that as between the bank as payee, and the United States as drawer, no such objections can be alleged by the United States; they having assumed the draft to be a bill of exchange, and dealt with it as commercial paper, are bound by the assumption. Still, the question meets us, that no form of draft could authorize a legal demand upon the drawee (France) on the face of the draft. So far from being a simple paper, carrying its authority to receive the money with it, the parties now before the court conceded, at the time the drawing took place, by obtaining the power, that the right to receive the money did mainly depend, and must depend, on the power signed by the President, and countersigned by the Secretary of State, with the seal of the United States attached, and the communication of the facts in official form, and through the proper channel, to the government of France, that is, through its Department of Foreign Affairs. These were the conditions and contingencies with which the draft was encumbered. They were legal consequences, 400*] apparent on its face, and are yet more apparent by the accompanying facts that took place at the time of drawing.

3. That a bill of exchange in form, drawn by one government on another, as this was, is not, and cannot be, governed by the law merchant; and that therefore it is not subject to protest and consequential damages.

And on these grounds we order that the judgment of the Circuit Court be reversed, and that the cause be remanded to that court for another trial thereof, on the principles stated in this opinion.

Mr. Chief Justice Taney filed the following memorandum:

The Chief Justice withdrew from the bench in the argument of this case, having given an official opinion, when he was Attorney-General of the United States, against the claim made by the *bank and concurring altogether [*401 with the above opinion given by the court. Mr. Justice McLean:

I dissent from the opinion of the court. No point is made in this case which was not elaborately discussed and substantially ruled in the same case, reported in 2 Howard, 711. It is true, the structure of the bill, and the liability Again. This controversy is between the of the government to the damages claimed, not original parties; the law governing the dealing, being points made in the former bill of excepeach was bound to know; the facts they did tions, were not authoritatively adjudged. But know equally well; and if a mutual mistake these points were so connected with the conwas made in supposing that a negotiable com-struction of the Maryland statute, the question mercial instrument could be founded on our then before the court, that neither the counsel claim against France, this mistake cannot change the commercial law, which in our opinion could not be made to apply to the subject matter of drawing, nor in any form of instrument founded on the subject matter.

nor the court could escape their consideration. No other instrument than a foreign bill of exchange is embraced by the statute, and if the government be not liable to damages, on a protested bill, no decision could have been given against it.

The points were as fully and as ably argued then as they have been at the present term. The addition of one learned counsel at the bar is the only change in the advocates. But the changes on the bench show the uncertainty of life, and the emptiness of human hopes. Two judges, distinguished for their great learning and ability, who participated in the former judgment, have gone to their account; ill health causes the absence of another, and the opinions of the two now present remain unchanged. We submit, as we are bound to do, to the views of our four learned associates who now decide this case.

It is insisted that the bank did not purchase the bill of exchange from the government, but acted as its agent, using the bill as an instrument through which to perform its agency.

The principal argument adduced to sustain the set-off claimed is founded on the fact, that by an act of Congress the Secretary of the Treasury had a discretion to adopt any appropriate means to obtain the money, and that a bill of exchange was an appropriate means. To this assumption it may be answered, that France was not bound by the act of Congress, but by the treaty; it stipulated, "that the indemnity of twenty-five millions of francs should be paid, in six annual installments, into should be paid, in six annual installments, into the hands of such person or persons as should be authorized to receive it." We repeat that this authority was to come from our government to the French government; was to pass through the Department of State here, and through the Department of Foreign Affairs there, and thus only could it reach the Minister of Finance, M. Humann. Our Secretary of the Treasury could not communicate with the By the fifteenth section of its charter the Minister of Finance, nor with any other func-bank, when required by the Secretary of the tionary of the French government, and there- Treasury, was bound "to give the necessary fore the bill drawn by Mr. McLean on M. Hu- facilities for transferring the public funds from mann, standing alone, was idle as waste paper, place to place within the United States or ternotwithstanding the act of Congress, in so far ritories, without charge." But this duty was as the French government was concerned. Nor limited to transfers within the Union, and did had M. Humann any power to pay the money, not extend to foreign countries. had it been in the treasury, until instructed The correspondence between the Secretary to do so by the Department of Foreign Affairs. of the Treasury and the president of the bank, 1. For these reasons, we are of opinion that in relation to this bill, shows a purchase of it the question on the structure of the bill is an by the bank. In his first letter to the bank, open question, because for the first time pre-dated the 31st of October, 1832, the Secretary sented to this court for decision. of the Treasury states the amount due under 2. That the statute of Maryland of 1785, in the French Treaty; that it was made his duty its terms, does not embrace a bill of exchange to have the amount transferred to the United drawn on a foreign government. States, and the views of Mr. Biddle as to the

mode of transfer were solicited. In his answer | who had used them in their moneyed operations Mr. Biddle says: "The simplest form would annually, to an amount equal to, if *not [*403 be the sale of a bill on Paris, drawn by the greater than, the revenue of this government. Secretary of the Treasury"; that "the bank Yet these men, the richest and most experienced has already in Paris a larger sum than it has bankers in the world, were mistaken in calling any immediate use for, yet it is not indisposed and treating this paper as a bill of exchange. to increase it, because it may hereafter have And the government, too, were reprehensible occasion for the fund, and because it is believed for paying the costs of protest, for such costs 402*] that, if *the terms can be made accept-could be charged only on a bill of exchange. able, the purchase of the whole by the bank would be the best operation for the government." The rates of exchange are then stated, and a proposition to purchase the bill at a certain per cent.

Against all this knowledge, experience, and action, it is now contended that the paper is a mere assignment, or anything else than a bill of exchange. That designation is repudiated, not the less zealously for having been the re

On the 26th of January ensuing, the Secre-sult of second thought. tary says he is ready to draw the bill, and adds: But what are the new lights shed upon this "I presume the bank is still disposed to pur-question? chase, and on the terms offered in your letter of the 5th of November." And also he says: "It is desirable that the credit be given to the treasurer by the bank, on receiving the bill." To this letter Mr. Biddle replies, that the rate of exchange has declined between England and France, and that the bank could not take the bill on the terms at first proposed. On the 6th of February the new terms were accepted, and on the following day the bill was transmitted, and its proceeds were placed on the books of the bank to the credit of the government.

Two documents are found in the present record, which were not before the court at the former argument; and these, it is said, have a material bearing on the case. The first is a letter dated 8th February, 1833, from the Secretary of State to Mr. Niles, our chargè d'affaires at Paris, informing him that a bill had been drawn on the French government for the first installment and interest under the treaty, in favor of Samuel Jaudon, cashier of the Bank of the United States, and requesting that notice should be given of the arrangement to the French government.

These facts show a proposal to sell the bill by the Secretary, and an agreement to purchase This is nothing more than a letter of advice, it by the bank at a certain per cent.; that the which usually precedes a bill of exchange, of bill was drawn and forwarded to the bank, which the payee in this instance had no knowland that for the amount of it a credit was en-edge. It, however, conduces to show the tered to the government. In the face of these statements, which show a purchase of the bill beyond all doubt, it is extraordinary that the fact should be controverted.

It is contended that the bill, "under the circumstances stated in the record, is not a bill of exchange, and is not embraced by the Maryland statute of 1785."

nature of the transaction, as not only the substance of a bill of exchange was regarded, but also its form and accompaniment.

The other document was under the seal of the United States, and signed by the President and Secretary of State. It stated the substance of the treaty; the act of Congress authorizing the Secretary of the Treasury to have the inThe Secretary of the Treasury proposed to stallments, as they became due, transferred to sell a bill of exchange to the bank, and the the United States; and that the Secretary had bank agreed to purchase the bill. On its face it drawn a "bill on the Minister and Secretary of is called a bill of exchange, and it was negotiated State for the Department of Finance of the as such by the bank to Baring, Brothers & Co., French government, payable at sight, for four of London, and by them to N. M. Rothschild, millions eight hundred and fifty-six thousand six who indorsed it to Messieurs D. Rothschild, hundred and sixty-six francs and sixty-six cenBrothers, of Paris. When the bill became due, times, being the amount of the first installment, a demand of payment was made on the drawee, payable to the United States, under the said conand a protest for nonpayment, which was fol-vention, on the second of the present month of lowed by due notice to the drawer. The government paid the cost of protest and other expenses to the bank, and also the commissions charged by Hottinguer & Co., who took up the bill, supra protest, as the agents of the bank; but the fifteen per cent. damages given by the Now, this paper is supposed to take away Maryland statute were refused. And in a from the bill of exchange its character as a letter to the Secretary of the Treasury, the commercial instrument. It can have no other Attorney-General says: "I have carefully ex-effect than to show that the Secretary had auamined the claims presented by the Bank of thority to draw the bill. It was no part of the the United States, on account of the protest of the bill of exchange drawn by you on the French government," etc. "The account," he says, "stated by the bank, if supported by proper vouchers, appears to be correct, with the exception of the claim of fifteen per cent. damages on the amount of the bill."

But now it seems that these eminent civilians and bankers were ignorant of the legal import of this instrument-men who had been all their lives conversant with bills of exchange, and

February, and of the interest which is payable at the same time; which bill is payable to Samuel Jaudon," etc., and the President ratifies the act of drawing the bill, and the receipt which shall be given.

bill of exchange, and indeed was not necessary to its negotiability. The indorsement of Jaudon implied an undertaking that he was the cashier of the bank, and that the bill was genuine and would be paid. No one can doubt that the payment of the money by the French government on the bill, without any additional evidence, would have been good. The bill upon its face *was perfect, and authorized [*404 the holder to receive and receipt for the money. At most, the document can only be considered

as authenticating the law under which the Secretary acted in drawing the bill. And this was all that the French government, under any circumstances, could require. But suppose this paper was a power of attorney, signed by the President, authorizing the Secretary to draw the bill; would that change or in any way affect its commercial character?

These decisions, and many others that might be referred to, put an end to the assumption, that a bill of exchange drawn by the government is an act of sovereignty, or anything different in principle from a bill drawn by an individual. Whether drawn by the government or an individual, a bill of exchange is the same commercial instrument, and subject to the same law. No principle is better settled than this by the decisions, of this court.

indorser was held to be discharged by the negligence of the government. And again, in The United States v. Bank of the Metropolis, 15 Peters, 392, the court say: "When the United States, by its authorized officer, become a party to negotiable paper, they have all the rights and incur all the responsibility of individuals who are parties to such instruments. We know of Any person may draw, accept, or indorse a│no difference except that the United States canbill by his agent. A partner may indorse for not be sued." the firm. And this authority may be by parol or writing not under seal. So a corporation may draw by its agent. Banks are in the constant practice of drawing bills through their cashiers. And has it ever been supposed, that, if evidence accompanied or was attached to the bill of the authority of the drawer, it impaired its commercial properties? Mr. Chitty says, in his Treatise on Bills (p. 27): "Where a bill is not signed by the party himself, the party taking it must first satisfy himself that the agent had power so to act for the supposed principal." In the case of The East India Company v. Tritton, 3 Barn. & Cress. 280, three bills upon the East India Company were payable to Hope or order; they got into possession of Card, who indorsed them for Hope. Card had a power of attorney from Hope, but it was not sufficient to warrant these indorsements. This power being seen by the holders of the bill, they were bound by it, as having notice of its extent.

But a bill drawn by an agent, under a power, was never supposed to be less a bill than if it had been drawn by the principal. And in such cases the assignee has only to satisfy himself that the drawer acted under a proper authority. This no more vitiates the bill, than evidence of the genuineness of the signature of the drawer. The bill in question was complete upon its face, and it is inconceivable to me how the paper signed by the President can affect it.

In the argument it is supposed that, in drawing this bill, the government acted in its sovereign capacity. The idea of attaching sovereignty to all the agencies of the government, however exercised, is as novel as it is unconstitutional. Cover every transaction of the agents of the government by the attributes of its sovereignty, and a despotism, characterized by the grossest acts of injustice and oppression, must result.

But it is supposed that there is something in the character of the drawee, the French government, which destroys the commercial character of the bill: This position is as unsustainable as that of the character assumed for the drawer. The bill was drawn on M. Humann, the Minister of Finance of the French government. The money was due, and the payment of it was subject to no contingency from the face of the bill, nor from any circumstance connected with it. The drawer guaranteed the payment of the bill on presentation by the holder, under all the responsibilities which the law attached. A demand, protest, and notice were the only conditions on which these responsibilities were to become fixed. These conditions have been performed by the bank, and the government has acknowledged its liability by paying a part of the damages claimed. But throwing itself upon its sovereignty, the government refuses to pay the damages claimed under the statute of Maryland, on the ground that the instrument is not a bill of exchange. If this ground be true, the costs of protest should not have been paid by it.

It is contended, that, as the question is now here, between the original parties to the bill, the bank may be supposed to have taken the bill under a full knowledge that it might not be paid by the French government; and could not be paid by it, unless the Chambers should make an appropriation. And from this knowledge it is inferred that the bank took upon itself the risk of the punctual payment of the bill. This assumption is shown to be unfounded by the fact that the government, on being notified of the protest, immediately returned the money to the bank which it had paid on account of the bill. Now, if there had been any understanding, express or implied, such as is presumed, in regard to the punctual payment of *the bill, would the government, [*406 have done this? There can be but one answer

A bill of exchange derives all its properties from the commercial law. It is a most convenient instrument for the transfer of funds from one country to another. And its chief and only value, in this respect, arises from the legal principles with which it is invested, and which regulate the duties and liabilities of those who become parties to it. In negotiating such an instrument, the government does not act in its sovereign capacity. It becomes subject, like all other parties to the bill, to the commer-to this question. cial principles which govern it.

405*] *In the case of The United States v. Administratrix of Barker, 12 Wheat. 559, it was held, that "whenever the government of the United States, through its lawfully authorized agents, becomes the holder of a bill of exchange, it is bound to use the same diligence in order to charge the indorser as in a transaction between individuals." And in that case the

There was no doubt in the minds of the original parties to this bill, that it would be paid on presentation. What was the language of this government on receiving notice of the protest? Was the failure of the French Chambers to make the appropriation received as an apology for the dishonor of the bill? That government was informed, in terms not to be misunderstood, that no excuse for a delav of

payment could be received. That the obliga- | fund supposed to be in Pratt's hands was not tion of the French government was absolute, and in no degree dependent on the will of the Chambers; and an immediate payment was required. The bank, shortly after the receipt of this bill, indorsed it to Baring Brothers & Co., in London. This affords the highest evidence that the bank believed the bill would be honored.

It is argued that the French government did not subject itself to a bill of exchange, and consequently to the payment of damages on a default of payment. This may be admitted, and yet it does not reach the question. The bill was not presented until the money was due, and by drawing it our own government undertook that it should be paid. This is as well settled as any other principle in the commercial law.

It seems to be considered that the case might have been stronger against the government, had it been made by an indorsee of the bill. This cannot be correct. Every indorsee, from the face of the bill, had all the notice which can be charged against the bank.

But it is contended that the bill was drawn on a particular fund, and therefore was not a bill of exchange.

It is admitted, if the payment of the bill is made to depend upon any contingency, it is not a bill of exchange. In the language of Mr. Chitty, "If the payment is to depend on the sufficiency of a particular fund, the bill or note will be invalid." The case of Jenny v. Herle, 2 Lord Raym. 1361, was much relied on in the argument. "Herle sued Jenny upon a bill drawn by him upon Pratt, and payable to Herle, as follows: Sir, you are to pay 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.' Herle had judgment in the Common Pleas; but upon a writ of error, the Court of King's Bench held that this was no bill of exchange, because it was only payable out of a particular fund, supposed to be in Pratt's hands, and the judgment was accordingly re

versed."

there, then the bill was not payable. Compare this with the French bill: "Sir, I have the honor to request you to pay at sight of this my first of exchange, etc., to the order of Samuel Jaudon, cashier of the Bank of the United States, the sum of four millions eight hundred and fifty-six thousand six hunderd and sixtysix francs sixty-six centimes, which comprises the sum of 3,916,666.66 francs, constituting the amount of the first payment to be made to the United States, by virtue of the convention concluded between the United States and France, the 4th of July, one thousand eight hundred and thirty-one (deduction made of the amount of the first payment, reserved to France by said treaty), and the additional sum of nine hundred forty thousand francs, for a year's interest at four per cent. upon the entire sums payable to the United States, dating from the day of the exchange of ratification to the second of February, 1833."

Now, there is not on the face of this bill any intimation out of what fund the French government should pay it. It specifies on what account the bill was drawn, showing the amount was due; but this does not affect the character of the bill. The installment "was referred to," in the language of Mr. Chitty, "in order to show the consideration, and not to render the payment contingent."

In Burchell, Adm'r, etc., v. Slocock, 2 Lord Raym. 1545, the action was on a promissory note, whereby the defendant promised to pay to A B £101 12s. in three months after the date of the said note, "value received out of premises in Rosemary Lane, late in the possession of G. H. The court, on demurrer, held this to be a promissory note within the statute.” And so in Hausoullier v. Hartsinck, 7 Term. 733, the defendant promised to pay -, or bearer, £25, being a portion of a value as under deposited in security for the payment thereof. Upon a special case being reserved, the court said they were clearly of opinion, that though, as between the original parties to the transaction, the payment of the notes was to be carried to a particular account, the defendants were liable on these notes, which were made payable at all events.

The question is, whether the payment of the bill is made to depend upon any con- [*408 tingency. Now, it is clear this is not done in the French bill. It is made payable absolutely, without any condition expressed or implied.

The decision in that case did not turn upon the words on the face of the bill, "being part of the consideration money for the purchase of the manor of West Buckland;" but on these, "You are to pay Mr. Herle out of the money in your hands belonging to the proprietors of the Devonshire mines." The former words The maker of a note promised to pay A B here cited in effect are the same as those used eight pounds, so much being to be due from 407*] in the French bill, showing *the con- me to C D, my landlady, at Lady day next, sideration on which it was drawn; but in who is indebted in that sum to A B. Was held Herle's case these words constituted no objec- not to be conditional. Chitty on Bills, 139. tion to the bill, and were not referred to by the Now, in this instrument the consideration is court. The case turned exclusively on the di- stated; but that did not vitiate the note. The rection to "pay out of the money in your French bill states nothing more, than that the hands belonging to the proprietors of the Dev- amount drawn for was due by treaty. And yet onshire mines." Had these words been omitted, this is supposed to destroy its negotiable charthe bill would have been good. So that the acter. A decision to this effect would, in my case of Herle, so much relied on by the plain-judgment, introduce a new principle into the tiff's counsel, does not show the invalidity of the French bill.

The bill in Herle's case, in the language of the court, was payable out of money supposed to be in Pratt's hands. Consequently it was payable out of no other fund. And if the

law governing bills of exchange.

Is the bank entitled, under the statute of Maryland, to the fifteen per cent. damages ?

The argument that the State of Maryland did not intend to subject her sovereignty to the provisions of the statute is entitled to but little

consideration. The interest involved does not reach the sovereignty of the State; and it is sufficient to say, there is no exemption of the interests of the State in the statute; and in passing it, the Legislature intended, as in the enactment of every other law, that all legal effect should be given to it.

bank, having negotiated the bill, was responsible for its payment, with damages. And after the protest, the agents of the bank supervened, and paid the amount of it to the holder. The propriety of this payment is not questioned. By this act, the bank became the holder of the bill, not as indorsee, but as the original payee. The words of the statute are "that upon all In effect, this ownership obliterated and anbills of exchange hereafter drawn in this State nulled the indorsements on the bill. The bank, on any person, corporation, company, or society as the holder, could look to no one but the govin any foreign country," etc.; and it is intimated ernment for payment. And payment to the that these words do not embrace a foreign gov-bank in this country was made, shortly after ernment. In answer to this, it may be said the notice of protest was received. bill is drawn on M. Humann, and is literally within the statute.

But the damages given by the statute have been withheld. Had the bank never negotiated From the cases above cited, it is clear that the bill, and made a demand of payment, and the government, in drawing or negotiating a protest for nonpayment, with regular notice, bill of exchange, subjects itself to all the lia-the right to the damages claimed could not bilities of an individual; consequently it is li- have been contested. And this is the precise able to the fifteen per cent. damages, under the condition of the bank. It is the holder, having Maryland statute, if the bank is entitled to paid the amount of the bill at Paris. them. These damages were considered by this court in the former decision as designed by the statute to cover re-exchange. This construction is opposed, and it is argued that re-exchange is provided for in the statute, where it declares that the holder of a protested bill "shall have a right to receive and recover so much current money as will purchase a good bill of exchange of the same time of payment, and upon the same place, at the current exchange of such bill." And the fifteen per cent. damages in this view are considered as a penalty.

The large amount of the damages claimed has been adverted to in the argument. This should have no influence on the legal questions that arise.

Suppose the bank had not taken up the bill after protest; is there any doubt that the holders could have recovered damages from their indorsers, and they from the bank? This would have subjected the bank to the payment of the damages given by the law of the place where the bill was first indorsed. But this circuitous course was prevented by the payment of the bill. It thus appears that the bank paid this large sum of money in Paris, unexpectedly, *which in the nature of things must [*410 have subjected it to great inconvenience and loss. By the payment, the credit of the government, as the drawer of the bill, was sustained, and the eventual liability of the bank for principal and damages anticipated.

Instead of covering re-exchange by the above provision, the Legislature intended to give the holder of the protested bill the money he paid for it, varying only as the rate of exchange should be at the time. If the rate of exchange at the protest of the bill was lower than when it was purchased, the holder under the statute would recover less than he paid for it; but if exchange had risen, he would recover Now, as between individuals, this would enmore. Now, this exchange is limited to this title the holder of the bill to the fifteen per 409*] *country, and therefore cannot have cent. damages. And it is equally clear and just, been intended as re-exchange. Re-exchange is that the bank should receive the same. There a bill drawn at the place of payment of the pro- has been paid to it by the government the printested bill, which shall sell for the amount of cipal, costs of protest, and the commission such bill. The holder of the French bill, on its charged by Hottinguer & Co. as the agents of protest, was entitled, on commercial principles, the bank, who took up the bill, but not one independently of the statute, to a bill on this cent has been paid to the bank for the advance country which would sell at Paris for the amount of the money at Paris. On the principles of of the protested bill. This would be a very differ- equity, independently of the statute, the bank ent sum from that which was paid for the bill in is entitled to the difference in value of the sum this country. The re-exchange depends upon paid by it in Paris, and the sum received by it the state of trade between the two countries, from the government in this country. This is direct and circuitous, the money market, al-re-exchange, which the fifteen per cent., in my ways regulated by the demand and supply, and other circumstances of a local character, which show that the price at which the bill was purchased in this country can never be the price at which a bill on this country would sell at Paris, or in any foreign country. This fact being known to the Legislature of Maryland, they could not have intended by the above provision to cover re-exchange. The statute gives to the purchaser of the bill the amount he paid for it, with the small variation stated, and nothing more. The fifteen per cent. damages were given in lieu of re-exchange, and not as a penalty. This is the view taken by the court in its former decision.

It is said that the bank, not having paid damages on the bill, is not entitled to them. The

opinion, was intended to cover. Of this opinion was the court which formerly decided this case.

I think the judgment of the Circuit Court should be affirmed.

Mr. Justice Wayne also dissented from the opinion of the court.

Mr. Justice Woodbury, having given an official opinion as Secretary of the Treasury against the claim of the bank in this case, did

not sit.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Eastern District of