an administrator, the Department requires evidence that he has filed adequate bonds as administrator with the appropriate court, and in addition a bond covering the amount of the payment to be made by the Department, the bond sometimes having to be approved under the seal of the court. This additional bond must also be filed by the assignee of an administrator. It appears that in a few cases a bond in double the amount of the payment to be made, running to the Department or to the Government, has been required as a condition of payment, the purpose of the bonds being, naturally, to insure the ultimate receipt of the money by those entitled thereto, and thus to relieve the Department of all responsibility in the matter, moral as well as legal. Attorneys or representatives of entitled beneficiaries. must file powers of attorney as a condition of payment.

Occasionally, before making a payment, the Department gives notice of a proposed payment to persons claiming an interest in the fund, when such notice had been requested. This is not, however, the usual practice, and it has been done in exceptional cases only.

The Secretary of State being properly regarded as having jurisdiction to pass only upon the rights of those who are initial or primary beneficiaries, and recognizing only these primary claimants and those holding uncontested instruments of transfer of interest or assignment from them, the Secretary has on numerous occasions declined to admit any assertion of a lien upon the funds in his hands by those holding secondary or derivative interests by virtue of certain legal relationships with the original claimant. If the primary beneficiaries have no such lien or legal right, a fortiori those holding derivative interests are without such rights so long as the funds are in the hands of the government. The complicated questions of law and fact which are incidental to the determination of the various kinds of derivative rights are best left to the jurisdiction of the ordinary courts of justice, where the proper machinery for their adjudication is provided.2

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1 Notwithstanding the fact that the statute denominates the moneys received from foreign governments as "trust funds," no court has yet granted the claimant the equitable rights of a cestui que trust, nor held the government liable as a trustee. The statute is believed merely to express the moral obligation inherent in the receipt of the funds.

2 A summary of cases in which suits have been brought against beneficiaries of

While the Secretary of State has, as a matter of convenience, usually undertaken to pass upon claims against awards when the case seems clear, he has, in more complicated cases, taken the position that he could refer the claimants to the Court of Claims for the establishment of their various interests.1 In many cases, such claimants have been referred to the ordinary courts.2 Prior to the Act of 1896, the Secretary either deposited the money in a bank, by agreement with the parties, or withheld payment, to await the decision of the court. Under the Act of 1896, upon such a reference to the courts, the Secretary may suspend the issuance of his certificate upon the Secretary of the Treasury.

§ 159. Method of Making Payment.

Having himself determined or become satisfied by the decision of a court, who the entitled claimants are, and the amounts due them respectively, the Secretary of State then issues his certificate to the Secretary of the Treasury, who, according to the statute, must pay the amounts mentioned in the certificates to the ascertained beneficiaries thereof, the statute itself making the necessary appropriation for this purpose. These certificates are issued to the original claimants, or, as a matter of grace and accommodation to the parties in interest, to persons holding uncontested assignments, orders for payment, powers of attorney, or other instruments evidencing a direction and willingness on the part of the original beneficiary to have the sum so paid. When the assignment or order is contested by the person granting it or his successor, and the parties cannot agree or decline to sub

awards or their successors by those holding derivative rights to a fund is presented in Solicitor's Opin. In re Alsop award, 28-30.

1 Although no case has been found where the Secretary has actually submitted a case of this kind to the Court of Claims, he has made the suggestion to claimants on several occasions, and it would seem clear that he has the right so to refer contesting claimants, without their consent, under § 2 of the Bowman Act, Mar. 3, 1883, 22 Stat. L. 485 and § 12 of the Tucker Act, Mar. 3, 1887, 24 Stat. L. 505. See Billings v. U. S., 23 Ct. Cl. 166, 173.

2

Bayard v. White, 127 U. S. 246; Porter v. White, 128 U. S. 235; 21 MS. Sol. Op. Dept. of State, 404, cited by Solicitor Clark; Solicitor's Opinion In re Distribution of Alsop award, pp. 28-30.

Solicitor's Opinion In re Distribution of Alsop award, p. 43.

mit their differences to a designated tribunal for adjudication, the Secretary may and sometimes does issue the certificate to the original claimant, leaving the contesting parties to assert their legal or equitable interests in any portion of the fund in a suit in the ordinary courts against the payee in order to determine the ultimate ownership of the fund or any particular portion of it.1

§ 160. Remedies of Rival Claimants or Beneficiaries. Secretary's Determination not Final.

Persons who contest a distribution made by the Secretary, or rival claimants, have two remedies open to them: (1) They may sue the person to whom the money has been paid in an action for money had and received, and thus recover from such person such money as may equitably belong to the plaintiff; or (2) the complaining party might, before payment of the money, enjoin the other from receiving any of such fund from the Secretary of the Treasury (formerly the Secretary of State).

While there is no provision in the statute of 1896 for an appeal from the Secretary's decision or for a review of his findings as to the persons entitled to share in the award, the money being in fact appropriated to pay "to the ascertained beneficiaries thereof of the certificates" issued by the Secretary of State, it seems clear, notwithstanding the absence of any adjudication by the courts upon the question of the finality of the Secretary's determination, that it is final only in the sense that it cannot be set aside by any court and that no action against the government or any official thereof can be brought by dissatisfied payees or others. In the matter of the ultimate ownership of the fund, however, and the conflicting claims of persons holding derivative rightsquestions, indeed, which the Secretary is not presumed to have determined his decisions and findings are not conclusive, any more than are the awards of claims commissions regarding the ownership of the funds with the distribution of which they are charged by treaty or statute. To regard the Secretary's determination as conclusive upon these secondary claimants, would make it a judgment in rem, a mani1 Municipal courts pass only upon the disposition of the fund, not the merits of the original claim (Comegys v. Vasse, 1 Pet. 193), unless Congress specifically refers the whole claim to the Court of Claims or a domestic tribunal.

fest impossibility. Moreover, the absence of all machinery in the Department for conducting judicial inquiries and the fact that the Secretary is not always a trained lawyer and other practical considerations of a political nature,1 all point to the certainty that the Secretary's determination is not final upon the question of ownership of the fund, nor conclusive upon derivative claimants. The courts, therefore, in the manner already indicated, are always open to such claimants against the individuals to whom awards may have been distributed.

§ 161. Expenses of Arbitration Usually Charged to Claimants.

It may be added that the government frequently provides for the payment by the claimants of the expenses of an arbitration, deducting the government's share from the awards distributed to claimants. The deduction of these expenses from awards is occasionally provided for in the treaty establishing the arbitral commission.2 In the case of the Alabama awards under the Act of 1874, the expenses of the arbitration were not deducted from the awards.3 In the submission of single claims to arbitration, various terms may be made, e. g., the claimant and the defendant government may bear the expenses in

1 Solicitor's Opinion In re Distribution of Alsop award, p. 41.

2 Sometimes only the expenses of the Commission are so provided for, each government paying its own arbitrator, secretary and agent or counsel. See, as examples of clauses providing for deduction of expenses from awards, the treaty between U. S. and Chile of Aug. 7, 1892, art. 10, Malloy, I, 188; between U. S. and France, Jan. 15, 1880, art. 10, Malloy, I, 538; between U. S. and Great Britain, Feb. 8, 1853, art. 6, Malloy, I, 667; between U. S. and Great Britain, May 8, 1871, art. 16, Malloy, I, 707; between U. S. and Mexico, July 4, 1868, art. 6, Malloy, I, 1131; between U. S. and Peru, Dec. 4, 1868, art. 6, Malloy, II, 1413. In all these cases the deduction was not to exceed 5 per cent of the awards. In the conventions between Great Britain and Chile, Sept. 26, 1893 (85 St. Pap. 24) and Sept. 29, 1887 (78 St. Pap. 774), between Great Britain and Nicaragua, Nov. 1, 1895 (87 St. Pap. 55), and between Italy and Chile, 1888 (For. Rel., 1888, I, 187), the amount to be deducted was not to exceed 6 per cent. In the recent compromis of Dec. 18, 1913 between France and Turkey (41 Clunet, 1914, 1444), France undertook to retain 10 per cent. of awards for expenses. Article 7 of the protocol of Nov. 25, 1899 between Italy and Peru, left the percentage to be deducted for expenses to the determination of the Abritrator. Descamps and Renault, Rec. int. des traités du xx siècle, 1901, p. 701.

3

U. S. v. Weld, 127 U. S. 51 (23 Ct. Cl. 126). In the agreement of Feb. 12, 1871 with Spain, it was provided that the expenses of the arbitration were to be defrayed by a percentage to be added to the amount awarded (Malloy, II, 1663). This relieved claimants of the obligation to bear the expenses of arbitration.

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equal proportions. When the protocol of submission contains no stipulation as to deductions from awards to cover expenses, the prosecuting government may charge its entire expenses upon the claimants.2 The reimbursement of the government's expenses requires no special agreement or understanding with the claimants. The government's complete control over the indemnity received enables it to deduct from any amount to be distributed such expenses as it may deem properly chargeable to the award. A government may even require claimants to deposit in advance a percentage of the sum claimed, to cover expenses and as an earnest of good faith. A demand by Germany for a deposit of 2 per cent of the sums claimed by its subjects from Haiti in the German-Haitian arbitration of 1913 is reported as having resulted in the withdrawal of a considerable number of claims.3

1 Ozama Bridge claim (U. S.) v. Dominican Rep., Mr. Powell to Gen. Heureaux, Mar. 5, 1898, For. Rel., 1898, 276. Such division may be conditioned upon success of claimant in the arbitration. Freraut (France) v. Chile, July 3, 1897, art. 5, For. Rel., 1897, p. 53.

2 This was done in the case of the Pious Fund claim against Mexico submitted to the Hague tribunal, and in the Alsop claim against Chile, submitted to His Britannic Majesty. In the Alsop case, there was an agreement between the parties stipulating for such deduction. Solicitor's Opinion, op. cit., 79.

Such a deposit of "security for costs" is most unusual. It may serve to eliminate claimants in bad faith, but may also disable and work an unnecessary hardship upon needy claimants.