THE UNITED STATES, PLAINTIFFS IN ERROR, V. GEORGE MAC

DANIEL.

The United States instituted a suit to recover a balance charged on the books of
the treasury department against the defendant, who was a clerk in the navy
department, upon a fixed annual salary, and acted as agent for the payment of
moneys due to the navy pensioners, the privateer pensioners, and for navy dis-
bursements; for the payment of which, funds were placed in his hands by the
government. He had received an annual compensation for his services in the
payment of the navy pensioners; and for fifteen years, he had received, in pre-
ceding accounts, commissions of one per cent. on the moneys paid by him for
navy disbursements. He claimed these commissions at the treasury, and the
claim had been there rejected by the accounting officers; and if allowed the
same, he was not now indebted to the government. The United States, on the
trial of the case in the circuit court, denied the right of the defendant to these
commissions, as they had not been allowed to him by any department of the
government, and asserted that the jury had not power to allow them on the trial.
The rejection of the claim to commissions by the treasury department, formed no
objection to the admission of it as evidence of offset before the *jury. Had
the claim never been presented to the department, it could not have been
[*2
admitted as evidence by the court. But, as it had been made out in form and
presented to the proper accounting officers, and had been rejected, the circuit
court did right in submitting it to the jury; if the claim was considered as
equitable.

This court will not sanction a limitation of the power of the circuit court, in cases
of this kind, to the admission of evidence to the jury on a trial, only to such
items of offset against the claims of the government as were strictly legal, and
which the accounting officer of the treasury should have allowed. It is admit-
ted that a claim which requires legislative sanction, is not a proper offset either
before the treasury officers or the court. But there may be cases in which the
services having been rendered, a compensation may be made within the discre-
tion of the head of the department; and in such cases the court and jury will
do, not what an auditor was authorized to do, but what the head of the depart-
ment should have done, in sanctioning an equitable allowance.
The act of the 27th of March, 1804, by which the president of the United States
was authorized to attach to the navy yard at Washington a captain of the navy
for the performance of certain duties, was correctly construed by the head

[United States v. Macdaniel.]

of the navy department until 1829, allowing to the defendant commissions on the sums paid by him, as the special agent of the navy department in making the disbursements.

By an act passed 10th July, 1832, congress authorized the appointment of a separate and permanent navy agent at Washington, and directed the performance of the duties "not only for the navy yard in the city of Washington, but for the navy department, under the direction of the secretary of the navy, in the payment of such accounts and claims as the secretary may direct." These duties would not have been so specially stated in this act, if they had been considered by congress as coming within the ordinary duties of an agent for the navy yard at Washington, under the act of 1804. But independent of this consideration, it is enough to know that the duties in question were discharged by the defendant, under the construction given to the law by the secretary of the navy.

It will not be contended that one secretary of a department has not the same power as another to give a construction to an act which relates to the business of his department.

A practical knowledge of any one of the great departments of the government, must convince every person that the head of a department, in the distribution of its duties and responsibilities, is often compelled to exercise his discretion. He is limited in the exercise of his powers by the law, but it does not follow that he must show a statutory provision for every thing he does. No government could be administered on such principles. To attempt to regulate by law the minute movements of every part of the complicated machinery of government, would evince a most unpardonable ignorance of the subject. Whilst the great outlines of its movements may be marked out, and limitations imposed on the exercise of its powers; there are numberless things which must be done,

*that can neither be anticipated nor defined; and which are essential to

*3] the proper action of the government. Hence, of necessity, usages have

been established in every part of the government, which have become a kind of common law, and regulate the rights and duties of those who act within their respective limits; and no change of such usages can have a retrospective effect, but must be limited to the future.

Usage cannot alter the law, but it is evidence of the construction given to it, and must be considered binding on past transactions. That the duties in question were discharged by the defendant during office hours, can form no objection to the compensation claimed. They were required of him by the head of the department; and being a subordinate, he had no discretion to decline the labour and responsibility thus imposed. But seeing that his responsibility would be greatly increased, and perhaps his labour, the secretary of the navy increases his compensation, as in justice he was bound to do. This action of assumpsit has been brought by the government to recover from the defendant the exact sum which in equity it is admitted he is entitled to receive for valuable services rendered to the public in a subordinate capacity, under the express sanction of the head of the navy department. This sum of money happens to be in the hands of the defendant; and the question is, whether he shall, under the circumstances, be required to surrender it to the government, and then petition congress on the subject. A simple statement of the case would seem to render proper a very different course.

It would he a novel principle to refuse payment to the subordinates of a department, because their chief, under whose direction they had faithfully served the public, had given an erroneous construction to the law.

The secretary of the navy, in authorizing the defendant to make the disbursements on which the claim for compensation is founded, did not transcend those powers, which, under the circumstances of the case, he might well exercise.

ERROR to the circuit court of the United States for the county of Washington, in the district of Columbia.

This action was brought on the 14th of August, 1829, in the cir cuit court, by the United States, to recover from the defendant the sum of nine hundred and eighty-eight dollars and ninety-four cents,

[United States v. Macdaniel.]

alleged to have been found due on a settlement of his accounts by the accounting officers of the treasury department.

The case was tried in May, 1831, and a verdict and judgment rendered for the defendant; to reverse which judgment, the United States prosecuted this writ of error.

Before the verdict was given, the district attorney of the

United States filed the following bill of exceptions. After [*4

stating that the United States gave in evidence an account against the defendant, settled at the treasury, upon which they claimed from the defendant a balance of nine hundred and eightyeight dollars and ninety-four cents, with interest from August 3d, 1829, the bill of exceptions proceeds:

"The defendant then examined a witness to prove that the said defendant was a clerk in the navy department, at an annual salary of fourteen hundred dollars, and while he was so acting, he was engaged and acted as the agent for the payment of the money due to the navy pensioners, the privateer pensioners, and acted also as a special agent for the navy disbursements; and the moneys which were applied to the use of those objects were placed in his hands by the government, to be disbursed by him. That he was allowed for his services in the payment of pensions, the annual sum of two hundred and fifty dollars. But he has no knowledge that any annual sum was ever allowed him for his services as a special agent for the navy disbursements. The witness stated that he was also a clerk in the navy department, and was in the habit of stating the defendant's accounts as special agent; and he knows that a commission of one per cent. was always allowed him, to his knowledge, for ten or fifteen years past, until the settlement of the present account, upon his disbursements as special agent for the navy disbursements.

"The witness further stated that the services of this special agent, in these disbursements, were similar to those performed by other navy agents, such as the navy agent of Boston, &c. That they amounted, during the period that he acted as agent as aforesaid, to from fifty to one hundred thousand dollars a year; that the defendant gave no bond or security, to his knowledge, for the performance of these duties.

"The defendant then gave in evidence to the jury the certificate of B. W. Crowninshield, then secretary of the navy, of the 3d May, 1817, and his account against the United States, allowed by Smith Thompson, then secretary of the navy.

"Navy Department, May 3, 1817. "George Macdaniel, as agent of the navy pension fund, upon *all expenditures by him heretofore made, is entitled to the same commissions as have been allowed to other agents.

"B. W. CROWNINSHIELD, "Secretary of the Navy.

"The navy pension fund to George Macdaniel:

[*5

"For compensation as clerk of the navy pension accounts, from

[United States v. Macdaniel.]

the 1st of July to the 31st of December, 1818, inclusive, at the rate of two hundred and fifty dollars per annum

$125 00. "G. MACDANIEL."

"Respectfully submitted,

'Upon which account are the following endorsements: To be

allowed,

"Received payment in account,

"SMITH THOMPSON.

"G. MACDANIEL.'

"The defendant set up against the claim made against him by the United States, in this case, a charge for a commission of one per cent., as special agent of the navy department, on the expenditure of eleven thousand seven hundred and eighty-nine dollars and twenty cents, amounting to one hundred and seventeen dollars and eightynine cents, and a like commission of six hundred and ninety-two dollars and thirty cents, upon the expenditure of sixty-nine thousand two hundred and twenty-nine dollars and ninety-two cents, which commissions had been disallowed by the navy department, and if now disallowed upon this trial, would leave the defendant indebted to the United States in the sum of eight hundred and ten dollars and nineteen cents, exclusive of the other items of claim made against him in this case.

"The witness who gave testimony for the defendant, proved that the services performed by the defendant, as special agent as aforesaid, were performed during office hours, and occupied from one-third to one-fourth of his time.

"The defendant further proved that witness had had occasion in the discharge of his duties in the fourth auditor's office, to examine the accounts of defendant, and reported the accounts in question; that the same commission was claimed by defendant in these accounts, as had been charged and allowed in all his previous accounts, so far as witness has examined them; that the service had then *6] been rendered, and the moneys disbursed, when the exception was taken; that witness knows that the accounts of public disbursements, including all these allowances of commissions upon disbursements, are annually submitted to congress, and inspected by a committee specially appointed for that purpose; that said committee attends at the different offices, where the books are open for their inspection; that the accounts embracing defendant's claims and allowances are regularly so submitted and inspected, and that no objection, as witness has ever heard, was taken by any committee, or any individual, to such allowances, until defendant's final account. after leaving office, was settled by the fourth auditor. Defendant promptly paid over all the moneys in his hands when the amount was adjusted, reserving only the sums claimed by him, which appear in the accounts exhibited; and if they are allowed him, he has no public money in his hands.

"Defendant further offered in evidence a report from the secretary

[United States v. Macdaniel.]

of the treasury to congress, 1st March, 1831. Doc. 126, H. R. 21st Cong. 2d Sess.

"Upon the evidence so given to the jury, the counsel for the United States prayed the court to instruct the jury, that if they should believe the same to be true, that still the defendant had no right, by law, to the commissions which he claims in this case, and that, as the sum so charged as aforesaid, as commissions, had never been allowed to him, by any department of the government, it was not competent for the jury to allow them upon this trial.

"Which instruction the court refused to give; to which refusal the United States, by their attorney, excepted."

The account exhibited on the trial by the district attorney of the United States, by which the balance alleged to be due was shown, was as follows:

To balance due the United States per his account
current, rendered on the 5th June, 1829,
This sum disallowed, as per reconciling statement of
his navy expenditure account herewith,
Commission on sixty-nine thousand two hundred and
twenty-nine dollars and ninety two cents, paid
over to the treasurer of the United States,
per cent, as debited in his account as late special
agent of the navy department, marked A. Re-
corded on the 5th June, 1829. Not allowed,
Compensation as agent for paying pensions from the
1st of March to the 31st of May, 1829. Not
allowed,

at one

Error in statement No. 141, (previous report) in payments of Fall's pension,

By this sum deposited to the credit of the treasurer of the United States, the 3d of August, 1829,

Balance due the United States, by statement examined by comptroller, 12th of August, 1829,

[*7

$688 33

228 14

692 32

62 50

6 00

$1,677 29

688 33

988 96

THOMAS H. GILLISS, Act. 4th Aud.

The case was argued by Mr. Taney, attorney-general, for the United States; and by Mr. Coxe and Mr. Jones, for the defendant.

For the United States it was contended, that the defendant was not entitled to the commissions claimed by him and mentioned in the bill of exceptions.

The attorney-general stated that the question presented in the case was, whether the defendant was entitled to commissions on payments made by him for navy purposes.

The navy agents, although not established by any particular law, have been recognized in various acts of congress. Their duties are