following passage, with which he was doubly in accord:

Limitation is not pleadable in the Court of Claims, against a claim cognizable therein, and which has been preferred by the head of an Executive Department for its judicial determination, provided such claim was presented for settlement at the proper department within six years after it first accrued, that is, within six years after suit could be commenced thereon against the Government. Where the claim is of such a character that it may be allowed and settled by an Executive Department, or may, in the discretion of the head of such department, be referred to the Court of Claims for final determination, the filing of the petition should relate back to the date when it was first presented at the department for allowance and settlement. In such cases, the statement of the facts, upon which the claim rests, in the form of a petition, is only another mode of asserting the same demand which had previously and in due time been presented at the proper department for settlement. These 1 United States v. State of New York (160 U.S. 598, 615-16). ■ Ibid. (160 U.S. 598, 617).

dents examined.

Claim not

limita

tion.

views find support in the fact that the act of 1868 describes the claims presented at an Executive Department for settlement, and which belong to the classes specified in its seventh section, as cases which may be transmitted to the Court of Claims. 'And all the cases mentioned in this section, which shall be transmitted by the head of any Executive Department, or upon the certificate of any auditor or comptroller, shall be proceeded in as other cases pending in said court, and shall, in all respects, be subject to the same rules and regulations,' with right of appeal. The cases thus transmitted for judicial determination are, in the sense of the act, commenced against the Government when the claim is originally presented at the department for examination and settlement. Upon their transfer to the Court of Claims they are to be ' proceeded in as other cases in said court '.1

Mr. Justice Harlan re-enforces the views expressed in the Lippitt case by a further quotation from Finn v. United States (123 U.S. 227, 232):

The duty of the court, under such circumstances, whether limitation was pleaded or not, was to dismiss the petition; for the statute, in our opinion, makes it a condition or qualification of the right to a judgment against the United States that-except where the claimant labors under some of the disabilities specified in the statutes— the claim must be put in suit by the voluntary action of the claimant, or be presented to the proper department for settlement, within six years after suit could be commenced thereon against the Government.2

Upon the authority of these cases the court decided, for the reasons stated in Mr. Justice Harlan's opinion, that the statute of limitations could not be pleaded as a bar, and therefore that the motion of the United States, to dismiss the appeal of the State on this ground, should be denied. Thus, he said:

we adjudge that, as the claim of New York was presented to the Treasury barred by Department before it was barred by limitation, its transmission by the Secretary of the Treasury to the Court of Claims for adjudication was only a continuation of the original proceeding commenced in that department in 1862. The delay by the department in disposing of the matter before the expiration of six years after the cause of action accrued, could not impair the rights of the State. Of course, if the claim had not been presented to the Treasury Department before the expiration of that period the Court of Claims could not have entertained jurisdiction of it.

Question

est on the

bonds.

For the reasons we have stated the motion of the United States to dismiss the appeal of the State is denied, and we proceed to the examination of the case upon its merits.3

The remainder of Mr. Justice Harlan's opinion deals with the question of interest, of inter- for the State of New York claimed $91,320.84 as the interest at seven per cent. which the State was required to pay on the short-time bonds issued until such time as the taxes should be levied and available for the expenses incurred in providing its quota of men. It also claimed the sum of $39,867.18 as interest paid on the money which the commissioners took from the Canal Fund and paid upon the money thus taken and appropriated to the same purpose-in all, $131,188.02-as part of the cost of the transaction, although in the form of interest.

As regards the first sum, counsel for the United States contended that, in addition to a statute (act of March 3, 1863, Revised Statutes, § 1091) forbidding the payment of interest on a claim to the time of its determination by the Court of Claims, the rule obtaining between nations, and therefore applicable between states, was 1 United States v. State of New York (160 U.S. 598, 617-18).

(ante, p. 255) dis

tinguish

and is, as held in United States v. North Carolina (136 U.S. 211, 216), that interest U.S. v. North 'is not to be awarded against a sovereign government, unless its consent to pay Carolina interest has been manifested by an act of its legislature, or by a lawful contract of its executive officers'. The Supreme Court, however, while accepting this general principle, believed that the allowance of the sum of $91,320.84 would contravene ed." neither the statute nor the general rule, inasmuch as the money raised was an aid to the government of the United States in the performance of a duty incumbent upon it, and that, in the circumstances of this particular case, interest was to be considered as a necessary part of the loan or as cost necessarily incurred in procuring it. To quote the exact language of the court on this point :

Liberally interpreted, it is clear that the acts of July 27, 1861, and March 8, 1862, created, on the part of the United States, an obligation to indemnify the States for any costs, charges, and expenses properly incurred for the purposes expressed in the act of 1861, the title of which shows that its object was to indemnify the States for expenses incurred by them in defence of the United States '.1

As to whether the interest should be included in costs, charges and expenses properly incurred, and as to whether these sums should be included in the expenses in defence of the United States for which the Congress should indemnify the States, Mr. Justice Harlan, speaking for the court, said:

allowed as one of

So that the only inquiry is whether, within the fair meaning of the latter act, Claim for the words 'costs, charges, and expenses properly incurred' included interest paid interest by the State of New York on moneys borrowed for the purpose of raising, subsisting, and supplying troops to be employed in suppressing the rebellion. We have no costs. hesitation in answering this question in the affirmative.2

Speaking of the State and the embarrassing situation in which it found itself because the moneys in the treasury were appropriated to other objects, and the revenues to be derived from legislation could only be collected in the course of the year, the learned Justice said:

It could not have borrowed money any more than the General Government could have borrowed money, without stipulating to pay such interest as was customary in the commercial world. Congress did not expect that any State would decline to borrow and await the collection of money raised by taxation before it moved to the support of the nation.3

And he thus concluded his opinion on this first item :

Such interest, when paid, became a principal sum, as between the State and the United States, that is, became a part of the aggregate sum properly paid by the State for the United States. The principal and interest, so paid, constitutes a debt from the United States to the State. It is as if the United States had itself borrowed the money, through the agency of the State. We therefore hold that the court below did not err in adjudging that the $91,320.84 paid by the State for interest upon its bonds issued in 1861 to defray the expenses to be incurred in raising troops for the national defence was a principal sum which the United States agreed to pay and not interest within the meaning of the rule prohibiting the allowance of interest accruing upon claims against the United States prior to the rendition of judgment thereon.4

So much for the interest on the bonds. Next as to the interest upon the moneys borrowed from the Canal Fund, which the Court of Claims rejected and which, as 1 United States v. State of New York (160 U.S. 598, 621). 2 Ibid. (160 U.S. 598, 621). 3 Ibid. (160 U.S. 598, 621).

Ibid. (160 U.S. 598, 621–2).

Judge

ment in favour of New York.

The line marked by commission under

will presently be seen, the Supreme Court of the United States allowed. The interest paid upon the moneys withdrawn by the Commissioners from the Fund, and used in aid of the United States, amounted to $48,187.13; but as part of the fund on deposit in bank earned interest amounting to $8,319.95, the State deducted this latter item from the amount of interest with which the commissioners were taxed, and presented the claim for the difference, amounting to $39,867.18, on account of interest paid to that Fund, and which, if not paid, the Fund would be without. In view of the holding of the court that 'interest payable upon the bonds of the State was to be considered as costs incurred in procuring the money expended in aid of the United States', it would serve no useful purpose to argue the point. 'Suffice it to say,' in the language of Mr. Justice Harlan,' that the Canal Fund was entitled to any interest earned upon moneys belonging to it, and fidelity to the constitution and laws of New York required the State to recognize that right in the only way it could at the time have been done, namely, by paying the interest that ought to have been realized by the commissioners of the Canal Fund, if they had invested in interest-paying securities the moneys they permitted the State to use for military purposes.' And after laying down this principle the court thus proceeded to apply it :

1

The substance of the transaction was that the State, for moneys that could not be legally appropriated for the ordinary expenses of its own government, and which the law required to be so invested as to earn interest for the Canal Fund, used those moneys for military purposes, under an agreement by its officers, subsequently ratified by the State, to pay interest thereon. It was, in its essence, a loan to the State by the commissioners of the Canal Fund of money to be repaid with interest.... It could not legally have become a party to any arrangement or agreement involving the use, without interest, of the moneys of the Canal Fund that had been set apart for the ultimate payment of the canal debt.2

On this state of affairs the court therefore inevitably held :

We are of opinion that the claim of the State for money paid on account of interest to the commissioners of the Canal Fund, is not one against the United States for interest as such, but is a claim for costs, charges, and expenses properly incurred and paid by the State in aid of the General Government, and is embraced by the act of Congress declaring that the States would be indemnified by the General Government for moneys so expended.3

And on the whole question the court decided that :

As the State was entitled to a larger sum than $91,320.84, the judgment is reversed, and the cause is remanded with directions for further proceedings not inconsistent with this opinion.4

40. State of Missouri v. State of Iowa.
(160 U.S. 688) 1896.

The first decree of the Supreme Court in the case of Missouri v. Iowa (7 Howard, 660), rendered in 1849, fixed the boundary line between Missouri on the south and Iowa on the north in accordance with the Sullivan line of 1816, although that line deviated slightly from the parallel of latitude generally chosen as the boundary line. In accordance with this decree, a commission was appointed to mark the line by (ante, p. 1 United States v. State of New York (160 U.S. 598, 623).

first

decree

190)