payment of a claim due to it from the United States, although in such case Con-
gress might not under the Constitution charge such corporate State with a liabil-
ity and enforce its payment in any other mode except by such set-off.
9. The legislation of Congress in relation to the quota of direct taxes apportioned to
Missouri and West Virginia, seems in principle to recognize the correctness of the
judgment of the First Comptroller by which, in May, 1868, he certified a balance
as due from the State of Georgia to the United States for its quota of the direct
tax apportioned to that State by the act of Angust 5, 1861.
10. The direct-tax act of August 5, 1861 (12 Stat., 311, section 53), provides a special
statutory mode of paying the quota of tax apportioned to any State by declaring
that it ^^thall he liable to be paid" by set-off "of any liquidated and determined
claim of snch State * * * against the United States.''
11. The sum appropriated in favor of the State of Georgia by the act of March 3, 1883..
IS a " liquidated and determined claim of such State against the United States, '
and so falls within the purpose of section 53 of the direct-tax act of August 5^
12. The same rule now applied to the State of Georgia, has been applied to the States
of Kansas, West Virginia, and Missouri, and as to the former State, the Attorney-
General refused to aid it by a judicial proceeding to determine its rights.
Digitized by VjOOQIC
Right to Apply Appropriations hy Way of Set-off-^Qeorgia Cc^e. 355
13. On the 29th of May, 1868, there was a political corporate State of Georgia, capa-
ble of contracting and of being charged with a pecnniary liability.
14. When a statute gives an executive officer a special authority to certify a sum of
nioney due to, or from the United States, and he has exercised it fully and finally
in a given case, his power is exhausted, and neither he, nor his saccessor, can re-
verse a decision thus finally made.
15. There may be cases, and especially in running accounts, iii which the decision of
a Comptroller in allowing a claim is merely interlocutory ^ in which case, it is sub-
ject to correction on a final settlement.
IG. When a claim is refeetedy it may, for sufficient reasons, be opened up for reconsid-
eration in the mode recognized by the act of June 14, 1878. (20 Stat., 130, sec. 4,
17. The statutory recognition of a power, is, in some oases, equivalent to a grant of
18. A Comptroller may, in some cases, exercise a jurisdiction over his own judgments
or those of his predecessor, in the nature of a writ of error, coram nobis.
19. The balance certified by the First Comptroller, May 29, 1868, as due to the United
States from the State of Georgia, for its quota of direct tax, under the act of
August 5, 1861, has not been in any form set aside or rendered inoperative.
20. When a State is indebted to the United States, and such State subsequently has a
less claim against the United States to be allowed by the Second Comptroller, the
proper Treasury Degartmeni practice is, for such Comptroller to certify a balance
due to such State, stating therein that it is *^to he paid to the Ti'easurer of the
United States, to be by him deposited to the credit of said State," on tlie proper
account against the State. The Secretary of the Treasury on this grants a war-
rant to be issued accordingly, and this is to be countersigned by the First Comp-
troller. In this mode the set-off is made. No other form of warrant would be
** warranted by law," and hence could not be countersigned.
May 11, 1868, by Eeport 2^o. 55448 the Fifth Auditor "examined and
adjusted an account between lihe United States and the State of Geor-
gia,'' and found " that the sum of $584,367.33 is due from said State to
the United States • • • for amount of direct tax imposed and ap-
])ortioned by the eighth section of" the direct tax act of August 5, 1861,
"amount to be debited to the State of Georgia on the books of the
Register of the Treasury."
May 29, 1868, the First Comptroller certified to the Eegister a bal-
ance due and payable as stated in the above report, and it was accord-
ingly charged on the Register's books, as a debt due from the State of
Georgia to the United States.
September 3, 1874, the Fifth Auditor by Report Ko. 6 adjusted an ac-
count between the United States and T. P. Robb, Samuel A. Pancoast
and John O. Bates/ Commissioners of Direct Tax for the State of Geor-
gia, from August 1, 1866, to December 15, 1866, and found them charge-
able with " amount of direct tax laid upon the State of Georgia by act
of Congress approved August 5, 1861, $584,367.34." The report shows
costs chargeable to the State $649.72, and finds the Commissioners en-
titled to credit for salaries and expenses $9,835.06, amount of taxes
remaining uncollected $501,939.86, amount refunded to tax-payers on
aocounrof collections improperly made $46.17, and cash deposited
$71,407.75,.covered into the Treasury by miscellaneous warrants num
Digitized by VjOOQIC
556 . First Comptroller's Offlcej treasury Department.
bered and dated in 1866, respectively, 747 March 31, 524 June 25, 697
June 30, 596 September 29, and 726 December 31.
January 9, 1875, the Acting First Comptroller certified a balance of
$1,788.22 ^^due to the United States from the Commissioners, as stated
in the above report." The amount of these warrants was placed to the
credit of the State of Georgia in the Register's Office on said account
for direct taxes.
*^ An act to refund to the State of Georgia certain money, expended
by said State for the common defense in 1777," approved March 3, 1883,
appropriates $35,555.42 to pay to the State of Georgia, for supplies fur-
nished for troops engaged in local defense, for the common cause of in-
March, 24, 1883, the Hon. W. W. Upton, Second Comptroller, by let
ter to the First Comptroller, informed him that an account in favor of
said State in accordance with said act '' has been stated in the office of
the Third Auditor and reported to this [Second Comptroller's] office for
settlement," and he inquires, " whether the records of your [First Com-
troller's] office show any reason why the amount stated should not be
The question thus presented is, whether the amount appropriated by
the act of March 3, 1883, shall be paid to the State of Georgia, or be
credited on the sum charged against said State for direct taxes?
Hon. W. 0. Tuggle argued the question orally, for the State of Georgia,
before the First Comptroller, and submitted elaborate and able briefs, as
" 1. The act approved March 3, 1883, ' to refund to the State of
Georgia certain money expended by said State, for the common defense
in 1777' is imperative, mandatory. *The Secretary of the Treasury
be and he is hereby authorized and required to pay to the State of Geor-
^' 2. It is alleged that said sum should not be paid to Georgia, but
credited on the account for direct taxes, under the act of August 5, 1861,
because First Comptroller Tayler, in May, 1868, certified that there
was a balance due by Georgia to the United States of $584,367.33. and
by section 191 Revised Statutes, his action is final. The reply to
this is :
^< 1. The First Comptroller did not mean by this certificate to charge
said sum against the State as 2^ political hody^ but simply used this form
of stating the account in a geographical sense, in order to save the
trouble of making an account against each lot of ground situated in
Georgia. The bmks of the direct tax commissioners for Georgia and
their accounts were before him, showing certain collections made in
Georgia from land owners in Savannah, Chatham County, Bibb County,
Richmond County, and Clarke County, amounting to $92,623.30, which
amount was reduced by expenses to $71,407.75. This sum was credited
to the State of Georgia on said account Mr. Tayler correctly under-
stood the law, for on September 24, 1870, he used this language, < Each
tract and lot of land was to be charged with its proportion of the amount
originally assessed.' He meant the same party in the debit and credit,
and the credit resulted from payments by land owners.
'' 2. Mr. Tayler had no jurisdiction over the subject-matter of said
Digitized by VjOOQIC
Right to Apply Appropriations bjf way of Set-Off— Georgia Case. 357
account, to wit, charging the State of Georgia, and hence his acts were
null and void. Definition of jurisdiction, Bouvier, ^Power over the
subject-matter given by law,' Wells on Jurisdiction, 1.
" The act of August 5, 1861, was superseded by the act of June 7,
18G2, as to the Southern States, and Mr. Tayler certified a balance and
stated an account against Georgia as being due under 8th section, act
August 5, 1861. 14 Wallace, 563; 9 Irf., 326, See 1st sec, act June
7, 1862 ; Comm'r Rollins Report, 1867; Ex, Doc. 24, 1st sess. 46th Con-
gress, p. 17. The act of June 7, 1862, did not apportion the tax among
the States, but charged the tax directly upon ^all the lands and lots of
ground' situated in the States, See Secretary McGullough's letter to
Governor of Texa«. [See United States v. Taylor, 104 U. S., 218.]
" 3. The relation or debtor and creditor never existed between the
United States under said acts, and hence there was no authority given
by law to make said charge against the State of Georgia.
'* In April, 1879, First Comptroller Porter decided in a similar case
that $72,296.94 should be paid to Georgia, and should not be credited
on said account, nor set off against the amount of direct tax under act
of August 5, 1861, and acts amendatory thereto, and the present Oomp-
troller in the Kansas case said: 'That conclusion was correct in law,
• • • under the Constitution Congress cannot levy, or enforce the
collection of a tax, or assessment on a corporate State which has not ,
assumed it,' Report First Comptroller, June 30, 1881, p. 17. Also
Ex. Doc. 24, Ist sess. 46th Congress.
'^ 4. The Fifth Auditor cannot audit and settle an account, unless au-
thority has been given by law. Rev. Stat,, 277, Stat, at Large, Vol. 2,
536. The First Comptroller can only direct such accounts to be audited
and settled as are authorized by law. (Same.)
*'* Statutory authority is to be strictly pursued.^ Wells on Jurisdic-
tion, 70, 55, 63. Also on Jurisdiction, 1 Peters 36, 340 ; 81 Pa. St., 349 ;
Smith's Leading Gases (6th Am. Ed.), 1011, 1024.
"5. Present Sirst Comptroller has authority to recall the certificate
and re-examine the settlement, to correct errors of law or fact. Op.
Atty8.-Genl., vol. 15, p. 197. The credit of $71,407.75 is still pending,
and no Comptroller has ever certified to said credit.
"6. There was no legal State government in Georgia, no corporate
State when the First Comptroller certified said balance to be due by
the State of Georgiq,. The political branch of the Government of the
United States decided, that Georgia aa a State, had no civil existence,
no legal State government, and Georgia was a part of the 3d military
district and under military rule in May, 1868, and so continued July 21,
1868. Shorter v. Cobb, 39 Georgia, 285: Foster v. Daniels, 39 Ga., 40.
llardeman v . Downer, Id. 441; 1 Woods, Marsh v. Burrough, Stat, at
Large, vol. 15, p. 73; also vol. 15, p. 14; vol. 14, p. 428. Heuce his act
charging the State of Georgia was a nullity.
'< Made part of 3d military district March 11. 1867, McPherson's Rec,
p. 200. Military government ends July 28, 1868, Id., 422, 428. Final
restoration July 15, 1870, Id., 609, 615.
'' Status of a State is o, political question. Luther v. Borden, 7 How.,
" See views of Hon. William Lawrence, Cong. Globe, part 1, 2d sess.
41st Cong., p. 430 and 431 on 'admission of Virginia.'
"Congress decided that there was no legal State government 'no
corporate State,' from March 2, 1867.
"Also views of Hon. William Lawrence, Cong. Globe, part 7 Appen-
dix, 2d sess., 41st Cong., p. 34 and 35.
Digitized by VjOOQIC
368 First Comptroller's Office^ Treasury Bepartmewt.
<^ 7. This sum, $35,555.42, due Georgia by act March 3, 1883, cannot
be set off and credited on said direct tax account.
" 1. Taxes are not subject of set off. 3 Metcalfe, 629.
" 2. There must be a subsisting debt, a debt now due by Georgia to the
■ United States in order to set off. There is no debt due by Georgia.
The Constitution does not authorize a tax against a corporate State.
(See Porter^s decision in Georgia case, 1879, and Lawrence's decision in
Kansas case.) Congress cannot create such a debt against a corpo-
rate State. (See Kansas case.) *The debt is due not from a State as a
body politic' (Internal Rev. Div., April 26, 1867; Sec'y McCuUough
in Texas case.)
" The present Comptroller must believe there is a debt due by Georgia
before he can set off. Due ivow^ under laic. No entry, no certificate of
a former Comptroller can crtate a debt.
** 3. To set off would be to collect the tax to that extent from G^rgia.
Congress cannot collect the tax from a corporate State. (Kansas case.)
Can the Comptroller collect the direct tax from a corporate State which
never assumed it? Tlie tax is a lien on the land in Georgia, and that
lien must be enforced, in order to collect said tax. It cannot be consti-
tutionally collected by set off against the corporate State of Georgia.
J. T. Power J for the State of Georgia, also made an able oral argu-
ment and submitted a brief, as follows:
" I. Until the State of Georgia would elect to assume the direct tax
levied and apportioned under the act of August 5, 1861, there could be
no legal liability, and hence an account could have no wider applica-
tion than the act on which it is based ; and to the extent that that
authority is exceeded, it is void. (Johnson v. United States, 5 Mass.,
425; United States v. City Bank, 6 McLean, 130.) But the account as
it stands has a meaniug and application consistent with law and prac-
tice, as a statistical or revenue account, required by section 239 R. S.,
in which the name of the State is used in a geographical sense as a
title or caption ; and as such is, under the uniform practice of the De-
partment in settling revenue accounts, entitled to a credit for the whole
balance as uncollected taxes. (See Internal Revenue Collectors' ac-
counts, in which uncollected taxes are credited.)
"As a statistical or revenue account it is clearly distinguishable from
an account which the accounting officers are authorized to state between
the United States and individuals as either debtor or creditor, and
which has the force and effect of a legal conclusion, binding on the
executive department. (Sections 191 and 236 R. S.)
"To determine the extent of the liability or the person or fund charged,
it is competent for the Comptroller at any time to look into it; or oth-
erwise it would be superior to a judgment of a court. (Report Commr.
Int. Rev., May 3, 1880, p. 11 ; Opinion of Comp. Porter in the Georgia
" II, Whatever liability this account may on its face show against
the State of Georgia, under the act of 1861, that liability is taken away
or denied by the act of 1862, which being subsequent legislation oper-
ates as a repeal of so much of the former a(*.t as is inconsistent there-
with. An account can have no greater power than it-s legislative war-
rant. There is a positive repugnance between the acts of 1861 and 1862,
which supports a repeal by implication. (Marlot v. Lawrence, 1 Blatchf ,
608; West v. Pine, 4 Wash , 691 ; Milne v. Huber, 3 McLean, 212.)
" III. Congress having exercised its power under the Constitution in
levying and apportioning this tax, cannot discriminate for or against
individual States by supplementary legislation; neither can the same
uiqiiizea Dv ^^iv^v^'X.'-^-
Bight to Apply Appropriations by way of Set-Off^-Oeorgia Case. 359
result be effected indirectly, by an account stated either properly or
improperly. (Section 8, Art<. 1, and section 9, Art. 1, clause 3, Const.)
<^ lY. This case is clearly distinguished from the Kansas case in which
it was held that the State had assumed the tax, if not directly, by legis-
lative concurrence. (Opinion of Comptroller Lawrence, Kansas case ;
EeportCommr. Int. Rev., 1868, Finance Report, 1868, p. 482.)
"V, As the State would not be entitled to be subrogated to the rights
4ind remedies of the United States, no set-off can be niade for want of
mutuality of account. (Robinson v. Wilson, 2 Maddox, 437 ; Hulber «.
Pacific Ins. Co., 2 Sumner, 471.)
'^The balance of this account represents uncollected taxes, and being a
debt payable in futuro cannot be set off against a present demand.
<Scott V, Jones, 1 Broc. Marsh., 244 ; Dealet?. Krofft, 4 Cranch, 448.)
'^As the State cannot be an original debtor by assumption of the debt,
no liability under another legal relation, as surety, could be sustaineu
with the right of set off so long as there is no default of the original
debtors. (Matter of Babcock, 3 Story, C. Ct., 393.)
<< y I. This is an account under which there is nothing due, being a tax
levied but not demanded ; the statutory remedy has not been pursued;
its collection is suspended by the act of the creditor, and is therefore
not such a debt as can be set off. (9 Op. Att.-Gen., 197.)
<< The collection of this tax was virtually suspended until further
legislation by Congress, by the act of March 26, 1867, under which the
persons charged with its collection were discharged." (Kept. Commr,
Int. Rev., May 3, 1880, p. 9.)
Hon. James A, Oreen also submitted a brief for the State.
Opinion by William Lawrence, First Comptroller:
The State of Georgia must be paid the sum appropriated in its favor
by the act of March 3, 1883, if—
First. The accounting officers of the Treasury Department have no
authority to withhold payment of such sum, and to apply it by way of
set-off as a credit on the amount certified by the First Comptroller,
May 29,' 1868, as due from the State to the United States, or.
Second. If the action of the Comptroller in certifying said balance
as due should now for some reason be disregarded.
These propositions will be considered in the order stated.
THE FIRST principal INQUIRY IS AS TO THE RIGHT OF SET-OFF.
Assuming that the State of Georgia is indebted to the United States,
(1) the authority of the accounting officers of the Treasury Department
to make the set-off in question is entiiely clear, unless (2) it has been
changed by statute.
1. The right to make the set-off on general principles is well settled.
The Supreme Court of the United States has said of the right of the
-Government to make a set-off in adjusting accounts, that ^'it is but the
exercise of the common right which belongs to every creditor, to apply
tbe unappropriated moneys of his debtor in his hands in extinguish-
ment of the debts due to him." Gratiot v. United States, 15 Pet., 370;
McKnight v. United States, 98 U. S., 186; United States v. Union Pacific
Railroad Co., 91 U. S., 79. In Bonnafon's case (14 Court of Claims, 484),
360 Mrst doinptrolW^s Office^ Tre€k9ury Department.
tbe 9yllab%i8 states that ^^Dotwithstanding the absence of statutory au-
thority, it was legal and proper for the accounting officers, in the course
of settling ordinary accounts in the Treasury, to set off a debt due &om
the claimant against one due from the Government." In Taggart's
case (17 Court Claims, 322), the syllabus says that in such case '^ the
accounting officers are required by law to set off the one indebtedness against
tJie other J and certify only the balance." The power to make the set-off
arises from the authority to settle and adjust accounts (Bev. Stat., 236),
and is in^posed on the Comptrollers by the duty to " certify the bal-
ances" — ^that is, the amounts remaining ^ne. (Bev. Stat., 269, 273;
Herndon's case, 1 Lawrence, Compt. Dec., 2d ed., 46 ; Bender's case,
Id.j 341; Star Boute case, 2d Zd., 446; Elgee's case, Id., 459; Kansas
case. Id,, 301 ; School Fund case, Id., 592 n.) The opinion of the Attor-
ney-General of July 21, 1858 (9 Op., 197), as to set-off and under exist-
ing statutes has long since ceased to be law. See opinion of November
If it were necessary, as it is not, the inquiry might be made whether
the spirit and purpose of section 1766 of the Bevised Statutes do not
give equal authority.
The set-off, when thus made, cannot be changed by the Secretary of
the Treasury, or by any authority except Congress or the courts (Rev.
Stat., 191). The Secretary is not charged with any duty in such ease
under the act of March 3, 1875 (18 Stat., 481). But the right of the
United States to make the set-off is so carefully guarded that if the
accounting officers refuse or neglect to make it, the Secretary is, perhaps,
by the act of March 3, 1875 (18 Stat., 481), required to make it, and, in
certain cases therein prescribed, to cause legal proceedings to be com-
menced to determine the rights of parties interested. (Ochiltriee's case,
4 Lawrence, Comp. Dec., 102.) But it is not intended now to decide any
question as to the set-off except that which arises in this case. (Bonna-
fon's case, 14 Court CI., 484.)
2. This right has not been changed by statute.
It is urged that the act of March 3, 1883 (22 Stats., 485), imperatively
requires the Secretewy of the Treasury "to pay to the State of C^eorgia"^
the sum in question, and that this excludes any authority to make a
set off. This would be true if there were no other law, or usage having
the force of law, affecting the subject. But this act is to be considered
in connection with, and as affected by, other statutes. All statutes
affecting the same subject-matter are, in pari materia, to be construed
together, and effect must be given to all. (United States r. Taylor, 104
U. S., 216).
The act of March 3, 1883 (22 Stats., 485), est^iblishes the reUtion of
debtor and ore<iitor between the United States and the State of Georgia,
and this becomes subject to the power of accounting officers, as given
by section 236 of the Bevised Statutes, under which set-offs are made.
When one person executes his promissory note to another, there is an
imperative promise to pay, but this is subject to the law affecting it
Digitized by VjOOQIC
r • '
Right to Apply Appropriations ly way of Set- Off— Georgia Case. 30r
which gives a right of set-off. The duty of accounting ofiBcers to make
the set-off in this case is clear beyond all doubt^ unless the action of
the First Comptroller in certifying a balance as. due from the State of
Georgia to the United States on the 29th of May, 1868, was absolutely
void, or has been in some form reversed or rendered inoperative. Th<e
right of set-oft' has not been changed by statute.
THE SECOND OENEBAL HEAD OF INQUIRY IS AS TO THE EFFECT
OF THE ACTION OF THE FIBST COMPTROLLER ON THE 2dTH OF MAY^
1868, IN CERTIFYING A BALANCE DUE FROM THE STATE OF aEORGIA
TO THE UNITED STATES.
This action cannot be disregarded by the First Comptroller or other
executive officers now in office, unless —
I. Such action was unauthorized or void, or,
II. Is not conclusive on the officers of the Treasury Department now^
III. May now be reversed for error of law or fact, or,
lY. Has been in some foim rendered inoperative.
These points of inquiry will be considered in the order stated.
I. The action referred to of the First Comptroller is not void.
There is a wide distinction between that which is (1) irregular or er-
roneous in law or fact, and (2) that which is void. If the Comptroller
had (a) no jurisdiction or authority to certify a balance against a cor-
I>orate State, or if, (6) there was no such corporate State as Georgia on
the 29th of May, 1868, his act was entirely void.
These subjects will now be considered, and it is regarded as clear^
that the propositions hereafter stated are correct.
1. The action of the Comptroller, even if not such as should have been
taken, is, nevertheless, valid, so far as the Executive Department and
officers of the Government are concerned.
(1) That he erred in deciding, as a question of law, that the State of
Georgia was indebted to the United States for direct taxes would seem
probable, and especially so, if for any purpose except for set-off in such
case as this. (Kansas case, 2 Lawrence, Compt. Dec, 2d ed., 310;
Senate Ex. Doc., No. 24, First session, Forty-sixth Congress.) But
mere irregularity op error, in the decision of any question of law or fact,