Michigan v. Phœnix Bank — 17 N.Y. Super. Ct. 363

Majority

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The People of the State of Michigan, Plaintiffs and Respondents, v. The Phœnix Bank of the City of New York, Defendants and Appellants.

Headnote

1 The decision of a legally constituted Board of State Auditors, upon a claim preferred by an individual against such State, made under the authority of the Constitution and laws of the State by which such board is created, is alike conclusive upon the State and such claimant, where such Constitution and laws confer on such board power and authority to examine and adjust all claims of the character of that so preferred; and to examine the claimants and witness upon oath; to issue subpoenas to compel the attendance of witnesses before them and to enforce obedience to such subpoena by attachment; to set off any legal or equitable demand of the State against such claimant; to adjourn from time to time; and require such board to keep a record of its proceedings and decide upon competent testimony.

2. After a claim against such State, within the jurisdiction of such board to examine and adjust, has been heard before such board according to the laws prescribing its powers and duties; and has been determined in favor of such claimant, and has been paid by an officer of such State, (acting in its behalf,) as required by law, it cannot be recovered back, where no fraud has been practised or intended by such claimant, by the means which he employed to assert and establish his claim before such board; merely upon the grounds, that upon the merits nothing was due from the State to the claimant; and that the decision of such board was made in ignorance of facts which, if proved, would have established that nothing was due.

3. The decisions of such a board upon matters within its jurisdiction, in cases free from fraud, are conclusive; unless an appeal is provided for, or other revision, by some appellate or supervisory tribunal, is prescribed by law.

A A State is competent to consent to be sued, and may grant such consent . upon such terms as it may think just.

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5. A State which, by the authority of its Constitution, creates by statute a board of its officers of State, with the powers before stated, and by such statute enacts that, when any claim shall be allowed by such board, (such claim being within its jurisdiction,) and the amount due shall have been settled by such board, the claimant “ shall be entitled to a warrant drawn by the Auditor-General upon the State Treasurer therefor forthwith," thereby consents to submit to the investigation and decision of claims against her, before such tribunal; upon the terms prescribed by such Constitution and laws, and can claim no exemption from the rule which, in like cases, is applicable to natural persons.

6. Although the laws of such State make it the duty of the Attorney-General to appear in behalf of the State before such board, when they shall sit to audit claims against the State; and to that end require the board to give him timely notice of the time and place of their meeting to audit such claims; the fact that he did not appear on the hearing of a claim which such board audited and allowed, and which was. paid by reason of being so audited and allowed; will not give the State the right to recover back the money so paid; nor aid its claim to a restoration of such money, espeially when it is not made to appear that the Attorney-General did not have timely notice of the meeting of the board to audit such claim.

7. Hotice to him is not essential under such statutes, to confer jurisdiction on such board to audit and settle claims.

8. It not having been found in the present case, that the defendants (claimants whose, claim had been audited, settled and paid) were guilty in fact or intent of any fraud in their proceedings before the Board of State Auditors of the State of Michigan to establish their claim against that State, it was

Meld, That a judgment against them in favor of the State, for the amount of a claim made by them against the State, and paid by the State on being audited and settled by such board, was erroneous and must be reversed.

(Before Bosworth, Ch. J., and Hoffman and Moncrief, J. J.)

Heard, January 4, 5;

decided, March 12, 1859

This action comes before the General Term on an appeal by the defendants from a judgment entered against them at Special Term, in favor of the plaintiffs, on the 3d of July, 1857, for $42,152.97. It was tried in April, 1.857, before Mr. Justice Hoffman, without a jury.

The action was brought to recover back from the defendants the sum of $35,603.74, paid to them by the plaintiffs on the 4th of December, 1854, and the interest thereon. That sum was so paid to the defendants as owners of a claim against the plaintiffs to that amount, which had been assigned to the defendants by the President and Directors of the Phcenix Bank—an old char

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tered institution, whose charter expired on the 31st of December, 1853.

It was so paid in pursuance of a decision or award of the Board of State Auditors of the State of Michigan, to which board the defendants had presented their claim against the State in May, 1854.

Section 31 of Article 1 of the Constitution of the State of Michigan, which took effect on the 1st of January, 1851, (and is found in the Michigan Revised Laws, of 1857, p. 54,) reads thus: (See Michigan R. Laws of 1857, pp. 83, 80, 81, § 19 of schedule.)

§ 31, Art. 1. “ The Legislature shall not audit nor allow any private claim or account.”

Article 8, section 4, (p. 63, id.,) reads thus:

§ 4, Art. 8. “ The Secretary of State, State Treasurer, and Commissioner of the State Land Office, shall constitute a Board of State Auditors to examine and adjust all claims against the State, not otherwise provided for by general law.” * * *

By an act of the Legislature of the State of Michigan, approved April 7, 1851, (Laws of 1851, p. 173,) sections 44, 46 and 47 of the Revised Statutes of 1846, were so amended as to conform to and carry out the constitutional provision for the creation of a Board of State Auditors, and as thus amended sections 44 and 47 read as follows: (See Mich. Revised Laws of 1857, pp. 145 and 146.)

“§44. The Secretary of State, State Treasurer, and Commissioner of the State Land Office, shall constitute a Board of State Auditors, and as such they shall have power, and it shall be their duty, annually, and at any other time in their discretion, to enter into a full settlement and final adjustment with every officer and agent of this State of all debts, credits, claims and demands of whatsoever description, between such officer or agent and this State, and it shall also be their duty to examine, adjust and settle all other claims and demands against this State, which may be presented by any other person Or persons, the settlement of which is not already provided for by law; but such board shall not allow and audit any claims against the State unless the same shall be established by competent testimony; and said board shall keep a record of its proceedings, which shall contain each claim presented, and its items, an abstract of the evidence taken, and the

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amount adjusted and settled.in favor of the person or persons presenting the claims, or in favor of the State; and any member of said board shall have power to administer oaths to any person or persons presenting claims, or to witnesses; to examine the person or persons under oath; to issue subpoenas to any part of the State against witnesses, and if any witness or witnesses fail to appear in pursuance thereof, and the fees provided herein shall have been paid or tendered, to issue attachments to compel their attendance; .to set off any legal or equitable claim against such person or persons in favor of the Statfe, upon proof of the same, and to adjourn from time to time.” * * * *

“ § 47. If, upon the allowance of any claim, or upon any balance being struck upon any settlement made in pursuance of this chapter, it shall appear that the State is indebted to the party with whom the settlement is made, or to whom such claim shall be allowed, he shall be entitled to a warrant drawn by the Auditor-General upon the State Treasurer therefor forthwith.”

Section 2 of a .statute of that State, approved January 26, 1848, (Laws of 1848, No. 12, § 2, p. 9,) reads thus:

“ § 2. It shall be the. duty of the Attorney-General to appear in behalf of the State, before the Board of State Auditors, when they shall sit to audit claims against the State, and to that end, said board shall give said Attorney-General timely notice of the time and place of their meeting to audit such claims.” (See I Mich. R. L. of 1857, p. 147, [210,] §2.)

Section 1 of “Schedule,” in the Constitution of said State, (1 R. L. of Mich., p. 77,) -reads thus:

“ Schedule,” “ § 1. The common law and the statute laws, now in force, not repugnant to this Constitution, shall remain in force until they expire by'their own limitation, or are altered, or repealed by the Legislature.”

The evidence tends to show that the claim of the Phoenix Bank was presented to the Board of State Auditors of the State of Michigan, in May, 1854.

The said Board allowed the claim on the 2d of December, 1854, and on that day entered upon the record of its proceedings, in relation to said claim, the following, to wit:

“ Claim of the Phoenix Bank, New York, against the State of Michigan, for an advance of $16,400, on State bonds, delivered

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to John Norton, junior, cashier of the Earmers’ and Mechanics’ Bank, Detroit, by order of Governor Mason, for the use of said State, March 13, 1838, and the interest thereon. The Board decided that, upon the evidence produced, said Phoenix Bank was justly and equitably entitled, for principal and interest on said claim, from March 12, 1838, to December 2, 1854, to the sum of $35,603.74.” ■ ■

That sum, in pursuance of such decision, the plaintiffs paid to the defendants, on the 4th of said December, and it is to recover back the sum so paid that this action is brought.

.The Attorney-General did not appear before the said Board of State Auditors, in relation to said claim, while it was pending before said Board: whether he was notified to appear, was not found by the Judge.

The Judge found a series of facts, (covering some eleven printed pages,) stating in detail the transactions in" which the claim originated, the evidence produced before the said Board of State Auditors, and certain transactions between the defendants and third persons (in relation to said claim, and which third persons are alleged to be the actual debtors, in respect of the matter thereof;) of which latter facts he also .found that .the members of said Board were severally ignorant during the proceedings before the Board, and until after payment of the sum allowed was made, and which latter facts he held were sufficient, of themselves, to extinguish any and all claims of the defendants upon the State, even if they, or their assignors, would otherwise have had any.

He also held, inter alia, as matter of law, that neither the plaintiffs nor their assignors ever had any just or valid claim against the State. His 14th conclusion of law is as follows, viz.:

“ 14th. Although the Board of State Auditors had, by the Constitution and laws of Michigan, power to examine and adjust and audit any claim against the State not otherwise provided for by general law; and although said Board did examine and adjust, audit and allow the claim of the Phoenix Bank, and the State did thereupon pay thl money; yet the award" is nothing higher than an adjustment of an account or claim by an agent constituted' to examine it.”

This decision was excepted to. The other matters of fact found, and conclusions of law stated, it is deemed unnecessary to

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recapitulate, as it was not found that the claim was-presented in bad faith, or that any fraud or artifice was practised or intended by the defendants, in any of their proceedings before the Board of State Auditors.

The other facts in the case, and the questions arising upon them, are not stated, as they were not considered, by the Court at General Term.

The Judge decided that the plaintiffs were entitled to recover back from the defendants the sum so paid as aforesaid by the former to the latter, amounting to $41,959.39. Judgment was entered thereupon in favor of the plaintiffs against the defendants ; and from that judgment the present appeal was taken by the defendants.

Edgar S. Van Winkle and Francis B. Cutting, for defendants and appellants.

I. Ho authority of the State of Michigan for beginning and prosecuting this action has been shown.

II. These defendants are not liable at all. If any party is liable, if is the trustees of the old Phoenix Bank. The defendants here were purchasers, in good faith, of a claim against the State of Michigan. The State paid it to them without any act on their part, and the money cannot be recovered back from the defendants.

The defendants had no existence until the 1st January, 1854.

They could not, therefore, have been participants in any acts or proceedings of any person or body prior to that time.

HI. Even if the old Phoenix Bank were defendants, the award of the Board of State Auditors could not be reexamined in this Court.

1. Because the matter is res adjudícala, only impeachable for fraud in obtaining the judgment. (Kingsland v. Spalding, 3 Barb. Ch., 341 ; Vail v. Vail, 7 Barb., 226 ; Hopkins v. Lee, 6 Wheat., 109 ;) and;

2. Because being a judgment, and the money collected under it, no action will lie to recover it back. (White v. Merritt et al, 3 Seld., 352; 2 Smith’s Leading Cases, 237, and note on 239.)

3. Because there is no valid proof of fraud.

The prayer of the complaint is,

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a. That defendants may be compelled to refund to plaintiffs the amount paid to them by Board of State Auditors.

b. That the allowance of said claim by said Board of State Auditors, and the entry thereof by said Board, may be declared to be fraudulent and void as against the plaintiffs, and that the same may be annulled and set aside.

The first part of the prayer can only be granted in case the second is allowed.

, The second cannot be granted unless fraud, as alleged, has been proved.

The complaint does not proceed on the ground of mistake for relief, but of fraud. For error the only relief is to falsify and surcharge, not to set aside. It can be avoided only upon the ground of fraud. (2 Danl. P., 764; Bruen v. Hone, 2 Barb., 592 .)

The judgment of the Board of Auditors could be set aside only for fraud. (Consequa v. Fanning, 3 Johns. Ch., 595 .)

The Board of State Auditors, consisting of the Secretary of State, Treasurer, and Commissioner of State Land Office, constituted a special tribunal having jurisdiction of this claim. (See Laws of 1846, p. , and of 1851, p. 473; Const. of Mich., art. 8, § 4, p. 60.)

The Board was a quasi-judicial body, with power to hear and determine claims against the State. (Ex parte Rogers, 7 Cow., 526 ; Van Steenbergh v. Bigelow, 3 Wend., 42 ; Martin v. Mott, 12 Wheat., 19 ; Walker v. Deveraux, 4 Paige, 229, 250; 3 Barn. & Ad., 271.)

Their power and duty is to examine, adjust and settle claims and demands against the State which may be presented by any person, the settlement of which is not otherwise provided for by law. They shall require competent testimony, keep a record of its proceedings, which shall contain, &c. May administer oath; can examine the claimant and other persons under oath; issue subpoenas and attachments; set off legal or equitable claims in favor of the State, and their allowance of a claim entitled a party to payment. (See act of April 7, 1851.)

This is a complete judgment after trial. Mo appeal lies from the board.

Its decision of the claim of the Phoenix Bank - is final and cannot be impeached collaterally, except upon proof by the State

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that a valid and equitable defense existed, which it was prevented from setting up by the fraud of the defendants, without negligence or other fault on the part of the State. (Vilas v. Jones, 1 Comst., 282.)

Its adjudication is more conclusive than an award by private arbitrators, because the Board is appointed by the State, without any selection by the Phœnix Bank. (Ex parte Rogers, 7 Cow., 526 .)

But even treated as of equal and no greater effect than an ordinary award, the merits of the claim cannot be reexamined; it can only be impeached by reason of partiality or corruption of the arbitrators. (Butler v. Mayor of New York, 1 Hill, 489 ; McKinney v. Newcomb, 5 Cow., 425 .)

Whether this is called an award or a judgment, matters but little, as neither is impeachable except for fraud. This claim was within their jurisdiction, and is therefore not triable again here. It was a claim.

Webster defines a claim to be “a demand of a right or a supposed right; a calling on another for something due or supposed to be due, as a claim of wages for services. A claim implies a right or supposed right in the claimant to something which is in another’s possession or power. A claim may be made in words, by suit, or by other means.”

Richardson says, “ It is to challenge, demand or pretend a title to.”

It was argued in the Court below that the jurisdiction can only relate to claims on contracts to which the State is bound legally. That was the very question to be tried by the Board of Auditors, whether the State was bound. That was the very foundation of the jurisdiction. (Britain v. Kinnaird, 1 Brod. & Bing., 432; Rankin v. Hoyt, 4 How. U. S. R., 327; 12 Pick., 572 , 583.)

The assent of the Legislature may be signified in various ways. They may do it directly, or they may delegate the power to the Board of Auditors, or any single officer, Governor, Attorney-General or Auditor

Whether the alleged contract was one to which the State was a party, was the very question presented and argued before the auditors. (Ex. 1 and 2 in commission; see the 2 Consts. of Mich. and the 2 laws of Board of State Auditors; Laws of Mich., vol. , p. .)

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The Courts of New York calinot overhaul and reexamine the question whether the law authorized the acts of Mason—whether the Phoenix Bank dealt with him on the faith of the law, or of the bonds—whether the money actually went into the State treasury. The board having jurisdiction of the subject has adjudicated upon and allowed the claim.

If this claim had been acknowledged by a law—the highest act of a State—then by the Constitution, the Board of State Auditors could have had no jurisdiction. (See Const, of Mich., art. 8, §4.)

The action of the Board of State Auditors was a judicial act, final and conclusive.

The State of Michigan being plaintiffs, seeking equitable relief, is subject to the same rules and equities as ordinary suitors, is bound to use the same diligence, and is chargeable with like notice, and affected by laches to the same extent as private suitors. (United States v. Barker, 4 Wash. C. C. R., 464; S. C., 12 Wheat., 559 ; Bank of United States v. The United States, 2 How., 711 ; United States v. Bank of the Metropolis, 15 Peters, 377; Dixon v. United States, 1 Brock. R., 177; United States v. Wilder, 3 Sum., 308; New Orleans v. The United States, 10 Peters, 662, 917; Darnington v. Bank of Alabama, 13 How., 12 ; Briscoe v. Bank of the Commonwealth, 11 Peters, 257.)

It cannot be avoided for error of law, for there is no appeal; none from the Board of State Auditors to the Superior Court of New York. The decision, if erroneous, is nevertheless the law of the case. (Mowatt et al. v. Wright, 1 Wend., 355 ; Mitchell v. Bush, 7 Cow., 185 ; McKinney v. Newcomb, 5 id., 425.)

Neither error of law nor of fact will avoid an award unless the error is apparent on the face of the award. (Watson on Awards, 159.)

It cannot be avoided for error of fact; a decision of a competent tribunal where the facts were in issue, or might have been in issue, is not reviewable elsewhere. (Kingsland v. Spalding, 3 Barb. Ch., 341 ; Vail v. Vail, 7 Barb., 226 ; Bruen v. Hone, 2 Barb., 586 ; Hopkins v. Lee, 6 Wheat., 109 ; United States v. Nourse, 9 Peters, 8; Voorhees v. The Bank of United States, 10 Peters, 473, 449; Embury v. Conner, 3 Comst., 511; See also United States v. Arredondo, 6 Peters, 691.)

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A decree of a competent Court of the highest jurisdiction is final and conclusive. (Penhallow v. Doane's Administrators, 3 Dallas, 54, 85.)

The debt itself cannot be inquirecLinto, but only fraud in procuring the judgment. It cannot be tried over again by this Court. It will, at the utmost, only receive proof of fraud affecting the defendants, which, if proved, would be sufficient to overturn the award.

That the proofs given before the Board of Auditors were sufficient, is beyond review.

That the testimony before them was competent, is beyond review here.

Neither of the arbitrators or Judges has sworn, that if he had known the new facts now proved it would have altered his award. (See Kyd on Awards; Ives v. Metcalfe, 1 Atk., 64; Tittenson v. Peat, July 1, 1747, 3 Atkyns, 529.)

This proceeding was in invitum. It was no compromise or bargain, it was a suit. The Attorney-General represented the State; if not present, it was the plaintiff’s fault or misfortune.

The Bank of River Raisin and Bank of State of Michigan were both within the jurisdiction. The deed of 1840 was on record.

The fraud to avoid must be an active and positive fraud not constructive, that is, if based on an adverse proceeding.

There must be circumvention. (See Brinckerhoff v. Lansing, 4 J. C. R., 70.)

Mere silence in regard to a fact within the knowledge or reach of both parties is not a fraud.

A Court of Equity will never be called into activity to remedy the consequences of laches or neglect, or the want of reasonable diligence. (Creath v. Sims, 5 How. U. S. R., 192.)

Money paid under a judgment cannot be recovered back in a new action. (White v. Merritt & Wheaton, 3 Seld., 352; Marriot v. Hampton, 7 T. R., 269; S. C., in 2d Smith’s Leading Cases, 237, and note on page 239; White v. Ward & Aylesworth, 9 Johns., 232 ; Loompis v. Pulver, id., 244 ; Loring v. Mansfield, 17 Mass. R, 394 ; Homer v. Fish et al, 1 Pick., 435 ; Carter v. Canterbury, 3 Conn., 456 .)

Equity will not grant relief in such a case. (Le Guen v. Gouverneur, 1 Johns. C., 436; Smith & Mead v. Lowry, 1 Johns. Ch.,

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320 ; Campbell v. Morrison, 7 Paige, 157; Clarke v. Dutcher, 9 Cow., 674 .)

“ Money paid with the full knowledge of facts or the means of knowledge cannot be recovered back, on the ground that the party supposed he was bound in law to pay it, when in truth he was not.” (Mowatt et al. v. Wright, 1 Wend., 355 ; Elliott v. Swartwout, 10 Peters, 138, 153.)

For fraud which the party litigant knew of or could have known of, or ought to have known of, even a Court of Equity will not open a judgment or award. (Le Guen v. Gouverneur, 1 Johns. C., 496, and cases there cited.)

There is nothing new in this case, nothing that the State could not have known at the time.

The mere taking of the deed from Stewart alters no rights. The trustee is changed—that is all; everything else the State knew.

A bill of review will lie, it is true, on newly discovered evidence, but only in cases and upon grounds where a new trial at law will be allowed.

The judgment at Special Term should be reversed, with costs.

J. L. Jernegan, for respondents, (the plaintiffs,) argued (among other points) that,

I. The payment of the claim by the State, after its allowance by the Board, does not bar its recovery in this action.

I. The payment was made by the State in ignorance of material facts, and the money can therefore be recovered back. (Connecticut v. Jackson, 1 Johns. Ch., 13 ; Stoughton v. Lynch, 2 id., 209; Mowry v. Bishop, 5 Paige, 98; Boyer v. Pack, 2 Denio, 107 .)

II. The Board of Auditors had no adequate means of discovering these facts, and their ignorance of them was not the result of negligence.

1. But whether they had adequate means of knowledge or not, it is' sufficient, especially in view of the fact that they were acting as officers of State, that they had no actual knowledge of these facts.

(a.) According to the rule, as now established, the question is, whether the party had actual knowledge of the facts; and the possession of means of knowledge is to be regarded only as evi

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dence to be left to the jury, bearing on the question of actual knowledge. (Bell v. Gardiner, 4 M. & G., 11, 21, per Tindal, Ch. J.)

(6.) Such means of knowlege in the possession of an. officer of government, while acting in his official capacity, is not permitted to have the same weight as in the case of an individual acting in his own right. In Hunter v. United States, ( 5 Pet., 173 ,) it was shown, that a paper showing the claim of the government, was in the possession of the government when the money was paid. Yet the Court held that that fact could not prejudice the government, and say: “ It might be dangerous to give the same effect to a voluntary payment by an agent of the government, as if made by an individual in his own right. The concerns of the government are so complicated and extensive, that no head of any branch of it can have the same personal knowledge of the details of business, which may be presumed in private affairs.”

2. These propositions apply with still greater force to any presumption of knowledge in the State, founded on communications made to any other of its officers, beside those composing the Board of Auditors.

8. The money can be recovered back on the ground that its payment was obtained by fraud.

III. Even should it be held that the proceedings of the Board of Auditors, were judicial in their character, they would not bar a recovery in this action.

1. The action of the Board was ex parte, and cannot be therefore pleaded as an estoppel to the State.

The act defining the duties of the Board, contains no provision for making the State a party to-the proceedings; it provides for no process against the State, or notice to any officer of the State, and it does not make it the duty of any officer to attend on the part of the State, or protect the rights of the State. Such a proceeding, where one of the parties only is represented, and no notice, actual or constructive, is given to the other, is ex parte, and can in no case estop the party against whom it is. This doctrine is elementary. (Woodruff v. Taylor, 20 Verm., 65 ; Bradstreet v. Neptune Ins. Co., 3 Sumn., 607 ; People v. Kingston and Middletown Turnpike Co., 23 Wend., 193 , 210.) In the first of these cases, the Court say: “ A proceeding professing to de

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termine the right of property, where no notice, actual or constructive, is given, whatever else it might be called, would not be entitled to be dignified with the name of a judicial proceeding. It would be a mere arbitrary edict, not to be regarded any where as the judgment of a Court.” In the case in Wendell, which was aguo warranto, claiming a forfeiture of the defendants’ charter, for a non-compliance with its provisions in relation to the mode of constructing their road, the defendants insisted that the State was estopped by the report of the commissioners appointed by the Governor to view the road and report whether the same was completed according to the requisitions of the charter. A report by these commissioners that the road had been thus constructed, was made by the charter a condition precedent to the issuing of a license by the Governor authorizing the Company to take toll. Such a report had been made to the Governor, and the license issued; But the Court held that these proceedings did not operate as an estoppel; “the proceeding,” say the Court, “is ex parte in respect to the people; it does not contemplate a contested trial, where the whole matter would be brought out for discussion and adjudication.”

2. As the State was not represented in the proceedings before the Board, it was the duty of the defendants to state all material facts within their knowledge, necessary to inform the judgment of the Board; and their omission to do so, and their concealment of material facts within their knowledge, was a fraud, and renders the decision thus fraudulently obtained, a nullity. (Loomer v. Wheelwright, 3 Sandf. Ch., 135 ; Borden v. Fitch, 15 Johns., 121 ; Andrews v. Montgomery, 19 Johns., 164 .)

The case of Loomer v. Wheelwright, was a bill filed to set aside a decree of foreclosure. The mortgagee had obtained the decree by default, against an infant by default, after the mortgage had been satisfied with the knowledge of the mortgagee. The mortgagee withheld from the defendant, and from the Court, all information in relation to the satisfaction of the mortgage, and the Vice-Chancellor held that for this reason, the decree was obtained by fraud, and should not be permitted to stand.

3. Even admitting all the defendants claim, that the decision of the Board of Auditors is clothed with all the attributes of the judgment of a Court of competent jurisdiction, this case combines

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2. The cases in this State holding that the decisions of the Canal Appraisers are conclusive, are justified by the statute, which all the elements which are necessary, according to the long established principles of Courts of Equity, to entitle the plaintiff to be relieved against it; it being contrary to good conscience that the defendants should reap the fruits of it, and the plaintiffs having been prevented from availing themselves of a good defense by the fraud of the defendants, and by ignorance on the part of the plaintiffs of the facts, at the time of the trial and the payment of the money, without fault or negligence on their part. (Marine Ins. Co. v. Hodgson, 7 Cran., 332; Countess of Gainsborough v. Gifford, 2 Peere Williams, 424; Williams v. Lee, 3 Atk., 223; 2 Story’s Eq., § 887, and authorities there cited; Reigal v. Wood, 1 J. C. R., 402; McDonald v. Neilson, 2 Cow. R., 139; Duncan v. Lyon, 3 J. C. R., 351; Shottenkirk v. Wheeler, id., 275 ; Dobson v. Pearce, 2 Kern., 156.) And the fact that the proceedings against which relief is sought, took place in another State, is immaterial. (Dobson v. Pearce, ubi supra, 169.)

IY. The authorities cited in opposition to our view of the effect of the allowance by the Board, have, we submit, no application in this case.

1. The general principle stated by one of the learned Justices in United States v. Arredondo, (6 Peters, 691,) “ that where power or jurisdiction is delegated to any public officer, or tribunal, over a subject matter, and its exercise is confided to his or their discretion, the acts so done are binding and valid as to the subject matter; and individual rights will not be disturbed collaterally for anything done in the exercise of that discretion within the authority and power conferred,” need not be controverted. The important limitation of this principle is stated in the next sentence : “ The only questions that can arise between an individual claiming a right under the act done and the public or any person denying its validity are, power in the officer, and fraud in the party.” The very question to be determined here, is a question of power in the Board. Was that power ministerial or judicial, a mere power to settle, adjust and pay accounts, or a power to render a final and conclusive judgment against the State ? And even were the question of power determined against us, the other question still remains, was there fraud in the party ?

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makes the State a party to all the proceedings by requiring one of the Canal Commissioners to attend in person or by agent on behalf of the State, and employ counsel and procure the attendance of witnesses, if necessary, (Laws of 1836, ch. 287, § 5,) provides for an appeal from the decision of the appraisers, (Laws of 1829, ch. 368, § 3,) and expressly provides that the decision on that appeal “ shall in all cases be final and conclusive.” (Id.)

3. In the case of Rankin et al. v. Hoyt, (4 How. U. S., 327,) no question was made as to the conclusiveness of the appraisement, and the case is, in other respects, easily distinguishable on the ground, that the importer had a right to be present and appeal from the decision.

Y. The defendants, having become assignees of this claim in 1854, took it cum onere, subject to all the equities which existed at the time of the assignment, and to all the defenses which existed against the assignor. (1 Parsons on Contracts, 195, and authorities there cited.)

The important questions arising on this appeal, are:

' 1. What is the force and effect of a decision by the “ Board of State Auditors of the State of Michigan,” upon a claim within their jurisdiction; that it is just, and that a sum which they specify is justly due from that State to the claimant; and of actual payment, by the proper officer of the State, in pursuance of such decision, of the sum so decidec( to be due?

2. Can the money so paid be recovered back on the mere grounds that, upon the merits, no sum was due, and that the Board made their decision ignorant of certain facts, upon which, if they had been proved, their decision would or should have been that nothing was due from the State; no fraud having been practised by the claimants, by the means which they employed to assert and establish their claim before such Board ?

It was conceded, on the argument of this appeal, not only that the Board of State Auditors had jurisdiction to entertain, examine into and determine this claim, but also, that under the Constitution and statutes of the State of Michigan, this Board had the sole and exclusive jurisdiction to examine into and decide it.

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By the act of April 7, 1851, amending sections 44, 46 and 47 of chapter 12 of the Revised Statutes of 1846, this Board was clothed with the “ power,” and it was made its “ duty,” “ to adjust and settle all claims ” (other than those otherwise provided for by law,) “ against this State which may be presented.”

By this statute, the Board is required to act, in allowing £ claim, upon “ competent testimony ;” and to “ keep a record of its proceedings.” Power is given “ to administer oaths to any person or persons presenting claims, or to witnesses; to examine the person or persons under oath; to issue subpoenas to any part of the State against witnesses, and if any witness or witnesses fail to appear in pursuance thereof, and the fees provided herein shall have been paid or tendered, to issue attachments to compel their attendance; to set off any legal or equitable claim against such person or persons in favor of the State, upon proof of the same, and to adjourn from time to time.” * * *

It also declares that the claimant, whose claim shall be allowed by the Board, “shall be entitled to a warrant, drawn by the Auditor-General upon the State Treasurer therefor, forthwith.” Another statute makes it the duty of the Attorney-General to appear before the said Board, in behalf of the State, and represent the State and its interests on such proceeding.

It is quite obvious that this Board was vested with powers, in their nature judicial. It was authorized to hear and determine certain civil controversies between the State and individuals. Power was given to it to compel the attendance of witnesses, to administer oaths to them, to adjourn from time to time, and it was required to act upon competent testimony, and to keep a record of its proceedings. The law provides for carrying its decisions into effect. A determination against the State, that it justly owes to the claimant a specified sum, is to be followed by a “ warrant ” for that sum upon the “ State Treasurer,” (one of the members of such Board,) drawn by another State officer, viz.: the Attorney-General, and to be drawn forthwith.

The creation of this Board is authorized by the Constitution of the State of Michigan. There is, therefore, no question as to the validity of the statute which defines its powers and duties.

Its proceedings and decisions are as truly judicial in their nature as those of any special tribunal constituted by competent

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authority to hear and decide controversies between the adverse parties thereto, and not proceeding according to the course of the common law, or in the mode usual in Courts of Chancery possessing original and general equity jurisdiction.

In The United States v. Arredondo and others, (6 Peters, 691-729,) Mr. Justice Story declares it to be “ an universal principle, that, where power or jurisdiction is delegated to any public officer or tribunal over a subject matter, and its exercise is confided to his or their discretion, the acts so done are binding and valid as to the subject matter, and individual rights will not be disturbed collaterally for anything done in the exercise of that discretion within the authority and power conferred. The only questions which can arise between an individual claiming a right under the acts done and the public, or any person denying its validity, are power in the officer and fraud in the party. All other questions are settled by the decision made or the act done by the tribunal or officer, whether executive, (1 Cr., 170, 171,)— legislative, ( 4 Wh., 423 ; 2 Peters, 412; 4 id., 563 ,)—-judicial, ( 11 Mass., 227 ; 11 S. & R., 429, adopted in 2d Peters, 167, 168,)—or special, (20 J. R., 739, 740; 2 Dow. P. Gas., 521, &c.,) unless an appeal is provided for; or other revision, by some appellate or supervisory tribunal, is prescribed by law.”

In the case before us, no question is made as to the power - of the Board to determine upon the claim in question, and how much, if anything, was due from the State of Michigan to the claimants. Although fraud in the defendants is alleged in the complaint, as a ground for setting aside the decision of the Board, and recovering back the money which the plaintiffs have paid to the defendants in pursuance of such decision, yet it is not found as a fact that any fraud was practised or intended by the defendants.

On the contrary, the learned Judge before whom the action was tried at Special Term, in the opinion accompanying his decision, says: “I am gratified in being able to arrive at my conclusions, without any imputation upon the integrity of the officers of the Phoenix Bank. They acted with fidelity to their principals, and without criminality towards the State. They were acting under an honest but gross delusion as to their rights and the responsibility of the State.” (Opinion, p. 31.)

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If the rule stated by Mr. Justice Stoby be a well settled rule of law, and if it be true that the powers and duties of the Board are in their nature judicial, and that no fraud was practised by the defendants in their proceedings before the Board; then it necessarily follows (it being conceded that the Board had full jurisdiction of the subject matter,) that its decision is conclusive, although erroneous, and that the money paid cannot be recovered back in this action, upon the facts established on the trial of it.

The decisions involving the proposition asserted by Mr. Justice Story, are uniform in its support.

In Brittain v. Kinnaird et al., (1 Brod. & Bing., 432,) it was asserted as a general principle, established by all the ancient and recognized by all the modern decisions, “ that a conviction by a magistrate, who has jurisdiction over the subject matter, is, if no defects appear upon the face of it, conclusive evidence of the facts stated in it.”

In that case, the defendants had authority, under an act of Parliament, on seizure and search, to condemn and direct to be burnt or sold any boat on the Thames suspected of carrying articles stolen, or unlawfully procured from any vessel. Under this act, the plaintiff’s decked and registered vessel of 15 tons burden, had been seized by police officers, and condemned by the defendants, who were sued as trespassers.

Chief Justice Dallas said, it is urged “ that, in order to give the magistrate jurisdiction, the subject matter of his conviction must be a boat; and that it is competent to the party to impeach the conviction, by showing that this was not a boat.” * * “ The magistrate, it is urged, could not give himself jurisdiction, by find ing that to be a fact which did not exist.” To these views Ohiet Justice Dallas answered: “ But he is bound to inquire as to the fact, and when he has inquired, his conviction is conclusive of it.” -x- -x- * “Much has been said about the danger of magistrates giving themselves jurisdiction, and extreme cases have been put, as of a magistrate seizing a ship of seventy-four guns, and calling it a boat. Suppose such a thing done, the conviction is still conclusive, and we cannot look out of it.”

Similar in principle to the above, are Henderson v. Brown, (1 Caines., 92,) The People v Collins, ( 19 Wend., 56 ,) Willis v.

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Havemeyer, ( 5 Duer, 447 , 459,) and numerous others, too familiar to make it necessary to cite them.

In The Supervisors of Onondaga v. Briggs, ( 2 Denio, 26 -33,) Bronson, Ch. J., in delivering the opinion of the Court, and speaking of the effect of the act of an officer appointed to tax costs, says : “It is of the same general nature as are the decisions made by a judge or commissioner in proceedings under the insolvent laws; the act to punish fraudulent debtors; between landlord and tenant; and the many other cases that might be enumerated. They are all judicial determinations which are conclusive upon the parties, until they have been reversed, vacated or set aside in the forms prescribed by law. They cannot be attacked in a collateral action, save where the Legislature has so expressly provided. This is a principle of universal application. It extends alike to the decisions of the highest court, and the humblest officer in the State who has been entrusted with the exercise of judicial powers. However desirable it may seem, in a particular case, to disregard the rule, it cannot be broken down without doing a great wrong to the community.” * * *

“A power to hear and determine, necessarily includes and carries with it a power which makes the judgment or determination obligatory, without any reference to the question whether it was wrong.” (Id., p. 34.)

If alleged to be erroneous, that question must be investigated and determined in the mode and by the tribunal prescribed by law. If no mode of reviewing the determination is prescribed by law, it is absolutely conclusive upon the parties to the proceeding. It can only be set aside on the ground of fraud of the party, in the proceeding in which such determination was made.

The Board of State Auditors of the State of Michigan, in exercising the powers vested in them, and in performing the duties cast upon them, act under the authority of law: their acts are public, and affect the rights of individuals as well as those of the State Government.' The law under which they thus act is a statute of that State, and that Board is a tribunal created by and under its Constitution and laws. The decision of such tribunal, in pursuance of the law by which it is created and which prescribes its powers and duties, upon any matters within its j urisdiction, is as conclusive upon the State as upon the individuals

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who are parties to the controversy which it has decided. The State cannot, in such a case, claim any exemption from the operation of the rule which is applicable to natural persons. ( United States v. Jones, 8 Peters, 375-385.)

The State of Michigan, by the statutes which define the powers and duties of her Board of State Auditors; and by her Constitution which provides for the creation of such a tribunal to hear and determine all controversies of a specified character between the State and individuals; and by the proceedings which those statutes prescribe for the determination of such controversies; and by the necessary import of the provisions of such Constitution and statutes, consent and agree to be bound by the decision, and undertake, with every person who may be a party to any such controversy between him and the State, to pay, forthwith, any claim which, upon investigation by such tribunal, it shall determine to be just, and the amount it shall decide to be due. ( United States v. Jones, supra, and Murray's Lessee et al. v. Hoboken Land and Improvement Co., 18 How. U. S. R., 281-286.)

“ Though, generally, both public and private wrongs are redressed through judicial action, there are more summary extrajudicial remedies for both.” * * “ It is competent for the United States” (or a State Government) “ to sue any of its debtors in a court of law. It is equally clear that the. United States” (or a State Government) “ may consent to be sued, and may yield this consent upon such terms as it may think just.” (18 How. U. S. R., 283.) x

When the' State of Michigan, under her Constitution and statutes, created the tribunal called the Board of State Auditors of the State of Michigan, to investigate claims against the'State, and declared, by one of these statutes, that any sum, found by such Board to be due to a claimant, should be paid forthwith, she pledged herself to be bound by the decision, and, in so doing,' was as competent to submit to an investigation of claims against her, upon such terms, as individuals are- to submit a real matter in controversy to a court, without action, in á manner prescribed "by law.

When a claim against the' State has been submitted in good faith to a-tribunal thus created, and in the manner prescribed by the laws creating it, and confessedly’ within its jurisdiction, and that tribunal has decided it, and the State has, in pursuance of

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such decision, paid the sum decided to he due, the money cannot be recovered back, merely because the Court in which a suit may be brought for that purpose is of the opinion that such tribunal was clearly wrong in the conclusion to which it came, or thatfacts existed which, if proved, would have led to an adverse decision.

The complaint, in speaking of the proceedings on the part of the defendants before said Board, alleges “that said defendants intending, as aforesaid, to cheat and defraud the State of Michigan,” made-various representations, which it enumerates and which it avers were false and known to the defendants to be so, and concludes with a prayer “ that said allowance of said claim by said Board • of. State Auditors, and the entry thereof by said Board, be declared to be fraudulent and void as against said plaintiffs, and that the same may be annulled and sét aside.”

Being of the opinion that the decision of the Board of State Auditors is conclusive, until it is found to have been procured by the fraud or by the fraudulent practices of the defendants, I deem" it out of place to enter upon the inquiry whether the defendants, upon the evidence contained in this case in relation thereto, "ever. had any just claim' upon the'" State, or, if it had, whether it forfeited or extinguished such claim by its subsequent transactions with the banks named in the complaint and proceedings in this action.

To whatever conclusion the Judge, at Special Term, might have properly come upon the evidence before him, it is enough to make it necessary to grant a new trial, that he has not found the defendants guilty of any fraud in fact or intent.

Although neither the Attorney-General nor any other person appeared as attorney for the State before said Board, on the auditing of said claim, that fact does not affect the question of the jurisdiction of said Board, nor impair the force of its decision.

It is not found by the Judge that the Board did not notify the Attorney-General. Mo such fact being found, the legal presumption is, that the Board did its duty,' and gave to him the notice required by law.

- For these reasons, I think the judgment should be reversed, and a new- trial granted, the costs of "the former" trial and of this appeal to be costs in the cause, and abide the event.

Ordered accordingly.