Case Name: The State of Texas v. White & Chiles
Court: Supreme Court of Texas
Jurisdiction: Texas
Decision Date: 1868-12
Citations: 25 Supp. Tex. 465
Docket Number: 
Parties: The State of Texas v. White & Chiles.
Judges: 
Reporter: Texas Reports
Volume: 25 Supp.
Pages: 465–621

Head Matter:
SUPREME COURT OF THE UNITED STATES.
DECEMBER TERM, 1868.
The State of Texas v. White & Chiles.
The word State describes sometimes a people or community of individuals united more or less closely in political relations, inhabiting temporarily or permanently the same country; often it denotes only the country, or terriritorial region, inhabited by such a community; not unfrequently it is applied to the government under which the people live; at other times it represents the compound idea of people, territory, and government.
In the Constitution, the term State most frequently expresses the combined idea just noticed of the people, territory, and government. A State, in the ordinary term of the Constitution, is a political community of free citizens, occupying a territory of defined boundaries, and organized under a government sanctioned and limited by a written constitution, and established by the consent of the governed.
But the term is also used to express the idea of a people or political community as distinguished from.the government. In this sense it is used in the clause which provides that the United States shall guarantee to every State in the Union a republican form of government, and shall protect each of them against invasion.
The Union of the States never was a purely artificial and arbitrary relation. It began among the'colonies, and grew out of common origin, mutual sympathies, kindred principles, similar interests, and geographical relations. It was confirmed and strengthened By the necessities of war, and received definite form, and character, and sanction from the Articles of Confederation. By these the Union was solemnly declared to “he perpetual.” And, when these articles were found to be inadequate to the exigencies of the country, the Constitution was ordained “to form a more perfect Union."
But the perpetuity and indissolubility of the Union by no means implies the loss of distinct and individual existence, or of the right of self-government by these States. On the contrary, it may be not unreasonably said, that the preservation of the States, and the maintenance of their governments, are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the National Government. The Constitution, in all its provisions, looks to an indestructible Union, composed of indestructible States.
When Texas became one of the United States, she entered into an indissoluble relation. The union between Texas and the other States was as complete, as perpetual, and as indissoluble as the union between the original States. There was no place for reconsideration or revocation, except through revolution, or through consent of the States.
Considered as transactions under the Constitution, the ordinance of secession adopted by the convention, and ratified by a majority of the citizens of Texas, and all the acts of her legislature, intended to give effect to that ordinance, were absolutely null. They were utterly without operation in
. law. The State did not cease to be a State, nor her citizens to be citizens of the Union. (Paschal’s Dig., p. 18.)
But, in order to the exercise by a State of the right to sue in this court, there needs to be a State government competent to represent the State in its relations with the National Government, so far, at least, as the institution and prosecution of a suit is concerned.
While Texas was controlled by a government hostile to the United States, and in affiliation with a hostile confederation, waging war upon the United States, no suit.instituted in her name could be maintained in this court. It was necessary that the government and the people of the State should be restored to peaceful relations to the United States, under the Constitution, before such a suit could be prosecuted.
Authority to suppress rebellion is found in the power to suppress insurrection and carry on war; and authority to provide for the restoration of State governments under the Constitution, when subverted and overthrown, is derived from the obligation of the United States to guarantee to every State in the Union a republican form of government. The latter, indeed, in the case of a rebellion, which involves the government of a State, and, for the time, excludes the national authority from its limits, seems to be a necessary complement to the other.
When slavery was abolished, the new freemen necessarily became part of the people, and the people still constituted the State; for States, like individuals, retain tjreir identity, though changed to some extent in their constituent elements. And it was the State thus constituted which was now entitled to the benefit of the constitutional guaranty.
In the exercise of the power conferred by the guaranty clause, as in the exercise of every other constitutional power, a discretion in the choice of means is necessarily allowed. It is essential only that the means must be necessary and proper for carrying into execution the power conferred through the restoration of the State to its constitutional relations under a republican form of government, and that no acts be done, and no authority exerted, which is either prohibited or unsanctioned by the Constitution.
So long as the war continued, it cannot be denied that the President might institute temporary government within insurgent districts occupied by the national forces, or take provisional measures, in any State, for the restoration of State government faithful to the Union, employing, however, in such efforts only such means and agents as were authorized by constitutional laws. But the power to carry into effect the clause of guaranty is primarily a legislative power, and resides in Congress, though necessarily limited to cases where the rightful government is subverted by revolutionary violence, or in imminent danger of being overthrown by an opposing government set up by force within the State.
The several executives of Texas, partially, at least, reorganized under the authority of the President and of Congress, having sanctioned this suit, the necessary conclusion is, that it was instituted and is prosecuted by competent authority.
Public property of a State, alienated during rebellion h í usvping State government for the purpose of carrying on war agamri. tiie I .'died States, may be reclaimed by a restored State government, organized in allegiance to the Union, for the benefit of the State.
Exact definitions within which the acts of a State government, organized in hostility to the Constitution and Government of the United States, must be treated as valid or invalid, need not he attempted. It may be said, however, that acts necessary to peace and good order among citizens, such, for example, as acts sanctioning and protecting marriage and the domestic relations, governing the course of descents, regulating the conveyance and transfer of property, real and personal, and providing remedies for injuries to person and estate, and other similar acts, which would be valid if emanating from a lawful government, must be regarded in general as valid when proceeding from an actual, though unlawful government; and that acts in furtherance or support of .rebellion against the United States, or intended to defeat the just rights of citizens, and other acts of like nature, must, in general, he regarded as invalid and void.
Purchasers of United States bonds, issued payable to the State of Texas or bearer, alienated during rebellion by the insurgent government, and acquired after the date at which the bonds became redeemable, are affected with notice of defect of title in the seller.
This was an original cause in equity, tried upon bills, answers, and proofs, as a case of original jurisdiction.
The Constitution ordains that the judicial power of the United States shall extend to certain cases, and among them “ to controversies between a State and citizens of another State; . . . and between a State, or the citizens thereof, and foreign States, citizens, or subjects.” It ordains-further, that in eases in which “ a State ” shall be a party, the Supreme Court shall have original jurisdiction.
With these provisions in force as fundamental law, Texas, entitling itself “The State of Texas, one of the United States of America,” filed, on the 15th of February, 1867, an original bill against different persons: White & Chiles, one Hardenberg, a certain firm, Birch, Murray & Co., and some others, citizens of Hew York and other States, praying an injunction against their asking or receiving jiayment from the United States of certain bonds of the Federal Government, known as Texan indemnity bonds, and that the bonds might be delivered up to the State, and for other and further relief.
The case was this:
In 1851 the United States issued its bonds—five thousand bonds for $1,000 each, and numbered successively from Ho. 1 to Ho. 5000, and thus making the sum of $5,000,000—to the State of Texas, as indemnity for certain boundary claims made by that State. The bonds, which were dated January 1, 1851, were coupon bonds, payable, by their terms, to the State of Texas, or bearer, with interest at 5 per cent, semi-annually, and “redeemable after the 31st day of December, 1864.” Each bond contained a statement on its face that the debt was authorized by act of Congress, and was “ transferable on delivery,” and to each were attached six-month coupons, extending to December 31, 1864. (For a particular account of these bonds, see Paschal’s Dig., Arts. 442-450, 5320, 5321, Notes, 1162, 1163.)
In pursuance of an act of the Legislature of Texas, the comptroller of public accounts of the State was authorized to go to Washington, and to receive there the bonds; the statute making it his duty to deposit them, when received, in the treasury of the State of Texas, to he disposed of “ as may be provided bylaw;” and enacting further, that no bond, issued as aforesaid and payable to hearer, should be “ available in the hands of any holder until the same shall have been indorsed, in the city of Austin, by the governor of the State of Texas.”
Most of the bonds were indorsed and sold according to law, and the coupons paid on presentation by the United States prior to 1860. A part of them, however, appropriated by act of the legislature as a school fund, were still in the treasury of Texas in January, 1861, when the late southern rebellion broke out.
The part which Texas took in that event, and the position in which the close of it left it, are necessary to he here adverted to.
At the time of that outbreak, Texas was confessedly one of the United States of America, having a State constitution in accordance with that of the United States, and represented by Senators and Representatives in the Congress at Washington. In January, 1861, a call for a convention of the people of the State was issued, signed by sixty-one individuals. The call was without authority and revolutionary. Under it delegates were elected from some-sections of the State, whilst in others no vote was taken. These delegates assembled in State convention, and, on the 1st of February, 1861, the convention adopted an ordinance “ to dissolve the union between the State of Texas and the other States, united under the compact styled ‘ the Constitution of the United States of America” The ordinance contained a provision, requiring, it to be submitted to the people of Texas, for ratification or rejection by the qualified voters thereof, on the 23d of February, 1861. The Legislature of the State, convened in extra session, on the 22d of January, 1861, passed an act ratifying the election of the delegates, chosen in the irregular manner above mentioned to the convention. The ordinance of secession submitted to the people was adopted by a vote of 34,794 against 11,235. The convention, which had adjourned immediately'on passing the ordinance, re-assembled. On the 4th of March, 1861, it declared that the ordinance of secession had been ratified by the people, and that Texas had withdrawn from the union of the States under the Federal Constitution. It also passed a resolution, requiring the officers of the State government to take an oath to support the provisional government of the Confederate States, and providing, that if “ any officer refused to take such oath, in the manner and within the time prescribed, his office should be deemed vacant, and the same filled as though he were dead.” On the 16th of March, the convention passed an ordinance declaring that whereas the governor and the secretary of State had refused or omitted to take the oath prescribed, their offices were vacant; that the lieutenant governor should exercise the authority and perform the duties appertaining to the office of governor, and that the deposed officers should deliver to their successors in office the great seal of the State, and all papers, archives, and property in their possession belonging or appertaining to the State. The convention further assumed to exercise and administer the political power and authority of the State. •
Thus was established the rebel government of Texas.
The Senators and Representatives of the State in Congress now withdrew from that body at Washington. Delegates were sent to the Congress of the so-called Confed erate States at Montgomery, Alabama, and electors for a president and vice president of these States appointed. War having become necessary to complete the proposed destruction by the South of the Federal Government, Texas joined the other southern States, and made war upon the United States, whose authority was now recognized in no manner within its borders. The oath of allegiance of all persons exercising public functions was to both the State of Texas and to the Confederate States ot America; and no officer of any kind representing the United States was within the limits of the State, except military officers who had been made prisoners. Such was and had been for several months the condition of things in the beginning of 1862.
On the 11th of January, of that year, the legislature of the usurping government of Texas passed an act, “to provide arms and ammunition, and for the manufacture of arms and ordinance for the military defenses of the State.” And by it created a “ military board,” to carry out the purpose indicated in the title. Under the authority of this act military forces were organized.
On the same day the legislature passed a farther act, entitled “ An act to provide funds for military purposes,” and therein directed the board, which it had previously organized, “ to dispose of any bonds and coupons which may be in the treasury on any account, and use such funds or their proceeds for the defense of the State; ” and it passed an additional act repealing the act which made an indorsement of the bonds by the governor of Texas necessary to make them available in the hands of the holder.
Under these acts, the military board, on the 12th January, 1865, a date at which the success of the federal arms seemed probable, agreed to sell to White & Chiles one hundred and thirty-five of these bonds, then in the treasury of Texas, and seventy-six others deposited with certain bankers in England, in payment for which White & Chiles were to deliver to the board a large quantity of cotton-cards and medicines. The former bonds were delivered to White & Chiles on the 15th March following, none of them being indorsed by any governor of Texas,
It appeared that in February, 1862, after the rebellion had broken out, it was made known to the Secretary of the Treasury of the United States, in writing, by the Hon. G. W. Paschal, of Texas, who had remained constant to the Union, that an effort would be made by the rebel authorities of Texas to use the bonds remaining in the treasury in aid of the rebellion; and that they could be identified, because all that had been circulated before the war were indorsed by different governors of Texas. The Secretary of the Treasury acted on this information, and refused in general to pay bonds that had not been indorsed. On the 4th of October,-1865, Mr. Paschal, as agent of the State of Texas, caused to appear in the money report and editorial of the Hew York Herald a notice of the transaction between the rebel government of Texas and White & Chiles, and a statement that the Treasury of the United States would- not pay the bonds transferred to them by such usurping government. On the 10th October, 1865, the provisional governor of the State published in the Hew York Tribune a “ Caution to the Public,” in which he recited that the rebel government of Texas had, under a pretended contract, transferred to White & Chiles “ one hundred and thirty-five United States Texan indemnity bonds, issued January 1, 1851, payable in fourteen years, of the denomination of $1,000 each, and coupons attached thereto to the amount of $1,287 50, amounting in the aggregate, bonds and coupons, to the-sum of $156,287 50.” His caution did not specify, however, any particular bonds by number. The caution went on to say that the transfer was a conspiracy between the rebel governor and White & Chiles to rob the State treasury; that White & Chiles had never paid the State one farthing, that they had fled the State, and that these facts had been made known to the Secretary of the Treasury of the United States. And “ a protest was filed with the Secretary by Mr. Paschal, agent of the State of Texas, against the payment of the said bonds and coupons, unless presented for payment by proper authority.” The substance of this notice, it was testified, was published in money articles of many of the various newspapers of about that date, and that financial men in Hew "York and other places spoke about it to Mr. Paschal, who had caused it to be inserted in the Tribune. It was testified also, that, after the commencement of the suit, White & Chiles said that they had seen it.
The"rebel forces being disbanded on the 25th May, 1865, and the civil officers of the usurping government of Texas having fled from the country, the President, on the 17th June, 1865, issued his proclamation, appointing Mr. A. J. Hamilton provisional governor of the State, and directing the formation by the people of a State government in Texas.
Under the provisional government thus established the people proceeded to make a constitution and reconstruct their State government.
But much question arose as to what was thus done, and the State was not acknowledged by th,e Congress of the United States as being reconstructed. On the contrary, Congress passed, in March, 1867, three certain acts, known as the reconstruction acts. By the first of these, reciting that no legal State governments or adequate protection for life or property then existed in the rebel State of Texas and nine other States named, and that it was necessary that peace and good order should be enforced in them until loyal and republican State governments could be legally established, Congress divided the States named into five military districts, (Texas, with Louisiana, being the fifth,) and made it the duty of the President to assign to each an officer of the army, and to detail a sufficient military force to enable him to perform his duties and enforce authority within his district. The act made it the duty of this officer to protect all persons in their rights, to suppress insurrection, disorder, violence, and to punish, or cause to be punished, all disturbers. of the public peace and criminals, either through the local civil tribunals or through military commissions, which the act authorized. It provided, further, that when the people of any one of these States had formed a constitution in conformity with that of the United States, framed in a way which the statute went on to specify, and when the State had adopted a certain article of amendment named to the Constitution of the United States, and when such article should have become a part of the Constitution of the United States, then that the States respectively should be declared entitled to representation in Congress, and the preceding part of the act become inoperative, and that until they were .so admitted any civil governments which might exist in them should be deemed provisional only, and subject to the paramount authority of the United States, at any. time to abolish, modify, control, or supersede them.
A state convention of 1866 passed an ordinance looking to the recovery of these bonds, and by act of October, of that year, the governor of Texas was authorized to take such steps as he might deem best for the interests of the State in the matter, either to recover the bonds or to compromise with holders. Under this act the governor appointed an agent of the State to look after the matter.
It was in this state of things, with the State government organized in the manner and with the status above mentioned, that this present bill was directed by this agent to be filed.
The bill was filed by Mr. B. T. Merrick and others, solicitors in this court on behalf of the State, without precedent written warrant of attorney. But a letter from J. W. Throckmorton, elected governor under the constitution of 1866, ratified their act, and authorized them to prosecute the suit. Mr. Paschal, who now appeared with the other counsel in behalf of the State, had been appointed by Governor Hamilton to represent the State, and Mr. Pease, a subsequent governor, appointed by General Sheridan, commander under the reconstruction acts, renewed this appointment.
The bill set forth the issue and delivery of the bonds to the State, the fact that they were seized by a combination of persons in armed hostility to the Government of the United States, sold by an organization, styled the military board, to White & Chiles, for the purpose of aiding the overthrow of the Federal Government; that White & Chiles had not performed what they agreed to do. It then set forth, that they had transferred such and such numbers, specifying them, to Hardenberg, and such and such others to Birch, Murray & Co., &c.; that these transfers were not in good faith, but were with express notice on the part of the transferees of the manner in which the bonds had been obtained by White & Chiles; that the bonds were overdue at the time of the transfer; and that they had never been indorsed by any governor of Texas. The bill interrogated the defendants about all these particulars, requiring them to answer on oath; and, as already mentioned, it prayed an injunction against the defendants asking or receiving payment from the United States, that the bonds might be delivered to the State of Texas, and for other and further relief.
As respected White & Chiles, who had now largely parted with the bonds, the case rested much upon what precedes, and their own answers.
The answer of Chiles, declaring that he had none of the bonds in his possession, set forth:
1. That there was no sufficient authority shown to prosecute the suit in the name of Texas.
2. That Texas, by her rebellious course, had so far changed her status, as one of the United States, as to -be disqualified from suing in this court.
3. That whether the government of Texas, during the term in- question, was one dejure or defacto, it had authorized the military board to act for it, and that the State was estopped from denying its acts.
4. That no indorsement of the bonds was necessary, they having been negotiable paper.
5. That the articles which White & Chiles had agreed to give the State were destroyed in transitu, by disbanded troops, who infested Texas, and that the loss of the articles was unavoidable.
The answer of White went over some of the same ground with that of Chiles. He admitted, however, “ that he was informed and believed, that in all cases where any of the bonds were disposed of by him, it was known to the parties purchasing for themselves, or as agents for others, that there was some embarrassment in obtaining payment of said bonds at the Treasury of the United States, arising out of the title of this respondent and his co-defendant Chiles.
As respected Hardenberg, the case seemed much thus:
In the beginning of November, 1866, after the date of the notices given through Mr. Paschal, one Hennessey, residing in New York, and carrying on an importing and commission business, then sold to Hardenberg thirty of these bonds, originally given to White & Chiles, and which thirty a correspondent of his, long known to him, in Tennessee, had sent to him for sale. Hardenberg bought them “ at the rate of $1 20 for the dollar on their face,” and paid for them. Hennessey had “ heard from somebody that there was some difficulty about the bonds being paid at the treasury, but did not remember whether he heard that before or after the sale.”
Hardenberg also bought others of these bonds near the same time at 1.15 per cent., under circumstances thus testified to by Mr. C. T. Lewis, a lawyer of New York:
“In conversation with Mr. Hardenberg, I had learned that he was interested in the Texas indemnity bonds, and meditated purchasing some. I was informed in Wall street that such bonds were offered for sale by Kimball & Co., at a certain price, which price I cannot now recollect. I informed Mr. Hardenberg of this fact, and he requested me to secure the bonds for him at that price. I went to C. H. Kimball & Co., and told them to send the bonds to Mr. Hardenberg’s office and get a check for them, which I understand they did. I remember expressing to Mr. Hardenberg the opinion that these bonds, being on their face negotiable by delivery, and payable in gold, must, at no distant day, be redeemed according to their tenor, and were, therefore, a good purchase at the price at which they were offered.
“My impression is, that before this negotiation I had read a paragraph in some Hew York newspaper, stating that the payment of the whole issue of the Texas indemnity bonds was suspended until the history of a certain portion of the issue, supposed to have been negotiated for the benefit of the rebel service, should be understood. I am not at all certain whether I read this publication before or after the date of the transaction. If the publication was made before this transaction, I hadprobably read the article before the purchase was made. My impression is, that it was a paragraph in a money article, but I attributed no great importance to it. I acted in this matter simply as the friend of Mr. Hardenberg, and received no commission for my services. I am a lawyer by profession, and not a broker.”
Kimball & Co. (the brokers thus above referred to by Mr. Lewis) testified that they had received the bonds thus sold from a firm, which they named, “ in perfect good faith, and sold them in like good faith, as we would any other lot of bonds received from a reputable house.” It appeared, however, that in sending the bonds to Kimball & Co. for sale, the firm had requested that they might not be known in the transaction.
Harclenberg’s own account of the matter, as declared' by his answer, was thus:
“ That he was a merchant in the city of Hew York; that he purchased the bonds held by him in open market in said city; that the parties from whom he purchased the same were responsible persons, residing and doing business in said city; that he purchased of McKim, Brothers & Co., bankers in good standing in Wall street, one bond at H5 per cent., on the 6th of Hovember, 1866, when gold was at the rate of $1 47¿, and declining; that when he purchased the same, he made no inquries of McKim, Brothers & Co., but took the bonds, on his own observation of their plain tenor and effect, at what he conceived to be a good bargain; that afterwards, and before the payment of said bonds and coupons by the Secretary of the Treasury, and at the request of the Comptroller, Hon. B. W. Tayler, he made inquiry of said firm of McKim, Brothers & Co., and they informed him that said bonds and coupons had been sent to them to be sold by the First Hational Bank of Wilmington, Horth Carolina; that he purchased, on the 8th of Hovember, 1866, thirty of said bonds, amounting to the sum of $32,475, of J. S. Hennessey, 29 Warren street, Hew York city, doing business as a commission merchant, who informed him, that, in the way of business, they were sent to him by Hugh Douglas, of Hashville, Tennessee; that he paid at the rate of $1 20 at a time, to wit, the 8th of Hovember, 1866, when gold was selling at $1 46, and declining; that the three other bonds were purchased by him on the 8th of Hovember, 1866, of C. H. Kimball & Co., 30 Broad street, brokers in good standing, who informed him, on inquiry afterwards, that said bonds were handed them to be sold by a banking house in Hew York of the highest respectability, who owned the same, but whose names were not given, as the said firm informed him they could ‘see no reason for divulging private transactions;’ and that he paid for last- mentioned bonds at the rate of $1 20, on said 8th day of ¡November, 1866', when gold was selling at $1 46, and declining.
“Further answering, he saith that he had no knowledge at the time of said purchase that the bonds were obtained from the State of Texas, or were claimed by the said State; that he acted on information obtained from the public report of the Secretary of the Treasury, showing that a large portion of similar bonds had been redeemed, and upon his own judgment of the nature of the obligation expressed by the bonds themselves, and upon his own faith in the full redemption of said bonds; and he averred that he had no knowledge of the contract referred to in the bill of complaint, nor of the interest or relation of White & Chiles, nor of any connection which they had-with said complainant or said bonds) nor of the law of the State of Texas requiring indorsement.”
The answer of White stated, in regard to Harden-berg’s bonds, that they were sold by his (White’s) broker; that he, White, had no knowledge of the name of the real purchaser, who, however, paid 115 per cent, for them; “that at the time of thé sale, his (White’s) broker informed him that the purchaser, or the person acting for the purchaser, did not want any introduction to the respondent, and required no history of the bonds proposed to be sold; that he only desired that they should come to him through the hands of a loyal person, who had never been identified with the rebellion.”
. Another matter, important possibly in reference to the relief asked by the bill, and to the exact decree made, should, perhaps, be mentioned about these bonds of Hardenberg.
The answer of Hardenberg stated, that “ on the 16th of February, 1867, the Secretary of the Treasury ordered the payment to the respondent of all said bonds and coupons, and the same were paid on that day.” This was literally true; and the hooks of the Treasury showed these bonds as among the redeemed bonds, and showed nothing else. As a matter of fact, it appeared that the agents of Texas, on the one hand, urging the Government not to pay the bonds, and the holders, on the other, pressing for payment —it being insisted by these last that the United States had no right to withhold the money, and thus deprive the holder of the bonds of interest—the Comptroller of the Treasury, Mr. Tayler, made a report, on the 29th of January, 1867, to the Secretary of the Treasury, in which he mentioned, that it seemed to be agreed by the agents of the State, that her case depended on her ability to show a want of good faith on the part of the holders of bonds, and that he had stated to the agents, that as considerable delay had already been incurred, he would, unless during the succeeding week they took proper legal steps against the holders, feel it his duty to pay such bonds as were unimpeached in title in the holders’ hands. He accordingly recommended to the Secretary payment of Harden-berg’s and of some others. The agents, on the same day that the Comptroller made his report, and after he had written most of it, informed him that they would take legal proceedings on behalf of the State; and were informed in turn that the report would be made on that day, and would embrace Hardenberg’s bonds. Two days after-wards a personal action was .commenced, in the name of the State of Texas, against Mr. McCulloch, the then Secretary of the Treasury, for the detention of the bonds of Hardenberg and others. This action was dismissed February 19. On the 15th of this same February, the present bill was filed. On the 16th of the month, the personal suit against the Secretary having at the time, as already above stated, been withdrawn, and no process under the present hill having then, nor until the 27th following, been served on Hardenberg, Mr. Tayler, Comptroller of the Treasury, and one Cox, the agent of Hardenberg, entered into.an arrangement, by which it was agreed that this agent should deposit with Mr. Tayler Government notes known as “ seven-thirties,” equivalent in value to the bonds and coupons held by Hardenberg, to be held by Mr. Tayler “as indemnity for Mr. McCulloch against any personal damage, loss, and expense in which he may be involved by reason of the payment of the bonds.” The seven-thirties were then delivered to Mr. Tayler, and a check in coin for the amount of the bonds and interest was delivered to Hardenberg’s agent. The seven-thirties were subsequently converted into the bonds called “five-twenties,” and these remained in the hands of Mr. Tayler, being registered in his name as trustee. The books of the Treasury showed nothing in relation to this trust; nor, as already said, anything more or other than that the bonds were paid to Hardenberg or his agent.
Hext, as respected the bonds of Birch, Murray & Go. It seemed in regard to these, that prior to July, 1855, Chiles, wanting money, applied to this firm, who lent him $5,000 on a deposit of twelve of the bonds. The whole of the twelve were taken to the Treasury Department. The department at first declined to pay them, but finally did pay four of them, (amounting, with the coupons, to $4,900,) upon the ground urged by the firm, that it had lent the $5,000 to Chiles on the hypothecation of the bonds and coupons without knowledge of the claim of the State of Texas, and because the firm was urged to be, and apparently was, a holder in good faith, and for value; the other bonds, eight in number, remaining in the treasury, and not paid to the firm, because of the alleged claim of the State of Texas, and of the allegation that the same had come into the possession of said White & Chiles improperly, and without consideration.
The difficulty now was less perhaps about the four . bonds than about these eight, whose further history was thus presented by the answer of Birch, one of the firm, to the bill. He said in this answer, and after mentioning his getting with difficulty the payment of the four bonds,
“ That afterwards, and during the year 1866, Chiles called upon him, with the printed report of the First Comptroller of the Treasury, Hon. E. W. Tayler, from which it appeared that the department would, in all reasonable probability, redeem all said bonds, and requested further advances on said eight remaining bonds; and that the firm .thereupon advanced said Chiles, upon the said eight bonds, from time to time, the sum of $4,185 25, all of which was due and unpaid. That he made the said advances as well .upon the representations of said Chiles that he was the bona fide holder of said bonds and coupons, as upon his own observation and knowledge of their legal tenor and effect, and of his faith in the redemption thereof by the Government of the United States.”
The answer said further, that
“At the time of the advances first made, the firm had no knowledge of the contract referred to in the bill, nor of the interest or connection of said White & Chiles with the complainant, nor of the law of the State of Texas referred to in the bill passed December 16, 1851, and that the bonds were taken in good faith.”
It appeared further, in regard to the whole of these bonds, that, in June, 1865, Chiles, wanting to borrow money of one Barret, and he, Barret, knowing Mr. Hamilton, just then appointed provisional governor, but not yet installed into office, nor apparently as yet having the impressions which he afterwards by his “Caution” made public, went to him, supposing him well acquainted with the nature of-these bonds, and sought his opinion as to their value, and as to whether they would be paid. Barret’s testimony proceeded:
“He advised me to accept the proposition of Chiles, and gave it as his opinion that the Government would have to pay the bonds. I afterwards had several conversations with him on the subject, in all of which he gave the same opinion. Afterwards (X cannot remember the exact time) Mr. Chiles applied to Birch, Murray & Co. for a loan of money, proposing to give some bonds as collateral security; and, at his request, I went to Birch, Murray & Co., and informed them of my conversations with Governor Hamilton, and of his opinion as expressed to me. They then seemed willing to make a loan on the security offered. In order to give them further assurance that I was not mistaken in my report of Governor Hamilton’s opinion, verbally expressed, I obtained from him a letter. [Letter produced.] It reads thus:
“Hew York, June 25,1865.
“Hon. J. B. Barret.
“Dear Sir: In reply to your question about Texas indemnity bonds issued by the United States, I can assure you that they are perfectly good, and the Government will certainly pay them to the holders.
“Yours, truly, A. J. Hamilton.”
The witness “mentioned the conversations had with Governor Hamilton, and also spoke of the letter, and sometimes read it to various parties, some of whom were dealing in these bonds,” and, as he stated, had “ reason to believe that Governor Hamilton’s opinion in regard to the bonds became pretty generally known among dealers in such paper.” The witness, however, did not know Mr. Hardenberg.
The questions, therefore, were:
1. A minor preliminary one; the question presented by Chiles’ answer, as to whether sufficient authority was shown for the prosecution of the suit in the name and in behalf of Texas.
2. A great and principal one; a question of jurisdiction, viz., whether Texas, at the time of the bill filed or now, was one of the United States of America, and so competent to file an original bill here.
3. Assuming that she was, a question whether the respective defendants, any, all, or who of them, were proper subjects for the injunction prayed, as holding the bonds without sufficient title, and herein and more particularly as respected Hardenberg and Birch, Murray & Co., a question of negotiable paper, and the extent to which holders, asserting themselves holders bona fide and for value, of paper payable “to bearer,’'’ held it discharged of precedent equities.
4. A question as to the effect of the payments, at the treasury, of the bonds of Hardenberg and of the four bonds of Birch, Murray & Co.
The case was argued by Messrs. Paschal and Merrick, in behalf of Texas; and contra, by Mr. Phillips, for White; Mr. Pike, for Chiles; Mr. Carlisle, for Hardenberg; and Mr. Moore, for Birch, Murray & Co.
George W. Paschal, for the State of Texas,
(after reciting a history of the pleadings and proofs,) filed the following points:
I. Thus, upon the whole case made by the bill, answers, and evidence, the defense rests entirely upon the validity of the possession of the bonds by White & Chiles, for no defendant stands in any better position than these original possessors. In none of the original answers is there a real attempt to rest the possession upon color of law. But in the supplemental answer of Chiles he invoices the act of 11th January, 1862, found on the 55th page of the Session Acts of that year. It creates a military board, and gives the right to defend the State by means of “ any bonds and coupons which may be in the treasury on any account, and may use such funds, or their proceeds, and, therefore, may sell, hypothecate, or barter such bonds and coupons, provided such disposal shall not exceed the amount of $1,000,000 of such bonds and coupons.”
But to this act we answer—
1. That it cannot reasonably be construed to relate to the bonds in question.
2. For previous acts of the same legislature clearly show what was intended.
3. That if such could be the construction, the second section of the act itself would make any such use void. For that declares that “ any bonds which may be disposed of under the provisions of this act shall be substituted by equal amounts of the bonds of the Confederate States of America,” &c.; thus showing the illegal purpose.
1. This act cannot be construed to change the special dedications of these bonds.
By an act of the Legislature of Texas, approved 31st January, 1854, it was provided that “the sum of $2,000,000 of the five per cent, bonds of the United States, now remaining in the treasury of the State, be set apart as a school fund, for the support and maintenance of public schools, which shall be called the special school fund, and the interest arising therefrom shall be apportioned and distributed for the support of schools as herein provided.” (Paschal’s Dig., Art. 3434, p. 571.)
. The act then proceeds to create- a system of schools, and to provide for distributing the fund among the poor. (Paschal’s Dig., Arts. 3484 to 3498.)
Afterwards, by the act of the 13th August, 1856, the legislature provided “for the investment of the special school fund in the bonds of railroad companies incorporated by the State.” This act provides, that “the governor, comptroller, and attorney general, shall, ex. oficio, constitute a board of school commissioners, whose duty it shall be to draw from the treasury the special school fund created by the act of 31st January, 1854,” &c. (Paschal’s Dig., Art. 3499.)
The act then carefully provides for the loan of these bonds to railroad companies at an increased rate of inter est, the accruing interest still to go to the purposes of education.
Here, then, was a double dedication: first, to a special school fund; second, to loan that school fund to railroads on the best of security. In point of fact, three-fifths of the bonds were loaned to railroads, and the remaining two-fifths remained in the hands of the school commissioners, to be used only for the purposes provided by law.
It cannot be pretended that, by a general law created for rebel purposes, it was intended to repeal the dedication and to destroy the education hoard. In contemplation of law, the bonds were not in the treasury for the purposes of the act of the 11th January, 1862. The State constitution forbids this.
By the 24th section of the 7th article of the State constitution of Texas, it is declared, that “ every law enacted by the legislature shall embrace but one object, and that shall be expressed in the title.” (Paschal’s Dig., p. 67, Dote 199.)
And by the 25th section it is said, that “no law shall be revised or amended by reference to its title, hut in such case the act revised or section amended shall be re-enacted and published at length.”
The act of 1862 is entitled, “ An act to provide funds for military purposes.”
According to the Texas decisions, (which are epitomized in Paschal’s Dig., Dote 199, p. 67,) under such a title the legislature could not so far depart from the object as to change the special dedications of the school fund, abolish the powers of the school board over the fund, and appropriate this fund to rebel military purposes.
The constitution is not directory, but mandatory. (Cannon v. Hemphill, 7 Tex., 208.) Such an end would be variant from the purposes of the law. (Ibid.; Martin v. Broach, 6 Ga., 27.)
There was no reference to the title of the law thus claimed to "be amended, and, had there been, it could not so have been amended. The construction given in Cannon v. Hemphill will be followed by this court.
2. But there were other purposes, consistent with the object, aim, and end of .the “act to provide for military purposes,” without construing it to apply to the special school fund.
By an act of the previous, legislature, “ authorizing a loan and imposing a specific tax to meet the principal and interest thereof, under the provisions of the 33d section of the 7th article of the constitution of the State,” bonds to the amount of $1,000,000 were created, and still 'remained in the treasury. (Paschal’s Dig., Arts. 4822,4823.) If we refer back to the 33d section of the 7th article of the constitution, we shall find that the purpose of these bonds was thought by the legislature to be, “in case of war, to repel invasion or suppress insurrections.” (Paschal’s Dig., p. 68, § 33.) And, by an amendatory a¿t of the 11th January, 1862, we find provisions so entirely in harmony with the act of the same day, creating the military board, that they are, in fact, pari materia, the same law. It recited that the military bonds had not been negotiated, and it provided for their sale by the very same officers which constituted the military board; therefore all of these several acts had reference to the same subject-matter, the same unlawful purpose. But there is no intimation that it was intended thus to appropriate the school fund for this unlawful purpose.
There is another act of the same day, 11th January, 1862, which provides for the use of half a million of these State bonds for military purposes. (Paschal’s Dig., Arts. 4833-4837.) The 5th section refers to this military board by name. (Id., Art. 4837.)
Thus we see that the law not only could operate upon other bonds, but might do so without any violation of the constitution. And, this being so, the court will not presume that the legislature not only intended to violate the constitution, -but also to divert a fund dedicated to a charitable use from its sacred purpose, and to apply that fund to treasonable objects.
3. This brings us to the third proposition, viz: That if it was the intention of the legislature to appropriate the school fund to these unlawful purposes, such an act would be void, and White & Chiles could derive no title under it. And we may as well here say, that the State of Texas is not to be considered as a particeps criminis, which has no right to recover the bonds.
The State, as a State, may be regarded as owner of the bonds under .the law. (Paschal’s Digest, Arts. 443-450, 5320.)
Under this law the State received* and held the bonds. And while its magistrates were all sworn to support the Constitution of the United States, the legislature dedicated the bonds to a charitable use of the most sacred character, that of educating the children of the poor, and as a means also of aiding railroads. The fund was thus withdrawn from the power of general appropriation.- The State, as a corporation, became the mere trustee of the fund, which was held for the use and benefit of the poor children of the State.
The State, as a State, could not and did not rebel against the United States. But the magistrates of the State, including the legislature, refused to take the oath required by the Federal Constitution, took an oath to support the pretended government at war with the United States, and, as a means of carrying on this rebellion, with or without the consent of the legislature, these unlawful magistrates, or this unlawful assemblage, placed these bonds in the hands of White & Chiles for. rebel purposes.
Dow, whatever may be the difference of opinion as to the powers of this rebel legislature, and whether their acts bo void ab initio, as maintained by a party in Texas, or whether they were, in fact, States de facto, or, as asserted by Comptroller Tayler, (Paschal’s Dig., ¡¡Note 1162, pp. 902, 904,) States de jure, with all the powers which they had before secession, no one contends that their powers were enlarged by secession; and there is a general agreement that all their acts in contravention of the Constitution, laws, and public policy of the United States, 'or in aid of the rebellion, are void ab initio; and, as a sequence, no such legislation can afford any justification or confer title. These acts, thus being void, they are as if they did not exist, and the possession of White & Chiles becomes tortious and wrongful, and at most they are constructive bailees of the trust fund.
It results, then, that the provisional authorities of Texas have the right to follow this trust fund wherever it can be found and identified, and to recover it for the uses and purposes of the dedication. The rights of the' cestui que trust, born and unborn, could not be defeated by the treason of the assumed administrators of the powers of the trustee.
The conventions of Texas of 1866 and the legislature of the same year, representing the loyal sentiment of the State, had authorized the pursuit of these bonds. (Paschal’s Dig., Art. 5323; Acts of 1866, p. 69.)
That all acts done by the rebel authorities, which were in contravention of the Constitution, laws, and public policy of the United States, or in aid of the rebellion, are void, has generally been decided by the supreme courts of the seceded States themselves.
Thus all these courts have held, that contracts founded upon confederate treasury notes come under the marim, ex dolo malo non oritur actio; and that such contracts are void, because issued to aid the rebellion, and upon their faces expressly looking to dissolving, the Union; and for this reason their vicious character adhered to every contract which they touched, not alone because of the illegal dealing of the parties, but because the thing dealt in could not he permitted to have any value. (Peltz v. Long, 40 Mo., 536; Schmidt v. Barker, 17 La. Ann., 264; Stillman v. Looney, 3 Cold. Tenn., 20; Thornbury v. Harris, Id., 157; Gill v. Creed, Id., 205; Shiner v. Green, Id., 419; Potts v. Gray, Id., 468; Henry v. Franklin, Id. 472; Linder v. Barbee, Smith v. Smith, and McGehee v. Goodman, unpublished, Texas.)
These cases have generally proceeded upon the analogies of illegal dealings, dealings against public policy, and dealings between alien enemies. (Kennet v. Chambers, 14 How., 38; Scholefield v. Eichelberger, 7 Pet., 568, 593; Griswold v. Wadrington, 16 John., 439, 446, 447, 450; Morrison v. Fales, 16 Mass., 33; White v. Burnley, 20 How., 249; The. Prize Cases, 2 Black, 668, 669; Mrs. Alexander’s Cotton Case, 2 Wall., 419; md the general class of war cases.)
4. And while this is the case of White & Chiles, we maintain that, under the case made and proved, those who hold under them are in no better condition than themselves. This is irresistibly so from the very nature of the case, the notice necessarily carried home, and the possession obtained after the bonds became dr e and had been dishonored. It is an effort to appropriate a fund dedicated by law to a charitable use. It is a purchase, with the knowledge of, the law requiring the indorsement of the bonds; of the fact that the parties who put the bonds in circulation were rebels against the Government; that payment had been refused; and, on their faces, the bonds payable in coin were overdue; and, when purchased, they were bought at a price which showed a knowledge of the fact that payment was disputed.
5. And, lastly, we state it as a sound legal principle, that where the parties purchased the bonds after their maturity, being due by a government which punctually pays all its bonds against which there is no valid objection, such purchasers took them subject to all the equities existing between the original parties, and to all the claim of legal ownership by the original payee; and, notwithstanding some seeming conflict, Hardenberg got no better title than White & Chiles held. (Murray v. Lardner, 2 Wall., 110; Thompson v. Lee County, 3 Id., 330; Swift v. Tyson, 16 Pet., 1; Andrews v. Pond, 13 Id., 65; Goodman v. Simonds, 20 How., 365; Brown v. Davies, 3 Tex., 83; Bochin v. Sterling, 7 Id., 426; Brown v. Turner, 7 Id., 630; Armory v. Mereweather, 4 Dow. and R., 86; 2 B. & C., 573; Brown v. Halling, 4 Id., 333; Crossley v. Harn, 13 East., 498; Bridge v. Hubbard, 15 Mass., 96; Root v. Godard, 3 McLean, 102; Government v. Fox, Eng. L. and Eq. 420; Chitty on Bills, 95; Wethered v. Smith, 9 Tex., 625; Whitehead v. McAdams, 18 Id., 551.)
Mr. Paschal addressed the court upon these points, from which the Reporter condenses as follows :
THE TEXAS BOUNDARY—ITS HISTORY.
I. General Houston and General Busk, at the battle of San Jacinto, settled with Santa Anna the western boundary of Texas by treaty. That boundary was reiterated and proclaimed in the act of the congress of the republic, which declared the boundary “to the mouth of the Bio Grande, to the 42° of north latitude, thence up the principal stream of said river to its source.” (Paschal’s Dig., Arts. 438 and 441.)
ANNEXATION.
This boundary was claimed and asserted by Texas until the treaty of annexation. These articles of annexation, as one of the terms,, settled that “said State is to be formed subject to the adjustment by the Government (of the Hnited States) of all questions of boundary that may arise with other governments.” (Paschal’s Dig., p. 44.)
THE SETTLEMENT.
This question did arise on the fields of .Palo Alto and Eesaca de la Palma, and was settled bp our victorious army under the walls of Mexico, as ratified by the treaty of Hidalgo. A controversy afterwards, arose between Texas and the United States about the very land which had been won in the name of Texas. T lis exciting issue of that day was again settled by the jcint resolution of Congress of the 9th September, 1850, vhich was ratified by Texas on the 25th Hovember, 1850, by which Texas ceded to the United States certain disp ited territory, in consideration of $10,000,000 to be paic by the United States. (Paschal’s Dig., Arts. 443 to 450.)
The bonds in controversy were issued under this act. But they were, in fact, delivered to Texis under the act of the 16th December, 1861. (Paschal’s Dig., Art. 5320.)
This act inhibited the circulation of the bonds without indorsement.
THE DEDICATION.
The public debt of Texas having b ;en paid by the United States and by Texas, the Legislature of that State dedicated $2,000,000 of these bonds, r rniaining in the treasury of the State, to be set apart is a school fund. (Paschal’s Dig., Art. 3484.)
And by an act of 13th August, 1816, a board was created, and authorized to lend this school fund to railroads, at an increased interest. (Paschal’s Dig., Art. 3499.) The loans amounted to some $1,200,000, leaving some $800,000 at the commencement of the civil war subject to the control of these school commissioners. That bloody strife arrested the building of roads and totally disorganized the march of education. Everything sacred in the State was seized, by the insurgents. This fund, devoted to a charitable use, did not escape. It was seized by a military board and placed in the hands o ’ faithless agents. The record shows that the bonds in controversy went into the possession of White & Chiles shortly before the surrender at Appomattox Court House. An honest surrender, an ingenuous feeling, the proper spirit towards the children born and to be born, would have returned the money. But this did not suit the views of these parties. We find them knocking at the treasury door for their payment, and hawking them in market.
The record sufficiently shows, that the provisional government of Texas protested against the payment of these bonds at the earliest possible day; that they were sufficiently described; that they went into circulation after protest and maturity of other unindorsed bonds; that publicity was given; that those who purchased did so after maturity; and, in fact, with such notice as subjects them to the rights of Texas, the rightful holder.
[Mr. Paschal here reviewed the contract of White & Chiles with the military board, and showed that the bonds had then already matured.]
H. The State of Texas followed the holders of these bonds into this court, by exhibiting an injunction bill against White & Chiles, and such holders under them as could be discovered; and, praying for the cancellation of the contract, and a perpetual injunction against the collection of the bonds by the wrongful holders, the ad interim injunction was granted. The' pleadings have been read and discussed so often, upon the motions to amend and file cross-bills against each other and against the State and to dissolve the injunction, that I need not recapitulate the statements and answers. It is enough that we have traced home the property of the defendants.
HAS THIS COURT JURISDICTION?
IH. But now, we are met in limine by the objection, that this court has no jurisdiction of the cause.
Perhaps I might safely rest the argument of the point upon the fact, that the counsel of the deft ndants exhausted their argument upon the motion to dissolve the injunction, and the court refused to dissolve. But as the Chief Justice then stated, that the point was reserved until the hearing, I urge nothing from the fact that the State has been put to the expense of proving the facts charged in the bill.
I therefore proceed to answer the objection.
It might be enough to quote the Ccnstitution: “The judicial power shall extend to all controversies between two or more States, between a State and citizens of another State.” (Const. U. S., Art. 3, sec. 2.)
The history of the litigation which has arisen under both these clauses is familiar. I will he excused if I do little more than cite this tribunabto my own annotation of the authorities, in my work upon the C institution of the United States, Notes 204, 205, 271, 272.
Under the first clause, there is a bear ng upon this case in the great case of the Cherokee Nation against Georgia. (5 Peters, 1, 15, 20.) I have had to study this case, and its twin brother, Worcester v. Georgia, (6 Peters, 569 to 619,) under the dark clouds which threatened to involve my native State in civil war, and which < after this tribunal proved powerless to enforce its own mandate) forced-this confiding people into a treaty, by which they relinquished their beautiful mountain homes and sought a promised asylum west of the then frontier State o' Arkansas.
The guaranties of the Government for the protection of those who yielded to the demands of the Government, and signed the New Echota treaty, were not observed. Civil war in that nation afterwards followed, as is fresh in the history of this court. The Indians’ rex enge swept away the house with which I was connected.
It is enough that, in The Cherokee Nation v. Georgia, it was well defined what is a State and what is not a State. That Georgia was a State, which was am enable to the original jurisdiction here, had been decided in one of the earliest cases. (Brailsford v. Georgia, 2 Dall., 402-415; and also in the great case of Chisholm v. Georgia, 2 Dall., 419-478.)
In this last case it had heen held, in answer to the then incipient, crude arguments, that a “sovereign” could not he amenable to the powers of a limited government, that the citizen of another State, or subject of a foreign state, had the right to sue Georgia here, in an action for money-had and received under the confiscation laws of Georgia, by which laws the money due to.a British subject had been paid into the treasury of Georgia during the struggle for independence. The whole argument was then rightly met; and it was correctly said by Mr. Justice Wilson, that the rights of the State were limited to the things to which the State had consented in the constitution, and the rights of the United States over the States -extended to the exercise of all powers which the States had agreed, in the Constitution, might be exercised, and that one of the things to which the States had agreed was, that citizens of other States might sue a “sovereign State” in this court.
This solemn annunciation put the question afloat. The States said they had conceded too much to citizens and aliens. The power of this court so to decide was not seriously questioned. But, in accordance with the Constitution, Congress and the States went to work to take away this power. The eleventh amendment was proposed in 1794, and was very soon ratified. By this amendment it was declared, that “the judicial power of the United States shall not be construed to extend to any suit in law or equity commenced or prosecuted against one of the United States by citizens of another State, or by citizens or subjects of any foreign State.” The history of this amendment and the causes which led to it are given in Cohens v. Virginia, 6 Wheat., 264-406; and its effects, as to dismissing all suits then pending, was decided in Hollingsworth v. Virginia, 3 Dall., 378. (See Paschal’s Annotated Constitution, Note 270, p. 270; Story on the Constitution, § 1864.)
But the amendment only took away the right of citizens and aliens to sue the States; it left to the States the right to sue citizens of another State in this forum.
The case of the Cherokee Nation v. Georgia, 5 Peters, 1, defined that this jurisdiction “between two or more States’- only extended to States of the Union. And while it was admitted that the Cherokee Nation, as then organized in Georgia, Alabama, and Tennessee, was a State for many purposes, yet it was not a State which might sue Georgia here.
But the right of a State to sue the citizens of another State, since the amendment, has been fully recognized by this court in the case of Pennsylvania v. Wheeling and Belmont Bridge Company, 13 How., 518; Id., 18 How., 421.
IV. It is now denied that Texas is a State of the Union, which may maintain an action in this court.
I am aware that there are those who denied the constitutionality of the annexation of Texas. And one legislature did resolve that this act, increasing the slave power, had dissolved the Union. But these were political questions, which this court cannot consider. The annexation of Texas, like the purchase of Louisiana and Florida, was the exercise of far-seeing statesmanship, which looked far down the vista of time, and was only a movement in the direction of bringing all this continent under the protection of our national emblem, the stars and stripes.
If the annexation of Texas was valuable for nothing else, it enables us to resolve all the difficulties about the “ perpetual union” under the Articles of Confederation, and “a more perfect union ” under the Constitution. There is often confusion of mind in thinking of the transition from colonial dependencies to revolutionary bodies; the union of these bodies by the Articles of Confederation; the action of one government, yet the recognition of thirteen States by name in the treaty with Great Britain, which acknowledged our independence; the Constitution, by “we the people of the United States;” the enumeration and-denial of “ certain rights,” and “the powers reserved to the States respectively or to the people.”
Out of this controversy grew the Virginia and Kentucky resolutions of 1799-1800, and all the subsequent disputations which ended in the arbitrament of arms.
But Texas was an independent Power among the nations of the earth; and our people well understood what they surrendered by becoming one of the States of the Union.
As one of the results, Texas surrendered its national flag and seal; its right to collect national taxes, duties, imposts, excises, and postage; to regulate commerce, to coin money, and regulate the value thereof; to pass uniform rules of naturalization and bankruptcy; to levy war, keep armies and navies; to make treaties and national compacts; to change the form of government and establish nobility or dynasties; to emit bills of credit; to pass ex post /ado laws, or laws impairing the obligation of contracts; to send ambassadors abroad; and, in fact, do any and everything which free, independent, and sovereign nations may do.
These surrenders of the powers -pf a national government the whole people of Texas then well understood. And they as well knew that, in turn, they became an integral part of “the people of the United States,” a government whose object was to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defense; promote the general welfare, and to secure the blessings of liberty to the whole people and their posterity. In becoming a part of these people, we acquired the proud distinction of being citizens of the United States; and, for some purposes, wre conferred the right of citizenship of Texas upon every citizen of every other State and Territory of the Union.
This was a doctrine well expressed by the first man who shed blood in the cause of nullification, Chief Justice John Hemphill, and his associates, in Cryer v. Andrews, 11 Tex., 170-183; and Ussery v. Highsmith, 25 Tex., Sup., 96.
Texas electors acquired the right to vote for two members of Congress of the United States, and to increase the number with the increase of our population, “ excluding two-fifths of all others,” (slaves,) and to elect two Senators in Congress, and electors for President and Vice President
We acquired the rights of appeal to the original jurisdiction of this court for redress of grievances against co-equal sister States or their citizens, and to the appellate jurisdiction in all cases involving the common constitution, law's, and treaties, and of the reclamation of fugitives from justice and service, which we had not in the weak neighboring State Of Mexico. We obtained all the guaranties in favor of “ citizens of the several States,” and of liberty. And Texas retained the right of enacting its owm municipal local laws, so far as they did not violate the Constitution, laws, and treaties of the United States, or infringe upon the principles of a republican form of government.
Such was Texas in the Union. And Texas profited by these privileges.
And while we transferred to the United States the war which gave to the nation California, with its golden shores and vast commerce, we received these bonds in consideration of a cession of useless land and unconquered inhabitants—a rich treasure, which enabled Texas to educate every poor child in the State, and to enter upon the career of developing the resources of our vast State by constructing railroads.
[Mr. Paschal here drew a vivid picture of Texas, as it was before the war, and Texas after its schools were broken up, its internal improvements arrested; a country four years without a new house or fence being built; no labor-saving machinery imported; no broken glass or china, or worn-out cutlery or implements of husbandry or handicraft supplied by a new article from abroad; eighty periodicals silenced, and the type being melted for bullets; choice literature used for wrapping-paper or wadding; a generation growing into manhood without education or parental control; a generation being born amidst the fierce passions of an armed soldiery, and the still fiercer passions of mothers ever ready to sacrifice husbands, fathers, and sons in behalf of the black gods—the slaves—if they could only save these idols as chattels. He said, as he daily saw man thus being resolved into his primitive state, and being killed or dying at the rate of five hundred a day, he had often wondered if this continent had not been peopled, not so very long ago, with civilized and cultivated inhabitants, who had perished by intestine wai-s, and he had sometimes tried to calculate how long it would take to remit us back from the barbarism of war to the primitive' savage life which the Genoese sailor discovered. And yet, he was every day told that this Texas did not suffer by the war.]
But now, this plea to the jurisdiction tells us that, although Texas was a State which might have maintained this action, it is no longer such; that it lost its position in the Union by its ordinance of secession, of the 1st day of February, 1861; the ratification of that ordinance by the vote of its people;, the admission into the Confederate States; its participation in forming the cdnstitution of that confederacy; the swearing all its magistrates to support that constitution, thus renouncing all allegiance to the Union; the marshalling of armies; the submission to universal conscription by the Confederate States; the contributions of money and munitions, and, in fact, the doing of every thing which that State could do to sever the Union and the allegiance of its inhabitants from the nation.
The argument, has never been more strongly put than in the one hundred pages of quaint rhetoric and eloquence filed in this ease by the scholar, poet, lawyer, and soldier, Albert Pike. I have read that argument with all the admiration for the genius of the misguided author which I had when we were contestants at the same bar, and when he appeared as advocate and reporter, where I had the honor to be one of the judges of the supreme court in a young State, but far advanced in its jurisprudence. I have preserved the history of these revolutionary acts, and now refer to them in Paschal’s Digest, from pages 78 to 94.
I have little argument to advance in answer to this long and able argument of General Pike, or of what may be urged by the learned gentlemen who appear with him.
I have already advanced my theory in regard to the government, in stating the position of Texas in the Union. Every part of that theory is at war with the notion, that the State of Texas could resume what the people of the republic of Texas had surrendered. Those people were aliens to the Union before they became citizens of the United States. But, by annexation, they not only made the inhabitants citizens of the United States, but, for some purposes, they made every citizen of the United States citizens of Texas, with the right to become inhabitants thereof, and yet to remain citizens of the United States, with every right under the Constitution of the common Union.
These things being so, the secession ordinance was void; the attempted dissolution of the Union was void; the relations to the new confederacy were void; all legislation in contravention of the Constitution, treaties, and laws of the United States, and in aid of the rebellion, was void; and, therefore, the body politic no more ceased to be a State of the Union, than was its vast domain geographically slided from the boundaries of the United States.
[Mr. Paschal continued to elaborate this position.]
But whatever might be our differences in -theory before a political forum, or whatever might be urged against the right of Texas to sue in this court during the war, or to be represented in the Senate and House, or to vote in the presidential election in 1864, it is enough that this suit was not brought until February, 1867.
V. And this brings me to answer .the objection, that the counsel had no right to exhibit this bill. The record shows, that I was appointed by the provisional governor of the State, Andrew J. Hamilton; that my associates were appointed under an ordinance of the convention and an act of the legislature of 1866, under the retainer of Governor Throckmorton, after the proclamation of President Johnson, restoring the State, on the 20th August, 1866, and that I hold the power of attorney of Governor E. M. Pease to prosecute this suit.
I have no time to discuss the various acts by which Texas has been recognized by the political authorities.
I admit, that, during the war, the old flag went down in all Texas; that every federal officer was expelled; and that for four years the Hnion had no badge of authority there save the occasional incursions of the Hnion armies. As I said, it is useless to discuss the lights of the State or people of Texas then. It is enough, that every proclamation of the President, and every act of Congres, from the apportionment bill, which was really after the commencement of hostilities, to the proposal of the 13th and 14th amendments of the Constitution to all the States, assumed that Texas was a member of the Hnion, and subject to the national legislation. Every act of Congress, in relation to revenue, slavery, and reorganization, embraced Texas. Ho sooner had the armies dispersed, the governor and principal State officers fled to Mexico and other foreign lands, and almost every magistrate ceased to perform his functions, than the President proceeded to enforce the whole body of national laws over the State of Texas. Customhouse officers were appointed, and our ports were again thi’own open to the world as ports of Texas, as they had been in 1845; the mail service was re-established; troops were stationed there to enforce order; a provisional 'government was organized; internal revenue officers were appointed from the inhabitants of Texas, and back taxes rigidly collected; the federal judiciary was reorganized; new ports of entry were enacted by law; and Congress made appropriations to cover every national duty, just as it had done from 1845 to 1861.
Behind these political recognitions this court cannot go. (Luther v. Borden, 7 How., 1.) •
VI. But we are met with the argument that Congress has not recognized these provisional governments, under which the counsel derive their authority, but that the reconstruction acts have declared that no “ legal governments exist in Texas,” and other “rebel States.” (Passchal’s Annot. Const., Hote 276, p. 282.) That these governments are subject to military commanders, whom Mr. Pike calls “pro-consuls,” and'that, at most, the State organizations are “provisional only.” (Same note.)
This is all true, and I need not pause to consider whether a provisional government is, or is not, under the circumstances, consistent with the corporate relations of the State to the Union. As I understand it, Texas remained a State of the Union all the time, and Congress possesses the power to pass all necessary legislation to protect every inhabitant in the United States in all his rights of citizenship in Texas. And, this being a power, Congress, must judge of the most appropriate means to guard and protect the powers committed to the Union. But whether the reconstruction laws be constitutional or not, is wholly immaterial to this argument; for, if we take them away, then Texas is a corporate State under the constitution of 1866, which, for all practical purposes, is now the basis of the State government; and, should we take away that constitution, then we fall back to the constitution of 1845 and the act of annexation, and Texas remains a State of the Union.
Therefore, upon every contradictory hypothesis, Texas remains a State of the Union, and its governors had the right to employ counsel to prosecute this suit.
VII. And now, because Texas remained a State of the Union, and all the laws in aid of the rebellion were void, I contend that the law requiring the governor’s indorsement on these bonds, and the law dedicating them to the school fund and railroads, still remain in full force; and that the laws repealing the law requiring the indorsement of the governor and creating the military board, and the assumed possession of that board, being in aid of the rebellion, are void; and therefore the title of the State remains unimpaired.
This proposition needs no elaboration. The laws are, in express terms, to create a fund for war purposes; to organize a board to invest this fund; to levy a tax for war purposes; to authorize the board to invest the .fund in munitions of war; to repeal the law requiring the indorsement to aid these objects; and therefore, as pari materice, the same law.
Dow, there is a small party in Texas, and a few men elsewhere, who maintain that the whole legislation of the rebel States, and every official act after secession, were null and void, ab initio. In other words, that Texas ceased to be a State, that magistrates ceased to be magistrates, and all was anarchy. This is a very convenient doctrine, but it is not necessary to our case. It has its dangerous advocates for the doctrine, that the reconstruction laws are unconstitutional, and therefore all the governments created under these acts are null and void, and every legislative, judicial, and ministerial act are nullities. Extremes meet upon this convenient slogan of revolutionary parties, who prefer anarchy and chaos to law and order.
[Mr. Paschal here explained the dangerous destructive tenets of the revolutionary destructive Ab Initio organization.]
And he continued: The theory of revolutions and revolutionary governments has been a favorite study with me. While my neighbors were trying to tear down and destroy, I found my own safety in compiling the laws of a country which had been a Province under the Crown of Castile, a State under the Mexican Confederation, a Republic among the nations of the earth, a State in the Union, and a State in rebellion to the Union. These transitions had all been revolutionary. Different sovereigns and different sovereignties had thus given laws to a restless people.
My plan was to compile, arrange, and annotate the laws in force and the repealed laws, upon which the rights of these revolutionists rest. As my thoughts were in the closet, and not for this case, I may take the liberty of quoting from one of my own publications, which has now become the standard in Texas:
“Biit here again arose the difficulty of determining what has been repealed by construction, superseded, expired, or become obsolete. The Supreme Court had not always determined these questions, and the editor is conscious that his own judgment must often be fallible. Again, there are those, whose ojiinions are entitled to great respect, who believe that none of the statutes passed after the ordinance of secession have any binding force whatever; that they are the mere emanation of unlawful assemblies, none of whose members were sworn to support the Constitution of the United States, which is now acknowledged to be, as that instrument declares, ‘the supreme law of the land.’ While we believed the secession ordinance and the acts of legislation void for the purposes of their enactment, we could never see that it followed that the laws changing the practice in our courts, the rate' of interest, limitation, remedies, and the mere rights of persons and things, were not as valid as if these ordinances and organic changes had never been attempted. At any rate, the authorities at Washington, and the provisional governor, acting under the direction of the President, seem to have settled that the acts, not in violation of the Constitution and laws of the United States, and not in aid of the rebellion, are valid and binding until abrogated by superior authority; and, e converso, that those acts antagonistic to the supreme law, and in aid of the opposition to the power of the United States, were void from the beginning; thus, in fact, adopting the general principles of conquest and revolution. These principles seem to have been substantially acknowledged by the Texas convention of 1866.” (Paschal’s Dig., Pref., p. iv.)
These views are more clearly elaborated in the able opinion of B. W. Tayler, the Comptroller of the Treasury, which opinion was approved by Attorney General Speed, and is published in Uote 1162, p. 904, of the same book. The opinion is entitled to the more consideration, because it was expressed about these same Texan indemnity bonds, and the defendants’ counsel have filed it as a part of the argument, as to the only point where Mr. Tayler fell into error.
I thus dismiss the Ab Initio doctrine. It is not necessary to my ease. I could not invoke a theory which would make all marriages, registrations, judgments, convictions, executions, sales, and every daily transaction of life, void for want of official solemnization. If so destructive a principle were necessary to our case, I should expect to lose it.
It is enough that the military board, its objects, ends, and aims, and the. contract with White & Chiles, would have been nullities if enacted at the same time, for the same objects, by loyal Massachusetts.
VHI. And now, the objections to jurisdiction and want of authority to prosecute the suit having been answered, and the right of White & Chiles having been swept away, little more of my time remains to elucidate the law of the case, after it has been stripped of these preliminary questions. The remaining principles are few and simple, however.
IX. As this was a void contract, the State of Texas may maintain trover to recover the bonds. (1 Chit, on Plead., 149.)
As where they had been delivered to a married woman for hire; because, according to Lord Ellenborough, (Grose and Le Blanc,) the contract did not bind both parties. (Smith v. Plomer, 15 East, 608; same case, new edition, vol. 8, p. 288.)
So, where the goods bad been obtained under false pretences, although the note given for them had not been surrendered. (Thurston v. Blanchard, 22 Pick., 20; Stevens v. Austin, 1 Met, 557; Woodworth v. Kessian, 15 Johns., 186.)
So, where goods are sold upon certain conditions, to he performed at the time of delivery, and the goods are delivered, but the conditions are not performed, trover will lie to recover them back. (2 Saund., 47 l, for which he cites Bishop v. Shillito and Hornblower v. Proud, 2 B. & A., 329.)
X. The title of White & Chiles being void, and they having received the bonds after the maturity, (the time of payment, having been fixed by the tenor of the bonds and the number of coupons now exhausted,) the holders under them could acquire no better title than these illegal bailees.
I am saved the necessity of any extended review of the English and American authorities. The ground has been well traveled over by others; and, if any mistake has been made, it only needs to be corrected. All agree that, since the case of Gill v. Cubitt down to the present day, the English authorities have been somewhat conflicting, while nearly all the American authorities have .been uniform. I may therefore commence with the American case which is regarded as the strongest against us-.
Enough for our purpose is found in the rule laid down by Mr. Chitty, and adopted by the Supreme Court of Georgia.
“If the owner of a foreign bill of exchange, check, banknote, or other note, transferable by mere delivery, lose, or be robbed of it, and it get into the hands of a person not aware of the loss or robbery bona fide, and for a sufficient CONSIDERATION, PREVIOUS TO ITS BEING DUE, such person, notwithstanding he derived his interest in the instrument through the person who found or stole it, will consequently forfeit all right of action.” (Matthews v. Poythess, 4 Ga., 301.)
And after reviewing the English and American authorities, Justice’Hesbitt says;
“He who buys a promissory note, bill of exchange, or any other security, negotiable by delivery, before it is due, acquires a title to such security, and a property in it by virtue of his possession. But if such security be proven to have been lost or stolen, or in any other way appropriated in fraud of the rights of the owner, then such purchaser does not acquire a title to it, until he proves that he took it bona fide and for value. And, in that event, that is, when the ■ purchaser has proven that he took the security bona fide and for value, his title may be defeated by proof, on the part of the defendant in the action where suit is brought upon the note or bill, or of the plaintiff, where the suit is for the note or bill, that he took it mala fide.” (Matthews v. Poythess, 4 Ga., 305; and see particularly pp. 306, 307.)
Thus, “where the note carried on its face circumstances of suspicion so palpable as to put those dealing, for it before its maturity on their guard, and as to require at their hands such inquiry into the title of those through -whose hands it had passed; failing to be thus diligent, they must abide the consequences their negligence imposed, and could not recover, though they had not in fact knowledge of the fraud.” (Fowler v. Brantley, 14 Pet., 318.)
The case of McConnell v. Hodson, 2 Gilm., Ill., 647, 648, is one of a trust, and asserts the doctrine of constructive trusts.
And if the school laws of Texas are to be considered, then the purchasers are answerable for the trust fund accprding to the exhaustive case of Colt v. Lasurer, 9 Cow., 323.
Cases where the defenses were let in, because the note was indorsed after it was due, (Brown v. Davis, 3 Tenn., 82,) where Lord Kenyon, Justices Amhurst, Butler, and Grose agreed, that if there were the slightest circumstances to cast suspicion on the note, the defense would be allowed.
It was.truly said, that a fair indorsee cannot be injured by the rule; for if the transaction be fair, he would still be entitled to recover. (Id., 82, 83.)
And in the subsequent case of Taylor v. Mather, E. 27 Geo. III, B. R., the holder was held liable for the slightest circumstance which would lead to the presumption that the indorsee was acquainted with the fraud.
The ease of Boehm v. Serling, 7 Term, 428, was one where the makers themselves were guilty of the fraud of ante-dating. Lord Kenyon admits the principle, that if a party take the instrument after it is due, he takes it subject to all the equities between the original parties.
The rule in Brown v. Davis was, in fact, affirmed.
The case of Armory v. Merryweather, 4 Dowl., 92, states the doctrine still more forcibly. The note having been purchased when it was overdue, and being infected with a gaming consideration, the giving a bond for the note did not relieve the indorsee from the original vice.
The case of Crossly v. Ham, 13 East, 504, treats the question as one settled.
It would be supererogation of learning in me to criticise the cases reviewed by Mr. Justice Clieeokd, in Goodman v. Simonds, 20 How., 365. "What, in the way of exhaustion, was left undone by the learned judge, was completed by the able counsel who argued the case; and, if any thing were omitted, it has been fully supplied by the Georgia judge, from whom extensive quotations have been made.
Some of these cases have drawn weak analogies from the sale of property in market overt. But we have no market overt in this country, except under our estray laws.
The few dicta which may be found against us relate to money which cannot be identified because “not in a bag,” and to commercial paper transferred in due course of trade by indorsement or delivery.
In the name of commerce, an abhorrent theory has been propounded, that if a thief rob a bank of cash, negotiable securities, (in which is now included unmatured United States bonds,) ingots of gold and silver, spoons and forks, the purloiner may sell the commercial paper to some Fagin behind a screen, and give a good title, because Fagin’s place in commerce demands it; but if Sykes sell the ingots, spoons, and forks to an honest purchaser, they may" be proved by witnesses, and recovered in trover against one hundred successive innocent purchasers, until a judgment be satisfied; and yet there may be doubt about the identity of the chattels; whereas there can be none about the bonds, which can be traced by numbers, letters, dates, and secret marks.
This invitation to commercial thieves is in the name of commerce. But the rule of possessor in good faith has not been extended to commercial paper overdue or otherwise branded with suspicion. These are yet regarded as chattels.
Twenty-three years ago, I had some overdue treasury notes stolen from the mail by a deputy postmaster, so high in the social circle, that the case became historical. Full descriptions of the notes had been preserved; and, as in this case, the Secretary of the Treasury gave notice to the redeeming officers that the stolen notes would not be paid. But the thief so skillfully altered them, that the notes were redeemed by the Bank of America, and the identity was first discovered at the Treasury Department.
After a full discussion and correspondence between that remarkable lawyer, Secretary John C. Spencer, and myself, upon the whole law of the case, he recommended Congress to reimburse my clients, and it was done by private acts.
' [Mr. Paschal here read those acts of 1846, in favor of Doremus and Hixon, and others.]
This was the rule of the G-overnment here, as to payment after notice of wrongful possession.
I doubt not but the court-will apply the rule.
Albert Pike, with whom was his partner, Robert W. Johnson, and James Hughes, filed a written argument of ninety-three pages, which it is impossible to give at length and very difficult to abbreviate.
Albert Pike, for Chiles.
—He first gave the issues in the pleadings.
I. The first question which this case presents for the decision of the court is, whether Texas is a State in the Union, whether it is now one of the United States? The Constitution gives this court jurisdiction, of original suits in which a State is a party. In the first clause of the section which gives this original jurisdiction, the judicial power is declared to extend to controversies between two or more States, between a State and citizens of another State, between citizens of different States, and fixes the meaning of the word “ States,” by the further provision extending that power to controversies between a State, or the citizens thereof, and foreign States.
If Texas is not a State, of if, being a State, it is not in the Union, it is not competent to sue here.
If it be a State, it is not one of the United States, because it is not permitted to be represented in Congress, and to have a voice in the legislation of the country, to have a voice in the election of President and Vice President of the United States, and because it is held and governed by the other States as a conquered province. It ceased to be a State upon its conquest. The States of the Union are sovereign, at least as to all their reserved rights and powers. So this court has again and again decided. The United States have no right of eminent domain within their limits, nor any sovereignty within them, except so far as they are expressly invested with it by the Constitution. A subjugated State, held in bondage, governed by a military pro-consul, declared by Congress to have no legal government, and its actual government subordinate to the military power, to be merely provisional, is no longer a State, any more .than California was after it was conquered by the United States, or Ireland after it was subjugated by England, or Poland after it was partitioned. The act of Congress of March 25, 1867, declared Texas to be a “rebel State,” and provided for its government until a legal and republican State- government could be legally established.
[Mr. Pike here recapitulated the reconstruction laws, and the practice of the generals under them.]
We express no opinion as to the justice or injustice, the wisdom or impolicy, of these measures and of this system of government. These considerations are not involved in the case nor fit to be argued here. The single question with which we are now dealing is, whether a people so governerned are a State, and one of the United States of America. There is and there can be no union between the victor and the vanquished, so long as the victor governs the vanquished with the iron hand of military despotism. There can be union only among equal States. Texas is not “ a political body, acting as a commonwealth.” It is not in any, sense a free agent. If it should make and adopt a constitution, it would do so under duress! It is a territory in absolute, uniform, systematic subjection from one end to the other: a country “governed on arbitrary, despotic, and oriental principles,” how leniently soever the immense powers with which the generals are invested may be exercised. A military government is necessarily despotic. It keeps the country in order by the strong hand of power, and military commissions for the trial of subjects who are not soldiers are the tribunals of a despotism. Such a government cannot in any just sense be deemed a government of laws. It is a government of force. “ Despotism,” Burke said, “ if it means anything that is at all defensible, means a mode of government bound by no written rules, and coerced by no controlling magistracies or well-settled orders in the State.”
The question therefore is, not whether Texas is, rightfully excluded from the Union and governed as a province, but whether it is so in fact. Congress may deny it the right of suing here as a State, with precisely the same right that it can refuse' the right of representation. It cannot be a State for the purpose of suing here, and not a State for the purpose of taking part in the legislation of the country. It can have no more right to one than to the other, and no remedy when one is denied it more than when the other is. It cannot sit in Congress by its Senators and Bepresentatives; it cannot sit here among its peers, by you as its judges. Incapacitated to do one, it is incapacitated to do the other.
To argue that the United States have no right to put a State out of the Union, and that therefore a State actually excluded is to be deemed not to be so, but to be still in the Union, would be like arguing that, because a particular person has no right to sit as judge in a particular court, therefore, although he has done so in fact, he is to be deemed not to have done so. The acts which an individual has no right to do, may or may not, therefore, be void, but those of a State are none the less so because wrongfully done. The courts dan only inquire as to the fact. We speak, of course, of the political action of the legislative power, and not of statutes forbidden by the Constitution, and not enacted in the exercise of political power. However contrary to its solemn contracts, or to right and justice, the political action of a nation may be, it cannot be held void, nor can it be annulled or rescinded by the courts, which have no more power to decree the recision of such acts, as contrary to compact or to right or justice, than to decree specific performance of such contracts.
That the United States will guarantee to each State in the Union a republican form of government is a solemn compact contained in the Constitution. Ho organized political body, not having that form of government, can rightfully be a State of the Union; and if the United States destroy that form of government in a State, they cut it off from the Union. And yet the courts are powerless to compel the United States to perform that high duty, and comply with that solemn compact.
Hor can this or any other court enjoin the President from executing an unconstitutional law, because to do so will be to violate the political or constitutional rights of a State. This court could not have gained jurisdiction to decide that Andrew Johnson was not President, because Tennessee was not in the Union when he was elected. The judicial power is not unlimited. There are many questions which, when they are settled by the political department of the Government, this court cannot re-examine. It could not have inquired into the title of the United States to Oregon, or to Hew Mexico, as a part of Louisiana. When the Government sold the Cherokee Hation the country on both sides of the Missouri-compromise line of 36° 30', and so planted slavery north of that line along its whole extent, this court could not have adjudged the sale void, and the Cherokee title to the country north of the line invalid, for the violation of the Missouri compromise.
All these, and all questions of the kind, are wholly above the jurisdiction of the court. If it could decide them, it could make itself the sole power in the Government. They are neither legal nor equitable, but political questions. We greatly doubt whether the court could, where private rights depended upon it, inquire whether a treaty had been ratified, when no quorum of the Senate was present.
The Congress has solemnly enacted a law for the government of Texas as a conquered province. It was within the competency of Congress to declare the status of the conquered States, and to decide that they had no legal governments or valid constitutions, and to rule them as provinces by the right of conquest. Whether they had or had not a right to secede, they did so in fact, and by waging war lost all right to claim to be admitted into the Union. It would be singular if, upon being conquered, when the bitterness of defeat might have exasperated the-passions and hatreds aroused by the war, the States that had overcome them could have been at once compelled to reunite with them, to accept them as peers, and to allow them, perhaps, to shape the legislation of the country. The courts are not competent to declare that Texas is in law a State in the Union, when the legislative power has declared that it is not so in fact, and shall not become so, except on certain conditions not yet performed.
If the court were to hold that Texas did not withdraw from, the Union in law, because it had no right to do so; that there was no constitutional compact, ho union of the States, but a union of the people of all into one people, and a constitution and government proper over them and the States, made by that one people, as an English court might perhaps have been induced to hold that Virginia did not cease to be a province of Great Britain until the peace and the acknowledgment of the independence of the States; if it should hold that the legislation of Congress has not deprived Texas of its character as a State, could it decide that Congress could not treat it as a conquered State, refuse it representation, and deny its people the rights which they had forfeited by making war?
Could not Congress exclude Texas from the Union temporarily or permanently, even if it continue to be a State ? Suppose it so continued when conquered as fully as France continued to be France when conquered by the allies. It would not at all follow, that it was entitled to be received again into the Union; and much less that it was in the Union, although conquered, and without the consent or even against the will of Congress. If the son rebels against the father, he will not cease to be his son. The relation of father and son will continue to exist; but the father may, nevertheless, exclude him from his household. The northern States became the superiors of the southern ones when they conquered them. If the latter had no right to declare the partnership dissolved, and it was not so dissolved in law, yet it was dissolved in fact by the war, and the conquerors may hold the rights of the conquered as partners to have been utterly forfeited and lost, and refuse to readmit or recognize them as such. When the legislative power of the conquering States has so declared, the judicial power cannot deny their right and power to do so. Whether Texas had the right to go out of the Union or not, she did, by attempting it, give the other States the right to put her out, if they chose. If they thought that it would be unnatural for those whose hands were red with each other’s blood to meet in the same body as brethren, and undertake to legislate together as for one harmonious people, could they not, after the conquest, refuse the association, until passion should have subsided and time should have healed the wounds of civil war, and the representa^tives of all could act safely and harmoniously together?
If they had no right to establish a military despotism in Texas, that right is to be denied on other grounds than any to be found in the Constitution. We deny it under a law that no judicial tribunal can enforce, and which the United States can violate if they will. For a violation of it there can he no condemnation, except by the public opinion of the world, or in God’s great chancery. That law is, that no republic has a right to establish a military despotism over a conquered people once free, familiarizing them with loss of liberty, and corrupting its own people by the exercise of arbitrary power. The people that enslaves others is preparing itself to be enslaved, and despotisms so established curse the conquerors and the conquered alike.
2. If the court should determine that Texas is still a State in the Union, competent to sue here, it will then become necessary to inquire as to the validity of the contract made with White & Chiles by the military board, under authority of the acting legislature. The court must determine whether the State existed and acted during the war, and, if so, what acts done by it are valid.
The other questions that may arise upon the determination of these we will consider as we reach them.
The court is too well aware of the immense importance of these questions to need to he reminded that it is-time to establish the great and enduring principles by which questions of individual right and liability, growing out of the war, are to be adjudicated; and that if it should decide-single and seemingly subordinate questions, in which these also are involved, in case after case, without consideration of the whole ground and exploration ab imo of the whole subject, it may entangle itself in a net of contradictions, or at least commit itself to conclusions, that must become exceedingly embarrassing hereafter. Pronouncing its judgment, after profound examination, upon this whole subject, all men will assent, if its says—
“Quod modo proposui, non est sententia;
Verum crédito me vobis folium recitare Sibylla:.”
[Mr. Pike here, made long quotations from the speech of Burke upon conciliation with America, and quotations from Cicero, and urged the great importance of the subject.] ^
The tribunal that would render such a judgment upon the great questions that have grown out of the war of 1861, and the attempt of the people of eleven States to win independence and nationality, as will command the approval of the publicists of the coming ages, will not fail to review the origin and consider the nature of that controversy, the principles on which the people of those States acted, their claims of rights, and their pretensions to sovereignty, as well as the immense magnitude of the struggle, in which they failed to win success.
The war was but the conclusion of a controversy that was born with the Union itself. When the Constitution was ratified by the States, until which time it was a mere draft, presented to them to be adopted as their act and deed or rejected, there was no common agreement as to its essential nature 04 as to the parties to it. Some of the States ratified it as a compact, in the language of Madison in 1821, “between the States as sovereign communities;” and others as a “ constitution of government,” a supreme and paramount law, over the States and people alike, enacted by the one people of all the States. Some accepted its provisions as stipulations, promises, and engagements, made by each of the States with each other and all; while others saw in them restrictions, prohibitions, and limitations of power and sovereignty imposed by the sovereign will of the one people of the United States on the States.
[Here Mr. Pike quoted the Virginia and Kentucky resolutions, and the theories of the contending parties as to the construction of the Constitution, and he quoted from Calhoun, Webster, Madison, and others.]
After reviewing these lights, he continued:
That the States continued to he sovereign, the people of the South had been taught by this court, in the cases of Briscoe v. The Bank of the Commonwealth of Kentucky, 11 Pets., 317; The Bank, &c., v. Wistar et al., 3 Pets., 431; The Bank of the United States v. The Planters’ Bank, 9 Wheat., 904; and Pollard’s Lessee v. Hagan, 3 How., 221. In the last case the court held that the United States had no constitutional capacity to exercise municipal jurisdiction, sovereignty, or eminent domain, within the limits of a State or elsewhere, except in the cases in which it is expressly granted. In the State of Rhode Island v. The State of Massachusetts, 14 Pets., 256, and Florida v. Georgia, 17 How., 492, the Chief Justice and Justices McLean and Curtis had declared the States sovereign, exercising sovereign power; and Mr. Justice Curtis said: “Florida is a sovereign State; on the other hand, the United States is a landholder. The line carries with it the sovereignty and territorial jurisdiction of States.”
“I hope no gentleman will think,” Marshall said, in the Virginia convention, “a State will be called at the bar of a federal court. It is not rational to suppose that the sovereign power shall be dragged before a court.”
The people of the South argued that the word “State” meant still what it meant before the Constitution was made; that it has the same meaning as the Latin words Hegnum, Imperium, and 1lespublica. The English jurisconsults have always used the term, the State, to signify the Realm of England. The Kingdom of Spain is, in the Spanish laws, termed M Usiado; and Louis XIV said: “IS Mat, c’est moi,” “I am the State.”
Subordinate sovereignties, they held—sovereignties governed by a law imposed on them by a supreme power—are no more possible than free slaves. Retention of some of the attributes of sovereignty is not retention of sovereignty itself. A Roman slave had one of the attributes of a free man: he was proprietor of his little peculium. Even a parish or county possesses some of the attributes of a State. They held that the United States was a corporation, having unity and individuality; one State constituted of many States, and all its powers theirs, exercised by it.
They believed that treason against the United States was treason against all the States jointly, and that the people of one State could not be guilty of treason in case of war between that State and the others. They believed that allegiance was to all the States jointly, and that this could continue only so long, for the citizens of a State, as such State continued united with the rest. They believed that not the Senate and House of -Representatives, nor their members, but the States themselves, “assembled in Congress;” that each State sat there by its Senators and Representatives, and there they jointly legislated; that the States, by their electors, and not the one people of all, elected the President, and by him, the States by their Senators consenting and advising, appointed the judges of this court, and sat here to'adjudicate questions arising under the Constitution and laws and treaties of the United States; to hold the States to their promises and engagements, and determine that whatever in their legislation was contrary to these promises and engagements was not the act of the State, which could not violate these promises and engagements, but the unauthorized action of her legislative agents, and even to decide the legislation of all the States in Congress assembled void, if contrary to their stipulations with each other, contained in the Constitution. Here, also, is the amphyctionie council of the States, each State sitting in her judicial robes, and without passion, with calmly majestic impartiality, decreeing justice.
As a corollary fr’dm these doctrines, they were convinced that, although a State could not remain in the Union, and refuse to obey the laws of the Union, decided by the Supreme Court to be constitutional, yet any one or more of the States could at any time, if the Constitution were vio lated by the others, or if circumstances should have so changed that the compact was no longer a fair and equal one, but, as to them, had become onerous and unjust, peaceably withdraw from the Union, and resume the separate exercise of all their inherent and undiminished powers of sovereignty; but they admitted that there ought to be just cause for such withdrawal, in consequence of the common interests that would be affected by it.
Others, denying the right of secession even as an extreme remedy, denying that New England would have that right, even if its States were consolidated by act of Congress into one, with two Senators instead of twelve, yet held, that if the people of the southern States had just cause to complain that the Constitution had been violated, and believed that the Union had become onerous and unfair, by change of circumstances or otherwise, and that the welfare and safety of the people required that they should establish their independence and a separate nationality, they had a right to do so; and that the other States were estopped to deny that right, by the Declaration of Independence and the established usages and customs of the United States in' regard to colonies and provinces claiming to be independent and enforcing their claim by arms. These held that the southern States had the same right as Ireland, Poland, and Hungary to. win their independence if they could; and that, if their own welfare and happiness demanded it, they were under no obligation to remain united to Oregon, Minnesota, Nevada, and Kansas.
The people of Texas entertained the same opinions as those of the States from which, for the most part, they had emigrated; convictions strengthened, if to strengthen them were possible, by the remembrance of the days of the near past, when their State was a recognized republic that had won her independence by arms.
The movement of the southern States was a deliberate act, done by the people of each State in their sovereign capacity, in affirmance and execution of a claim of right; asserted by them from the beginning, and understanding which to exist they had ratified the Constitution. This great and grave fact could not be made not to exist; and a war by States be made, on paper, a mere insurrection of individuals. If it was or is desirable “to make treason odious,” in order to prevent like attempts in the future, it is far more desirable and far more important not to belittle, discredit, and degrade a great and combined movement of great masses of freemen, of our own blood, by treating it as criminal, ignominious, and. the creature of base, sordid, unworthy motives; for, to do this, it seems to us not only greatly to err, when the consequences are most terrible, but so basely to esteem human nature, that one who can believe that a whole great people could be led by such motives to hazard every thing upon the fortunes of war, ought not to think very well of his race, or of the fitness of any people to be free.
[Mr. Pike followed with some eloquent illustrations from the flag. He then continued with the history of the colonies, and the character of the struggle for independence.]
We say that the people of each State, as a State, withdrew. It is wholly unwarrantable to say, that, because they had no right to withdraw, they did not do so, but secession was the act of combinations of individuals in each State, and not of the States themselves. England could have said the same thing, and with much more reason, of the colonies; for these were not States, and the people had to rebel as colonists, and organize themselves into States after rebelling. Undoubtedly, they had not, according to the laws and constitution of Great Britain, any right to rebel, any right to become independent. But they set up a claim of right; they became independent in fact, as they declared themselves in 1776. They stated to the world their reasons, and they maintained by arms the right which.they claimed in council and with the pen. After the contest commenced, the question of right was no longer one to be considered. They had a cle facto government, although Great Britain still regarded them as rebels.
Mr. Justice Chase, in Ware v. Hylton, 3 Dallas, 199, inquiring what powers Congress possessed from the first meeting, in September, 1774, until the ratification of the Articles of Confederation, said that their powers were derived from the people they represented, given through the medium of their State conventions or legislatures.
The word “ State,” in its most enlarged sense, means the people composing a particular nation or community. In that sense it means the whole people, united into one body politic; and “the State” and “the people of the State” are equivalent expressions. (Penhallow v. Doane, 3 Dallas, 93.)
In free States, Mr. Justice Wilson says, “the people form an artificial person, a body politic, a moral person, a complete body of free, natural persons, united together for their common benefit.” “ The State, by which we mean the people composing the State,” said Mr. Justice Iredell, in Penhallow v. Doane. “ The residuary sovereignty of each State is in the people of the State,” said Jay, Chief Justice, in the same case.
A nation or State cannot, by changing the government, which is the organ of its will, disengage itself from its obligations, nor forfeit the benefit of its treaties. A treaty relating directly to the body of the State subsists when a republic is changed into a monarchy, or a monarchy into a republic; “for the State and nation are always the same, whatever changes are made in the forms of the government.” (Yattel, b. ii, § 85. See also Burlamaqui, part iv, ch. ix, § 16, f 6.)
Wheaton says: “Whatever may be its internal constitution or form of government, or whoever may be its rulers, or even if it be distracted with anarchy through a violent contest for the government between different parties among' the people, the State still subsists in contemplation of law, until its sovereignty is completely extinguished by the final dissolution of the social tie, or by some other cause which puts an end to the being of the State. (§ 20.)
A new State, springing into existence, does not require the recognition of other States to confirm its internal sovereignty. The existence of the State defacto is sufficient, in this respect, to establish its sovereignty de jure. It is a State because it exists. (§ 21.)
Even the temporary suspension, in consequence of a civil war, of the obedience of the people to a superior authority, and of that authority itself, does not necessarily extinguish the being of the State. (§ 22.)
Conquered, Texas ceased to be a State. It is said that a nation cannot conquer its own territory. Texas never was the territory of the United States. They never had even the right of eminent domain in it. If Great Britain had succeeded in the war of the revolution, it would have conquered the States which were once the colonies, although the territory of these States was at the beginning British territory. To be sure, upon regaining possession, she would have been in of her old title, and not by a new one, but she would, by conquest, have regained her old title.
How could the secession or revolt of Texas as a State destroy its existence as a State? It did not derive that existence from the United States. It became liable to cease to be a State if conquered; but how could it cease to be so by breaking a compact of union, or disobeying a supreme law? The people did not cease to exist; they did not become a disorganized mob; the government remained unchanged; the State made war, and was completely independent of the United'States for four years—in fact, exercising all the prerogatives of internal sovereignty. If it ceased to be a State, how could it, if it had succeeded, not merely have become a State upon that success, but all the time have been so ?
The whole is a question of fact, as the question of war or no war is. If it were a question of law, however, on what principle could it be held that Texas lost the rights which she had as a State and a sovereign, and which she reserved on entering the Union, by attempting to withdraw from the Union? She might forfeit them in consequence of that act, if she were conquered; but they were certainly not ipso facto destroyed. There id* no relation between the cause and the imagined consequence. During the war, Texas was not a province; its people were not an unorganized mob, without government, law, order, obedience, or constitution, or anything that distinguishes a civilized community from a horde of barbarians. Texas had what Cicero required to constitute a regular enemy—Pempublican, curiam, cerarium, consensum, et concordiam civium, rationem cdiquampacis etfcederis.
\_Mr. Pike here proceeded with his precedents from history, to show that in so great a war rebellion ceased, and the southern States became a government.]
Even by the municipal law a judge may have no right to sit upon the bench, may not be judge at all, and, therefore, the State not having selected or commissioned him, what he does and decides may not in reality be the acts and decisions of the State, as all the acts of her lawful judges are; and yet, that wrong and injustice may not be done to individuals, the acts of such a judge defacto will be held to be valid and effectual. How immense, in comparison, are the rights and interests dependent upon the acts, the legislation, the judicial determinations of a State waging war against the United States, under a claim of independence!—how immense, how incalculably vast, in comparison, the injustice that must result from a decision that none of the acts of the government de facto of a State so warring are valid, and that the State became civiliter mortuus, by endeavoring to withdraw from the Union, and vindicating her right to do so by arms.
It does not at all follow that after other nations have the right to recognize the independence of a revolted State or colony, as France did that of the American colonies, the mother country, or the republic so dismembered may not still continue its efforts to subdue and conquer the recognized State. But it will he no longer an attempt to suppress an insurrection or rebellion. It becomes an effort to subdue a refractory State. It is a war between States, at the close of which the mother country or republic may exercise all the rights of conquest, but no other. If England had subdued the colonies, she could not have treated Washington as a traitor or a rebel-» The contest had long before become a war in fact; and the law of nations, we again say, deals with facts, far more than with rights.
If the continental armies had at last surrendered, the execution of André would not have become a murder, nor that of Hayne justifiable. Theories and fictions all disappear before the stern realities of war and the shocks of hostile States.- Every State has a right to its independence, if it can win it. ETo bargain to the contrary can bind it forever; and, as we have said before, no organized war, conducted by an organized State, having a government regularly established, whether the State be large or small, and whether it throws off its allegiance to a king, or breaks its compact with other States, can be treated and dealt with as an insurrection or rebellion, or its generals and legislators as traitors. So the United States have again and again pronounced the law to be for other nations, and have vindicated the justice of their decision by the most cogent arguments. They have never admitted that the people of the British colonies were traitors, and that, if they had failed to win their independence, they would have been criminals deserving death by the halter.
Our courts have held, that “ where one portion of an empire rises up against another, no longer obeys its sovereign, but by force of arms throws off his authority, and is of sufficient strength to compel him to resort to regular hostilities against it, a state of civil war exists, as distinguished from rebellion; and the conflicting parties are to be regarded, by other nations as two distinct Powers, each independent of all foreign authority.” (Stoughton v. Taylor, 2 Paine, 652.)
There are not a state of war and a rebellion at the same. time. A thing cannot be itself and quite another thing at the same time. There is a state of war, as distinguished from a rebellion. There is not a state of war, which is always to have been a rebellion, in case of final success by the sovereign. That would be like the death-bed forgiveness of an enemy, by which the patient obtained extreme unction and absolution, but which, he then said, was to go for nothing if he should recover. Foreign nations have no right to interfere between a sovereign and his rebellious subjects, so long as it continues to be a rebellion only. If they do, it is just cause of war. Whenever other nations are entitled to regard the revolted party as a distinct power, it is because it has become a Power in fact, and nations deal with facts: it is because they have a right so to regard it: it is because it has a right to be so regarded. Neither will foreign nations allow the sovereign to be the sole judge of the existence or non-existence of that right, for he is a party to the cause.
“When, in a republic,” Vattel says, “the nation is divided into two opposite factions, and both sides take up arms, this is called a civil war. * * * Custom appropriates the term ‘civil war’ to every war between the members of one and the same political society.” The term “rebellion,” he says, “is applied only to such an insurrection against lawful authority as is void of all appearance of justice.”
“When a nation,” he ^ays, “becomes divided into two parties, absolutely independent, and no longer acknowledging a common superior, the State is dissolved, and the war between the two parties stands on the same ground, in every respct, as a public war between two different nations. Whether a republic be split into two fractions, each maintaining that it alone constitutes the body of the State, or a kingdom be divided between two competitors for the crown, the nation is divided into two parties, who will naturally term each other rebels.”
This court has held, that when a civil war rages in a foreign nation, one part of which has seperated itself from the old-established government, the courts must regard such newly-constituted government as it is viewed by the legislative and executive departments of our own Government. They cannot consider whether the revolt was rightful or without just cause and reason. (United States v. Palmer, 3 Wheat,, 610; Rose v. Himely, 4 Cr., 241.)
And if our Government remain neutral, but recognize the existence of a civil war, the courts cannot consider as criminal such acts of hostility as war authorizes, directed by the new government against its enemy. (Same cases, and The Divina Pastora, 4 Wheat., 52; The ¡Nuestra Señora de la Caridad, Id., 497.)
So, if the neutral rights of the United States are not violated by the cruisers of such newly-erected States, captures by them must be regarded as other captures jure belli, and their legality cannot be determined by our courts. (Same cases.)'
The United States never said to the Confederate States and their people, “We propose and offer to recognize you as belligerents, to the end that we may have all the benefits of a state of war, as distinguished from a rebellion, but if we conquer you, all that shall go for nothing, you shall be held to have been all the time in rebellion; never to have been States, or had governments de facto ; all your legislation, and all proceedings of your courts and magistrates, shall be deemed to have been null and void; your officers, civil and military, and your soldiers, shall be deemed to have been all the time traitors, and your naval officers and sailors pirates and bucaneers.” There are rights of war as well as' rights of peace, and one can no more be made by conquest never to have existed, than the other. It was held in the Sarah Starr (Blatchford) Prize Case, 69, that the civil war between the United States and the seceding States involved the usual consequences and rights of international wars. What other doctriné than this on the subject would be just? What other, if practiced on by the Government, would not cover the country with dishonor? If Great Britain had conquered the colonies, could she, in defiance of that law of justice and honor and reason which governs nations, have tried and executed Washington as a traitor ? The dictum of Judge Cadwalader, in United States v. Smart, in 1861, that a revolutionary government cannot be held entitled to the privileges of a de facto government whilst the contest continues, pronounced during the first heat and passion engendered by the war, ceases to apply when such revolutionary government has been recognized as a belligerent. In point of fact, such governments are recognized as governments defacto. Our Government and courts have so recognized such governments over and over again; and the government of the colonies Was a de facto government even prior to the 4tli of July, 1776. It is a question of fact, whether there is or is not a de facto government; and there is one as soon as one is organized in action as a regular gov ernment, and exercising the powers of regular governments, and when the combatants are no longer an unorganized assemblage or number of persons, with insurrectionary leaders only, and none of the forms of civil government. After such a government is in fact established, and in the exercise of supreme authority, making, executing, and expounding its laws, and placing officered armies in the field, governed by the rules of civilized warfare, the courts must be guided, not by municipal, but by international law; and so this court has adjudged, as we propose to show. After that, the courts cannot “ only regard those in arms against the , Government as traitors and rebels.” The sovereign out of possession is only a sovereign de jure.
Undoubtedly the cessation of the civil war restored the ancient possession, authority, and laws of the United States, and reinstated all who had remained loyal in all their rights, without pardon or amnesty; and the United States acquired no new title, but had vindicated that which had previously existed. There was no new title to the lands, forts, or other property of the United States, in the States whose attempt to achieve independence had failed. Any conveyance or sale of such property during the war, by the defacto States, would be held invalid, for title to such property could only be obtained by the revolting States by success. But the conquest did not annul everything done by the governments of these States, and all their departments, during the war, but only so much as could only become valid in case of success.
This court has held that by the conquest and military occupation of a portion of our territory by a public enemy, that territory becomes a foreign country, and goods imported into it are not imported into the United States; and also, that the re-possession of such country by the United States cannot change the character of past transactions, and the jus post liminii does not apply so as to make previous importations liable for duties to the United States, although the conqueror in temporary possession could not, by transfer, impair the rights of the United States. It is certain that the' United States were out of possession of the State of Texas during the whole war. As a belligerent, when acknowledged as such, Texas held the country included in her limits, and it was, for many purposes, (so far, for example, as respected the revenue laws,) no part, for the time, of the United States. The resumption-of possession and authority by the United States could no more change the character of past transactions, than if any other public enemy had taken possession of and held the country.
In Ware v. Hylton, Mr. Justice Chase said, that from the moment that the people of Virginia exercised the power of abolishing the old government and establishing a new one, “ all dependence on, and connection with, Great Britain absolutely and forever ceased, and no formal declaration of independence was necessary.” After that time, he said, the “Legislature of Virginia, established by the authority of the people, was forever thereafter invested with the supreme and sovereign power of the State.”
Moreover, he said that, before the solemn acts, (of Virginia, in June, 1776, and of the United States, on the 4th of July,) the war was a civil war; that instantly, on that declaration of independence, “the war changed its nature, and became a public war between independent governments.”
“From the 4th of July, 1776,” he said, “the American States were defacto as well as dejure in the possession and actual exercise of all the rights of independent governments.” In 1778, the King of France entered into an alliance with them, and in 1782 a treaty was made with them by the States General of the United Provinces.
“ States and nations are but assemblages of men,” living under some definite form of government, and ruled by laws. The formal and solemn acts of every people must be held everywhere to be the acts of the State which they compose.
The people of Texas, by folemn acts done by them as a people, withdrew from the Union. They withdrew in fact and effectually. It cannot be said that they did not withdraw de jure. That distinction is not applicable. It may be said that they had not the right to withdraw, but not that they did not do it. A king de jure is supposed to have reigned all the time. Louis XVH succeeded Louis XVI, and. on Ms death Louis XVIII began to reign in theory, and perhaps in law; and it maybe that the Jesuit who wrote history was not wholly wrong in law in saying that General Bonaparte commanded the armies of the king, Louis XVIU, and won many victories for him.
The act of the people of Texas was the act of the State. The fiction cannot be allowed, that it was not so, because the State had no right to withdraw. It is not of the least importance whether France or England had the right to revolt against the king, or Xapoleon to expel the legislar ture of France with the bayonet. He may never have been de jure emperor or consul, as Cromwell may never have been de jure lord protector; but when the people sustained each, the act of that people was the act of the State.
Xeither can resort be had to the fiction of law, that the corporation is a being in law distinct from the corporators. To do so would be to relieve a people of the consequences of their most solemn acts. H a State could avoid what was done by the consent of her whole people and by authority derived from them, either on the ground that what the people and the rulers selected by them did what was wrong or contrary to a compact or against the obliga^ tions of a higher allegiance, was, because of the want of right, not the act of the State, and null and void, or that the act of the whole people, even in overturning their government and by a revolution establishing a new one, was not in law the act of the State, then the people could escape from the consequences of their acts, avoid the most solemn contracts, and be profited by and rewarded for the greatest wrongs.
Hor does it make any difference if only a majority of the people concur in the action which afterwards they seek as a State to avoid. There was a minority in every one of the American colonies opposed to the separation from Great Britain. There were bodies of American loyalists in the British service; but the declaration of independ ence was none the less deemed and adjudged to be the act of the people of each State, and of the State itself. One man, or ten, or a thousand, cannot paralyze the action of the great -majority of the citizens, however much the minority may be in the right, and the majority in the wrong.
During the war that ensued, and up to the last moment of it, the authority of the State and Confederate 'Governments was acknowledged all over the State. Everywhere the authority of the State government was undisputed and implicitly obeyed. The course of justice was undisturbed, the legislature held its sessions, the machinery of the State government worked with all its accustomed regularity.
Eor did the armies of the United States ever occupy any portion of the State, except a small force camped for a time on its low, sandy, southern shore, and the only portion taken from her was retaken by arms.
Texas, Virginia, Eorth and South Carolina, and Georgia were not like the colonies of Great Britain, when these revolted and asserted their independence. They were States, had been possessed' of plenary sovereignty and independence, and at least retained' many of the most important attributes of that sovereignty. In withdrawing from the Union, they took upon themselves no new character, nor revolted as colonies, to become States by the revolt They resumed the plenary sovereignty which they had once possessed. It may be doubted whether a sovereign State can make any compact with others, by which she shall alienate in perpetuity her sovereignty, so that she shall forever be disabled to reclaim it. The leagues and alliances and compacts of union of States are in their nature and necessarily temporary, because no compact so solemn can be made that a State will not be justified in breaking it, if the welfare and safety of her people require it.
Eor, perhaps, will history at last adjudge that the British colonies had more reason, and, therefore, a more complete right, to throw off their allegiance to the mother country than the southern States to withdraw from the Union, nor that the cause of the revolt of the colonies was of a higher degree; -for the colonies complained of taxation only and of pecuniary burdens, and deemed themselves enslaved because they were taxed without representation.
The southern States withdrew from the Union in the assertion of what their people believed to be a great right and the true theory of the Government. They fought for a great principle, for the rights of the States, as they understood them; and how entirely soever they may have been in error, there was at least in the assertion of that principle nothing that was sordid or pitiful. The war was a war of ideas; and such a war always ennobles, as the discipline of sorrow always chastens a people. It ennobles both sides; and every one who wishes to respect human nature, and to believe that the people are moved to great efforts far more effectually by noble and high motives than by base and low ones, ought to be glad to be convinced, that while one of the parties to the great war fought for what they deemed the rights of the States and the truth, the other also fought for what they believed the truth and for the Union, and the flag that was the symbol of union, and to them of nationality.
Texas had been a republic, sovereign and independent. Other of the States had been colonies, and afterwards free, sovereign,¿and independent States. They had not forgotten the days when they were crowned with all the prerogatives of sovereigns. They believed that the Constitution was a compact made by them as sovereigns, and that they had the right to withdraw from the Union. They deemed their relations and rights the same in that respect as those of Scotland and Hungary, and of Belgium when it was united to France. Virginia had at the beginning reserved the right to withdraw. The southern States had been assured, before they ratified the Constitution, that it was a compact between the States, and not the law imposed on them by the people of all. So Mr. Madison had assured the convention of the people of Virginia, when Mr. Henry denounced the Constitution as intended to be such a law, and not a compact. They had been uniformly taught by this court that they were sovereign States, whatever the nature of the Constitution, or by whom made.
• The people of Texas were not subjects of the United States. They did not inhabit a colony or a province. When they asserted their independence, they did not assert a right to form or become a State; but their right, as a State, as a State already sovereign, to resume a seperate and independent existence.
Can-the United States, remembering their own history, and in what manner the colonies became States, and their claim to have been so defacto and dejure, while Great Britain claimed that their people were rebels,—can the United States, which recognized the Spanish colonies as belligerents, and hastened to acknowledge the independence of them and of Texas,—now insist that, because the southern States had not a right under the Constitution, whether it was a compact or a law, to separate from the Union, therefore the act of withdrawal was null and void, and there was no government defacto in Texas during the war?
. Whatever the right, how wrongful soever the action, even if the case were as if there had been a positive stipulation on the part of Texas, on entering the Union, that she never would, under any circumstances, withdraw from it, she did at least withdraw in fact, and endeavor to vindicate her right to do so by war. She placed more than forty thousand men in the armies of the confederacy, and reigned supreme within her own territory for four years. It seems to us,-we deferentially submit, that, to insist that because she had no right to secede, the ,act of secession and the subsequent acts of her government were void, is not more logical than it would he to argue that, because she had no power to make war, all her acts as a belligerent were void.
According to the opinion of Mr. Justice Chase, in Ware v. Hylton, the war of 1861 was not even a civil war, but a public one. If the colonies became an independent nation, and the war a public one, by their declaration of independence,'the southern States became so, and the war became such by the secession of the States as States, without change of their government, each withdrawing, armed, and standing erect to meet the terrible blows of the great Hnion from which they claimed the right to withdraw. The status of the colonies, and the nature of the war between them and the mother country, did not in the least depend on the rightfulness of their action or the sufficiency of their plea of justification. They claimed to be independent, they organized a government, they maintained their claim by armies and diplomacy; and these facts determined their status, the nature of the war, then-rights as belligerents. The same facts existed in the last war, with the single difference that then the States that withdrew were States already, and in this case as little as the other can a court have any concern with the question of rightfulness of action.
We do not argue that question. We do not argue what we claim that the court cannot consider in order to decide the question presented in this case. We make what may be mistaken for the defense of the Southern States only to show, that their action, based upon their convictions and upon the claims that they preferred, constituted them States de facto, belligerent States, waging public war against the Hnited States, and their people in no manner amenable to the criminal law1 as rebels and traitors.
[Mr. Pike here proceeded to argue and enforce the doctrine of belligerent rights. He quoted Chief Justice Mar shall, in Rose v. Hinely, 4 Cranch, 272, and criticised Mr. Dana.]
Whether a revolted province or colony or State is or is not a belligerent, is a question of fact, and not of law. When the status of belligerency is recognized, it is by an agreement between the parties, and not by concession, or grace and favor. The moment the condition of belligerency exists in fact, “every principle of justice and the usages of modern warfare,” which make part of the law of nations, require its recognition, and make such acts as the burning of Washington by the British and the plundering of galleries by the French unlawful.
There was undoubtedly a war between Texas and the United States, and all the powers and rights of war were in exercise bjr Texas. Therefore, foreign nations had a right to recognize it as a State and government de facto, entitled to the rights of war. They could not have had a right so to do unless it had been in fact so entitled; and, if so entitled, it was entitled to them as a matter of right, and to have them as against the United States. There is no grant or concession of that to which a party is entitled.
The sovereign cannot, upon conquering, undo what he has done as belligerent, and make it to have been another thing, any more than he can make the hostilities not to have been a civil or a public war.
Sovereignty is acquired by a State when it separates itself from the community of which it previously formed a part, and on which it was dependent. The internal sovereignty of a State does not, in any degree, depend upon its recognition by other States. The existence of the State de facto is sufficient, in this respect, to establish its sovereignty de jure. The internal sovereignty of each of the United States was complete from the time when they declared themselves independent. (Wheat., § 21.) This court has held that the several States, as to their munici pal regulations, became from that time entitled to all the rights and powers of sovereign States, and that they did not derive them from concessions made by Great Britain. The treaty of peace contained a recognition of their sovereignty, not a grant of it. (McIlvaine v. Coze’s Lessee, 4 Cranch, 212.)
An internal revolution, merely altering the municipal constitution and form of government, does not affect the being of the State. It remains the same. (Wheat., § 22.) In Texas there was never any revolution, or change of the constitution and form of government, or of the officers of any department of it. It was an existing State, or State de facto, with which foreign nations had a right to deal: an actual belligerent. The claim of right by the parent country, however perfect its right may be, does not affect the actual existence or the validity of much of the action of the revolted State. Spain refused to recognize the Netherlands for nearly seventy years after its declaration of independence, and Portugal for forty years after its revolt in 1640; but the great Powers of Europe dealt with both as sovereigns, notwithstanding.
Texas declared its independence of the republic of Mexico, of which Coahuila and Texas had been a State, in December, 1835. During the summer of 1836, the Congress of the United States resolved that the independence of Texas ought to be acknowledged by the United States “whenever satisfactory information should be received that it had in successful operation a civil government capable of performing the duties and fulfilling the obligations of an independent Power.” In 1861, Texas had ten times, perhaps twenty times, the population it had in 1836, and it was but one of eleven States that declared their independence and established a confederate government.
Moreover, this court has decided that where a nation is not able to protect its citizens, its claim upon their alie giance is suspended during hostile occupation. They cannot be afterwards punished for having acquiesced in the authority that gained control over the place, nor even be compelled, after restoration of the country, to pay taxes, excise, or customs for the time during which the enemy occupied the country. (United States v. Rice, 4 Wheat., 246.)
And, further, the people of a conquered place, who submit to the conqueror, and remain as non-combatants, owe a temporary and qualified allegiance to the occupying Power.
Any one who was in Texas or any other' of the southern States during the war well knows that the State and confederate governments not only existed de facto, but that they were most completely governments in every sense of the word, terribly energetic, and terribly in earnest. All the severe measures of the Government of the United States were made use of there. The government of the confederacy and that of Texas were as implicitly obeyed as that of the United States ever was. Each was regarded as perfectly legitimate, and their laws as having all the sanction that laws can have. Bo man dared murmur if he was discontented. Bo man dared to disobey; none claimed any right or immunity, however dear and sacred, , when the government took it from him.
Too readily to hold things void, because they are done unlawfully, or in violation of contracts, or without lawful authority, or contrary to the Constitution, is a dangerous judicial practice, that will lead courts into never-ending complications. A judgment cannot be held to be void because rendered by one who was not a judge de jure, nor a judgment of a court of general jurisdiction because no process was served upon the defendant. The supreme court of one of the States for a time held both void, but was compelled to retrace its steps. Suits for trespass against judge, sheriff, and attorney, for levying execution under such judgments, restored it to its reason.
The acts of States are never void, that is, as if never done at all; and at least never so because they are wrong. Necessity is, in a great measure, the law that governs nations.
The Constitution provides that no State shall, without the consent of Congress, enter into any agreement or compact with another State. Whether this is a law imposed upon the States by a common superior, or an agreement by each to refrain from making such compacts or agreements, it is not certain that, if one were nevertheless made, it would be void.
If the ordinance of secession of Texas was void, then it had no effect whatever, and least of all to end or suspend her existence as a State. She continued to be a State de jure as well as de facto. If the subsequent acts of the government of Texas, of the persons exercising the powers of •government there hostile to the United States, were unlawful, whether because they were contrary to the Constitution, or because they were acts of rebellion, they were not void; and if these were, acts of every other kind, not being of that hostile character, but relating to the internal economy and domestic affairs of the State, were not void, nor even unlawful and liable to be annulled, any more than the decisions of the Supreme Court of Louisiana after the State had seceded.
If sales and grants of land were made by Texas during the war, they were not void, nor are they avoided by conquest. Could the State now' reclaim the land, on the ground that the acts of the de facto government were not in law her acts, although they were in fact the acts of her whole people, and could she also refuse to refund the price, on the ground that it was an unlawful contract, made with persons who had usurped the powers of government, such pretences would shock the moral sense of mankind, and a law that permitted such things would be the patron of fraud. To rebel would have been for the people of Texas a profitable speculation if that could be done.
The compact of union was violated not by an unorganized multitude of individuals, but by the people and the State. That violation no more dissolved the State, or produced its civil death, than the violation of a treaty would. Zurich once withdrew from the Swiss Confederation, and was compelled by arms to submit and return. Ho one dóubts that it was both de facto and de jure a State or canton while so separated in fact, and it was never pretended that its people were traitors.
For whether such a movement on the part of a people is treason by the individuals, depends on the circumstances and the magnitude and order of the movement, and not upon success or failure. These can have no such relation, no such retroactive effect, as to change the nature, moral or legal, of past acts.
There is no individual treason where a people claims a right to nationality, and establishes an organized government, and carries on a regular war.
It is insisted that all acts done by the State of Texas, or the government de facto of the State, during the war, which were contrary to the Constitution of the United States, were void. It was not contrary to that Constitution to sell the bonds in question, nor was it contrary to that instrument to buy cotton cards and medicines for the people with the proceeds of 'the bonds, or with the bonds themselves. It is true, that the bill avers that an unlawful combination of individuals, in armed hostility to the United States, claiming to exercise political authority over the State, seized on its treasury, archives, and property, including the bonds, and established a military board, 'and that the board disposed of the bonds for an unlawful and illegal object, viz, the overthrow of the authority of the Government and Constitution of the United States, which the convention proposed to effect by withdrawing the State from the Federal Union.
But the articles of agreement exhibited with the bill form part of it, as if incorporated in it, and these show that the bonds were sold for the purpose of procuring cards and medicines. And the answers of White & Chiles expressly deny that this purchase was for the purpose alleged in the bill, and aver that the cards and medicines were not to be used for any purpose connected with the army, but to be distributed among the suffering and destitute of the State. It is matter of public history that the whole military force of the seceded States was in the service of the confederacy, whose conscript law placed in that service every man between the ages of seventeen and fifty.
If the contract in question was invalid, as contrary to the Constitution of the United States, it must be on the naked ground that secession made the government of the State unlawful, and that all it did was void. The allegation of the bill, and its ground for relief is, that for want of authority to make the contract, and because it was contrary to law, and done for the unlawful purpose alleged, it did not affect the title of Texas to the bonds, or transfer any right or title to White & Chiles.
Such acts and contracts on the part of a revolutionary government-are never void. They are done for the benefit of the people of the State, and that people, when the government changes, cannot repudiate them. Uor, indeed, was the government of the State revolutionary in any true sense of that word, because it was the same government as before, and there was no internal change whatever in the State. It was unlawful, if at all, precisely as the continental congress was, and not revolutionary, as the English parliament and the national convention were, which deposed the regular governments of England and France. It was the lawful government of the State, or else the tribunal which rendered the decision in White v. Cannon was not the Supreme Court of the State of Louisiana; for the judiciary is one department of the government, and that court could not be a lawful tribunal and at the same time part of an unlawful government.
It seems to us, that if the right to secede did not exist, contradictions, if not absurdities, can only be avoided by holding that the people of the State, constituting and being the State, did secede in fact; that, the State government being unchanged, its acts were the acts of the people of Texas, done through their chosen agents; that, when the confederation was acknowledged to be a belligerent Power, there was no longer a rebellion, but a war, a public, and not merely a civil war; that, after conquest, the status of rebels and traitors could not, for any purpose, be reimposed on the people of Texas; since, if it could, General Lee, having been paroled, could not be tried for treason, while Mr. Stephens, who was but a civil officer, could; that the United States may exercise the rights of conquest over what, upon being conquered, ceased at once to be a State and became a province, without any right of readmission into the Union; may annul the laws of the conquered State, and govern it as a province but cannot annul executed contracts, or make that not to have been done, which was in fact done, on any such theory as that the State did not secede, because it had no right to secede.
The case of Respublica v. Chapman, 1 Dallas, 53, in the Supreme Court of Pennsylvania, decided in 1781, two years before Great Britain, by treaty, recognized the people of the United States as no longer rebels, seems to us to apply with singular force to the questions now before this court in this case.
\_Mr. Pike quoted this case at length.]
IU. If it should, contrary to_ our hope, be thought that, in regard to the status of the State of Texas and its people during the war, this court is hound to he governed hy the action and decision of the political power of the government, and must, therefore, enunciate as applicable here the doctrines laid down by Mr. Dana, then we shall, with great deference, submit that the political power is estopped by its own declarations and action to apply these doctrines; and that this court has so decided, in the Prize Cases and the case of Mrs. Alexander’s Cotton, as to establish, beyond possibility of refutation, the principles in support of which we have attempted this argument.
[Mr. Pike here reviewed the several acts of Congress, to show that the States and not a part of the people were regarded as rebels.]
And in determining this, the court must give the preference to that intention, by making which effectual the great and leading purpose of the Government was to -be attained, the conquest of the refractory States effected, and. the measures necessary to it, such as the blockade, non-intercourse, and the treatment of the inhabitants of the hostile country as public enemies, be legitimized; as also to that which would be most consonant in its consequences, during the contest, with humanity, justice to the nation’s own soldiery, and the rules and usages of civilized warfare with a people having all the forms, and all the substance too, of an organized and civilized government. Wherever there are seen to be conflicting intentions, that which is the stronger, the more beneficial, and produced by the more controlling motives, must be deemed to have been the only governing one.
Tested by this rule, which the judicial tribunals must obey, unless they would' humiliate the political orgáns of the public will, it must, we earnestly believe, be held that the .Congress of the United States was actuated by the paramount and supreme intention to hold the hostile action of the South to be the action of the States, and not of lawless and unorganized assemblages of individuals, and the hostilities themselves a public war, in which each party had irrevocably won for itself all the rights and immunities, and assumed all the duties and responsibilities, of belligerents. That being so, the whole was outside of “the narrow circle of municipal justice,” as all acts are, in the eye of history, of a people unanimous in their fixed resolve to win for themselves independence or to accept . with patient equanimity and heroic endurance the adverse fortunes that are the heritage of the vanquished.
We come now to the adjudications of this court, which have given effect to what we have shown to have been the paramount and overpowering intention of the political power and legislative will.
“A divine law is n'ot right because God wills it, but He wills it because it is right,” said Saint Thomas Aquinas. Such, too, is at least the theory in regard to the great laws of a republic, which affect the fortunes and the honors of whole States.
[He then reviewed the Prize Oases, 2 Black, 635.]
From these he quoted: “ Bnder the very peculiar constitution of .this Government, although the citizens owe supreme allegiance to the Federal Government, they owe also a qualified allegiance to the State in which they are domiciled. Their persons and property are subject to its laws.”.
“Hence, in organizing this rebellion, they have acted as States, claiming to be sovereign over all persons and property within their respective limits, and asserting a right to absolve their citizens from their allegiance to the Federal Government. Several of these States have combined to form' a new confederacy, claiming to be acknowledged by the world as a .sovereign State. Their right to do so is now being decided by wager of battle. The ports and territory of each of these States are held in hostility to the General Government. It is no loose, unorganized insurrection, having no defined boundary or possession. It has a boundary marked by lines of bayonets, and which, can be crossed only by force. South of this line is enemies’ territory, because it is claimed and held in possession by an organized, hostile, and belligerent power.
“All persons residing within this territory, whoso property may be used to increase the revenues of the hostile power, are, in this contest, liable to be treated as enemies, though not foreigners. They have cast off their allegiance and made war on their government, and are none the less enemies because they are traitors.”
He also reviewed the opinions of Sir James Marriott, judge of the high court of admiralty, in The Rebecca, 1 H. & M., 212; and The Dickinson, 1 IT. & M., 40.
In the case of Mrs. Alexander’s Cotton, 2 Wall., 404, the court said: “We must be governed by the principle of public law, so often announced from this bench, as applicable alike to civil and international wars, that all the people of each State or district in insurrection against the "United States must be regarded as enemies until, by the action of the legislative and executive, or otherwise, that relation is thoroughly and permanently changed.” “This court,” it said, “ cannot inquire into the personal character and dispositions of individual inhabitants of enemy territory.”
The law, as decided in these cases by this court, is this: As soon as President Lincoln issued his first proclamation, calling for troops, a civil war existed, waged by States, acting as such, against the United States, and all persons within the limits of those States at once became parties to that war, and enemies to the United States, and their property liable to capture and confiscation.
How could the act of the State make loyal men, who did not consent to it, traitors? If all the inhabitants were enemies alike, and alike parties to the law, how could any of them be guilty of treason ? They could not, unless all were so, which would be a horrible proposition. If the act of the State made all of them enemies, it is very clear that none of them were traitors; for it could not make them so, if they owed a higher or supreme allegiance to the United States. The act of the State could only be the act of all, upon the hypothesis that it was not prohibited. by any superior power, and that it was valid, and not null and void for want of power.
Very grave consequences and singular conclusions flow from this decision of the court.
If the act of the State were the act of all her citizens, and they therefore were all enemies of the United States in law, the State had the jiower to secede, and exercised it, and did cease to be a member of the Union. Whether she had the moral right to do so or not, she did do it.
If all the citizens of the State were parties to her action in seceding, and parties to the war carried on by her afterward, those were traitors to their State who took up arms against her, or gave aid and comfort to the United States.
If, upon the insurrection enlarging to the dimensions of a war, all the Union men in the seceding States became enemies and parties to the action of their,States, those who had been such, and were opposed to secession, were perfectly justifiable in determining to adhere to their States and share their fortunes. What other option was left to them? ÜSTine-tenths of the leaders of the confederacy, in-the field and in council, and who long remained unpardoned, were Union men, who acquiesced in what they could not prevent, the action of their States, and obeyed that which the court has, it seems to us, in fact decided to be their first and paramount allegiance. It is only through his State, and a citizen of it, that the citizen of a State owes allegiance to the United States. There is no other possible principle on which it can be holden that, when a State seceded, every inhabitant of it was a party to the act, and upon war blazing out became an enemy of the United States.
When provinces or subjects revolt against their sovereign, and maintain their claim to independence by arms, a time always comes when foreign Powers recognize their independence.
This recognition not being wrongful, not the exercise of a mere arbitrary discretion, but of a right, there must be some mode of determining when the right comes into existence; and, when it does, the insurgents must have ceased to be rebels or traitors, and have become belligerent enemies, carrying on lawful war.
The fourth Nouvelle Cause Celebre of the law of nations, reported by the Baron Charles De Martens, is that of the controversy of 1778 between Great Britain and Prance, in respect of the acknowledgment by the latter of the independence of the Anglo-American colonies. In it, the author says, was involved this question of high importance, to wit: “Until what point are subjects to be considered as rebels, and consequently when is it permissible or forbidden to foreign Powers at peace with the sovereign to embrace their cause, without violating the principles of the law of nations?” It is at once seen that this writer, of the very highest authority, makes the right of recognition to depend on the fact, that the war has reached or gone beyond the point at which the revolutionists ceased to be rebels; and this must needs be so since so long as they are rebels they are traitors, and treason is a crime punishable not only with death, but with infamy.
The United States, against the opinion of the civilized world, still persists in considering those whom they have conquered as traitors. We submit that they are estopped to do so, and to deny to those whom they for more than three years recognized as belligerent enemies the rights which they had as such, and did not'take by the grace or grant of the hostile power. The recognition by foreign nations of a state of war and condition of belligerence is the recognition of a fact.
TV. There are other questions in the case that may demand consideration and decision.
The bonds in question made the United States debtor to Texas. We cannot deny that these were cancelled when the State engaged in a war against the United States. They were not like public securities of one enemy held by individual citizens of another. If available to and transferable by Texas during the war, they could be used to carry on the war. Any sale of them for that purpose was necessarily invalid. But, if this be true, it is fatal to the present claim of Texas. For, upon that ground, she might as well come here to reclaim them, if they had been sold for money, for their full value, and the money used in purchasing food for the people.
If Texas had succeeded in winning her independence, could she, when recognized by the United States, have claimed these bonds, as she does now, and upon the same grounds? If not, how would success have changed those grounds, or have made the sale of them any the less unlawful, the purpose different, or less contrary to the Constitution ?
Or if, retaining the bonds, she had gained her independence, could she then, without any stipulation on the subject in a treaty of recognition, have demanded payment of the bonds, as held by her uncanceled by hostilities or rebellion ?
She alleges in her bill that the bonds were sold in aid of hostilities against the United States. She alleges also that the military board had no authority to sell them, but that is stated as a corollary from the alleged fact that the board was established to aid in the purpose of withdrawing from the Union and making war. There is no allegation that the officers of the State government were deposed, or that there was any change or revolution in that government, or that it usurped upon the people, or was not sustained by them. If the State had, after seceding, still the right to demand payment of the bonds from the United States, and it was not the State that rebelled and made war, but only a combination of individuals, and if .the bonds were not disposed of by the government of the State, but only by these individuals, would not payment of the bonds have continued to be demandable by the State until she had gained her independence, and could she not then have reclaimed them, as she does now, on the grounds set up in the bill?
Ho ground of unfairness, lesion, inadequacy of consideration, overreaching, or the like, in the contract, is alleged in the bill. A State cpuld hardly avail itself of such a ground for avoidance of a contract made by her officers. Ho collusion or fraud is charged. The allegation is simply want of authority to sell on account of the purpose.
At the time when the contract was made, the issue of the war was still uncertain. If Texas succeeded, the bonds would certainly not be paid to her. If she failed, they would not, in all probability, be paid to her or to those to whom she sold them. Of course they had no certain and definite value. Hot being conquered, she had a right to agree to receive, in lieu of them, if circumstances should prevent the furnishing the cards and medicines, her own bonds and warrants, which would be good and valid if she succeeded. That, upon her failure, these were repudiated, and have become worthless, does not make the contract to have been unfair at the time.
Whether these bonds and warrants were valid or not, is and was'a judical question. If she bound herself to receive them, she cannot be relieved of the contract in a court because she has by legislative act repudiated them, and the United States had no right to dictate that repudiation as one of the terms of readmission into the Union after conquest, or, if they had, the State has not been readmitted; and if it has.never since the war had any legal government, as Congress has declared, there has been no valid repudiation.
Y. If the authorities of Texas had sold the bonds for money at par, and used every dollar in purchasing munitions of war and paying troops in arms against the United States, Texas would have, on the ground of unlawfulness of the contract and want of authority to make it, the same case that it'has now, and would be here virtually demanding that the United States pay to its people, upon their bonds, moneys already received in full by that people, and used in carrying on the war. It is a suit to prevent the people of Texas from losing, by what they now claim to have been a rebellion, moneys expended in carrying on that rebellion.
On the theory of the bill, it seems to us the bonds are extinguished, unless they are in the hands of bom fide holders, not affected by the unlawfulness of the transfer to White & Chiles.
YI. It seems to us that the court is asked to establish a new principle of mercantile law, when it is asked to hold that one who purchases an overdue bond is. not only bound by the equities between the maker and payee, but also by equities in favor of the payee, who has¡ transferred by indorsement or delivery, and that, not only as against the maker, but also as against the payee so transferring, he must inquire into the consideration, not of the instrument itself, but of the sale and transfer of it, even when on its face it is transferable by delivery. What if such a bond were stolen from the payee, and put on the market? Would not the fair purchaser for value hold it,.even if it were overdue?
We need hardly say, that to attempt to charge the purchasers with any equities in favor of Texas, by showing that notices were published in newspapers, or that it was generally known that there was some objection to paying these bonds, amounts to nothing. The knowledge must be brought directly home to the parties. If such testimony amounted to anything, there would be no safety in any stock transactions whatever.
VH. The bill in this case makes no allegation whatever in regard to the status of either White or Chiles, at the time when the contract in question was made. It is not alleged that either of them was then a citizen.ofithe United States, or owed them any allegiance, or that either of them had ever resided in the United States. For aught that is alleged in the bill, both may have been foreign-born, and at the time subjects of Gr^at Britain. How the facts were as to that, the court cannot know, because there being nothing in regard to them affirmed, there is not, nor could be, admission or denial; and what the State has not chosen to affirm, in her own favor, the court must presume not to have been so, or she would by affirmation have excluded the conclusion against her. That these defendants are citizens of particular States now, does not prove that they were so then, nor raise the presumption that it was so, in ■ the absence of an allegation in regard to the fact itself.
Hardenberg was a citizen of the State of Hew York when he purchased in open market and in the course of trade, without any proven notice that can affect his good faith, the bonds for a little while held by him and.then paid at the Treasury. Birch, Murray, and the other partner of their firm were likewise citizens of Hew York when other of the bonds were hypothecated to them for advances made upon them.
How, the people of Texas, who, in the language of Mr. Justice Iredell, in Chisholm v. Georgia, 2 Dall., 448, “created the State,” “their voluntary and deliberate choice ” “ being the pure and sacred source ” from which the State derives its authority; the people of that State, to whom, in the words of Mr. Justice Wilson, in the same case, (Id., 455,) the State is subordinate; the people, the complete body of whom, united together, is the State, and cannot be denied to be so, nor their deliberate act not to be its acts, without striking a blow at the very foundation of all republican or otherwise free government, having sold these bonds to persons not shown to have been incompetent or disqualified to contract with the defacto government of the State to furnish for the use of its citizens articles not contraband of war, now comes here to demand of loyal citizens of the United States the bonds which it was thus instrumental in putting upon the market, in order that it may be repaid by the United States what otherwise it will by the fortune of war have lost.
And if, as the bill alleges, the purpose of the sale was to procure means with the aid whereof to carry on the war, and the contract was therefore an unlawful one, then the case is all the worse, since the purpose of the bill is to enable the people of Texas to reclaim from the United States the amount of their bonds, which the same people had put in circulation to injure the United States.
Will that people be allowed to use the fiction that the State and people, the corporation and the corporators, are different in law, for the purpose of compelling the United States or their loyal citizens to pay, to the amount of the bonds reclaimed, with interest, the expenses incurred by the people of Texas in carrying on the war. We say their loyal citizens, because the bill does not impeach the loyalty of either White or Chiles, or of these purchasers of the bonds.
If these bonds had been disposed of by faithless agents, against the will or without the consent of the people of the State, the ease would be very different; but it neither was so, nor is any such allegation made in the bill, and what is not alleged cannot be proven.
Could the people of Texas thus make rebellion or even war profitable, by first getting the value of the bonds in war supplies, (say arms and ammunition,) expending these in hostilities or rebellion against the United States, and then reclaiming the bonds, in order to collect the amount of them from the United States, by alleging, not that they did not authorize it' but that the acts of the legislature elected by them, acts sanctioned by the immense majority of the people, and not, indeed, denied by the bill to have been sanctioned by all, were nevertheless not the acts of the State ?
Again: If the contract was an unlawful one, made by the people, by the agency of a government created and sustained by them, and thus made by the State, will the court, in the exercise of its equitable jurisdiction, give the same people or State any assistance or relief, to enable them to avoid the consequences of a contract made in violation of law, or against public policy, or contrary to the laws of nations, which invalidate dealings with the enemy?
The general principle, for which we need not cite authorities, is, that, where a contract is contrary to law or to public policy, neither party to it can have any remedy against his particeps criminis in a court of justice; no relief in regard to it will be given, either in law or equity. If the contract is already executed, it cannot be set aside as illegal or immoral,- for it is a maxim that in pari delicto melior est conditio defendentis. There is no fraud or mistake in this case. The State and people of Texas were equally in delict with those to whom they sold the bonds. She has chosen to allege that the purpose was unlawful, and she cannot have relief on the ground that her own allegation is not true. Can any such fiction as that there was a State of Texas, in January, 1865, distinct and difierent from the people of Texas and from the State of Texas, actually existing and waging war, contracting and legislating—a State in nubibus, a metaphysical abstraction and subtlety, having no real life, or action, or powers, or attributes; and that this State did not make the contract, but now comes here to repudiate it—can such a fiction of a mere imaginary being relieve the actual, living, palpable State, if it is still a State, and not a province, from the application of the principle which we have stated?
It is upon this fiction that the people of Texas are now presented here in the humiliating attitude of repudiating a contract entered into Tiy their chosen and trusted officers, while they were engaged in a war for independence. It is upon it that they seek to be saved from the loss otherwise to be borne by them, in consequence of acts which they allege to have been unlawful, and which were yet done by their authority. It is not a fiction of law, that the people of- a State are not the State, so as to be responsible for the acts of the government of the State, but a mere fiction without law, and one which is very far from being in furtherance of justice.
P. Phillips, for Mr. White,
argued substantially that ' Texas was a State, which could bind the people by its officers.
The people of Texas had organized two governments, one for their domestic affairs, and one for federal affairs. The ordinance of secession purported to dissolve its relations to the latter Government, but it left intact the State government, to which it in nowise refers. The relation between the people of the State to its domestic State government was, therefore, the same in all respects after as it was before secession.
The effect of the ordinance, even were it properly applied, must wholly depend upon its validity. That which is void can produce no effect in judgment of law; and that this ordinance is void, is the settled doctrine of the court.
This court said, in treating of this question, “the objection that the judgment of the Supreme Court of Louisiana is to be treated as void, because rendered some days after the passage of the ordinance of secession, is not tenable. That ordinance was an absolute nullity.” (White v. Camon, 6 Wall., 450.)
It would be, indeed, a singular result, if that which was an absolute nullity was potent enough to paralyze a State government which the people, in the legitimate exercise of their power, had established over them.
In the original brief, I considered this denial of power in the State government to dispose of its property as equivalent to a denial of all power, legislative, executive, or judicial, and thus all contracts, including that of marriage, dependent on official sanction, would be without authority of law and void.
It is well understood, (says Chancellor Kent,) at a period when alterations in the constitution of governments and revolutions are familiar, that it is a clear position of the law of nations that positive obligations with creditors are not weakened by any such mutations. (1 Com., 25.)
The force of these principles is attempted to be avoided by the assertion “that the State and the government of the State are not one and the same.” That is, the government of the State sold us their bonds, but the State is not bound, because “ the government of the State” and the “ State” are not one and the same.
Again, it is repeated, “no contract made by that government can be said to be a contract of the State.”
This is very confidently claimed to be “the only means by which to obtain a sound and logical solution of the question of the relation of the southern States to the Federal Union during the late rebellion.”
This is not a solution, but a dissolution. If the government of a State cannot enter into a contract or compact binding upon the State, how can she be ever bound? The government is the creation of the constitution, and the constitution is the fundamental law which speaks the voice of the people assembled in convention. This is a source of authority higher than which we cannot ascend; and if it afford not the means to hind the State, then there are none, and this is a dissolution of all faith and confidence.
“A State can only act through its agents; and it would be absurd to say that any act was not done by the State which was done by its authorized agents.” (Briscoe v. Bank of Kentucky, 11 Pet., 318.)
The power of the State to deal with these bonds is again denied upon another ground, to wit, that the usurper does not “ obtain possession of the debts due the subverted government de jure by seizing its bonds and notes; ” and Phillimore, p. 14, is cited for this.
In the subtle discussions of the publicists, we must carefully mark the very terms in which their propositions are stated. “Incorporeal rights,” says the author, “do not accrue to the conqueror from the fact of his having possessed himself of the documents relating to those rights, and it is not competent in him to bestow upon or transfer to another what he has not physically taken possession of himself.”
But the author immediately cautions the reader “to hear in mind the distinction already alluded to between the mere conqueror and the established regent of a country.” He then goes on to show how the change from conquest to established government may be effected, and says, this result may be produced inter alia by the submission of the conquered people to the new government, indicated either by some public act or by the fact itself, evidenced by the tranquillity of the people, their obedience to the laws, and, above all, by the quiet and regular administration of iustice in the proper civil tribunals.” (p. 474.)
Bearing this in mind, we can fully appreciate what is said by the author further on: “We have seen when and under what circumstances the right of the conqueror may he so exercised as to acquire a title to possess and to alienate both immovable and incorporeal property. Two con ditions, we have seen, are requisite. The conqueror must have become regent of the country.” (Ib., 477.)
A question then is suggested, whether, in the case of a debt paid to a regent, and the former sovereign is eventually restored, the latter may claim of the debtor the payment of the debt which he had discharged?
He quotes Bynkershock as holding, that the debt is “satisfied and extinct;” and adds, “such is unquestionably the opinion, both of the greater number and of the most able jurists; such is also the conclusion from many analogies of the Roman law,” &c.
Having thus determined the rights of a regent or de facto government, the author proceeds to another head:
“If, however, the payment be made to a mere conqueror, it may, nevertheless, be valid, but then the burden of proof lies upon the debtor to show four things. The fourth is what is relied on in the brief, that the payment was compulsory.”
It is thus seen that these four conditions apply to the case of mere conquerors, and not to a regent or de facto government.
What then was the condition of Texas ? Let us admit that the government was a revolutionized one. The people submitted to it. There was a regular administration of justice in the proper civil tribunals, But the total inapplicability of this whole doctrine to the case in hand is apparent, from the fact that there had been no revolution, no change in the State government; consequently there has never been, as to the State, either a conqueror or regent. The government was founded by the people, administered by their chosen representatives, and continued to exist by their sufferance only. This present suit is authorized by the government of the State organized by the same people, in the same manner, and with the same powers as the government which existed during the war. There is only this difference, the present gov- eminent was organized under executive proclamation. The old State government was the unbiased expression of republican principles. Surely, if the former is entitled to be considered as occupying the status of a State, so as to maintain a suit under the Constitution, the latter may be considered to have had the right to dispose of its property.
Having thus disposed of the question of ownership in the State, we now call attention to the second point of the complainant, who, “ admitting the ownership of the State, denies it could transfer a valid title by such a contract as that set out in this case.”
To know precisely what is in issue, we must refer to the allegation of the bill. It sets forth that an unlawful combination of individuals, having seized Itpon the archives, treasury, and property of the State, claiming to exercise political authority, established an organization called a “military board,” and that this board sold these bonds, which were then in the treasury. The bill then charges that the contract was without authority, contrary to law, and contemplated and proposed as part of the consideration an unlawful object, to wit, the overthrow of the Government of the Hnited States.
There is no allegation that the illegal intent was shared in by the defendant. There is not a tittle of evidence to establish that fact, and there is the sworn statement in the answer, “ The contract was made for the express benefit of the people of Texas, and not for the purpose of aiding the confederate government.”
The whole weight of this objection, as to the illegality of the consideration, is founded upon the words of the act which authorized the board to dispose of these bonds for the purpose of “providing for the defense of the State.” This defense would include protection from domestic tumult, against incursions by the Indian tribes upon her borders, or raids by her Mexican neighbors, as well as from attacks Tby troops of the United States. We may venture to assert, that'laws couched in similar language are to be found among the statutes of every State in the Union.
But whatever was the motive which actuated the board, ■ whether legal or illegal, the defendant cannot be affected by it. Even his knowledge of such intention, if he was not a ”sharer in the transaction, and did not enter into it for the very purpose of accomplishing the illegal design, could not deprive him of his rights under the contract. (Hodgson v. Temple, 5 Taun., 18; Camon v. Boyce, 3 Barn. & A., 257; Holman v. Johnson, Cowp., 341; Dexter v. Earle, 3 Gray, 482.)
But if the contract were illegal, and both parties were involved in the illegality, then it would follow that, if the bonds had not been delivered, the court, on this' ground, would refuse to enforce the delivery; and, if delivered, the court would, on the same ground, refuse to decree their restoration.
“ To state such a case,” says this court, “is to decide it. Public morals, public justice, and the well-established principles of all judicial tribunals, alike forbid the interposition of courts of justice to lend their aid to purposes like this. The law leaves the parties to such a contract as it found them. Parties must not expect that a judicial tribunal will degrade itself by an exertion of its power in shifting the loss from one to the other.” (Barth v. Coleman, 4 Pet., 188; Creath v. Sims, 5 How., 204; Randal v. Howard, 2 Bl., 588.)
The effect of this principle is sought to be avoided by distinguishing the State from the State government. The contract, it is said, is made by the State government, and not by the State, but we have already shown that there is no such distinction.
The uniform decisions of this court apply to contracts of a State the same rules they apply to contracts of indi victuals. I know of no case where a distinction has been made. (Bank of the United States v. Planters’ Bank, 9 Wheat., 904; Briscoe v. Bank of Kentucky, 11 Pet., 324; United States v. Bank of Metropolis, 15 Pet., 392; Bank of the United States v. United States, 2 How., 732.)
When, therefore, the State comes into court with the allegation that the contract which she seeks to set aside was entered into by her for the purpose of obtaining means to overthrow the Government of the United States, she states a transaction which at once deprives her of all aid from courts of justice.
Lastly, we have presented an ultimatum, which is supposed to place the defendant on the horns of a dilemma. Using the words “in aid of the rebellion,” as the equivalent of the words written in the statute, “ to provide for the defense of the State;” it is said, “if the bonds were sold to aid in the rebellion, the contract is, for this reason, void; if not sold to aid in the rebellion, there was no authority in the board to sell, and on that ground it is void.”
Let us not deal with hypothetical cases. The corrected proposition is this: If the bonds were sold for the “ defense of the State,” the contract is illegal. If not sold for this purpose, there is no authority to sell, and no title has therefore passed.
The authority was to sell the bonds for the “ defense of the State.” But who was to determine what should be proper or necessary for this purpose? Where is to be found those well-defined boundaries by which a citizen dealing with the board could ascertain what was within the grant of power and what without? The board say that the people are naked, and must be clad; they are sick, and must have medicines. Authorized to defend the State, we judge that clothing and medicines are necessary to keep the people tranquil and prevent popular commotion. Were these considerations such as the defendant was bound to weigh ? and, if the hoard so determined, could a judicial tribunal review that judgment, and hold the act void for want of authority, because the board had arrived at an improper conclusion ? These questions would seem to afford their own answers.
J. M. Carlisle, for Hardenberg.
—[He argued that Hardenberg was a bona fide purchaser, without notice of the title of "White & Chiles.]
I. As to the transfer of the legal title from the State of Texas to White & Chiles.
The bill concedes (passim) that these bonds were the properly of the State of Texas. They were never the property of the United States in any sense, absolute or qualified. From the time they became bonds, to wit, from the time of their delivery to the original obligee, the State of Texas, it was not legally possible that the United States (the obligor) could have any property in them, except as evidence, of payment, in whole or in. part. Hot only in the view of the common law, as to mere proprietary right, but in any view of constitutional or political right or power, it is equally true, that these bonds, once delivered, were in all respects simply the bonds or solemn evidences of debt, delivered by obligor to obligee, and as to rights, if not as to remedies, precisely as if the parties were private, natural persons.
The State of Texas, the original obligee, was one .of the States of this Union. It was in that character that the United States contracted with her in the premises, and agreed to pay these millions for the consideration expressed by the statute authorizing the payment, not in cash, but in stock, bearing interest semi-annually for fourteen years, the principal sum to be redeemable, not on a day certain, but after the expiration of that period, and not to the government of the State, but to whomsoever should be the bearer of the bonds or evidences of debt, five thousand in number, as the same should be respectively held.
The State of Texas, at the date of the transaction, had a political organization as a State of the Union, admitted under the Constitution of the United ' States. It could exist as a body politic only so long as that organization existed in some form or other, being “republican.” And so it must exist now, in order to be entertained as a party suing originally in this court, for the purposes of this case, or for any other purpose.
The State of Texas entered into the contract proposed by the act of Congress of September, 1850,‘under which these bonds were issued, received the same, executed the contract on its part, and disposed of these five thousand bonds, all in the same manner, with the same form of government, under the same organic law of its existence, as a body politic or being known to the Constitution and laws of the United States. ■
It has never ceased to exist, as the same legal and political entity or State, at any time to the present suit, unless it ceased so to exist prior to the institution of this suit, by virtue of the acts of Congress passed subsequently to all the transactions involved in the title of the defendant, Hardenberg, now in question. Up to that time, all the departments of the Government, and signally the executive and the Congress—the former by the proclamations of the President and the conduct of our foreign relations, and the latter by the uniform course of its manifold statutes—treated the State of Texas, and all the States “in rebellion,” as the same identical States of the Union that they had theretofore been; and they were only treated, and could only be treated, as “ States in rebellion and insurrection,” precisely because they were the same identical States or political entities, bound by the same identical obligations under the Constitution of the United States as before, and consequently liable to be compelled by the whole force of the nation to submit and to perform them. By some—apparently by more than two-thirds of both houses of Congress—this political condition is supposed to have abruptly ended when the rebellion or civil war was suppressed. But this doctrine has nothing to do with the case at bar, except that, from the moment it is recognized and approved by this court, it must effectually and undeniably exclude this complainant and all other ci-devant States in like category from any possible recognition as parties in this court. Of course, the complainant will not insist on this. And, indeed, this court has tacitly rejected this heresy on every occasion which presented itself, and notably after argument in this very case. The application of the law of war in the Prize Cases furnishes no exception.
This same political being, the State of Texas, acting in the only mode known to the law of its existence, and in precisely the same manner in which it received these bonds from the United States, did, as the bill duly shows, dispose of them by the alleged contract with White & Chiles. It sold and delivered the bonds (so the bill itself describes the transaction) to these parties. If there be any real complainant here, it is the same State. There has not even been a revolutionary or usurped government of that State, at any time between the delivery of the bonds by the United States and their sale and delivery to White & Chiles, as. alleged in the bill. The attempt to break away from the constitutional Union—the act of secession—was not an attempt to overthrow the State government, but, on the contrary, the formal act of that government, asserting its existence, and claiming to exercise what an old and well-known political sect, or school of politicians, had always claimed to be an inherent right of State sovereignty under the Constitution of the United States. The state of war which ensued was brought about, not to overthrow or in any manner disturb the State sovereignty, but in the vain effort to throw off the allegiance of the people of the State to the Federal Union, and to dissolve the political bonds which connected the State of Texas with it under the Constitution of the United States.
The pretext for repudiating the contract of a de facto government, or usurped sovereignty, by the restored legitimate sovereign, cannot exist in this case. It is á misnomer and a confusion of ideas to call the government of Texas, at the date of the contract with White & Chiles, a defacto government. It was the government of the State; the only embodiment of the abstract idea of a State which had ever given it existence for an instant since its admission to the Federal Union.
But if it were the case of a contract made by a usurped or revolutionary government, which for four years had been, as the bill itself shows, and the public history attests, in the firm and exclusive possession and exercise of all the attributes of State sovereignty, there can be no doubt or question in the mind of any publicist that such contract was valid and binding upon the State so governed, and is valid and binding upon the lawful government when restored. It would be a vain parade of learning to cite authorities for a proposition so universally admitted in the public law of nations.
.And with these observations the first proposition of the complainant’s case may be dismissed. It cannot be successfully denied that, according to the bill itself, the bonds were, in fact, sold and delivered by the complainant, the State of Texas, to White & Chiles, under the contract exhibited with the bill.
H. The complainant’s second proposition surrenders the first, argumenti gratia, and founds itself upon the contract, affirming its original validity, and pretending, in matter of fact, that White & Chiles failed to perform its stipulations on their part, and, in matter of law, that such failure, and the overthrow of the rebel government, have rendered the said. White & Chiles liable to restore the bonds to the complainant.
But how stands the case in this respect as to Harden-berg? We have seen that his answer, which is strictly responsive to’ the bill, distinctly and effectually denies all knowledge, information, or suspicion of the White & Chiles contract, or that they had .ever owned or 'possessed the bonds purchased by him of various persons openly in the Hew York market. And there is not one scintilla of evidence to charge him with such knowledge, information, or suspicion.
That these coupon bonds, payable to bearer, are negotiable securities, passing by delivery, like bank notes, and that the possession is sufficient evidence of title, and that nothing short of knowledge of the infirmity of title, even in the case of stolen bonds of this description, will defeat the title of a bona fide purchaser for value, is now firmly settled as law. The cases of Murray & Lardner, 2 Wall., 110, and Goodman and Simonds, 20 How., 343, contain the whole law on the subject, as it is now established both in England and this country. (See also Moran v. Miami County, 2 Black, 731.)
But it is confidently insisted for the complainant, that when Hardenberg purchased these bonds they were overdue, and that this circumstance defeats his title.
We shall presently see that it is a mistake to say that they were over-due. But suppose they were, in all respects, like a promissory note, indorsed after it was due? What would be the legal consequence ? Such an instrument does not cease to be negotiable when it is past due and unpaid.
“It has never been determined, says Buller, J., that a bill or note is not negotiable after it is due; but if there are1 any circumstances of fraud in the transaction, and it is indorsed to the plaintiff after it is due, I have always left it to the jury, upon the slightest circumstances, to presume that the indorsee was acquainted with the fraud.” (Taylor v. Mother, 3 T. R., 83, in nolis.)
But since the date of that case, it has come to he settled law, both in England and in this court, as we have seen, (Goodman & Simonds, Murray & Lardner, siipra,) that circumstances which would have put a prudent man upon inquiry are not enough to affect the title of a bona fide holder for value. And there is not and cannot be the slightest imputation to Mr. Plardenberg of mala fid.es. How, the most that can be said of the fact, apparent on the face of a negotiable instrument that it is over-due, is, that it implies, prima fade, perhaps, that the bill or note has been dishonored; that the maker or- acceptor (the party primarily liable) refuses to pay. In point of fact, in the case- at bar, no such thing is pretended. On the contrary, the whole ground for the suit, which is an invocation of the equity powers of the court, is, that the maker, the United States, will certainly pay the bonds to the holder according to the face and tenor thereof, unless the court will interfere and forbid such payment. It is not perceived how such a fact could have any such significance upon the question whether the holder is, as his possession imports, really the owner; and that is the principal question made by the complainant here, upon the first proposition above considered.
Hor can it have any significance as to their second proposition, which is in effect the want of consideration for the transfer. At most, the fact of the transfer, when overdue, of a bill or note, is to subject it in the hands of the holder to all its equities, to all the equities with which it is encumbered at the time of the transfer.
An original absence of consideration is not one of those equities which attach on the instrument, and defeat the title of an indorsee for value of an over-due bill, although with notice of the fact. (Charles v. Marsden, 1 Taunt., 224; Sturtevant & Ford, 4 M. and G., 101; Lazarus v. Cowie, 3 Queen’s Bench, 459; Stein v. Yglesias, 1 C., M. & R., 565.)
If, therefore, this were like the case of a suit upon a hill or note, indorsed to the plaintiff post-due, it is not perceived how the complainant could profit by the analogy.
But it is only necessary to read the statute under which the bonds were issued, and the face of the bonds themselves, to see that there is no analogy whatever in this respect between them and a commercial bill of exchange or promissory note, payable to order on a certain day. They were issued as stock, not payable to hearer on any certain day, but “ redeemable after fourteen years from their date.” They certified that interest would he paid semi-annually for that period; but thereafter the bonds might be redeemed by the United States, at its pleasure and convenience.
The fact that the day had passed after which the bonds might he redeemed, and that they had in fact not been redeemed, signified nothing inconsistent with the obligation on its face. The bonds had not been called in. The financial condition of the country, and its unsettled political relations with the rebel States, sufficiently explained the fact that they had not been redeemed at the earliest day when, by their tenor, they were redeemable.
The fact that the bonds were not indorsed by the governor of Texas could not affect the title of Hardenberg. The face of the bonds not only did not call for such an indorsement, but was utterly repugnant to any such condition of transfer. The answer of Hardenberg denies that he had any knowledge, information, or suspicion of the existence of such an act of Texas. Besides, it is now shown that the statute was repealed prior to the transaction covered by the bill, and the act of Texas, under which these bonds were disposed of by the military board, was itself, pro tanto, a repeal of the act of 1851, if it had not, as it had, been expressly repealed. Upon this question, and upon_ the other general questions common to all the defendants, reference is respectfully made to the several briefs already on file, and especially to the very able opinion of Mr. Comptroller Tayler, which will be found in the record.
It is certainly - desirable that this controversy should be settled on its merits. If it were otherwise, there seem to be very obvious and conclusive objections to the equitable iurisdiction of the court in the premises.
Richard T. Merrick, for the State.
—He reviewed the history of the Texas legislation in regard to secession and rebellion, substantially as set forth in the other arguments and the opinion of the court.
1. The nature of the rebel government was such, that it could acquire no title whatever to the property of the government de jure upon which it seized. The public history of the organization shows that it was a government not founded in right, but in power, deriving its authority from no higher principle of public law than the McGregor rule :
“ The simple plan,
That they should take who have the power,
And they should keep who can.”
But it is alleged that it was a government organized by the people of Texas, who had the right to create it, and that it is in the regular line of her legitimate State governments.
Conceding the fact as claimed, that the government was organized by the people, before it can be determined that it was a regular and lawful government of the State, it is necessary to ascertain, in the absence. of a recognition by the political department of the Federal Government, whether it was such a government as the people could lawfully organize in the exercise of the political right reserved to them under the Constitution of the United States, and limited by that instrument.
It is submitted, that the government was such a government as the people themselves could not, even by unanimous action, ordain and establish.
(a.) The people of the United States, in adopting the Federal Constitution, have limited the right to exercise the political power inherent in themselves; and by this compact of Federal Union, adopted by all the people of the United States, they have agreed, each with the other, that neither individually nor collectively will they, under any circumstances, exercise political power in derogation of that Constitution which they have declared shall be the supreme law of the land.
In the system of American politics, the people not only limit the power of their governments, but they limit their own political power; and by the adoption of the Constitution of the United States, whether it be regarded as having been adopted by the people of the several States, or by the people of the United States, it operated after adoption as a -limitation upon the political power previously unlimited and inherent in the people. By reason of this limitation, the people of’a State cannot organize a State government, which is the depository of their political power, for the purpose of using that power in hostility to the Federal Constitution. A State government so organized, and for such a purpose, cannot be a lawful government de jure, or government of the State, as that word is understood in the Federal Constitution.
But it may be necessary in this connection to meet the position that the government and the State are one and the same .thing.
It is submitted that the State and the government of the State are, in political contemplation, though united, yet distinct.
A State is a voluntary association of individuals, which precedes the formation of government.
The government of the State is the organization through which the State exercises its political power.
There may be a State without a government, though there cannot be a government without a State.
A State- is none the less a State, though anarchy may prevail, and all government be overturned. The association of individuals remains under the social compact, though without any organized power exercising and directing its political force. It is, therefore, apparent that the State and the government are not one and the same.
In Chisholm v. State of Georgia, 2 Dall., per Wilson, Justice, this court says: A State is “ a complete body of free persons, united together for their common benefit, to enjoy peaceably what is their own, and to do justice to others. It has its affairs and its interests. It has its rules. It has its rights.”
“A civil society continues the same, notwithstanding any changes that are made in its civil constitution. When a monarchy is established in a free State, or when, on the ■ contrary, a popular form of government is introduced instead of a monarchy, it is the constitutional compact that is changed, and not the social compact. In the language of the schools, the essence of a State consists in its form. A union of men, of free condition, by compact, for such purposes, as we have already had frequent occasion to mention, is the form of a State. This union is certainly essential to a State; for there can be no State where no such union subsists, and wherever such union does subsist, it produces a State. How, a change of the civil constitution of a State is a change of form in the State. And this is sometimes urged to prove that a change of the civil constitution of a State must be a change of the State itself; because a change of form is a change of essence. But the answer is obvious. A change of civil constitution is a change of the form of government in a State, and not a change of the essential form of the State itself. The several members of the' State, notwitstanding the form of government is changed, still continue to be bound by compact, as they were before, jointly to pursue the purposes of civil union, and are still parties in the compact by which the State was originally produced.
“From hence it follows, that a State neither loses any of its rights, nor is discharged from any of its obligations, by a change in the form of its civil government.” (Ruth. Inst., ch. 10, sec. 14, p. 587.)
If the State and the government are not the same, and the government of Texas, during the rebellion, was a government defacto, founded in power, and not a government de jure, organized by the legitimate exercise of the political power of the people, no contract made by that government can be said to be the contract of the State. This distinction between the government and the State is the only means by which to obtain a sound and logical solution of the question of the relation of the southern States to the Federal Bnion during the late rebellion.
The governments of those States were usurping governments, established upon the overthrow of the governments de jure, and organized for the purpose of hostility to the Bnion. And the object of the war was to overthrow these hostile and usurping governments, and re-establish the governments de jure in their legitimate authority, and at the same time restore the supremacy of the Federal Constitution in States that never had been and could not be withdrawn from the Federal Bnion.
Wherever the flag of the Republic was unfurled, it exhibited qn its folds the evidence of the existence and indestructibility of each and all the States.
The inquiry now recurs, what right of property or title to the bonds in question was acquired by the de facto government of Texas ? But before proceeding to this inquiry, it is proper upon this point to notice the question of juris diction, raised in the brief of counsel for the defendants. It is contended that this court has no jurisdiction, because Texas is not a State in the Union, and this is attempted to be established from the fact that she is without representation in either branch of the Congress of the United States; and to maintain the position, the opinion of Chief Justice Marshall, in the case of Hepburn and Elezy, in 2 Cranch, is cited.
In that opinion the Chief Justice declared, “That those political bodies only can be regarded as States under the Constitution which are entitled to representatives in the Senate and House of Representatives and the appointment of electors.”
A political body in the Union may be entitled to the representation to which the Chief Justice refers, but may not have the privilege of exercising the right; and the opinion might be quoted with much greater advantage to one of the co-ordinate branches of the Government, in considering the question of the propriety of allowing these political communities the. exercise of their fights, than to this court, upon a question as to the existence of the rights.
It is further urged, in the brief of the counsel for the defendant, that the reconstruction acts, by virtue of which the State of Texas is now subj ect to military control, are unconstitutional, and that, Congress having declared the government formed by the people under the proclamation of the Federal Executive to be illegal, both the government organized under the proclamation and that organized under the reconstruction acts are unconstitutional; and that, therefore, Texas- has no constitutional government, and without such she is not a State, and cannot therefore institute a suit in this court.
If the theory already submitted, as to the distinction between the State and the government of the State, is correct, the entire position is answered.
(b.) But the legality of the government of Texas since the-suppression of the rebellion is in any event not a question with which this court has anything to do, nor is it necessary for this court in this case to determine the question of the constitutionality and regularity of the governments formed either under the proclamation of the President or under the acts known as the “ reconstruction acts.” Whether a State has a government or not, and in case of contest which is the lawful government of the State, are questions belonging to the political, and not the judicial, department of the Federal Government.
The political department recognizes'domestic as well as foreign governments, and the judicial department follows the political in that regard when it has pronounced judgment.
In Luther v. Borden, 7 How., p. 1, the court says:
“ No one, we believe, has ever doubted the proposition, that according to the institutions of this country, the sovereignty in every State resides in the people of the State, and that they may alter and change their form of government at their own pleasure; but whether they have changed it or not, by abolishing an old government and establishing a new one in its place, is a question to be settled by the political power; and when that power has decided, the courts are bound to take notice of its decision2 and to follow it.”
The government of Texas, organized under the proclamation of the Executive, and under which J. W. Throckmorton was elected governor of the State, was recognized by the executive department, and the government organized under the reconstruction acts was recognized by the legislative department as well as the executive; and this-suit was originally brought in obedience to the direction of the government in which Throckmorton was governor, as shown by the power of attorney set forth in the record, and is now prosecuted by direction of and in obedience to- the authority of the government organized under the reconstruction acts.
It is not then proper to embarrass the case by an inquiry as to the legality and regularity of either of these governments. It would have been wiser and better probably, and have tended to bring about more speedily that unnecessarily long-deferred and ardently-desired restoration of the practical relations of the States to each other and to the Federal Union, had the United States, Avhen the armies of the rebellion surrendered, and she found the southern States in a condition of partial anarchy, retained possession of them for a time, subject to her control, preserving, as far as possible, peace and order in their disturbed communities, until the people, relieved from the usurping power of the rebellion, and unrestricted in their restored constitutional rights, could, in the exercise of their legitimate political authority, reconstruct for themselves, amid their desolation, the fabric of government, and then, as soon as that was done, had withdraAvn at once the federal forces and the federal control in the domestic affairs of the States, and left results to the operation of natural causes. But what would have been wise, and Avhat was unwise, are questions not in'this case, and not before the court, and not within the jurisdiction of this department of the Government.
Upon this matter of jurisdiction the only question is, “ What State government has been recognized by the political department of the Federal Government?” And, in pursuing this inquiry, we find that the government organized under the proclamation, and the government organized under the reconstruction acts, have both been recognized, and that they are the only governments that have been recognized since the regular line of State governments was interrupted by the usurpation of the convention that assembled in 1861.
The inquiry now recurs, what right of property or title to the bonds in question did the rebel government of Texas acquire ?
(c.) It is submitted that such a government could acquire no right whatever, conceding it to have been a de facto government, a term which, in the language of Chief Justice Chase, “ as. descriptive of a government, has no fixed and definite sense.”
A de facto government is vested with certain political powers, which it may lawfully exercise, but does it acquire rights of property by reason of its overthrow of the government dejure?
What are its powers ? It is impossible to determine by any rule which will be applicable to every case and all conditions. ' They are limited by necessity, and it is difficult, if not impossible, to give them any precise definition.
It is contended, in the brief of the counsel for the defendant, that unless the government defacto possessed the power of making the contract in question in this case, it could possess no legislative or executive or judicial authority whatever, and that all it did on the assumption of such authority is absolutely null and void: that marriages solemnized during its existence should be held null; that the judgments of the courts in civil and criminal cases should be held null; and ail concerned in their execution responsible, civilly and criminally, for a usurpation of power. Such consequences are not the logical result of the position. Whatever was necessary to be done, in order to preserve the social community from anarchy, and to guard and protect its members in their intercourse with each other, might lawfully be done by such a government. Amidst all the mutations that have occurred in Trance, where government has passed from one revolutionary hand to another, in the sudden and rapidly-succeeding convulsions of society, the judicial hierarchy has remained undisturbed. And even when revolutionary tribunals were at times executing the wrath of a faction, the judicial officers, as far as the circumstances would permit, administered the law.
But whatever' is not necessary for the preservation of the order and peace of the community, and especially whatever is done for the purpose of strengthening the de facto government in its contest with the government de jure, cannot he held valid in the courts of the de jure government, after it has been restored to lawful authority in the State.
“The acts of sovereignty exercised by a.usurper may have an.obligatory force, not by virtue of his right, for he has none, but because it is very probable that the lawful sovereign, whether it be the people themselves, or a king, or a senate, chooses rather that the usurper should be obeyed during the time, than that the exercise of the laws and justice should be interrupted, and a State thereby exposed to the disorders of anarchy. But in those things which are not so" necessary for the public good, and which contribute towards establishing the usurper in his unjust position, if by disobedience we run no great hazard, we must not obey.” (Grotius de Bello et Pace, l. 1, c. 4, sec. 15.)
The acts of sovereignty done by the usurping government which will he recognized as obligatory by the restored government are such only, therefore, as are necessary to protect the community from anarchy; and the recognition of these even is within the discretion of the restored government de jure. For, as Grotius says, the usurping government does not act by virtue of right, for it has none, but by permission or sufferance of the lawful sovereign, whether it be king, people, or Senate. (Shortridge v. Mason, U. S. C. C. for N. C., opinion of Chief Justice Chase, p. 95 Amer. Law Rev., Oct., 1867; Coppel’s Adm’r v. Petersburg R. R. Co., U. S. C. C. for Va., opinion of Chief Justice Chase, p. 389 Amer. Law Rev., Jan., 1869.)
In the case last referred to, the Chief Justice says:
“ What effect, then, is to be given to acts done under the authority of an insurgent body, actually organized as a government, and actually exercising the powers of a government within a large extent of territory, not merely in hostility to the regular and lawful government, but in complete exclusion of it from the whole territory subject to the insurgent control?
“It is not easy to give a general answer to this question. On the one hand, it is clear that none of its acts in hostility to the regular government can be recognized as lawful. On the other, it is equally clear that transactions between individuals, which would be legal and binding under ordinary circumstances, cannot be pronounced as illegal and of no obligation, because done in conformity with laws enacted or directions given by the usurping power.”
The only rule upon which the court of the restored power can act with safety is, to limit the validity of the acts of the usurping government to the absolute necessities of society, and even in regard to such acts, and certainly as to all others, exercise a sound judicial discretion; for the validity of whatever may be done by the usurping government is more or less within the discretion of the judicial tribunals of the restored government.
Defacto governments may be and are of different kinds, possessing, according to their conditions and the period of their duration, different classes of powers. But in no condition of a defacto government, however long it may have endured, or however firmly it may be established, can it possess itself of the property of the government de.jure, which it has overthrown, by a title which the government de jure will recognize in its judicial tribunals when it resumes its lawful authority.
Cromwell’s government iu England exercised all the powers of government through a period of over twenty years, and during that time took possession of the lands and property of"'the crown, of the church, and of the nobles that were' loyal to the house of Stuart, and con- ¿seated" large amounts of property "belonging to the royalists.
When Charles II was placed upon the throne, and the government of the king re-established on the overthrow of the government of the protector, parliament endeavored to effect some satisfactory arrangement between the parties who had purchased the titles assumed to be transferred by the usurping government, and those who claimed their titles by grant from the government which the commonwealth had overthrown; but, failing to effect an adjustment, the conflicting claims of the parties were left to be adjudicated by the courts.
“The parties were left to the common course of law. The church, the crown, and the dispossessed royalists, re-entered triumphantly on their lands; there were no means of repelling the owners’ claim, nor any satisfaction to be looked for by the purchasers under so defective a title.” (3 Hallam’s Const. Hist., ch. 11, p. 296.)
The de facto government of Texas was never firmly established. It never had a day of peace. Organized in force, its entire duration was one continuing battle for existence, and it was demolished in the conflict, and passed from the face of the earth. The government of “the commonwealth” of England existed for nearly a quarter of a century, undisturbed by an assault from the government it had overthrown, and recognized by nations as the legitimate and lawful authority in the State.
(n.) But conceding to the de facto government of Texas the fullest power accorded to the most firmly established de facto government, and conceding its right to exercise the political power of the State, could it acquire any right or title to debts due the government de jure ? The right of a de facto government is, in any event, only a naked possessory right. 3STo further right is claimed for such an organization in regard to property of which it may become possessed by any writer.
This right is derived from its power, and its power can operate only on things actually within its possession and control. Any title it may have, therefore, necessarily requires the possession of the res ipsa to' support it. It does not obtain possession of the debts due the subverted government de jure by seizing its bonds and notes. Bonds, promissory notes, and other negotiable securities, are not debts, but only evidences of debt, and the possession of these evidences of debt gives the de facto government no right to the debt itself. (3 Philli. Int. Law, 689, 690.)
' A creditor may recover a debt, though the instrument by which it is evidenced may be destroyed.
It is, therefore, evident that the instrument and the debt are not the same thing, although in commercial law they are sometimes so regarded.
But suppose the bond or other evidence of debt is to be regarded as the debt itself: In such a case it is necessary, to give a de facto government a title by which it can dispose of a debt due the State, that the bond or note should be due from some one within the imperium of the usurping government. Debts due beyond the territory over which the defacto government is established are not among the acquisitions of the usurping government to which it obtains any right whatever. (3 PhilH. Int. Law, 693, 694.) The right of such a government, if it have any, being derived from power, cannot extend further than its power; and it can claim no right, therefore, in that which is beyond the reach of its sword.
“ So, if the actual debt of the State be not locally within the imperium of the conquering ruler, he does not acquire a title by which he can dispose of it.”
“If the debts due to the State be situated not in the conquered country, but they are in an unconquered or in a neutral territory, there is no doubt they are not within the imperium of the conqueror.” (3 Philli. Int. Law, 694.)
A fair test of the right of the de facto government to a debt due the State is the liability of a debtor, who may pay the defacto government during the period of its possession, to be called upon and made to answer to the government de jure when its authority may he re-established. The circumstances under which a debtor will be protected who pays to the de facto government a debt due the State are fully discussed in 8 Philli. Lit. Law, 697.
And among the conditions which he states as necessary to the protection of the debtor from liability to jiay the de jure government is, in the order in which he enumerates them, the following:
Ho. 4. “That the payment had been compulsory, the effect of a vis major upon the debtor, not necessarily extorted by the use of physical force, but paid under an order, the disobedience of which was threatened with punishment.”
Though the defacto government of Texas had possession of these bonds, could it have demanded payment of the United States? Would the United States have made payment if demanded? or, if it had made payment, could it protect itself from liability to the State of Texas by claiming that the payment had been made under compulsion of the defacto government?
It is submitted, then—
1. That a defacto government can acquire no right to a debt due the State from parties not subject to the authority of such government.'
2. That if a debtor of a State so situated pay the debt to a defacto government, such payment is no discharge of his obligation to the government de jure.
And if these conclusions are correct, what possible right could the de facto government of Texas acquire to a debt due by the Federal Grovernment to the State of Texas, by reason of its temporary overthrow of the • constitutional government of that State in a war with the United States.
II. Conceding, further, that the usurping government of Texas acquired a right to the bonds in question, as the government of Texas de facto or de jure, it matters not which, could it transfer a valid title by such a contract as that set out in this case ?
The contract stipulates—
First. Dor the delivery of the bonds to White & Chiles.
Second. That they should be paid for in cotton-cards and medicines.
Third. That, upon the failure to deliver these articles, the parties should pay for the bonds in seven or eight per cent, bonds of the State of Texas, or treasury warrants of the State. _
What these bonds and treasury warrants of the State were, is shown by a stipulation at page 68 of the record, where it appears -that the bonds, tendered in compliance with this stipulation of the contract, were “bonds and papers issued by the State of Texas, under the act of 8th of April, 1861, the same having been issued for military purposes in the war against the United States.”
This court, in the case of Mauran v. The Insurance Company, 6 Wall., 13, used the following language:
“We agree that all the proceedings of the eleven States, either severally or in conjunction, by means of which the existing governments were overthrown and new governments erected in their stead, were wholly illegal and void, and that they remained, after the attempted separation and change of government, in judgment of law, as completely under all their constitutional obligations as before. The Constitution of the United States, which is the fundamental law of each and all of them, not only afforded no countenance or authority for these proceedings, but they were in every part of them in express diregard and violation of it.”
Taking this to he the settled law, in regard to the questions to which it refers, its application to the contract in this case must defeat the claim set up by the defendants, even if the defacto government of Texas had all the right and power claimed for it in the brief of the counsel for the defendant.
The parties to the contract are the military hoard of Texas and White & Chiles.
The contract is for the purchase of cotton-cards and medicines, but the bonds that were delivered to White & Chiles by the military board are to be paid for, if they fail to deliver the cards and medicines, in the bonds and treasury warrants of the State of Texas. The bonds and warrants which are thus to be paid for these securities are bonds and warrants issued by the State of Texas for war purposes. By the constitution of Texas, her legislature was limited to the issue of bonds to. the amount of $100,000 only; but the usurping government of Texas repealed that provision of the constitution, and authorized an unlimited issue: Provided, Such issue should be for military purposes.
The._ tender made by White & Chiles, in attempted execution of their contract, and which tender was refused, as appears by the record, shows that the bonds, for which the contract stipulated, were the bonds which had been issued •for the purposes of the war.
The contract of the military board, therefore, assuming to have been made in behalf of the State of Texas on the one side, and White & Chiles on the other, was a contract stipulating for trade in securities issued to carry on the war.
The purchase and sale of those securities, by giving them credit and value, and receiving them in exchange for value, necessarily tended, if not to accomplish the. overthrow of the de jure government of Texas, at least to keep .that government out of possession of its lawful authority; and under the decision of the Supreme Court, above referred to, such a contract cannot be treated as valid.
The contract in this case was made under the authority of an act of the legislature of the de facto government of Texas, bearing date January 11, 1862, entitled an act “to provide funds for military purposes,” and providing as follows:
1. “JBe it enacted by the Legislature of the State of Texas, That the governor, comptroller, and treasurer shall constitute a military board; and a majority of said board shall have the power to provide for the defense of the State by means of any bonds and coupons which may be in the treasury on any account, and may so use such funds or their proceeds, and therefor may sell, hypothecate, or barter such bonds or coupons: Provided, Such disposal shall not exceed the amount of one million of such bonds or coupons, and that they shall not be disposed of at any discount greater than twenty per cent, of their face amounts.
2. “ Any bonds which inay be disposed of under the provisions of this act shall be substituted by equal amounts of any bonds of the Confederate States of America that may be obtained by this State, and the bonds so substituted, respectively, in all respects, shall be in place of the funds disposed of as aforesaid.” (Tex. Laws, 1862, p. 55.)
(a.) It is submitted that this act is void, as being contrary to the Constitution of the United States.
The people could give their legislature no power to pass such an act.
Under the Constitution, they were incapable of vesting such power in the government of their State.
The war was unconstitutional and unlawful, and, therefore, any legislative act to provide funds for the purposes of the war must be regarded as null and void by the federal courts.
The authority of the military board to dispose of the bonds in question is derived exclusively from this act of the legislature.
It professed to confer on the military board the power to act as agents of the State.
If the act was void, the agents were without power, and could not bind the principal. If the principal is not bound by the contract of the agent, the title to the bonds which the agent attempted to pass is still in the principal.
It is suggested in the brief of the counsel for the defendant, “that the contract is innocent and inoffensive.” If the contract is innocent, and the sale of the bonds was not for the purpose indicated in the title and specified in the body •of the act, to wit, “to provide funds for military purposes,” and for the defense of the State, then the agents-transcended their authority, by making a contract they were not empowered to make, and the contract is void for that reason. (The State of Illinois v. Delafield, 8 Paige, 526; same case, 2 Hill, 159.)
In the case referred to, the agents of the State of Illinois were authorized to sell certain of her bonds. They sold a portion of her bonds, and stipulated to receive part of the purchase-money in cash, giving a credit for the residue. The State of Illinois filed a bill in the courts of Hew York, seeking to restrain the sale of the bonds by the parties who had purchased them from the agents of the State, on the ground that the agents had transcended their authority» and praying that the bonds might be delivered over to her. The court held, that the agents who were authorized to sell possessed no authority to sell upon any other terms than for cash, and that, having sold upon credit, they transcended their power, and could transfer no title; and decreed that the purchasers, otherwise innocent in the transaction than from a presumed knowledge of a public law in Hlinois, should be required to deliver the bonds to the State of Hlinois. -
The parties contracting with the military board cannot be protected by the principle which shields a party dealing with an agent or trustee from liability to the principal or cestui que trust, where the agent or trustee misapplies a fund which he receives.
White & Chiles were citizens of Texas at the time, as appears on the face of the contract.
The law was a public, general law, of which they had notice.
They knew, therefore, that the military board, by their warrant of authority as agents, could sell these bonds for no other purpose than to provide money for military purposes, or to provide for the defense of the State in the war, and if they accepted the bonds from the military board under a contract by the terms of which they were to give, in consideration for the purchase of the bonds, neither money nor munitions of war, hut articles which were not intended to be used, and which could not be used, for the only purpose for which the agents were authorized to make the sale, then they conspired with the agents to defraud' their principal, and can derive no title through such a transaction.
It is respectfully submitted—
1. That the law of 11th January, 1862, authorizing the sale of the bonds in question, is unconstitutional and void.
2. That the contract made under that law was a contract in aid of the rebellion, and that the contract is therefore void, even if the law be valid.
8. That if the contract made under the law was not a contract in aid of the rebellion, but the bonds were sold for a purpose other than the purpose declared in the law as the purpose for which alone the agents were authorized to sell them, then the agents transcended their authority, and the contract is void for that reason.
The contract and the law of 1862 are void, under the 4th section of the 14th amendment of the Constitution of the United States, which provides as follows:
“IsTeither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States.”
The law provides that the bonds in the treasury of Texas, to be disposed of for the purposes indicated in the act, shall be replaced by equal amounts of any bonds of the Confederate States of America. The law therefore contemplated the purchase of the Confederate States securities, and the bonds of the "United States in the treasury of Texas were to be dispqsed of for the purpose of purchasing Confederate States securities.
(b.) But it is contended that the State cannot maintain the bill in this case, for the reason that, granting the contract to be illegal, the complainant, being a party thereto, is in pari delicto.
The doctrine of par delictum cannot apply to a State.
Her officers are her agents, and if they defraud her by an unauthorized disposition of her property, she has her remedy in a court of law, and cannot be arrested in its prosecution by the allegation that she is in pari delicto.
The State government made the contract. The officers who discharge political functions in a State are but the agents of the State, which is made up of the peojile; and a principal, who has been defrauded by the illegal act of Ms agent, can never be prevented from prosecuting his remedy by the application to him of the.doctrine of par delictum. Otherwise, what remedy would the State have ?
Her" only remedy would be to elect new agents, when her people should hav‘e the privilege of again exercising the elective franchise. But that would only be a partial remedy; for, whilst it would displace faithless officers, and substitute them by officers who would be reliable, it w’ould not restore the property unlawfully disposed of by the former.
A State, in this particular, may be regarded as subject to the same rules of law that apply to a corporation, and the doctrine of par delictum was never yet applied to a corporation in a case where it appeared that the director’s, or the corporators themselves, had transcended the corporate powers.
The contract in this case is not claimed as invalid simply because it is illegal, but it is illegal because it was beyond the power of the legislature to authorize or the military board to execute. It is not illegal for the reason of being contrary to good morals, but it is illegal because executed without authority.
Such was the case of the State of Illinois v. Belafield, and such was the case of the Pennsylvania and Belaware Steam Navigation Company v. Dandridge. (8 Gill & Johnson, 319.)
“It has been urged that the defendants, having entered into this contract, are estopped from denying their competency to have done so. To the doctrine of estoppel," applied to such cases, we cannot yield our assent. If the corporation is estopped from denying its power, the doctrine of estoppel operates with like effect upon those who contract with them, and the result would be, that no matter how limited the power of a corporation may appear in its charter, practically it is a corporation without limitation as to its powers.”
The objection which is made by the complainant to this contract is an objection derived from a want of power to make it, and an objection derived from a want of power is of a legal disability. Was there ever an estoppel against a legal disability? Such a case was never heard of. (Fairtitle v. Gilbert, 2 D. &. E., 171.)
III. Birch, Murray & Co. and Hardenberg claim to be bona fide purchasers of these bonds without notice, and set up in their answers that they purchased them in the market of Few York for value, ignorant that they had ever been the property of the State of Texas.
That the bonds purchased by them were the same as those transferred to White & Chiles by the defacto government of Texas is admitted; but these parties claim to be protected in their title as bona fide purchasers of negotiable securities, without notice of the defect in the title of the parties from whom they bought.
The contract with White & Chiles bears date the 12th day of January, 1865, and it appears from the record in the case, that directly after the execution of the contract, one of the partners proceeded to Matamoros, and the other started, as he states in his answer, “for Havana and a market.” Shortly afterwards, learning of the surrender of the armies of Lee and Johnston, they came to the city of Hew York, and there made various efforts to dispose of these bonds. Some of them were finally purchased by Hardenberg, and, as appears in his answer, the purchase was made in Hovember, 1866. The bonds had then been hawked about the market of Hew York from sometime in the spring of 1865 down to the fall of 1866. They were on their face due and payable at the Treasury of the United States after the 31st day of December, 1864. They were coupon bonds, and, at the time Hardenberg made the purchase, a number of coupons were over-due and unpaid, and attached to the bonds, as appears by his answer.
It appears, then, that he purchased the bonds of the United States nearly two years after their maturity, with over-due coupons attached, paid for the same much less than their face, and he now asks from this court that he may be protected as a purchaser in good faith of commercial paper, without notice of the invalidity in the title of the party from whom he bought.
(a.) Over-due paper is withdrawn from the protection of commercial law, and thrown back into the mass of ordinary property, subject to common-law rules.
A.bond maybe negotiated after its maturity, but the party who takes it can derive no better title than that of the party from whom he received it. The party who sells, thereby warrants his title, and if it is defective, the purchaser may have recourse for any loss against the vendor, but cannot defeat the claim of the rightful owner.
In this case, there can be no better title in any of these parties than there was in White & Chiles, the other defend ant having purchased the bonds after their maturity. This subject is fully considered, and elaborately and thoroughly discussed, in the opinion of this court in Goodman v. Symonds, 20 How., 365, where the cases of Andrews v. Pond, 13 Pet., 65, and Swift v. Tyson, 16 Pet., 1, are considered and approved, and where the court lays down the following rules:
“A bona fide holder of a negotiable instrument for a valuable consideration, without notice of facts which impeach its validity between the antecedent parties, if he take it under an indorsement made before the same becomes due, holds the title unaffected by these facts, and may recover thereon, although, as between antecedent parties, the transaction may he without legal validity.” Clearly indicating, if not declaring, that the only paper that can thus pass unembarrassed by defects in the title of the antecedent parties is paper which has not reached its maturity at the time of the transfer.
And in the same opinion, the court says further, in referring to the case of Andrews and Pond, “Where the supposed defect or infirmity in the title of the instrument appears on its face at the time of its transfer, the question whether the party who took it had notice or not is, in general, a question of construction, and must be determined by the court as matter of law. And so it was understood by this court in Andrews v. Pond, 13 Pet., 165, where it is said that a person who takes a bill, which upon the face of it was dishonored, cannot be allowed to claim the privileges which belong to a bona fide holder. If he choose to receive it under such circumstances, he takes it with all the infirmities belonging to it, and is in no better condition than the person from whom he received it.”
The court regarded the decision in Brown v. Davis, 3 Term R., 80, as a decision of great authority in leading them to the conclusions to which they arrived. (Gardner v. Murray, 2 Wall., 121; Down v. Halling, 4 Barn. & Cress., 332.)
The case of Down v. Hailing meets all the objections urged against the position and right of the complainant in this case.
In that case, the owner of a check having lost it by "accident, it was tendered to a shop-keeper in payment of goods, and accepted by him five days after its date. He obtained the money upon it from the bank on which it was drawn, and the owner was allowed to recover the proceeds in an action against the party who had received them. It was held that “ a party who takes such an instrument, so long after its date or maturity, must show that the party from whom he took it had a good title to it.”
(b.) The proof in the case affects Hardenherg with actual notice.
The court, to which the question of good or bad faith is submitted, as a question of fact, cannot fail to perceive that Hardenherg must have bought the bonds and coupons with knowledge of the defective title of the vendor, and trusted to the chances of overcoming that defect by representing himself at the Treasury Department as a bona fide purchaser, and obtaining payment by successful negotiation.
It is objected, in his behalf, that the bonds have been paid, and therefore cannot be reached by any decree that may be passed in this case. He so avers in his answer.
1. If the bonds have been paid, and he has received the proceeds, the complainant is entitled to a personal decree against him.
2. It is untrue that the bonds have been paid, so as to be beyond reach of the decree of this court.
At pages 97 and 98 of the record will be found the exhibits attached to the evidence of Mr. Tayler, Comptroller of the Treasury, from which it appears that the bonds, though paid in form, yet were never paid in fact, and that the proceeds of the. bonds have been withheld from Hardenberg because of the legal proceedings in regard to them, which the Secretary of the Treasury did not desire to defeat.
The conversion of the securities was for the purpose of saving interest upon the fund. As the bonds which had been deposited at the- Treasury were over-due, and no longer bearing interest, it was thought proper, by the officers of the Government having them in charge, to acquiesce in the demand of the claimant, and allow the bonds to be sold, and the proceeds invested in interest-bearing securities. These securities are now held at the Treasury, for the purpose of answering any decree that may be rendered in this case.
The prayer of the bill asks that the defendant, Harden-berg, with others, should" be enjoined from receiving payment of these bonds, and for general relief. The court, if it decree the complainant entitled, can therefore decree that these proceeds, which represent the bonds, and in chancery are regarded as the bonds themselves, should not be received by Hardenberg, but paid to the complainants.

Opinion:
Mr. Chief Justice Chase
delivered the opinion of the Court.
This is an original suit in this court, in which the State of Texas, claiming certain bonds of the .United States as her property, asks an injunction to restrain the defendants from receiving payment from the ¡National Government, and to compel the surrender of the bonds to the State.
It appears from the bill, answers, and proofs, that the United States, by act of September 9, 1850, offered to the State of Texas, in compensation for her claims connected with the settlement of her boundary, $10,000,000 in five per cent, bonds, each for the sum of $1,000, and that this offer was accepted by Texas."
One-half of these bonds were retained for certain purposes in the National Treasury, and the other half were delivered to the State.
The bonds thus delivered were dated January 1, 1851, and were all made payable to the State of Texas, or bearer, and redeemable after the 31st day of December, 1864.
They were received, in behalf of^the State, by the comptroller of public accounts, under authority of an act of the legislature, which, besides giving that authority, provided that no bond should be available in the hands of any holder until after indorsement by the governor of the State.
After the breaking out of the rebellion, the insurgent legislature of Texas, on the 11th of January, 1862, repealed the act requiring the indorsement of the governor, (Acts Tex., 1862, p. 45; Paschal's Dig., Art. 5322,) and on the same day provided for the organization of a military board, composed of the governor, comptroller, and treasurer, and authorized a majority of that board to provide for the defense of the State by means of any bonds in the treasury, upon any account, to the extent of $1,000,000. (Tex. Laws 1862, p. 55.)
The defense contemplated by the act was to be made against the United States by war.
Under this authority, the military board entered into an agreement with George W. White and John Chiles, two of the defendants, for the sale to them of one hundred and thirty-five of these bonds, then in the treasury of the State, and seventy-six more, then deposited with Droege & Co., in England, in payment for which they engaged to deliver to the board a large quantity of cotton-cards and medicines. This agreement was made on the 12th of January, 1865.
On the 12th of March, 1865, White & Chiles received from the military board one hundred and thirty-five of these bonds, none of which were endorsed by any governor of Texas.
Afterward, in the course -of the years 1865 and 1866, some of the same bonds came into the possession of others of the defendants, by purchase or as security for advances of money.
Such is a brief outline of the case. It will be necessary hereafter to refer more in detail to some particular circumstances of it.
The first inquiries to which our attention was directed by counsel arose upon the allegations of the answer of Chiles, (1,) that no sufficient authority is shown for the prosecution of the suit in the name and on the behalf of the State of Texas; and (2) that the State, having severed her relations with a majority of the States of the Union, and having by her ordinance of secession attempted to throw off her allegiance to the Constitution and Government of the United States, has so far changed her status as to be disabled from prosecuting suits in the national courts.
The first of these allegations is disproved by the evidence. A letter of authority, the authenticity of which is not disputed, has been produced, in which J. W. Throckmorton, elected governor under the constitution adopted in 1866, and proceeding under an act of the State legislature relating to these bonds, expressly ratifies and confirms the action of the solicitors who filed the bill, and empowers them to prosecute this suit; and it is further proved by the affidavit of Mr. Paschal, counsel for the complainant, that he was duly appointed by Andrew J. Hamilton, while provisional governor of Texas, to represent the State of Texas in reference to the bonds in controversy, and that his appointment has been renewed by E. M. Pease, the acting governor. If Texas was a State of the Union at the time of these acts, and these persons, or either of them, were competent to represent the State, this proof leaves no doubt upon the question of authority.
The other allegation presents a question of jurisdiction. It is not to be questioned that this court has original jurisdiction of suits by States against citizens of other States, or that the States entitled to invoke this jurisdiction must be States of the Union. But it is equally clear that no such jurisdiction has been conferred upon this court of suits by' any other political communities than such States.
If, therefore, it is true that the State of Texas was not, at the time of filing this bill, or is not now, one of the United States, we have no jurisdiction of this suit, and it is our duty to dismiss it.
We are very sensible of the magnitude and importance of this question, of the interest it excites, and of the difficulty, not to say impossibility, of so disposing of it as to satisfy the conflicting judgments of men equally enlightened, equally upright, and equally patriotic. But we meet it in the case, and we must determine it, in the exercise of our best judgment, under the guidance of the Constitution alone.
Some not unimportant aid, however, in ascertaining the true sense of the Constitution, may be derived from considering what is the correct idea of a State, apart from any union or confederation with other States. The poverty of language often compels the employment of terms in quite different significations, and of this hardly any example more signal is to be found than in the use of the word we are now considering. It would serve no useful purpose to attempt an enumeration of all the various senses in which it is used. A few only need be noticed.
It describes sometimes a people or community of individuals united more or less closely in political relations, inhabiting temporarily or permanently the same country; often it denotes only the country, or territorial region, inhabited by such a community; not unfrequently it is applied to the government under which the people live; at other times it represents the combined idea of people, territory, and government.
It is not difficult to see that in all these senses the primary conception is that of a people or community. The people, in whatever territory dwelling, either temporarily or permanently, and whether organized under a regular government, or united by looser and less definite relations, constitute the State.
This is undoubtedly the fundamental idea upon which the republican institutions of our own country are established. It was stated very clearly by an eminent judge (Mr. Justice Patterson, in Penhallow v. Doane's Administrators, 3 Dall., 93) in one of the earliest cases adjudicated by this court, and we are not aware- of anything in any subsequent decision of a different tenor:
" In the Constitution, the term ' State most frequently expresses the combined idea just noticed, of people, territory, and government. A State, in the ordinary sense of the Constitution, is a political community of free citizens, occupying a territory of defined boundaries, and organized under a government sanctioned and limited by a written constitution, and established by the consent of the governed. It is the union of such States under a common constitution which forms the distinct and greater political unit which that Constitution designates as the United States, and makes of the people and States which compose it one people and one country."
The use of the word in this sense hardly requires further remark. In the clauses which impose prohibitions upon the States in respect to the making of treaties, emitting of bills of credit, laying duties of tonnage, and which guarantee to the States representation in the House of Representatives and in the Senate, are found some instances of this use in the Constitution. Others will occur to every mind.
But it is also used in its geographical sense, as in the clauses which require that a representative in Congress shall be an inhabitant of the State in which he shall be chosen, and that the trial of crimes shall be held within the State where committed.
And there are instances in which the principal sense of the word seems to be that primary one to which we have adverted, of a people or political community, as distinguished from a government.
In this latter sense the word seems to be used in the clause which provides that the United States shall guarantee to every State in the Union a republican form of government, and shall protect each of them against invasion.
In this clause a plain distinction is made between a State and the government of a State.
Having thus ascertained the senses in which the word "State" is employed in the Constitution, we will proceed to consider the proper application of what has been said.
The republic of Texas was admitted into the Union as a State on the 27th of December, 1845. By this act the new State, and the people of the new State, were invested with all the rights, and became subject to all the responsibilities and duties, of the original States under the Constitution.
From the date of admission until 1861 the State was represented in the Congress of the United States by her Senators and Representatives, and her relations as a member of the Union remained unimpaired. In that year, acting upon the theory that the rights of a State under the Constitution might be renounced, and her obligations thrown off at pleasure, Texas undertook to sever the bond thus formed, and to break up her constitutional relations with the United States.
On the 1st of February (Paschal's Dig., p. 78) a convention, called without authority, but subsequently sanctioned by the legislature regularly elected, adopted an ordinance to dissolve the un-ion between the State of Texas and the other States under the Constitution of the United States, whereby Texas was declared to be "a separate and sovereign State," and "her people and citizens," to be " absolved from all allegiance to the United States, or the Government thereof."
It was ordered, by a vote of the convention, (Paschal's Dig., p. 80) and by an act of the legislature, (Laws of Tex., 1859-61, p. 11,) that this ordinance should be submitted to the people, for approval or disapproval, on the 23d of February, 1861. .
Without awaiting, however, the decision thus invoked, the convention, on the 4th of February, adopted a resolution designating seven delegates to represent the State in the convention of seceding States at Montgomery, "in order," as the resolution declared, "that the wishes and interests of the people of Texas may be consulted in reference to the constitution and provisional government that may be established by said convention."
Before the passage of this resolution the convention had appointed a committee of public safely, and adopted an ordinance, giving authority to that committee to take measures for obtaining possession of the property of the United States in Texas and for removing the national troops from her limits. The members of the committee, and all officers and agents appointed or employed by it, were sworn to secrecy and to allegiance to the State. (Paschal's Dig., 80.) Commissioners were at once appointed, with instructions to repair to the headquarters of General Twiggs, then representing the United States, in command of the department, and to make the demands necessary for the accomplishment of the purposes of the committee. A military force was organized in support of these demands, and an arrangement was effected with the commanding general, by "which the United States troops were engaged to leave the State, and the forts and all the public property, not necessary to the removal of the troops, were surrendered to the commissioners. (Tex. Rep. Com., Lib. of Con., 45.)
These transactions took place between the 2d and the 18th February, and it was under these circumstances that the vote upon the ratification or rejection of the ordinance of secession was taken on the 23d of February. It was ratified by a majority of the voters of the State.
The convention, which had adjourned before the vote was taken, reassembled on the 2d of March, and instructed the delegates, already sent to the Congress of the seceding States, to apply for admission into the confederation, and to give the adhesion of Texas to its provisional constitution.
It proceeded, also, to make the changes in the State constitution which this adhesion made necessary. The words "United States" were stricken out wherever they occurred, and the words " Confederate States" substituted, and the members of the legislature, and all officers of the State, were required by the new constitution to take an oath of fidelity to the • constitution and laws of the new confederacy.
Before, indeed, these changes in the constitution had been completed, the officers of the State had been required to appear before the committee and take an oath of allegiance to the Confederate States.
• The governor and secretary of state, refusing to comply, were summarily ejected from office.
The members of the legislature, which had also adjourned and reassembled on the 18th of March, were more compliant. They took the oath, and proceeded, on the 8th of April, to provide by law for the choice of electors of president and vice president óf the Confederate States.
The representatives of the State in the Congress of the United States were withdrawn, and, as soon as the seceded States became organized under- a constitution, Texas sent senators and representatives to the confederate congress.
In all respects, so far as the object could be accomplished by ordinances of the convention, by acts of the legislature, and by votes of the citizens, the relations of Texas to the Union were broken up, and new relations to a new government were established for them.
The position thus assumed could only be maintained by arms, and Texas accordingly took part, with the other Confederate States, in the war of the rebellion, which these events made inevitable. During the whole of that war there was no governor, or judge, or any other State officer in Texas, who recognized the national authority. Uor was any officer of the Unite!! States permitted to exercise any authority whatever under the Uational Government within the limits of the State, except under the immediate protection of the national military forces.
Did Texas, in consequence of these acts, cease to be a State? Or, if not, did the State cease to be a member of the Union ?
It is needless to discuss at length the question whether the right of a State to 'withdraw from the Union for any cause, regarded by herself as sufficient, is consistent with the Constitution of the United States.
The Union of the States never was a purely artificial and arbitrary relation. It began among the colonies, and grew out of common origin, mutual sympathies, kindred principles, similar interests, and geographical relations. It was confirmed and strengthened by the necessities of war, and received definite form and character and sanction from the Articles of Confederation. By these the Union was solemnly declared to "be perpetual." And, when these Articles were found to be inadequate to the exigencies of the country, the constitution was ordained il to form a more perfect union." It is difficult to convey the idea of indissoluble unity more clearly than by these words. What can be indissoluble, if a perpetual union, made more.perfect, is not?
But the perpetuity and indissolubility of the Union by no means implies the loss of distinct and individual existence, or of the right of self-government, by the States. Under the Articles of Confederation, each State retained its sovereignty, freedom, and independence,- and every power, jurisdiction, and right, not expressly delegated to the United States. Under the Constitution, though the powers of the States were much restricted, still, all powers not delegated to the United States, nor prohibited to the States, are reserved to the States respectively, or to the people. And we have already had occasion to remark at this term, that " tie people of each State compose a State, having its own government, and endowed with all the functions essential to separate and independent existence," and that, "without the States in union, there could be no such political body as the United States." (County of Lane v. The State of Oregon.) Not only, therefore, can there be no loss-of separate and independent autonomy to the States, through their union under the Constitution, but it may be not unreasonably said, that the preservation of the States and the maintenance of their governments are as much within the design and care of the Constitution, as the preservation of the Union and the maintenance of the National Government. The Constitution, in all its provisions, looks to an indestructible Union, composed of indestructible States.
When, therefore, Texas became one of the United States, it entered into an indissoluble relation.r All the obligations of perpetual union, and all the guaranties of republican government in the Union, attached at once to the State. The act which consummated its admission into the Union was*something more than a compact, it was the.incorporation of a new member into the political body, and it was final. The union between Texas and the other States was as complete, as perpetual, and as indissoluble, as the union between the original States. There was no place for reconsideration or revocation, except through revolution, or through consent of the States.
Considered, therefore, as transactions under the Consti tution, the ordinance of secession adopted by the convention, and ratified by a majority of the citizens of Texas, and all the acts of its legislature, intended to give effect to that ordinance, were absolutely null. They were utterly without operation in law. The obligations of the State, as -a member of the Union, and of every citizen of the State, as a citizen of the United States, remained perfect and unimpaired. It certainly follows, that the State did not cease to be a State, nor its citizens to be citizens, of the Union. If this were otherwise, the State must have become foreign, and its citizens foreigners. The war must have ceased to be a war for the suppression of rebellion, and must have become a war for conquest and subjugation.
Our conclusion, therefore, is, that Texas continued to be a State, and' a State of the Union, notwithstanding the transactions to which we have referred. And this conclusion, in our judgment, is not in conflict with any act or declaration of any department of the National Government, but entirely in accordance with the whole series of such acts and declarations since the first outbreak of the rebellion.
But, in order to the exercise, by a State, of the right to sue in this court, there needs to be a State government, competent to represent the State, in its relations with the National Government, so far, at least, as the institution and prosecution of a suit is concerned.
And it is by no means a logical conclusion, from the premises which we have endeavored to establish, that the governmental relations of Texas to the Union remained unaltered. Obligations often remain unimpaired, while relations are greatly changed. The obligations of allegiance to the State, and of obedience to its laws, subject to the Constitution of the United States, are binding upon all citizens, whether faithful or unfaithful to them; but the relations which subsist while these obligations are per formed are essentially different from those which arise when they are disregarded and set at nought. And the same must necessarily he true of the obligations and .relations of States and citizens1 to the Union. Ro one has been bold enough to contend that, while Texas' was controlled by a government hostile to the United States, and, in affiliation with a hostile confederation, waging war upon the United States, Senators chosen by its legislature, or Representatives elected by its citizens, were entitled to seats in Congress; or that any suit, instituted in its name, could be entertained in this court. All admit that, during this condition of civil war, the rights of the State, as a member, and of its people, as citizens of the Union, were suspended. The government, and the citizens of the State, refusing to recognize their constitutional obligations, assumed the character of enemies, and incurred the consequences of rebellion.
These new relations imposed new duties upon the United States. The first was that of suppressing the rebellion. The next was that of re-establishing the broken relations of the- State with the Union. The first of these duties having been performed, the next necessarily engaged the attention of the Rational Government.
The authority for the performance of the first had been found in the power to suppress insurrection and carry on war; for the performance of the second, authority was derived from the obligation of the United States to guarantee to- every State in the Union a republican form of government. The latter, indeed, in the case of a rebellion, which involves the government of a State, and, for the time., excludes the national authority from its limits, seems to be a necessary complement to the former.
Of this, the case of Texas furnishes a striking illustration. • When the war closed, there was no government in the State except that which had been organized for the purpose of waging war against the United States. That government immediately disappeared. The chief functionaries left the State. Many of the - subordinate officials followed their example. Legal responsibilities were annulled or -greatly impaired. It was inevitable that great confusion would prevail. If order was maintained, it was where the good sense and virtue of the citizens gave support to local acting magistrates, or supplied more directly the needful restraints.
A great social change increased the difficulty of the situation. Slaves, in the insurgent States, with certain local exceptions, had been declared free by the proclamation of emancipation, and whatever questions might be made as to the effect of that act, under the Constitution, it was clear from the beginning that its practical operation, in connection with legislative acts of like tendency, must be complete enfranchisement. Wherever the national forces obtained control the slaves became freemen. Support to the acts of Congress and the proclamation of the President concerning slaves was made a condition of amnesty, (13 U. S. Stats., 737,) by President Lincoln, in December, 1863, and by President Johnson, in May, 1865. (13 U. S. Stats., 758.) And emancipation was confirmed, rather than ordained, in the insurgent States, by the amendment to the Constitution, prohibiting slavery throughout the Union, which was proposed by Congress in February, 1865, and ratified, before the close of the following autumn, by the requisite three-fourths of the States. (13 U. S. Stats., 774-5.) [Paschal's Anhot. Const., p. 271, Art. 13, fifote 274.]
The new freemen necessarily became part of the people, and the people still constituted the State; for States, like individuals, retain their identity, though changed, to some extent, in their constituent elements. And it was the State thus constituted which was now entitled to the benefit of the constitutional guaranty.
There being, then, no government in Texas, in constitutional relations with the Union, it became the duty of the United States to provide for the restoration of such a government. But the restoration of the government which existed before the rebellion, without a new election of officers, was obviously impossible; and, before any such election could be properly held, it was necessary that the old constitution should receive such amendments as would conform its provisions to the new conditions created by emancipation, and afford adequate security to the people of the State.
In the exercise of the power conferred by the guaranty clause, as' in the exercise of every other constitutional power, a discretion in the choice of means is necessarily allowed. It is essential only that the means must be necessary and proper for carrying into execution the power conferred, through the restoration of the State to its constitutional relations, under a republican form of government, and that no acts be done, and no authority exerted, which is either prohibited or unsanctioned by the Constitution.
It is not important to review at length the measures which have been taken, under this power, by the executive and legislative departments of the National Government. It is proper, however to observe, that almost immediately after the cessation of organized hostilities, and while the war yet smouldered in Texas, the President of the United States issued his proclamation, appointing a provisional governor for the State, and providing for the assembling of a convention, with a view to the re-establishment of a republican government, under an amended constitution, and to the restoration of the State to her proper constitutional relations. A convention was accordingly assembled, the constitution amended, elections held, and a State government, acknowledging its obligations to the Union, established.
Whether the action then taken was in all respects warranted by the Constitution it is not now necessary to determine. The power exercised by the President was supposed, doubtless, to be derived from his constitutional functions as commander-in-chief; and, so long as the war continued, it cannot be denied that he might institute temporary government within insurgent districts occupied by the national forces, or take measures in any State for the restoration of State government faithful to the Union, employing, however, in such efforts, only such means and agents as were authorized by constitutional laws.
But the power to carry into effect the clause of guaranty is primarily a legislative power, and resides in Congress. "Under the fourth article of the Constitution, it rests with Congress to decide what government is the established one in a State. For, as the United States guarantee to each State a republican government, Congress must necessarily decide what government is established in the State, before it can determine whether it is republican or not."
This is the language of the late chief justice, speaking for this court in a case from Ehode Island, (Luther v. Borden, 7 How., 42,) arising from the organization of opposing governments in that State. And we think that the principle sanctioned by it may be applied, with even more propriety, to the case of a State deprived of all rightful government by revolutionary violence, though necessarily limited to cases where the rightful government is thus subverted, or in imminent danger of being overthrown by an opposing government set up by force within the State.
The action of the President must, therefore, be considered as provisional, and in that light it seems to have been regarded by Congress. It was taken after the term of the Thirty-Eighth Congress had expired. The Thirty-Ninth Congress, which assembled in December, 1865, followed by the Fortieth Congress, which met in March, 1867, proceeded, after long deliberation, to adopt various measures for reorganization and restoration. These measures were embodied in proposed amendments to the Constitution, and in the acts known as the reconstruction acts, which have been so far carried into effect, that a majority of the States which were engaged in the rebellion have been restored to their constitutional relations, under' forms of government adjudged to be republican by Congress, through the admission of their " Senators and Representa-' tives into the councils of the Union."
Nothing in the case before us requires, the court to pronounce judgment upon the constitutionality of any particular provision of these acts.
But it is important to observe, that these acts themselves show that the governments which had been established, and had been in actual operation under executive direction, were recognized by Congress as provisional, as existing, and as capable of continuance.
By the act of March 2, 1867, (U. S. Stats., 428,) the first of the series, these governments were, indeed, pronounced illegal, and were subjected to military control, and were declared to be provisional only; and, by the supplementary act of July 19, 1867, the third of the series, it was further declared that it was the true intent and meaning of the act of March 2, that the governments then existing were not legal State governments, and, if continued, were to be continued subject to the military commanders of the respective districts, and to the paramount authority of Congress. We do not inquire here into the constitutionality of this legislation, so far as it relates to military authority, or to the paramount authority of Congress. It suffices to say, that the terms of the acts necessarily imply recognition of actually existing governments, and that, in point of fact, the governments thus recognized, in some important respects, still exist.
What has thus been said generally describes, with sufficient accuracy, the situation of Texas. A provisional governor of the State was appointed by the President in 1865; in 1866 a governor was elected by the people, under the constitution of that year; at a subsequent date a governor was appointed by the commander of the district. Each of the three exercised executive functions, and actually represented the State in' the executive department.
In the case before us, each has given his sanction to the prosecution of the suit, and we find no difficulty, without investigating the legal title of either to the executive office, in holding that the sanction thus given sufficiently warranted the action of the solicitor and counsel in behalf of the State. The necessary conclusion is, that the suit was instituted and is prosecuted by competent authority.
The question of jurisdiction being thus disposed of, we proceed to the consideration of the merits, as presented by the pleadings and the evidence.
And the first question to be answered is, whether or not ,the title of the State to the bonds in controversy was divested by the contract of the military board with White & Chiles?
That the bonds were the property of the State of Texas, on the 11th of January, 1862, when the act prohibiting alienation, without the indorsement of the governor, was repealed, admits of no question, and is not denied. They came into its possession and ownership through public acts of the General Government and of the State, which gave notice to all the world of the transaction consummated by them. And we think it clear that, if a State, by a public act of her legislature, imposes restrictions upon the alienation of her property, every person who takes a transfer of such property must be held affected by notice of them. Alienation in disregard of such restrictions can convey no title.
In this case, however, it is said, that the restriction imposed by the act of 1851 was repealed by the act of 1862. And this is true, if the act of 1862 can be regarded as valid. [Paschal's Dig., Arts. 5320, 5322.] But was it valid?
The legislature of Texas, at the time of the repeal, con stituted one of the departments of a State government established in hostility to the Constitution of the United States. It cannot he regarded, therefore, in the courts of the United States, as a lawful legislature, or its acts as lawful acts. And yet, it is a historical fact that the government of Texas, then in full control of the State, was its only actual government; and, certainly, if Texas had been a separate State, and not one of the United States, the new government, having displaced the regular authority, and having established itself in the customary seats of power, and in the exercise of the ordinary functions of administration, would have constituted, in the strictest sense of the words, a de facto government, and its acts, during the period of its existence as such, would be effectual, and, in almost all respects, valid. And to some extent this is true of the actual government of Texas, though unlawful and revolutionary as to the United States.
It is not necessary to attempt any exact definitions, within which the acts of such a State government must be treated as valid or invalid. It may be said, perhaps with sufficient accuracy, that acts necessary to peace and good order among^ citizens, such, for example, as acts sanctioning and protecting marriage and the domestic relations, governing the course of descents, regulating the conveyance and transfer of property, real and personal, and providing remedies for injuries to person and estate, and other similar acts, which would be valid if emanating from a lawful government, must be regarded in general as valid when proceeding from an actual, though unlawful government; and that acts in furtherance or support of rebellion against the United States, or intended to defeat the just rights of citizens, and other acts of like nature, must, in general, be regarded as invalid and void.
Wliat, then, tried by these general tests, was the character of the contract of the military board with White & Chiles?
That hoard, as we have seen, was organized, not for the defense of the State against a foreign invasion, or for its protection against domestic violence, within the meaning of these words as used in the ¡National Constitution, but for the purpose, under the name of defense, of levying war against the United States. This purpose was undoubtedly unlawful, for the acts which it contemplated are, within the express definition of the Constitution, treasonable.
It is true that the military board was subsequently reorganized. It consisted thereafter of the governor and two other members, appointed and removable by him, and was, therefore, entirely subordinate to executive control. Its general object remained without change, but its powers were " extended to the control of all public works and supplies, and to the aid of producing within the State, by the importation of articles, necessary and proper for such aid."
And it was insisted, in argument on behalf "of some of the defendants, that the contract with White & Chiles, being for the purchase of cotton-cards and medicines, was not a contract in aid of the rebellion, but for obtaining goods capable of use entirely legitimate and innocent, and, therefore, that payment for those goods by the transfer of any property of the State was not unlawful. We cannot adopt this view. Without entering, at this time, upon the inquiry whether any contract made by such a board can be sustained, we are obliged to say that the enlarged powers of the board appear to us to have been conferred in furtherance of its main purpose, of war against the United States, and that the contract under consideration, even if made in the execution of these enlarged powers, was still a contract in aid of the rebellion, and, therefore, void. And we cannot shut our eyes to the evidence which proves that the act of repeal was intended to aid rebellion, by facilitating the transfer of these bonds. It was supposed, doubtless, that negotiation of them would be less difficult if they bore upon their face no direct evidence of having come from the possession of any insurgent State government. We can give no effect, therefore, to this repealing act.
It follows, that the title of the State was not divested by the act of the insurgent government in entering into this contract.
But it was insisted further, in behalf of those defendants who claim certain of these bonds by purchase or as collateral security, that however unlawful may have been the means by which White & Chiles obtained possession of the bonds, they are innocent holders, without notice, and entitled to protection as such under the rules which apply to securities which pass by delivery. These rules were fully discussed in Murray v. Lardner, 2 Wall., 118. We held in that case that the purchase of coupon bonds, before due, without notice and in good faith, is unaffected by want of title in the seller, and that the burden of proof in respect to notice and want of good faith is on the claimant of the bonds as against the purchaser. We are entirely satisfied with this doctrine.
Does the State, then, show affirmatively notice to these defendants of want of title to the bonds in White & Chiles ?
It would be difficult to. give a negative answer to this question, if there were no other proof than the legislative acts of Texas. But there is other evidence which might fairly be held to be sufficient proof of notice, if the rule to which we have adverted could be properly applied to this case.
But these rules have never been applied- to matured obligations. Purchasers of notes or bonds past due take nothing but the actual right and title of the vendors. (Brown v. Davis, 37 R., 80; Goodman v. Symonds, 20 How., 366.)
The bonds in question were dated January 1, 1851, and were redeemable after the -31st of December, 1864. In strictness, it is true they were not payable on the day when they became redeemable, but* the known usage of the United States to pay all bonds as soon as the right of payment accrues, except where a distinction between redeem- . ability and payability is made by law, and shown on the face of the bonds, requires the application of the rule respecting over-due obligations to bonds of the United States which have become redeemable, and in respect to which no such distinction has been made.
Now, all the bonds in controversy had become redeem-. able before the date of the contract with White & Chiles, and all bonds of the same issue which have the indorsement of a governor of Texas, made before the date of the secession ordinance, (and there were no others indorsed by any governor,) had been paid in coin on presentation at the Treasury Department; while, on the contrary, applications for the payment of bonds without the required indorsement, and of coupons detached from such bonds, made to that department, had been denied.
As a necessary consequence, the negotiation of these bonds became difficult. They sold much below the rates they would have commanded had the title to them been unquestioned. They were bought in fact, and under the circumstances could only have been bought, upon speculation. The purchasers took the risk of a bad title, hoping, doubtless, that through the action of the National Government or of the government of Texas, it might be converted • into a good one.
And it is true, that the first provisional governor of Texas encouraged the expectation that these bonds would be ultimately paid to the holders. But he was not authorized to make any engagement in behalf of the State, and in fact made none. It is true, also, that the Treasury Department, influenced perhaps by these representations, departed, to some extent, from its original rule, and paid bonds held by some of the defendants without the required indorsement. But it is clear that this change in the action of the department could not affect the rights of Texas as a State of the Union, having a government acknowledging her obligations to the National Constitution.
It is impossible, upon this evidence, to hold the defendants protected by absence of notice of the want of title in White & Chiles. As these persons acquired no right to payment of these bonds as against the State, purchasers could acquire none through them.
On the whole case, therefore, our conclusion is, that the State* of Texas is entitled to the relief sought by her bill, and a decree must be made accordingly.