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except that no answer shall be necessary on the part of the United States : and if, upon dissolving the injunction, it shall appear to the satisfaction of the judge who shall decide upon the same, that the application for the injunction was merely for delay, in addition to the lawful interest which shall be assessed on all sums which may be found due against the complainant, the judge may add such damages as that, with the lawful interest, shall not exceed the rate of ten per centum per annum on the principal sum.(1)
Such injunction may be be granted or dissolved by such judge either in or out of court.(2)
292. If any person shall consider himself aggrieved by the decision of such judge, either in refusing to issue the injunction, or, if granted, on its dissolution, such person may lay a copy of the proceedings had before the dis: rict judge, before a judge of the supreme court, who may either grant the injunction, or permit an appeal, as the case may be, if, in his opinion, the equity of the case requires it; and thereupon the same proceedings shall be had upon such injunction, in the circuit court, as are prescribed in the district court, and subject to the same conditions in all respects whatsoever.(3)*
293. Nothing in the act of 15th May, 1820, shall be construed to take away or impair any right or remedy which the United States now have, by law, for the recovery of taxes, debts, or demands.(4)
294. Where any revenue officer, or other person, hereafter becoming indebted to the United States, by bond or otherwise, shall become insolvent, or where the estate of any deceased debtor, in the hands of executors or administrators, shall be insufficient to pay all the debts due from the deceased, the debt due to the United States shall be first satisfied : and the priority hereby established shall be deemed to extend, as well to cases in which a debtor, not having sufficient property to pay all his debts, shall make a volun. tary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent, debtor, shall be attached by process of law, as to cases in which an act of legal bankruptcy shall be committed. 5)
In all cases of insolvency, or where any estate in the hands of the execil. tors, administrators, or assignees, shall be insufficient to pay all the debts due from the deceased, the debt or debts due to the United States, or any revenue bond shall be first satisfied, and any executor, administrator, or assignees, or other person, who shall pay any debt due by the person or estate from whom, or for which, they are acting, previous to the debt or debts due to the United States from such person or estate being first duly satisfied and paid, shall become answerable in their own person and estate, for the debt or debts so due to the United States, or so much thereof as may remain due and unpaid: And actions or suits at law may be commenced against them for the recovery of the said debt or debts, or so much thereof as may remain due and unpaid, in the proper court having cognizance thereof.(6)7
(1) Act May 15th, 1820, sec. 4.
(5) Act March 3d, 1797, sec. 5.-Act (2) Ibid. sec. 5.
2d March, 1799, sec. 65. (3) Ibid. sec. 6.
(6) Act March 2d, 1799, sec. 65, cl. 2. (4) Ibid. sec. 9.
• Under this act, 15th May, 1820, no appeal can be had from the district to the circuit court, except in the mode specially provided in the act. No provision being made in the act for an appeal by the government, an appeal cannot be allowed to it.-U. S. v. Nourse, 6 Peters, 470.
The judgment on a warrant of distress under this act, and the proceedings under the judgment, are a bar to any subsequent action for the same cause.-U. S. v. Nourse, 9 Peters, 8; and see that case for a comprehensive construction of this statute.
The priority of payment to the United States, extends to their debtors gener.
295. When any revenue officer, or other person accountable for public money, shall neglect or refuse to pay into the treasury the sum or balance reported to be due to the United States, upon the adjustment of his account,
ally-Fisher v. Blight, 2 Cranch, 358. United States v. Fisher and al. 391, 395. But the foregoing provisions do not create a lien, nor extend to a bona fide conveyance by the debtor to another person in the ordinary course of business, nor to a mortgage given by the debtor to secure a debt, nor to a case where the debtor's property is seized under a fi. fa, before the right of preference has accrued to the United States.-United States v. Hooe, 3 Cr. 73, 90. 2 Wheat. 396, 424, 4 Wheat. 108, 116. Conrad v. The Atlantic Insurance Company, 1 Pet. 386. Conrad v. Nichol, 4 Pet. 291. Hunter v. U.S. 5 Pet. 173. Nor to an assignment under a commission of bankruptcy.-2 Cranch, 358. But a voluntary assignment by the debtor, under circumstances which would be fraudulent under the bankrupt laws, does not defeat such priority --5 Cranch, 289, 301. Harrison v. Sterry.
The priority of the United States extends as well to debts by bonds for duties which are payable after the insolvency or decease of the obligor, as to those actually payable or due at the period thereof.-U. S. v. The State Bank of North Carolina, 6 Peters, 29.
The term “due," as applied to debts, is sometimes used to express the mere state of indebtment, and then it is equivalent to "owed" or owing; and it is sometimes used to express the fact, that the debt has become payable. Ibid.
This priority does not take the property of a partner from partnership effects, to pay a separate debt due from such partner to the United Stales, when the partnership effects are not sufficient to satisfy the creditors of the partnership.-U. S. v. Hack & al. 8 Pet. 271.
It has been the uniform construction of the acts giving priority of payment to the United States, that whether in case of insolvency, death, or assignment, the property of the debtor passes to the assignee, executor or administrator, the priority of the United States operating not to prevent the transmission of the property, but giving them a preference in payment out of the proceeds.
This preference is in the appropriation of the debtor's estate ; so that if before it has attached, the debtor has conveyed or mortgaged his property, or it has been transferred in the ordinary course of business, neither are overreached by the statutes; and it has never been decided that it affects any lien, general or specific, existing when the event took place which gave the United States a claim to priority.
The priority does not attach to property legally transferred to a creditor on respondentia; though he may hold it subject to an account equity or trust for the borrower.-Brent v. The Bank of Washington, 10 Peters, 596.
The assignment under which such right or preference attaches must be of all the debtor's property, unless where part has been reserved for the purpose of evading the laws. United States v. Hooe, 3 Cr. 77, 91. 4 Wheat, 108, 118.' U.S. v. Clark, 1 Paine, 629. U. S. v. Mott et al. 1 Paine, 186.
In the distribution of the bankrupt's effects, the United States have a priority although the debt be contracted in a foreign country, and the United States vote for an assignee, and prove their debt.--5 Cr. 289, 298.
The priority attaches at the time of the insolvency manifested in any of the modes above specified, whether suit have or have not been commenced by the United States.—2 Cranch, 358. Field & al. v. U.S. 9 Pet. 182. But it is limited to these enumerated cases, where the debtor is living, but takes place generally if he be dead.-2 Cranch, 390. A mere state of insolvency in a debtor gives no right of preference, unless accompanied by a voluntary assignment of his property for the benefit of his creditors, or his estate or effects are attached, as of an absent, concealed, or absconding debtor, or unless he have committed some legal act of bankruptcy or insolvency.
But if, before the right of preference accrue to the United States, the debtor make a bona fide conveyance of his estate to a third person, or mortgage it to secure a debt, or if his property has been seized under an execution, the debtor is divested of the property, and it is not liable to the United States.-2 Cr. 358, 3 Cr. 73. Prince v. Bartlett, 8 Cr. 431. 2 Wheat, 396. Thelusson & al. v. Smith. See 1 Pet. 386.
A judgment gives to the judgment creditor a lien on the debtor's lands, and a preference over subsequent judgment creditors. But the law defeats the preference in favour of the United States, in cases specified in article 294.-Thelusson v. Smith, 2 Wheat, 396.
the comptroller shall institute suit for the recovery thereof, adding to the sum stated to be due on such account, the commissions of the delinquent, which shall be forfeited in every instance where suit is commenced, and judgment obtained thereon, and an interest of six per centum per annum, from the time of receiving the money until it shall be repaid into the treasury.(1)
296. In any suit which shall be hereafter instituted by the United States, against any corporate body, for the recovery of money upon any bill, note, or other security, it shall be lawful to summon, as garnishees, the debtors of such corporation; and it shall be the duty of any person, so summoned, to appear in open court, and depose, in writing, to the amount which he was indebted to such corporation, at the time of the service of the summons, and at the time of making such deposition; and it shall be lawful to enter up judgment in favour of the United States, for the sum admitted by such garnishee to be due to such corporation, in the same manner as if it had been due and owing to the United States : But no judgment shall be rendered against any garnishee, until after judgment shall have been rendered against the corporation defendant to such action, nor until the sum in which the garnishee may stand indebted be actually due.(2)
Where any person summoned as garnishee shall depose in open court that he is not indebted to such corporation, nor was at the time of the service of the summons, the United States may tender an issue upon such demand, and if, upon the trial of such issue, a verdict be rendered against such garnishee, judgment shall be entered in favour of the United States, pursuant to such verdict, with costs of suit.(3)
297. If any person summoned as garnishee under the foregoing provisions, shall fail to appear at the term of the court to which he has been summoned, he shall be subject to attachment for contempt of the court.(4)
298. The attorneys of the United States, for the several judicial districts in the prosecution of all suits therein in the name and for the benefit of the United States, shall conform to such directions and instructions, as shall, from time to time, be given to them respectively, by the agent (solicitor) of the treasury. And they shall, immediately after the end of every term of
(1) Act 3d March, 1797, sec. 1.
(3) Act 20th April, 1818, sec. 9.
Where a bank, in which the bonds for customs were left under the authority of the government, discounted for the principal obligor, certain notes for the payment of these bonds, and the proceeds were carried to the credit of the United States in bank, in discharge of the bonds, and it turned out that the endorsements on the notes were forgeries, practised by the principal: it was held that the bonds were discharged, and that there was no remedy in equity to acquire a priority on the assets of the principal. United States v. Rousmanieres' admr. 2 Mason, 373.
P. as surety for S. in a bond for duties, paid the amount of the bond to the United States, and s. having become insolvent, assigned his effects to B. in trust, first to pay his custom house bonds, then to indemnify his sureties, and the residue for his general creditors. B. received from the estate of S. four thousand dollars, which he mixed with his own moneys, became bankrupt, and R. and others were appointed his assignees. Held, that P. was not entitled to be paid by the assignees, in preference to the general creditors of B. but that the United States would so have been entitled had they been the plaintiffs. Pollock v. Pratt et al. assignees, 2 Wash. C. C. R. 490.
A surety in custom house bonds, who has paid the same after a commission of bankruptcy had issued against his principal, is entitled to a preference over the general creditors, and is to be first paid out of the effects of the bankruptcy. Mott v. Morris, assignee, 2 Wash. C, C, R. 196.
If the persons or property of the debtors of the United States, are within the jurisdiction of our courts, the United States have a priority over all other claimants. -Harrison v. Sterry et al. Bee, 244.
the district and circuit courts, or of any state court, in which any suit or action may be pending, on behalf of the United States, under their direction respectively, forward to the agent (solicitor) of the treasury a statement of the cases which have been decided during such term, together with such information touching such cases as may not have been decided, as may be required by such officer.(1)
299. In every case of delinquency, where suit has been, or shall be instituted, a transcript from the books and proceedings of the treasury certified by the register, and authenticated under the seal of the department, and in cases relating to the accounts of the war and navy departments, such transcript signed by the auditors respectively, charged with the examination of these accounts,(2) shall be admitted as evidence, and the court trying the cause may grant judgment, and award execution, accordingly. And all copies of bonds, contracts, or other papers, relating to, or connected with, the settlement of any account between the United States and an individual, when certified by the register to be true copies of the originals on file, and authenticated under the seal of the department, may be annexed to such transcripts, and shall have equal validity, and be entitled to the same degree of credit, which would be due to the original papers if produced and authenticated in court: where suit is brought upon a bond, or other sealed instrument, and the defendant shall plead " non est factum,” (or) upon motion to the court, such plea or motion being verified by the oath or affirmation of the defendant, the court may take the same into consideration, and (if it shall appear to be necessary for the attainment of justice) may require the production of the original bond, contract, or other paper specified in such affidavit.(3)
300. Where suit shall be instituted against any person indebted to the United States, the court where the same may be pending, shall grant judg. ment at the return term, upon motion, unless the defendant shall, in open court, (the United States' attorney being present,) make oath or affirmation, that he is equitably entitled to credits which had been, previous to the com. mencement of the suit, submitted to the consideration of the accounting officers of the treasury, and rejected, specifying each particular claim so reject, ed, in the affidavit; and that he cannot then come safely to trial. Oath or affirmation to this effect being made, subscribed, and filed, if the court be thereupon satisfied, a continuance, until the next succeeding term, may be granted; but not otherwise, unless as provided in the preceding section.(4)
301. In suits between the United States and individuals, no claim for a credit shall be admitted, upon trial, but such as shall appear to have been presented to the accounting officers of the treasury, for their examination, and by them disallowed, in whole or in part, unless it be proved, to the satisfaction of the court, that the defendant is, at the time of trial, in possession of vouchers not before in his power to procure, and that he was prevented from exbibiting a claim for such credit, at the treasury, by absence from the United States, or some unavoidable accident.(5)*
(1) Act May 15th, 1820, sec. 7. Act ton v. United States. 9 Wheat, 651. May 29th, 1830.
(4) Act 3d March, 1797, sec. 3, (2) Act March 30, 1817, sec. 11.
5) Act 3d March, 1797, sec. 4. Uni(3) Act March 3d, 1797, sec. 2. Wal- ted States v. Giles, 9 Cranch, 213.
• The defendant on trial shall have full benefit of any credit, whether arising out of the particular transaction on which he is sued, or any distinct and independent transaction which can constitute a legal or equitable set-off._United States v. Wilkins, 6 Wheat, 144. U. $. v. Robeson, 9 Peters, 319. See United States v. Hawkins, 10 Peters, 125.
302. The clerks of the district and circuit courts, within thirty days after the adjournment of each successive term of such courts respectively, shall forward to the agent (solicitor) of the treasury a list of all judgments and decrees which have been entered in such courts respectively, during such term, to which the United States are parties, showing the amount which has been so adjudged or decreed for or against the United States, and stating the term to which execution thereon will be returnable. The marshals of the several judicial districts of the United States, within thirty days before the commencement of the several terms of the courts, shall make returns to such agent (solicitor) of the proceedings which have taken place upon all writs of execution or other process which have been placed in his hands for the col. lection of the money which has been so adjudged and decreed to the United States, in the said courts respectively.(1)
303. All writs of execution upon any judgment obtained for the use of the United States, in any of the courts of the United States, in one state, may run and be executed in any other state, or in any of the territories of the United States, but shall be issued from, and made returnable to, the court where the judgment was obtained.(2)
- 304. Nothing in the act of March third, 1797, shall repeal or impair any legal remedy for the recovery of debts, taxes or demands due to the United States, in law or equity, from any person, which remedy might be used if such act were not in force.(3)
Remedies for Creditors of the United States.
305. The United States cannot be sued.(4) No other remedy exists for a creditor who is refused payment at the treasury or elsewhere than an application to congress; there is no lien against the government for advances made to its use.(5)
(1) Act May 15th, 1820, sec. 8.
(4) Cohens v, Virginia, 6 Wheat, 411, 412.
(5) United States v. Barney, 3 Hall's L. J. 130.
But no claim for credit can be admitted at the trial which has not been presented to the accounting officer of the treasury, although no proceedings have been had by notification under the act of March 3d, 1795, supra, page 59.-Walton v. United States, 9 Wheat, 651.
Nor is a debtor entitled to credit for money received by an agent of an officer of the United States, whose office becomes extinct before the money is received by the agent.-- United States v. Patterson, 7 Cr. 575.