any advantage therefrom, yet it is not bound to do so. When the Government has no claim against an original contractor, no loss can accrue if accounting officers give effect to such contracts. Good faith is essential to the validity of a subcontract. If a subcontract be made, giving in terms to the subcontractor the right to the whole compensation provided for in the original contract, yet, in fact, with an agreement or understanding aliunde that the original contractor shall receive a portion of the compensation, this will be so far an attempted fraud at least, against the United States, as to subject it to the operation of the act of May 4, 1882, and authorize the accounting officers to retain the whole contract price of service to satisfy damages arising by defaults of the orig inal contractor under other contracts.

Pending the consideration of this appeal, there were filed with the First Comptroller papers dated January 19, 1883, to wit: affidavit of A. E. Boone, that the subcontract was "executed by him at the time and date it purports on its face to have been executed;" certificate of the Second Assistant Postmaster General, "that mail service was performed on route No. 30107 according to contract during the quarter ended September 30, 1882;" and affidavit of Chase Andrews, that "he has [considered] and does consider himself responsible for the mail service performed on route No. 30107 from July 1, 1882, to the end of the contract term and that he has caused the service on said

has paid his

route to be performed since July 1, 1882, and carrier for said service." This evidence with some other relating to the circular regulations of October 15, 1880, was not before the Auditor when he declined to certify a balance in favor of the claimant. It is proper that he should have an opportunity to consider all this and other evidence, if any be presented. The action of the Auditor, in refusing to certify a balance due the claimant for service prior to the date of the subcontract, September 15, 1882, is affirmed. The right of the claimant to compensation for service since September 15, 1882, depends on the questions of fact (which are not distinctly shown), when he executed the subcontract, and of his performance of service under it, and on any other evidence affecting its validity.

In order that the Auditor may re-examine the subject, upon the principles of law stated, and with the additional evidence mentioned, his action thus far as to all matters relating to compensation since September 15, 1882, is reversed. The original contractor and subcontractor will be notified of the action of this Office, so that they may be again heard by the Auditor on all questions remaining to be disposed of.

TREASURY DEPARTMENT,

First Comptroller's Office, January 19, 1883.

CONSTRUCTION OF SECTION 3477 OF THE REVISED STATUTES, IN REGARD TO ASSIGNMENTS OF CLAIMS AGAINST THE UNITED STATES, AND IN REGARD TO POWERS OF ATTORNEY, ORDERS, AND OTHER AUTHORITIES FOR RECEIVING PAYMENT OF SUCH CLAIMS.-CLAIMSASSIGNMENT CASE.*

1. Section 3477 of the Revised Statutes is applicable to accounts for definite sums of money due upon contract or by operation of law.

2. This section is equally peremptory in requiring that the power of attorney therein mentioned must be executed "after the allowance of the claim"; and it seems reasonable to conclude from the whole act that the allowance of the claim and the ascertainment of the amount due is the essential demand, and that the recital of the warrant is required, by way of proof that the claim has been allowed by the accounting officers.

Besides this, the statute makes a valid power impossible in a case when no warraut is to be drawn.

3. The reference in United States v. Gillis (5 Otto 407) to certain claims which are excepted from the operation of the statute because liquidated by being audited, shows a clear recognition of the principle that the express exception, in the statute, of claims that were thus liquidated, negatives any inference that other than audited claims can be within that exception because of the degree of certainty that may characterize them; and in Spofford v. Kirk (7 Otto 484) the court evidently desired it to be understood that the nature of an unaudited claim, and the question whether it was disputed or undisputed, certain or uncertain in amount, were in no way material, and that the statute was equally operative against the assignment of an unaudited debt, no matter how fixed in amount as against the assignment of any claim, "however arising, or whatever its nature.” 4. This ruling is not new. The sufficiency of such power of attorney was questioned (in view of the opinion of the court in United States r. Gillis) by the Second Auditor, in a letter addressed by him to the Second Comptroller, July 11, 1878, and as early as November, 1878, the rule that such powers were not sufficient authority for receiving money due for supplies under contract, or on other accounts, was enforced by the Second Auditor with the approval of the Second Comptroller; and after the rule had been enforced a few weeks all indications of serious inconvenience disappeared.

5. Cases in which the attorney makes no claim as an assignee cannot be distinguished by an examination of the instrument containing the power from those cases in which the attorney claims in his own right a part or the whole of the balance; nor does the statute make the sufficiency of the power of attorney as an authority for receiving money depend upon that question.

6. A naked power is as clearly within the words of the statute as one that attempts to convey an interest.

7. By General Orders No. 116 of the General of the Army, made September 25, 1882, by direction of the Secretary of War, paragraph 1664 of the Army Regulations is amended to read: "1664. An assignment or a power of attorney executed before the account or voucher to which it pertains has been audited by the accounting officers of the Treasury is not sufficient to authorize payment to an assignee or attorney. Disbursing officers will therefore make payments only to, and take receipt of, the party or parties to whom the money is due from the United States. *NOTE BY FIRST COMPTROLLER.-The questions so ably discussed in the foregoing case were also considered in "Claims Assignment case," 3 Lawrence, Compt. Dec. 13.

When an account is presented by an individual who is not known to the disbursing officer, the latter will require such evidence of identity as will secure the Government, as well as himself against loss.”

TREASURY DEPARTMENT,

SECOND COMPTROLLER'S OFFICE,

Washington, D. C., May 22, 1882.

SIR Referring to your inquiry in regard to the right to make payment to attorneys in cases where a general power of attorney is executed by the claimant before the allowance of the claim, I respectfully present the following considerations:

Shortly after the passage of the act of February 26, 1853 (10 Stat., 170), the position was taken that the act was not applicable to accounts for definite sums of money due upon contract or by operation of law; * but since the decisions of the United States Supreme Court in United States vs. Gillis and in Spofford vs. Kirk, I think it is not attempted to maintain that position. It has recently been proposed that there are claims that are not required to be adjusted by the accounting officers which may be paid to one holding a general power of attorney, and it is argued that a quartermaster or paymaster may pay to attorneys, in cases when such course could not be taken if the same account should be allowed by the accounting officers.

The argument in support of this position rests solely on a supposition or assumption that claims or debts paid by a disbursing officer are not claims or debts that are required to be audited by the accounting officers, a supposition that is without foundation, because every claim that can be paid by a quartermaster must be audited by the accounting officers, either before or after payment is made. If the payment is illegally made, or made to a wrong party or upon insufficient authority, it becomes chargeable by the accounting officers, both to the quarter

*NOTE BY THE FIRST COMPTROLLER. -In Billings v. O'Brien (45 Howard, N. Y., Practice Reports, 392), decided in 1873, it was held that "the purchase by payment in advance, of the future earnings of the salaries of the officers or employés of the United States Government is void as against public policy," and that "it is also in direct violation of the act of Congress of February 26, 1853." (Rev. Stat., 3477.) It would not seem probable that this statute was intended to destroy a wise rule of public policy. It contains no language indicating such a purpose.

If salaries could be assigned, the effect in practice would be ruinous. They would often be purchased at heavy discounts, and the whole land would swarm with men speculating on the necessities of officers.

In Trist v. Child (21 Wallace, 441), it appeared that there was an assignment of a definite part of a claim against the United States, the amount of which claim was fixed absolutely by an act of Congress. Yet the court, referring to that claim and the act of February 26, 1853 (Rev. Stat., 3477), declared that it was "fatally adverse to the claim of a lien" created by such assignment. It thus seems that under the statute an assignment is void even though the amount of the claim is absolutely fixed, definite, and not controverted. The principles decided in the text may now be regarded as the law recognized by the Comptrollers. The opinion of the Solicitor-General of June 29, 1883, discusses the same subject with great ability.

master and the party wrongly paid, and if the amount can be and is recovered from the party wrongly paid, the quartermaster will then be relieved from the charge.

The argument in support of this position ignores the fact that claims paid by a disbursing officer must be passed upon by the accounting officers; that the action of the disbursing officer is not final and does not partake of the nature of a decision, and that it is merely a payment made at the risk of the disbursing officer, who pays with a knowledge that his act must be approved or disapproved by the accounting officers. Stress is laid on the words of section 3477, Revised Statutes, “after the issuing of a warrant," and on the injunction of the statute that the power of attorney "must recite the warrant," as if such specific mention of the warrant affords ground for concluding that the statute is not applicable to any case where a subsequent formal warrant on the Treasury proper is not required.

But issuing the warrant is not the only prerequisite. The statute is equally peremptory in requiring that the power must be executed "after the allowance of the claim"; and it seems reasonable to conclude from the whole act that the allowance of the claim and the ascertainment of the amount due is the essential demand, and that the recital of the warrant is required, by way of proof that the claim has been allowed by the accounting officers.

Besides this, the statute makes a valid power impossible in a case when no warrant is to be drawn. The requirement of the statute, that assignments and powers of attorney shall be void unless executed "after the allowance of such claim," is a strong indication that disbursing officers are not to pay upon powers of attorney. The Treasury needs protection against frauds as much when the claim is presented to a disbursing officer as when it is presented to the accounting officers.

Many arguments are on file in this office attempting to prove that the statute does not include a claim which is certain in amount, but I am not aware that the position was ever before taken that a power of attorney may be good when the claim is presented to a disbursing officer which would be void if the claim was being audited by the accounting officers.

There is a disposition to treat rulings recently made on this point as a new departure from settled practice, and there is a tendency to treat the question in cases where the attorney claims no interest adverse to his client as one of minor importance. But the ruling is not new, and cases in which the attorney makes no claim as an assignee cannot be distinguished by an examination of the instrument containing the power from those cases in which the attorney claims in his own right a part or the whole of the balance; nor does the statute make the sufficiency of the power of attorney as an authority for receiving money depend upon that question. The papers filed in cases in which the attorney claims to have acquired an interest may be precisely similar

to the papers presented by a disinterested attorney, and in one of the cases of the former class the attorney may rely on an implied agreement for a reasonable percentage as his fee; in another, on an express agreement in writing (not filed or presented) for such reasonable fee; in a third, on a written agreement for a specified percentage as his fee; and in a fourth case a written instrument not presented may be relied on and intended as a transfer of the whole claim to the attorney for value. (Trist v. Child, 21 Wall., 441.)

The case presented by a disinterested attorney is no less within the restriction of the statute than those above referred to, and if payment can be made on the naked power in such a case, it would seem that the whole object of the statute can be thwarted by suppressing so much of the writings as relates to an assignment.

In a case where the attorney claims to be owner of the debt or of a percentage thereon, adverse to his client, I do not think any one at all conversant with the subject would attempt to argue in favor of his right to receive the money by virtue of his alleged power of attorney; yet a naked power is as clearly within the words of the statute as one that attempts to convey an interest. I think also that the danger of inconvenience resulting from an adherence to the construction given to the statute by the Supreme Court is not as great as seems to be apprehended. The sufficiency of such power of attorney was questioned (in view of the opinion of the court in United States vs. Gillis) by the Second Auditor, in a letter addressed by him to this office, July 11, 1878, and as early as November, 1878, the rule that such powers were not sufficient authority for receiving money due for supplies under contract or on other accounts was enforced by the Second Auditor with the approval of this office; and after the rule had been enforced a few weeks. all indications of serious inconvenience disappeared.

The following notes of rulings of this office, made in relation to accounts settled by the Third Auditor, will also show that the question is not new:

After the decision of the Supreme Court in United States vs. Gillis, and before being advised of the ruling in Spofford vs. Kirk, this office, having under consideration a power of attorney executed by Chauncey D. Spaids, contractor for dredging in Occoquan River, Virginia, appointing E. C. Ingersoll (one of his bondsmen) his attorney, to receive such funds as may become due for work done, held that, in view of the uncertain condition of the adjudications and rulings on the question whether a power of attorney to collect an unaudited debt against the United States is valid, the Comptroller could not be justified in recommending that payment be made through the agent when it might be made directly to the principal;" that (in view of the indications contained in the correspondence submitted that the power was intended to convey an interest) "the restrictions of section 3737 of the Revised Statutes are such as to prevent the attorney from acquiring any rights