Whitfield v. United States

APPEAL from the Court of Claims.

During the war of the rebellion, Whitfield, a resident of the State of Alabama, being the owner of a hundred and seventy-seven bales of cotton raised by himself, sold it to the Confederate States, agreeing to receive in payment their eight per cent bonds. In January, 1865, payment of the purchase-price was made and accepted in bonds of the kind agreed upon, payable to bearer, and falling due in the years 1868, 1871, and 1880. Whitfield kept the bonds in his possession, and, at the trial of this case below, produced them in open court. The cotton was never taken away by the Confederate States authorities, but remained in his possession until Sept 1, 1865, when it was seized by the treasury agents of the United States, acting under color of the authority of the abandoned and captured property acts. After the seizure, fifty-nine bales were, pursuant to an arrangement, restored to him, as compensation for putting the cotton in good order, and the remaining one hundred and eighteen bales sent forward to New York, where they were sold by the cotton agent of the United States, and the proceeds paid into the treasury. This suit was brought to recover these proceeds.

In the Court of Claims, the petition was dismissed: whereupon Whitfield appealed to this court.

Mr. P. Phillips for the appellant.

There was no legal authority for the seizure of the cotton. It did not come within the definition of captured property as recognized in United States v. Padelford, 9 Wall. 537.

The Court of Claims, in Sprott v. United States, 8 Ct. of Cl. 499, decided that the government of the Confederate States was an unlawful assemblage, without power to take, hold, or convey real or personal property. If such be the law, the sale in question did not divest the title of the claimant.

Conceding, however, that they could enter into a contract of purchase recognizable in our courts, the question is then presented, whether property so purchased, the possession of which was never parted with by the owner, can be taken from him by the United States after the overthrow and dissolution of that government, he being then the holder of the securities given as the consideration of the purchase.

Let it be supposed that Whitfield had sold this cotton to A., and had received his bond for the purchase-money, but had never parted with the possession. A. becomes insolvent; but his property had been forfeited to the United States. Surely, under these circumstances, the government, asserting its claim through A., could never rightfully demand the cotton without paying the purchase-money.

There is no difference between this supposititious case and that now before the court, as the contract, under the same circumstances, was made with the Confederate government.

When a government enters into a contract of purchase or other mercantile operation, it puts off its sovereignty; and, in such transactions, its rights and obligations are regarded by the court as standing on no higher ground than like transactions between individuals. 2 Story, Com., § 1330; United States v. Buford, 3 Pet. 12; Davis v. Gray, 16 Wall. 232.

Conceding the right of the government to exercise all powers necessary to carry on the war to a successful termination, we maintain that war does not operate proprio vigore a confiscation of the enemy's property.

It is for the legislative body to determine the policy on which the war shall be conducted.

Congress determined the question how far belligerent rights should be exercised.

The act 13th July, 1861, provides for the seizure of ships or vessels belonging to citizens of States engaged in insurrection, found at sea.

By the act 6th August, 1861, property sold or given, with intent to use or employ the same for the purpose of promoting the insurrection, is made subject to prize or capture.

By the act 17th July, 1862, the property of persons designated by six enumerated classes is, in a certain contingency, subject to confiscation.

In neither of these acts is the title of the owner divested by the seizure. This takes place only when judicial proceedings are instituted, and a judgment of condemnation is had. Then the property is sold, and the proceeds paid into the treasury.

With neither of these acts had the Treasury Department any concern. Its sole authority is under the act of 1863, which limits its power to captured or abandoned property.

As the government has not chosen to proceed against this cotton under the act of 6th August, 1861, as having been sold for the purpose of promoting the insurrection, in the mode pointed out in the act, it cannot now claim to hold it on that ground by virtue of the seizure made in this case.

If this cotton was neither captured, abandoned, nor condemned under any act of Congress directing its confiscation, the government of the United States can only claim title to it by virtue of its right to succeed to the property owned by the conquered government.

This right must rest alone upon general principles of international law.

It was on the theory of succession or representation alone that the suits brought in England by the United States against the agents of the Confederacy could be maintained.

The Vice-Chancellor, after announcing as a clear principle of public law, that any government which de facto succeeds to any other, whether by revolution or restoration, conquest or reconquest, succeeds to all the public property of the displaced power, held that 'this right is the right of succession. This right of representation is a right not paramount, but one derived through the displaced authority, and can only be enforced in the same way, and to the same extent, and subject to the same correlative obligations and rights, as if that authority had not been suppressed, and was itself seeking to enforce it.' United States v. Prioleau, 2 Hem. & M. Ch. Cas. 560; United States v. McRae, 8 L. R. Eq. 75.

It is admitted, that when terms of sale are agreed on, and every thing the seller has to do with the goods is complete, the contract of sale becomes absolute between the parties, without actual payment or delivery, and the property, and the risk of accident to the goods, vest in the buyer.

When the sale is for cash, the vendee, though he acquires a right of property by the contract, does not acquire the right of possession until he pays or tenders the price.

When it is on a credit, the vendee, in the absence of stipulation, is entitled to immediate possession, as the right of possession and the right of property vest at once in him.

But this doctrine is subject to the important qualification, that this right of possession is not absolute, and will be defeated if the buyer becomes insolvent before he obtains the actual possession: for though the buyer has the property vested in him, so as to subject him to the risk of any accident, he has not an indefeasible right to the possession; and his insolvency without payment defeats that right, equally after the transitus has begun as before the seller has parted with the actual possession. Bloxam v. Saunders, 6 B. & C. 941.

There is manifestly a marked distinction between those acts, which, as between vendor and vendee, go to make a constructive delivery, and vest the property in the vendee, and that actual delivery which puts an end to the right of the vendor to hold the goods as security for the price. Arnold v. Delano, 4 Cush. 38; D'Aquila v. Lambert, 2 Eden, 77; Kinloch v. Craig, 3 T. R. 119; Mason v. Lickbarrow, 1 H. Bl. 357.

But the title of the vendor is not entirely divested until the goods have come into the possession of the vendee. He has, therefore, a complete right, for just cause, to retract the intended delivery, and stop the goods in transitu. The cases in our courts of law have confirmed this doctrine, and the same law obtains in other countries. Comm. of Gaius, p. 232; 1 Domat, Civ. Law, 202, note.

The right of the vendor is not affected by the fact that he received the note or bond of the vendee in payment of the price. Bell v. Moss, 5 Wheat. 204. Nor is his lien lost by an express agreement that he will retain the goods for the vendee, either with or without rent. Townley v. Crump, 4 Ad. & Ell. 63; Miles v. Groton, 2 Cr. & M. 511; Winkes v. Hassels, 9 B. & C. 372.

As the seizure did not displace the title of the claimant, he is entitled to recover.

Mr. Solicitor-General Phillips for the United States.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.