Macauley v. United States
Opinion of the Court
delivered the opinion of the court:
The single question is, whether the United States has a legal right to set off against the balance of the allowance in favor of Bailey the balance due on the judgment against Bailey, which McKee assigned to the United States. If that right exists, the claimant cannot recover; if it does not exist, he is entitled to recover the amount withheld by the Secretary of the Treasury.
By the third section of the act of March 3, 1863, re-organizing this court, (12 Stat. L., p. 765,) it is provided that this court shall “ have jurisdiction of all set-offs, counter-claims, claims for damages whether liquidated or unliquidated, or other demands whatsoever, on the part of the Government against any person making claim against the Government in said court; and upon the trial of any such cause it shall hear and determine such claim or demand both for and against the Government and claimant.”
In reference to this section the Supreme Court, in Allen v. United States, (17 Wall., 207,) said: “The third section of the statute is broad enough to authorize the Court of Claims, in suits against the United States, to hear and determine demands of the Government of every kind against the claimant, or those whom the claimant represents, whether liquidated or unliqui-dated, and to set off against the claim in suit the amount found
Were this suit, therefore, in favor of William Bailey, there would be no doubt of the right of the Government to set off against the balance of the allowance in his favor the balance of that judgment. Is this right cut off by an assignment made by Bailey of his claim, of which no notice was given to the-United States before it acquired title to the judgment ¶ We think not. In Brashear v. West, (7 Pet., 608,) the Supreme Court held that a chose in action is assignable in equity, and that equity will protect and enforce the assignment; but that if subsequent to its being made, and before notice of it, any counter-claims be acquired by the debtor, they may unquestionably be sustained. This ruling is directly applicable to this case, for it is entirely clear that the Government had no notice of Bailey’s assignment to the claimant until after it had acquired title to the judgment against Bailey.
The fact that the doctrine laid down in that case was applied in a case in equity, does not impair its force here ; for that decision was under a system which did not admit of a suit at law by an assignee of a chose in action. But, as was held in Lawrence’s case, (8 C. Cls. R., 252,) an assignee of a claim may sue the United States in this court in his own name; and when he does so he stands in the same position as an assignee suing in his own name and right in a court of equity; and hence the Supreme Court’s doctrine is quite as applicable here as it would be there.
The set-off pleaded by the defendants is sustained, and the claimant’s petition dismissed.
Concurring Opinion
concurring:
I concur in the judgment of the court, in the absence of our brother, Judge Bichard son, but with some doubt as to whether the Government is in a position to set up, in this case, the judgment against Bailey, which it holds by a naked assignment and obtained without the payment of a present consideration or the relinquishment of an existing security.
Reference
- Full Case Name
- John L. Macauley, assignee of Bailey v. United States
- Status
- Published
- Syllabus
- Congress award $45,161 to Bailey and direct the Secretary of the Treaswry to pay that amount to him. Bailey assigns the award to the claimant. The defendants having previously recovered a judgment against one McKee, and he having recovered a judgment against Bailey, they procure an assignment of the latter and deduct it from the award, crediting the amount to McKee. The claimant brings his action for the portion of the award ivithheld. The defendants insist on their right to set off the judgment assigned to them against the claimant’s demand. I. The Government having recovered a judgment against A, may take an assignment from him of a judgment against B and set it off in a suit brought by B upon award made in his favor by Congress, and this right of set-off exists though B assigned his award to M, who is the party claimant, if the set-off was acquired before notice of the assignment. II. Equity will protect and enforce the assignment of a chose in action; but if before notice a counter-claim be acquired by the’ debtor, it may be set up against the demand. III. The Amended Court of Claims Aot, (12 Stat. L., p. 765, § 3,) as construed by the Supreme Court in Allen Street’s Case, (8 C. Cls. B., p. 90,) is broad enough to authorize this court to hear and determine demands of the Government of every kind against a claimant or those whom a claimant represents.