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[175 U.S. 423, 425] The questions involved in this case arise from a claim made by the La Abra Silver Mining Company, a New York corporation, for damages alleged to have been sustained in consequence of certain acts and omissions of duty upon the part of official representatives of the Republic of Mexico.
The claim was originally the subject of investigation by a commission organized pursuant to a convention between the United States of America and the Republic of Mexico concluded July 4, 1868, and proclaimed February 1, 1869. 15 Stat. at. L. 679.
An award was made by the Commission in relation to this claim, but it has been executed only in part-its full execution having been suspended by legislation in conformity with which the present suit was instituted to ascertain whether the award had been obtained by fraud effectuated by means of false swearing or other false and fraudulent practices on the part of the La Abra Company, its agents, attorneys, or assigns. 27 Stat. at L. 409, chap. 14.
It will conduce to a clear understanding of the questions to be determined if we state fully the circumstances that led to the organization of the commission, and show how it came about that a court established by this government took cognizance of a moneyed demand made by an American corporation against a foreign government.
By the above convention of July 4, 1868, it was provided that all claims on the part of corporations, companies, or private indiviauals, citizens of the United States or of the Republic of Mexico, arising from injuries to their persons or property committed by the authorities of the respective gov- [175 U.S. 423, 426] ernments, and presented to either government for its interposition with the other since the treaty of Guadalupe Hidalgo of February 2, 1848, and which remained unsettled or did not arise out of any transaction prior to that date, as well as any other claims presented within the time prescribed in the convention, should be referred to two commissioners-one to be appointed by the President of the United States by and with the advice and consent of the Senate and the other by the president of the Mexican Republic.
The commissioners were conjointly to investigate and decide the claims presented to their notice in such order and manner as they thought proper, but 'upon such evidence or information only' as should 'be furnished by or on behalf of their respective governments.' Where they failed to agree in opinion upon any individual claim, they were to call to their assistance an umpire, who was to decide upon it finally and without appeal. It was competent for each government to name one person to attend the commissioners as its agent, to present and support claims on its behalf, and to represent it generally in all matters connected with the investigation.
When every case presented had been decided by the commissioners or the umpire, the total amount awarded in favor of the citizens of one government was to be deducted from that awarded to the citizens of the other government, and the balance to the amount of $300,000 was to be paid to the government in favor of whose citizens the greater sum had been awarded, without interest or any other deduction than that specified in the convention. The residue was to be paid in annual instalments not to exceed $300,000 in any one year, until the whole amount had been paid.
The contracting parties agreed to consider the result of the proceedings of the commission as a full, perfect, and final settlement of every claim upon either government, arising out of any transaction of a date prior to ratification of the convention, and to give full effect to the decision of the commission or the umpire without objection, evasion, or delay; and they further engaged that every such claim, whether or not [175 U.S. 423, 427] presented to the notice of, made, preferred, or laid before the commission, should from and after the conclusion of its proceedings be considered and treated as finally settled, barred, and thereafter inadmissible.
The commission was organized in the city of Washington, and held its first meeting on the 31st day of July, 1869, Mr. William H. Wadsworth and Senor Don Miguel Maria de Zamacona being the commissioners respectively, and Mr. J. Hubley Ashton and Mr. Caleb Cushing, the agents respectively, on behalf of the United States and Mexico. Dr. Francis Lieber, the first umpire, having died, he was succeeded by Sir Edward Thornton, who at that time was the British minister accredited to the government of the United States at Washington.
On the 23d day of February, 1870, Secretary Fish issued a circular referring to the convention of 1868 and stating that the Department of State deemed it advisable to refer to the joint commission all claims of corporations and citizens of this country without special examination of their merits. He took care to say that the government thereby expressed no opinion either as to the merits of the claims presented or as to the principles of law to be invoked in their support. The responsibility of deciding questions of fact and law, he observed, rested with the commissioners.
On the 17th day of March, 1870, the La Abra Company gave written notice to the Secretary of State that it claimed from Mexico $1,930,000 'for damages and losses suffered by it in consequence of the violence and outrages committed by the authorities of Mexico against the rights of said company in 1867 and 1868.' It asked for the interposition of the government of the United States with Mexico for the payment of that demand, and requested that its claim and proofs thereafter to be produced be referred to the commission for settlement. This notice was transmitted by the Secretary to the commission.
Subsequently, June 14, 1870, the company filed with the commission a memorial of its claim, stating the amount thereof to be $3,000,030. Before the case was finally heard the claim was increased to $3,962,000. [175 U.S. 423, 428] The period within which the commission was to conclude its labors was from time to time extended by the two governments. Of the claims presented by the United States there was allowed the sum of $4,125,622.30, while of the claims presented by Mexico the sum of $150,498.41 was allowed.
In respect of the claim of the La Abra Company the commissioners differed in opinion, and the case went to the umpire for consideration.
The award of the umpire, which was made December 27, 1875, embraced the following items as representing the damages sustained by the La Abra Company and to be paid by the Republic of Mexico: (1) On account of subscriptions and sales of stock, $235,000; (2) money lent and advanced, $ 64,291.06; (3) rent, expenses, salaries, law expenses, $42,500: (4) amount derived from reduced ores, $17,000; (5) ore extracted from the mines and deposited at the mills, $100,000; in all, $458,791.06. On $358,791.06, the aggregate of the first four items, the umpire allowed interest from March 20, 1868, at 6 per cent, and upon $100,000, the fifth item, interest was allowed from March 20, 1869. The total amount of principal and interest allowed was $683,041.32.
An application was made to the umpire by the government of Mexico for a rehearing of the case, but a rehearing was denied.
Subsequently, the Mexican government without at all disputing its obligation under the convention of 1868 to comply with the award, placed in the possession of the Secretary of State of the United States certain books, papers, and documents which it alleged had been then recently discovered and would show that the claim of the La Abra Company was not only fictitious and fraudulent, but had been supported by false and perjured testimony. At that time a large part of the sum awarded to the company had been paid by Mexico and was in the hands of the Secretary of State. The distribution of the amount received had been delayed by the Secretary acting under the orders of the President to await legislation deemed necessary in order to make good to the fund the amount with which it was chargeable, and [175 U.S. 423, 429] also because, as stated by the Secretary, it was desirable that the form and manner of the reservation from the instalment in hand of the expenses of the government should first be settled.
These difficulties were met by the passage of the act of June 18, 1878. 20 Stat. at L. 144, chap. 262.
By the second section it was provided that 'out of any moneys in the Treasury not otherwise appropriated a sufficient sum is hereby appropriated to enable the Secretary of the Treasury to pay to the Secretary of State of the United States, in gold or its equivalent, the equivalent of fifty thousand five hundred and twenty-eight dollars and fifty-seven cents in Mexican gold dollars, and ten thousand five hundred and fifty-nine dollars and sixty-seven cents in American gold coin, and eighty-nine thousand four hundred and ten dollars and seventeen cents in United States currency, said sums being the aggregate in said currencies respectively of the awards made under the said convention of July 4, 1868, in favor of citizens of the Mexican Republic against the United States, and having been deducted from the amount awarded in favor of the citizens of the United States, and payable by Mexico, in accordance with article four of the said treaty; and that said sums, when paid to the Secretary of State as aforesaid, shall be regarded as part of the awards made under the said treaty, to be paid or distributed as herein provided.' [175 U.S. 423, 430] The third section made provision for meeting out of the moneys received by the Secretary the expenses of the commission, including contingent expenses paid by the United States as ascertained and determined in pursuance of the provisions of the treaty.
The fourth section provided that in the payment of money in virtue of the act to any corporation, company, or private individual, the Secretary of State should first deduct and retain or make reservation of such sums, if any, as might be due to the United States from any corporation, company, or private individual in whose favor awards were made under the convention.
The fifth section of the act was in these words: 'And whereas the government of Mexico has called the attention of the government of the United States to the claims hereinafter named with a view to a rehearing, therefore be it enacted, that the President of the United States be, and he is hereby, by, requested to investigate any charges of fraud presented by the Mexican government as to the cases hereinafter named, and if he shall be of the opinion that the honor of the United States, the principles of public law, or considerations of justice and equity, require that the awards in the cases of Benjamin Weil and La Abra Silver Mining Company, or either of them, should be opened and the cases retried, it shall be lawful for him to withhold payment of said awards, or either of them, until such case or cases shall be retried and decided in such manner as the governments of the United States and Mexico may agree, or until Congress shall otherwise direct. And in case of such retrial and decision, any moneys paid or to be paid by the Republic of Mexico in respect of said awards respectively shall be held to abide the event, and shall be disposed of accordingly; and the said present awards shall be set aside, modified, or affirmed, as may be determined on such retrial: Provided, That nothing herein shall be construed as an expression of any opinion of Congress in respect to the character of said claims, or either of them.' 20 Stat. at L. 144, chap. 262.
Pursuant to the direction of President Hayes the investi- [175 U.S. 423, 431] gation required by the fifth section of the act of July 4, 1878, was made by the Secretary of State.
Having reviewed all the proceedings of the commission, including the testimony originally submitted to it, the supplemental evidence furnished in support of the allegations of fraud as to the Weil and La Abra claims, and the action theretofore taken by the Department of State, Secretary Evarts referred to the contention that in deciding against opening those awards diplomatically and reexamining them by a new international commission, the whole discretion vested in the Executive as a part of the treaty-making power and under the special provisions of the act of Congress was exhausted, and that the payments in the cases referred to should be no longer suspended. He said that a solicitous attention to the rights of the claimants and the duty of the Executive in the premises had confirmed him in the opinion that Congress should determine whether 'the honor of the United States' required any further investigation in these cases or either of them, and provide the efficient means of such investigation, if thought necessary.
After stating the considerations which led him to that conclusion, the Secretary proceeded: 'While these considerations led to the conclusion that these cases ought not to be made the subject of a new international commission, I was yet of opinion that 'the honor of the United States' was concerned to inquire whether in these cases, submitted by this government to the commission, its confidence had been seriously abused, and the government of Mexico, acting in good faith in accepting a friendly arbitration, had been subjected to heavy pecuniary imposition by fraud and perjury in the maintenance of these claims, or either of them, before the commission. In furtherance, however, of this opinion, it seemed to me apparent that the Executive discretion under the act of Congress could extend no further than to withhold further payments on the awards until Congress should, by its plenary authority, decide whether such an investigation should be made, and should provide an adequate procedure for its conduct, and prescribe the consequences which should follow [175 U.S. 423, 432] from its results. Unless Congress should now make this disposition of the matter, and furnish thereby definite instructions to the Department to reserve further payments upon these awards till the conclusion of such investigation, and to take such further order with the same thereafter as Congress might direct, it would appear to be the duty of the Executive to accept these awards as no longer open to reconsideration, and proceed in the payment of the same pro rata with all other awards under the convention.' Senate Ex. Doc. No. 150, 49th Cong. 2d Sess.
The suggestions of the Secretary having been approved by the President, the first, second, and third instalments of the award received from Mexico on account of the claim of the La Abra Company, amounting to $ 138,565.52, were paid to the representatives of that company. Payments were subsequently made out of moneys received from Mexico, amounting to $ 103,117.54, leaving in the possession of the United States on account of the award $403,030.08.
After Mr. Arthur became President further distribution of the money received was suspended because of the negotiation of a treaty between the United States and Mexico for a re-examination of the Weil and La Abra cases. This treaty was signed on the 13th day of July, 1882, and was submitted to the Senate for its approval, but after some delay it was rejected by that body.
While that treaty was before the Senate, Key, as assignee of part of the Weil claim, and the La Abra Company, filed separate petitions in the supreme court of the District of Columbia for a mandamus upon the Secretary of State, compelling him to pay to the petitioners their distributive shares of the sums paid by Mexico in accordance with the terms of the convention of July 4, 1868. In Key's Case the writ asked for was awarded, while in the La Abra Case the petition was dismissed. The cases having been brought to this court, the judgment in the Key Case was reversed with direction to dismiss the petition and the judgment in the La Abra Case was affirmed. Frelinghuysen v. Key, 110 U.S. 63 , 28 L. ed. 71, 3 Sup. Ct. Rep. 462.
Chief Justice Waite, delivering the judgment of this court, [175 U.S. 423, 433] said: 'No nation treats with a citizen of another nation except through his government. The treaty, when made, represents a compact between the goverments, and each government holds the other responsible for everything done by their respective citizens under it. The citizens of the United States having claims against Mexico were not parties to this convention. They induced the United States to assume the responsibility of seeking redress for injuries they claimed to have sustained by the conduct of Mexico, and as a means of obtaining such redress the convention was entered into, by which not only claims of citizens of the United States against Mexico were to be adjusted and paid, but those of citizens of Mexico against the United States as well. By the terms of the compact the individual claimants could not themselves submit their claims and proofs to the commission to be passed upon. Only such claims as were presented to the governments respectively could be 'referred' to the commission, and the commissioners were not allowed to investigate or decide on any evidence or information except such as was furnished by or on behalf of the governments. After all the decisions were made and the business of the commission concluded, the total amount awarded to the citizens of one country was to be deducted from the amount awarded to the citizens of the other, and the balance only paid in money by the government in favor of whose citizens the smaller amount was awarded, and this payment was to be made, not to the citizens, but to their government. Thus, while the claims of the individual citizens were to be considered by the commission in determining amounts, the whole purpose of the convention was to ascertain how much was due from one government to the other on account of the demands of their respective citizens. As between the United States and Mexico, the awards are final and conclusive until set aside by agreement between the two governments or otherwise. Mexico cannot, under the terms of the treaty, refuse to make the payments at the times agreed on if required by the United States. This she does not now seek to do. Her payments have all been made promptly as they fell due, as far as these records show.
... * * [175 U.S. 423, 434] 'As to the right of the United States to treat with Mexico for a retrial, we entertain no doubt. Each government, when it entered into the compact under which the awards were made, relied on the honor and good faith of the other for protection as far as possible against frauds and impositions by the individual claimants. It was for this reason that all claims were excluded from the consideration of the commission except such as should be referred by the several governments, and no evidence in support of or against a claim was to be submitted except through or by the governments. The presentation by a citizen of a fraudulent claim or false testimony for reference to the commission was an imposition on his own government, and if that government afterwards discovered that it had in this way been made an instrument of wrong towards a friendly power, it would be, not only its right, but its duty, to repudiate the act and make reparation as far as possible for the consequences of its neglect, if any there had been. International arbitration must always proceed on the highest principles of national honor and integrity. Claims presented and evidence submitted to such a tribunal must necessarily bear the impress of the entire good faith of the government from which they come, and it is not to be presumed that any government will for a moment allow itself knowingly to be made the instrument of wrong in any such proceeding. No technical rules of pleading as applied in municipal courts ought ever to be allowed to stand in the way of the national power to do what is right under all the circumstances. Every citizen who asks the intervention of his own government against another for the redress of his personal grievances must necessarily subject himself and his claim to these requirements of international comity. None of the cases cited by counsel are in opposition to this. They all relate to the disposition to be made of the proceeds of international awards after they have passed beyond the reach of the governments and into the hands of private parties. The language of the opinions must be construed in connection with this fact.' Frelinghuysen v. Key, 110 U.S. 63 , 71-73, 28 L. ed. 71-74, 3 Sup. Ct. Rep. 462.
Referring to the act of 1878, and observing that it did not [175 U.S. 423, 435] undertake to set any new limits on the powers of the Executive, the court further said: 'From the beginning to the end it is, in form even, only a request from Congress to the Executive. This is far from making the President for the time being a quasi-judicial tribunal to hear Mexico and the implicated claimants and determine once for all, as between them, whether the charges which Mexico makes have been judicially established. In our opinion it would have been just as competent for President Hayes to have instituted the same inquiry without this request as with it, and his action with the statute in force is no more binding on his successor than it would have been without. But his action as reported by him to Congress is not at all inconsistent with what has since been done by President Arthur. He was of opinion that the disputed 'cases should be further investigated by the United States to ascertain whether this government has been made the means of enforcing against a friendly power claims of our citizens based upon or exaggerated by fraud,' and, by implication at least, he asked Congress to provide him the means 'of instituting and furnishing methods of investigation which can coerce the production of evidence or compel the examination of parties or witnesses.' He did report officially that he had 'grave doubt as to the substantial integrity of the Weil claim' and the 'sincerity of the evidence as to the measure of damages insisted upon and accorded in the case of La Abra Company.' The report of Mr. Evarts cannot be read without leaving the conviction that if the means had been afforded, the inquiries which Congress asked for would have been further prosecuted. The concluding paragraph of the report is nothing more than a notification by the President that unless the means are provided, he will consider that the wishes of Congress have been met, and that he will act on such evidence as he has been able to obtain without the help he wants. From the statements in the answer of Secretary Frelinghuysen in the Key Case, it appears that further evidence has been found, and that President Arthur, upon this and what was before President Hayes, has become satisfied that the contested decisions should be opened and the claims retried. Consequently, the Presi- [175 U.S. 423, 436] dent, believing that the honor of the United States demands it, has negotiated a new treaty providing for such a re-examination of the claims, and submitted it to the Senate for ratification. Under these circumstances it is, in our opinion, clearly within the discretion of the President to withhold all further payments to the relators until the diplomatic negotiations between the two governments on the subject are finally concluded. That discretion of the Executive Department of the government cannot be controlled by the Judiciary. The United States, when they assumed the responsibility of presenting the claims of their citizens to Mexico for payment, entered into no contract obligations with the claimants to assume their frauds and to collect on their account all that, by their imposition of false testimony, might be given in the awards of the commission. As between the United States and the claimants, the honesty of the claims is always open to inquiry for the purpose of fair dealing with the government against which, through the United States, a claim has been made.' Frelinghuysen v. Key, 110 U.S. 63, 74 , 76 S., 28 L. ed. 71, 75, 3 Sup. Ct. Rep. 462.
After the rejection of the treaty negotiated in 1882, President Cleveland in 1886 sent a message to the Senate calling attention to the act of 1878, and asking consideration of the status of the Weil and La Abra claims. By that message Congress was in substance notified that if it did not take some action in the matter the President would proceed to distribute the funds received from Mexico under the award and remaining in the hands of the United States. The matter having been referred to the Senate committee on foreign relations, it recommended the passage of a bill providing for a reinvestigation of those claims. The committee's report on the subject thus concluded: 'This brief r esum e of the correspondence between the two governments shows that Mexico, while observing, in good faith, all her obligations under the convention, has earnestly and constantly urged upon the United States that these claims were fraudulent. This appeal to the spirit of justice cannot be ignored, but should be met by a frank and open examination by our own courts of the facts presented by Mexico. These claimants have no vested rights [175 U.S. 423, 437] growing out of these claims which entitle them to come between Mexico and the United States, and to demand the payment of any part of these awards that are the outgrowth of fraud and perjury.' Senate Doc. Report No. 2705, p. v., 50th Cong. 2d Sess.
No action having been taken by Congress, the subject was again mentioned in a message sent by the President to the Senate on the 5th of March, 1888, in response to resolutions of that body. The message was accompanied by a report from Mr. Bayard, Secretary of State, in which reference was made to the action of his predecessor. He said: 'It is fair to assume that the rejection by the Senate of the treaty signed by Mr. Frelinghuysen, for an international rehearing of the awards, was in no sense an expression of opinion adverse to their investigation, which Mr. Evarts had recommended. It is rather to be regarded as an approval of the opinion which he also expressed, that the investigation should, under the circumstances, be made by this government for itself, as a matter affecting solely its own honor. It is a remarkable fact that whenever, since the distribution of the Mexican fund was commenced, the deliberate judgment of the official authorized by Congress to make such distribution has been recorded upon the two awards in question, it has uniformly been to the effect that the evidences that the United States, in presenting the claims, had been made the victim of fraudulent imposition were of such a character as to require investigation by a competent tribunal, possessing appropriate powers for that purpose. . . . The sole question now presented for the decision of this government is whether the United States will enforce an award upon which the gravest doubts have been cast by its own officers in opinions rendered under express legislative direction, until some competent investigation shall have shown such doubts to be unfounded, or until that branch of the government competent to provide for such investigation shall have decided that there is no ground therefor.' Senate Doc. Report No. 2705, p. v., 50th Cong. 2d Sess. The Secretary recommended that Congress take action providing expressly for the reference of the Weil and La Abra claims to the court of [175 U.S. 423, 438] claims or such other court as was deemed proper, in order that a competent investigation of the charges of fraud might be made.
Pending the consideration of this matter in the Senate the committee on foreign relations examined the evidence alleged to have been discovered by Mexico after the award in question,-especially certain letters and copies of letters of the officers and agents of the La Abra Company contained in a letter-impression book that was not before the commission. The committee in their report to the Senate on March 1, 1889, among other things said: 'The main allegation in the petition of the La Abra Company presented to the mixed commission, to wit, that the company was dispossessed of its property by the forcible interference of the Mexican authorities, is disproved and shown to have been wholly false, and this mainly by the correspondence of the company's own officers and agents; and it appears by the testimony taken by the committee that the abandonment of the property and the failure of the company were wholly due to the poverty of the mines and the consequent financial embarrassment of the company.' After reviewing, in the light of precedent and upon principle, the question of the power of Congress to order a re-examination of the La Abra claim, the committee concluded its report to the Senate: 'It thus appears that the power of Congress to reopen the La Abra award, and to direct a suit to be brought to judicially determine whether or not it was procured by fraud, has been affirmed by successive Secretaries of State, assumed by Congress in the passage of the act of June 18, 1878, expressly declared by committees of both houses of Congress, and substantially held to exist by the highest judicial tribunal of this government.' Senate Doc. Report No. 2705, pp. ix., xviii., 50th Cong. 2d Sess.
This brings us in the orderly statement of the history of this dispute to the act of December 28, 1892, amending and enlarging the above act of June 18, 1878. 27 Stat. at L. 409, chap. 14.
'That in further execution of the purpose of said act, the Attorney General of the United States be, and he is hereby, authorized and directed to bring a suit or suits in the name of the United States in the court of claims against La Abra Silver Mining Company, its successors and assigns, and all persons making any claim to the award or any part thereof in this act mentioned, to determine whether the award made by the United States and Mexican mixed commission in respect to the claim of the said La Abra Silver Mining Company was obtained, as to the whole sum included therein, or as to any part thereof, by fraud effectuated by means of false swearing or other false and fraudulent practices on the part of the said La Abra Silver Mining Company, or its agents, attorneys, or assigns; and, in case it be so determined, to bar and foreclose all claim in law or equity on the part of said La Abra Silver Mining Company, its legal representatives or assigns, to the money, or any such part thereof, received from the Republic of Mexico for or on account of such award: and any defendant to such suit who cannot be found in the District of Columbia shall be notified and required to appear in such suit by publication as the court may direct, in accordance with law, as applicable to cases in equity.
'Sec. 2. That full jurisdiction is hereby conferred on the court of claims to hear and determine such suit and to make all interlocutory and final dcerees therein, as the evidence may [175 U.S. 423, 442] warrant, according to the principles of equity and justice, and to enforce the same by injunction or any proper final process, and in all respects to proceed in said cause according to law and the rules of said court, so far as the same are applicable. And the Secretary of State shall certify to the said court copies of all proofs admitted by the said mixed commission on the original trial of said claim, and the said court shall receive and consider the same in connection with such competent evidence as may be offered by either party to said suit.
'Sec. 3. That an appeal from any final decision in such cause to the Supreme Court of the United States may be taken by either party within ninety days from the rendition of such final decree, under the rules of practice which govern appeals from said court; and the Supreme Court of the United States is hereby authorized to take jurisdiction thereof and decide the same.
'Sec. 4. That in case it shall be finally adjudged in said cause that the award made by said mixed commission, so far as it relates to the claim of La Abra Silver Mining Company, was obtained through fraud effectuated by means of false swearing, or other false and fraudulent practices of said company or its assigns, or by their procurement, and that the said La Abra Silver Mining Company, its legal representatives or assigns, be barred and foreclosed of all claim to the money or any part thereof so paid by the Republic of Mexico for or on account of such award, the President of the United States is hereby authorized to return to said government any money paid by the government of Mexico, on account of said award, remaining in the custody of the United States, that has not been heretofore distributed to said La Abra Mining Company or its successors and assigns, which such court shall decide that such persons are not entitled, in justice and equity, to receive out of said fund.
'Sec. 5. That, during the pendency of said suit and until the same is decided, it shall not be lawful for the Secretary of State to make any further payments out of said fund, on account of said award, to La Abra Silver Mining Company, [175 U.S. 423, 443] or its legal representatives, attorneys, or assigns; and in case it shall be finally adjudged in said cause in either the court of claims or in the Supreme Court of the United States that the award made by said mixed commission, so far as it relates to the claim of La Abra Silver Mining Company, or any definable and severable part thereof, was not obtained through fraud as aforesaid, then the Secretary of State shall proceed to distribute so much of the said award as shall be found not so obtained through fraud, or the proceeds thereof remaining for distribution, if any, to the persons entitled thereto.' 27 Stat. at L. 409, chap. 14.
That the bill did not state facts sufficient to constitute a cause of action or to authorize the granting of any relief.
The demurrer to the bill, so far as it involved the jurisdiction of the court of claims and the charges of fraud, was overruled, the opinion of the court being delivered by Judge Weldon. 29 Ct. Cl. 432, 484. The question whether the act of December 28th, 1892, was so approved by the President as to become a law was determined in favor of the United States, upon the grounds stated in the opinion of the court previously delivered by Judge Nott, now chief justice of that court, in United States v. Weil, 29 Ct. Cl. 523.
The case having been prepared on the merits, the court of claims upon final hearing found that the award made by the commission on the claim of the La Abra Company 'was obtained as to the whole sum included therein by fraud effectuated by means of false swearing and other false and fraudulent practices on the part of said company and its agents;' and it was adjudged that all claims in law and equity on the part of the company, its legal representatives [175 U.S. 423, 447] and assigns, be forever barred and foreclosed in respect of the money received from the Republic of Mexico for or on account of such award. 32 Ct. Cl. 462, 520, 521.
Chief Justice Nott dissented in part from the judgment. He was of opinion that the first three items in the award of the umpire, above set forth, should stand, but that the fourth item was fraudulently exaggerated and should be reduced to $420.09, and the fifth, $100,000, rejected altogether as having been utterly overthrown by the evidence. 32 Ct. Cl. 521, 533. [175 U.S. 423, 448] From the judgment of the court of claims the present appeal was prosecuted.
Messrs. J. M. Wilson, Crammond Kennedy, John C. Fay, and E. I. Renick for appellant.
Messrs. William A. Maury and Solicitor General Richards for United States.
In the light of this history of the claim of the La Abra [175 U.S. 423, 451] Company we proceed to the consideration of such of the principal questions presented in argument as are essential to the disposition of the case.
I. If, as insisted by the appellants, the above act of December 28, 1892, was not so approved by the President as to become under the Constitution a law, it would be unnecessary to consider any other question raised by the pleadings; for that act is the only basis of jurisdiction in the court of claims to render a judgment that would be conclusive between the parties and which could be reviewed by this court. We must therefore first consider whether that act is liable to the constitutional objection just stated.
The ground of this contention is that having met in regular session at the time appointed by law, the first Monday of December, 1892, and having on the 22d day of that month (two days after the presentation of the bill to the President) by the joint action of the two Houses taken a recess to a named day, January 4, 1893, Congress was not actually sitting when the President, on the 28th day of December, 1892, by signing it, formally approved the act in question. The proposition, plainly stated, is that a bill passed by Congress and duly presented to the President does not become a law if his approval be given on a day when Congress is in recess. This implies that the constitutional power of the President to approve a bill so as to make it a law is absolutely suspended while Congress is in recess for a fixed time. It would follow from this that if both Houses of Congress by their joint or separate action were in recess from some Friday until the succeeding Monday, the President could not exercise that power on the intervening Saturday. Indeed, according to the argument of counsel the President could not effectively approve a bill on any day when one of the Houses, by its own separate action, was legally in recess for that day in order that necessary repairs be made in the room in which its sessions were being held. Yet many public acts and joint resolutions of great importance, together with many private acts, have been treated as valid and enforceable, which were approved by the President during the recesses of Congress covering the [175 U.S. 423, 452] Christmas holidays. In the margin will be found a reference to some of the more recent of those statutes.
Do the words of the Constitution, reasonably interpreted, sustain the views advanced for appellant?
'The Congress shall assemble at least once in every year, and such meeting shall be on the first Monday in December, unless they shall by law appoint a different day.' Art. I. 4.
'Neither House, during the session of Congress, shall, without the consent of the other, adjourn for more than three days, nor to any other place than that in which the two Houses shall be sitting.' Art. I. 5.
'Every bill which shall have passed the House of Representatives and the Senate shall, before it becomes a law, be presented to the President of the United States; if he approves, he shall sign it, but if not, he shall return it, with his objections to that House in which it shall have originated, who shall enter the objections at large on the journal, and proceed to consider it. If after such reconsideration two thirds of that [175 U.S. 423, 453] House shall agree to pass the bill, it shall be sent, together with the objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a law. But in all such cases the votes of both Houses shall be determined by yeas and nays, and the names of the persons voting for and against the bill shall be entered on the journal of each House respectively. If any bill shall not be returned by the President within ten days (Sundays excepted) after it shall have been presented to him, the same shall be a law, in like manner as if he had signed it, unless the Congress by their adjournment prevent its return, in which case it shall not be a law.' Art. I. 7.
'Every order, resolution, or vote to which the concurrence of the Senate and House of Representatives may be necessary (except on a question of adjournment) shall be presented to the President of the United States; and before the same shall take effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the rules and limitations prescribed in the case of a bill.' Art. I. 8.
It is said that the approval by the President of a bill passed by Congress is not strictly an executive function, but is legislative in its nature; and this view, it is argued, conclusively shows that his approval can legally occur only on a day when both Houses are actually sitting in the performance of legislative functions. Undoubtedly the President when approving bills passed by Congress may be said to participate in the enactment of laws which the Constitution requires him to execute. But that consideration does not determine the question before us. As the Constitution, while authorizing the President to perform certain functions of a limited number that are legislative in their general nature, does not restrict the exercise of those functions to the particular days on which the two Houses of Congress are actually sitting in the transaction of public business, the court cannot impose such a restriction upon the Executive. It is made his duty by the Constitution to examine and act upon every bill passed by Congress. The time within which he must approve or dis- [175 U.S. 423, 454] approve a bill is prescribed. If he approve a bill, it is made his duty to sign it. The Constitution is silent as to the time of his signing, except that his approval of a bill duly presented to him-if the bill is to become a law merely by virtue of such approval-must be manifested by his signature within ten days, Sundays excepted, after the bill has been presented to him. It necessarily results that a bill when so signed becomes from that moment a law. But in order that his refusal or failure to act may not defeat the will of the people, as expressed by Congress, if a bill be not approved and be not returned to the House in which it originated within that time, it becomes a law in like manner as if it had been signed by him. We perceive nothing in these constitutional provisions making the approval of a bill by the President a nullity if such approval occurs while the two Houses of Congress are in recess for a named time. After a bill has been presented to the President, no further action is required by Congress in respect of that bill, unless it be disapproved by him and within the time prescribed by the Constitution be returned for reconsideration. It has properly been the practice of the President to inform Congress by message of his approval of bills, so that the fact may be recorded. But the essential thing to be done in order that a bill may become a law by the approval of the President is that it be signed within the prescribed time after being presented to him. That being done, and as soon as done, whether Congress is informed or not by message from the President of the fact of his approval of it, the bill becomes a law, and is delivered to the Secretary of State as required by law.
Much of the argument of counsel seems to rest upon the provision in relation to the final adjournment of Congress for the session whereby the President is prevented from returning, within the period prescribed by the Constitution, a bill that he disapproves and is unwilling to sign. But the Constitution places the approval and disapproval of bills, as to their becoming laws, upon a different basis. If the President does not approve a bill, he is required within a named time to send it back for consideration. But if by its action, after the [175 U.S. 423, 455] presentation of a bill to the President during the time given him by the Constitution for an examination of its provisions and for approving it by his signature, Congress puts it out of his power to return it, not approved, within that time to the House in which it originated, then the bill falls, and does not become a law.
Whether the President can sign a bill after the final adjournment of Congress for the session is a question not arising in this case, and has not been considered or decided by us. We adjudge-and touching this branch of the case adjudge nothing more-that the act of 1892 having been presented to the President while Congress was sitting, and having been signed by him when Congress was in recess for a specified time, but within ten days, Sundays excepted, after it was so presented to him, was effectively approved, and immediately became a law, unless its provisions are repugnant to the Constitution.
The principles announced in the above cases are illustrated by the opinion prepared by Chief Justice Taney for the case of Gordon v. United States, 2 Wall. 561, 17 L. ed. 921, and printed in 117 U.S. 697 , appx. That case was brought to this court from the court of claims, and related to a demand asserted against the United States. The principal question was whether this court had jurisdiction to review the final order made in the court [175 U.S. 423, 457] below. The chief justice died before the case was decided, and the opinion prepared by him in recess was not formally accepted. But if the court approved his views, as it undoubtedly did, the appeal was dismissed upon the ground that Congress could not authorize or require this court to express an opinion on a case in which its judicial power could not be exercised, and when its judgment would not be final and conclusive upon the rights of the parties. 'The award of execution,' Chief Justice Taney said, 'is a part, and an essential part, of every judgment passed by a court exercising judicial power. It is no judgment, in the legal sense of the term, without it. Without such an award the judgment would be inoperative and nugatory, leaving the aggrieved party without a remedy. It would be merely an opinion which would remain a dead letter, and without any operation upon the rights of the parties, unless Congress should at some future time sanction it and pass a law authorizing the court to carry its opinion into effect. Such is not the judicial power confided to this court in the exercise of its appellate jurisdiction; yet it is the whole power that the court is allowed to exercise under this act of Congress.' In a more recent case this court dismissed an appeal from a final order made in the court of claims in virtue of a particular statute, observing: 'Such a finding is not made obligatory on the department to which it is reported-certainly not so in terms, and not so, as we think, by any necessary implication. We regard the function of the court of claims, in such a case, as ancillary and advisory only. The finding or conclusion reached by that court is not enforceable by any process of execution issuing from the court, nor is it made by the statute the final and indisputable basis of action, either by the department or by Congress.' Re Sanborn, 148 U.S. 222, 226 , 37 S. L. ed. 429, 431, 13 Sup. Ct. Rep. 577; Interstate Commerce Commission v. Brimson, 154 U.S. 447, 483 , 38 S. L. ed. 1047, 1059, 4 Inters. Com. Rep. 545, 14 Sup. Ct. Rep. 1125.
Under the principles established in the cases above cited, the objections urged against the jurisdiction of the court of claims and of this court cannot be maintained, if the present proceeding involves a right which in its nature is susceptible of judicial determination, and if the determination of it by [175 U.S. 423, 458] the court of claims and by this court is not simply ancillary or advisory but is the final and indisputable basis of action by the parties.
The money in the hands of the Secretary of State was paid to the United States by Mexico pursuant to the award of the commission. That tribunal dealt only with the two governments, had no relations with claimants, and could take cognizance only of claims presented by or through the respective governments. No claimant, individual or corporate, was entitled to present any demand or proofs directly to the commission. No evidence could be considered except such as was furnished by or on behalf of the respective governments. While the claims of individual citizens presented by their respective governments were to be considered by the commission in determining amounts 'the whole purpose of the convention was to ascertain how much was due from one government to the other on account of the demands of their respective citizens.' And 'each government, when it entered into the compact under which the awards were made, relied on the honor and good faith of the other for protection as far as possible against frauds and impositions by the individual claimants.' Frelinghuysen v. Key, above cited. As between the United States and Mexico, indeed as between the United States and American claimants, the money received from Mexico under the award of the commission was in strict law the property of the United States, and no claimant could assert or enforce any interest in it so long as the government legally withheld it from distribution.
When the La Abra Company asked the intervention of the United States it did so on the condition imposed by the principles of comity recognized by all civilized nations, that it would act in entire good faith, and not put the government whose aid it sought in the attitude of asserting against the Mexican Republic a fraudulent or fictitious claim; consequently the United States, under its duty to that Republic, was required to withhold any sum awarded and paid on account of the company's claim, if it appeared that such claim was of that character. As between the United States and the [175 U.S. 423, 459] company, the honesty or genuineness of the latter's claim was open to inquiry in some appropriate mode for the purpose of fair dealing with the government against which such claim was made through the United States. We so adjudged in the Key Case. The United States assumed the responsibility of presenting the La Abra claim and made it its own in seeking redress from the Mexican Republic. But from such action on its part no contract obligations arose with the La Abra Company 'to assume their frauds and to collect on their account all that, by their imposition of false testimony, might be given in the awards of the commission.' United States ex rel. Boynton v. Blaine, above cited.
These considerations make it clear that the act of 1892 is not liable to the objection that it subjected to judicial determination a matter committed by the Constitution to the exclusive control of the President. The subject was one in which Congress had an interest, and in repect to which it could give directions by means of a legislative enactment. The question for the determination of which the present suit was directed to be instituted was whether the award made by the commission in respect to the claim of the La Abra Company was obtained as to the whole sum included therein or as to any part thereof, by fraud effectuated by means of false swearing or other false and fraudulent practices on the part of the company, or its agents, attorneys, or assigns. It cannot, we think, be seriously disputed that the question whether fraud has or has not been committed in presenting or prosecuting a demand or claim before a tribunal having authority to allow or disallow it is peculiarly judicial in its nature, and that in ascertaining the facts material in such an inquiry no means are so effectual as those employed by or in a court of justice. The executive branch of the government recognized the inadequacy for such an investigation of any means it possessed, and declared that Congress by its 'plenary authority' ought not only to decide whether such an investigation should be made, but provide an adequate procedure for its conduct, and prescribe the consequences to follow therefrom. The suggestion that the question of fraud be committed to the determination of a judicial [175 U.S. 423, 460] tribunal first came from the executive branch of the government. Undoubtedly Congress, having in view the honor of the government and the relations of this country with Mexico, could have determined the whole question of fraud for itself, and by a statute approved by the President, or which being disapproved by him was passed by the requisite constitutional vote, have directed the return to Mexico, the other party to the award, of such moneys as had been paid into the hands of the Secretary of State. It is also clear that in the absence of any statute suspending the distribution of such moneys, the President could have ignored the charges of fraud and ordered the distribution to proceed according to the terms of the treaty and the award. But it does not follow that Congress was without power, no distribution having been made, to control the whole matter by plenary legislation.
It has been adjudged that Congress by legislation, and so far as the people and authorities of the United States are concerned, could abrogate a treaty made between this country and another country which had been negotiated by the President and approved by the Senate. Head Money Cases, 112 U.S. 580 , k99, sub nom. Edye. v. Rebertson, 28 L. 580, 599, sub nom. Edye v. Robertson, 28 L. v. Robertson, 124 U.S. 190, 194 , 31 S. L. ed. 386, 388, 8 Sup. Ct. Rep. 456; Chinese Exclusion Case, 130 U.S. 581 , 600, sub nom. Chae Chan Ping v. United States, 32 L. ed. 1068, 1073, 9 Sup. Ct. Rep. 623; Fong Yue Ting v. United States, 149 U.S. 698, 721 , 37 S. L. ed. 905, 915, 13 Sup. Ct. Rep. 1016. It is therefore difficult to perceive any ground upon which to question its power to make the distribution of moneys in the hands of the Secretary of State-representing in that matter the United States and not simply the President-depend upon the result of a suit by which the United States would be bound and in which the claimants to the fund in question could be heard as parties, and which was to be brought in a court of the United States by its authority, for the purpose of determining whether the La Abra Company, its agents or assigns, had been guilty of fraud in the matter of the claim that it procured to be presented to the commission. The act of 1892 is to be taken as a recognition, so far as the United States is concerned, of the legal right of the company to receive the moneys in question unless it appeared upon judicial investigation that the [175 U.S. 423, 461] United States was entitled, by reason of fraud practised in the interest of that corporation, to withhold such moneys from it. Here, then, is a matter subjected to judicial investigation in respect of which the parties assert rights-the United States insisting upon its right under the principles of international comity to withhold moneys received by it under a treaty on account of a certain claim presented through it before the commission organized under that treaty in the belief, superinduced by the claimant, that it was an honest demand; the claimant insisting upon its absolute legal right under the treaty and the award of the commission, independently of any question of fraud, to receive the money, and disputing the right of the United States upon any ground to withhold the sum awarded. We entertain no doubt these rights are susceptible of judicial determination within the meaning of the adjudged cases relating to the judicial power of the courts of the United States as distinguished from the powers committed to the executive branch of the government.
It remains, in our consideration of the question of jurisdiction, to inquire whether the judgment authorized by the act of 1892 to be rendered would be a final, conclusive determination, as between the United States and the defendants, of the rights claimed by them respectively, or only ancillary or advisory. In our opinion the act of Congress authorized a final judgment of the former character, and therefore the judgment of the court of claims is reviewable by this court in the exercise of its appellate judicial power. If our judgment should be one of affirmance then the La Abra Company, its legal representatives or assigns, are barred of all claim, legal or equitable, to the money received by the United States from the Republic of Mexico on account of the award of the commission. Such a determination would rest upon the broad ground that the United States in its efforts to protect the alleged rights of an American corporation had been the victim of fraud upon the part of that corporation, its agents or assigns, and was in law relieved from any responsibility to that corporation touching the claim in question [175 U.S. 423, 462] or the moneys received on account of it. If, on the other hand, this court should find that the charges of fraud were not sustained or were disproved, and reverse the decree of the court of claims, then it would become the absolute legal duty of the Secretary of State to proceed in the distribution of the moneys in his hands a according to the terms of the award. It was competent for Congress by statute to impose that duty upon him, and he could not refuse to obey the mandate of the law.
Much was said in argument about the interference by the act of 1892 with the discharge by the President of his constitutional functions in connection with matters involved in the relations between this country and the Republic of Mexico. For reasons already given this contention cannot be sustained. It is without support in anything done or said by the eminent jurists who have presided over the Department of State since the controversy arose as to the integrity of claim made by the La Abra Company. On the contrary, those officers have uniformly insisted that the authority of Congress was plenary to determine whether the award in respect of those claims was procured by fraud practised on the part of that company, and whether in that event the company should be barred of any claim to the moneys received from the Republic of Mexico. Upon this question the legislative and executive branches of the government have acted in perfect harmony. The question arises under the Constitution of the United States, and a treaty made by the United States with a foreign country is judicial in its nature, and one to which the judicial power of the United States is expressly extended. Both branches of the government were concerned in the enactment subjecting that question to judicial determination, and it cannot properly be said that the President, by approving the act of 1892 or by recognizing its binding force, surrendered any function belonging to him under the supreme law of the land.
It was also said in argument that the act of Congress in some way-not clearly defined by counsel-was inconsistent with the principles underlying international arbitration, a [175 U.S. 423, 463] mode for the settlement of disputes between sovereign states that is now more than ever before approved by civilized nations. We might well doubt the soundness of any conclusion that could be regarded as weakening or tending to weaken the force that should be attached to the finality of an award made by an international tribunal of arbitration. So far from the act of Congress having any result of that character, the effect of such legislation is to strengthen the principle that an award by a tribunal acting under the joint authority of two countries is conclusive between the governments concerned, and must be executed in good faith unless there be ground to impeach the integrity of the tribunal itself. The act of 1892 is a recognition of the principle that 'international arbitration must always proceed on the highest principles of national honor and integrity.' Frelinghuysen v. Key, above cited. By that act the United States declares that its citizens shall not through its agency reap the fruits of a fraudulent demand which they have induced it to assert against another country. Such legislation is an assurance in the most solemn and binding form that the government of this country will exert all the power it possesses to enforce good faith upon the part of citizens who, alleging that they have been wronged by the authorities of another country, seek the intervention of their government to obtain redress.
We hold that the act of 1892 is not unconstitutional upon any of the grounds adverted to; that the court of claims had jurisdiction to render the decree in question; that such decree, unless reversed, is binding upon the parties to this cause; and that this court, in the exercise of its appellate power, has authority to re-examine that decree and make such order or give such direction as may be consistent with law.
III. The court of claims did not make a finding of facts. It is therefore contended on behalf of the United States that the appeal provided for by the act of 1892 does not authorize a re-examination of the evidence, as in equity cases generally; and that the present case comes within the rule prescribed by this court under the authority of the act of March 3, 1863, 12 Stat. at L. 766, chap. 92 (Rev. Stat. 708), providing that in connec- [175 U.S. 423, 464] tion with any final judgment rendered in the court of claims there shall be a finding of facts.
In its opinion on the demurrer to the bill the court of claims said: 'The directions of the statute [the act of 1892] as to the character of the decree seem to be without doubt, and as the court in the trial of the cause is in the exercise of equity powers, it would find no difficulty in entering such a decree as will carry out the purpose of the statute.' 29 Ct. Cl. 432, 452. In its opinion on the final hearing of the case the court below said: 'This being a proceeding in equity, this court is not called upon to settle the facts by the finding of ultimate facts for the consideration of the Supreme Court, but the whole record is transmitted to that court, and the case is to be determined in the Supreme Court upon the law as it shall be adjudged and upon the facts as they shall be found by the decision of the Supreme Court. That would be so in a case of this kind arising under the ordinary jurisdiction of the court of claims, but it is especially true from the provisions of the statute giving us the special jurisdiction to determine the issues of this proceeding. The statute provides for a decree, and not for a money judgment.' After citing Harvey v. United States, 105 U.S. 671 , 26 L. ed. 1206, the court continued: 'All the testimony being before the Supreme Court for the purpose of settling ultimate facts from such testimony, we have confined the limits of this opinion to questions of law and the determination of the ultimate fact, which is whether the company was compelled to abandon its mines because of the acts of the people of Mexico and the Mexican authorities.' 32 Ct. Cl. 462, 515, 516.
In our judgment the court of claims properly interpreted the act of 1892. While that act does not, in express words, direct the Attorney General to institute a suit 'in equity' or declare that this court on appeal should re-examine the entire case on both law and facts, a suit of that character was contemplated when Congress invested the court of claims with full jurisdiction to make 'all interlocutory and final decrees therein as the evidence may warrant, according to the principles of equity and justice, and to enforce the same by injunc- [175 U.S. 423, 465] tion or any proper final process,' and gave either party the right to appeal to this court from the final decision within ninety days 'from the rendition of such final decree.' This construction is not inconsistent with the direction that the court of claims should in all respects proceed in the suit brought by the Attorney General 'according to law and the rules of said court, so far as the same are applicable,' and that the appeal from its final decree should be taken 'under the rules of practice which govern appeals from said court.' Looking at the words of the act of 1892 and the peculiar nature of the important questions involved in any suit brought under it, we cannot suppose that Congress intended to relieve this court from the responsibility of determining for itself and upon its own view of all the evidence what were the ultimate facts bearing upon the inquiry as to the alleged fraud in brining about the award in question. The present proceeding, we think, comes within the principle announced in Harvey v. United States, 105 U.S. 671, 691 , 26 S. L. ed. 1206, 1213, where it was said that the rule in regard to findings of fact in the court of claims had no reference to a case 'of equity jurisdiction conferred in a special case by a special act' in which 'this court must review the facts and the law as in other cases in equity, appealed from other courts.' This principle was approved and applied in United States v. Old Settlers, 148 U.S. 427, 428 , 465 S., 37 L. ed. 509, 523, 13 Sup. Ct. Rep. 650.
We are of opinion that the appeal provided for in the act of 1892 was one under which it is our duty to determine the rights of the parties as in a case in equity. The provision in the act expressly empowering the court below in the event it was found that the award in question was fraudulently obtained as to the whole or any part of the sum included therein by the La Abra Company, to bar and foreclose all claims in law or equity on its part, together with the provision authorizing the court to render such interlocutory and final decrees as the evidence may warrant, according to the principles of equity and justice, and to enforce the same by injunction, imports such jurisdiction in the court of claims as may be ordinarily exercised by courts of equity as distinguished from courts of law, [175 U.S. 423, 466] and as entitled that court to send up the entire evidence for examination here.
IV. We come now to consider in the light of all the evidence whether the award in question was obtained by fraud effectuated by means of false swearing or other false and fraudulent practices on the part of the La Abra Company, its agents, attorneys, or assigns.
In view of the exceptional character of the case, and that there may be no ground to misapprehend the basis upon which our decree will rest, we deem it appropriate to set forth in this opinion the principal facts bearing on the issue of fraud.
In its memorial presented to the commission through the United States, the La Abra Company referred to the mines in Mexico of which it asserted ownership as being of extraordinary richness and historical interest.
It was stated in the memorial that after becoming the proprietor of those mines the company with all possible despatch proceeded to the working of them, and to that end sent intelligent agents to Mexico, employed miners, machinists, and laborers, purchased mules, equipments, provisions, the best and most improved machinery, which were transported on the backs of mules to the mines at heavy cost, and incurred other expenses necessary to the most extensive and successful working of the property; that they expended in the purchase of the mines and in their working the sum of $303,000, and as the result of this large expenditure were getting out a large amount of the richest ore and were in the act of realizing the extraordinary profit of $1,000,000 per annum when, by reason of unfriendly and illegal acts of the Mexican officials, they were compelled to abandon their mines, all their machinery and other property, and over a thousand tons of ore obtained by the company from the mines; that intense prejudice was constantly manifested by the civil and military authorities and by the Mexican populace against all Americans, and especially against those engaged in mining, this prejudice being intensified by the belief that the United States intended to annex Durango, Sinaloa, and other states to its territory, and that the La [175 U.S. 423, 467] Abra Company was assisting in that purpose; that the property of the company and the persons and the lives of employees were threatened by the authorities and the people, and its superintendent was arrested without having given cause for offense, and fined and imprisoned without trial and without out being informed of any offense; that when he applied to the authorities, civil and military, in Durango and Sinaloa for protection, his request was harshly refused, and acts of violence, encouraged by the authorities, were committed against the property and employees of the company, which so alarmed the employees that it was impossible to keep them at work; that the authorities repeatedly seized its mule trains loaded with provisions and appropriated the same to their use, and large quantities of ore from the mines were taken from the company, its employees being deterred by threats from resisting such spoliation; that things finally got to such a pass that an employee of the company in charge of one of its trains was killed by the Liberal forces and the train seized, and that was made matter of boast by the Mexican officials, and the authorities at San Dimas openly avowed their purpose to drive out all American mining companies and get their property; that the one motive of this persecution was to compel the company to leave, and thus permit the Mexicans to obtain possession of their valuable property; and that from such persecution, outrages, and insecurity it became impossible for the company to work the mines and they were abandoned as stated, such enforced abandonment utterly ruining the company.
The memorial concluded by alleging that when the company acquired the La Abra mines, though they were of immense richness, it was impossible from their neglected state to extract ores except by heavy expenditures; that in connection with the principal mines were buildings of great cost and other permanent structures, but owing to the abandoned condition of the mines they were of no present value; that the large expenditures made by the company at the mines gave a very great value to them and to the buildings and other permanent structures, and they became and were of the value of [175 U.S. 423, 468] $1,000,000; THAT THE COMPANY WAS OBLIGED to abandon 1,000 tons of silver ore already extracted, worth $500,000, which it was impossible for them to bring away, and which upon the abandonment of the mines, were carried off by the Mexicans and lost to the company; that when such abandonment occurred the company was extracting large quantities of ore, and the profits would have been great if it had been permitted to work them; that the company estimated its clear annual profits which it could have obtained from the mines at $1,000,000 per annum; that in addition to the expenditures in the mines as aforesaid, the company had expended $30,000 in conducting its business; and that the mines and the improvements and machinery therein had become wholly lost to the company, and its losses and damages because of the enforced abandonment were $3,000,030.
The memorial also stated that the company had never received any indemnity for its claim, and its prayer was for an award against the Mexican government for its damages, with interest thereon.
It may be here observed that this memorial contained no hint or intimation that the abandonment by the company of mining operations in Mexico was due in any degree to its inability or failure to supply the money necessary for the development of its property and to meet the expenses of mining operations.
That the La Abra Company ceased to work its mines in Mexico and practically abandoned them is undoubtedly true. But is it true that they did so in consequence of violence and outrages committed against it by the public authorities of the Republic of Mexico? The United States insists upon a negative answer to this question. It contends that the company ceased to work its mines and abandoned its property for reasons wholly disconnected from anything done or omitted to be done by the authorities of Mexico, and asserts that the La Abra Company suspended operations in that country, not only because of want of funds necessary to develop its property, but because of the belief of stockholders that the mines were not of sufficient value to justify a larger expenditure of money; [175 U.S. 423, 469] and that it was a pure afterthought to attempt by the agency of the United States to fasten upon Mexico responsibility for the losses incurred by the company in the abandonment of its mining property.
The successor of Bartholow as superintendent in charge of the mining property was Colonel Julian A. De Lagnel, formerly an officer in the army of the United States. He had had no experience in mining, but was recognized by all-- [175 U.S. 423, 471] and properly, according to the evidence in this record-as a gentleman of integrity and force of character. He left New York for the mines in March, 1866, and arrived there in April of that year. He discharged the duties of superintendent for about one year and until the spring of 1867, and was succeeded by a person named Exall. The latter remained in charge of the mines until about March or April, 1868, when he abandoned the property and returned to New York, and all work at the mines ceased. When Exall left Mexico for New York, the property was placed by him in charge of one Granger. The principal witnesses before the commission on behalf of the La Abra Company were Bartholow and Exall. The company did not take the testimony of De Lagnel, giving as a reason for not doing so the impossibility of ascertaining his whereabouts. That excuse is not sustained by the record before us.
During the entire period when Bartholow, De Lagnel, and Exall were respectively superintendents at the mines, Garth was the executive officer and manager of the affairs of the company at the city of New York, representing it in all correspondence with the different superintendents. Whatever omissions of duty were fairly chargeable against the Mexican authorities in respect of the company's property necessarily occurred after Bartholow took charge at the mines and before Exall returned to New York. During that period of about three years there was a regular correspondence by letter between the respective superintendents and Garth in his capacity as representative of the company at its chief office in New York. Neither the commissioners nor the umpire had those letters before them when the La Abra claim was examined by them. After the award in question, the letter-impression book in which the letters or reports of the superintendents were originally copied was discovered by Mexico and brought by its diplomatic representatives to the attention of the Department of State. Of the identity of that book, as containing the correspondence between the La Abra Silver Mining Company and its several superintendents at the mines, no doubt can exist, although it is insisted that some letters do [175 U.S. 423, 472] not now appear in the book that were once in it. It was, we suppose, principally the evidence furnished by that correspondence that induced Secretary Evarts to report to the President that the honor of the United States required that the La Abra claim should be further investigated in order to ascertain whether its government had not been induced to enforce against a friendly power claims of American citizens based upon or exaggerated by fraud and false swearing.
That there was before the commission some evidence which, uncontradicted or unexplained, tended to support the allegations of outrage, violence, and neglect of duty on the part of Mexican authorities may be admitted. That evidence came largely from Bartholow and Exall. But it is manifest that the umpire could not possibly have reached the conclusion he did in respect to the La Abra claim if the letter book, giving detailed accounts from time to time of all that occurred at the mines while in charge of Bartholow, De Lagnel, and Exall, had been in evidence when he rendered his decision. The reports made by the company's superintendents as to the management of the property and of what occurred at the mines are utterly inconsistent with the statement that the company's abandonment of mining operations and of its property was in consequence of the misconduct and violence of the Mexican authorities. Placing this letter book beside the evidence adduced before the commission and the umpire by the La Abra Company, it is clear that the material transactions and incidents which the company's witnesses before the commission detailed as establishing the charge against the Mexican authorities were misstated or grossly exaggerated. It now appears that much of the evidence upon which the commission must have rested its conclusion was wholly without foundation and had its origin in a fraudulent purpose or plan to make it appear that the public authorities of Mexico were chargeable with a responsibility that could not fairly or justly be imputed to them.
Let us see how far this general statement is justified by the evidence adduced in the present case when examined in connection with the testimony brought before the commission. [175 U.S. 423, 473] In the memorial presented by the company through the United States the principal specification of the outrages alleged to have been committed by the Mexican authorities was that 'one of the personnel of the company, in charge of one of its trains, was openly killed by the Liberal forces, and the train seized, and that was made matter of boast by the Mexican officials, and the authorities at San Dimas openly avowed their purpose to drive out all American mining companies and get their property.' The particular matter here referred to was that of the killing during the superintendency of Bartholow of William Grove, an employee of the company. We have already referred to the deposition of Bartholow taken June 22, 1874. It seems that prior to that date the Mexican government had taken the deposition or affidavit of Pio Quinto Nunez and Cepomuceno Manjarraz. Nunez, who resided in the district where the mines were situated, among other things testified 'that it is not true that these Americans abandoned their enterprise on account of the acts of Mexican officials, and that it is equally false that either the civil or military authorities, or the inhabitants of the district, made any prejudicial opposition to them, as they have alleged they did; that the deponent has never seen or heard it said that any superintendent was imprisoned, and much less does he believe that such superintendent complained to the civil or military authorities in Durango and Sinaloa, and was denied the protection thus solicited; that he has never known that the authorities have countenanced acts of violence against the interests and employees of the company; that it is false that the authorities, as the company allege, took possession of their mules and provisions and appropriated the same to their own use; that the company never had any ore taken from them, as they affirm, since that which they took out of their mines still exists, as before stated; nor have their employees ever been threatened by any Mexican with intention to rob them; that the company has no reason to complain, in any way, against Mexico, because they did not abandon their operations on account of the Mexicans, but because they themselves did not understand how to carry on the work- [175 U.S. 423, 474] ing of the mines, as is proved by the unproductive manner in which they worked; that this is the cause of their abandonment, and not, as they say, from any want of security; that the reparation which the company claims of Mexico is not founded in justice, because the allegations upon which it is based are false.' Manjarrez, residing in the same district, testified to the same effect.
Can the statements in that report be reconciled with the declaration in the affidavit of Clark and in the deposition of Bartholow, that the robbery of Scott was by the military authorities of the Republic under General Corona? We think not. The affair as described in that letter could never have been made the basis of a finding that would place the responsibility for this robbery upon the public authorities then holding control in Mexico.
There are many other specific matters discussed in the elaborate briefs of counsel. To consider each of them and show the grounds upon which our conclusions rest would extend this opinion far beyond all proper limits. There were undoubtedly some unpleasant occurrences, such as the affair between Exall and Perez, a local judge, growing out of a misunderstanding by the letter of Exall's order to him to keep out of a particular room at the mines. But none of those occurrences had any real connection with the abandonment by the company of its mining property in Mexico; and, as is [175 U.S. 423, 483] evident from the new proof adduced in this cause, they were described by the company and its witnesses in the testimony before the commissioners in such exaggerated terms as to justify the charge of fraud made in the bill filed by the government.
What does the letter-impression book disclose as the real cause of the company's abandonment of its mines?
In the reports made by Bartholow, the first superintendent, to Garth, of February 6, March 7, and April 10, 1866, no statement is made which even by inference showed that any difficulties were in his way that had their origin in the acts or conduct of the public, civil, or military authorities of Mexico. On the contrary, one letter shows that he obtained military protection for the mill transported from Mazatlan to the mines, and another one that he had pleasant relations with the civil and military authorities of the locality.
We come now to the period during which Exall was superintendent. His reports to Garth, as the representative of the company, and Garth's letters to him, make it clear that its bankruptcy was all the time imminent, and the time near at hand when all work at the mines would be suspended, not because any obstacles were put in the way of the company by the Mexican authorities, but solely because it was without money to employ in developing the property.
The first letter written by Exall shows that the financial situation at the mines was such as to require the utmost economy on the part of the company's superintendent.
So straitened were the circumstances of the company at that time that it was sued in New York on promissory notes past due (one of the notes being held by an assignee of Garth), and it permitted judgment on them by default in July, 1867, for the sum of $53,653.50. Manifestly that suit was instituted with the consent, if not by the direction, of the officers of the company who had charge of its affairs in New [175 U.S. 423, 488] York, who were aware of its financial embarrassments and knew that it must soon suspend business and go into liquidation.
From the above and other evidence in the record it is certain that before the La Abra Company ceased to work the mining property it had become utterly bankrupt, and that its abandonment of all operations at the mines was due to its inability from want of funds to carry them on, and to the belief, founded upon the experience of two years and more, that the mines, if not entirely worthless, were not of sufficient value to justify its owners in proceeding further in their development. If the proper working of the mines while Bartholow, De Lagnel, and Exall were successively in charge of them was prevented by the acts or omissions of duty on the part of the public authorities of Mexico, surely that fact would have been disclosed by the letters or reports made to the company by its several superintendents. The demand made during that time by the company's representatives in charge of the mines was not for military or civil protection, but for the money needed to develop the property and to meet the debts incurred at the mines during the progress of the work there. We do not doubt that the situation was accurately described by Exall when in the above letter to Garth of October 6, 1867, he reported that 'there are no difficulties about authorities, boundaries, or anything else concerning the mines and hacienda, provided there is money on hand, and money must be sent;' and when in his letter of November 17, 1867, he endeavored to impress Garth with 'the necessity of acting decidedly and sending means to prosecute the works and pay off the debts of the company, or abandoning the enterprise at once.' In that condition of affairs, it is not strange that Exall in the letter of January 24, 1868, just before he left Mexico for New York, wrote to Garth: 'I am owing considerable and no means of paying. What is your intention? Is it to let your interests here go to the dogs? You have either to do this or send money out to protect them.' We have seen that Garth, as the representative of the company, in [175 U.S. 423, 497] a letter to Exall, dated July 10, 1867, warned him against running into debt and getting into difficulty with the authorities, 'if there are any such things existing;' 'but,' he continued, 'at the same time be firm in maintaining your rights, and don't submit to imposition except by force, and then make a legal and formal protest as a citizen of the United States and as an American company duly organized and prosecuting a legitimate business under the protection of the law, and our rights will be protected by our government.' Now, it does not appear that there was any formal protest before the United States Consul at Mazatlan by any representative of the company to the effect that the Mexican authorities had so acted or failed in duty as to compel it to abandon its property in Mexico. If the company's superintendents had any such view of the situation when they returned to the United States and gave an account of their management of the property, how natural it would have been for the company, in some formal way, to have promptly brought the whole matter to the attention of the government of the United States, and sought its aid in order to have justice done to them by the Republic of Mexico. No such course was taken, and we cannot doubt, in view of the evidence adduced after the commission made its award, in connection with the evidence before that tribunal, that the idea of attributing the losses of the company to the wrongful conduct of the Mexican authorities never occurred to the company until after the organization of the commission, long after the arrival of Exall in New York. In March, 1870, the company for the first time gave notice to the Department of State that it had any claim against the Republic of Mexico. It then claimed only $1,930,000. A few months later it increased its claim to $3,000,030, and before the commission concluded its labors, it amended its claim and fixed it at $3,962,000.
One point in connection with the letter-impression book cannot be passed without notice. It is contended that what passed between Garth and the superintendents in charge of the property, in the form of letters or reports by the letter to the former, was not admissible in evidence against the com- [175 U.S. 423, 498] pany. This proposition cannot be sustained. The superintendents placed at the mines were its representatives in charge of the company's property. What they did at the locality of the property in and about its management were the acts of the company, so far as those acts were within the scope of the business intrusted to them. So what they said while engaged in managing and with reference to the management of the property, particularly what they reported to their principal in respect to the condition of the property and their acts in the course of the business, constitute part of the res gestoe of the controversy between the parties. The vital inquiry in this cause is whether the company's representatives at the mines were prevented by the Mexican authorities from developing and working them, whereby it was forced to abandon the property. Surely, what those representatives said and did or forbore to do at the mines, bearing upon that inquiry, would have been part of the res gestoe and admissible in evidence against the company. Upon like ground, their written reports or letters to the company while in charge of the property and in respect of its management are admissible in evidence so far as they bear upon the same inquiry and constitute a part of the res gostoe. The rule, we think, is accurately stated by Greenleaf, who, after saying that the act of declaration of each member of a partnership in furtherance of the common object of the association is the act of all, because by the very act of association each one is constituted the agent of all in respect of the common business, says: 'A kindred principle governs in regard to the declarations of agents. The principal constitutes the agent his representative, in the transaction of certain business; whatever, therefore, the agent does, in the lawful prosecution of that business, is the act of the principal whom he represents. And, 'where the acts of the agent will bind the principal, there his representations, declarations, and admissions respecting the subject-matter, will also bind him, if made at the same time, and constituting part of the res gestoe.' They are of the nature of original evidence, and not of hearsay; the representation or statement of the agent, in such cases, being the ultimate fact to be proved, and not an admission of [175 U.S. 423, 499] some other fact. But it must be remembered that the admission of the agent cannot always be assimilated to the admission of the principal. The party's own admission, whenever made, may be given in evidence against him; but the admission or declaration of his agent binds him only when it is made during the continuance of the agency in regard to a transaction then depending et dum fervet opus. It is because it is a verbal act, and part of the res gestoe, that it is admissible at all; and, therefore, it is not necessary to call the agent himself to prove it; but, wherever what he did is admissible in evidence, there it is competent to prove what he said about the act while he was doing it; and it follows, that, where his right to act in the particular matter in question has ceased, the principal can no longer be affected by his declarations, they being hearsay.' Vol. 1, 113. See also Story, Agency, 134.
Upon a careful scrutiny of all the evidence we are of opinion that so far from the Mexican government being legally responsible for the losses falling upon the company, its investment was without profitable results because the company did not have or did not furnish to its superintendents at the mines the funds required for their successful development, and did not find the property to be as valuable as they had supposed. All this is apparent from the reports made from time to time to the company by its superintendents, duplicate originals of which are to be found in the letter-impression book which was not before the commission. The identity of that book is fully established and the Mexican Republic is not fairly chargeable with negligence in not having discovered it sooner. It is certain that that government, within a reasonable time after it received the book, delivered it to the Department of State, and called attention to the important and vital facts disclosed by it, so that the United States could take such action as its sense of duty suggested.
Our conclusion is that the question stated in the act of 1892-whether the award in question 'was obtained as to the whole sum included therein, or as to any part thereof, by fraud effectuated by means of false swearing or other false [175 U.S. 423, 500] and fraudulent practices on the part of the said La Abra Silver Mining Company, or its agents, attorneys, or assigns'-must be answered in the affirmative as to the whole sum included in the award. That company placed before the commission a state of facts that had no existence, and which we are constrained by the evidence to say its principal representatives must have known had no existence, but which being credited by the commission under the evidence adduced before it brought about the result complained of in the bill. The whole story of losses accruing to that company by reason of wrongs done by the authorities of Mexico, is, under the evidence, improbable and unfounded. We do not wish to be understood as saying that the company did not meet with losses on account of its investments in this mining property. But we do adjudge that it had no claim which, upon any principle of law or equity, it was entitled to assert against the Republic of Mexico.
The decree below is affirmed.
Mr. Justice Gray did not hear the argument on the facts and took no part in their consideration. Mr. Justice McKenna took no part in the decision.
I. PUBLIC ACTS: 1862, 12 Stat. at. L. 632, c. 4; Id. c. 5; Id. c. 6; 1866, 14 Stat. at L. 374, c. 5; 1868, 15 Stat. at L. 266, c. 4; 1869, 16 Stat. at. L. 61, c. 4; Id. c. 5; 1872, 17 Stat. at L. 400, c. 12; Id. c. 13; Id. c. 14; Id. c. 15; Id. c. 17; 1873, 18 Stat. at L. 1, c. 3; 1874, 18 Stat. at L. 293, c. 7; Id. c. 8; Id. c. 9; Id. c. 10; 1875, 18 Stat. at L. 294, c. 12; 1875, 19 Stat. at L. 1, c. 1; 1879, 21 Stat. at L. 59, c. 1; Id. c. 2; 1880, 21 Stat. at L. 311, c. 4; Id. c. 5; Id. c. 6; Id. c. 7; Id. c. 8; Id. c. 9; Id. c. 10; 1884, 24 Stat. at L. 353, c. 9; 1887, 24 Stat. at L. 354, c. 11; Id. c. 12; Id. c. 13; Id. c. 14; Id. c. 15; Id. c. 16; 1888, 25 Stat. at L. 638, c. 7; Id. c. 8; 1889, 25 Stat. at L. 639, c. 18; 1892, 27 Stat. at. L. 409, c. 14; Id. c. 15; Id. c. 16; 1894, 28 Stat. at. L. 595, c. 8, Id. c. 9; Id. c. 10; Id. c. 11; Id. c. 12; Id. c. 14; Id. c. 15; 1897, 30 Stat. at L. 226, c. 3.
II. JOINT RESOLUTIONS: 1869, 16 Stat. at L. 368, No. 5; Id. No. 6; 1872, 17 Stat. at L. 637, No. 1; 1878, 20 Stat. at L. 487, No. 1; Id. No. 2; Id. No. 3; 1883, 23 Stat. at L. 265, No. 3; 1885, 24 Stat. at L. 339, No. 2; Id. No. 3; 1893, 28 Stat. at L. 577, No. 7; 1894, 28 Stat. at L. 967, No. 2.
III. PRIVATE ACTS: 1873, 18 Stat. at L. 529, c. 2; 1874, 18 Stat. at L. 529, c. 4; 1879, 21 Stat. at L. 531, c. 3; 1880, 21 Stat. at L. 601, c. 11; Id. c. 12; Id. c. 13; Id. c. 14; 1884, 23 Stat. at L. 615, c. 6; 1885, 24 Stat. at L. 653, c. 1; Id. c. 2; 1886, 24 Stat. at L. 881, c. 10; 1887, 24 Stat. at L. 882, c. 17; Id. c. 18; Id. c. 19; Id. c. 20; 1888, 25 Stat. at L. 1251, c. 9; Id. c. 10; Id. c. 11; Id. c. 12; Id. c. 13; Id. c. 14; Id. c. 15; Id. c. 16; Id. c. 17; 1894, 28 Stat. at L. 1022, c. 13; Id. c. 16; Id. c. 17.

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