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Attorney(S)

Mr. Assistant Attorney-General Smith for the plaintiff in error. No opposing counsel.

Judges

Morrison Remick Waite

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Smart Summary

United States v. Thompson et al. (October Term, 1876)

Factual and Procedural Background

This case arises from proceedings in the Circuit Court of Queen Anne's County, Maryland, to settle the affairs of McFreely Hopper, an insolvent partnership, and to collect and apply the partnership assets to pay its liabilities. The United States filed a petition seeking allowance of a claim in its favor and payment out of the fund in court in preference to other creditors, invoking a statutory priority for debts due the United States (Act of March 3, 1797; Rev. Stat. sect. 3466).

The petition was referred to an auditor. The auditor's report, as summarized in the record, described the following factual sequence: Thompson (an appellee) was a deputy collector of internal revenue who permitted McFreely Hopper to handle sales and collections of internal-revenue stamps and checks. On settlement in December 1865 there was a balance due Thompson of roughly $1,500–$1,600 for stamps and related collections. In December he had checks received in payment of internal-revenue taxes indorsed to the firm to collect; the funds were deposited to the firm's credit. In February 1866 the firm gave Thompson a $3,000 check to satisfy amounts due him (including approximately $2,537 for the stamps and other amounts). With that check and other instruments Thompson obtained a certificate of deposit from the National Exchange Bank of Baltimore, payable to the Treasurer of the United States for about $24,000, which was remitted and later paid to the Treasurer. Some days later, Thompson paid a protested McFreely Hopper check by using United States funds in his hands as deputy collector. On September 1, 1866, McFreely Hopper reimbursed Thompson in money for all but $2,537, and gave Thompson a promissory note for that amount with two sureties, payable one day after date.

Thompson presented that $2,537 note for allowance as a claim in his favor; the United States claimed priority for the money originally received for stamps and checks. The auditor reported against the United States on the ground that any claim the United States may have had was extinguished by payment of the certificate of deposit to the Treasurer. The Circuit Court confirmed the auditor's report and entered a decree accordingly. The Court of Appeals of Maryland affirmed that decree, and a writ of error to the Supreme Court of the United States was then sued out.

Legal Issues Presented

Whether judgments in State courts against the United States may be re-examined in this Court by a writ of error where the same relief would be afforded to private parties (i.e., whether a federal question exists permitting review).
Whether, on the record presented, there remained any United States debt or federal question to be decided (specifically, whether the Court of Appeals' decision rested on extinguishment/payment rather than on the federal priority question).

Arguments of the Parties

Plaintiff in Error (United States)

The United States sought allowance and priority of payment for amounts the firm had received on account of internal-revenue stamps and checks, relying on statutory priority (Act of March 3, 1797; Rev. Stat. sect. 3466).
At argument before this Court, the United States conceded that the question of priority under United States law was not decided in the court below because that court found there was no debt due; the United States nonetheless argued that the check of McFreely Hopper not having been paid did not discharge the United States' debt.

Appellees (Thompson et al.)

The auditor, and the lower courts as reflected in the record, treated the United States' asserted claim as having been paid and extinguished by the payment of the certificate of deposit to the Treasurer; the decree rejecting the United States' claim was entered on that ground.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bethel v. Demaret, 10 Wall. 537	Affirmation that this Court lacks power to review State court decisions on questions of general law not resting on federal statute, treaty, or constitutional provision.	Listed among authorities supporting the proposition that the Supreme Court cannot re-examine State court decisions on such general-law questions in a writ of error from a State court judgment against the United States.
Delmas v. Ins. Co., 14 Wall. 666	Same general principle restricting review of State court determinations of general law.	Referenced to show consistency of prior holdings that this Court lacks jurisdiction to review State court decisions on such questions.
Ins. Co. v. Hendren, 92 U.S. 287	Continued recognition of the limitation on this Court's power to review State court decisions where no federal statute or constitutional question was actually decided below.	Applied as part of the line of authority establishing the bar to review in the present case.
Rockhold v. Rockhold, 92 U.S. 130	Reinforcement of the rule that this Court will not re-examine State court decisions on general-law issues absent a controlling federal question.	Relied upon to support dismissal of the writ where the record exhibited only a State-law determination (that the claim was paid/extinguished).

Court's Reasoning and Analysis

The Court began with the broad jurisdictional principle that judgments in State courts against the United States cannot be brought here for re-examination by writ of error except in cases where the same relief would be afforded to private parties — i.e., where a federal question exists that was decided below. In the argument before this Court, the United States conceded that the court below did not decide the question of priority of payment under federal law because it had been found that there was no debt due the United States.

The record affirmatively showed that the Circuit Court rejected the United States' claim on the ground that it had been paid (extinguished), and the Court of Appeals' decision was presumed to rest upon the same ground. The Court of Appeals' opinion, included in the record, expressly waived questions as to the original liability of McFreely Hopper to the United States and placed the decision solely on the ground that "any claim the United States may have ever had against the firm, growing out of these dealings with Thompson, has been paid and extinguished."

The Court observed that the United States did not contend the decision below was repugnant to the Constitution, any law, or any treaty of the United States. The remaining argument (that the unpaid check of McFreely Hopper did not discharge the United States' debt) turned on principles of general law rather than on any statute of the United States. The Supreme Court reiterated its settled rule — supported by prior decisions cited in the opinion — that it lacks power to review State court decisions on such general-law questions where no federal question was decided below. Because the record presented only the State-law determination of extinguishment/payment and no federal question properly before this Court, the writ could not be maintained.

Holding and Implications

Writ dismissed.

Implications:

The immediate consequence is that the judgment of the Court of Appeals of Maryland stands unreviewed by this Court, leaving the decree rejecting the United States' claim (on the ground of payment/extinguishment) undisturbed.
The decision turns on jurisdictional limitation: where a State court's decision rests solely on general-law principles (and no federal question is decided below), this Court will not re-examine that decision on writ of error. The opinion cites and applies prior decisions establishing that rule.
The opinion does not announce any new rule of federal law beyond applying established precedent; it explains only the inability of this Court to review the State courts on the particular facts and legal posture presented.

Opinion delivered by Mr. Chief Justice Waite.

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UNITED STATES v. THOMPSON ET AL.

Judgments in the State courts against the United States cannot be brought here for re-examination upon a writ of error, except in cases where the same relief would be afforded to private parties.

ERROR to the Court of Appeals of the State of Maryland.

In the progress of a suit pending in the Circuit Court of Queen Anne's County, Md., to settle the affairs of McFreely Hopper, an insolvent partnership, and to collect and apply the assets of the firm to the payment of its liabilities, the United States presented a petition for the allowance of a claim in their favor, and its payment out of the fund in court in preference to other creditors, on account of the priority given to debts due the United States by the act of March 3, 1797. 1 Stat. 515, sect. 5; Rev. Stat. sect. 3466.

This petition was referred to an auditor, to take testimony, and report. The facts, as they appear in his report, are substantially as follows: —

Thompson, one of the appellees, was a deputy-collector of internal revenue for the first district of Maryland. In the course of his business he permitted McFreely Hopper to dispose of and receive the money for internal-revenue stamps, which had been furnished him by the United States to sell. On a settlement with the firm, in December, 1865, there was found due him on that account between $1,500 and $1,600. During the same month of December he held checks received from various parties in payment of internal-revenue taxes, and these he indorsed and delivered to the firm to collect for him. The money was collected, and deposited in bank to the credit of the firm. Some time in February, 1866, the firm gave Thompson a check for $3,000, to pay the amount due him for stamps and checks, — viz., $2,537, — and an amount that was due to him on account of other transactions. With this check, and other checks and current notes, he obtained from the National Exchange Bank of Baltimore a certificate of deposit payable to the treasurer of the United States, for about $24,000. This was at once remitted to the treasurer, to whom it was afterwards paid. Some days after, the check of McFreely Hopper was protested; and Thompson took it up from the National Exchange Bank, using therefor moneys belonging to the United States in his hands as deputy-collector. Sept. 1, 1866, McFreely Hopper took up the check from him, paying in money all but $2,537, and giving him their note for that amount, with two sureties, payable one day after date.

This note Thompson presented for allowance, as a claim in his favor. The United States claimed, on account of the money originally received for the stamps sold and checks collected.

The auditor reported against the United States, upon the ground, that, even if they ever had any claim against the firm, it was extinguished by the payment of the certificate of deposit to the treasurer. The report of the auditor was confirmed by the Circuit Court, and a decree entered accordingly. This decree was affirmed by the judgment of the court of appeals. The present writ of error to that court was sued out.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

Judgments in the State courts against the United States cannot be brought here for re-examination upon a writ of error, except in cases where the same relief would be afforded to private parties. It was conceded upon the argument in behalf of the United States, that the question of priority of payment, under the laws of the United States, was not decided in the court below, because it was found that there was no debt due. With this concession, which could not be avoided, it is difficult to see what Federal question there is in the record.

It appears affirmatively that the Circuit Court rejected the claim, because it had been paid; and the presumption, in the absence of any showing to the contrary, is, that the Court of Appeals based its decision upon the same ground. But, in addition to this, on looking into the opinion which has been sent here as part of the record in that court, we find that all questions as to the original liability of McFreely Hopper to the United States were expressly waived, and the decision placed solely upon the ground that "any claim the United States may have ever had against the firm, growing out of these dealings with Thompson, has been paid and extinguished."

It is not contended that this decision is repugnant to the Constitution, or any law or treaty of the United States; but the argument is, that, as the check of McFreely Hopper was not paid, it did not pay their debt. Whether this is so or not, does not depend upon any statute of the United States, but upon the principles of general law alone. We have many times held that we have no power to review the decisions of the State courts upon such questions. Bethel v. Demaret, 10 Wall. 537; Delmas v. Ins. Co., 14 id. 666; Ins. Co. v. Hendren, 92 U.S. 287; Rockhold v. Rockhold, id. 130.

Writ dismissed.

UNITED STATES v. THOMPSON ET AL