Case ID: us-ct-cl_5/html/0586-01.html
Source: Caselaw Access Project
Author: {"author": "Loring, J., Nott, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

DILLON’S CASE. Robert Dillon v. The United States.
    
      On the Proofs.
    
    
      The claimant, a New Yorlc merchant of unquestionable loyalty, owns stoclc in a cotton press in the (Aty of Savannah. By deed executed April 22, and acknowledged May 20, 1861, at New York, 'he conveys the stoclc to one Cohen, at Savannah, for $23,500. The deed is received by Cohen beticeen May 20 and 31, 1861, and recorded March 16, 1864. No part of the price specified is ever paid, the deed being intended to place the stoclc in Cohen’s hands to prevent its seizivreby the Confederate government. Me holds the property for the benefit and account of the claimant. After commercial intercourse is forbidden, Cohen advises the claimant that he has possession of his property ¡which letter is merely acknowledged by the claimant. Cohen receives the dividends of the cotton press and to protect them from seizure by the Confederate government, enters them on his boolcs to the credit of the “Cotton Press.” This money he invests in cotton; the cotton teas, in fact, previously bought by him with his own funds, he being a commission merchant, and is now turned over on his boolcs, he charging only the cost, cartage, and his usual commission. An invoice of the cotton is made by Cohen January 15, 1864, and at some subsequent time sent to the 
      
      claimant, who malees no objection to the investment. In January, 1865, the cotton is returned by Cohen to an officer of the United States Army as the claimant’s. It is taken possession of and sold, the proceeds being paid into the Treasury. The shares in the cotton press are retransferred to the claimant by Cohen.
    
    Where a deed is executed in New York on the 20th of May, 1861, by a loyal citizen, resident in that city, which conveys property in Savannah to a citizen thereof, for the purpose of saving- it from confiscation by the Confederate government, it constitutes a standing relation between enemies, forbidden and unlawful under the law of nations and by the “ Non-intercourse act,” Vith July, 1861. (12 Stat. L., p. 257.) And where the grantee collects the rents, and invests them in cotton for and on account of the grantor, the latter acquires no title though he ratifies the purchase. He does not become the owner within the meaning of the “Abandoned and captured property act.” (12 Stat. L., p. 820.)
    
      Mr. John Townshend, and Mr. A. 8. Diossy for claimant:
    This case comes before the court upon tbe petition of Eobert Dillon, Terified 13tli April, 1867. Said petition alleges: That in January, 1865, he was owner and possessed of 153 bales of upland cotton, weighing 75,295 lbs., his own property) that on 9th January, 1865, Octavus Cohen, the agent of the petitioner, for the purpose of investing money received by him as such agent, from dividends of the Central Cotton Press, and other sources, and who had the care and custody of said cotton, turned over the same at Savannah to the United States authorities; that no receipt was given for the said-cotton, and said cotton was transferred to an agent of the Treasury Department; that said cotton was shipped to the city of New York, and there sold, and the proceeds, to the amount of about $40,000, over and above all cost and expenses, paid into the United States Treasury; that petitioner was the owner of said cotton and entitled to the proceeds, and has at all times borne true allegiance to the Government of the United States, and has not in any way aided or abetted, or given encouragement, or given aid or comfort to the late rebellion.
    Testimony was taken on the part of the claimant only; and from such testimony it appears, and the leading facts of the case are as follows:
    The claimant is a northern man, a resident of the city of New York; never having resided at the South, and having no relatives there.
    
      The claimant, prior to and during the war, bad a cotton press in the city of New York, and prior to the breaking out of the rebellion, and at the time of its breaking out, was a large shareholder in a cotton press at Savannah, called the Central Cotton Press. Prior to the war the claimant had business relations with Savannah, and chiefly with Óctavus Cohen, a commission merchant there. In April, 1861, and as the witness Cohen stated, u in view of the anticipated exigency of the-times,” and to cover up “the property against any hazard from either side,” the claimant executed to Cohen a bill of sale of his interest in the Central Cotton Press. This bill of sale was recorded, and by virtue of it, Cohen maintained his claim to the press as his property, against the so-called Confederate government, who claimed the same as the property of Eobert Dillon,-the claimant ; after the war Cohen reassigned said interests in said press to the claimant.
    In October, 1863, Cohen, then having no funds of the claimant on hand, and contrary to his custom, not being in the habit of buying anything on his own account, purchased in various lots 153 bales of upland cotton; afterward, in March, 1864, Cohen received moneys on behalf of the claimant, being dividends from the earnings of the said Central Cotton Press, which were carried to the credit of the claimant but not to his name, to conceal the fact of the claimant being the owner. These moneys, amounting to about thirty or forty thousand dollars, Cohen appropriated to his own use, and in lieu thereof transferred to claimant said 153 bales of cotton. This cotton was stored in the name of and as the property of Cohen, at the Central Cotton Press, and so continued until January, 1865, at which time Cohen returned it to the United States authorities as the property of Eobert Dillon. As soon as communication opened between the North and South, Cohen sent the claimant an invoice for the cotton, and on the arrival of the cotton at New York, the claimant made a demand of it upon the United States agent. The cotton was sold with the other seized cotton, and the proceeds deposited in the Treasury of the United States.
    The claimant’s loyalty to the United States has never been questioned.
    The seizure* and sale of the cotton, the payment of the pro-, ceeds in the Treasury, and the amount, are made clearly to appear, and are matters of mere routine, as to which nothing-need here be said.
    
      Mr. B. S. Sale, special counsel of the Treasury, for the claimant:
    The claim is for the proceeds of 153 bales of upland cotton, captured at Savannah.
    On these facts, it is submitted:
    The title to the cotton never vested in the claimant. It was purchased by Cohen as his own, and was unquestionably his, and his only, from October, 1863, to March, 1864. No sale was ever effected by him to Dillon. A sale is a contract requiring two parties, vendor andpurchaser, which this transaction lacked. It requires something in the way of payment, delivery, or some act evidencing the consent of the one party to part with, and of the other to receive, the title. It requires a distinct and sufficient specification of the property sold, so as to mark it as the property of the purchaser. Every element of this kind is lacking here.
    Dillon never consented to receive title to this cotton until after its capture by the United States, or even knew that it was attempted to make him the owner. Cohen had no authority to bind him as agent by receiving the cotton; and Cohen, as principal, certainly could not sell to Cohen as agent for the claimant without very explicit and undoubted authority. No act was done indicating a sale; no possession was changed.
    The fair test of claimant’s title in such a case is this: Suppose the cotton in question, after the pretended transfer to claimant, and before capture, had been burned, and Dillon had sued Cohen for the moneys received by him, could Cohen have successfully defended himself by showing this transaction precisely as alleged by him, on the ground that he had paid his debt by investment in the cottons in question ? The answer is too plain to need discussion.
    The pretended purchase of the cotton in question by claimant, and the transactions from which funds for such pretended purchase were derived, were wholly in violation of the non-intercourse acts.
    During the entire war, the claimant, a resident of New York, was carrying on trade in Savapnah in the name of an enemy, but for his own sole and direct benefit, and that in connection with, thé preparation for market of an article on which the hopes of the rebel confederacy for financial success were mainly founded. This trade in the name of Cohen was equally unlawful as if carried on in the claimant’s own name. The mere cover of nominal ownership in Cohen did not change the nature of the transaction. From such illegal acts claimant can claim no benefit here.
   Loring, J.,

delivered the opinion of the court:

The petitioner claims the net proceeds of 153 bales of cotton. And we find the material facts to be: That the. petitioner was a merchant of New York, and owned 195 shares of the corporate stock of the Central Cotton Press, a corporation in the city of Savannah; that by deed executed on the 22d day of April, and acknowledged the 20th day of May, 1861, in the city of New York, the petitioner purported to convey to Octavus Cohen, of Savannah, the said 195 shares, for the sum of $23,500; that the deed was sent from New York, by Mr. Dillon, to Mr. Cohen at Savannah, and by him received there between the 20th May and the 31st May, 1861; and that it was recorded in the records of the superior court for Chatham County, Georgia, on the 16th March, 1864; that no part of the consideration specified in the deed was paid, and that the deed was intended only to place the property in the name of Mr. Cohen, to protect it from seizure by the confederate government. And Mr. Cohen held the property for the benefit and account of the petitioner.

After commercial intercourse was prohibited between the States loyal to the Union and those in insurrection, Mr. Cohen advised the petitioner that he had possession of his property, and the petitioner replied that he had received Mr. Cohen’s letter. This correspondence was by way of Liverpool, and through a friend of Mr. Cohen’s there.

In October, 1863, Mr. Cohen purchased for himself, and with his own funds, 153 bales of cotton, and at some time subsequent to this purchase he received as dividends from the shares of the cotton press, standing in his name and belonging to the petitioner, $37,303 26; and he afterward, to wit, on 18th March, 1864, invested this money in the 153 bales of cotton he had purchased for himself, and thus transferred the cotton to Mr. Dillon at its cost and expenses. And he thereupon entered the cotton on Ms books to tbe credit of tbe cotton press, to protect it from sequestration by tbe confederate government. Tbe cotton remained in tbe Central Cotton Press, where it bad been previously stored by Mr. Coben. At tbe time of tbis transfer of tbe cotton, Mr. Coben was abundantly provided with funds of bis own.

At tbe time of tbe purchase of tbe cotton in October, 1863, by Mr. Coben, be bad in bis bands no funds of Mr. Dillon’s. And tbe dividends, as they were afterward received from tbe Central Cotton Press by Mr. Cohen, were entered in bis books in tbe tbe name and to tbe credit of tbe Central Cotton Press, to separate themfrom Mr. Cohen’s property, and to protect them from seizure by tbe Confederate government.

An invoice of the ucotton, dated Savannah, January 18,1864, was made out by Mr. Coben and sent by him to Mr. Dillon, but when it was sent did not appear.

In January, 1865, tbe cotton was returned by Mr. Coben to Colonel Kansom, as tbe property of Mr. Dillon, and it was taken possession of by tbe United States and sold by them at auction, and its net proceeds, amounting to tbe sum of $20,532 60, paid into tbe public Treasury.

Tbe 195 shares in tbe Central Cotton Press conveyed by Mr. Dillon to Mr. Coben were retransferred by him to Mr. Dillon by deed executed and acknowledged by Mr. Cohen, and recorded in Savannah February 13, 1865.

During tbe war, (but when did not appear,) tbe said shares were seized by tbe Confederate government, and Mr. Coben defended bis title to them by the deed from Mr. Dillon to him. And tbis was done for tbe benefit of Mr. Dillon as an old and intimate friend.

Tbe petitioner has at all times borne true allegiance to tbe government of tbe United States, and has not in any way aided, abetted, or given encouragement to rebellion.

Mr. Coben was an assistant quartermaster general in tbe military service of tbe State of Georgia, cooperating with tbe Confederate government in tbe rebellion.

In tbis case tbe' deed of tbe claimant transferring to Mr. Coben the shares in tbe Central Cotton Press in Savannah was dated in New York, tbe 22d of April, 1861, and acknowledged in New York by tbe claimant on tbe 20th May, 186Í, and tbe conclusion is that it was sent to Mr. Cohen in Savannah, and received by him there after the last-named date.

In the case of Reeside v. The United States, (2 C. Cls. R., p. 481,) this court held “ that from and after the proclamation of the President of the United States on the 15th of April, 1861, a state of actual war existed between the United States and the Confederate States of the South,” because that proclamation declared that “the laws of the United States have been for some time past, and now are opposed, and the execution thereof obstructed in the States of North Carolina, Georgia, Alabama, Florida, Mississippi, Louisiana, and Texas, by combinations too powerful to be suppressed by the ordinary course of judicial proceedings, or by the powers vested in the marshals by law.

And the doctrine declared by the Supreme Court in the Prize Cases (2 Black, 635) is as follows:

“As a civil war is never publicly proclaimed, eo nomine, against insurgents, its actual existence is a fact in our domestic history which the court is bound to notice and know.

“The true test of its existence as found in the writings of the sages of the common law may be thus summarily stated: When the regular course of justice is interrupted by revolt, rebellion, or insurrection, so that the courts of justice cannot be kept open, civil war exists and hostilities may be prosecuted on the same footing as if those opposing the government were foreign enemies invading the land.”

And on this ground the Supreme Court affirmed the right of the President to constitute the blockade of the southern ports, which was an act of war; and held that vessels captured on the high seas in the spring of 1861 were prize of war. And on the same ground Congress passed its Act of 13th July, 1861, “approving, legalizing, and making valid all the acts, proclamations, and orders of the President,” by which war measures had been instituted before the session of Congress in the summer of that year.

It follows that the deed from the claimant to Mr. Cohen was made during war, in which by the common law and the law of nations all peaceful intercourse was forbidden and unlawful between the citizens of New York and the citizens of Georgia.

And the evidence shows that it was the intent and object of the deed to make Mr. Cohen the agent of the claimant for him and for his benefit, to cover the property with the name and apparent title of Mr. Cohen, so as to protect the property and the dividends it might yield from seizure by the Confederate government, as enemy’s property. It was thus an agency constituted between enemies, in a time of war, to operate during war. And such an agency was au illegal and prohibited transaction when it was made and while it continued; and no claim founded oh it, or growing out of it, 'or of any act done under it, or in pursuance of it, can be maintained in this court. Whatever may be its quality between Mr. Dillon and Mr. Cohen, in the view and policy of the law and in the language of its authorities, “it is all noxious, and in a greater or less degree it is criminal.”

It is true that the deed on its face merely purported to convey the shares in the Central Cotton Press to Mr. Cohen, and did not purport to authorize him to receive the dividends, and invest them in cotton for the claimant. But the power to receive the dividends as they accrued was the direct consequence of the deed to Mr. Cohen and its necessary effect, and was thus a part of the original transaction, and must be assumed as the purpose of the parties in entering into it; and whether those dividends were held in the currency in which they were received, or were invested aucl held in something of more permanent value, is entirely immaterial. In either shape they were the fruits of au illegal transaction and tainted with its illegality. The case claimed for the petitioner was, that Mr. Cohen having Mr. Dillon’s money in his hands, invested it in cotton, sua sponte and without any suggestion from Mr. Dillon, and merely to serve an old and intimate friend. But Mr. Dillon in time of war sent Mr. Cohen the deed which produced the money; and it is of that illegal transaction that Mr. Dillon is now claiming the benefit. The sole purpose of the deed was to protect Mr. Dillon’s property, and the investment in cotton was the mode in which that purpose was carried into effect.

It it true that a belligerent state may so modify the relations of a state of war as to permit commercial intercourse with its enemies; and in this case Mr. Cohen testified that he received the deed before intercourse was interrupted, and mail communications between the loyal and disloyal States were not suspended by our government till May 31, 1861; and by the act of July 13, 1861, Congress authorized the President, in certain cases, to' declare disloyal States to be in insurrection, and enacted that “ thereupon” commercial intercourse should cease and be unlawful. And the implication is not without force that while the government continued the mail service, and until the President had executed the power given to him, intercourse was not forbidden but permitted; and that an agency constituted then, like an agency constituted before a war, might, for some purposes, and such as receiving aud securing money accruing to the principal, continue iuto the war. But such an implication would not serve a case like this, for here the agency was made in direct reference to the war and because of it, and to operate during the war. It was to cover and protect Mr. Dillon’s property throughout the war, and was intended to be a standing relation between enemies, for as long as they should continue enemies, and thus made peaceful intercourse between enemies; for the fact is found that it induced a correspondence betweén Mr. Dillon and Mr. Cohen, by the way of Liverpool, after intercourse was prohibited. It has no resemblance, therefore, to an agency constituted in a time of peace aud innocent of all reference to a time of war; nor to'a single commercial transaction begun and finished before the commercial intercourse contemplated by the act of’Congress ivas forbidden by it.

On the facts found it is ordered that the petition be dismissed.

Nott, J.,

dissenting:

The right of the claimant to recover in this case need not rest upon the transfer given by the claimant in New York to his friend in Savannah on the 20th May, 1861; but I think it sufficient, and that the claimant should recover, for the following reasons:

I. In an international war the citizens of each country become instantly the enemies of the citizens of the other; all intercourse between them is illegal, and all transactions are void. In a civil war the same principle is applicable, but not to the same extent. The loyal citizen cannot say wheu and where the state of war begins and is. Moreover, it was all his own country, and he went not with the risks of an alien when he went into what afterward became an insurrectionary part. In this instance, his government was in the same doubt. As appeared in the Reeside Mail Contract Case, (2 C. Cls. R., p. 481,) it was not till the 27th May, 1861, that the Postmaster General ordered tbe postal service to be discontinued with Georgia, and then the order was prospective and not to take effect till the Hist. lion constat but that this deed or transfer of the claimant’s went by the government mail; indeed, there is little doubt but it did. It were a great absurdity to say that the government ran mails for the promotion of forbidden intercourse between its citizens and its enemies. A more just application of the doctrine of non-intercourse will be to hold that non-intercourse began in strictissimiwith the statute forbidding, and that, until the statute, a loyal citizen in the North might try to save his property in the Sou th. The .courts of the Confederate States might well hold this transfer to be void, for it was made to injure the Confederate government. But neither the purpose nor the effect of the transfer was to injure the United States, and the courts of the United States should not apply a principle of international law in favor of an insurrectionary government and against their own citizens.

II. The transfer from the claimant to Mr. Cohen did not constitute an agency but a trust. The purpose for which it was created was to prevent the property of a loyal northern citizen from being seized by the rebel government. The purpose was commendable and lawful. -It then became the duty of the trustee to collect the avails of the transferred estate and to save them by judicious investmént. This he did and nothing more. From the time of the enactment of the non-intercourse act the claimant rigidly abstained from all intercourse with Mr. Cohen, and his case does not come within the decision of the Supreme Court in Grossmeyer’s Case.

III. The investment of the trust funds in property owned by the trustee was voidable, not void. Its good faith is shown by the fact that the trustee, a commission merchant, turned over the recently purchased property at its cost, adding only thereto his expenses and ordinary commissions. The transaction might be questioned by the beneftciary, but by no one else. ' _ •

IY. The reporting of the captured property by the trustee in the name of and as the property of the claimant, followed by the claimant’s acceptance, was a sufficient transfer of the legal estate to the party holding the equitable, and constitutes the claimant the. owner within the meaning of the Abandoned or eap-tured property act.