Texas v. White
United States Supreme Court
74 U.S. (7 Wall.) 700, 19 L. Ed. 227 (1869)
THE STATE OF TEXAS, Compt.,
GEORGE W. WHITE, John Clues, John A. Hardenberg, Samuel Wolf,
George W. Stewart, The Branch of the Commercial Bank of Kentucky,
Weston F. Birch, Byron Murray, Jr., and Shaw.
(See S. C. 7 Wall. 700-743.)
Action by State attorney for effect of secession by State authority of attorney of state Act as to transfer of property contract of insurgent military board, or legislature void purchaser of past due notes rights of.
The Governor of a State may authorize an attorney to bring an action in its name.
When Texas became one of the United States, it entered into an indissoluble relation.
By the Ordinance of Secession, adopted by the Convention and ratified by a majority of the citizens of Texas, and the Acts of its Legislature intended to give erect to that ordinance, the State did not cease to be a State, nor its citizens to be citizens of the Union.
Where the provisional Governor of the State appointed by the President and a Governor elected by the people in 1861 and a Governor appointed by a Commander of the district, each has given his sanction to the prosecution of a suit, the suit was instituted and is prosecuted by competent authority.
If a State, by a public Act of its Legislature, imposes restrictions upon the alienation of its property, every person who takes a transfer of such property must be held affected by notice of them.
A contract made by an insurgent State Military Board in aid of the rebellion is void.
An Act of an insurgent State Legislature intended to aid rebellion, can be given no effect by this court.
Purchasers of notes or bonds past due, take nothing but the actual right and title of the vendors.
[No. 6. Original Bill]
Argued Feb. 5, 8, 9, 1869. Decided Apr. 12, 1869.
THIS is an original suit in this court, in the State of Texas filed a bill, Feb. 15, 1867, claiming certain bonds of the United States as its property. The bill prays an injunction to restrain the defendant from receiving payment from the National Government, and to compel the surrender of the bonds to the State.
The bill charges the possession of certain United States indemnity bonds, issued under the Compromise Acts of Sep. 9 and 25, 1850, which bonds bore date Jan. 1, 1851, and were payable to Texas or bearer, and redeemable after Dec. 31, 1854, with interests at the rate of five per centum per annum; that by the Act of the Legislature of Texas on the 10th of December, 1861, it was provided that no bonds issued as aforesaid, as a portion of said $5,000,000.00 of stocks 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 Texas; that the bonds remained in the possession of Texas until sometime in 1861, or shortly thereafter, when they were seized and taken by certain unlawful combinations of individuals in armed hostility to the Government of the United States; that such organization, pretending to act in behalf of the State, establishing a certain Military Board for the purpose of accomplishing the overthrow of said Government of
Note. Governor's power to employ counsel for the state see note, 55 L.R.A. 493.
[18 L. Ed. 227]
the State of Texas under the Constitution of the United States, by withdrawing said State from the Federal Union, and for waging war against the Government of the United States, that said Military Board, Jan. 12, 1863, sold to the defendants 135 of said bonds and the coupons attached thereto, besides seventy-six other bonds then on deposit in England.
It is also charged that the contract is illegal and void, that it was never fulfilled by White & Chiles, and that Texas has the right to recover; that said bonds, or a portion thereof, were delivered to certain other of the defendants by White & Chiles; that said persons either hold the bonds for White & Chiles in trust, or else they were purchased with knowledge of the circumstances; that the bonds were not obtained in good faith; that they were purchased with notice of the title of the complainants; that they were never indorsed as required by law; that White & Chiles still hold a part of the bonds, and that they are unable to respond.
The charges, in short, are property in the complainant; unlawful possession by White & Clues and their co-defendants; purchase with notice and after the bonds were overdue.
The contract of White & Chiles carries illegality on its face.
The defendant, John A. Hardenberg, admits the purchase of certain of the bonds, on the 6th and 8th of November, for $32,475 and $34,700, having purchased the same at $1.15 and $1.20 per dollar. Defendant denies all knowledge of the ownership of Texas, says that he purchased upon the information that a part of such bonds had been redeemed; denies any trust upon the part of White & Chiles; and all notice of the character of their ownership; alleges that he paid $45,611.25 in good faith. The defendant is silent as to his purchasing them after they were due, but the date he gives shows that they were so purchased. The defendant, Chiles, first denies the authority of Texas to sue, and the ability of the State to maintain the action; insists upon an improper joinder of the parties; sets up a contract of White & Clues with the State, and insists that the State is estopped from denying its validity, He denies the illegality of the contract; admits that the bonds were not indorsed, but insists that this was not necessary; says that he is unable to give further description than is found in the contract; states that $3,000 were sold to Thomas Haas; that twelve of them were placed in the hands of Birch, Murray & Co., as collateral security for advances made to him; that four of them were placed in the hands of Edward A. Thornton, for collection; that one was placed in the bands of J. R. Barrett as a fee to procure the collection of the bonds; that five of them were sold by the defendant to Thomas J. Goff; that four were sold by him to a New York broker, name not recollected; that $3,000 were paid by him to A. J. McKinley, on account of White.
He sets out dates which show that all these sold after they had matured; he sets up that he and White purchased about $60,000 worth of cotton cards and medicines, in fulfillment of their contract; but that the same was seized by robbers in transitu from Mexico to Austin; and be claims the benefit of this casualty; pleads a tender of the treasury warrants of Texas in discharge of their contract. He sets up an answer in the nature of a cross-bill. The defendants, Birch, Murray & Co., admit the possession of eight of the bonds; say that they received twelve bonds from John Chiles, as collateral security for $5,000 loaned by them to Chiles; that, on the 15th of December, 1868, they were paid four of the bonds amounting to $4,900; that the remaining eight are still held by the Treasury, "for the benefit of the parties entitled thereto;" that after the refusal of the Comptroller to pay, the defendants advanced Chiles $4,185.25 more; that they did so upon the assurance of Chiles that he was the true owner of the bonds. He denies generally all bad faith. The defendant, White, admits the main charges in the bill, but attempts to justify under the Ordinance of Secession and the acts of the Military Board. He sets up his contract and claims under it; alleges that they purchased $65,000 worth of supplies which were seized by robbers; sets up the tender, to Governor Hamilton, of the Texas securities. He alleges that he has disposed of all the bonds in his possession, and substantially states the same facts in regard to Birch, Murray & Co.
A fuller statement of the circumstances under which the transfer of the bonds in question to White & Clues was made, seems desirable, and is here given.
In January, 1861, a call for a Convention of the people of Texas was issued, signed by sixty-one individuals.
The call was without authority and revolutionary.
The persons issuing the call were not acting by the direction nor with the sanction of the existing government, but in the capacity of private citizens.
Under this call delegates were elected from some sections of the State, whilst in others no vote whatever was taken.
These delegates assembled in State Convention, and Feb. 1, 1861, the Convention adopted an Ordinance: To Dissolve the Union between the State of Texas and the Other States United under the Compact styled "The Constitution of the United States of America."
The Ordinance contained a provision requiring it to be submitted to the people of Texas, for ratification or rejection by the qualified voters thereof, Feb. 23, 1861.
To avoid any internecine disturbance the irregular call of the State Convention might produce, Governor Houston convened the Legislature of the State in extra session at Austin, Jan. 22, 1861.
The Legislature passed an Act ratifying the election of delegates for the State Convention.
The Ordinance of Secession submitted to the people was adopted by a vote of 34,794 in favor of the ratification, to 11,235 against its ratification.
The Convention, which had adjourned immediately on passing the Ordinance, reassembled. Mar. 14, 1861, it declared that the Ordinance of Secession had been ratified by the people, and that Texas had withdrawn from the Union of the States under the Federal Constitution. It also passed a resolution requiring the officers of the State Government to take an oath to support the provisional govern-
[18 L. Ed. 228]
ment of the Confederate States, and providing as follows:
"Should any officer of the government refuse to take said oath or affirmation, in the manner and within the time prescribed, then and in that case, his office shall be deemed vacant, and the same filled and the duties thereof discharged as though he were dead or had resigned."
Mar. 16, the Convention passed an Ordinance, declaring that Whereas, Sam Houston, Governor of the State, and E. W. Cave, Secretary of State, had refused or omitted to take the oath prescribed, their offices were vacant; that the Lieutenant-Governor should exercise the authority and perform the duties appertaining to the office of Governor, and that the deposed officers should deliver and turn over to their successors in office the great seal of the State, and all papers, archives and property in their possession, belonging or appertaining to the State.
The Convention further assumed to exercise and administer the political power and authority of the State.
Thus was inaugurated the Rebel Government of Texas.
In many, if not all the other States that united in the league of "The Confederacy," the State Government organized under the Confederacy assumed the political power of the State, with the acquiescence and consent of the existing government. But in Texas the State Government was organized, not only without the consent of the existing government, but by the forcible ejection of its officers.
When the army of the Trans-Mississippi Department was surrendered, the civil officers of the usurping Government of Texas, including the Governor, Treasurer and Secretary of State, emigrated to Mexico. The State Government disappeared, and the State was disorganized and in a condition of anarchy.
Thereupon, June 17, 1865, the President issued his proclamation appointing a provisional Governor, and directed the formation by the people of a State Government in Texas.
Under the Provisional Government thus established, the people proceeded to make a Constitution and reconstruct their State Government.
It is under the authority of this government, so organized, that these proceedings are instituted, to vacate and set aside the proceedings and contracts of the Revolutionary Government in question.
Jan. 11, 1862, the Legislature of the usurping Government of Texas passed an Act:
"To Provide Arms and Ammunition, and for the Manufacture of Arms and Ordinance for the Military Defenses of the State;" and by said Act created a Military Board, with certain powers, to carry out the purpose indicated in the title.
On the same day the Legislature passed a further Act entitled "An Act to Provide Funds for Military Purposes," and therein directed the Board, which it had previously organized, to dispose of any bonds and coupons which may be in the Treasury on any account, and use such funds or their proceeds for the defense of the State: further providing that "Any bonds so disposed of under the provisions of this Act, shall be substituted by an equal amount of bonds of the Confederate States of America."
Under the authority of the Act last referred to, the Military Board executed the above mentioned contract with White & Chiles, which this proceeding is instituted to vacate.
By this contract it appears that the bonds in question, belonging to the State of Texas, were transferred to White & Chiles, upon certain terms and conditions; and the question now arises: what title, if any, was vested in White & Chiles under the contract, and what in their assignees?
A further statement appears in the opinion of the court.
See, also, a subsequent decision by this court in one branch of the case (post.)
Messrs. J. B. Brent, R. T. Merrick, Geo. W Paschal, George Taylor, and B. H. Epperson, for the complainant:
Upon the whole case made by the bill, answers and evidence, the defense rests entirely upon the validity of the possession of the bonds by White & Chiles; for no defendant stands in any better position than these original possessors. In none of the original answers is there a real attempt to rest the possession upon color of law. But in a supplemental answer of Chiles, he invokes the Act of Jan. 11, 1862, found on the 55th page of the Session Laws of that year. It creates a Military Board, and gives the right to defend the State "By means of any bonds and coupons which may be in the Treasury on any account, and may use such funds or their proceeds, and, therefore, may sell, hypothecate or barter such bonds and coupons, provided such disposal shall not exceed the amount of $1,000,000 of such bonds and coupons," etc.
But to this Act we answer:
1. That it cannot reasonably be construed to relate to the bonds in question.
2. For previous Acts of the same Legislature clearly show what was intended.
3. That if such could be the construction, the 2d section of the Act itself would make any such use void, for that declares that "Any bonds which may be disposed of under the provisions of this Act, shall be substituted by equal amounts of the bonds of the Confederate States of America," etc. thus showing the illegal purpose.
This Act cannot be construed to change the special dedications of the bonds to school purposes.
Act of the Legislature of Texas, approved Jan. 31, 1854; Pasch. Annot. Dig. art. 3434, p. 571; Idem. arts. 3484, 3498; Act of the 13th of August, 1856; Pasch. Annot. Dig. art. 3499.
It cannot be pretended that, by a general law created for rebel purposes, it was intended to repeal the dedication and to destroy the Military Board. In contemplation of law, the bonds were not in the Treasury for the purposes of the Act of the 11th January, 1862. The State Constitution forbids this.
A de facto government is vested with certain political powers, which it may lawfully exercise; but does it acquire rights of property by reason of its overthrow of the government de jure?
What are its powers, is impossible to deter-
[18 L. Ed. 229]
mine by any rule which will be applicable to any case and all conditions. They are limited by necessity, and it is difficult, if not impossible, to give them any precise definition.
It is contended in the brief of the counsel for the defendant, that unless the government de facto possessed the power of making the contract in question in this case, it could possess no legislative nor executive nor judicial authority whatever; and that all it did on the assumption of such authority is absolutely null and void; that marriages solemnized during its existence should be held null; that the judgments of the courts in civil and criminal cases should be held null, and all concerned in their execution responsible, civilly and criminally, for an usurpation of power. Such consequences are riot the logical result of the position. Whatever was necessary to be done in order to preserve the social community from anarchy, and to guard and protect its members in their intercourse with each other, might lawfully be done by such a government. Amidst all the mutations that have occurred in France, where the government has passed from one revolutionary hand to another in the sudden and rapidly succeeding convolutions of society, the judicial hierarchy has remained undisturbed. And even when revolutionary tribunals were at times executing the wrath of a faction, the judicial officers, as far as circumstances would permit, administered the law.
But whatever is not necessary for the preservation of the order and peace of the community, and especially whatever is done for the purpose of strengthening the de facto government in the contest with the government de jure, cannot be held valid in the courts of the de jure government after it has been restored to lawful authority in the State.
The act of sovereignty exercised by the usurper may have been in obligatory force, not by virtue of his right, for he had none; but because it is very probable that the lawful sovereign, whether it be the People themselves or a King or a Senate, chooses rather that the usurper should be obeyed during the time, than that the exercise of the laws and justice should be interrupted, and a State thereby exposed to the disorder of anarchy. But in those things which are not so necessary for the public good, and which contribute toward establishing the usurper in his unjust position, if by disobedience we run no great hazard, we must not obey." Grotius, De Bello ac Pacis, L. I. ch. 4. sec. 15.
The acts of sovereignty done by the usurping government which will be recognized as obligatory by the restored government, are such only, therefore, as are necessary to protect the community from anarchy; and the recognition of these, even, is within the discretion of the restored government de jure. For, as Grotius says, the usurping government does not act by virtue of right, for it has none: but by permission or sufferance of the lawful sovereign, whether it be King, People or Senate.
Shortridge v. Mason, 2 Am. Law Rev. 95; Keppehl v. Petersburg R. R. Go. 3 Am. Law Rev. 389.
That all acts done by the rebel authorities which were in contravention of the Constitution, laws and policy of the United States, or in aid of the rebellion are void, has generally been decided by the Supreme Courts of the seceded States themselves.
Thus all these courts have held, that contracts founded upon Confederate Treasury Notes come under the maxim, ex dolo malo non oritur actio; and that such contracts are void because issued to aid the rebellion, and upon their faces expressly look to dissolving the Union. For this reason their vicious character adhered to every contract which they touched, not alone because of the illegal dealing of the parties, but because the thing dealt in could not be permitted to have any value.
Peltz v. Long, 40 Mo. 536; Schmidt v. Barker, 17 La. Ann. 264; Stillman v. Looney, 3 Cold. (Tenn.), 20; Thornburg v. Harris, Id. 157; Gill v. Creed, Id. 295; Schurer v. Green, Id. 419; Potts v. Gray, Id. 468; Henly v. Franklin, Id. 472; Linder v. Barbee; Smith v. Smith, cited in 30 Tex. 754; and McGehee v. Goodman, unpublished, in Texas.
These cases have generally proceeded upon the analogies of illegal dealings against public policy, and dealings between alien enemies.
Kennett v. Chambers, 14 How. 38; Scholefield v. Eichelberger, 7 Pet. 588 593; Griswold v. Waddington, 16 Johns. 439; Musson v. Fales, 16 Mass. 332; White v. Burnley, 20 How. 249, 15 L. ed. 889; The Prize Cases, 2 Black, 668, 17 L. ed. 477; Mrs. Alexander's Cotton, 2 Wall. 419, 17 L. ed. 919, and the war cases generally.
While this is the case of White & Chiles, we maintain that under the case made and proved, those who hold under them are in no better condition than themselves. This is irresistibly so from the very nature of the case, from the notice necessarily carried home, and from the possession obtained after the bonds had become due and had been dishonored. it is not the case of ordinary dealings between the parties. It is an effort to appropriate a fund dedicated by public law to a charitable use. On their faces, the bonds payable in coin were overdue; and when purchased they were bought at a price which showed a knowledge of the fact that payment was disputed.
It is a sound legal principle, that where the parties purchased the bonds after their maturity being due by a government which punctually pays all its bonds, against which there is no valid objection, such purchasers took them subject to all the equities existing between the original parties and to all the claim of legal ownership by the original payee. And notwithstanding some seeming conflict, Hardenberg got no better title than White & Chiles held.
Murray v. Lardner, 2 Wall. 110, 17 L. ed. 857; Thompson v. Lee Co. 3 Wall. 330, 18 L. ed. 178; Swift v. Tyson, 16 Pet. 1; Andrews v. Pond, 13 Pet. 65; Goodman v. Simonds, 20 How.363, 15 L. ed. 941; Brown v. Davies, 3 T. R. 83; Boehm v. Sterling, 7 T. R. 426; Brown v. Turner, 7 T. B. 630; Armory v. Meryweather, 4 Dow. & R. 86; 2 B. & C. 573; Down v. Halling, 4 B. & C. 333; Crosley v. Ham, 13 East, 498; Bridge v. Hubbard, 15 Mass. 96; Root v. Godard, 3 McLean, 102; Governor v. Fox, 3 Eng. L. & E. 420; Chit. Bills, 95; Weathered v. Smith, 9 Tex. 625; Whithed v. McAdams, 18 Tex. 551.
Birch, Murray & Co., and Hardenberg, claim to be bona fide purchasers of these bonds
[18 L. Ed. 230]
without notice, and set up in their answers that they purchased them in the market of New York for value, ignorant that they had ever been the property of the State of Texas.
That the bonds purchased by them were the same as those transferred to White & Chiles by the de facto government of Texas, is admitted.
It appears, then, that Hardenberg purchased the bonds of the United States nearly two years after their maturity, with overdue coupons attached; paid for the same much less than their face, and he now asks from this court that he may be protected as a purchaser, in good faith, of commercial paper, without notice of the invalidity in the title of the party from whom he bought.
Overdue paper is withdrawn from the protection of commercial law, and thrown back into the mass of ordinary property subject to common law rules.
A bond may be negotiated after its maturity; but the party who takes it can derive no better title than that of the party from whom he received it. The party who sells thereby warrants his title, and if it is defective, the purchaser may have recourse for any loss against the vendor, but cannot defeat the claim of the rightful owner.
In this case there can be no better title in any of these parties than there was in White & Chiles, the other defendant having purchased the bonds after their maturity.
Goodman v. Simonds, 20 How. 36, 15 L. ed. 941, where the cases of Andrews v. Pond, 13 Pet. 65, and Swift v. Tyson, 16 Pet. 1, are considered and approved; Murray v. Lardner, 2 Wall. 121, 17 L. ed. 859; Brown v. Davies, 3 T. R. 80; Down v. Halling, 4 Barn. & C. 332.
The proof in the case affects Hardenberg with actual notice.
The court, to the which question of good or bad faith is submitted as a question of fact, cannot fail to perceive that Hardenberg must have bought the bonds and coupons with knowledge of the defective title of the vendor, and trusted to the chances of overcoming that defect by representing himself at the Treasury Department as a bona fide purchaser, and obtaining payment by successful negotiation.
It is objected in his behalf that the bonds have been paid and, therefore, cannot be reached by any decree that may be passed in this case. He so avers in his answer.
1. If the bonds have been paid and he has received the proceeds, the complainant is entitled to a personal decree against him. Messrs. Albert Pike, Robert W Johnson, and James Hughes, for Chiles, defendant:
If Texas is not a State, or, being a State, is not in the Union, it is not competent to sue here. If it be a State, it is not one of the United States because it is not permitted to be represented in Congress and to have a voice in the legislation of the country. No State can, without its consent, be deprived of its equal suffrage in the Senate. Every State included within this Union is entitled to be represented; and if deprived of representation, is excluded from the Union.
It is not one of the United States, because it is not permitted to have a voice in the election of President and Vice-President of the United States; a right of which, like that of representation, a State of the Union cannot be deprived.
It is not one of the United States, because it is held and governed by the other States as a conquered province. It ceased to be a State upon its conquest. The States of the Union are sovereign, at least as to all their reserved rights and powers. So this court has again and again decided. A subjugated State held in bondage, governed by a military proconsul, declared by Congress to have no legal government, and its actual government subordinate to the military power, to be merely provisional, is no longer a State, any more than California was, after it was conquered by the United States; or Ireland, after it was subjugated by England; or Poland, after it was partitioned. The Act of Congress of March 25, 1867, declared Texas to be a rebel State, and provided for its government until a legal and republican state government could be legally established. It constituted Louisiana and Texas, the 5th military district, and made it subject, not to civil authority, but to the military authority of the United States. Over each military district an officer, not below the rank of Brigadier-General, was placed in command, with power to protect all persons in their rights of person and property, to suppress insurrections, disorder and violence, and punish, or cause to be punished, all criminals, and disturbers of the public peace. He might allow the local civil tribunals to take jurisdiction of and try offenders, or organize military commissions and tribunals for that purpose. This provision abrogated the Constitution of the State, in respect to the judicial power, and deprived the people of their dearest right that of trial by jury. It excluded Texas from the Union, because it deprived the people of that State of the benefits of the first and sixth amendments of the Constitution.
If the court should determine that Texas is still a State in the Union, competent to sue here, it will then become necessary to inquire as to the validity of the contract made with White & Chiles, by the Military Board, under the authority of the acting Legislature. The court must determine whether the State existed and acted during the war, and if so, what acts done by it were valid.
How could the secession or revolt of Texas as a State, destroy its existence as a State? It did not derive that existence from the United States. The people did not cease to exist; they did not become a disorganized mob; the government remained unchanged; the State made war and was completely independent of the United States for four years, in fact exercising all the prerogatives of internal sovereignty. If it ceased to be a State, how could it, if it had succeeded, not merely have become a State upon that success, but all the time have been so?
If we concede that the formal and deliberative attempt of eleven of the States of the Union to dissolve the political bonds that had connected them with the other States; if we concede that a movement of such magnitude, so almost unanimous and made with so ranch coolness and deliberation, was not in law the movement and action of the States in question, but only of so many of their people as united in it,
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still we invite the earnest attention of the court to the grave and serious question, whether the action of the people of each State could be treated as a rebellion, and in point of law was such, after it had assumed the proportions of a great public war.
No tribunal ever had before it for its decision a question of greater gravity and importance; for it not only affects vast numbers of men and concerns their rights of property, and their civil and political franchises, but also communities and States, their contracts, their laws, the judgments of their courts, their good faith and honor.
It is insisted that all Acts done by the State of Texas or the government de facto of the State during the war which were contrary to the Constitution of the United States, were void. It was not contrary to that Constitution to sell the bonds in question, nor was it contrary to that instrument to buy cotton cards and medicines for the people, with the proceeds of the bonds or with the bonds themselves.
If the contract in question was invalid as contrary to the Constitution of the United States, it must be on the naked ground that secession made the government of the State unlawful, and that all it did was void. The allegation of the bill and its ground for relief is, that, for want of authority to make the contract and because it was contrary to law and done for the unlawful purpose alleged, it did not affect the title of Texas to the bonds, or transfer any right or title to White & Chiles.
Such Acts and contracts on the part of a revolutionary government, are never void. They are done for the benefit of the people of the State, and that people, when the government changes, cannot repudiate them. Nor, indeed, was the Government of the State revolutionary, in any true sense of that word, because it was the same government as before, and there was no internal change whatever in the State.
If it should, contrary to our hope, be thought that in regard to the status of the State of Texas and its people during the war, this court is bound to be governed by the action and decision of the political power of the government, and must, therefore, enunciate as applicable here, the doctrines laid down by Mr. Dana, then we shall with great deference submit that the political power is estopped, by its own declaration and action, to apply these doctrines; and that this court has so decided in the Prize Cases and the case of Mrs. Alexander's Cotton.
The people of Texas, who, in the language of Mr. Justice Iredell, in Chisholm v. Georgia, 2 Dall. 448, created the State, their voluntary and deliberate choice being the pure and sacred source from which the State derives its authority; the people of that State to whom, in the words of Mr. Justice Wilson, in the same case (Id. 455), the State is subordinate; the people, the complete body of whom united together in the State and cannot be denied to be so, nor their deliberate act not to be its act without striking a blow at the very foundation of all republican or otherwise free government, having sold these bonds to persons not shown to have been incompetent or disqualified to contract with the de facto government of the State to furnish for the use of its citizens articles not contraband of war, now comes here to demand of loyal citizens of the United States the bonds which it was thus instrumental in putting upon the market, in order that it may be repaid by the United States what otherwise, by the fortune of war, it would have lost.
If, as the bill alleges, the purpose of the sale was to procure means with the aid whereof to carry on the war and the contract, was, therefore, an unlawful one, then the case is all the worse, since the purpose of the bill is to enable the people of Texas to reclaim from the United States the amount of their bonds which the same people had put in circulation to injure the United States.
Will that people be allowed to use the fiction that the State and people, the corporation and the corporators, are different in law, for the purpose of compelling the United States or their loyal citizens to pay, to the amount of the bonds reclaimed, with interest, the expenses incurred by the people of Texas in carrying on the war. We say their loyal citizens, because the bill does not impeach the loyalty of either White or Chiles, or of these purchasers of the bonds.
If these bonds had been disposed of by faith. less agents against the will or against the consent of the people of the State, the case would be very different; but it neither was so, nor is any such allegation made to the bill; and what is not alleged cannot be proven.
Again; if the contract was an unlawful one, made by the people, through the agency of the government, created and sustained by them, and thus made by the State, will the court, in the exercise of its equitable jurisdiction, give the same people or State any assistance or relief, to enable them to avoid the consequences of a contract made in violation of law or against public policy, or contrary to the laws of nations, which invalidate dealings with the enemy?
The general principle, for which we need not cite authorities, is, that where a contract is contrary to law or public policy, neither party to it can have any remedy against his particeps criminis in a court of justice. No relief in regard to it will be given, either in law or in equity. If the contract is already executed, It cannot be set aside as illegal or immoral; for it is a maxim that in pan delicto, melior est conditio defendentis. There is no fraud or mistake in this case. The State and people of Texas were equally in delicto with those to whom they sold the bonds. Texas has chosen to allege that the purpose was unlawful, and it cannot have relief on the ground that its own allegation is untrue. Can any such fiction as that there was a State of Texas in January, 1865, distinct and different from the people of Texas, and from the State of Texas actually existing and waging war, contracting and legislating, and that this State did not make the contract, but now comes here to repudiate it? Can such a fiction of a mere imaginary being relieve the actual, living, palpable State if it is still a State, and not a Province, from the application of the principle which we have stated?
It is upon this fiction that the people of Texas are now presented here in the humiliating attitude of repudiating a contract entered into by their chosen and trusted officers, while they are engaged in a war for independence.
It is upon it that they seek to be saved from
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the loss otherwise to be borne by them in consequence of acts which they allege to have been unlawful, and which were yet done by their authority. It is not a fiction of law that the people of a State are not that State, so as to be responsible for the acts of the government of the State; but a mere fiction without the law, and one which is very far from being in furtherance of justice.
Mr. J. M. Carlisle, for Hardenberg, defendant:
Mr. Hardenberg's case is wholly unconnected with that of either of the other defendants, except by the fact that, as to all the bonds purchased by him except one, they were at the time held by White and Chiles, under the contract of January, 1865, exhibited with the bill. Under this title, or as the complainant must admit, at least color of title and possession, followed the contract. It now appears that White and Chiles disposed, among others, of the Hardenberg bonds; but when, where, and to whom, or what consideration is not alleged or proven, or possible to be inferred from the record. That they treated the bonds as their own under the contract, and did dispose of them, and have now no pretense of claim to the Hardenberg bonds, is admitted by them in this suit.
Hardenberg knew nothing of the bonds, except what appeared on their face and from the published official Treasury Report, that similar bonds of the same issue had been paid and redeemed at the Treasury of the United States, notwithstanding the secession of Texas, and the civil war and rebellion, which had been suppressed, in point of fact, more than a year and a half before his purchase. He had no knowledge or information that Texas had, at any time, assumed to alter the terms of the contract of the United States, as expressed on the face of the bonds, so as to expunge from them the express declaration that they were payable to "bearer," and the repeated declaration to the same effect, that the bonds passed "by delivery." He, therefore, was not affected by the fact that the bonds were not indorsed by the Governor of Texas (if that alteration of the tenor of the bonds had any legal efficacy), and was wholly ignorant that such indorsement had been authorized or required by Texas for its security against fraud, or for any other purpose.
He had no knowledge or information that the bonds purchased by him had ever been held or claimed by White and Chiles, or either of them; or that any such contract as that set up by the bill had been made. In brief, he was a perfect stranger to all and singular the matters alleged by the bill as affecting the title to the bonds.
He found them in open market, in the City of New York, in November, 1866, and bought them in good faith and for their full market value, of brokers and others of high standing, in the usual and regular course of business, not only without knowledge or notice, but without suspicion, or reason to know or suspect that there was any infirmity in the title of his respective vendors, or any of them.
It is a misnomer and a confusion of ideas to call the Government of Texas at the date of the contract with White and Chiles, a de facto government. It was the Government of the State; the only embodiment of the abstract idea of a State which had ever given it existence for an instant, since its admission into the Federal Union.
But if it were the case of a contract made by a usurped or revolutionary government, which for four years had been, as the bill itself shows and the public history attests, in the firm and exclusive possession and exercise of all the attributes of state sovereignty, there can be no doubt or question in the mind of any publicist that such a contract was valid and binding upon the State so governed, and is valid and binding on the government when restored. It would be a vain parade of learning to cite authorities for a proposition so universally admitted in the public law of nations.
The complainant's second proposition surrenders the first, argumenti gratia, and founds itself upon the contract, affirming its original validity, and pretending in matter of fact, that White and Chiles failed to perform its stipulations on their part.
Their second proposition is, then, in effect, the want of consideration for the transfer. At most, the fact of the transfer of a bill or note when overdue, is to subject it, in the hands of the holder, to all its equities; to all the equities with which it is incumbered at the time of the transfer.
An original absence of consideration is not one of those equities which attach on an instrument and defeat the title of an indorsee for value of an overdue bill, although with notice of the fact. Charles v. Marsden, 1 Taunt. 224; Sturtevant v. Ford, 4 M. & G. 101; Lazarus v. Gowie, 3 Q. B., N. S. 459; Stein v. Yglesias, 1 C. M. & R. 565.
Mr. P. Phillips, for White, defendant:
We are first to inquire as to the status of the complainant.
This question involves the consideration, whether at the filing of the bill Texas was a State, within the meaning of that clause of the Constitution which confers original jurisdiction in this court, where a State is a party.
In Hepburn v. Ellzey, 2 Cranch, 452, it was strenuously contended that a citizen of this District was a citizen of a State in the constitutional sense, so far as to enable him to maintain a suit in the circuit court; that Columbia was a distinct political society and, therefore, a State according to the definition of writers on general law.
This definition is declared by Judge Marshall not applicable to the Constitution, which, by its several provisions, shows that those political bodies only who were entitled to representation in the Senate and House of Representatives, and the appointment of electors, were intended.
This doctrine was applied in the case of New Orleans v. Winter, 1 Wheat. 91, to a citizen of a Territory; the court holding, that though a Territory may differ from the District of Columbia in many respects, neither of them is a State in the sense in which the term is used. 5 How. 379.
Now, what is the condition of Texas? It is denied the right of representation in Congress, and all power to appoint electors. Its State Government is declared to be illegal. All authority to govern it is lodged in a military commander; civil tribunals are made subservient to his dictation; the regulation of the right of
[18 L. Ed. 233]
suffrage is assumed by Congress; a provisional governor is appointed by the President to act in subserviency to military authority. This condition of things is wholly inconsistent with the idea that there remains with the people of Texas any political power whatever, or that they are entitled to any of the guaranties of the Constitution of the United States.
Our next inquiry is, as to the terms of the agreement.
The bill alleges that, admitting that the contract was made with a de facto government yet, as its conditions and stipulations were not performed, the complainant is entitled to a restoration of the bonds.
The answer is:
1. This is not a case of dependent covenants. There was an absolute sale and delivery of the bonds. Then the other side stipulates to deliver certain commodities. These are two separate contracts. 2 Pars. Cont. 40.
2. For the performance of this contract, security was given according to the stipulation of the parties.
3. The parties agreed upon the mode by which a default should be paid.
Invalidity of the Agreement.
First. It is alleged that the contract is illegal, the object being to overthrow the Government of the United States.
On its face, there is nothing illegal nor immoral in the argument. To supply a State with cotton cards and medicines is not only innocent but legitimate.
But it is sought to attach an illegal intent to what is fair in itself.
It is not sufficient that in such a case the illegal motive should have existed on the part of the State of Texas, but to affect the defendant, it must be clearly established that it entered into his intention and design; that the articles furnished should be used for an illegal purpose and that, in point of fact, they were so used. Hodgson v. Temple, 5 Taunt. 181.
Bare knowledge on the part of the vendor, that the vendee intends to put the goods or money to an illegal use will not vitiate the sale or loan and deprive the vendor of a remedy for the purchase money. Dater v. Earl, 3 Gray, 482.
A contract is, therefore, not void, because there may be in its surroundings or connection something illegal, though it is void when the consideration is illegal.
The distinction may be illustrated by two cases:
Goods were sold to one who intended to smuggle them, and the vendor, who knew of the design, recovered the price. Holman v. Johnson, Cowp. 341.
But where goods were sold, and the vendor not only knew that they were to be smuggled, but put them up in a particular manner so as to enable it to be done, it was held that the price could not be recovered. Biggs v. Lawrence, 3 T. R. 454.
But, assuming the illegality, what is the position of the complainant in a court of justice?
1. If the bill can be maintained on the assumption that Texas is a State, then, for the purposes of the case, it is the same State that existed when this contract was entered into.
The State being essentially the same, has no standing in court to assert the invalidity of its own agreement.
2. "In pari delicto, melior est conditio possidentis," is a maxim of public policy, equally respected in courts of law and equity.
Thus no recovery can be had for premium paid for insurance to cover a trading with the enemy; nor for property placed in the hands of another to be smuggled. Broom, Leg. Max. 565, 566, 567; Adams v. Barrett, 5 Geo. 404.
Second. The right to recover those bonds is based upon the allegation that there was no authority in Texas competent to enter into an agreement during the rebellion.
This proposition maintains that from the date of the Ordinance of Secession to the adoption of the present Constitution, there existed no competent public authority capable of entering into a contract. If this be true, there was no power of legislation, no executive or judicial authority; and all that has been done on the assumption of such authority is absolutely null and void. No contract, however solemn in its nature, which depends for its consummation on official sanction, can be sustained.
Marriages are to be held null because the marriage ceremony was performed or the marriage license granted by an officer without authority; judgments of courts, in civil and criminal cases to be held for naught for the like reason, and all concerned in their execution to be made responsible, civilly and criminally, as for usurpation of power.
The shocking consequences of such a doctrine is itself its best refutation. The civilized world recognizes the necessity of government at all times; and no authority on the law of nations holds any language inconsistent with this necessity.
A State can only act through its agents, and it would be absurd to say that any act was not done by the State which was done by its authorized agents. Briscoe v. Bk. of Ky. 11 Pet. 318.
Having thus disposed of the question of ownership in the State, we now call attention to the second point of the complainant, who, "admitting the ownership of the State, denies that it could transfer a valid title by such a contract as that set out in this case."
The bill charges that the contract was without authority, contrary to law, and contemplated and proposed as part of the consideration an unlawful object, to wit: the overthrow of the Government of the United States.
There is no allegation that the illegal intent was shared in by the defendant. There is not a tittle of evidence to establish that fact, and there is the sworn statement in the answer:
"The contract was made for the express benefit of the people of Texas, and not for the purpose of aiding the Confederate Government.
But whatever was the motive which actuated the Board, whether legal or illegal, the defendant cannot be affected by it. Even his knowledge of such intention, if he were not a sharer in the transaction and did not enter into it for the very purpose of accomplishing the illegal design, could not deprive him of his rights under the contract.
Hodgson v. Temple, 5 Taunt. 181, 503; Carman v. Bryce, 3 B. & Al. 179; Holman v. Johnson, Cowp. 341; Dater v. Earl, 3 Gray, 482.
[18 L. Ed. 234]
But if the contract were illegal, and both parties were involved in the illegality, then it would follow that if the bonds had not been delivered, the court, on this ground, would refuse to enforce the delivery, and if delivered, the court would, on the same ground, refuse to decree their restoration. Bartle v. Coleman, 4 Pet. 188; Creath v. Sims, 5 How. 204; Randall v. Howard, 2 Black, 588, 17 L. ed. 270.
The effect of this principle is sought to be avoided by distinguishing the State from the State Government. The contract, it is said, is made by the State Government and not by the State, but we have already shown that there is no such distinction.
The uniform decisions of this court apply to contracts of a State the same rules they apply to contracts of individuals. I know of no case where a distinction has been made.
Bank of U. S. v. Planters' Bank, 9 Wheat. 904; Briscoe v. Bk. of Ky. 11 Pet. 324; U. S. v. Bk. Metropolis, 15 Pet. 392; Bk. of U. S. v. U. S. 2 How. 732.
When, therefore, the State comes into court with the allegation that the contract, which it seeks to set aside, was entered into by it for the purpose of obtaining means to overthrow the Government of the United States, it states a transaction which at once deprives it of all aid from courts of justice.
Messrs. S. S. Cox and J. W. Moore, for Weston F. Birch, Byron Murray, and others, defendants.
Mr. Chief Justice Chase delivered the opinion of the court:
This is an original suit in this court, in which the State of Texas, claiming certain bonds of the United States as her property, asks an injunction to restrain the defendants from receiving payment from the National Government, and to compel the surrender of the bonds to the State.
It appears from the bill, answers, and proof, that the United States, by Act of September 9, 1850, offered to the State of Texas, in compensation of her claims connected with the settlement of her boundary $10,000,000 in five per cent bonds, each for the sum of $1,000; and that this offer was accepted by Texas. One half of these bonds were retained for certain purposes in the National Treasury, and the other half were delivered to the State. The bonds thus delivered [74 U.S. 700, 718] were dated January 1, 1851, and were all made payable to the State of Texas, or bearer, and redeemable after the 31st day of December, 1864. They were received in behalf of the State by the Comptroller of Public Accounts, under authority of an Act of the Legislature, which, besides giving that authority, provided that no bond should be available in the hands of any holder until after indorsement by the Governor of the State.
After the breaking out of the Rebellion, the Insurgent Legislature of Texas, on the 11th of January, 1862, repealed the Act requiring the indorsement of the Governor (Acts of Texas, 1862, p. 45), and on the same day provided for the organization of a Military Board, composed of the Governor, Comptroller, and Treasurer; and authorized a majority of that Board to provide for the defense of the State by means of any bonds in the Treasury, upon any account, to the extent of $1,000,000. Texas Laws, 55. The defense contemplated by the Act was to be made against the United States by war. Under this authority the Military Board entered into an agreement with George W. White and John Chiles, two of the defendants, for the sale of them of one hundred and thirty-five of the bonds, then in the Treasury of the State, and seventy-six more, then deposited with Droege & Co., in England; in payment for which they engaged to deliver to the Board a large quantity of cotton cards and medicines. This agreement was made on the 12th of January, 1865. On the 12th of March, 1865, White and Chiles received from the Military Board one hundred and thirty-five of these bonds, none of which were indorsed by any Governor of Texas. Afterward, in the course of the years 1865 and 1886, some of the same bonds came into the possession of others of the defendants, by purchase, or as security for advances of money.
Such is a brief outline of the case. It will be necessary hereafter to refer more in detail to some particular circumstances of it.
The first inquiries to which our attention was directed by [74 U.S. 700, 719] counsel arose upon the allegations of the answer of Chiles (1), that no sufficient authority is shown for the prosecution of the suit in the name and on the behalf of the State of Texas; and (2) that the State, having severed her relations with a majority of the States of the Union, and having by her ordinance of secession attempted to throw off her allegiance to the Constitution and Government of the United States, has so far changed her status as to the disabled from prosecuting suits in the national courts.
The first of these allegations is disproved by evidence. A letter of authority, the authenticity of which is not disputed, has been produced, in which J. W. Throckmorton, elected Governor under the constitution adopted in 1866, and proceeding under an Act of the State Legislature relating to these bonds, expressly ratifies and confirms the action of the solicitors who filed the bill, and empowers them to prosecute this suit; and it is further proved by the affidavit of Mr. Paschal, counsel for the complainant, that he was duly appointed by Andrew J. Hamilton, while provisional Governor of Texas, to represent the State of Texas in reference to the bonds in controversy, and that his appointment has been renewed by B. M. Pease, the actual Governor. If Texas was a State of the Union at the time of these acts, and these persons, or either of them, were competent to represent the State, this proof leaves no doubt upon the question of authority.
The other allegation presents a question of jurisdiction. It is not to be questioned that this court has original jurisdiction of suits by States against citizens of other States, or that the States entitled to invoke this jurisdiction must be States of the Union. But, it is equally clear that no such jurisdiction has been conferred upon this court of suits by any other political communities than such States.
If, therefore, it is true that the State of Texas was not at the time of filing this bill, or is not now, one of the United States, we have no Jurisdiction of this suit and it is our duty to dismiss it.
[74 U.S. 700, 720] We are very sensible of the magnitude
[18 L. Ed. 235]
and importance of this question, of the interest it excites, and of the difficulty, not to say impossibility, of so disposing of it as to satisfy the conflicting judgments of men equally enlightened, equally upright, and equally patriotic. But we meet it in the case, and we must determine it in the exercise of our best judgment, under the guidance of the Constitution alone.
Some not unimportant aid, however, in ascertaining the true sense of the Constitution, may be derived from considering what is the correct idea of a State, apart from any union or confederation with other States. The poverty of language often compels the employment of terms in quite different significations; and of this hardly any example more signal is to be found than in the use of the word we are now considering. It would serve no useful purpose to attempt an enumeration of all the various senses in which it is used. A few only need be noticed.
It describes sometimes a people or community of individuals united more or less closely in political relations, inhabiting temporarily or permanently the some country; often it denotes only the country or territorial region, inhabited by such a community; not infrequently it is applied to the government under which the people live; at other times it represents the combined idea of people, territory, and government.
It is not difficult to see that in all these senses the primary conception is that of a people or community. The people, in whatever territory dwelling, either temporarily or permanently, and whether organized under a regular government, or united by looser or less definite relations, constitute the State.
This is undoubtedly the fundamental idea upon which the republican institutions of our own country are established. It was stated very clearly by an eminent judge, Mr. Justice Paterson, In Penhallow v. Doane, 3 Dall. 93, in one of the earliest cases adjudicated by this court, and we are not aware of anything, in any subsequent decision, of a different tenor.
[74 U.S. 700, 721] In the Constitution the term "state" most frequently expresses the combined idea just noticed of people, territory and government. A State, in the ordinary sense of the Constitution, is a political community of free citizens occupying a territory of defined boundaries, and organized under a government sanctioned and limited by a written constitution, and established by the consent of the governed. It is the union of such States, under a common constitution, which forms the distinct and greater political unit, which that Constitution designates as the United States, and makes of the people and States which compose it one people and one country.
The use of the word in this sense hardly requires further remark. In the clauses which impose prohibitions upon the States in respect to 'the making of treaties, emitting of bills of credit, and laying duties on tonnage, and which guarantee to the States representation in the House of Representatives and in the Senate, are found some instances of this use in the Constitution. Others will occur to every mind.
But it is also used in its geographical sense, as in the clauses which require that a representative in Congress shall be an inhabitant of the State in which he shall be chosen, and that the trial of crimes shall be held within the State where committed. And there are instances in which the principal sense of the word seems to be that primary one to which we have adverted, of a people or political community, as distinguished from a government.
In this latter sense the word seems to be used in the clause which provides that the United States shall guarantee to every State in the Union a republican form of government, and shall protect each of them against invasion.
In this clause a plain distinction is made between a State and the government of a State.
Having thus ascertained the senses in which the word "state" is employed in the Constitution, we will proceed to consider the proper application of what has been said.
[74 U.S. 700, 722] The Republic of Texas was admitted into the Union, as a State, on the 27th of December, 1845. By this Act the new State, and the people of the new State, were invested with all the rights, and became subject to all the responsibilities and duties of the original States under the Constitution.
From the date of admission, until 1861, the State was represented in the Congress of the United States by her Senators and Representatives, and her relations as a member of the Union remained unimpaired. In that year. acting upon the theory that the rights of a State under the Constitution might be renounced, and her obligations thrown off at pleasure, Texas undertook to sever the bond thus formed, and to break up her constitutional relations with the United States.
On the 1st of February (Paschal, Dig. Laws of Texas, 78) a Convention, called without authority, but subsequently sanctioned by the Legislature regularly elected, adopted an Ordinance to dissolve the union between the State of Texas and the other States under the Constitution of the United States, whereby Texas was declared to be "a separate and sovereign State," and "her people and citizens" to be "absolved from all allegiance to the United States, or the government thereof."
It was ordered by a vote of the Convention (Paschal, Dig. 80) and by an Act of the Legislature (Laws of Texas, 1859-61, p. 11) that this Ordinance should be submitted to the people, for approval or disapproval, on the 23d of February, 1861.
Without awaiting, however, the decision thus invoked, the Convention, on the 4th of February, adopted a resolution designating seven delegates to represent the State in the Convention of seceding States at Montgomery, "in order," as the resolution declared, "that the wishes and interests of the people of Texas may be consulted in reference to the constitution and provisional government that may be established by said Convention."
Before the passage of this resolution the Convention had [74 U.S. 700, 723] appointed a committee of public safety, and adopted an Ordinance giving authority to that committee to take measures for obtaining possession of the property of the United States in Texas, and for removing the national troops from her limits. The members of the committee, and all officers and agents appointed or employed by it, were sworn to secrecy and to allegiance to the State. (Paschal,
[18 L. Ed. 236]
Dig. 80.) Commissioners were at once appointed, with instructions to repair to the headquarters of General Twiggs, then representing the United States in command of the department, and to make the demands necessary for the accomplishment of the purposes of the committee. A military force was organized in support of these demands and an arrangement was effected with the commanding general, by which the United States troops were engaged to leave the State, and the forts and all the public property, not necessary to the removal of the troops, were surrendered to the Commissioners. Tex. Rep. of the Committee (Lib. of Cong.), p. 45.
These transactions took place between the 2d and the 18th of February, and it was under these circumstances that the vote upon the ratification or rejection of the Ordinance of Secession was taken on the 23d of February. It was ratified by a majority of the voters of the State.
The Convention, which had adjourned before the rote was taken, re-assembled on the 2d of March, and instructed the delegates already sent to the Congress of the seceding States, to apply for admission into the Confederation, and to give the adhesion of Texas to its provisional constitution.
It proceeded, also, to make the changes in the State Constitution which this adhesion made necessary. The words "United States" were stricken out wherever they occurred, and the words "Confederate States" substituted; and the members of the Legislature, and all officers of the State, were required by the new Constitution to take an oath of fidelity to the Constitution and laws of the new confederacy.
Before, indeed, these changes in the constitution had been [74 U.S. 700, 724] completed, the officers of the State had been required to appear before the committee and take an oath of allegiance to the Confederate States.
The Governor and Secretary of State, refusing to comply, were summarily ejected from office.
The members of the Legislature, which had also adjourned and re-assembled on the 18th of March, were more compliant. They took the oath, and proceeded on the 8th of April to provide by law for the choice of electors of President and Vice-President of the Confederate States.
The representatives of the State in the Congress of the United States were withdrawn, and as soon as the seceded States became organized under a constitution, Texas sent Senators and Representatives to the Confederate Congress.
In all respects, so far as the object could be accomplished by ordinances of the Convention, by Acts of the Legislature, and by votes of the citizens, the relations of Texas to the Union were broken up, and new relations to a new government were established for them.
The position thus assumed could only be maintained by arms, and Texas accordingly took part, with the other Confederate States, in the war of the rebellion, which these events made inevitable. During the whole of that war there was no governor, or judge, or any other state officer in Texas, who recognized the national authority. Nor was any officer of the United States permitted to exercise any authority whatever under the National Government within the limits of the State, except under the immediate protection of the national military forces.
Did Texas, in consequence of these Acts, cease to be a State? Or, if not, did the State cease to be a member of the Union?
It is needless to discuss, at length, the question whether the right of a State to withdraw from the Union for any cause, regarded by herself as sufficient, is consistent with the Constitution of the United States.
The Union of the States never was a purely artificial and [74 U.S. 700, 725] arbitrary relation. It began among the Colonies, and grew out of common origin, mutual sympathies, kindred principles, similar interests and geographical relations. It was confirmed and strengthened by the necessities of war, and received definite form, and character, and sanction from the Articles of Confederation. By these the Union was solemnly declared to "be perpetual." And when these articles were found to be inadequate to the exigencies of the country, the Constitution was ordained "to form a more perfect Union." It is difficult to convey the idea of indissoluble unity more clearly than by these words. What can be indissoluble if a perpetual Union, made more perfect, is not?
But the perpetuity and indissolubility of the Union by no means implies the loss of distinct and individual existence, or of the right of self government by the States. Under the Articles of Confederation each State retained its sovereignty, freedom and independence, and every power, jurisdiction and right not expressly delegated to the United States. Under the Constitution, though the powers of the States were much restricted, still all powers not delegated to the United States, nor prohibited to the States, are reserved to the States respectively, or to the people. And we have already had occasion to remark at this term, that "the people of each State compose a State, having its own government, and endowed with all the functions essential to separate and independent existence," and that "without the States in union, there could be no such political body as the United States." Lane Co. v. Oregon, infra, 101. Not only, therefore, can there be no loss of separate and independent autonomy to the States, through their union under the Constitution, but it may be not unreasonably said that the preservation of the States, and the maintenance of their governments, are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the National Government. The Constitution, in all its provisions, looks to an indestructible Union, composed of indestructible States.
[74 U.S. 700, 726] When, therefore, Texas became one of the United States, she entered into an indissoluble relation. All the obligations of perpetual union, and all the guaranties of republican government in the Union, attached at once to the State. The Act which consummated her admission into the Union was something more than a compact; it was the incorporation of a new member into the political body. And it was final. The union between Texas and the other States was as complete as perpetual, and as indissoluble as the Union between the original States. There was no place for re-
[18 L. Ed. 237]
consideration, or revocation, except through revolution, or through consent of the States.
Considered, therefore, as transactions under the Constitution, the Ordinance of Secession, adopted by the convention and ratified by a majority of the citizens of Texas, and all the Acts of her Legislature intended to give effect to that ordinance, were absolutely null. They were utterly without operation in law. The obligations of the State as a member of the Union) and of every citizen of the State, as a citizen of the United States, remained perfect and unimpaired. It certainly follows that the State did not cease to be a State, nor he? citizens to be citizens of the Union. If this were otherwise, the State must have become foreign, and her citizens foreigners. The war must have ceased to be a war for the suppression of rebellion, must have become a war for conquest and subjugation.
Our conclusion, therefore, is, that Texas continued to be a State, and a State of the Union, notwithstanding the transactions to which we have referred. And this conclusion, in our judgment, is not in conflict with any act or declaration of any department of the National Government, but entirely in accordance with the whole series of such acts and declarations since the first outbreak of the rebellion.
But in order to the exercise, by a State, of the right to sue in this court, there needs to be a State Government, competent to represent the State in its relations with the National [74 U.S. 700, 727] Government, so far at least as the institution and prosecution of a suit is concerned.
And it is by no means a logical conclusion, from the premises which we have endeavored to establish, that the governmental relations of Texas to the Union remained unaltered. Obligations often remain unimpaired, while relations are greatly changed. The obligations of allegiance to the State, and obedience to her laws, subject to the Constitution of the United States, are binding upon all citizens, whether faithful or unfaithful to them; but the relations which subsist while these obligations are performed, are essentially different from those which arise when they are disregarded and set at naught. And the same must necessarily be true of the obligations and relations of States and citizens to the Union. No one has been bold enough to contend that, while Texas was controlled by a government hostile to the United States, and in affiliation with a hostile confederation, waging war upon the United States, Senators chosen by her Legislature, or Representative elected by her citizens, were entitled to seats in Congress; or that any suit, instituted in her name, could be entertained in this court. All admit that during this condition of civil war, the rights of the State as a member, and of her people as citizens of the Union, were suspended. The government and the citizens of the State, refusing to recognize their constitutional obligations, assumed the character of enemies, and incurred the consequences of rebellion.
These new relations imposed new duties upon the United States. The first was that of suppressing the rebellion. The next was that of reestablishing the broken relations of the State with the Union. The first of these duties having been performed, the next necessarily engaged the attention of the National Government.
The authority for the performance of the first had been found in the power to suppress insurrection and carry on war; for the performance of the second, authority was derived from the obligation of the United States to guarantee to every State in the Union a republican form of government. [74 U.S. 700, 728] The latter, indeed, in the case of a rebellion which involves the government of a State, and for the time excludes the national authority from its limits, seems to be a necessary complement to the former.
Of this, the case of Texas furnishes a striking illustration. When the war closed there was no government in the State except that which had been organized for the purpose of waging war against the United States. That government immediately disappeared. The chief functionaries left the State. Many of the subordinate officials followed their example. Legal responsibilities were annulled or greatly impaired. It was inevitable that great confusion should prevail. If order was maintained, it was where the good sense and virtue of the citizens gave support to local acting magistrates, or supplied more directly the needful restraints.
A great social change increased the difficulty of the situation. Slaves, in the insurgent States, with certain local exceptions had been declared free by the Proclamation of Emancipation; and whatever questions might be made as to the effect of that Act, under the Constitution, it was clear, from the beginning, that its practical operation, in connection with legislative Acts of like tendency, must be complete enfranchisement. Wherever the national forces obtained control, the slaves became freemen. Support to the Acts of Congress and the Proclamation of the President, concerning slaves, was made a condition of amnesty (13 U. S. St. 737, by President Lincoln, in December, 1863, and by President Johnson, in May, 1865. 13 U. S. St. 758. And emancipation was confirmed, rather than ordained, in the insurgent States, by the Amendment of the Constitution prohibiting slavery throughout the Union, which was proposed by Congress, in February, 1865, and ratified, before the close of the following autumn, by the requisite three-fourths of the States. 13 Stat. at L. 774, 775.
The new freemen necessarily became part of the people, and the people still constituted the State; for States, like individuals, retain their identity, though changed to some [74 U.S. 700, 729] extent, in their constituent elements. And it was the State, thus constituted, which was now entitled to the benefit of the constitutional guaranty.
There being, then, no government in Texas in constitutional relations with the Union, it became the duty of the United States to provide for the restoration of such a government. But the restoration of the government which existed before the rebellion, without a new election of officers, was obviously impossible; and before any such election could be properly held, it was necessary that the old Constitution should receive such amendments as would conform its provisions to the new conditions created by emancipation and afford adequate security to the people of the State.
In the exercise of the power conferred by the guaranty clause, as in the exercise of every
[18 L. Ed. 238]
other constitutional power, a discretion in the choice of means, is necessarily allowed. It is essential only that the means must be necessary and proper for carrying into execution the power conferred, through the restoration of the State to its constitutional relations, under a republican form of government, and that no acts be done, and no authority exerted, which is either prohibited or unsanctioned by the Constitution.
It is not important to review, at length, the measures which have been taken, under this power, by the Executive and Legislative Departments of the National Government. it is proper, however, to observe that almost immediately after time cessation of organized hostilities, and while the war yet smoldered in Texas, the President of the United States issued his Proclamation appointing a provisional Governor for the State, and providing for the assembling of a convention, with a view to the reestablishment of a republican government, under an amended Constitution, and to the restoration of the State to her proper constitutional relations. A Convention was accordingly assembled the Constitution amended, elections held, and a State Government, acknowledging its obligations to the Union, established.
Whether the action then taken was; in all respects warranted by the Constitution, it is not now necessary to determine. [74 U.S. 700, 730] The power exercised by the President was supposed, doubtless, to be derived from his constitutional functions, as Commander-in-Chief; and, so long as the war continued, it cannot be denied that he might institute temporary government within insurgent districts, occupied by the national forces, or take measures, in any State, for the restoration of State Government faithful to the Union, employing, however, in such efforts, only such means and agents. as were authorized by constitutional laws.
But the power to carry into effect the clause of guaranty is primarily a legislative power, and resides in Congress. "Under the 4th article of the Constitution, it rests with Congress to decide what government is the established one in a State. For, as the United States guarantee to each State a republican government, Congress must necessarily decide what government is established in the State, before it can determine whether it is republican or not."
This is the language of the late Chief Justice, speaking for this court in a case from Rhode Island (Luther v. Borden, 7 How. 42), arising from the organization of opposing governments in that State. And we think that the principle sanctioned by it may be applied, with even more propriety, to the case of a State deprived of all rightful government, by revolutionary violence; though necessarily limited to cases where the rightful government is thus subverted, or in imminent danger of being overthrown by an opposing government, set up by force within the State.
The action of the President must, therefore, be considered as provisional, and in that light it seems to have been regarded by Congress. It was taken after the term of the 38th Congress had expired. The 39th Congress, which assembled in December, 1865, followed by the 40th Congress, which met in March, 1867, proceeded, after long deliberation, to adopt various measures for reorganization and restoration. These measures were embodied in proposed amendments to the Constitution, and in the Acts known as the Reconstruction [74 U.S. 700, 731] Acts, which have been so far carried into effect, that a majority of the States which were engaged in the rebellion have been restored to their constitutional relations, under forms of government, adjudged to be republican by Congress, through the admission of their "Senators and Representatives into the councils of the Union."
Nothing in the case before us requires the court to pronounce judgment upon the constitutionality of any particular provision of these Acts.
But it is important to observe that these Acts themselves show that the governments, which had been established and had been in actual operation under executive direction, were recognized by Congress as provisional, as existing, and as capable of continuance.
By the Act of March 2, 1867 (14 U. S. St. 428), the first of the series, these governments were, indeed, pronounced illegal, and were subjected to military control, and were declared to be provisional only; and by the supplementary Act of July 19, 1867, the third of the series, it was further declared that it was the true intent and meaning of the Act of March 2, that the governments then existing were not legal State Governments, and if continued, were to be continued subject to the military commanders of the respective districts and to the paramount authority of Congress. We do not inquire here into the constitutionality of this legislation so far as it relates to military authority, or to the paramount authority of Congress. It suffices to say, that the terms of the Acts necessarily imply recognition of actually existing governments; and that in point of fact, the governments thus recognized, in some important respects, still exists.
What has thus been said generally describes, with sufficient accuracy, the situation of Texas. A provisional Governor of the State was, appointed by the President in 1865; in 1866 a Governor was elected by the people under the constitution of that year; at a subsequent date a Governor was appointed by the commander of the district. Each of the [74 U.S. 700, 732] three exercised executive functions and actually represented the State in the Executive Department.
In the case before us each has given his sanction to the prosecution of the suit, and we find no difficulty, without investigating the legal title of either to the executive office, in holding that the sanction thus given sufficiently warranted the action of the solicitor and counsel in behalf of the State. The necessary conclusion is that the suit was instituted and is prosecuted by competent authority.
The question of jurisdiction being thus disposed of, we proceed to the consideration of the merits as presented by the pleadings and the evidence.
And the first question to be answered is, whether or not the title of the State to the bonds in controversy was devested by the contract of the Military Board with White and Chiles.
That the bonds were the property of the State of Texas on the 11th of January, 1862, when the Act Prohibiting Alienation Without the
[18 L. Ed. 239]
Indorsement of the Governor, was repealed, admits of no question, and is not denied. They came into her possession and ownership through public acts of the General Government and of the State, which gave notice to all the world of the transaction consummated by them. And, we think it clear that, 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.
In this case, however, it is said that the restriction imposed by the Act of 1851 was repealed by the Act of 1862. And this is true if the Act of 1862 can be regarded as valid. But was it valid?
The Legislature of Texas, at the time of the repeal, constituted one of the departments of a State Government, established in hostility to the Constitution of the United States. It cannot be regarded, therefore, in the courts of the United States, as a lawful Legislature, or its Acts as lawful [74 U.S. 700, 733] Acts. And yet it is an historical fact that the Government of Texas, then in full control of the State, was its only actual government; and certainly if Texas had been a separate State and not one of the United States, the new government, having displaced the regular authority, and having established itself in the customary seats of power and in the exercise of the ordinary functions of administration, would have constituted, in the strictest sense of the words, a de facto government, and its acts, during the period of its existence as such, would be effectual and, in almost all respects, valid. And, to some extent, this is true of the actual government of Texas, though unlawful and revolutionary as to the United States.
It is not necessary to attempt any exact definitions, within which the Acts of such a State Government must be treated as valid or invalid. It may be said, perhaps with sufficient accuracy, that Acts necessary to peace and good order among citizens, such, for example, as Acts sanctioning and protecting marriage and the domestic relations, governing the course of descents, regulating the conveyance and transfer of property, real and personal, and providing remedies for injuries to person and estate, and other similar Acts, which would be valid if emanating from a lawful government, must be regarded, in general, as valid when proceeding from an actual, though unlawful government; and that Acts in furtherance or support of rebellion against the United States, or intended to defeat the just rights of citizens, and other Acts of like nature, must, in general, be regarded as invalid and void.
What, then, tried by these general tests, was the character of the contract of the Military Board with White and Chiles?
[74 U.S. 700, 734] That Board, as we have seen, was organized, not for the defense of the State against a foreign invasion, or for its protection against domestic violence, within the meaning of these words as used in the National Constitution, but for the purpose, under the name of defense, of levying war against the United States. This purpose was, undoubtedly, unlawful, for the Acts which it contemplated are, within the express definition of the Constitution, treasonable.
It is true that the Military Board was subsequently reorganized. It consisted, thereafter, of the Governor and two other members, appointed and removable by him; and was, therefore, entirely subordinate to executive control. Its general object remained without change, but its powers were "extended to the control of all public works and supplies, and to the aid of producing within the State, by the importation of articles necessary and proper for such aid."
And it was insisted in argument on behalf of some of the defendants, that the contract with White & Chiles, being for the purchase of cotton cards and medicines, was not a contract in aid of the rebellion, but for obtaining goods capable of a use entirely legitimate and innocent, and, therefore, that payment for those goods by the transfer of any property of the State was not unlawful. We cannot adopt this view. Without entering, at this time, upon the inquiry whether any contract made by such a Board can be sustained, we are obliged to say that the enlarged powers of the Board appear to us to have been conferred in furtherance of its main purpose, of war against the United States, and that the contract, under consideration, even if made in the execution of these enlarged powers, was still a contract in aid of the rebellion, and, therefore, void. And we cannot shut our eyes to the evidence which proves that the Act of repeal was intended to aid rebellion by facilitating the transfer of these bonds. It was supposed, doubtless, that negotiation of them would be less difficult if they bore upon their face no direct evidence of having some from the possession of any insurgent state government. We can give no effect, therefore, to this repealing Act.
It follows that the title of the State is not devested by the act of the insurgent government in entering into this contract.
But it was insisted further, in behalf of those defendants who claim certain of these bonds by purchase, or as collateral security, that however unlawful may have been the means by which White & Chiles obtained possession of the bonds, [74 U.S. 700, 735] they are innocent holders, without notice, and entitled to protection as such under the rules which apply to securities which pass by delivery. These rules were fully discussed in Murray v. Lardner, 2 Wall. 118, 17 L. ed. 858. We held, in that case, that the purchaser of coupon bonds, before due, without notice and in good faith, is unaffected by want of title in the seller, and that the burden of proof in respect to notice and want of good faith, is on the claimant of the bonds as against the purchaser. We are entirely satisfied with this doctrine.
Does the State, then, show affirmatively notice to these defendants of want of title to the bonds in White and Chiles?
It would be difficult to give a negative answer to this question if there were no other proof than the legislative Acts of Texas. But there is other evidence which might fairly be held to be sufficient proof of notice, if the rule to which we have adverted could be properly applied to this case.
But these rules have never been applied to matured obligations. Purchasers of notes or
[18 L. Ed. 240]
bonds past due take nothing but the actual right and title of the vendors. Brown v. Davies, 3 T. R. 80; Goodman v. Simonds, 20 How. 366, 15 L. ed. 941.
The bonds in question were dated January 1, 1851, and were redeemable after the 31st of December, 1864. In strictness, it is true they were not payable on the day when they became redeemable; but the known usage of the United States to pay all bonds as soon as the right of payment accrues, except where a distinction between redeemability and payability is made by law and shown on the face of the bonds requires the application of the rule respecting overdue obligations, to bonds of the United States which have become redeemable, and in respect to which no such distinction has been made.
Now, all the bonds in controversy had become redeemable before the date of the contract with White and Chiles, and all bonds of the same issue which have the indorsement of [74 U.S. 700, 736] a Governor of Texas made before the date of the Secession Ordinance and there were no others indorsed by any Governor had been paid in coin on presentation at the Treasury Department; while, on the contrary, applications for the payment of bonds, without the required indorsement, and of coupons detached from such bonds, made to that department, had been denied.
As a necessary consequence, the negotiation of these bonds became difficult. They sold much below the rates they would have commanded had the title to them been unquestioned. They were bought, in fact, and under the circumstances could only have been bought, upon speculation. The purchasers took the risk of a bad title, hoping, doubtless that through the action of the National Government, or of the Government of Texas, it might be converted into a good one.
And it is true that the first provisional Governor of Texas encouraged the expectation that these bonds would be ultimately paid to the holders. But he was not authorized to make any engagement in behalf of the State and, in fact, made none. It is true, also, that the Treasury Department, influenced, perhaps, by these representations departed to some extent from its original rule, and paid bonds held by some of the defendants without the required indorsement. But it is clear that this change in the action of the department could not affect the rights of Texas as a State of the Union, having a government acknowledging her obligations to the National Constitution.
It is impossible, upon this evidence, to hold the defendants protected by absence of notice of the want of title in White and Chiles. As these persons acquired no right to payment of these bonds as against the State, purchasers could acquire none through them.
On the whole case, therefore, our conclusion is that the State of Texas is entitled to the relief sought by her bill, and a decree must be made accordingly.
[74 U.S. 700, 737] Mr. Justice Grier, dissenting, delivered the following opinion:
I regret that I am compelled to dissent from the opinion of the majority of the court on all the points raised and decided in this case.
The first question in order is the jurisdiction of the court to entertain this bill in behalf of the State of Texas.
The original jurisdiction of this court can be invoked only by one of the United States. The Territories have no such right conferred on them by the Constitution, nor have the Indian tribes who are under the protection of the military authorities of the government.
Is Texas one of these United States? Or was she such at the time this bill was filed, or since?
This is to be decided as a political fact, not as a legal fiction. This court is bound to know and notice the public history of the nation.
If I regard the truth of history for the last eight years, I cannot discover the State of Texas as one of these United States. I do not think it necessary to notice any of the very astute arguments which have been advanced by the learned counsel in this case, to find the definition of a State, when we have the subject treated in a clear and common sense manner by Chief Justice Marshall, in the case of Hepburn v. Ellzey, 2 Cranch, 452. As the case is short, I hope to be excused for a full report of the case, as stated and decided by the court:
"The question," says Marshall, Ch. J., "is, whether the plaintiffs, as residents of the District of Columbia, can maintain an action in the Circuit Court of the United States for the District of Virginia. This depends on the Act of Congress describing the jurisdiction of that court. The Act gives jurisdiction to the circuit courts in cases between a citizen of the State in which the suit is brought and a citizen of another State. To support the jurisdiction in this case, it must appear that Columbia is a State. On the part of the plaintiff, it has been argued that Columbia is a distinct political society, and is, therefore, a 'State' according to the [74 U.S. 700, 738] definition of writers on general law. This is true; but as the Act of Congress obviously uses the word 'State' in reference to that term as used in the Constitution, it becomes necessary to inquire whether Columbia is a State in the sense of that instrument. The result of that examination is a conviction that the members of the American Confederacy only are the States contemplated in the Constitution. The House of Representatives is to be composed of members chosen by the people of the several States, and each State shall have at least one Representative. 'The Senate of the United States shall be composed of two Senators from each State.' Each state shall appoint, for the election of the Executive, a number of electors equal to its whole number of Senators and Representatives. These clauses show that the word 'State' is used in the Constitution as designating a member of the Union, and excludes from the term the signification attached to it by writers on the law of nations."
Now, we have here a clear and well defined test by which we may arrive at a conclusion with regard to the questions of fact now to be decided.
Is Texas a State, now represented by members chosen by the people of that State and received on the floor of Congress? Has she two Senators to represent her as a State in the Senate of the United States? Has her voice been heard in the late election of President.
[18 L. Ed. 241]
Is she not now held and governed as a conquered province by military force? The Act of Congress of March 28th, 1867, declares Texas to be a "Rebel State," and provides for its government until a legal and republican State Government could be legally established. It constituted Louisiana and Texas the 5th military district, and made it subject, not to the civil authority, but to the "military authorities of the United States."
It is true that no organized rebellion now exists there, and the courts of the United States now exercise jurisdiction over the people of that province. But this is no test of the State's being in the Union; Dakota is no State, and yet the courts of the United States administer justice there as they do in Texas. The Indian tribes, who are governed by military force, cannot claim to be States of the Union. Wherein does the condition of Texas differ from theirs? [74 U.S. 700, 739] Now, by assuming or admitting as a fact the present status of Texas as a State not in the Union politically, I beg leave to protest against any charge of inconsistency as to judicial opinions heretofore expressed as a member of this court, or silently assented to. I do not consider myself bound to express any opinion judicially as to the constitutional right of Texas to exercise the rights and privileges of a State of this Union, or the power of Congress to govern her a conquered province, to subject her to military domination, and keep her in pupilage. I can only submit to the fact as decided by the political position of the government; and I am not disposed to join in any essay to prove Texas to be a State of the Union, when Congress have decided that she is not. It is a question of fact, I repeat, and of fact only. Politically, Texas is not a State in this Union. Whether rightfully out of it or not is a question not before the court.
But conceding the fact to be as judicially assumed by my brethren, the next question is, whether she has a right to repudiate her contracts. Before proceeding to answer this question, we must notice a fact in this case that was forgotten in the argument. I mean that the United States are no party to this suit, and refusing to pay the bonds because the money paid would be used to advance the interests of the rebellion. It is a matter of utter insignificance to the Government of the United States to whom she makes the payment of these bonds. They are payable to the bearer. The government is not bound to inquire into the bona fides of the holder, nor whether the State of Texas has parted with the bonds wisely or foolishly. And although by the Reconstruction Acts she is required to repudiate all debts contracted for the purposes of the rebellion, this does not annul all Acts of the State Government during the Rebellion, or contracts for other purposes, nor authorize the State to repudiate them.
Now, whether we assume the State of Texas to be judicially in the Union (though actually out of it) or not, it will not alter the case. The contest now is between the State of Texas and her own citizens. She seeks to annul a contract [74 U.S. 700, 740] with the respondents, based on the allegation that there was no authority in Texas competent to enter into an agreement during the rebellion. Raving relied upon one fiction, namely: that she is a State in the Union, she now relies upon a second one, which she wishes this court to adopt, that she was not a State at all during the five years that she was in rebellion. She now sets up the plea of insanity and asks the court to treat all her Acts, made during the disease, as void.
We have had some very astute logic to prove that judicially she was not a State at all, although governed by her own Legislature and Executive as "a distinct political body."
The Ordinance of Secession was adopted by the Convention on the 18th of February, 1861; submitted to a vote of the people, and ratified by an overwhelming majority. I admit that this was a very ill-advised measure. Still it was the sovereign act of a sovereign State, and the verdict on the trial of this question, "by battle" (Prize Cases, 2 Black, 673, 17 L. ed. 478), as to her right to secede, has been against her. But that verdict did not settle any question not involved in the case. It did not settle the question of her right to plead insanity and set aside all her contracts, made during the pending of the trial, with her own citizens, for food, clothing or medicines. The same "organized political body," exercising the sovereign power of the State, which required the indorsement of these bonds by the governor, also passed the laws authorizing the disposal of them without such indorsement. She cannot, like the chameleon, assume the color of the object to which she adheres, and ask this court to involve itself in the contradictory positions that she is a State in the Union and was never out of it, and yet not a State at all for four years, during which she acted and claims to be "an organized political body," exercising all the powers and functions of the independent sovereign State. Whether a State de facto or de jure, she is estopped from denying her identity in disputes with her own citizens. If they have not fulfilled their [74 U.S. 700, 741] contract, she can have her legal remedy for the breach of it in her own courts.
But the case of Hardenberg differs from that of the other defendants. He purchased the bonds in open market, bona fide, and for a full consideration. Now, it is to be observed that these bonds are payable to bearer, and that this court is appealed to as a court of equity. The argument to justify a decree in favor of the Commonwealth of Texas as against Hardenberg is simply this: these bonds, though payable to bearer, are redeemable fourteen years from date. The government has exercised her privilege of paying the interest for a term without redeeming the principal, which gives an additional value to the bonds. Ergo, the bonds are dishonored. Ergo, the former owner has a right to resume the possession of them, and reclaim them from a bona fide owner by a decree of a court of equity.
This is the legal argument, when put in the form of a logical sorites, by which Texas invokes our aid to assist her in the perpetration of this great wrong.
A court of chancery is said to be a court of conscience; and, however astute may be the argument introduced to defend this decree, I can only say that neither my reason nor my conscience can give assent to it.
[18 L. Ed. 242]
Of course I am justly convicted by my brethren of an erroneous use of both, but I hope I may say without offense, that I am not convinced of it.
Mr. Justice Swayne delivered the following opinion:
I concur with my brother Grier as to the incapacity of the State of Texas, in her present condition, to maintain an original suit in this court. The question, in my judgment, is one in relation to which this court is bound by the action of the Legislative Department of the Government.
Upon the merits of the case, I agree with the majority of my brethren.
I am authorized to say that my brother Miller unites with me in these views.
It is adjudged, ordered and decreed, as follows:
That the objection interposed by way of plea, and the answer of defendants to the authority of the solicitors of [74 U.S. 700, 742] the complainant, to institute this suit, and to the right of complainant as one of the States of the National Union to bring a bill of complaint in this court, be, and the same is hereby overruled.
That the contract bearing date the 12th January, 1865, purporting to have been executed between the Military Board of the State of Texas and Geo. W. White and John Chiles, and signed by said White and Chiles and by P. Murrah, J. S. Holman, and N. B. Pearce, members of the said Military Board, and which said contract is set forth as exhibit "A" to the complainant's bill of complaint, is null, void and of no effect, and that the said White and Chiles, their agents and attorneys, and all others claiming to act in their behalf, be perpetually enjoined from asserting any right or claim under the same; and that the complainant is entitled to recover and receive the bonds and coupons mentioned in said contract as having been transferred or sold to the said White and Chiles, which, at the several times of service of process In this suit, were in the possession or under the control of the defendants respectively, and any proceeds. thereof, which have conic into such possession or control, with notice of the equity of the complainants.
That George W. White, John Chiles, John A. Hardenberg, Weston F. Birch, Byron Murray, Jr., George W. Stewart, and Charles P. Shaw, and each of them, be hereby perpetually enjoined from setting up any claim or title to any of the bonds and coupons attached, which are described in the first article of said contract, filed as exhibit "A" to the bill of complaint, and that the above complainant is entitled to restitution of such of the bonds and coupons and proceeds as have come into the possession or control of the said defendants respectively and as aforesaid.
And the court proceeding to determine upon the pleadings and proofs in the cause, for which and how many of said bonds the said defendants are respectively accountable to the complainants to make restitution thereof, or make good the proceeds thereof, doth order, adjudge and decree, that the defendants, Weston F. Birch, and Byron Murray, Jr., are so accountable to the complainant for and in respect of eight of said United States Texas indemnity bonds, numbered from 4916 to 4923, inclusive, with coupons attached; and the defendant, George W. Stewart, is so accountable to the complainant for and in respect of four other of said United States Texas indemnity bonds, 4230, 4231, 4235 and 4236, with coupons attached; and accordingly it was ordered and adjudged and decreed that the said defendants, Birch and Murray, do forthwith surrender and deliver to the complainants the said bonds numbered from 4916 to 4923, inclusive, with coupons attached, and for that purpose shall make all necessary and proper transfers and assignments, and execute all necessary instruments and powers, and that payment of said bonds or any of them by the Secretary of the Treasury to the said complainant shall be an acquittance of said Birch and Murray to that extent under this decree, and for such payment this decree shall be sufficient warrant to the said Secretary.
And it is further ordered, adjudged and decreed, that the said defendant George W. Stewart, do forthwith surrender and deliver to the complainant the said bonds, numbered. 4230, 4231, 4235 and 4236, with coupons attached, and for that purpose shall make all necessary and proper transfers and assignments and execute all necessary instruments and powers, and that payment of said bonds or any of them by the Secretary of the Treasury to the said complainant shall be an acquittance of said defendant, Stewart, to that extent under this decree, and for such payment. This decree shall be sufficient warrant to the said Secretary.
And it appearing upon the pleadings and proofs in this cause, that before the filing of the bill in this cause, said defendants, Weston F. Birch and Byron Murray, Jr., had received and collected from the United States the full amount of four others of said United States Texas indemnity bonds, numbered 4897, 4898, 4914 and 4915; and that the defendant, John A. Hardenberg, before the commencement of this suit, deposited thirty-four of said United States Texas indemnity bonds, numbered 4777, and from 4237 to 4248, inclusive, and from 4930 to 4947, inclusive, and for 4232 to 4234, inclusive in the Department of the Treasury of the United States, according to their tenor, of which bonds the said Hardenberg claims to have received payment [74 U.S. 700, 743] from the Secretary of the Treasury before the service of process on him in this suit, in respect to which payment, and the effect thereof, the counsel for the said Birch and Murray, and for the said Hardenberg, respectively, desiring to be heard, it is ordered that time for said hearing be given to said parties on the first Friday of October next, or some convenient day thereafter.
And it is further ordered, adjudged and decreed, that the complainant and the defendants, respectively, be at liberty to apply to the court at the foot of this decree for further direction in respect to the execution of the same, if they shall be so advised.
And it is further ordered, that the complainant shall recover from the defendants its costs, to be taxed by the clerk of this court.
[18 L. Ed. 243]