Case ID: us-ct-cl_25/html/0178-01.html
Source: Caselaw Access Project
Author: {"author": "Weldon, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THOMAS FAWCETT v. THE UNITED STATES.
    [No. 16699.
    Decided March 3, 1890.]
    
      On the defendants’ Motion.
    
    The Confederate authorities in New Orleans confiscate the property of a northern citizen, sell the same and deposit the money as part of a fund derived from confiscated property in a hank. General Butler, for the purpose of preserving the property of the citizen, seizes the money and sends it to the Treasury.
    I. It is immaterial what may have heen the purpose of a military officer who seized a Confederate fund during the war; the court must deal with what the capturing power did, not what the capturing officer intended.
    II. The Government is not liable for the proceeds of property taken by capture from the public enemy because it had belonged to a i loyal citizen and been unlawfully confiscated; nor does a trust result from such a capture; nor can a contract be implied from the holding of the money.
    
      The Reporters' statement of the case:
    The grounds of the motion will be found set forth in the opinion of the court.
    
      
      Mr. James H. Nixon (with whom was Mr. Assistant Attorney-General Cotton) for the motion:
    It is claimed that this property was rightfully seized as enemies’ property, held in the name of Huger, receiver of the ■{Confederate States, and became, so far as the acts of General Butler were concerned, enemies’ property captured before July 2, 1862, and passed absolutely to the Government under the general laws of war, according to the principle clearly laid down in the case of Moore v. United States (10 0. 01s. R., 375) until Congress, by some special legislation, should make provision for its restoration to those who could prove their right to it.
    It follows logically and of course that the capture of this money, held by Huger, the Confederate receiver, having been made in June, 1862, and transmitted June 17 to the Secretary of the Treasury, the claimant was shut out from the benefits of the act of March 12,1863 (12 Stat. L., 820), which, by the act of July 2, 1864 (13 Stat-., 375), is given a retroactive effect back to July 17, 1862, and, therefore, has no sufficient cause of action against the United States in this court.
    The jurisdiction of this court, if it ever had any, ended in six years from July 5,1862, the date when the assistant treasurer of the United States made the entry on his books of the receipt of $245,760.10 of balances held by certain banks at Few Orleans for the so-called Confederate States, received, from Major-General Butler. Uo remedy after that date remained to claimant, through his own laches, except to ask Congress, as many others have in cases of neglect to seek redress until barred by statute, to pass a special act for his relief, giving this court, or some other, jurisdiction to hear and adjudicate his claim.
    That no other relief is afforded was, we think, clearly indicated by this court in the case of Eayeraft vs. United States (8 O. Ols., R. 483), and by the United States Supreme Court in If l in (Jase (13 allace, 128).
    An the cases cited by the counsel for claimant tend to strengthen the position of the defendant if they have any bearing at all upon the question now under consideration, the first list of cases (except the first case) being cases brought within the statutory period under the captured and abandoned property act, which created, as has been repeatedly held, a trust for a certain period, but to the benefits of which this claimant does not pretend to be entitled; and the second list of cases serves to prove what is here insisted upon, that if any right of action ever accrued to the claimant it was one of indebitatis assumpsit iov money had and received by the Government to his use under an implied contract to pay him, which action, to give this court jurisdiction, should have been brought within six years after the right of action accrued unless some disability intervened not existing in this case.
    The only possible application of the principles laid down in the Planters’ v. Union Bank Case (16 Wallace, U. S. Bepts., 483), and the other cases cited by claimant’s counsel, to the case at bar, is to show that these unlawful acts of the Confederate Receiver Huger did not relieve the several creditors of the claimant from their liability to pay him if he had seen fit to sue them.
    The Planters’ Bank and other cases cited have no bearing-upon the claimant’s present case in this court, nor do they in any way affect the question of this court’s jurisdiction now under discussion. The Planters’ v. Union Bank ease is not parallel. That was property held by two artificial persons, and that case was the same as if General Banks had ordered a debt due from one citizen to another paid to him, or his quartermaster, iustead of the rightful creditor.
    Money standing to the credit of the Secretary of the Treasury would, of course, be held to be the property of the Confederate States, and, we insist, equally so if to the credit of a receiver of the Confederate States, for both were fiscal officers representing the rebel government, and government funds are-generally held by the banks in the name of the government’s officers.
    If claimant can establish by this suit that all who had property confiscated by the Confederate Government, as, for instance,, cotton, which was afterwards captured as property of the Confederate Government and sold by the proper agents of the-United States, can recover in this court the proceeds of their cotton by claiming that a resulting trust exists for their benefit, then a multitude of claimants will doubtless soon appear with similar demands. It seems needless to say that no general jurisdiction of such a class of cases has been conferred upon this court by Congress, and no parallel case anywhere appears in the reports, that I have discovered. The one most like the present case is that of Haycraft v. United States (8 C. 01s. R., 483). It is there held that the Government is a trustee only for those who were included in the captured and abandoned property act.
    If this Government can be made a trustee by operation of law, then all the numerous legal duties and liabilities of a trustee could be demanded of it. Whenever the United States has been recognized by the courts as a trustee, it has been by virtue of some statute of Congress putting it in that relation. The cases cited on page 13 of claimant’s brief are applicable only to the relations between citizens, or between citizens and corporations, but do not affect the question under discussion. In support of the position here assumed we cite: Perry on Trusts, section 41; Perry on Trusts, section 131; Briggs v. lÁghtboats (11 Allen, Mass. Reports, 157); Levy v. Levy (33 bf. Y. Reports, 97); Shoemaker v. Commissioner (36 Indiana, 176).
    
      Mr. H. S. Cummings and Mr. A. G. Safford opposed:
    The property was taken by a decree under the treasonable law of August 31, 1861, of the Confederate States, and through the intervention of court proceedings actually converted into a credit to- a so-called receiver of the Confederate States, forty-seven days after the proclamation of non-intercourse, and thirty-four days after the passage of the confiscation act by the Confederate Congress. But were it otherwise, and had he not suffered as to his property so swiftly, after the fact of this law, he was simply through his agent trying to save what he had been compelled to leave. (U. S. v. Quigley, 103 U. S., 595. Carson v. Dunham, 121 U. S., 421.)
    The decisions of the Supreme Court of the United States as to the effect of Confederate laws and judgments of Confederate courts upon the rights of property of those who remained loyal to the Government of the United States, have no uncertain sound. The doctrine is, 11 that all their acts hostile to the rightful Government are violations of law, and originate no rights which can be recognized by the courts of the nation whose authority and existence have been alike assailed.” (Shot-
      bridge v. Macon, Chase’s Decisions, 136. Williams v. Sniffy, 90 U. S., 176. Same case, 102 U. S., 248. Stevens v. Griffiths, 111 U. S., 48.)
    The property was that of the claimant when the Confederate States passed the law referred to; it was his when Huger instituted the confiscation proceedings under that law, and it remained his when deposited in the Citizens’ Bank, for the law, and all proceedings under it, were the veriest nullity.
    General Butler, at the time of the surrender, issued a proclamation, containing this clause: "
    
    “All the rights of property of whatever kind will be held inviolate, subject only to the laws of the United States.”
    This clause of that proclamation was before the Supreme Court, and considered in the case of The Venice (2 Wallace, 258), and in Planters1 Banlc v. Union Banlc (16 Wallace, 483).
    The attention of the court is invited especially to these cases, because it is apparent from the motion to dismiss, that it is to be claimed that the Government, through the agency of General Butler, seized or captured claimant’s property.
    After the money passed into the hands of General Butler, the funds realized from claimant’s property still belonged to the claimant, and General Butler’s possession was with full knowledge of his interest in it and his full proprietorship thereof.
    The facts surrounding the transfer of the fund to Butler shows conclusively that he understood whose property he was dealing with, and rebuts any presumption that there was a seizure in a military sense.
    It would be a most “ lame and impotent conclusion,” to hold that the right of the claimant had been in any way altered by what General Butler did. We have seen that he had neither the power nor the intention to deprive the claimant of his property. He was, to be sure, a receiver of stolen goods, not in the ordinary and legal signification of that term, for he was actuated purely by patriotic considerations. The offensive epithet can only apply in its ordinarily received signification to the United States, if having received the claimant’s money, which had been stolen from him, it succeeds by the artifice of book-keeping, or any legal stratagem in retaining it.
    It is apparent that the Secretary of the Treasury had full notice of what this particular fund contained, and that it was a fund in which the United States had no interest, except that of fulfilling and executing the trust created by the act of all the parties, of which trust this claimant is one of the beneficiaries.
    It will be observed that this money was received by the Treasurer before July 17, 1862; .it is therefore not within the purview of the Captured and Abandoned Property Acts, as this Court has decided. (Moore v. The United States, 10 C. Cls. R, 375.)
    And as held by the Supreme Court of the United States. (United States v. Pugh, 99 U. S., 265.)
    It is quite certain, therefore, that the acts of March 12,1863, and of July 2,1864, have no application to -the facts of this case. It is unnecessary to elaborate the proposition that if the claimant could not invoke the remedial clauses of those acts, because his property reached the Treasury before July 17, 1862, he is not prohibited by any limitation they may contain from asserting his right,_ which,’ if he has any, is quite independent of either of those statutes.
    It appears from the official letter of Mr. John J. Cisco, assistant treasurer of the United States, dated July 5, 1862, that the sum was not covered into the Treasury, generally, but was credited upon the books in such a way as to recognize its trust character; the style of the account, opened on that day, was as follows:
    u The Treasurer of the United States, received from Major-General Butler, on account of balance held by certain banks at New Orleans, for the so-called Confederate States.”
    And the funds of the claimant remained so “ear-marked” in the Treasury, as we claim, ever since; but the present Secretary of the Treasury claims that that special account (this matter of book-keeping) was altered after the passage of the joint resolution of March 30, 1868; it only remains, in tracing the history of the fund, to consider the scope and effect of that act.
    The act in question only applied to property captured and seized under the captured and abandoned property acts. This property was not within that description. (Moore v. The United States, supra.) It only applied to property which had been seized and sold by the special agents mentioned in those acts. The Secretary of the Treasury had no power in the absence of Congressional action to cover this money into the Treasury. And so tar as the claimant, without reference to the “book-keeping,” is concerned it remains as if the account had been continued as at first made by Mr. Cisco. The difference in the Treasury Department was only a change in the way it was regarded. The conduct of the Secretary of the Treasury was made in accordance with a mistaken notion of the scope of the joint resolution of 1868. and before the decision in Moore’s case. There being no law for the covering into the Treasury, the claimant could not have constructive notice of the attempt of the Secretary to change his relation to the fund. This court cannot say that the situation of the fund or the relation of the claimant to it has in any way changed or altered, as the Secretary was powerless to act as he attempted to do.
    It is not claimed that the United States is liable as for a tort. We admit the doctrine, in its fp.ll force, as laid down in Straughan’s Case, 1 0. 01s. R., 324, but the case is within the principles stated in Wiggins’s Case, 3 C. 01s. R., 412; Brown’s Case, 6 id., 171; Radovich’s Oase, 5 id., 541; O’ Grady’s Case, 10 id., 134; Same case, 22 Wall., 641.
    And by analogy, within the principles of those cases, where the United States have been held accountable on an implied contract, where its officers have used letters patent.
    Were the transaction one between individuals, indebitatus assumpsit, would lie. Johnson v. Reed, 8 Ark., 202; Jones v. Marks, 40 Ill., 313; Downing v. Freman, 13 Maine, 90; Hill v. Pine River Bank, 45 1ST. H., 300; Barker v. Gory, 15 Ohio, 9; Berly v. Taylor, 5 Hill, 577; Chambers v. Lewis, 2 Hill, 591; International Bank v. Monteath, 39 U. Y., 297; Blaloek v. Phillips, 38 Georgia, 216; Patterson v. Prior, 18 Ind., 440.
    The money now in the possession of the Secretary of the Treasury represents, stands in the place of, property which belonged to the claimant. So far as he is concerned, he has done nothing and suffered nothing to be done, which altered or in the least degree qualified his paramount and exclusive right of property.
    So far as the conduct of the Confederate authorities was concerned, the taking possession of claimant’s property was nothing less than robbery. It was not the imposition of a penalty by a defacto Government, but a felonious taking in the strictest sense of the term. It was “ taken, stolen, and carried away, ” and its character as stolen property has never departed from it, and that character has been recognized by all the officers who have dealt with it.
    It is not claimed that the reception of this money was by or through any illegal act; we maintain the contrary. This “stolen” property has found its way properly into the custody of the Secretary of the Treasury, and unless, by the interposition of some technicality, that official is permitted to hold it against the lawful demand of the claimant, made on the 14th of November, 1880, no criminality attached to any one.
    The money which is in the custody of the Secretary of the Treasury is within the definition of a “resulting trust,” because when this property reached the Secretary of the Treasury there, was “no reason to infer that it was the intention to confer and convey the beneficial interest. ” Perry on Trusts, sec. 124 et seq. This case must be tried upon an allegation directly made that it was “ sent to the Secretary of the Treasury, to be retained until it should be delivered” to the claimant. The holders of the proceeds of stolen property are chargeable as trustees for the owner. Newton v. Porter, 5 Lansing, 417; Thompson v. Parker, 3 Mason, 332; Hoffman v. Ganow, 22 Wend., 285; Bassett v. Spofford, 45 N. Y., 387; Sils-hury v. McCoon, 3 Comstock, 579.
    And in other cases, where the facts are analogous to those of the present case, it has been held that a trust results. Duluth v. Goursault, 5 Oraneh O. 0., 349; Martin v. Banlc, 31 Ala., 115: People v. Houghtaling, 7 Cal., 348; Matter of Fernam, 1 Ashmead, 319.
    This being a trust, the plea of the statute of limitations does not avail. (State of Louisiana’s Case, 23 O. Gis. R.., 53.)
   Weldon, J.,

delivered the opinion of the court.

The defendants move to dismiss this case upon three grounds, as follows:

First. Because the petition does not set forth a sufficient cause of action against the United States.

Second. Because the alleged claim does not come within the general jurisdiction of the court.

Third. Because the claim is barred by both the general and special statutes of limitation.

The legal effect of the first clause of the motion is, to admit the allegations of the petition; and the question presented is, as to the sufficiency of the pleading to maintain a cause of action. It is in effect a demurrer, and raises a question of law for our determination.

It is alleged that the claimant is a citizen of the United States, residing in the city of Pittsburgh; that he has always been loyal to the United States; that preceding and during the early part of the war he had extensive business interest in and relations with the city of New Orleans; that said business was carried on, during said time, through the medium of an agent; that on the 31st of August, 1861, the so-called Confederate government passed a sequestration act, providing for the confiscation of the property of citizens of the United States, who bore allegiance to the United States, by judicial process and proceeding, according to the terms of said act; that after the passage of said act an officer of said government, called “Confederate States receiver,” instituted proceedings in the courts of the so-called Confederacy, for the purpose of confiscating the money and property of petitioner, then in the city of New Orleans, and subject to the dominion and power of said Confederate government; that by virtue of said judicial proceedings the said agent, on the 4th day of October, 1861, seized the property of the petitioner, then in the hands of his agent, consisting of money, promissory notes, and personal property, amounting in the aggregate to the sum of $55,006; that the property so seized was sold, and the proceeds paid into the Citizens’ Bank of New Orleans, to the credit of said Confederate agent; that the proceeds thus deposited remained in said bank, as aforesaid, when, after the fall of said city into the hands of the Federal forces, to wit, on the 11th day of June, 1863, General Butler, then commanding the United States forces, for the purpose of preserving the property of petitioner, seized the said money in the name and by the authority of the United States,, and on the 17th day of July, 1862, sent the same to the Treasury of the United States to be retained for the use, benefit, and behoof of the petitioner; that the proceeds of said property was a part of a fund of $108,812 which was transmitted as aforesaid, said amount being in the form of bullion, and that it remains-in the care, custody, and control of the defendants; that no-part or portion of said amount has been paid the petitioner; that on the 11-th day of November, 1889, he demanded the said money from the Secretary of the Treasury, who refused to pay the same or any part thereof; that in reply to the demand made by petitioner as aforesaid, the Acting Secretary of-the, Treasury says:

“ In reply, you are informed that the funds seized from the Citizens’ Bank at New Orleans, and transmitted by General Butler to the Secretary of the Treasury, were covered into the Treasury, June 30,1868, under the provisions of the joint resolution of Congress, approved June 30, 1868, and that there is-no law authorizing the Secretary of the Treasury to adjudicate and pay Such claims.”

Although it is alleged that the bullion seized, and which represented the property of the claimant, still remains in the Treasury, the communication of the Secretary shows, that the money transmitted by General Butler was covered into the Treasury, and is now apart of Government funds in the Treasury of the United States. The theory on .which the claimant seeks to maintain this suit is, that when the motley was seized and transmitted, there originated an implied contract and obligation, on the part of the defendants, to restore the same to the lawful owner, when demanded, that the Government became a trustee of the funds, and that the statute of limitation did not attach to the rights of the parties, until a refusal on the part of the officers to refund the money to the claimant. If that contention be true as a legal theory, then this suit involves a cause of action, and the defendants should traverse the allegations of the petition, if a defense is intended.

At the time of seizure or capture, the money in controversy, was in the possession of an agent of the so-called Confederate government; it stood on the books of the bank credited to the u Confederate States receiver,” ¿subject to his draft, and subordinate to the interest and control of the public enemy of the United.States. It may have passed improperly, from the possession of the claimant to the possession of the Confederacy, but that was its condition in fact, at the time General Butler seized or captured it; and while he may have had the purpose of preserving it to the petitioner, as he alleges, we can deal only in this proceeding, with what the captaring power did, and not with what the capturing officer intended.

Express contracts are the result and effect of what parties agree to, while implied contracts are the legal results and effect of what parties do. There are no allegations in the petition, from which an express contract can be deduced, and if a contract does not result from the facts alleged, there can be no right of recovery on the part of the claimant, and no right on the part of the court to deal with the case.

The discussion incident to the disposition of the demurrer, •comprehends the broad question, whether the United States are now liable in this court, for the proceeds of property, taken by capture from the public enemy, when and where such property, had been improperly confiscated by the Confederate authorities, or improperly seized, because such property belonged to a loyal citizen of the Ü nited States. A1 though confining, as we do, the liability nf the United States Government to what was done by the mere act of capture or seizure, unaffected by the purpose of the capturing officer, the question is far-reaching and important.

♦ The state of the law at a certain period, is often determined by ascertaining what changes have been made at a subsequent time, by the act of the legislative power. The capture or seizure in this case was made in June, 1862, and at that time there was no statute of the United States, which by its provisions applied to a seizure of property in the enemy’s country, belonging to a loyal citizen of the United States. To afford a remedy to loyal owners Congress, on the 12th of March, A. D. 1863, •passed the abandoned property act (12 Stat. L., 820), and on :the 2d day of Jnly, 1864, passed an additional act amending the former act (13 Stat. L., 375).

These statutes embrace in detail, a mode of dealing with property of loyal citizens captured or abandoned, and the fundamental policy, of restoring to loyal claimants, property captured or abandoned, was provided for and recognized, for the ■first time by the provisions of these statutes. This legislation, ■ tends to show, the legal status and condition of property, taken by the Army of the United States, antecedent to the passage of those laws. It is insisted, that the captured and abau--doned property act, had no application to the rights of the claimant; that may be true, and it is to be considered only, for the purpose of ascertaining the state of the law, at the’ time it is alleged the capture was made.

If the transaction, became subject to the provisions of the said statute, this proceeding would be clearly within the limitation as applicable to that law, and the claim would have to be dismissed, under the third clause of the defendant’s motion. If this court, has jurisdiction of the alleged cause of action, presented by the allegations of this petition, it is under that provision of 1059, of the Revised Statutes, which provides a jurisdiction “upon contracts, expressed or implied.” There is no contention that there was any express contract, and the-claim is predicated upon the legal evolution of an implied contract.

If private property is taken for public use, the Government clearly recognizing at the time of the taking, that it is a taking of the property of a citizen; and no claim of ownership or title is made to the property by the Government, it might beheld, that the mere appropriation by-the Government, without the knowledge or consent of the owner, would create an implied obligation to pay, on which, in a judicial proceeding, the-United States might be held liable; in other words, when the Government, in the exercise of the right of eminent domain,, appropriates or uses private property, there is an implied agreement to pay for it, on which a suit can be maintained, unless the cause of action is barred by the statute of limitations.

But that condition does not exist in this case, and it is not necessary to pass upon the ultimate question of the defendant’s-liability. General Butler at the time the seizure was made, was a military officer of Vhe United States, acting in his capacity as such, in the prosecution of belligerent operations against the public enemy of the United States. He was not in the exercise of civil power, and was not the representative of the United States, to make contracts or impose civil obligations;, and did not assume to perform any function, except a military duty. When he captured Few Orleans, he found a large fund in the Bank of New Orleans credited to the “Receiver of the-Confederate States;” and to cripple the resources of those States, he seized this property and transferred it to the jurisdiction and control of the United States. In the letter to the Secretary of the Treasury transmitting' drafts for the. funds seized, he says:

“ The principal amounts are from banks, to the credit of the receivers of the Confederate States, and will make a fund upon which those whose property has been confiscated may have a claim.”

The specific fund arising from the sale of claimant’s property, in the proceedings of confiscation under the Confederate statutes, was not sent to the Treasury, but constituted, as alleged, a part of an aggregate fund of $245,760.10.

This court, in the Haycraft Case (8 C. Cls. R., 483), said:

“ So far as they (referring to the principles in the Klein case) relate to suits for the recovery of the proceeds of abandoned or captured property, it is observable that the Government is held to be a trustee, not for all indiscriminately whose property was captured and sold and passed into the Treasury in money, but primarily for those only who were, by the terms of the act, declared entitled to the proceeds of their abandoned or captured property; and, secondarily, for those whom the Government should thereafter recognize as entitled. The descriptions of persons might be many or few, as might be the actual number; but, whether many or few, it is settled by the court of last resort that none can reclaim the proceeds of their property from the Treasury but those specified in that act, or who should be thereafter specified in some other act of Congress.”

In the same direction of authority, it is said in the Moore Case (10 C. Cls. R., 375):

“We recognize the ‘humane maxims of the modem law of nations which exempt private property of non-combatant enemies from capture as booty of war’ (Klein's Case, 7 C. Cls. R., 243, 13 Wall., 128), and the Constitutional provision that Congress has power to ‘make regulations concerning captures made on land and water’ (Constitution, Article I, section 8, par. 2). But, until Congress makes the necessary regulations and confers the authority, this court has no jurisdiction to compel the United States to refund money obtained contrary to those maxims.
“Before Congress made regulations and enacted laws in relation to the seizure and disposition of the enemy’s property all property so seized became vested in the United States by the rigorous rules of earlier warfare, which were justified on the ground that the power and resources of the enemy were weakened and those of the captors strengthened thereby. And now that Congress has made some provisions for returning the proceeds of captured and abandoned property in specified cases tliis court with its limited power can take no jurisdiction beyond that which is clearly and expressly given by statute.”

It is not necessary in this connection to speculate on the rights of the claimant in the property seized by General Butler; it is a question of judicial jurisdiction, that we are to determine. It is contended, that upon the receipt of the inouey by the Treasury Department, the United States became a trustee for the claimant, and the cause of action did not accrue until the disavowal of the trust in the year 1889. If there is no jurisdiction in this court, to enforce by its judgment, any legal obligation against the Government, because of the capture, then no resulting trust can originate in favor of the claimant, founded on such capture. Resulting trusts, as applicable to the ownership of property, are founded upon a right, in the cestui que trust, existing at the time, the alleged trustee becomes legally invested with the property. The Supreme Court held in the captured and abandoned property cases, that the United States were a trustee for the loyal owners of property captured; but the decisions in those cases, were based on the provisions of the statute, which has no application to the rights of the claimant in this case. So far as we have examined we concur in the statement made by counsel for the defendants.

“ Whenever the United States have been recognized by the court as a trustee it has been by virtue of some statute of Congress putting them in that relation.”

If the claimant has any rights, legal or equitable, in the fund now in the Treasury, he must apply to that branch of the Government, that exercises discretion and determines policies, and not to the judicial branch, which is limited by law. The demurrer will be sustained on the ground first set out, to wit: “Because the petition does not set forth a sufficient cause of action against the United States.”

The petition is dismissed with leave to the claimant to have the judgment set aside for the purpose of amending his petition if he makes a motion to that effect on or before May 1,1890.