text:
National Bank of Washington v. Texas

APPEAL from the Supreme Court of the District of Columbia; the case being thus:

The United States, on the 1st of January, 1851, issued to the State of Texas for the sale of a portion of her northwestern territory, five thousand coupon bonds of $1000 each, numbered successively from No. 1 to No. 5000, and 'redeemable after the 31st day of December, 1864.' They were made on their face all payable 'to bearer,' and declared to be transferable on delivery. The coupons, which extended to December 31st, 1864, and no farther, were equally payable 'to bearer.' These bonds were known as Texas indemnity bonds.

On the 16th of December, 1851, in anticipation of the bonds being delivered to it, the State of Texas passed an act authorizing their governor to receive them from the United States,

'And when received, to deposit them in the treasury of the State of Texas, to be disposed of as may be provided by law; provided, that no bond issued as aforesaid, as a portion of the said $5,000,000 of stock, payable to bearer, shall be available in the hands of any holders until the same shall have been indorsed in the city of Austin, by the governor of the State of Texas.'

After this act of December 16th, 1851, and between that day and the 11th of February, 1860, the State of Texas passed thirteen different acts, providing for the sale or disposal of the whole $5,000,000 of these bonds; for lawful State purposes; as ex gr., paying the public debt of the State; the erection of a State capitol; to establish a system of schools, &c., &c., the construction of railroads: the terms of none of these acts requiring an indorsement of the bonds by the governor, as required in the above-quoted act of December 16th, 1851, nor any of them designating by numbers on them the particular bonds to be appropriated to the particular objects authorized. Subsequently to this again, the rebellion having broken out, and the State having gone over to the rebel side, and there being a large number of the bonds still undisposed of in the State treasury, the legislature of Texas, by an act of January 11th, 1862, repealed the act of December 16th, 1851 (making an indorsement necessary), and the then authorities of Texas, through its 'military board,' in January, 1865, sold or transferred, as was said, and as in former cases in this court was supposed to be shown, certain of the bonds, but not all of them, to two persons, White and Chiles, for the purpose of aiding the rebellion. In those cases-the cases, namely, of Texas v. White and Chiles, and Texas v. Hardenberg, -it was determined that as against the true, that is to say, the loyal State of Texas (particular citizens of which had stopped payment of them at the Federal treasury), no title had passed to bonds which had been thus transferred; and that notwithstanding the transfer, the reconstructed State might reclaim the bonds or their proceeds.

How many bonds were transferred to White and Chiles, or what were their exact numbers, was not well ascertained; but, as already said, it was well known that the bonds transferred to White and Chiles did not comprise the whole issue for $5,000,000, and that a considerable number of them had been transferred under one or other of the thirteen enactments already mentioned. In particular, it appeared that one hundred and forty-eight of them (numbered from 4694 to 4842 inclusively) had been transferred, in pursuance of a statute, to the Southern Pacific Railroad Company; some of which the company paid out to contractors for work done on the road. These bonds were not indorsed by the governor.

In this state of things the State of Texas brought her complaint in chancery in the court below against the First National Bank of Washington, W. S. Huntington, its cashier, and others, for discovery and relief in regard to certain of these Texas indemnity bonds, of which the bill alleged that the State had been dispossessed by fraud or treasonable practices. The number now claimed was nineteen; thus numbered:

'Numbers 4226, 4227, 4229, 4703, 4705, 4706, 4748, 4813, 4825, 4843, 4844, 4912, 4927, 4928, 4929, 4960, 4961, 4962, 4963.'The bill alleged that these indemnity bonds were each for the sum of $1000, dated January 1st, 1851, redeemable after December 31st, 1864, and that those in controversy were received and remained in the treasury of the State of Texas until after the period fixed for redemption. It was alleged that in the year 1865 the insurrectionary power which had usurped control of the State, made a contract with White and Chiles by which from one hundred and forty-five to one hundred and sixty-two of the bonds were delivered to them, in consideration of which they agreed to furnish means to carry on the war against the United States in which that State was then engaged, with others, under the name of the Confederate States of America.

It was further alleged that these bonds, then overdue, afterwards came to the hands of the defendants, who purchased them with full notice of the purpose for which they had been delivered to White and Chiles.

It was also alleged that said bonds were never indorsed by the governor of the State of Texas in such manner as by the law of Texas was required, by reason of which no legal title to the same passed from the State, or was vested in the parties to whom they were delivered. The defendants were required to answer under oath, and a decree against them in regard to the bonds left with Taylor, or for other relief, was prayed.

The bank and Huntington answered and admitted the purchase of some of the Texas indemnity bonds, and having others as agents for the owners of them. They gave a list of all these, specifying those held in their own right and those held as agents. They averred that the bonds had all been paid to them in full by the Treasury of the United States before this suit was commenced, and that those owned by themselves were purchased for value (namely, ninety-eight cents to the dollar), without notice of any of the matters set up in the complainant's bill.

They denied all knowledge on their part, that the bonds claimed by them were part of the bonds issued to Chiles and White, or had been issued in aid of the rebellion; and they denied also the facts that they were so issued. And they denied the statements of the bill in these matters. A general replication was filed and testimony taken.

To make out its case, the State of Texas adduced the testimony of Mr. R. W. Taylor, the Comptroller of the Treasury of the United States, and of Mr. G. W. Paschall, one of the attorneys for the complainant. Mr. Taylor's deposition was a long one. What follows are extracts which bear principally on the case. He is under examination by the complainant's counsel.

'Question. I see it stated that these bonds came through the hands of J. P. White. Do your investigations enable you to say they were part of the bonds received by White and Chiles?

'Answer. I do not know anything more about that than what is to be gathered from the general appearance of the transaction. There was nothing at that time known here about the White and Chiles purchase; at least I had heard nothing of it.

'Question. But from this general appearance of which you speak, what is your opinion as to their having been part of the same bonds?

'Answer. From all the circumstances, my opinion is, those were of the White and Chiles bonds. That is only an opinion, however.'

CROSS-EXAMINED.

'Question. Do you know of your own knowledge that White and Chiles, or either of them, ever saw one of these bonds?

'Answer. I knew it only from the papers on file in the department, that is, from my opinion of what those papers show.

'Question. It would be a very tedious process (and I presume you could not do it) to furnish the various papers from which you make up your opinion?

'Answer. They are too numerous for me to present now, and I might add, that one would have to study them very carefully and make his calculations as to the different bonds.

'Question. Would you not have to do so by ascertaining the entire number of bonds, and then tracing those bonds into the hands of persons other than White and Chiles; would not your opinion be based upon the conclusion that, inasmuch as so many bonds were in the hands of other people, it followed, as a necessary result, that if White and Chiles had any, they must be those?

'Answer. It would be by taking the seven hundred and eighty-two bonds that were not indorsed, and tracing them back, by the evidence, into the hands of those parties who held them at different times, and ascertaining in some instances, the particular numbers that were known to be in the hands of particular parties before the transaction between White and Chiles and the military board, and taking others again, that came from the State of Texas, and then drawing my conclusions as to what were White and Chiles bonds.'

Mr. Paschall said in reply to questions in chief and on cross-examination:

'I was employed by Governor Pease to prosecute this suit, and caused it to be instituted in 1868; and judging from a careful examination made in Texas and in the Treasury Department here, I feel confident that the bonds redeemed for the bank, described by Mr. Taylor, were part of the bonds which passed through the hands of White and Chiles. I judge this from circumstances which he has stated. . . . I did satisfactorily to myself, identify those paid to Huntington, &c., because I found an affidavit of a brother of White attached to them, and was thus able to trace them as having come through White. I inferred so from the fact that they passed through the hands of White's brother, and through the hands of a Nashville man named Douglass. I thought I saw clearly that they appertained to that class, and from those numbers, knowing that the authorities of Texas had taken off the bonds, consecutively, from No. 1 of the 782. I knew about where these numbers would begin, but I was at a loss about the precise numbers, because I wanted to describe them in Texas, and I could not certainly identify them.'

Such, in the main, was the complainant's case. As this court held that it was in itself insufficient, the evidence by the other side is but adverted to. That evidence tended to show that in the case of all the bonds the cashier of the bank had gone, prior to purchasing them, to the Treasury of the United States, and had made full inquiry about them, that the Comptroller of the Treasury had advised that bon a fide holders of such bonds should be paid; that many such bonds were paid, and that the purchases here were made in view of this action; that of the nineteen bonds now in question, fifteen or sixteen had been bought in December, 1865, and in August and September, 1866, from Jay Cooke & Co., and three from Simon Wolf, of New York, acting as agent for various residents there; that of the fifteen or sixteen bought from Jay Cooke & Co., at least six were of the number transferred to the Southern Pacific Railroad Company; that four had never been delivered to the military board; that leaving the remaining to rest on the fact (among other facts) that they came from Jay Cooke & Co., who were not shown to have ever stood in relations of any sort with Chiles and White.

The court below decreed in favor of the complainant as to the nineteen bonds, and the defendants took this appeal.

Messrs. E. R. Hoar and J. Hubley Ashton, for the appellants, contended that on the complainant's own case, as proved, the bill ought to have been dismissed; that the testimony of Taylor and Paschall fell within the case of Carter v. Boehm, in which Lord Mansfield said of such testimony: 'It is mere opinion, which is not evidence;' that all the allegations of the bill were denied by answers responsive to it; and was not sustained by any evidence overcoming the denials; that Huntington v. Texas had decided that the State must prove not only unlawful issue and use, but also the further fact of notice to the defendant; that though express notice was here averred, none was proved; that the doctrine of constructive notice, applicable to dishonored private mercantile paper, payable to order on a day certain, could not be applied to public securities like these, under the circumstances attending them, when purchased in the open market after the day had passed when, by their tenor, they were redeemable; that they were issued as stock, not payable to bearer on any certain day, but 'redeemable after the 31st day of December, 1864;' that they stated that interest would be paid for fourteen years, but that after December, 1864, the bonds might be redeemed at the pleasure of the United States; that the bonds were not dishonored; that dishonor and non-payment at maturity, in the case of private mercantile paper, were not necessarily the same thing; that a note on demand was mature and demandable at once, but was not dishonored until after such a lapse of time that the law considered the paper ought to have been paid, and that every one was bound to suppose that payment must have been demanded and refused within that time; that Mr. Attorney-General Black had held, after full consideration, that the reason of the rule which makes ordinary bills and notes, when transferred after maturity, subject to prior equities, did not apply to treasury notes of the United States, redeemable after one year from their date, and that a purchaser for value of such a note, after maturity, was entitled to the same protection as the bon a fide holder of ordinary commercial paper taken before maturity.

The counsel contended further, that it was clear enough, viewing the bonds specifically, that these particular bonds had not been the bonds of White and Chiles; ten of them assuredly had not been so, and the presumptions were that the others had not been.

That even if it were clear that they all had passed under the White and Chiles transaction, that the State ought not to recover; that this court was reviewing the decree below in its capacity as a court of equity; that the property had been acquired honestly and in good faith for a full consideration, without knowledge or notice of that transaction, and after due and full inquiry instituted at the Treasury Department, whose duty it was, as this court has said, to ascertain and decide whether the bonds had or had not been issued in aid of the rebellion.

Messrs. R. T. Merrick and T. J. Durant, having referred to the case of Texas v. White and Chiles, to show the history of the Texas indemnity bonds, and referred to the testimony of Messrs. Taylor and Paschal as that of persons intimately acquainted with the history of the bonds now specifically involved, submitted—

That upon the state of facts shown, the absence of the indorsement of the governor raised a presumption against the validity of the alienation of the bonds; and that the cause of justice would best be subserved by giving effect to this presumption, and requiring the holder of a bond not indorsed to prove that it had been issued by the State for some lawful and proper purpose.

That circumstances having been proved establishing illegality in the original transfer of the bonds, the burden of showing that value was given for them before maturity was cast upon the holder; and if it appeared that he took them after they became due, he would be regarded as having taken them subject to all the rights and equities of the State, and could not protect a defective title by any rule of commercial law.

That the questions involved in this case were all decided in Texas v. White and Chiles; that they again came before the court in the case of Texas v. Hardenberg, in which the court, referring to the opinion in the case of White and Chiles, says:

'This conclusion leaves but one question for consideration, namely, whether Hardenberg at the time he purchased the bonds had notice of the equity of the State of Texas. This question was not concluded by the decree, but it was fully considered by the court upon the former argument, and our conclusion, as stated in the opinion, as then delivered, was that Hardenberg, as well as the other purchasers of indemnity bonds about the same time, was affected by such notice. We will not restate what we then said; it is only necessary to say, that we have reconsidered the grounds of that decision, and are still satisfied with it.'

That the expressions in the opinion delivered in White and Chiles, and referred to in the above extract, would be found on page 732 of 7th Wallace, and were as follows:

'We think it clear, if a State, by a public act of her legislature, imposes restrictions upon the alienation of her property, that every person who takes a transfer of such property must be held affected by notice of them. Alienation, in disregard of such restrictions, can convey no title to the alienee.'

The learned counsel, referring to the opinion of the court in the subsequent case of Huntington v. Texas, as qualifying and explaining the fundamental principles announced in the preceding cases, and regulating their application, submitted that it did not in any way annul the fundamental principles declared in those previous cases, but, on the contrary, reaffirmed them.

Mr. Justice MILLER delivered the opinion of the court.

title: National Bank of Washington v. Texas


text: Talk:National Bank of Washington v. Texas

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
National Bank of Washington v. Texas/Opinion of the Court

Waiving for the present the question whether the bonds were overdue in the sense which puts a purchaser of dishonored negotiable paper on the inquiry as to defences which may be set up against it, it is quite clear that they were transferable by delivery after due the same as before. To invalidate the title so acquired by a purchaser, it is necessary to make out some defect in that title.

The main allegation of the bill is that these are part of the bonds issued to White and Chiles, in aid of the rebellion. All knowledge of this fact is denied by defendants, and the fact itself is denied. Conceding that their denial of the fact, about which perhaps they know nothing, had no other effect than to put in issue the allegation of plaintiff's bill on that subject, it remained for plaintiff to establish its truth by evidence.

This it attempted to do. Two witnesses alone are relied on for this purpose, namely, Taylor, the Comptroller of the Treasury of the United States, and Paschal, one of the attorneys for complainants. The former was examined at much length, and gave it as his opinion, from certain calculations made by him, based upon papers in his office and information received by him from officers of the State of Texas, and other sources, that these bonds were of the White and Chiles issue. He says that it is only an opinion, and it is evident from his deposition that the data on which he bases that opinion are far from conclusive. It is not worth while to waste words in proving that such testimony is wholly incompetent to establish any fact, or rather to show that it is not evidence at all.

The deposition of Paschal is to the effect that by reason of his connection with the suit of Texas v. White and Chiles, he had become familiar with a number of facts from which he had satisfied himself that these bonds were of the White and Chiles lot. As the matters on which this conclusion was founded were all of them statements of others, some verbal, some written, and all of them capable of being proved, no reason is perceived why the witness should be substituted for the court in weighing these facts, and making the proper inferences. The same observation applies with equal force to Taylor's testimony.

Not only is there no evidence that these bonds were irregularly or improperly issued, or were issued for any treasonable or other unlawful purpose, but there is evidence that there were at the time these depositions were taken, bonds greatly exceeding in amount those in controversy, issued lawfully to a railroad company, which were not identified by their numbers, or in any other manner, so as to prove that the bonds in controversy were not these bonds. Nor was there any evidence tracing all the bonds lawfully issued so as to show where these were or to repel the presumption that they were of that class. In short, the testimony on this branch of the subject is an absolute failure.

But it is said that as these bonds did not bear the indorsement of the governor of the State of Texas, this fact alone was sufficient to prove that they were unlawfully obtained from its treasury, and that the rights of the State should therefore be protected in this suit.

The opinions of this court in the cases of Texas v. White and Chiles, and Same v. Hardenberg, are much relied on in support of this proposition, and in fact are supposed to control this case in all respects. But while it is true that the bonds in question in both those cases (they were, in fact, but one case) were the bonds delivered to White and Chiles, and that some very important questions were decided concerning the relation of the State of Texas to the Union, and the validity of her legislation while under control of the enemy during the war of the rebellion, it is also true that the very matters of which the present bill is full, but of which there is a flat denial and no proof whatever, were supported in that case by sufficient evidence. On an examination of the report of that case it will be seen that the court was of opinion that it was established both in evidence and by the answers of some of the parties that the bonds then in controversy were all of them issued to White and Chiles, and the illegal contract on which they were issued was in evidence, and the court was further of opinion that the parties defendant had notice of those facts.

It is true that in the first of these cases the eminent judge who delivered the opinion, in addition to deciding that the bonds were overdue when delivered to White and Chiles, and for that reason subject to an inquiry as to the manner in which they obtained possession of them, gave as an additional reason why defendants could not hold them as bon a fide purchasers, that they had not been indorsed by the governor as required by the statute of Texas. And for that purpose he entered into an argument to show that the State could by statute, while those bonds were in her possession, limit their negotiability by requiring as one of its conditions the indorsement of the governor. He also said in reference to the repeal of that statute by the rebel legislature of Texas, in view of the supposed treasonable purpose of it, that it was void. All of this, however, was unnecessary to the decision of that case, and the soundness of the proposition may be doubted.

In the subsequent case of Texas v. Huntington, which was an action at law in reference to some of the bonds in the same category as those now before us, the justice who delivered the abovementioned opinion, qualifies it so far as to say that the repealing statute, though passed by a rebel legislature, is not void in its application to bonds not issued for treasonable purposes. This is sufficient to relieve the present case of any embarrassment growing out of that branch of the opinion in the case of Texas v. White and Chiles.

This latter case, Texas v. Huntington, on a careful examination of it must be held to dispose of the one before us. It is said, among other things, 'that no one other than a holder of the bonds, or one who having held them has received the proceeds, with notice of the illegal transfer, for an illegal purpose, can be held liable to the claim of the reconstituted State.' Again: 'Whether there was evidence in the present case establishing the fact of the unlawful issue and use, and the further fact of notice to defendants, within the principles heretofore laid down, as now explained and qualified, is a question for the jury.'

In the case before us, which is a suit in equity, it was a question for the chancellor, to be established by evidence. As we have already said, there is no proof either of the unlawful issue or use, or purpose, nor of any notice to defendants of the probable existence of these facts.

DISMISS THE BILL.

I concur in the judgment of the court just announced, but as the case involves important legal principles I prefer to give my views in a separate opinion.

Pursuant to the act of Congress of September 9th, 1850, the United States issued to the State of Texas their bonds to the amount of five millions of dollars. They were denominated on their face 'Texas Indemnity Bonds.' They all bore date January 1st, 1851. Each one was for $1000. It was certified on their face 'that the United States of America are indebted to the State of Texas or bearer' in that sum, 'redeemable after the 31st of December, 1864, with interest at the rate of five per cent. per annum, payable on the first days of January and July in each year, at the Treasury of the United States, on presentation and surrender of the proper coupon hereto attached,' and that the bond 'is transferable by delivery.' Coupons were attached extending to December 31st, 1864. Texas received them and placed them in her treasury. On the 16th of December, 1851, her legislature passed an act whereby it was provided 'that no bond issued as aforesaid, as a portion of the five million of stock payable to bearer, shall be available in the hands of any holder until the same shall have been indorsed in the city of Austin by the governor of the State of Texas.' A large portion of the bonds were indorsed by the governor and disposed of pursuant to other acts of the legislature. Acts were passed from time to time appropriating other portions for different purposes. Some of these acts prescribed a different mode of transfer, and some were silent upon the subject. Transfers were made in such cases without the governor's indorsement. On the 11th of January, 1861, the provision requiring his indorsement was repealed. On the same day a military board was created and authorized to prepare the State for defence, and for that purpose to use the bonds still in the treasury to the extent of a million of dollars. This action was taken by the State with the view of engaging in the war of the rebellion, then impending, against the United States. On the 12th of January, 1865, the military board entered into a contract with White and Chiles, in pursuance whereof $135,000 of the bonds were sold and delivered to them. On the 15th of February, 1867, the State of Texas filed in this court an original bill against White and Chiles and others, wherein it was charged that the repeal of the requirement of the governor's indorsement and the contract with White and Chiles were in aid of the rebellion and therefore void, and it sought to recover back the bonds or their value from White and Chiles and the other defendants to whom it was alleged White and Chiles had transferred portions of them. This court decreed against White and Chiles. The case stood over as against Hardenberg, one of the other defendants. Subsequently a decree was rendered against him. The State also sued William S. Huntington, at law, in the Supreme Court of the District of Columbia, for the conversion of certain of the bonds redeemed at the Treasury, the proceeds whereof had gone to him. The State recovered as to thirteen of these bonds and failed as to the residue. The judgment was brought to this court upon error and reversed.

The case made in the record before us by the complainant, so far as is necessary to state it, is as follows:

It is alleged that the military board for insurrectionary purposes sold and delivered to White and Chiles one hundred and thirty-five of the bonds; that thirty-three of these bonds, after becoming past due, were sold to the bank, or were placed in its hands to collect for White and Chiles, with full knowledge of the manner in which White and Chiles had obtained them, and in bad faith on the part of the bank; and that the bonds had never been indorsed in such manner as to pass the title out of the State of Texas. The prayer is that the bank be enjoined from receiving the amount due on the bonds from the United States; that they may be delivered up to the State, if still in the possession of the bank, and if not, that the bank may be decreed to pay their value to the State. A copy of the contract of the military board with White and Chiles is annexed to the bill.

The bank and Huntington answered jointly. The answer, among other things—

Denies all knowledge of the transactions between the military board and White and Chiles; it denies that they hold or claim the bonds described in the bill; it denies that they were in any way the agents of White and Chiles or bought any bonds from them; it denies that they had any knowledge that their bonds came through White and Chiles; it avers that they had heard there would be difficulty about the White and Chiles bonds, and before purchasing made diligent inquiry at the Treasury Department; that no one there could identify the bonds in question as White and Chiles's bonds, and that the bank bought them believing they were not such; it avers that they knew the Secretary of the Treasury had paid similar bonds, and gives a large list of such bonds; it denies all knowledge of White and Chiles.

The court below decreed against the bank for the value of nineteen bonds and interest. Those bonds are numbered in the decree as follows: 4226, 4227, 4229, 4703, 4705, 4706, 4748, 4813, 4825, 4843, 4844, 4912, 4927, 4928, 4929, 4960, 4961, 4962, and 4963.

The bank removed the case to this court by appeal, and it is now before us for review. The complainant did not appeal. This defines the ground of the controversy in this court between the parties, and narrows the circle of inquiry to the bonds numerically specified in the decree.

There is neither proof nor admission in the record of the execution of the contract of the military board with White and Chiles. It must, therefore, be laid out of view.

Averments by the complainant, vital in the case, are denied by the answer. The answer is responsive and the denials absolute. This throws the burden of proof upon the complainant, and the denials are conclusive unless overcome by the testimony of two witnesses to the contrary, or the testimony of one witness, and circumstances established otherwise equal in effect to the direct testimony of another.

The effort of Texas to leave the Union was revolutionary. All her legislative acts for the accomplishment of that object were void. Her position has been aptly resembled to that of a county in rebellion against the State. While her enactments outside of the sphere of her normal authority were without validity, those within it, passed for the ordinary administration of her powers and duties as a State, had the same effect as if the rebellion had not occurred. The latter principle springs from an overruling necessity. A different rule would involve the dissolution of the social compact, and resolve society back into its original elements.

The repeal touching the governor's indorsement was an act of ordinary legislation. It was, therefore, within the rule last mentioned. If it had in view the promotion of the rebel cause it was too remote from that end, and its tendency too indirect to render it fatally liable to that objection. The repeal put an end to the existence of the restriction. But if the restriction had not been repealed I cannot admit that the want of the indorsement would have in any wise affected a bon a the holder, or in other words, one who had honestly bought the bonds for a valuable consideration without knowledge of any infirmity in the title of his vendor. The United States made them payable 'to the State of Texas, or bearer.' Delivery passed the title. Texas could not restrain their transferability in the markets of the world, according to the law merchant, in any case without bringing home notice to the party sought to be implicated or putting upon the bonds something which must necessarily operate as a notice to every buyer.

Winston v. Westfeldt has an important bearing upon this subject. There the holder of a promissory note had been enjoined from transferring it. He transferred it, underdue, by indorsement. The indorsee gave a valuable consideration and took it without notice of any defect. It was held that the title of the indorsee was valid, notwithstanding the injunction.

The fact that the bonds were overdue when the bank bought them does not affect the case. The transferee of overdue negotiable paper takes it liable to all the equities to which it was subject in the hands of the payee. But those equities must attach to the paper itself, and not arise from any collateral transaction. A debt due to the maker from the payee at the time of the transfer cannot be set off in a suit by the indorsee of the payee, although it might have been enforced if the suit had been brought by the latter. The result is the same whether the transfer be made by indorsement or delivery. But the protection of this principle is confined to the maker or obligor. It does not apply as between successive takers. Actual notice is necessary to affect them. There is no adverse presumption. Each one takes the legal title, and his equity is equal to that of his predecessors. 'The equities being equal, the law must prevail.' The position of the transferee must be at least as favorable as that of the assignee of a chose in action. There the assignee takes subject to the equity residing in the debtor, but not to an equity residing in a third person against the assignor.

Chancellor Kent, speaking of this rule in this class of cases, says: 'The assignee can always go to the debtor and ascertain what claims he may have against the bond or other chose in action which he is about purchasing from the obligee, but he may not be able with the utmost diligence to ascertain the latent equity of some third person against the obligee. He has not any object to which he can direct his inquires, and for this reason the assignee, without notice, of a chose in action, was preferred in the late case of Redfearn v. Ferrier et al., to that of a third party setting up a secret equity against the assignor. Lord Eldon observed in that case that if this were not so no assignment could ever be taken with safety.' This reasoning is strikingly applicable in the case before us. It was the duty of the cashier to inquire at the Treasury Department. He did so, and learned that there was no objection to any of the bonds but those which had been delivered to White and Chiles, and he became satisfied that those involved in this controversy did not belong to that class. It was impossible for him to find and consult all those through whose hands they might have passed before they were offered to the bank.

If negotiable paper, underdue, be in the hands of a bon a fide holder, any subsequent holder may avail himself of that fact against the equity of the maker. Every holder is presumed to have acquired his title before the maturity of the instrument and bon a fide. The burden of proof rests upon the party alleging the contrary. It is only in case of dishonor that the equities of the maker, or obligor, can be set up against a bon a fide holder. It may be doubted whether these bonds belonged to that class. I have preferred to consider the case in this aspect, upon the hypothesis most favorable to the complainant. It is unnecessary to resolve, in this case, either way the doubt suggested.

The rights of the holders of commercial paper were largely considered by this court in Goodman v. Simonds, and in Murray v. Lardner. What was there said need not be repeated.

It remains to consider the case in the light of the evidence. In order to maintain the decree it is necessary for the complainant to establish the following facts:

(1.) That the bonds specified in the decree were of those disposed of by the military board to White and Chiles;

(2.) That the transaction was in aid of the rebellion;

(3.) That the bank, before it bought, had notice of the infirmity of the title of White and Chiles.

And these facts must be established by the measure of proof requisite to overcome the responsive denials of the answer.

It is shown by the complainant's own testimony-and there is none to the contrary-that six of the bonds here in question were transferred and delivered by the authorities of the State pursuant to an act of the legislature to the Southern Pacific Railroad Company. They are numbered 4703, 4705, 4706, 4748, 4813, and 4825. It is proved by the same testimony that four more were not of those delivered to White and Chiles. They are numbered 4960, 4961, 4962, and 4963. It is also proved that five of the bonds, Nos. 4843, 4844, 4927, 4928, and 4929, were sold to the bank by Jay Cooke & Co. It is not shown when Cooke & Co. acquired them. It is, therefore, presumed they bought them underdue and bon a fide, and their title enures to the benefit of their vendee. Three of the bonds, Nos. 4226, 4227, and 4229, were bought by the bank of Wolf. There is some testimony tending to show that he bought after they were due. But there is no such proof as to his vendor. The presumption as to the latter is, therefore, otherwise. This ends the controversy as to these eighteen bonds. The remaining bond is No. 4912.

The only testimony in the record in any degree adverse to the bank upon the points in issue, is that of Comptroller Taylor and that of Judge Paschal.

In his examination-in-chief the comptroller said:

'From all the circumstances, my opinion is those were of the White and Chiles bonds. That is only an opinion, however.'

'Q. Do you know, of your own knowledge, that White and Chiles, or either of them, ever saw one of these bonds?

'A. I know it only from the papers on file in the department; that is, from my opinion of what those papers show.

'They are too numerous for me to present here now, and I might add, that one would have to study them very carefully, and make his calculations as to the different bonds.

'It would be by taking the seven hundred and eighty-two bonds that were not indorsed, and tracing them back by the evidence into the hands of those parties who held them at different times, and ascertaining, in some instances, the particular numbers that were known to be in the hands of particular parties before the transaction between White and Chiles and the military board, and taking others, again, that came from the State of Taxas, and then drawing my conclusions as to what were White and Chiles's bonds.'

With these admissions before us it is sufficient to remark that his testimony is clearly incompetent. And, if not so, it would be insufficient to maintain, in behalf of the complainant, the issue between the parties. The same remarks are applicable to the testimony of Judge Paschal. So far as it affects this case it is liable to the same objections. He says, among other things:

'I was employed by Governor Pease to prosecute this suit, and caused it to be instituted in 1868; and judging from a careful examination made in Texas, and in the Treasury Department here, I feel confident that the bonds redeemed for the bank, described by Mr. Taylor, were a part of the bonds which passed through the hands of White and Chiles, and I judge this from the circumstances which he has stated.' This is mere opinion, founded upon data not disclosed and in part upon the opinion of another witness. Further remarks upon the subject are unnecessary. There are other defects in the evidence for the complainant, but it is unnecessary to advert to them. Altogether it fails wholly to sustain the case made by the bill. The decree of the court below is, in my opinion, properly reversed.


text: Talk:National Bank of Washington v. Texas/Opinion of the Court


text: The Confiscation Cases Slidell's Land

title: The Confiscation Cases Slidell's Land


text: Talk:The Confiscation Cases Slidell's Land


text:
The Confiscation Cases Slidell's Land/Opinion of the Court

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

On the 17th of July, 1862, Congress passed an act entitled 'An act to suppress insurrection, to punish treason and rebellion, to seize and confiscate the property of rebels, and for other purposes.'

The act contains fourteen sections. The first prescribes the punishment for treason; punishing it with death, or, in the discretion of the court, with imprisonment and fine, and liberating the offender's slaves.

The second provides for the punishment of the offence of inciting, setting on foot, or engaging in any rebellion or insurrection against the authority of the United States or the laws thereof, or engaging in or giving aid and comfort to the rebellion then existing.

The third declares that parties guilty of either of the offences thus described, shall be forever incapable and disqualified to hold any office under the United States.

The fourth provides that the act shall not affect the prosecution, conviction, or punishment of persons guilty of treason before the passage of the act, unless such persons are convicted under the act itself.

'That to insure the speedy termination of the present rebellion, it shall be the duty of the President of the United States to cause the seizure of all the estate and property, money, stocks, credits, and effects of the persons hereinafter named in this section, and to apply and use the same, and the proceeds thereof, for the support of the army of the United States, that is to say:

'First. Of any person hereafter acting as an officer of the army or navy of the rebels, in arms against the government of the United States.

'Secondly. Of any person hereafter acting as President, Vice-President, member of Congress, judge of any court, cabinet officer, foreign minister, commissioner, or consul of the so-called Confederate States of America.

'Thirdly. Of any person acting as governor of a State, member of a convention or legislature, or judge of any court of any of the so-called Confederate States of America.

'Fourthly. Of any person who having held an office of honor, trust, or profit in the United States, shall hereafter hold an office in the so-called Confederate States of America.

'Fifthly. Of any person hereafter holding any office or agency under the government of the so-called Confederate States of America, or under any of the several States of the said Confederacy, or the laws thereof, whether such office or agency be national, State, or municipal in its name or character: Provided, That the persons, thirdly, fourthly, and fifthly, above described, shall have accepted their appointment or election since the date of the pretended ordinance of secession of the State, or shall have taken an oath of allegiance to, or to support the constitution of the so-called Confederate States.

'Sixthly. Of any person who, owning property in any loyal State or Territory of the United States, or in the District of Columbia, shall hereafter assist and give aid and comfort to such rebellion; and all sales, transfers, or conveyances of any such property, shall be null and void; and it shall be a sufficient bar to any suit brought by such person for the possession or the use of such property, or any of it, to allege and prove that he is one of the persons described in this section.'

The sixth section makes it the duty of the President to seize and use as aforesaid all the estate, property, moneys, stocks, and credits of persons within any State or Territory of the United States, other than those named in the fifth section, who, being engaged in armed rebellion, or aiding and abetting the same, shall not, within sixty days after public warning and proclamation duly made by the President of the United States, cease to aid, countenance, and abet such rebellion, and return to their allegiance to the United States.

'That to secure the condemnation and sale of any of such property, after the same shall have been seized, so that it may be made available for the purpose aforesaid, proceedings in rem shall be instituted in the name of the United States in any District Court thereof, or in any Territorial court, or in the United States District Court for the District of Columbia, within which the property above described, or any part thereof, may be found, or into which the same, if movable, may first be brought, which proceedings shall conform, as nearly as may be, to proceedings in admiralty or revenue cases, and if said property, whether real or personal, shall be found to have belonged to a person engaged in rebellion, or who has given aid or comfort thereto, the same shall be condemned as enemy's property, and become the property of the United States, and may be, disposed of as the court shall decree, and the proceeds thereof paid into the treasury of the United States, for the purposes aforesaid.'

The eighth section authorizes the said courts to make such orders, and establish such forms of decrees of sale, and direct such deeds and conveyances to be executed, where real estate shall be the subject of sale, as shall fitly and efficiently effect the purposes of the act, and vest in the purchasers of the property good and valid titles.

The thirteenth section authorizes the President, at any time thereafter, by proclamation, to extend to persons who may have participated in the existing rebellion, pardon and amnesty, with such exceptions, and at such time and on such conditions, as he may deem expedient.

The fourteenth section gives the courts aforesaid full power to institute proceedings, make orders and decrees, issue process, and do all other things to carry the act into effect.

In pursuance of this act, the United States, on the 15th of September, 1863, filed what it entitled a libel of information, but what in form and substance was an information, in the District Court of the United States for the District of Louisiana, for the condemnation and forfeiture of certain real property, to wit, eight hundred and forty-four lots and ten squares of ground in New Orleans, all described in the information. One of the averments of the information was that the lots and squares had, on the 15th of August, 1863, been seized by the marshal, in compliance with written instructions issued by the Attorney-General of the United States to the district attorney thereof, by virtue of the act of Congress of July, 1862, the act above quoted, and that they belonged to John Slidell. It was not, however, said in terms that the seizure was made by order of the President of the United States. Other averments were the following:

'5th. That the said John Slidell, subsequently to said 17th day of July, in the year of our Lord 1862, did act as an officer of the army or navy of the rebels in arms against the government of the United States, OR as a member of Congress, OR as a judge of a court, OR as a cabinet officer, OR as a foreign minister, OR as a commissioner, OR as a consul of the so-called Confederate States of America; OR that while owning property in a loyal State or Territory of the United States, or the District of Columbia, he did give aid and comfort to the rebellion against the United States, and did assist such rebellion.

'6th. That the said John Slidell, subsequently to said 17th day of July, in the year of our Lord 1862, did act as governor of a State, OR as a member of a convention or legislature, OR as judge of a court of one of the so-called Confederate States of America, to wit, the State of Louisiana, OR did hold an office in the so-called Confederate States of America, after having held an office of trust or profit in the United States; OR did hold an office or agency under the government of the so-called Confederate States of America, OR under one of the States thereof, said office being national, State, or municipal in its name and character, which said office or agency he accepted after the date of the pretended ordinance of secession of the State of Louisiana; that he did take an oath of allegiance to, or to support the constitution of the so-called Confederate States.

'7th. That the said John Slidell, subsequently to said 17th day of July, in the year of our Lord 1862, within a State or Territory of the United States, was engaged in armed rebellion against the government of the United States, and did not, within sixty days after public warning and proclamation duly given and made by the President of the United States, on the 25th day of July, in the year of our Lord 1862, cease to aid, countenance, and abet such rebellion, and return to his allegiance to the United States.

'8th. That the said John Slidell, subsequently to said 17th day of July, in the year of our Lord 1862, within a State or Territory of the United States, was engaged in aiding and abetting an armed rebellion against the government of the United States, and did not, within sixty days after public warning and proclamation duly given and made on the 25th day of July, in the year of our Lord 1862, by the President of the United States, cease to aid, countenance, and abet such rebellion, and return to his allegiance to the United States.'

On the presentation of the libel of information the District Court directed a warrant to issue to the marshal, commanding him to seize the property described, and to cite and admonish the owner, or owners, and all other persons having, or pretending to have, any right, title, or interest in or to the same, to appear before the court on or before the third Monday from the service thereof, to show cause, if any they had, why the property should not be condemned and sold according to the prayers of the libellants.

The 'order of publication,' made September 15th, 1863,

'Ordered, That notice be given to the owner and owners of said property and real estate, and all persons interested or claiming an interest therein, to appear and answer this information on the 5th day of October, 1863, and show cause, if any they have, why said property and real estate, and the right, title, and interest therein of the said John Slidell should not be condemned and sold according to law; and that notice be given by posting a copy of this order upon the front door of the courthouse in the district, and by publication in the Era newspaper twice a week previous to said 5th day of October, A.D. 1863, the first publication to be on or before 19th instant.'

The marshal, on the 3d of October, returned:

'Received, 16th September, 1863, and on the same day, in obedience to the within order of seizure, seized and took into my possession the within described property, posted copies of the warrant, libel, and judge's order on the door of the court-house, published monition in the Era, a newspaper printed and published in New Orleans, on the 18th, 23d, 26th, 30th September, 3d October, 1863, returnable 5th October, 1863.'

The warrant, citation, and monition was signed by the deputy clerk (not by the clerk), and was attested by the signature of the judge and the seal of the court.

On the 18th of April, 1864, after due monition and proclamation, no claim or defence having been interposed, a default was entered, and the information was adjudged and taken pro confesso. Depositions were then taken and filed, and on the 18th of March, 1865, after consideration of the law and the evidence, the District Court adjudged and decreed a condemnation and forfeiture of the property to the United States; there having been, as the reader will understand without its being said, no jury trial in the case. The exact language of the decree, after its recital, was:

'That the eight hundred and forty-four lots and ten squares of ground, with all the buildings and improvements thereon, property of John Slidell, and fully described in the libel of information on file, be, and the same are hereby, condemned as forfeited to the United States.'

Subsequently, a venditioni exponas was issued, under which portions of the property were sold. The money produced, it was said at the bar, was yet in the registry.

On the 17th of March, 1870, the case was removed to the Circuit Court by writ of error, where the judgment of the District Court was reversed and the libel of information was ordered to be dismissed. The sales, however, were confirmed.

'The information is a remarkable specimen of loose pleading and uncertain statement. From the allegation in the fifth article no man can tell what John Slidell did. The next article is of the same ambiguous and unconsequential nature. The extreme ambiguity of the charges in it is something more than a matter of form; it amounts to a substantial defect. There is, in truth, no charge at all. There is no charge that Slidell acted as a foreign minister of the confederacy. The allegation is that he either did that or something else; but we are not informed what. If the defect were one of form it might be amended; but being substantial, it seems to me it is fatal.

'The other articles of the information do not save it. The same ambiguity is kept up in the saventh and eighth articles as in the previous ones, but they do not set forth any of the offences which in the statute are made the basis or cause of confiscation. They are evidently meant to be assigned under the sixth section of the act. But that section refers to persons who in any State or Territory of the United States, other than those named as aforesaid, were engaged in the rebellion. Now, the States named, as aforesaid, were the loyal States, which had just been named in the last clause of the fifth section. Therefore, the States or Territories, other than those, were the disloyal States or rebellious States. So that the sixth section of the act only refers to persons who within any disloyal or rebellious States or Territory were engaged in the rebellion.

'Yet the seventh article of the information merely alleges that Slidell, within a State or Territory of the United States, was engaged in rebellion. It does not make a charge within the statute.

'The whole information, therefore, is substantially defective, and the judgment must be reversed.'

From this action of the Circuit Court the case was brought here.

It is proper here to refer to certain proclamations relied on in support of the decree of that court.

On the 4th of July, 1868, the President, in pursuance of authority given to him by Congress, issued his proclamation. After preamble reciting the then condition of things, it said:

'And whereas it is believed that amnesty and pardon will tend to secure a complete and universal establishment and prevalence of municipal law and order in conformity with the Constitution of the United States, and to remove all appearances or presumptions of a retaliatory or vindictive policy on the part of the government, attended by unnecessary disqualifications, pains, penalties, confiscations, and disfranchisements, and on the contrary to promote and procure complete fraternal reconciliation among the whole people, with due submission to the Constitution and laws.

'Now, therefore, I hereby proclaim and declare unconditionally and without reservation to all and to every person who directly or indirectly participated in the late insurrection or rebellion, except such person or persons as may be under presentment or indictment in any court of the United States having competent jurisdiction, upon a charge of treason or other felony, a full pardon and amnesty for the offence of treason against the United States, or of adhering to their enemies during the late civil war, with restoration of all rights of property except as to slaves, and except also as to any property of which any person may have been legally divested under the laws of the United States.'

On the 25th of December, 1868, another proclamation was made, relinquishing all previous reservations and exceptions, proclaiming and declaring unconditionally and without reservation to all and every person who directly or indirectly participated in the late insurrection or rebeellion a full pardon and amnesty for the offence of treason against the United States, or of adhering to their enemies during the late civil war, with restoration of all rights, privileges, and immunities under the Constitution and the laws which have been made in pursuance thereof.

Mr. Thomas Allen Clarke, against the decree of confiscation:

1. The District Court was without jurisdiction. The jurisdiction established by the Confiscation Act is special. It does not enlarge the admiralty and revenue jurisdiction. It only refers to the mode of procedure therein as that to be observed. A limited jurisdiction is given to this court. It had no such jurisdiction before. Its powers in this regard are the same as and no greater than such powers would be if a new court had been created to exercise the jurisdiction.

2. No property is within the seventh section unless it have been seized previously to the filing of the information. There is nothing like such a seizure in this case.

Further. Such previous seizure must be made by order of the President of the United States. The libel avers that the district attorney, as directed by the Attorney-General, caused the seizure. This not tantamount to an order from the President. The averment should have been that the President had caused the seizure, and this could have been established by proof of seizure through the intermediate directions. The authority of seizure is intrusted to the President. He alone can exercise that authority. His will must be manifested. This court has repeatedly determined that the authority is derived from the war powers which Congress possesses, and has intrusted to him.

In The Sea Lion, Congress authorized the President to license certain traffic with the enemy. The various officers, army, navy, and treasury, sanctioned the trade, but the court determined that their acts were not and could not be within the warrant of the act of Congress. 'The President only could grant such a license.' The action of his subordinates was not presumable as by his authority. Neither in the duties or authority of the Attorney-General is there any such relation to the President as would authorize him to act as the organ of the President in reference to seizures. On the contrary, it is inferable from the fact that the seizure is a war seizure, that the officers charged with the subordinate executive power in matters of war would be the persons charged with the seizure, rather than a peace officer.

3. The proceedings were on the admiralty instead of the common-law side of the court. The proceedings commenced by a libel of information, not by an information. The warrant and citation is called a monition. The witnesses were examined out of court; and, greatest of all, the case was tried by the judge without the presence of a jury. This sort of mistake is one which has been made many times under the Confiscation Act, both in Louisiana and elsewhere. But wherever made it has been fatal; as the cases to which we refer in illustration of the fact, themselves show.

4. There was no service of process. The District Court ordered 'that notice be given by posting a copy of this order upon the front door of the court-house in this district, and by publication in the Era newspaper, twice a week previous to said 5th day of October, A.D. 1863, the first publication before 19th instant.' All the service made of this order was by posting copies of the order on the door of the court-house. This was no service or substituted service.

5. The libel of information was informal. It contained no charge against Slidell. We iterate and invoke to our benefit as unanswerable in this matter what is said by the Circuit Court. The law has long been settled, from the time of Sergeant Hawkins, and before, that charges in the disjunctive are erroneous, and do not authorize judgment on either.

Still further. The twenty-second admiralty rule ordains that

'All informations and libels of information upon seizures for breach of the revenue, navigation, or other laws of the United States,. . . shall aver the same to be contrary to the form of the statute or statutes of the United States in such case provided.'

The absence of this averment has, upon error, been determined to be fatal both in indictments and informations.

6. The warrant, citation, and monition were not signed by the clerk of the court, who alone was the proper person to sign them.

7. There is no finding that the property was Slidell's, nor the property of any one liable to the penalty of the Confiscation Act.

Notwithstanding the default, it was the duty of the court to 'proceed to hear and determine the case according to law, as is directed by the 89th section of the act of March 2d, 1799, respecting forfeitures incurred under that act.'

The rule in existence at the time of the passage must be regarded as embraced in effect in the statute of 1862.

8. The proclamations of 1868 effect a repeal of the Confiscation Act. They restore all rights of property. Proceedings hostile to any of the parties engaged in the late civil war would be in violation of the spirit and letter of the proclamations. The war has ceased. Further action 'to insure the speedy termination of the (then) present rebellion,' is not required. The army is no longer arrayed upon a war footing, and the proceeds of property of the offenders is no longer needed for such a use.

The cases of Yeaton v. The United States, and United States v. Preston, determine that the repeal of the law pending an appeal leaves nothing to operate upon, and that the decree must be reversed.

In this case the money produced by the sales is in the registry.

Mr. C. H. Hill, Assistant Attorney-General, contra.

Mr. Justice STRONG delivered the opinion of the court.

The Circuit Court was of opinion that the information was insufficient; that it did not aver distinctly and separately what John Slidell had done; that it, in fact, made no charge at all against him, and, therefore, that it was substantially defective. In this opinion we cannot concur. As was said in Miller v. The United States, the proceedings directed by the fifth, sixth, and seventh sections of the Confiscation Act are proceedings in rem, and they are required to conform, as nearly as may be, to proceedings in admiralty or revenue cases. They are in no sense criminal proceedings, and they are not governed by the rules that prevail in respect to indictments or criminal informations. It may be conceded that an indictment or a criminal information which charges the person accused, in the disjunctive, with being guilty of one or of another of several offences, would be destitute of the necessary certainty, and would be wholly insufficient. It would be so for two reasons. It would not give the accused definite notice of the offence charged, and thus enable him to defend himself, and neither a conviction nor an acquittal could be pleaded in bar to a subsequent prosecution for one of the several offences. But in proceedings against real or personal property to obtain a decree of condemnation and forfeiture under the Confiscation Act, liability of the property seized to confiscation is alone the subject of inquiry. No judgment is possible against any person. The enactment of Congress was that property belonging to any one embraced within several classes of persons should be subject to seizure and condemnation. Persons were referred to only to identify the property. Not all enemies' property was made confiscable; only such as was designated by the act, and reference to the ownership was the mode selected for designating that which was made liable to confiscation. If the property belonged to a person who had filled either of the offices specified, or who had done any of the acts mentioned in the fifth, sixth, or seventh articles of the information, it was the property which the act had in view. The United States had, therefore, only to aver and prove that the lots and squares seized belonged to some one who was one or another of the persons referred to in the fifth or sixth sections of the act of Congress. In either alternative the property was made subject to confiscation. It may be the information might have been more artifically drawn, and that if the owner had appeared in answer to the citation he might have interposed successfully a special demurrer. But after default was made and entered, and after a final judgment of condemnation, faults in the mode of pleading, mere formal faults, can be of no importance. They cannot have injured any one. If the information set forth, though informally, a substantial right of action, it was sufficient, and the judgment cannot be disturbed because of such faults. And that it did in this particular cannot be questioned, for if the ownership of the property was in a person embraced in either class mentioned in the fifth and sixth sections of the act (no matter which class), it was liable to confiscation. This the information averred. It pursued the words of the law, and that in an admiralty or a revenue case is all that is required. In the case of The Emily and the Caroline, which was a case where the libel described the offence in the alternative, pursuing the words of the law, alleging that the vessel was fitted out within a port of the United States, or caused to be sailed from a port within the United States, for the purpose of carrying on trade or traffic in slaves, the same objection was raised which has been raised in this case, namely, that the charge was in the alternative. But it was overruled. The court admitted that fitting out and causing to sail were distinct offences, but denied that charging them in the alternative was exceptionable. It was said that in 'admiralty proceedings a libel in the nature of an information does not require all the formality and technical precision of an indictment at common law. If the allegations are such as plainly and distinctly to mark the offence, it is all that is necessary. And where it is founded upon a statute, it is sufficient if it pursues the words of the law.' Reference was then made with, approbation to a note of Judge Story, in the beginning of 7th Cranch, to the case of The Caroline, in which it was said the court did not mean to decide that stating the charge in the alternative would not have been sufficient if each alternative had constituted an offence for which the vessel would have been forfeited. The court then added these observations: 'It is said this mode of alleging two separate and distinct offences leaves it wholly uncertain to which of the accusations the defence is to be directed. This objection, if entitled to consideration, would apply equally to an information laying each offence in a separate count,' and they concluded that the objection, if available at all, must go to the full length of limiting every information to a single offence, which they thought was not required by any principle of justice or sanctioned by any rule of practice applicable to admiralty proceedings. The same doctrine was asserted by Chief Justice Marshall in Jacob v. The United States. So in Parsons on Shipping and Admiralty, the author, in view of the authorities, gives his opinion that a libellant may state his case in the alternative. So in Cross v. The United States, Judge Story remarked that 'in proceedings in admiralty the same strictness is not required as in proceedings in common-law courts. And where the seizure is on land,' said he, 'although the proceedings would seem to be analogous to informations in the Exchequer, yet I do not know that in our courts the rigid principles of the common law applicable to such informations have been solemnly recognized.' These considerations, in our opinion, justify us in ruling that the Circuit Court erred in deciding that the information is fatally defective because it does not aver distinctly and separately what John Slidell had done, but makes its allegations in the alternative.

No other reason than this we have mentioned, and which we regard as insufficient, was assigned by the Circuit Court for reversing the decree of confiscation, and ordering the information to be dismissed. But during the argument in this court, other objections have been urged against the decree, which, if they are valid, would justify its reversal, though some of them would not warrant the dismissal of the libel. It, therefore, becomes necessary to examine and determine whether they exhibit error in the action of the District Court.

The first of these objections, and the one most pressed, is, that the court was without jurisdiction of the case. It is said no other property than such as had, prior to the filing of the information, been seized by the direction of the President of the United States, was within the purview of the seventh section of the Confiscation Act, and, therefore, within the limited jurisdiction of the District Court; and it is insisted the record does not show there had been any executive seizure of the eight hundred and forty-four lots and ten squares of ground before the information was filed, or, indeed, at any time.

Undoubtedly, though not an inferior court, the District Court is one of limited jurisdiction, and that it has jurisdiction of the particular case which it attempts to adjudicate, must always appear. Undoubtedly, also, only such property as has been seized by executive order is within the power of that court for confiscation proceedings. Thus much is conceded. But it is a mistaken assertion that the record in this case does not show an executive seizure of the property condemned before the District Court assumed any jurisdiction over it. The information avers that such a seizure was made on the 15th of August, 1863, by the marshal, under written authority given him by the district attorney, in compliance with instructions issued to him by the Attorney-General of the United States, by virtue of the act of Congress of July 17th, 1862 (the Confiscation Act); and to a citation or monition founded on the information, default was made. What the effect of this default was we do not propose now to discuss at length. We have gone over the ground recently in the case of Miller v. The United States, and to that case we refer. In view of what was there said and decided, and in view of the authorities cited, it must be held that the default established the truth of all the material averments in the information, and among others, that there had been an executive seizure before the information was filed. It was equivalent in effect to a confession. Now, while it is true a party cannot, by consent, confer jurisdiction where none would exist without it, it is equally true that when jurisdiction depends upon the existence of a fact, its existence may be shown as well by the confession of a party as by any other evidence.

It is next contended that the court had no jurisdiction, even if the seizure alleged in the information was made, because it is not averred to have been made by order of the President of the United States. As we have seen, the libel sets forth a seizure made by the marshal, under authority given by the district attorney, in pursuance of instructions issued by the Attorney-General of the United States, by virtue of the act of Congress (viz., the Confiscation Act). It is said this exhibits no authority given by the President for the seizure, and that the Attorney-General was not empowered to direct it. But if the seizure was made by virtue of the act of Congress, as the information avers it was, it was necessarily essarily caused to be made by the President, for he only was empowered by the act to cause it. Then the Attorney-General must have been the agent of the President to give instructions to the district attorney, and through him to the marshal. The language of the statute is, 'it shall be the duty of the President to cause the seizure,' &c. This implies that the seizure is to be made by the agents of the President. And a direction given by the Attorney-General to seize property liable to confiscation under the act of Congress must be regarded as a direction given by the President. In Wilcox v. Jackson, it was ruled that the President speaks and acts through the heads of the several depart ments in relation to subjects which appertain to their respective duties. Therefore, where, by an act of Congress, all lands reserved from sale by order of the President were exempted from pre-emption, this court ruled that a request for a reservation made by the Secretary of War for the use of the Indian department, must be considered as made by the President within the meaning of the act. The same doctrine was asserted in United States v. Eliason. It may, we think, be properly applied to the present case. While it is true the right of seizure and confiscation grows out of a state of war, the means by which confiscation is effected have a very appropriate relation to the duties of the law department of the government. But whether this is so or not, it is sufficient that the information in this case avers the seizure was made by virtue of the act of Congress. It must, therefore, have been caused by the President.

It is next objected that the suit was on the admiralty, and not on the law side of the District Court. The seventh section of the Confiscation Act enacts that the proceedings shall conform as nearly as may be to the proceedings in admiralty or revenue cases. Strict conformity is not required. No doubt in cases of seizure upon land, resort should be had to the common-law side of the court, and such, in substance, was, we think, the case here. Everything necessary to a common-law proceeding in rem is found in the record. An information was filed (called a libel of information, it is true, but still and information), a citation as well as a monition was issued, a default was taken, and, after consideration of the evidence, condemnation was adjudged. What was lacking in this to a common-law proceeding in rem? The principal lack alleged is that there was no jury trial. But in courts of common law on jury is called when there is no issue of fact to be tried. An inquest is sometimes employed to assess damages; but a jury to find facts is never required where there is no traverse of those alleged, and where a defendant has defaulted. What matters it then that the information was called a libel of information, or that the warrant and citation is called a monition? The substance and all the requisites of a common-law proceeding are found in the record. Technical niceties are not required either in admiralty or revenue cases.

It is next objected there was no sufficient service of the process; but we think the return of the marshal shows exact compliance with the order of the court directing service, and the manner in which it should be made. The order was that notice be given in two ways to the owner or owners of the property, and all persons interested therein, requiring them to appear and answer the information. The first of these ways was by posting a copy of the order on the front door of the court-house, and the second was by publication, viz., publication of the requirement to appear in the Era newspaper. In the execution of the order the marshal went beyond it. He posted copies of the information, of the warrant, and of the order of the judge, and he published the monition, which was a citation, as he was directed. The service was, therefore, sufficiently made.

It is further objected that the information was informal, in that it contained no charge against Slidell, the alleged owner, but that its averments were in the disjunctive. We have already sufficiently answered this. So, too, the absence of any averment that the causes of forfeiture were contrary to the form of the statute or statutes of the United States in such case provided, is no sufficient reason for reversing the judgment of the District Court. Such an averment is required by the twenty-second admiralty rule, but even in admiralty a failure to make it cannot be taken advantage of in a court of errors. The defect is only formal. It is true the absence of such averment in indictments and criminal informations has been held to be a fatal fault, but for reasons inapplicable to civil proceedings, and we need not repeat that the present is a civil case.

Another objection urged against the proceedings in the District Court is, that the warrant, citation, and monition was not signed by the clerk of the court. It was attested by the judge, sealed with the seal of the court, and signed by the deputy clerk. This was sufficient. An act of Congress authorized the employment of the deputy, and in general, a deputy of a ministerial officer can do every act which his principal might do.

A further objection urged against the adjudication of forfeiture made by the District Court is, that it was made without any finding that the property belonged to John Slidell, or any person included in either of the classes designated in the fifth and sixth sections of the Confiscation Act. This is a renewal of the complaint so earnestly pressed in Miller v. The United States, and which we held to be without foundation. It is said that notwithstanding the default, it was the duty of the court to 'proceed to hear and determine the case according to law, as is directed by the eighty-ninth section of the act of March 2d, 1799, respecting forfeitures incurred under that act.' But were this conceded, of what avail would it be in this case in support of the objection? The court did proceed to hear and determine the case after the default was entered. And it was not until after such hearing and consideration that the property was condemned. This appears by the record. Having heard and considered evidence, it must be presumed the court found that the property belonged to a person engaged in the rebellion, or one who had given aid or comfort thereto, as well as all other facts necessary to the rendition of the judgment. This is a presumption always made in support of judgments of courts after their jurisdiction is made to appear. No rule of law required the District Court to state in detail in its record its findings of fact, and no such practice has prevailed in any court except some which are both of limited and inferior jurisdiction. Nor is it to be considered in a court of error whether the evidence was sufficient to warrant the findings presumed to have been made, and without which the judgment could not have been given. A less degree of evidence is certainly needed after a default. Even in United States v. The Lion, so much relied upon, where a condemnation was sought under an act of Congress which enacted that after the default the court should proceed to hear and determine the case according to law, Judge Sprague said, 'To what extent there must be a hearing must depend on the circumstances of the case.' 'The court,' said he, 'will at least examine the allegations of the libel, to see if they are sufficient in law, the return of the marshal, and such affidavit or affidavits as the district attorney shall submit.' And he added that a wilful omission by the owners to answer might of itself satisfy the court that a forfeiture should be decreed. But without further consideration of this objection, we refer to the opinion delivered in Miller v. United States, to which we still adhere.

There remains but one other matter which requires notice. It is contended that the proclamations of amnesty in 1868 amounted in effect to a repeal of the Confiscation Act. To this we cannot assent. No power was ever vested in the President to repeal an act of Congress. Moreover, the property condemned in this case became vested in the United States in 1865, by the judgment of forfeiture, and the sale under the venditioni exponas merely converted into money that which was the property of the government before. No subsequent proclamation of amnesty could have the effect of divesting vested rights. Even the express repeal of a statute does not take away rights of property which accrued under it while it was in force.

We have thus reviewed the whole record of the proceedings in the District Court, and we have been able to discover nothing which justified a reversal of the decree of condemnation.

JUDGMENT OF THE CIRCUIT COURT REVERSED, and the cause remanded with instructions to

AFFIRM THE JUDGMENT OF THE DISTRICT COURT.

I dissent from the opinion of the court in this case because it is repugnant to the repeated decisions of this court, to the eighty-ninth section of the Collection Act, and to the twenty-ninth admiralty rule of this court, which was adopted as the rule of decision more than thirty years ago; and because it is opposed to the whole current of the decisions of the admiralty courts and to the rules laid down by the most approved writers upon admiralty law.

Apart from that, I also adhere upon the merits to the dissenting opinion in the case of Miller v. United States.

I dissent from the opinion and judgment of the court on the grounds stated in the dissenting opinions in the cases of Miller v. United States, and Tyler v. Defrees, reported in the 11th of Wallace, so far as they are applicable to the facts of this case; and on the further ground that the libel of information is fatally defective in charging no one offence positively, but several offences in the alternative.

Mr. Justice DAVIS also dissented.

Mr. Justice BRADLEY, not having heard the argument, took no part in the judgment.


text: Talk:The Confiscation Cases Slidell's Land/Opinion of the Court


text:
Claims of Marcuard

IN these cases, which were several appendages to the case just above reported, and which came here on error or appeal from the Circuit Court for the District of Louisiana, Marcuard, the Citizens' Bank of Louisiana, and the Merchants' Bank of New Orleans, alleged that at the time of filing the information mentioned in the foregoing case as the foundation of the sale which was made of the eight hundred and forty-four lots and ten squares of ground in New Orleans, owned by Slidell, they respectively held liens against the said property. And they were permitted by the courts below to intervene for the protection of their claims. Those courts, however-the District Court first, and the Circuit Court affirming its action-refused to let them take the proceeds of the sale.

On the different writs of error or appeals the question was whether this action was right.

Mr. Thomas Allen Clarke, for the parties appellant or plaintiffs in error, denied that it was.

Mr. C. H. Hill, Assistant Attorney-General, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Claims of Marcuard


text: Talk:Claims of Marcuard

title: Talk:Claims of Marcuard


text:
Claims of Marcuard/Opinion of the Court

The parties now before us complain that they were not allowed to take the proceeds of the sales. But they ought not to have been allowed to intervene. They had no interest, even if they were lien holders, in the confiscation proceedings. It was only the right of John Slidell, whatever that right was, that could be condemned and sold, and the sale under the judgment of condemnation in no degree disturbed their liens. By the decree of condemnation the United States succeeded to the position of Slidell, and the sale had no other purpose or effect than to make the think confiscated available for the uses designated by the Confiscation Act. This was decided in Bigelow v. Forrest, and more recently in Day v. Micou The District Court, therefore, acted correctly in rejecting the claims of the appellants and plaintiffs in error, even if the reasons given for the rejection were insufficient, and the Circuit Court was not in error in affirming what the District Court did.

The action of the Circuit Court in the premises is, therefore,

AFFIRMED IN EACH OF THE CASES.

Mr. Justice BRADLEY did not sit during the argument, and took no part in the decision of any of the above causes.

title: Claims of Marcuard/Opinion of the Court


text: Talk:Claims of Marcuard/Opinion of the Court


text:
Conrad's Lots

ERROR to the Circuit Court for the District of Louisiana.

On an information very similar to that in Slidell's case, filed in the District Court for Louisiana, by The United States v. Ten Lots of Ground, the property of C. M. Conrad, the lots had been decreed by that court forfeited to the United States, and were sold accordingly; the money being paid into the registry of the court.

On error to the Circuit Court that judgment was set aside, and the information was ordered to be dismissed, but it was also ordered that the net proceeds of the property sold under the judgment be paid to Conrad, and that the sale stand confirmed.

Two writs of error were sued out, one by the United States and one by Conrad; that by the United States being to the action of the Circuit Court in setting aside the judgment of the District Court and ordering the information to be dismissed, and that by Conrad to the action of the court confirming the sale made under the judgment of condemnation and forfeiture.

On the writ taken by the United States this court (just after reversing the judgment in Slidell's case) reversed the judgment in Conrad's case also, and for the same reasons that it had reversed the judgment in Slidell's case, and remanded the cause, with instructions to affirm the judgment or decree of the District Court.

The present case was on the writ of error taken by Conrad, and upon it he now sought here to obtain a reversal of so much of the judgment as confirmed the sale made under the judgment of condemnation and forfeiture.

Mr. C. M. Conrad, plaintiff in error, in propri a person a; Mr. C. H. Hill, Assistant Attorney-General, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Conrad's Lots


text: Talk:Conrad's Lots

title: Talk:Conrad's Lots


text:
Conrad's Lots/Opinion of the Court

We have just decided in the case of the United States v. Ten Lots of Ground, the property of C. M. Conrad (it being a writ of error sued out by the United States), that the judgment of the Circuit Court was erroneous, and reversed it, ordering that the decree of confiscation be affirmed. This leaves nothing upon which the present writ of error can act. The judgment having been reversed, the order of confirmation of the sale, as well as the order of distribution, fall with it. We can, therefore, only repeat the judgment given in the former case, which was a judgment of reversal.

JUDGMENT REVERSED.

Justices CLIFFORD, DAVIS, and FIELD dissented from the judgment rendered, and were of opinion that only so much of the judgment of the Circuit Court should be reversed as confirmed the sale made under the decree of the District Court.

title: Conrad's Lots/Opinion of the Court


text: Talk:Conrad's Lots/Opinion of the Court

title: Talk:Conrad's Lots/Opinion of the Court


text:
Knapp v. Western Vermont Railroad Company

ERROR to the Circuit Court for the District of Vermont; the only question in the case being whether the suit originally brought in a State court (the County Court for the County of Bennington), had been rightly removed to the Circuit Court, in pursuance of the act of Congress of March 2d, 1867; one enactment of which is as follows:

'That where a suit is now pending, or may hereafter be brought in any State court, in which there is a controversy between a citizen of the State in which the suit is brought and a citizen of another State, and the matter in dispute exceeds the sum of $500, exclusive of costs, such citizen of another State, whether he be plaintiff or defendant, if he will make and file, in such State court, an affidavit stating that he has reason to and does believe that, from prejudice or local influence, he will not be able to obtain justice in such State court, may, at any time before the final hearing or trial of the suit, file a petition in such State court for the removal of the suit into the next Circuit Court of the United States, to be held in the district where the suit is pending,' &c.

The case was thus:

The Western Vermont Railroad Company, a corporation of Vermont, having issued a large amount of bonds, made a mortgage of the road to Knapp and Briggs, both citizens of New York, in order to secure the payment. By a foreclosure, in regular equity form, of that mortgage under the laws of Vermont, the title of Knapp and Briggs to the railroad became absolute in fee, in trust for the bondholders under the mortgage. They thereupon leased the railroad for a term of years to the Troy and Boston Railroad, a corporation of New York; and, therefore, according to the decisions of this court, a citizen of the same State with Knapp and Briggs. The lease contained various covenants.

In the meantime, and before the expiration of the lease, a new corporation, called the Bennington and Rutland Railroad Company, had been organized by a majority of the bondholders, in pursuance, as was said, of certain provisions of a railway act of Vermont. That act, as the new corporation conceived, authorized the majority of the bondholders of any railroad company purchasing the road under a foreclosure, to form a new corporation, which would own, maintain, and work the purchased railroad. It vested the company thus formed with all the powers, privileges, and franchises of the original corporation, and empowered it 'to proceed in any manner it may deem expedient, either by purchase or otherwise, to obtain the title and ownership, or the use and benefit of the whole estate, and to satisfy the undivided interest or claims of any other party or parties interested in said railroad; and until the interests of such other parties shall become vested in such new corporation, such corporation shall be the trustees thereof, and shall be accountable therefor as tenants in common.'

By an act passed November 18th, 1864, the corporation formed under the foregoing provisions was declared entitled to receive rents accruing under leases executed by the trustees who foreclosed.

In this state of things, Knapp and Briggs sued the Troy and Boston Railroad Company, on the covenants already mentioned of their lease to them. The defendants-alleging that the new corporation was, by the provision of the statute under which it was formed, substituted as trustee of the other bondholders, in place of Knapp and Briggs, and had thus become the real party in this suit, and filing such affidavit of local prejudice as the act of March 2d, 1867, requires-asked the State court, in a petition addressed to it, to remove the cause into the Circuit Court. They contended that the subject-matter of the controversy was wholly between the Bennington and Rutland Railroad Company, a Vermont corporation, and themselves, and that Knapp and Briggs were now but nominal parties to it, having no interest in it.

The petition, with the affidavit annexed to it, together with the original writ, declaration, and pleas, were transmitted to the Circuit Court. The plaintiffs, upon these papers, the certified copy of the lease, and the affidavits of certain persons that there were outstanding bonds of the Western Vermont Railroad, which had not been converted into or exchanged for the stock of the Bennington and Rutland Railroad Company, nor in any other way paid or discharged, moved the Circuit Court to remand the cause to the State court for want of jurisdiction. This motion the Circuit Court denied, and proceeded to hear ad adjudge the case; and after suit gave judgment for the company. The plaintiff, Knapp, thereupon (Briggs having died) took this writ of error.

The transcript of the record, as it came to this court, presented in regular form the papers on which the order for removal was founded, and those filed in support of the motion to remand. It contained, in addition, a statement by the clerk of the court below (not authenticated in any way by the judge, nor appearing in a bill of exceptions), occupying three pages of the transcript, of a number of things which according to the statement 'appeared' or 'were proved' on the hearing of the motion, and of different things that were 'admitted' or 'agreed to' by the parties respectively. One part of the certificate was thus:

'It further appeared that said Knapp and Briggs had no interest, directly or indirectly, in the commencement or prosecution of this suit; that they had no control whatever over it; paid no part of the expenses of its prosecution; had employed no counsel; and that said suit was prosecuted solely by, and for the benefit of, said Bennington and Rutland Railroad Company, and at its expense; and that the said Bennington and Rutland Railroad Company had indemnified the said Knapp and Briggs against any liability growing out of said suit. And that Knapp and Briggs did not know that said suit was to be brought until after the writ had been served.

'It was admitted by both the plaintiffs and defendants that the said Bennington and Rutland Railroad Company was organized under the same laws of the State of Vermont; that said organization was valid and legal; and that thereby said Bennington and Rutland Railroad Company became the trustees of such bondholders as had not converted their bonds into the stock of said Bennington and Rutland Railroad Company; and of the interests and claims of all other parties in said railroad.

'And it was admitted by the plaintiffs that this suit was brought in their names because, as the plaintiffs claimed under the laws of the State of Vermont, and the rules of pleading then in force in that State, it was necessary so to commence the same in order to recover on said covenant, as no action upon a covenant can be maintained in that State in the name of any other person than the covenantor, unless where the covenant is, in terms, assignable, and runs with land, and has been duly assigned by the warrantee deed of the covenantor conveying the premises to which the covenant applies.'

Messrs. L. P. Poland and E. J. Phelps, for the plaintiffs in error; Mr. W. J. Beach, contra.

Mr. Justice DAVIS delivered the opinion of the court.


text: Talk:Knapp v. Western Vermont Railroad Company