United States v. Kauhoe

2 D. Haw. 272
District Court, D. Hawaii·Decided March 23, 1905·Published

Opinion

Dole, J.

This is an action against the sureties on the bond of Levi P. Kaulioe, late postmaster at Kapaa, Island of ICauai, in this Territory. The complaint alleges, in substance, the appointment of the postmaster and of Frank J. Hare as Post-Office Inspector of the Post-Office Department of the United States; and that in the matters related in the complaint, he was acting on behalf of the United States and not for his own benefit; that these defendants were the sureties upon the official bond of such postmaster, and that on June 15th, 1901, and within the preceding three years, said postmaster embezzled eighteen hundred and ninety-one ($1891.00) dollars of the money-order funds of the United States coming into his possession as such postmaster; that on said 15th day of June,'said inspector demanded of the postmaster and his sureties upon his [273] bond, the full amount of such embezzlement, whereupon the said sureties, these defendants, requested of the inspector an extension of time for ninety days within which to pay the United States the money embezzled as aforesaid, and agreed with the inspector that if such extension of time was given, they would execute and deliver to the inspector a promissory note, which is set out at length in the complaint, and would pay the same when it became due; and that the inspector consented to give such time and thereupon the defendants executed and delivered to him said promissory note for the said amount, payable in ninety days, in consideration of such extension and of the United States refraining from proceeding against them for such period, and in consideration of the obligation of the defendants to reimburse the United States for “any losses sustained by the said United States through the acts of the said “Levi P. Kauhoe as such postmaster,” such note being for the use and benefit of the United States alone; and that the plaintiff was, and is now, the legal holder and owner of the said note and that the defendants have had the benefit of the said extension of ninety days, but that they, the defendants, have failed and refused to pay the same upon its coming due, whereby the same is now due with legal interest .from the 15th day of September, 1904.-; with prayer for process and for judgment in the sum of eighteen hundred and ninety-one ($1891.00) dollars, and legal interest and costs.

Each of the defendants filed a demurrer to the complaint, which demurrers were similar so that it is sufficient to refer to only one of them. The first ground of the demurrer is “That the United States of America is not a proper “party plaintiff herein, and that there is no capacity in the “United States of America upon the facts alleged in said complaint, to have or maintain a suit against this defendant.”

This ground was elaborated in argument at the hearing, counsel for defendants contending that only the inspector was authorized to sue for the collection of this note, on the ground that the note was made payable to him and that the reference [274] to his official capacity in the note was simply a matter of identification. Although the description in the note in question of the official status of the Post-Office Inspector is somewhat vague, he being merely described as “P. O. Inspector,” yet the statement of the note that the promise to pay the money in question “on account shortage in money order funds at Kapaa Post-Office,” together with the allegation of the petition to the effect that the note is in the plaintiffs possession, are, in addition to the description, sufficient evidence of the beneficial interest of the plaintiff in it. 2 Daniels’ Negotiable Instruments, Sec. 1187.

“But supposing the bill to be the property of the United States; still it is insisted, that the action should have been in the name of hlr. Tucker, their trustee, and not in the name of the cestui que trust; and much was said to show the hardship of unnecessarily exposing a party to a suit in the name of the United States, who paid no costs, and sued under several other advantages which were not common to other plaintiffs. No case has been cited to show that where a bill is endorsed to the known agent of another,- for the use of the principal, as is the necessary intendment here, that an action may not be maintained in the name of such principal; but were that the case, I should say that the government ought to form an exception to the rule, a.nd that au action might be brought in every case in the name of the United States, where it appeared on the face of the instrument, that they alone were interested in the subject matter of the controversy. This certainly is not carrying prerogative (if it deserve that name) too far. There is a fitness, that the public by its own officers, should conduct all actions in which they are interested; and the inconveniences to which individuals may be exposed in this way are but light, when weighed with those which would result from their agents always bringing actions in their own names. They-might employ whom they pleased, and by negligence or otherwise,-the rights of the public be jeopardized. Set-offs too might be interposed [275] against the individual who was plaintiff, unless the court, to prevent them, would take notice of the beneficial interest of the public; and if they could do this to prevent a set-off, which courts of law have done, why not do it at once, by permitting an action to be instituted in the name of the United States ?” United States v. Barker, 24 Fed. Cas. 987, 988 (No. 14,517).

“Where bills or notes are made payable to. an officer or agent of the United States or other government, and it appears from the face of the instruments, and from evidence aliunde, that they are for the benefit of such government, the action may be brought in its name.” 2 Parsons, Notes & Bills, 451-2; Dugan v. United States, 16 U. S. 172, 180, 181.

I find, therefore, that the action is properly brought in the-name of the United States as plaintiff.

The second and third grounds of the demurrer will be considered together. They are as follows:

• “2. That said complaint fails to show any legal or valid', “consideration moving or having moved from said plaintiff, or“from any person or persons acting for or on behalf of said’, “plaintiff in the premises, for the execution and delivery by “this defendant of the promissory note in said complaint set; “forth.”

Free access — add to your briefcase to read the full text and ask questions with AI

United States v. Kauhoe, 2 D. Haw. 272 (D. Haw. 1905).

2 D. Haw. 272 (United States v. Kauhoe) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Warder v. Tucker
7 Mass. 449 (Massachusetts Supreme Judicial Court, 1811)
Rossiter v. Marsh
4 Conn. 196 (Supreme Court of Connecticut, 1822)
Dugan v. United States
16 U.S. 172 (Supreme Court, 1818)
United States v. Barker
24 F. Cas. 987 (U.S. Circuit Court for New York, 1816)