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The New York Indians

ERROR to the Court of Appeals of New York; the case being thus:

In 1786, and before the adoption, therefore, of the Federal Constituktion, the State of Massachusetts, which laid claim to four tracts of land in Western New York then occupied by native Indians (Senecas, chiefly), and known respectively as the Alleghany, Cattaraugus, Buffalo Creek, and Tonawanda reservations, entered, at the conclusion of some disputes, into an agreement with the State of New York by which New York ceded to Massachusetts, and her grantees, in fee, the right of pre-emption from those Indians and all estate in the reservations, except jurisdiction and sovereignty, which it was agreed should belong to the State of New York. By the fourth article of this compact New York stipulated thus:

'The said Indian reservations, so long as they shall remain the property of Massachusetts, shall be exempt from all taxes whatever, and no general or State tax shall be charged on the lands of the said reservations thereafter to be granted by Massachusetts, or on the occupants or proprietors of such lands, until fifteen years after the confirmation of such grants in the manner mentioned in the compact; but the said lands, and the occupants thereof, during the said period shall be subject to town and county charges or taxes only.'

Before the adoption of the Constitution, the then United States, and after its adoption, the Federal government, made several treaties with these Indians; the Treaty of Canandaigua, November 11, 1794, being one, by which the land in those reservations were acknowledged to belong to them, the said Indians, and by which it was agreed that the United States would 'never claim' the same, nor disturb the Indians, and that the land should 'remain theirs until they chose to sell the same to people of the United States.'

In 1791 Massachusetts parted with her rights in these reservations, and the same had, in 1838, become vested in Ogden & Fellows. In that year, 1838, a treaty was made between the United States and the Indians, poviding for the removal of the latter to the west of the Mississippi River; and at the same treaty a deed of conveyance was executed between the Seneca nation and Ogden & Fellows in fee, as joint tenants of the four reservations. The treaty provided for the removal of the Indians within five years. It was to become obligatory on the parties only after being proclaimed by the President. And as this proclaimation was not made till April 4, 1840, no right (as the treaty was construed by the officers of the Federal government, a construction in which Ogden & Fellows acquiesced) accrued to Ogden & Fellows till April 4, 1845.

Before the expiration of these five years, differences arose between the Indians and Ogden & Fellows, and in order to settle them, a new treaty was made in 1842 between the United States and the Indians; and a deed was executed between Ogden & Fellows and the Indians, by which it was agreed that the Indians should remain in possession of two of the reservations, to wit, the Alleghany and Cattaraugus, with the same right and title in all things that they had possessed before the sale. The two others (the Buffalo Creek and Tonawanda) being, by the deed, ceded to Ogden & Fellows.

The Indians remained in possession accordingly of the two retained reservations.

In 1840, May 9th, the legislature of New York passed an act, by which it authorized a highway tax to be assessed upon the Alleghany and Cattaraugus reservations (the two still in possession of, and subsequently agreed to be retained by, theIndians); and the tax was assessed.

In the following year, May 4th, 1841, the same legislature authorized the assessment of other taxes for making roads upon those same two reservations, and on one of the others also, the Buffalo Creek.

That act of 1841 contained eight sections.

The first authorized the board of supervisors of Erie County to appoint commissioners to lay out, open, and construct roads across the Cattaraugus reservation lying within the county, and the same in respect to the supervisors of the county of Cattaraugus, over the Alleghany reservation in that county.

The second provided for the survey of these roads by the commissioners, and conferred upon the supervisors the power to direct the repair and improvement of them.

The third provided for raising money to defray the expenses of constructing and repairing the roads, and for the building of bridges, and repairing the same, by levying for the years 1841, 1842, and 1843, on the lands in the Cattaraugus reservation, lying in the county of Erie, the sum of $4000, and on the Alleghany $4000, and on the Cattaraugus, lying within the county of Cattaraugus, $1000 each year.

The fourth provided for the survey and maps of the reservations, with a view to the taxation. with a view to the taxation.

The fifth section provided for the sale of the lands in case of default in the payment of the taxes. It contained, however, this proviso:

'PROVIDED, That no sale for the purpose of collecting said taxes shall in any manner affect the right of the Indians to occupy said lands.'

The eighth or last section was thus:

'The taxes hereby authorized may be imposed, assessed, levied, and collected as directed by this act, notwithstanding the occupation of the said lands, or parts or portions thereof, by the Indians, or by any other person or persons; and the failure to extinguish the right of the Indians, or to remove them from the possession thereof, shall not impair the validity of said taxes, or prevent the collection thereof.'

The act of 1840 did not contain the proviso, above given, to the fifth section of this act of 1841.

Under these acts, the county supervisors assessed taxes to the amount of $16,000, or more. One of the tracts afterwards retained by the Indians (the Cattaraugus), and one of those agreed at the expiration of the five years to be ceded to Ogden & Fellows, were, in addition to the beforesaid special tax, assessed; also, in 1840, 1841, 1842, and 1843, with ordinary town and county taxes. The taxes of no kind being paid, the lands were sold.

A case being agreed on, Fellows and others (Ogden being dead) brought suit in the Supreme Court of New York against the controller of the State and the purchaser at the tax sales praying that the assessments might be declared void. That court gave judgment for the defendants; a judgment which the Court of Appeals of the State affirmed. This judgment was now here for review; the question being whether the State of New York had power to tax the Indian reservations in that State, especially the Cattaraugus and Alleghany.

Mr. Martindale, Attorney-General of New York, for the appellees, and in support of the right to tax:

The Indians' title is a right of occupancy, use, and enjoyment, and not of alienation. It does not include the whole property in the land. The 'ultimate fee' to these reservations which carries with it the right of pre-emption, is the real property, and this has hitherto proved far more valuable, in market and in treaties, than the Indian right of occupancy.

Now the assessment of taxes authorized by the law of 1841 does not relate to, or affect the Indians' title. On the contrary, that title-the right of occupancy-is by the fifth section expressly excepted from the operation of the statute.

The taxes were not authorized by the legislature until after the lands were conveyed by the Indians to our own citizens, and after the purchase had been approved by the general government. Under these circumstances, the intent presumable, not less than the intent expressed, was to impose and enforce the tax in respect to the interest rightfully acquired by our citizens, and it is only on that assumption that the plaintiff has any standing in court.

The assessments complained of are made then, in fact, against the right and property of Fellows, to which the treaty of Canandaigua, 1794, had no relation. His title is, without doubt, liable to taxation by State authority.

In addition, the fourth article of the compact of 1786, between New York and Massachusetts, admits the right to impose town and county taxes, of which class the taxes here laid are.

Mr. J. H. Reynolds, contra.

Mr. Justice NELSON delivered the opinion of the court.

title: The New York Indians


text: Talk:The New York Indians

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title: Talk:The New York Indians


text:
The New York Indians/Opinion of the Court

The principal authority to tax is derived from two acts of the legislature, passed May 9, 1840, and May 4, 1841. As the act of 1840 was held by the court below void as respects these reservations, we will, for the present, dismiss it.

The act of 1841 contains eight sections.

[His honor here stated the first five sections of the act in the words already given on pages 763-4.]

The eighth section provides that the taxes may be assessed, levied, and collected as directed by the act, notwithstanding the occupation of the lands by the Indians. The failure to extinguish the right of the Indians, or to remove them from the possession, shall not impair the validity of said taxes or prevent the collection.

This last section furnishes, doubtless, a solution of what we must otherwise regard as a very free, if not extraordinary, exercise of power over these reservations and the rights of the Indians, so long possessed and so frequently guaranteed by treaties. These treaties are historical and need not be referred to, beginning in 1784 and coming down to 1842. That of 1794, entered into at Canandaigua, New York, may be cited as a specimen. Third article, 'The United States acknowledge all the land within the aforementioned boundaries (which include the reservations in question) to be the property of the Seneca nation, and the United States will never claim the same nor disturb the Seneca nation,. . . in the free use and enjoyment thereof; but it shall remain theirs until they choose to sell the same to the people of the United States, who have the right to purchase.'

We will now refer to the explanation of this law, which, it is admitted, is the first (except that of 1840) ever passed by the legislature of New York to tax these Indian reservations.

By the treaty of 1938 the Seneca nation on these reservations agreed to remove to the west of the Mississippi River, and, at the same time, with the consent of the United States, sold their lands to Ogden & Fellows, who held the pre-emptive right, derived from Massachusetts, and executed a conveyance of the same. The treaty provided for the removal within five years. It was proclaimed April 4, 1840. Before the expiration of the five years, difficulties arose between the grantees and the Indians, which resulted in a new treaty, 20th May, 1842, between the United States and the Seneca nation, when it was agreed that the deed embracing these two reservations should be cancelled, and the Indians remain as before with all their original rights. The words are: 'The said nation shall continue in the occupation and enjoyment of the whole of the said two several tracts of land, called the Cattaraugus reservation and the Alleghany reservation, with the same right and title in all things as they had and possessed therein immediately before the sale of said reservation.'

Now, it will be seen that this act of New York, which was passed in 1841, was passed at a time when the grantees, under the treaty of 1838, had taken the title in fee, but before the expiration of the five years. And it was doubtless assumed, which we think a mistake, that the whole title being in the grantees, the State, notwithstanding the possession of the Indians, might enter upon the reservations in the exercise of its internal police powers, and deal with them as with any other portion of its territory. Hence the eighth section directing that taxes may be imposed, assessed, or levied and collected, notwithstanding the occupation of the Indians, or the failure to extinguish their right, or to remove them from the possession, and declaring that the neglect should not impair the validity of the taxes or prevent the collection.

This explanation is due to the character of the State, and removes the inference that might otherwise be drawn, that the legislature were encouraging, if not authorizing, a direct interference by the owners of the right of pre-emption with these ancient possessions and occupations, secured by the most ascred of obligations of the Federal government.

It is provided, however, that the execution of these laws shall not disturb or affect the right of the Indians in their occupation of the reservations, and a clause in the fifth section is referred to as conclusive of this position. 'But no sale for the purpose of collecting said taxes shall in any manner affect the right of the Indians to occupy said lands.' It is true that this clause undertakes to save this right, which the act of 1840 did not; but the rights of the Indians do not depend on this or any other statutes of the State, but upon treaties, which are the supreme law of the land; it is to these treaties we must look to ascertain the nature of these rights, and the extent of them.

It has already been shown that the United States have acknowledged the reservations to be the property of the Seneca nation-that they will never claim them nor disturb this nation in their free use and enjoyment, and that they shall remain theirs until they choose to sell them. These are the guarantees given by the United States, and which her faith is pledged to uphold. Now we have seen that this law, taxing the lands in the reservations, authorizes the county authorities to enter upon them, survey and lay out roads, construct and repair them, construct and repair bridges, assess and collect taxes to meet the expenses, and survey the lands for the purpose of making the assessments, and in pursuance of these powers the proper officers of the counties have assessed upon them large sums for the years 1840, 1841, 1842, and 1843.

The answer to all this interference with the possession, and occupation, and exercise of authority is, that the sale of the lands in default of payment of the taxes shall not 'affect the right of occupancy of the Indians.' We are of opinion that this is not a satisfactory answer.

We have looked through all the treaties from 1784 down to the present time, and find but one of them in which any right is stipulated to enter upon the lands reserved to construct roads. That is the treaty of 1794, in which the Seneca nation cede to the United States the right to make a wagonroad from Fort Schlosser to Lake Erie, as far south as Buffalo Creek.

A clause in the adjustment of the dispute between New York and Massachusetts, in respect to these and other lands, has been referred to, which provides that no general or State tax shall be charged or collected from the lands thereafter to be granted by Massachusetts, or on occupants or proprietors of such lands until fifteen years have elapsed after confirmation, &c., 'but that the lands so granted, and the occupants thereof, shall, during the said period, be subject to town and county charges, or taxes only.' We suppose this provision had no relation to the Indian occupation, or Indian occupants, for the two States possessed no power to deal with Indian rights or title. They were dealing exclusively with the pre-emption right after the Indian title was extinguished, and with the government and jurisdiction over the territory. The clause doubtless related to the condition of these lands in case the Indian title should be extinguished as to the whole or any part of them within the fifteen years' exemption. At all events, whatever may be the true construction, it can in no way affect the Indian occupants. The commissioners had no power over them.

The question of the taxation of Indian lands, while in their tribal organization, by the State authorities, has been before us this term in several cases from the State of Kansas, and after a very full consideration of the subject the power was denied. We refer to the opinions in these cases as rendering any further examination of the subject unnecessary.

The tax imposed on the Buffalo reservation in 1840, 1841, 1842, and 1843, is not distinguishable from that imposed on the Alleghany and Cattaraugus reservations. Teh Indians were still in their ancient possessions and occupancy, and till removed by the United States were entitled to the undisturbed enjoyment of them.

On looking into the record it appears that these reservations, besides the special taxation referred to, have been taxed for the years 1840, 1841, 1842, and 1843, for the ordinary town and county charges in each year.

If I understand the opinion of the learned judge of the Court of Appeals, these taxes, as it respects the Buffalo reservation, are sustained on the ground that the Indians had parted with their title to Ogden & Fellows by the treaties and conveyances of 1838 and 1842, and that the whole title was in the grantees, though the period for the removal of the Indians had not expired, but would before the sales could take place for default in payment or the purchaser be entitled to the possession.

We have already given the answer which we think satisfactory to this ground in support of the judgment below. Until the Indians have sold their lands, and removed from them in pursuance of the treaty stipulations, they are to be regarded as still in their ancient possession, and are in under their original rights, and entitled to the undisturbed enjoyment of them. This was the effect of the decision in the case of Fellows v. Blacksmith. The time for the surrender of the possession, according to their consent given in the treaty, had not expired when these taxes were levied. The period within which the removal was to take place, under the treaty of 1838, was five years from the time it went into effect. It was not proclaimed till 1840, and under that of 1842 the time did not expire till 1846. The taxation of the lands was premature and illegal.

It will be seen on looking into the general laws of the State imposing taxes for town and county charges, as well as into the special acts of 1840 and 1841, that the taxes are imposed upon the lands in these reservations, and it is the lands which are sold in default of payment. They are dealt with by the town and county authorities in the same way in making this assessment, and in levying the same, as other real property in these subdivisions of the State. We must say, regarding these reservations as wholly exempt from State taxation, and which, as we understand the opinion of the learned judge below, is not denied, the exercise of this authority over them is an unwarrantable interference, inconsistent with the original title of the Indians, and offensive to their tribal relations.

The tax titles purporting to convey these lands to the purchaser, even with the qualification suggested that the right of occupation is not to be affected, may well embarrass the occupants and be used by unworthy persons to the distrubance of the tribe. All agree that the Indian right of occupancy creates an indefeasible title to the reservations that may extend from generation to generation, and will cease only by the dissolution of the tribe, or their consent to sell to the party possessed of the right of pre-emption. He is the only party that is authorized to deal with the tribe in respect to their property, and this with the consent of the government. Any other party is an intruder, and may be proceeded against under the twelfth section of the act of 30th June, 1834.

We are gratified to find that in 1857 the legislature of New York passed a law declaring, in substance, that no tax shall thereafter be assessed on either of the two reservations (Alleghany and Cattaraugus), or on any part of them, so long as they remain the property of the Seneca nation, and that all acts of the State conflicting with the provisions of this section are hereby repealed.

Our conclusion is, that the whole of the taxes assessed upon the three reservations (Buffalo Creek, Alleghany, and Cattaraugus), are illegal, and void as in conflict with the tribal rights of the Seneca nation as guaranteed to it by treaties with the United States.

The judgment must therefore be REVERSED, and the cause remanded, with directions to enter a judgment IN CONFORMITY WITH THIS OPINION.


text: Talk:The New York Indians/Opinion of the Court


text:
Supervisors v. Schenck

ERROR to the Circuit Court for the Northern District of Illinois; the case being thus:

An Illinois statute, passed in 1849, authorized the 'county court' of counties wishing to subscribe to stock in railroads, to make subscriptions and to issue bonds. But the statute provided that no subscription should be made or bonds issued whereby any debt should be created by the county court, except after an election to be held in a mode prescribed in the statute, and after at such election two-thirds of the qualified voters of the county had voted to have it.

In 1851-that is to say, two years after the statute just mentioned had been passed-the legislature passed another statute, called The Township Organization Law, thus:

'No county under this organization shall possess or exercise any corporate powers, except such as are enumerated in this act, or shall be specially given by law, or shall be necessary to the exercise of the powers so enumerated or given.

'The powers of a county as a body politic can only be exercised by the board of supervisors thereof, or in pursuance of a resolution by them adopted.

'The board of supervisors of each county in this State shall have power. . . to perform all other duties, not inconsistent with this act, which may be required of or enjoined on them by any law of this State relating to the county courts.'

One of the counties of Illinois-Marshall County-had adopted the township organization which this statute of 1851 authorized before the 28th day of February, 1853, and was on that day so organized and acting.

In this state of the statute law and of facts Schenck brought assumpsit in the Circuit Court for Northern Illinois against the board of supervisors of this same Marshall County, to recover interest which had become due September 12th, 1865, on the coupons of certain bonds issued nine years before, signed by the board of supervisors of the said county, for stock in the Western Air-Line Railroad. The narr. was in the ordinary form.

Special plea, that on the 28th day of February, 1853, the County Court of Marshall County ordered an election, to vote for and against a subscription, & c. That such election was held under said order; that the board of supervisors, on the 14th of November, 1854, acting by authority of said election, subscribed; that the bonds and coupons were issued in payment of the said subscription; that no election was ever held by order of the board of supervisors, and that the said Marshall County had been organized and was acting under the Township Organization Law since prior to 28th of February, 1853, all of which appeared from the public records of said county. The plea alleged, therefore, that the bonds and coupons had been issued without authority of law, and were void.

Special replication, not denying the facts alleged in the plea, but alleging that the bonds and coupons were issued in payment for stock of the company, which stock was received by the county; that the county enjoyed all the benefits of a stockholder; that the bonds were sold by the railroad compary to the plaintiff, for value, without any notice of any want of authority to execute the same, other than the constructive notice, which might be implied from the record of the said proceedings; that ever since the date of the bonds (1856) the board of supervisors had annually levied and collected the necessary taxes, and paid the interest on them; and that therefore the bonds and coupons had been ratified, and were now valid and binding on the county.

General demurrer and judgment on it against the supervisors of the county for the amount of the coupons declared on.

The county now brought the case to this court; the error complained of being that the Circuit Court had overruled the demurrer, instead of sustaining it, and the question being, whether the bonds were void in the hands of bona fide holders before maturity, because the election which authorized their issue was called by the County Court of Marshall County, instead of the board of supervisors of the county, notwithstanding that all the subsequent proceedings as was admitted were regular, and the county had, for seven or eight years, levied and collected taxes to pay the interest upon them, and had paid the interest as it fell due, until the default stated in the declaration of this case.

Mr. Cook, for the supervisors of the County of Marshall, plaintiff in error:

1. This is a question of power and of its legal exercise. Counties are organized for purposes of government. If they create debts for purposes so alien to the purpose of their creation as building railroads, they must do so under general or special law. Without law, the creation of such a debt is void. If a law exists for the creation of the debt, unless such debt is created substantially according to the law, no liability attaches to the county. These statutes have expressly declared that the bonds should not issue, unless in pursuance of authority conferred by a vote of the majority in favor of such subscription, at an election called in the mode pointed out by the act. It is admitted that these bonds were issued without such an election. A slight deviation from the mode prescribed will not, we may fully admit, invalidate such securities in the hands of innocent holders for a valuable consideration. But there is a wide difference between an act performed without authority, or in violation of law, and an act defectively performed under authority. In the former case the act is absolutely void. Here a ratification is set up. But how could the county authorities ratify a contract which they had no authority to make, and especially without any further or other authority than that which they had at the time they made it? Such a contract is 'incapable of ratification by the county authorities.'

2. Then it is set up that the plaintiffs are bona fide holders of these bonds without notice. But can there be such holders of bonds like these?

The supervisors derived their authority to act from the law, which was public, and the condition precedent was not only one which was in its nature public, but it was also a matter of record in the public offices. Purchasers of these bonds were bound to look to these records, and if those showed prima facie that the board was not authorized in law to issue the bonds, then the holders took them with notice.

3. The Supreme Court of Illinois has construed these statutes, in Cook v. Supervisors of Marshall County, not yet reported, and held part of the issue of these same bonds to be void. This court follows the rulings of State courts on State statutes.

Mr. S. W. Fuller, contra:

1. The exact question raised here has been decided by this court numerous times. Knox County v. Aspinwall, is full to the point. In that case it appeared that, under the law of Indiana, it was the duty of the sheriffs to give the notices of the election; but the election authorizing the issue of the bonds was called by the board of commissioners of Knox County, and the court held, that as all the subsequent proceedings were regular, the error in calling the election did not invalidate the bonds in the hands of bona fide holders. The same question was again raised, and decided the same way, in Bissell et al. v. City of Jeffersonville; and other cases since, are in harmony with these.

2. By levying and collecting taxes to pay the interest on its bonds, and paying that interest for a series of years in the manner stated in the replication, the county has ratified its bonds. In Keithsburg v. Frick, in the State where this case comes from, the court say, in regard to bonds similarly issued:

'The corporation is now estopped from setting up any irregularity in their issue, inasmuch as they have repeatedly recognized their validity by paying them out, levying taxes, and paying interest on them for a series of years. . . . It is now too late to raise a question as to the regularity of their issue.'

We need not criticize or discuss the soundness of the decision in Cook v. The Board of Supervisors of Marshall County. It is not one of that class of decisions of the State courts which are binding upon this court. Bonds and coupons like those involved in this suit are commercial securities, negotiable instruments, and the questions pertaining to them must be decided by the rules of commercial law. This court has always expounded that law for itself. Its right to do so was declared in Swift v. Tyson, a decision never, that we know of, departed from.

Mr. Justice CLIFFORD delivered the opinion of the court.

title: Supervisors v. Schenck


text: Talk:Supervisors v. Schenck

title: Talk:Supervisors v. Schenck


text:
Supervisors v. Schenck/Opinion of the Court

Counties in the State of Illinois may purchase or subscribe for shares in the capital stock of any railroad company incorporated or organized under any law of the State, in any sum not exceeding one hundred thousand dollars.

Pursuant to that law the corporation defendants, on the twelfth day of September, 1856, issued, as alleged in the first count of the declaration, thirty bonds, each for one thousand dollars, payable to the Western Air-Line Railroad Company, or order, in twenty years from date, with interest coupons annexed, stipulating for the payment to bearer of interest annually, at the rate of six per centum per annum. Same count alleged that the plaintiff, on the first day of July, 1857, became the legal holder of those bonds, with the coupons thereto attached, by due indorsement and delivery.

Present suit, which was an action of assumpsit, was brought by the plaintiff to recover one year's interest on those bonds, which fell due on the twelfth day of September, 1865, nine years after the bonds were issued and eight years after the plaintiff became the holder of the same, for value, and in the usual course of business.

The authority of counties to purchase or subscribe for such shares and issue such bonds is subject to certain conditions or regulations, one of which is, that a majority of the qualified voters of the county must first vote for such subscription or purchase. Provision is also made for proper notice to the electors of the time and place of the meeting for that purpose, and the requirement is, that the notice must specify the company in which stock is proposed to be subscribed, the amount proposed to be taken, the time the bonds are to run, and the rate of interest the bonds are to bear.

Defendants appeared and filed a special plea, and rested their defence entirely upon the allegations of that plea. Substance of the defence was, that the bonds were issued without authority, and were invalid, because the election to procure the consent of a majority of the qualified voters of the county was ordered to be held by the county court of the county, and not by the board of supervisors of the county, as required by law; but they admitted, among other things, that the election was properly conducted, and that the returns were duly made, and that the proceedings, in all other respects, were regular and correct.

Replication of the plaintiff alleged that the bonds and coupons were executed and delivered in payment of a like number of shares of the stock in the railroad company; that the shares of the stock were received by the defendants in payment for the bonds, and that the defendants have ever since held and owned the same, and by virtue thereof have participated in the election of the officers of the company, and in all other benefits and advantages attending such ownership. He also alleged that the transfer of the bonds to him was for a valuable consideration, and without notice of any defect in the preliminary proceedings, and that the defendants, having paid the interest annually accruing on the bonds to the amount of six thousand dollars, have thereby ratified and confirmed the same as binding and obligatory.

Defendants demurred, and the plaintiff joined in demurrer. Circuit Court overruled the demurrer, and rendered judgment for the plaintiff, and the defendants removed the cause into this court.

I. Bonds to the amount of one hundred thousand dollars were issued by the defendants, of which the bonds specified in the declaration were a part, and the railroad company, at the same time, transferred stock to them in the same amount. Decision of the Circuit Court in overruling the demurrer is the only error assigned in the record, and the single question presented in the case is, whether the bonds specified in the declaration, and which were indorsed and delivered before maturity, are void in the hands of the plaintiff, who is the holder for value, and without notice of any defect in the proceedings, because the order for the election in which the majority of the qualified voters of the county voted to subscribe for the stock of the railroad company and purchase the shares, was made by the county court, and not by the supervisors of the county.

Before examining that question it may be well to mention some of the further admissions of the defendants, as exhibited in their special plea. They therein admit, in express terms, that the notices of the election were duly published, that the election was held, that the required number of qualified votes were given on the fifth day of April, 1853, and that the board of supervisors of the county, on the fourteenth day of November, 1854, made an order, and recorded it, that the county do subscribe one hundred thousand dollars to the stock of the company named in the bonds; and that the board, on the same day, passed another order to empower the chairman of the board to make the subscription, and that he made the subscription and purchased the shares on the following day.

These admissions of the plea, or answer, are followed by others of equal importance, to wit: That the chairman and clerk of the board did afterwards issue, by the order of the board, the bonds of the county, as alleged in the declaration, and that the same were duly delivered to the railroad company, in payment for a like number of the stock shares of the company.

Looking at these several admissions, it is obvious that the sole objection to the validity of the bonds, even inter partes, arises from the fact alleged in the plea, and not directly denied in the replication, that the order for the election was passed by the county court of the county, and not by the board of supervisors. Express authority is conferred upon counties in that State to subscribe for shares, or purchase the same, in any railroad company incorporated and organized under the laws of the State, in any amount not exceeding the sum already specified, and the Supreme Court of the State have settled the doctrine in a series of decisions that the law of the State conferring such authority is constitutional and valid.

Power in the county, therefore, to make the subscription, purchase the shares, and issue the bonds in this case, if the proceedings were regular, is placed beyond all question. Support to that proposition is hardly necessary, as it is settled by the decisions of this court, as well as by the highest judicial authority of the State, and stands confessed.

Notices of the time and place of the election, in due form of law, were duly published, and the meeting was formally held at the time appointed, and at the usual place for such elections. Returns of the election were duly made, and the admission of the plea warrants the conclusion that they show that a majority of the qualified voters voted for the subscription. Compliance, therefore, is shown with every provision of the original law which authorized counties to make such subscriptions and purchase shares in the capital stock of railroad companies. Orders for such elections were required under that law to be made by the county court of the proper county, and the provision was that the stock so subscribed or purchased should be under the control of the county court making such subscription or purchase, in all respects, as stock owned by individuals.

Prior to the date of the order for the election in this case, however, the township organization law was passed, which provides that the powers of a county as a body politic can only be exercised by the board of supervisors thereof, or in pursuance of a resolution by them adopted.

None of the other provisions of the prior law are repealed, nor is there any change in the regulations, except that the order for the election is required to be made by the board of supervisors, and not by the county court of the county. The objection is that the order in this case was made as under the prior law, but the notices, in regular form, were duly published, and the election was held, and the board of supervisors of the county ratified the proceedings by subscribing for the stock, issuing the bonds, accepting the shares in payment of the same, and by participating ever after in the election of the officers of the company and in the management of its affairs, as owners to that extent of the stock of the company.

Throughout they appear to have adopted the order and the results of the election as rightfully authorized acts, and for the period of ten years the county has held the stock as their own property, and have voluntarily enjoyed all the benefits of absolute legal ownership, without any complaint or any attempt to enjoin the proceedings.

Preliminary proceedings looking to such a subscription by a municipal corporation may often be enjoined for defects or irregularities before the contract is perfected, in cases where the corporation will be held to be forever concluded, if they remain silent and suffer the shares to be purchased, the bonds to be issued, and the securities to be exchanged. Nothing of the kind was attempted in this case, and the defendants have never rescinded, or attempted to rescind, the contract, and have never returned, or offered to return, the evidences of their ownership of the shares in the stock of the company, but have annually acknowledged the validity of the bonds by voting taxes for the payment of the accruing interest, and have actually paid the same to the amount of six thousand dollars.

Judge Story said there was no maxim, where it does not prejudice the rights of strangers, better settled in reason and law than Omnis ratihabitio retrotrahitur et mandato priori aequiparatur, and it is equally well settled that the maxim is as applicable to corporations in matters of simple contract as to other contracting parties. Questions of ratification most frequently arise in respect to the acts or omissions of agents, but the general rule is the same in all cases where the act done was one which it was competent for the party attempted to be charged to do. When the principal, upon a full knowledge of all the circumstances of the case, deliberately ratifies the acts, doings, or omissions of his agent, he will be bound thereby as fully, to all intents and purposes, as if he had originally given him direct authority in the premises, to the extent which such acts, doings, or omissions reach.

Ratification is inoperative if the party attempted to be charged was not competent to make the contract in question when the same was made, nor when the supposed acts of ratification were performed, or if the contract was illegal, immoral, or against public policy. Like an individual, a corporation may ratify the acts of its agents done in excess of authority, and such ratification may, in many cases, be inferred from acquiescence in those acts, as well as from express adoption. Such ratification may be by express consent, or by acts and conduct of the principal inconsistent with any other hypothesis than that he approved, and intended to adopt what had been done in his name; and it was held in Peterson v. The Mayor of New York, that the principle is as applicable to corporations as to individuals. Where the officers of the corporation openly exercise powers affecting the interests of third persons, which presupposes a delegated authority for the purpose, and other corporate acts subsequently performed show that the corporation must have contemplated the legal existence of such authority, the acts of such officers will be deemed rightful, and the delegated authority will be presumed.

All of the acts of the board of supervisors of the county in making the subscription, purchasing the shares, issuing the bonds, and exchanging the securities, appear to have been open and well known to the corporation, and yet they constantly suffered themselves to be represented in the choice of officers and in the management of all the affairs of the railroad company, and have voluntarily voted taxes for the payment of the yearly interest on the bonds, and actually paid the same, as admitted in the special plea.

Examined in the light of those suggestions, it would be difficult to imagine a case where the rule that a subsequent ratification is as good as a previous authority can be more justly applicable than in the case under consideration. So, where shares in a railroad company were received by the officers of a county in exchange for their bonds, and were never returned, and the proper officers of the county voted for directors at two elections, and the supervisors paid two annual instalments of interest, the Supreme Court of Illinois held that those acts, unexplained, were as satisfactory evidence of a design to ratify the issue of the bonds as if it had been done by an order of the supervisors.

Direct decision to the same effect was also made by that court in Keithsburg v. Frick, which is the latest reported decision upon the subject. Views of the court in that case were that the acts of the supervisors in issuing the bonds and putting them upon the market, and by levying taxes and paying interest for a series of years, estopped the county from setting up any irregularity in their issue, and this court has, in repeated instances, affirmed the same doctrine.

Leading case in this court is that of Knox County v. Aspinwall, which was very fully considered by the court. Alleged defect in that case was that the notices of the election, as required by law, had not been given in any form, but the decision was that the question as to the sufficiency of the notice, and the ascertainment of the fact whether the majority of votes had been cast in favor of the subscription, was necessarily left to the inquiry and judgment of the county board, as no other tribunal was provided for the purpose. Intimation of the court was that their decision might not be conclusive in a direct proceeding to inquire into the facts previously to the execution of the power, and before the rights and interests of third parties had attached. But the court held that after the authority had been executed, the stock subscribed, the bonds issued, and in the hands of innocent holders, it was too late, even in a direct proceeding, to call the power in question; much less, say the court, can it be called in question to the prejudice of a bona fide holder of the bonds in a collateral way.

Similar views were expressed by this court in the case of Bissel v. Jeffersonville, and in many others referred to by the plaintiff. When a corporation has power, under any cir cumstances, to issue negotiable securities, the decision of this court is that the bona fide holder has a right to presume they were issued under the circumstances which give the requisite authority, and they are no more liable to be impeached for any infirmity in the hands of such a holder than any other commercial paper.

State courts in other States have decided in the same way, as well where the controversy was between the original par ties as in favor of indorsers and holders, without notice of the alleged defect.

Argument of the defendants proceeds upon the ground that if they can show that the order for the election emanated from the wrong source, the plaintiff, although an innocent holder for value, cannot recover; but it is clear that in a case like the present, where the power to issue the bonds was fully vested in the corporation, the proposition cannot be sustained. On the contrary, it is settled law that a negotiable security of a corporation, which upon its face appears to have been duly issued by such corporation, and in conformity with the provisions of its charter, is valid in the hands of a bana fide holder thereof, without notice, although such security was in point of fact issued for a purpose, and at a place not authorized by the charter of the corporation.

Attention is drawn to the fact that in a recent case not yet reported, the Supreme Court of the State have held that these bonds are void, even in the hands of an innocent holder, but inasmuch as the power to issue the bonds was fully conferred by law, the question of their validity in the hands of innocent holders, without notice, is a quesion of commercial law where the State adjudications, although entitled to great respect, do not furnish the rule of decision in this court.

Prior decisions of the State court were in accordance with the decisions of this court, and as those decisions were supposed to be correct expositions of the law of the State at the period when these bonds were issued, the latter adjudications cannot control the judgment in this case.

JUDGMENT AFFIRMED, WITH COSTS.


text: Talk:Supervisors v. Schenck/Opinion of the Court


text:
Kelly v. Crawford

On error to the Circuit Court for the Northern District of Illinois; the case was thus:

Crawford & Co., in 1860, were coal dealers in Cleveland, and at the same time Kelly & Maher were coal dealers in Chicago. On the 4th August Kelly made a contract with Crawford & Co., the purport of which was, that Crawford & Co. were to supply Kelly & Co. with coal; that the coal was to be furnished at Cleveland; that Kelly & Co. were to advance the freight and insurance; that upon its arrival here they were to dock and sell it, to guarantee the payment of all sales. The contract prescribed the manner in which the proceeds of the sales were to be divided between the parties, and provided that the coal was to remain the property of Crawford & Co.

On the 13th of September, 1861, there being a large sum of money due Crawford & Co. for coal furnished under the contract, an agreement was made, in substance thus:

'Know all men, &c., that whereas Kelly & Co. are indebted to Crawford & Co. upon joint account, the exact amount to be ascertained from the books of Kelly & Co. by one G. H. Quigg, under the supervision of the parties to this agreement (the amount so found to be due and owing to be final). In consideration of such indebtedness, &c., the said Kelly & Co. hereby assign to the said Crawford & Co. all the accounts hereunto attached, and marked 'Exhibit A,' together with two wheelbarrow scales [and other chattels personal, specified], and all other accounts due and owing to said Kelly & Co. upon their coal books, except the accounts now enjoined in chancery. Further: that Crawford & Co. are to put the said accounts into speedy collection; and after paying the expenses of collecting, the balance shall be applied to the extinguishment of the debt of said Kelly & Co. to Crawford & Co., as ascertained by the aforesaid G. H. Quigg. It being distinctly understood that the said Quigg is to ascertain the amount due, which the parties hereto now agree is to be the actual amount. Should there be any balance left after collecting the sums herein referred to, the said Crawford & Co. agree to pay the same over to Kelly & Co.; and should the said sum of accounts, and the personal property herein referred to, be insufficient to pay the sum found (hereafter) to be due to Crawford & Co., then Kelly & Co. agree to pay the balance remaining unpaid to Crawford & Co.'

No 'exhibit' of any kind had been annexed to this contract at the date of its execution, nor was ever afterward annexed.

Quigg, in September, 1861, along with Mahel, Crawford & Co. supervising what he did, proceeded to determine from the books of Kelly & Co. the amount due Crawford & Co. In doing this he corrected errors and oversights, and made some new entries, and on the 16th of June, 1862, he wrote up a balance of the accounts as they stood on the books at that time; including in it all the accounts that had been entered upon the books by him subsequent to the agreement. Acting thus, he reported, in June, 1862, the sum due to be $5474.

Kelly & Co. having failed to pay the amount thus found, Crawford & Co. brought assumpsit in the court below against them.

The declaration consisted of one special count on the agreement, and the award of Mr. Quigg, thereunder. It set forth that the accounts had been put into collection, and that there was a deficit. The common counts were added.

To this declaration Maher pleaded:

1st. General issue.

2d. That he did not execute the agreement set out in first count of the declaration.

3d. That the agreement so set out was executed by Kelly, in the name of Kelly & Co., without his knowledge or consent, and that long before the date thereof, the firm of Kelly & Co., of which he had been a member, was dissolved.

On the trial, the contract between the parties of September 13th, 1861, was admitted by the court in evidence, 'subject to the proof to be given thereafter,' without the exhibit to which it refers, against two objections of the defendants-1st, that it was incomplete without the exhibit; 2d, that it was invalid, because executed by one of the firm of Kelly & Co., after its dissolution.

Quigg was examined as a witness in the case, and exhibited the books, and testified that the entries made by him, and the balance the books showed, were accurate.

Mr. D. C. Nichols, for Kelly & Co., plaintiffs in error:

1. The contract without the schedule was incomplete-a contract with its most important part omitted-and did not tend to show the case between the parties. Their rights, under the contract, depended upon the accounts assigned. The accounts were to be put into speedy collection. The first count of the plaintiffs' declaration alleges that this was done. If more was collected than Quigg should award, the plaintiffs were to pay the balance to the defendants below; if less, the defendants below were to make up the deficiency. The contract without the schedule had no certain meaning. The absence of the schedule made a patent ambiguity which cannot be supplied by parol evidence.

If this contract could have been rendered competent by extrinsic evidence, that evidence should have been first introduced, before the contract was received in evidence.

2. By the contract of September 13th, 1861, Quigg was to determine the balance due the plaintiffs from the defendants as shown by the books at the time they were submitted to him. Instead of so finding the balance he changed the books; introduced new and original matter in them, and in making up the balance-sheet included this matter. In doing this he exceeded the submission.

Now, an award not in pursuance of the submission, or based upon matters not submitted, is void.

Mr. Merrick, contra:

The court is now asked to reverse this judgment, not because of any injustice done the defendants, or that the judgment and finding of the jury are not fully supported by the pleadings and proofs in the case, or that the jury were in anywise misled by the direction of the court, or would not be justifiable in coming to the same conclusion under any aspect of the case consistent with the facts, or that substantial justice has not been done to the defendant; nothing of the kind is assigned for error. On the contrary, there being no errors assigned in this court, the plaintiffs in error substantially admit that the defendants in error made out their case. The allegation is that the court erred technically in permitting the defendants in error to introduce and read in evidence to the jury, the contract of September 13th, 1861, and the books of Kelly & Co. There is really nothing else. There was no substantial error in what was done, and none even in a technical view. There was no dispute about anything. Quigg was not an arbitrator; but was a mere accountant, fixed on to find the sum due on the books of Kelly & Co.

Mr. Justice FIELD delivered the opinion of the court.

title: Kelly v. Crawford


text: Talk:Kelly v. Crawford

title: Talk:Kelly v. Crawford


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Page:The Confidence Man.djvu/207

Rh "Yes, you pun with ideas as another man may with words."

"Oh well, sir, whoever talks in that strain, whoever has no confidence in human reason, whoever despises human reason, in vain to reason with him. Still, respected sir," altering his air, "permit me to hint that, had not the force of analogy moved you somewhat, you would hardly have offered to contemn it."

"Talk away," disdainfully; "but pray tell me what has that last analogy of yours to do with your intelligence office business?"

"Everything to do with it, respected sir. From that analogy we derive the reply made to such a patron as, shortly after being supplied by us with an adult servant, proposes to return him upon our hands; not that, while with the patron, said adult has given any cause of dissatisfaction, but the patron has just chanced to hear something unfavorable concerning him from some gentleman who employed said adult long before, while a boy. To which too fastidious patron, we, taking said adult by the hand, and graciously reintroducing him to the patron, say: 'Far be it from you, madam, or sir, to proceed in your censure against this adult, in any thing of the spirit of an ex-post-facto law. Madam, or sir, would you visit upon the butterfly the sins of the caterpillar? In the natural advance of all creatures, do they not bury themselves over and over again in the endless resurrection of better and better? Madam, or sir, take back this adult; he may have been a caterpillar, but is now a butterfly."

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Kelly v. Crawford/Opinion of the Court

On the trial of this cause the agreement of September 13th, 1861, was admitted in evidence, without the exhibit to which it refers, against two objections of the defendants: 1st, that it was incomplete without the exhibit; 2d, that it was invalid, because executed by one of the firm of Kelly & Co. after its dissolution.

The answer to the first objection consists in the fact that no exhibit, though mentioned in the agreement as annexed to it, was in truth annexed. The parties executed the agreement, and acted upon it without this document being attached. The agreement cannot, therefore, be treated as incomplete in the absence of the exhibit; it was only ineffectual to pass the amounts specified in that paper; it was effectual to pass all other matters mentioned. The contract was not intended merely to transfer certain assets; it had for a further object to ascertain the amount of the indebtedness of the defendants from the examination of their books by an accountant. It was clearly admissible in connection with the statement of the accountant to show the amount of such indebtedness.

To the second objection the answer is equally brief and conclusive. The agreement was admitted, 'subject to the proof to be given thereafter,' and it was subsequently proved that the agreement was ratified by the other partner of the firm of Kelly & Co., and the fact of ratification is specially found by the jury.

The principal objections urged for a reversal of the judgment rest upon the idea that the agreement of September 13th, 1861, was a submission to arbitration, and the report or statement of Quigg was the award of an arbitrator; and that both are to be judged by the strict rules applicable to arbitrations and awards. This is, however, a mistaken view of the agreement and report. As observed by counsel, there was no dispute or controversy between the parties to be submitted to arbitration; nor was anything to be submitted to the judgment or discretion of Quigg. The books of account of the defendants were to determine the amount due; about these there was no controversy. The only duty of Quigg was to examine them as an accountant and to state what they exhibited.

The objection that the report was not made from the accounts as they stood on the books at the time they were placed in the hands of Quigg, is not one which can affect the result. The object of submitting the books to him for examination was to ascertain the exact amount of the indebtedness of the defendants to the plaintiffs. For this purpose it was in his power to write up the books, to correct errors discovered, and make entries of what had been omitted by oversight or mistake. It is to be presumed that the parties desired to arrive at a just result, not to have a balance struck from the books without regard to their correctness. The agreement provides that the amount due was to be ascertained by Quigg, under the supervision of the parties, and the proof shows that this was done under the immediate supervision of one of the defendants.

Besides, Quigg was examined as a witness in the case, and exhibited the books, and testified as to the balance they showed and the entries made by him. These books were, of themselves, admissible as evidence of the balance due by the defendants, independent of the agreement of September 13th, 1861. Upon the evidence they furnished, taken in connection with the testimony of Quigg, the verdict of the jury may be sustained without reference to his report. They showed the amount received from the sales of coal furnished to the defendants to which the plaintiffs were entitled; and for such amount the recovery can be upheld under the common counts, for money had and received.

JUDGMENT AFFIRMED.

title: Kelly v. Crawford/Opinion of the Court


text: Talk:Kelly v. Crawford/Opinion of the Court


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Page:The Confidence Man.djvu/208

194 "Pun away; but even accepting your analogical pun, what does it amount to? Was the caterpillar one creature, and is the butterfly another? The butterfly is the caterpillar in a gaudy cloak; stripped of which, there lies the impostor's long spindle of a body, pretty much worm-shaped as before."

"You reject the analogy. To the facts then. You deny that a youth of one character can be transformed into a man of an opposite character. Now then—yes, I have it. There's the founder of La Trappe, and Ignatius Loyola; in boyhood, and someway into manhood, both devil-may-care bloods, and yet, in the end, the wonders of the world for anchoritish self-command. These two examples, by-the-way, we cite to such patrons as would hastily return rakish young waiters upon us. 'Madam, or sir—patience; patience,' we say; 'good madam, or sir, would you discharge forth your cask of good wine, because, while working, it riles more or less? Then discharge not forth this young waiter; the good in him is working.' 'But he is a sad rake.' 'Therein is his promise; the rake being crude material for the saint.' "

"Ah, you are a talking man—what I call a wordy man. You talk, talk."

"And with submission, sir, what is the greatest judge, bishop or prophet, but a talking man? He talks, talks. It is the peculiar vocation of a teacher to talk. What's wisdom itself but table-talk? The best wisdom in this world, and the last spoken by its teacher, did it not literally and truly come in the form of table-talk?"

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Page:The Confidence Man.djvu/209

Rh "You, you you!" rattling down his rifle. "To shift the subject, since we cannot agree. Pray, what is your opinion, respected sir, of St. Augustine?"

"St. Augustine? What should I, or you either, know of him? Seems to me, for one in such a business, to say nothing of such a coat, that though you don't know a great deal, indeed, yet you know a good deal more than you ought to know, or than you have a right to know, or than it is safe or expedient for you to know, or than, in the fair course of life, you could have honestly come to know. I am of opinion you should be served like a Jew in the middle ages with his gold; this knowledge of yours, which you haven't enough knowledge to know how to make a right use of, it should be taken from you. And so I have been thinking all along."

"You are merry, sir. But you have a little looked into St. Augustine I suppose.

"St. Augustine on Original Sin is my text book. But you, I ask again, where do you find time or inclination for these out-of-the-way speculations? In fact, your whole talk, the more I think of it, is altogether unexampled and extraordinary."

"Respected sir, have I not already informed you that the quite new method, the strictly philosophical one, on which our office is founded, has led me and my associates to an enlarged study of mankind. It was my fault, if I did not, likewise, hint, that these studies directed always to the scientific procuring of good servants of all sorts, boys included, for the kind gentlemen, our

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Mauran v. Insurance Company

ERROR to the Circuit Court for Massachusetts.

Mauran brought suit in that court against the Alliance Insurance Company on a policy of insurance upon the ship Marshall for one year from the 29th November, 1860, covering the sum of $8000. The insurance, as stipulated in the body of the policy, was 'against the adventures and perils of the seas, fire, enemies, pirates, assailing thieves, restraints, and detainments of all kings, princes, or people of what nation or quality soever.'

In the margin of the policy was the following:

'Warranted by the assured free from loss or expense arising from capture, seizure, or detention, or the consequences of any attempt thereat, any stipulations in this policy to the contrary notwithstanding.'

The vessel was seized on the afternoon of the 17th of May, 1861, two or three miles inside of the bar at the mouth of the Mississippi River, on her way up to New Orleans, by the officers and crew of the steamer Music, belonging to the so-called Confederate States. Some persons on board the steamer at the time of the seizure, hoisted the Confederate flag to the mast-head of the Marshall, and informed the captain and pilot that the ship was 'a prize to the Confederate States.' Verdict and judgment having been given in favor of the insurance company, the question here on error was, whether this taking of the vessel by the naval forces of the so-called Confederate States was a capture within the warranty of the assured in the margin of the policy? If it was, then the loss was not one of the perils insured against, and the judgment below was right.

Mr. Cushing (who submitted with his own, a learned brief of Messrs. R. H. Dana, Jr., and Horace Gray, Jr., in the case of another vessel before the Supreme Court of Maine), for the plaintiff in error:

If this loss was by 'assailing thieves' or 'pirates,' then the insurers are bound to pay; for undoubtedly a taking by assailing thieves or pirates does not operate to make in law a 'capture.' Rovers, thieves and pirates have always been treated as ordinary perils of the sea. Chancellor Kent lays down the distinction in explicit terms:

'The enumerated perils of the sea, pirates, rovers, thieves, include the wrongful and violent acts of individuals, whether in the open character of felons, or in the character of a mob, or as a mutinous crew, or as plunderers of shipwrecked goods on shore. . . . But the stipulation of indemnity against takings at sea, arrests, restraints, and detainments of all kings, princes, and people, refers only to the acts of government for government purposes, whether right or wrong.'Other writers make the same classification. 'Taking by pirates,' says Mr. Dane, 'has none of the effects of legal capture.'

Now, can this court, a court of the United States, treat the persons who made the seizure here otherwise than as pirates or thieves? The political department of the government, it will be conceded, has never acknowledged the rebel confederation as a government de facto, any more than one de jure. On the contrary, it is matter of common knowledge that it has most scrupulously, and in every form, avoided doing so. As to their captures of ships, it has actually treated them as 'pirates.'

The Crimes Act of 1790 makes the taking of a vessel of the United States by rebels an act of piracy. It says:

'If any citizen shall commit any piracy or robbery aforesaid, or any act of hostility against the United States, or any citizen thereof, upon the high seas, under color of any commission from any foreign prince or state, or any pretence of authority from any person, such offender shall, notwithstanding the pretence of any such authority, be deemed, adjudged, and taken to be a pirate, felon, and robber; and on being thereof convicted, shall suffer death.'

In United States v. Wiltberger, the court, obiter, says that the sole object of this statute was to reach a citizen of the United States who depredates on commerce of the United States under color of a foreign commission. The word 'foreign' here includes, of course, any government other than the United States, and especially a pretended government; and most especially a pretended government in rebellion against our own.

The definition of piracy by the law of nations is this:

'Depredating on the seas, without being authorized by any sovereign state, or with commissions from different sovereigns at war with each other.'

Of course, looking to all the conditions of the rebellion, cruising by rebels who are as yet unacknowledged by anybody, even as a de facto government, would be cruising without being authorized by any sovereign, and so would be piracy by the law of nations.

The proclamation of the President of the United States of April 19, 1861, is explicit, as follows:

'And I hereby proclaim and declare, that if any person, under the pretended authority of said (Confederate) States, or under any other pretence, shall molest a vessel of the United States, or the persons or cargo on board of her, such person will be amenable to the laws of the United States for the prevention and punishment of piracy.'

This proclamation is fully justified by the section of the Crimes Act heretofore cited. It was in force at the time of the taking of the ship Marshall. Its applicability is recognized by successive acts of Congress, and it was obligatory on every citizen of the United States; construing every contract made within the United States between citizens of the same.

How then can this court, a depository of the judicial power of the United States, recognize as a government of any kind, a confederation whose representatives the political department proclaims to be pirates, and who, as in the case of Smith, tried before GRIER, J., have been tried and convicted as such.

title: Mauran v. Insurance Company


text: Talk:Mauran v. Insurance Company

title: Talk:Mauran v. Insurance Company


text:
Mauran v. Insurance Company/Opinion of the Court

In whatever light they may be to be looked on by the courts of foreign powers, certainly all cruisers, under the flag of whatever combination of persons, are, in all courts of the United States, to be regarded as pirates by the law of nations, unless such persons have been recognized by the Executive as lawful belligerents, and so a de facto government. That this is a true principle of law, this court decided on all the questions arising out of the Spanish-American Revolution, holding that if the captors represented a de facto authority recognized by the Executive of the United States, they were not pirates by the law of nations, but that if not so recognized by the Executive, they were. Indeed, on these public questions, courts must respect the acts of their own governments, whether herein those acts be reasonable or unreasonable, or even right or wrong. They cannot stultify their own counties.

So also is the law of Great Britain. In a debate on a matter quite kindred to this one, Lord Chelmsford said:

'If the Southern Confederacy had not been recognized by us as a belligerent power, he agreed with his noble and learned friend (Lord Brougham), that any Englishman aiding them by fitting out a privateer against the Federal government would be guilty of piracy.'

The Lord Chancellor (Campbell) impliedly admitted this, in saying that an Englishman entering the Confederate service could not be deemed a pirate after the publishing of the Queen's proclamation recognizing the Southern States as 'entitled to the exercise of belligerent rights and carrying on what might be called a justum bellum.'

In accordance with these views is the case of Swinerton v. Columbian Insurance Company, in the Superior Court of New York City. There a policy of insurance was made on a schooner against the usual perils, including 'pirates, rovers, thieves,' but 'warranted free from loss or expense arising from capture, seizure, or detention, or the consequences of any attempt thereat.' The vessel was lying at Norfolk, for repair, on the 21st of April, 1861, four days after the passage, by the State of Virginia, of her 'secession ordinance,' when a band of men came alongside of her with a steamboat, and professing to act by authority of the State of Virginia, without riot or tumult, towed her out into the channel, and there sunk her. The Superior Court, at first at nisi prius, and then in banc, held that the secession ordinance could not be admitted in evidence for the defence; and that the loss did not come within the exception, but was a loss by pirates, rovers, and thieves. So also in point is the case, before the Commercial Court, or Handelsgericht, of Bremen, of the Harvest, captured by the Shenandoah, a rebel cruiser; where a similar decision was made, and supported by a learned opinion. It will be strange if foreign courts pay a respect to what is done by the political department of our government which the courts of our own country do not.

The policy uses the word 'pirates' in that simple and ordinary sense, in which it now is, and immemorially has been, known to the general commercial law of the civilized world; and not to describe offenders against some municipal criminal law, of some particular country. The interpretation and effect of policies belong to a system of law, existing before the statute of 1790, or any of President Lincoln's proclamations were made, and was not intended to be affected by them. This system of law is not merely a branch, or division of municipal law, but belongs to, and is part of, the common law of nations which defines piracy.

Such instruments have no reference to the legality of governments: they refer always to de facto authority of kings, princes, and people; and an interpretation which should make a risk depend on the legality of an actual government, under whose authority the property had been captured, seized, or detained, would be unprecedented and dangerous. Lemonnier cites a decision of the Tribunal of Commerce, of Marseilles, that the revolted Colombians, having attacked only Spaniards, and not all nations like pirates, were to be considered a government.

No authority can be produced to show that a capture under a commission issued by a regularly organized de facto government, engaged in open and actual war, to cruise against its enemy, and against its enemy only, is piracy under the laws of nations.

The Executive government of the United States has, by public proclamations and messages to Congress, and in other appropriate public documents, recognized and affirmed a condition of open and public war, existing between the United States and a de facto government of the so-called 'Confederate States.' And the United States cannot at the same time insist that they have the belligerent rights which by the law of nations belong to a sovereign waging public war, and yet assert that there is no such public war as is known to the law of nations. That it is a civil war, does not change the rule of the law of nations respecting those who carry it on.

Any capture or seizure, whether rightful or wrongful, and whether made under a commission from a de jure, or de facto government, or made by mere pirates, is equally within the warranty in this case. Such is the interpretation of the words 'capture, seizure, and detention,' by writers of authority on Insurance, and by courts also. The English cases of Powell v. Hyde, and of Kleinworth v. Shephard, are in point. In the former case it was held by Lord Campbell, Coleridge and Wightman, JJ., that the loss of a British vessel in the Danube by being fired upon by the Russians (then at war with Turkey, but not with England), was within the exception of 'warrant free from capture and seizure,' and in the second the terms were extended to a mutiny of Coolie passengers.

And the words capture and seizure are so often used by correct writers and judges, and in legislation, to describe the acts of pirates and of persons acting under de facto governments, as to manifest a jus et norma loquendi.

Finally. The very question now raised has been fully argued and directly adjudicated in the Supreme Courts of Pennsylvania, Massachusetts, and Maine.

We may concede that the United States have never admitted the so-called 'Confederate States' to be a government. And this is a matter most proper to be asserted by the United States in its dealings with both its own citizens and foreigners. It may well treat every citizen of the United States who aided in the rebellion as committing treason or piracy; and regard transfers of property, &c., made in virtue of the Confederate laws, and against those of the United States, as void. So in dealing with foreign powers it may properly assert that these did a wrong to us in recognizing the Confederacy as a belligerent power. But this case raises no such question as any of these. The fact remains that here was a great power capable of levying war against us, which did so levy and wage war, and which made a capture. Much of the disquisition by opposing counsel is therefore from the purpose. It has no practical application.

Reply: The case of Powell v. Hyde, the first of the two English cases, relied on by the other side, was that of a 'capture' or 'seizure,' in the usual sense of the words, made by a power authorized to wage war, and then actually waging war.

Kleinworth v. Shephard, the other English case-the only case in which 'seizure' has been said to include acts of individuals not acting under the authority of a recognized government, and in which it was extended by the Court of Queen's Bench to the mutiny by Coolie passengers-was argued before Lord Campbell, Wightman, Crompton, and Hill, JJ., but four of the fifteen English common law judges, none of which four had any peculiar experience or authority in commercial law, and the weight of whose opinion must therefore depend upon the soundness of the reasons assigned for it. The case, before it is finally disposed of, may be taken to the Court of Exchequer Chamber, if not to the House of Lords, and their decision overruled. It is hardly in any respect such a decision as should induce this court to go agaist the recent express decision, in Swinerton v. Columbian Insurance Co., of the Superior Court of the City of New York, a tribunal which has long held the position of a very high authority on questions of maritime law; or against the able decision in the Commercial Court of Bremen, a tribunal in which public law in reference to this class of cases is of necessity very familiar to the court.

Mr. Justice NELSON delivered the opinion of the court.

The question in the case is, whether this taking of the vessel by the naval forces of the so-called Confederate States was a capture within the warranty of the assured in the margin of the policy? If it was, then the loss is not one of the perils insured against, as the assured, in express terms, had assumed it upon himself.

A capture, as defined by some of the most eminent writers on insurance within the policy, is a taking by the enemy of vessel or cargo as prize, in time of open war, or, by way of reprisal, with intent to deprive the owner of it. This was probably the primary or original idea attached to the term in these instruments. Losses of ships and cargo engaged in commerce by the public enemy were the most to be apprehended and provided against. But usage, and the course of decisions by the courts, have very much widened this meaning, and it now may embrace the taking of a neutral ship and cargo by a belligerent jure belli; also, the taking forcibly by a friendly power, in time of peace, and even by the government itself to which the assured belongs.

Capture is deemed lawful when made by a declared enemy, lawfully commissioned, and according to the laws of war, and unlawful when made otherwise; but, whether lawful or unlawful, the underwriter is liable; the words of the policy being broad enough, and intended to be broad enough, to include every species of capture to which ships or cargo, at sea, may be exposed. Any other rule would furnish but a very imperfect indemnity to the assured if we regard either the character of these seizures and the irregularities attending them, or the trouble, expense, and delay consequent upon the duty or burden of proving in a court of justice the unlawfulness of the act. It is never, therefore, a question between the insurer and the insured whether the capture be lawful or not. The recent case of Powell v. Hyde is very decisive on this point. In that case a British ship passing down the Danube was fired upon from a Russian fort and sunk. A war existed between Russia and Turkey, but none between the former and Great Britain. The policy of insurance in that case contained the warranty of the assured 'free from capture, seizure,' &c., upon which the underwriters relied, as here, for a defence. In answer to this it was urged for the assured that these words in the warranty related to a lawful capture or seizure, by a party having authority to make it, and that, inasmuch as the capture was in open violation of law and wholly illegal, it was not within the warranty, and the underwriters were, therefore, liable. But the court held otherwise, and determined that this term in the warranty was not confined to lawful capture, but included any capture, in consequence of which the ship was lost to the insured. This same principle was again deliberately asserted by the court in Kleinworth v. Shepherd. The same question had been decided many years before by Lord Mansfield in Berens v. Rucker, in which he held the insurer liable in case of an illegal capture of a neutral vessel by an English privateer. Chancellor Kent states the rule as follows: 'Every species of capture, whether lawful or unlawful, and whether by friends or enemies, is also a loss within the policy.' As kindred to this rule is another, that the insurer is liable for a loss by capture, whether the property in the thing insured be changed by the capture or not. In every case of an illegal capture the property is not changed, yet as between the insurer and the insured, the effect is the same as in case of a capture by an enemy in open war.

In the case of a capture under a commission from an organized government, against an enemy, jure belli, to bring the capture within the policy, it is not necessary that the commission should issue from a perfectly lawful government any more than that the capture itself should be lawful. The principle is the same. An illustration will be found in the war between Spain and her revolted colonies in South America, which continued for many years. Our government was the first to recognize their independence, which was in 1822; but even down till this event, from the time the revolt had reached the dimensions of a civil war, the government had recognized the war, and conceded equal belligerent rights to the respective parties; and the capture of the vessels of Spain by a commander under a commission by one of the colonies in the exercise of this right, was recognized as legal as if it had occurred in open public war, and, as a matter of course, would have been within the marginal warranty clause of the insured in a policy of insurance. Indeed it has been so held. It will be observed that at this time these colonies had not achieved their independence; they were yet in the heat of the conflict; nor had they been recognized by any of the established governments on either continent as belonging to the family of nations. In this connection it will not be inappropriate to refer to the case of United States v. Palmer, which was an indictment against the defendant for piracy in the capture of a Spanish vessel under a commission from one of these colonies, and which he set up as a defence. One of the questions certified from the circuit was, whether the seal annexed to the commission purporting to be a public seal used by persons exercising the powers of government in a foreign colony, which had revolted from its allegiance and declared itself independent, but had never been acknowledged as such by the United States, was admissible in a court of the United States as proof of its legal existence with or without proof of its genuineness. The court held that the seal of such unacknowledged government could not be permitted to prove itself, but that it might be proved by such testimony as the nature of the case would admit. The defendant was permitted, also, to prove that he was employed in the service of the colony at the time of making the capture, and which, it was agreed, would constitute a defence to the indictment for piracy. The proof became necessary on account of the obscurity and unknown condition of this incipient state.

Another illustration will be found in a capture by a de facto government, which government is defined to be one in possession of the supreme or sovereign power, but without right-a government by usurpation, founded perhaps in crime, and in the violation of every principle of international or municipal law, and of right and justice; yet, while it is thus organized, and in the exercise and control of the sovereign authority, there can be no question between the insurer and the insured as to the lawfulness of the government under whose commission the capture has been made. If any presumption could properly be indulged as to the perils against which the insured would most desire to protect himself, it might well be captures by these violent and irregularly constructed nationalities. The court in the case of Nesbitt v. Lushington, fitly described the character of the government contemplated in the clause respecting the restraints, &c., of kings, princes, or people, namely: 'the ruling power of the country,' 'the supreme power,' 'the power of the country, whatever it might be,'-not necessarily a lawful power or government, or one that had been adopted into the family of nations.

Now, applying these principles to the case before us, it will be seen that the question is not whether this so-called Confederate government, under whose authority the capture was made, was a lawful government, but whether or not it was a government in fact, that is, one in the possession of the supreme power of the district of country over which its jurisdiction extended? We agree that all the proceedings of these eleven states, either severally or in conjunction, by means of which the existing governments were overthrown, and new governments erected in their stead, were wholly illegal and void, and that they remained after the attempted separation and change of government, in judgment of law, as completely under all their constitutional obligations as before.

The Constitution of the United States, which is the fundamental law of each and all of them, not only afforded no countenance or authority for these proceedings, but they were, in every part of them, in express disregard and violation of it. Still, it cannot be denied but that by the use of these unlawful and unconstitutional means, a government, in fact, was erected greater in territory than many of the old governments in Europe, complete in the organization of all its parts, containing within its limits more than eleven millions of people, and of sufficient resources, in men and money, to carry on a civil war of unexampled dimensions; and during all which time the exercise of many belligerent rights were either conceded to it, or were acquiesced in by the supreme government, such as the treatment of captives, both on land and sea, as prisoners of war; the exchange of prisoners; their vessels captured recognized as prizes of war, and dealt with accordingly; their property seized on land referred to the judicial tribunals for adjudication; their ports blockaded, and the blockade maintained by a suitable force, and duly notified to neutral powers the same as in open and public war.

We do not inquire whether these were rights conceded to the enemy by the laws of war among civilized nations, or were dictated by humanity to mitigate the vindictive passions growing out of a civil conflict. We refer to the conduct of the war as a matter of fact for the purpose of showing that the so-called Confederate States were in the possession of many of the highest attributes of government, sufficiently so to be regarded as the ruling or supreme power of the country, and hence captures under its commission were among those excepted out of the policy by the warranty of the insured.

We could greatly extend the opinion upon this branch of the case by considerations in support of the above view, but the question has undergone very learned and able examinations in several of the State courts, deservedly of the highest eminence, and which have arrived at the same conclusion, and to which we refer as rendering further examination unnecessary.

JUDGMENT AFFIRMED.

Dissenting, the CHIEF JUSTICE and Mr. Justice SWAYNE.

NOTE. At the same time with the preceding were argued and adjudged four other cases by the same plaintiff against other insurance companies, all four being adjudged in the same way as the one above reported. In two of them the policies and warranty were in the same language as in that case. In two others there was a difference in the marginal warranty of the insured in this, that while he warranted free from loss or expense by capture, &c., 'ordinary piracy' was excepted, so that if the loss was on account of a capture or seizure by pirates, the insured would have been entitled to recover. But NELSON, J., giving the judgment of the court, observed that as the court had arrived at the conclusion that the capture of the vessel was under the authority of a quasi government, or government in fact (the ruling power of the country at that time), it was to be held to be within the warranty or exception in the marginal clause. Dissenting, the CHIEF JUSTICE and SWAYNE, J.


text: Talk:Mauran v. Insurance Company/Opinion of the Court


text:
Haight v. Railroad Company

ERROR to the Circuit Court for the Western District of Pennsylvania; the case, as derived from the statement of it by the learned judge below (McCandless, J.), who sat for the Circuit Court, having been thus:

title: Haight v. Railroad Company


text: Talk:Haight v. Railroad Company

title: Talk:Haight v. Railroad Company


text:
Haight v. Railroad Company/Opinion of the Court

The 122d section of the internal revenue act of 1864, provides that 'any railroad company indebted for any money for which bonds have been issued upon which interest is payable shall be subject to and pay a duty of five per cent. on the amount of all such interest whenever the same shall be payable, and said company are authorized to deduct and withhold from all payments on account of any interest or coupons due and payable as aforesaid, the duty of five per cent., and the payment of the amount of said duty, so deducted from the interest or coupons, shall discharge said company from that amount of the interest on the bonds held by any person whatever. Except where said company may have contracted otherwise.'

With this act of Congress in force, Haight, a citizen of New York, was the holder of bonds to the amount of $100,000, issued by the Pittsburg, Fort Wayne and Chicago Railroad Company, and secured by a mortgage on real estate. The bonds were in the ordinary form of coupon bonds, and promised that the Company would pay $1000 to the obligee or bearer, on the 1st of January, 1887, with interest at the rate of seven per cent., payable half yearly, on the presentation of the interest warrants, &c. The defeasance clause of the mortgage was thus:

'Provided, always, that if the said railway company or their successors do well and truly pay to the said Haight, the said $100,000 on the days and times hereinbefore mentioned, together with the interest payable thereon, without any deduction, defalcation or abatement to be made of anything for or in respect of any taxes, charges or assessments whatsoever, then,' &c.

The railway company having retained five per cent. on the amount of the coupons, as they paid them, Haight brought suit against it, contending that it could not deduct the taxes from the interest due him, because it had, in the language of the act of Congress, 'contracted otherwise.'

The argument in the court below, derived from a very critical examination of the different parts of the act of Congress in question, was that the tax of five per cent. laid in the 122d section, was a tax upon the coupon or interest, that is to say, a tax on the thing and not on Haight's income; and, therefore, that under the contract in the mortgage it was to be paid by the company from its own property and not from Haight's.

It was admitted that Haight paid no income tax at New York, his residence, on the interest received from these bonds.

The learned judge who heard the case, thought that the tax was on Haight's income, and gave his opinion to this effect:

What are the coupons, upon which this suit is instituted, but income,-the annual profit upon money safely invested? There is no special contract to pay government taxes upon the interest. The measure of the company's liability is expressed in the bonds as being debt and interest only. It has nothing to do with the taxes which the government may impose upon the plaintiff for the interest payable to him. The clause in the mortgage cannot enlarge the duty which the mortgage was given to secure, that is, the payment of debt and interest. It is to be found in all mortgages. . . . The plaintiff, a citizen of New York, pays no internal revenue tax on these bonds at the place of his residence. It is therefore no case of double taxation. The tax should be paid somewhere, and it was to meet investments like this in banks, railroads, insurance and other companies, that the 122d section of the act of 1864 was passed.

Judgment was accordingly given for the company, and the case was brought by Haight on error to this court, where it was submitted on briefs.

Mr. Knox, for the plaintiff in error; Messrs. Lowrie and McKnight, contra.

Mr. Justice GRIER delivered the opinion of the court.

The facts in this case are properly stated and the law correctly decided by the learned judge of the Circuit Court.

The provision in the condition of defeasance of the mortgage, has reference only to covenants between mortgagor and mortgagee, and is usual in every mortgage; being put there in order to secure the mortgagee, who may not be in possession, from demand for taxes incurred while the mortgagor was in possession. It can have no possible application to the income tax of bondholders. The 122d section of the revenue act of 1864, was enacted for greater facility of collection of the tax. These corporators often contract to pay for the bondholder all such taxes; but when they have not so contracted, they are authorized to deduct or withhold the amount of the tax. In all assessments of income tax the citizen is credited with the amount thus detained; so that there is no double taxation.

JUDGMENT AFFIRMED.


text: Talk:Haight v. Railroad Company/Opinion of the Court