John McLean

“ The question is not now, whether a balance can be shown, but merely whether the evidence is legal; a cash balance is prima facie evidence of a debt. Every term of office is a separate responsibility, as to principal and sureties. No matter how the accounts are kept; the law of 1820 cuts through and severs them. Act of 1840, commonly called the Sub-treasury Act, declares the appropriation of public money a felony, and such an appropriation to pay an old debt is the basis of this defence. In 9 Wheat. the bond was given during an executive appointment. ”

“ An agent who keeps the money in bank is presumed to be using it for his own benefit. 11 Peters, 61. A debtor paying a debt out of his own money has a right to apply it, but not paying it out of another man's money. He held the money of the government as a mere bailiff, and had no right to do any thing with it but hand it over.
Mr. Justice McLEAN delivered the opinion of the court.
This action was commenced in the Circuit Court for the southern district of New York, against the sureties of Swartwout, late collector of the customs at that city. ”

“ If neither party make the application, courts will consult the interests of creditor as well as debtor, because they will apply it to a debt not bearing interest or not secured, rather than to one bearing interest or secured. In a running account the oldest credits are applied to the oldest debts, and so on, in order of time. ”

“ And in this view it would be as logical and just to hold that the sureties are liable for defalcations after the expiration of the term as for those which occurred before its commencement. There is no such condition in the instrument. It recites the new appointment, and, by consequence, limits the obligation to the term of office fixed by law.
The rule as to the appropriation of payments by debtor or creditor in the ordinary transactions of business, is earnestly relied on as applicable to the present case. And all the leading authorities on this subject are referred to. ”

“ In adjusting this account, the auditor began with charging Swartwout with the balance as it stood against him in the preceding account, then charged him with all the moneys which he had received in that quarter. Having given him credit for various sums paid into the Treasury, and paid to individuals under proper authority, he strikes a balance in favour of the United States, which is stated to consist of bonds uncollected, not due, bonds in suit, general bonds for spirits, wines, &c., and cash on hand. ”

“ As to the application of payments.
1. The act of 3d March, 1797, 1 Story, 464, declares that a transcript of the account shall be evidence. It is objected that this is not such, because the account is re-stated. But if an account has been once stated, why not state it again? Accounting officers are not judges. Need not re-state, unless some error. Time does not discharge sureties. United States v. Kirkpatrick, 9 Wheat. Government is not estopped if new evidence be discovered. ”

“ In answer to the question, 'whether the payments made by the collector subsequently to the 28th of March, 1834, should be appropriated in discharge of his indebtment on that day,' we say, that so far as such payments were made of moneys accruing and received in the subsequent term, they should not be so applied. ”

“ Payments in this case were in fact and in law applied to extinguishment of former balances. Law required accounts to be settled quarterly. Every quarter Swartwout made the application, and it must bind him. So the government officers, also, by bringing down fresh balances. 3 E ast, 484; 9 Peters, 12; 1 Mason, 323; 14 East, 239; 8 Wend. 403.
Suppose a new person had been appointed who had debited himself with the balance, and the government had assented to it; would not this have discharged principal and surety? and how is it changed if the same man be reappointed? ”

“ The quarterly accounts are settlements, and bind the parties. Act of March 3, 1817, makes it the duty of the government to settle them. Onus is on the government. 1 McLean's Rep. 493; 9 Cranch, 230, 237. ”