States, and embraces bills drawn on behalf of the government, by an officer authorized by law to draw them. If such be the construction of this law, and it is construed to embrace bills drawn by the State, it is the first instance in the history of nations in which a sovereignty has imposed a penalty upon itself in order to compel it to be honest in its dealings with individuals. A sovereignty is always presumed to act upon 760*] principles of justice, and if, from mistake or oversight, it does injury to a nation or an individual, it is always supposed to be ready and willing to repair it. It is bound to compensate the party injured, and to make the indemnity a full and ample one. But it is bound to nothing more. And it ought not to be supposed to have made a provision so unusual as the one now contended for, unless very clear words were used to indicate that intention. or not. Nor does it matter whether this fifteen per cent. is technically to be regarded as a penalty It is, at all events, a new provision, engrafted upon the general law merchant. It is a new charge imposed upon the drawer of a protested bill, beyond that to which he was before subject. The question still recurs, does this statute include bills drawn by the State? In England it is well settled that the king is not embraced by the provisions of an act of Parliament, however broad and general the terms of it may be, unless he is expressly named, or the language of the statute and the nature of its enactments imply that it was intended to operate on the rights of the sovereign as well as upon those of individuals. (5 Co. Rep., 14b; 11 Co. Rep., 70; 8 Mod., 8; 1 Str., 516.) The same doctrine has been long since firmly established in Maryland. (Murray and Taylor v. Ridley, adm'r, 3 Harr. & McHenry, 171; Contee v. Chews' ex'r., 1 Harr. & Johns., 417; The State v. The Bank of Maryland, 6 Gill & Johns., 226.) And if the State of Maryland would not have been liable to this demand under the Act of 1785, it follows that the United States are not responsible. For the adoption by Congress of the Maryland law, certainly did nothing more than place the general government, in relation to this contract, upon the same ground that the State would have occupied before the cession of the district. Now, in this law there are certainly no express words including the State; nor is there anything in its language or its object to lead to that conclusion. And it appears to me that no one who reads the act can for a moment imagine that the State intended to impose upon itself this fifteen per cent. damages, in case one of its foreign bills, from some unforeseen cause or other, should happen to be protested. It is no answer to this argument, to refer to cases decided or usages adopted, where certain fixed damages are given as a substitute for the charges recognized by the general mercantile law. Such decisions and usages rest upon different principles from the present case, and the reasons upon which they are allowed would undoubtedly apply to government bills as well as 761*] to those of individuals. Neither is it sufficient to say that the government, if it was the holder of a protested bill, would be entitled to these damages from an individual, and that it is therefore just that it should pay them in return. If such a rule be a sound one. and if it ought to be followed by the Legislature. yet it would not authorize the court to repeal a statute, and make a regulation different from that enacted by the legitimate authority. It would be difficult, however, for anyone to maintain that there is any foundation in justice or fair dealing for applying such a rule against the United States in this instance, and in favor of the bank. The justice of the case is most manifestly on the same side with the law. And, indeed, the law of the case would be the same, even if the contract had been nothing more than the sale of this bill, and the liabilities of the United States were to be deter. mined by the rules which govern similar contracts between two individuals. The bill, upon the face of it, is drawn upon a particular fund. And such a bill, although usually spoken of as a bill of exchange, is yet not recognized as such in the commercial code. Nor is it subject to the rules and usages which have been established in relation to bills of exchange. It cannot be declared on as such, nor is the drawer answerable to the indorsee or holder upon protest for costs, charges, or reexchange; nor for any fixed sum in lieu of them. The Act of 1785, therefore, does not apply to it; for that statute manifestly intended to embrace those instruments only which are recognized by law as bills of exchange. The general rule as to what constitutes a bill of exchange, in the legal sense of these terms, is given in Story on Bills of Exchange, sec. 46; where, after stating that bills payable out of a particular fund only, or upon an event which is contingent, are not in contemplation of law bills of exchange, the definition of that instrument is given in the following words: "And hence the general rule is, that a bill of exchange always implies a personal credit not limited or applicable to particular circumstances and events, which cannot be known to the holder of the bill in the general course of its negotiation; and if the bill wants, upon the face of it, this essential quality or character, the defect is fatal." The cases which establish and illustrate this principle, and show what bills are regarded as drawn upon a particular fund, are all referred to in the section above mentioned, and in the one succeeding it, and may, indeed, [*762 be found in any of the standard works on bills and notes. It would be useless to cite here the multitude of cases on the subject. A single one will show the application of the principle, as settled by the current of authorities. In Jenney v. Herle (2 Ld. Raym., 1361), the bill was in the following words: "Sir, you are to pay to Mr. Herle £1,945, out of the money in your hands belonging to the proprietors of the Devonshire mines, being part of the consideration money for the purchase of the manor of West Buckland." It will be observed that the language of this bill assumes that the money was in the hands of the drawee; that the fund out of which it was payable had already been received by the party upon whom the bill was drawn. Yet this was held to be no bill of exchange, in the legal sense of the words, it being payable out of a particular fund. So, too, an order from the owner of a ship to the freighter, to pay money on account of freight, is no bill, because the quantum due on the freight may be open to litigation. (Chitty on Bills, 58; 2 Str., 1211, Banbury v. Lissett, so held by Lee, Chief Justice.) And so firmly have the principles decided in these early cases been since adhered to, that it is now greatly doubted whether the cases of Andrews v. Franklin (1 Str., 24), and Evans v. Underwood (1 Wils., 262), which seemed in some degree to relax the rule, would at this day be held to be law. (See Story on Bills, page 60, note.) Now, can anyone read the bill in question, and distinguish it in principle from the case of Jenney v. Herle? Or bring it within the definition of a bill of exchange, as given in Story on Bills? Upon the face of the bill, it is drawn by the American Secretary in his official and not in his private character. It is drawn upon Mr. Humann, not for any money he was expected to pay to the American Secretary in his private capacity, but upon a particular fund which was due from the French nation, and which was presumed to be in his hands as the minister of finance. It is upon the credit to which the Secretary supposed himself to be officially entitled, on account of this particular fund, that he draws the bill. This is carefully and distinctly set out in the bill itself. It does not in its terms imply a personal or official credit, not limited or applicable to particular circumstances. On the contrary, it claims the credit, and requests the payment, on account of the particular circumstance that the money was due from the French government, and the funds to pay it presumed to be in the hands of the minister of finance. cable to particular circumstances and events, which cannot be known to the holder of the bill in the general course of its negotiation. But if none of these objections stood in the way of this claim, and if the transaction were regarded as one between individuals for the purchase of a bill of exchange, in the legal meaning of the terms, and therefore to be governed by the Act of 1785, yet the bank would have no claim to the damages in question. The first clause of the first section of this law gives the fifteen per cent. damages, in addition to the re-exchange, costs, and interest, to the person who is the owner or holder of the bill protested. The second clause of the same section provides, that any indorser who shall have paid to the holder or other person entitled, the value of the principal, damages, and interest, shall have a right to recover the same from the drawer or other person liable to such indorser on the bill. The plain language of the law gives the fifteen per cent. damages to th party who is the holder of the bill at the time of the protest; and gives to the in- [*761 dorser the right to recover from the drawer, or other person liable, so much only as he shall be compelled to pay on account of the protest. The indorser is entitled to nothing-neither to principal, costs, re-exchange, nor damages-until he has paid them, and then to so much as he has actually paid, and to nothing more. The policy of this law is as obvious and as just as its words are plain. It conforms in its provisions to the general commercial code, as nearly as the situation of Maryland would at that time permit. By the general mercantile law, the holder of Moreover, the Secretary knew, and the bank a protested bill is entitled to redraw from the 763*] knew, that France was a constitution- place where it was dishonored, upon the drawal monarchy, under which no money could beer or indorser, in the country where they reside, raised, or applied to any particular purpose, without the sanction of the legislative body. And that the money due from France could not be paid by Mr. Humann, unless money was placed in his bands, and by law appropriated for that purpose: the payment of the bill, therefore depended upon that circumstance. If that event had not happened-that is to say, if the money had not been provided by the Legislature, and the payment authorized out of the fund thus provided, then, upon the face of the bill, it was evident that Mr. Humann would not and could not pay it. It is true that the bill assumes that the money was in his hands. But that was the case, also, in Jenney v. Herle. Indeed, the bill there expressly stated the fund to be in the hands of the drawee; yet it was held not to be a bill of exchange. It will hardly be said that this bill is to be treated as if drawn by the United States against France. But, even if that view of the subject could be maintained, it would not affect the argument. The bill claims no general credit for the United States with France that would give them a right to draw independently of the money due by the treaty. In any aspect of the case, the credit upon which the bill is drawn is expressly confined to this particular sum. And I cannot imagine how this instrument can be dealt with as a bill of exchange, if the rule is to stand, that no instrument is a bill of exchange, in contemplation of law, unless it implies a personal credit not limited or appli for an amount that will produce, by its sale, at the existing market price of such bills, a sum exactly equal to the amount of the original bill at the time when it ought to have been paid, or when he is able to draw the re-exchange. together with his necessary expenses, and interest. He is not, however, obliged to redraw, but is entitled to recover what would be the price of such a bill, with interest, and the nec essary expenses and charges. This is the amount of the holder's damages. But the indorser is not entitled to recover of the drawer the damages incurred by the nonpayment of a bill, unless he has paid them or is liable to pay them. (3 Kent's Com., 115, 116, 4th edition; Story on Bills, 470, and notes; Chitty on Bills, 670, 8th ed.) The reason of the difference made between the holder at the time of the protest, and the indorser, who may afterwards by taking up the bill become the holder, is evident. The holder, by purchasing the bill and presenting it for payment, shows that he desires funds to that amount, at that place, at the time when the bill becomes duc, and that he has counted upon obtaining them by means of the bill which he holds. His disappointment may subject him to serious loss and embarrassment in his business, and the law therefore authorizes him to raise the same sum immediately by re-exchange on the drawer or indorser, in the country in which they reside. And if he cannot or does not redraw, the price of the re-exchange to which he was entitled, together with his costs and expenses, is, of course, the measure of his damages. But the indorser stands on different ground. He has already sold the bill, and received the consideration for it, at the time and place where it suited his convenience. And, having by his indorsement guarantied the safety of the bill to any subsequent holder, if, in consequence of this engagement, he is compelled to 765*] pay it, the natural and just measure of his damages against a party answerable over to him is the precise sum he is compelled to pay, with interest upon it. This is the uniform rule, where one person is obliged to pay money, for which he has his remedy against another; and it is daily and familiarly acted upon, where a surety pays money for his principal. and he had indorsed it to Rothschild & Brothers, who presented it for payment, and were the holders at the time of the protest; and Hottinguer & Co. paid it, supra protest, for the honor, as they declared, "of the signature and account of Mr. Samuel Jaudon, cashier of the Bank of the United States, the first indorser." It also appears by the statement in the record, that, although Hottinguer & Co. said they had funds of the bank in their hands, and were apprised that the bill would not be paid by Mr. Humann, they yet declined taking it up until it should be protested. They did not, therefore, pay it as agents of the bank, but paid it supra protest; and they thereby, upon established and indisputable principles of com mercial law, became the holders of the bill in their own right, and not as agents of the party for whose honor it was paid. Rothschild & Brothers, having received the amount due them, had certainly no claim to these damages; and they have made none. I shall not stop to inquire whether Hottinguer & Co., who volun tarily intervened in this business, could have claimed of the bank, or of the United States, either re-exchange or damages of any kind. It is sufficient for the decision of this controversy, that they neither claimed nor received them: They demanded what they were entitled to by the general law merchant, and nothing more that is to say, the principal, the costs and charges, and usual commissions. They had a right to make this demand directly upon the United States, as drawers, or upon the bank as indorser, both being responsible to them. (Exparte Lambert, 13 Ves., 129.) They made their demand upon the bank, as indorser, and as such it paid it. Can the bank enlarge the claim of Hottinguer & Co.? Or can it, under and by virtue of the Act of 1785, recover from the United States more than it has paid, or is liable to pay as indorser? It will scarcely be said that the bank has become the owner and holder, by paying Hottinguer & Co., and tak ing up the bill, and are therefore entitled to all the rights given to the owner and holder by the first clause of the first section of the act of Assembly. This clause evidently applies to the holder at the time of the protest, and it is the second clause in the same section which defines the rights and of indorsers who become holders afterwards by discharging the claim against them; and this clause gives them right to recover so much as they have paid, and nothing more. If this claim is to [*767 be allowed to the bank, what is to be done with this clause in the act of the Assembly? It is plain and unambiguous in its words; it is consistent with the other provisions of the law; its policy is evident, and it is in perfect couformity to the general commercial code. which has always been celebrated for the justice and equity of its principles; and this claim of the bank cannot be maintained, unless this clause is blotted out of the statute. Can this be done by judicial authority, upon any known rule for the construction of statutes? I think not. There have been many decisions upon the conUpon what ground, then, can the bank struction of many statutes, but it will be diffi 766] claim the fifteen per cent. "damages cult to find a precedent anywhere, or of any under this law? It was not the holder of the time, that would sanction such a decision on bill at the time it was protested. It appears by an act of Assembly like this. Certainly there the record that the bank had indorsed it to never has been any practice in Maryland, nor Baring, Brothers & Co.; they to Rothschild,|any decision under this law. to warrant such a Now, the Maryland statute differs from the general mercantile code only in this-that in relation to the holder, it gives him the price of the re-exchange from the place where the bill was drawn, instead of the place where it was payable; and superadds the fifteen per cent. to the usual allowances; and the reason of this difference is readily understood, when we advert to the situation of Maryland at the time this law was passed. The State was then just renewing her commerce with England, which had been broken up by the revolutionary war; and she was for the first time about to open a trade with the other nations of the world; and when that law was passed, there was most probably not a place in Europe (certainly not one out of England), at which there was any market rate of exchange for bills upon Maryland, by which damages could be measured in the case of a protested bill; and if such a rate happened to exist at any place, it would in the then state of navigation have produced ruinous delays and expenses to procure the testimony to prove it. The price of re-exchange in Maryland upon the same place was, there fore, from necessity substituted for the reexchange in the foreign country. Because, here the proof of the sum for which a new bill could be brought could be easily obtained, and would always be within the reach of the party. But as the holder of a bill payable in a foreign country could hardly at that time be expected to find a purchaser for his re-exchange upon Maryland, and the injury and inconvenience produced by the protest could not, therefore, be repaired immediately on the spot, by the sale of re-exchange upon the drawer or indorser, the act of assembly imposed the penalty of fifteen per cent., in addition to the established allowances of the general mercantile law, in order to insure, as far as practicable, caution and prudence on the part of drawers and indorsers; and to deter the unprincipled and greedy from attempting to create for themselves a fictitious capital, by giving currency to bills which they knew would be dishonored. The second clause of this section, in relation to indorsers, conforms entirely with the general law merchant. They are entitled to recover over only what they are compelled to pay. construction. Upon the whole case, therefore, | bill, and not the holder or owner at one time the following conclusions appear to me to be of the protest, it is not by that act entitled to irresistible: recover these damages, since it has not paid them. 1. That the contract with the bank, according to its true construction and meaning, was not for the sale of a bill of exchange, in the legal sense of these terms; but an agreement by which the bank undertook, as agent for the government, to transfer to the United States the first installment due under the treaty with France; and that the bill in question was used as one of the instruments for carrying that contract into execution, for the greater convenience of the parties. 2. That if the contract be even considered as one merely for the purchase of a bill of exchange, in the strict legal meaning of the words, yet the bank is not entitled to these damages, because the Maryland Act of 1785, under which alone they are claimed, does not extend to bills drawn by the United States. 3. But if the law of 1785 is construed to embrace bills of exchange drawn by the government, and this case is to be decided by the same rules which apply to similar contracts between Individuals, still the United States are not responsible for these damages, because the bill in question is drawn upon a particular fund, and, therefore, not a bill of exchange in the legal meaning of the terms, and consequently, not within the statute. 4. And if the claim were free from the three preceding objections, and to be decided under and according to the provisions of the Act of 1785, yet the bank being an indorser of the 462 *Upon each of these grounds, I [*768 think the bank has no claim in law or in equity to the damages in question. Note. When this subject was before me as Attorney-General of the United States (if my recollection is correct), I was under the impression, from the evidence, that Hottinguer & Co. had paid the bill out of the money of the bank in their hands, and as agents of the bank. In that view of the subject there could, I presume, be no foundation for the claim of fifteen per cent. damages; because the bank being the agent of the government, with public money in its possession sufficient to take up the bill, the payment by the agents of the bank out of its money ought to be regarded as a payment for the government, and would in substance and effect be a payment out of the public funds in the hands of the bank. But, upon the facts as now presented in the record, upon the evidence offered by the bank, it appears that Hottinguer & Co. declined paying the bill before protest; and that they paid it supra protest, reserving their remedy on the bill against the bank as well as the United States. They, therefore, according to the proofs, as now stated, be came the holders of the bill on their own ac count; and it is upon this view of the facts that the foregoing opinion is formed. Howard 2. |