127 U. S. 70, 8 Sup. Ct. 1067, 32 L. Ed. 51; Los Angeles Milling Co. v. Los Angeles, 217 U. S. 217, 30 Sup. Ct. 452, 54 L. Ed. 736. *

II. EFFECT ON PRIVATE RIGHTS OF PROPERTY

UNITED STATES v. PRIOLEAU.

(High Court of Chancery, 1865. 2 Hem. & M. 559.)

Certain of the component States of the United States of America having seceded, and established a de facto government under the style of the Confederate States of America, the Confederate government raised funds by voluntary contributions and taxes, and thereby became possessed, as public property of their Government, of certain cotton.

By an agreement dated the 7th of July, 1864, between the defendant, Prioleau, one of the members of a firm of Fraser, Trenholm & Co., carrying on business in Liverpool, of the one part, and McCrae, who was an agent of the Confederate Government, of the other part, it was agreed as follows: Prioleau was to build eight steam-vessels, to be let out to hire to McCrae, and to be employed in the transport of cotton from the Confederate States. The cargoes were to be consigned to Prioleau, to be sold by him according to instructions. Out of the proceeds all expenses of sailing the ships and otherwise in respect thereof were to be recouped and commission paid, and of the balance one-half was to be applied as McCrae should direct, and the other half to be retained by Prioleau until the gross purchase-money of the vessels should be made up, and the vessels were then to be transferred to McCrae as purchaser. The purchase-money was to be 20 per cent. in addition to the cost of building. McCrae was to guarantee the safety of the ships, and pay damages for any that might be lost. The members of Fraser, Trenholm & Co., were Americans, but Prioleau was naturalized as a British subject.

Certain of the cotton before mentioned was shipped at Galveston in Texas, one of the Confederate States, by the agent of the Confederate Government, and taken to Havana, where the cotton was delivered to an agent of Prioleau's firm. He caused it to be reshipped in the Aline, one of the eight ships the subject of the agreement, and consigned to Fraser & Co. in Liverpool, where the ship had recently arrived, and was lying in the Mersey Docks. The ship Aline was consigned to the defendants, Malcolmson and others. The Aline had left Havana before the submission of the Confederate armies in Texas, but after the conquest of other portions of the Confederate States.

The plaintiffs by their bill claimed to have the cotton delivered up to them, and prayed an injunction to restrain the defendants from dealing with it, and a receiver.

The case now came on upon motion for a receiver and injunction.

It appeared in the evidence that the cotton was worth about £40,000, and that Fraser & Co. had incurred expenses in sailing the ships of about £20,000, which remained unsatisfied, independently of the cost of building. Some of the ships had not gone to sea, and had not been taken from the builders' yard at the time of the subjection of the Confederate Government.

Vice Chancellor Sir W. PAGE WOOD. The first point raised as to the rights of the United States Government was whether they could take the cotton, except subject to the agreement between the defendants and the Confederate Government. The title of the United States to what was once the property of the de facto Government, of the socalled Confederate States is scarcely disputed. That Government raised funds (it scarcely matters whether by voluntary contribution or by taxation, though it is not denied that compulsory means were used), and this cotton is the produce of the funds so raised.

The de facto Government has been displaced, and the authority of the Government of the United States has been restored. This cotton was clearly acquired by the de facto Government, including several States, and not by the State of Texas alone. It is therefore public property of the people of the United States, and belongs as such to the plaintiffs. The case of the King of the Two Sicilies and other authorities establish the principle that, where a de facto Government has, as such, obtained possession of property, the Government which displaces it succeeds to all its rights.

Then upon the second point, as to the claim of the defendants under the agreement: I confess I do not see much room to doubt that the United States must take subject to the agreement. That was the result of a negotiation between the de facto Government and certain persons in England (one of them, as it appears, being naturalized), who had a perfect right to deal with the de facto Government. It is not, as was said, a taking of the plaintiffs' property with notice of their rights. If the transactions were regarded in that light, the result would be that no dealing with a de facto Government would ever be possible. That Government exercised the power of levying taxes, and enjoyed belligerent rights against what, the plaintiffs say, was the only lawful Government. Other nations cannot enter into that question, but must protect their subjects, and cannot allow a Government which succeeds to the property of a de facto Government to displace rights acquired by their people. If this were otherwise, the plaintiffs might equally have insisted that Confederate vessels lying in our ports during the war should have been handed over by the authority of English tribunals to the Government of the United States, as being their property.

If the case had been that of a body of mere robbers devastating and plundering the territories of the United States, our Courts might have. interfered to restore property so acquired; but then the rightful claimants would have been not the United States Government, but the per

sons who had been robbed. It is only because the money was raised by a de facto Government that the United States can come here to claim at all. Had the money been obtained by mere robbery it would never have become public property. It only acquired that character because it was levied by an authority exercising rights of government.

I have so little doubt upon this point that I cannot put the defendants upon any terms which would abridge their rights under the contract. It may be contended that the measure of damages should be ascertained on this principle: the defendants to take out of the gross. proceeds the expenses of sailing the ships, and then to divide the balance and carry one-half to the account of the purchase-money of the eight ships, and upon that the plaintiffs to be entitled to the eight ships (other than those lost within the meaning of the last clause of the agreement). The only liability sworn to by the defendants is a sum of £20,000 for expenses, and subject to the results of an account. I must treat them at this stage of the cause as entitled to that. Of the remaining £20,000, the plaintiffs seem to be entitled to one-half and the defendants to retain the other half, but only on the terms of giving up the ships. I do not now decide any of these questions; but, under the circumstances, the proper course will be to appoint the defendant, Prioleau, receiver, he either giving security for £20,000, or else paying that amount into Court on or before the 1st of November.33

33 In the case of the United States of America v. McRae, L. R. 8 Eq. 69 (1869), James, V. C., held "that upon the suppression of a rebellion, the restored legitimate government is entitled, as of right, to all moneys, goods, and treasure which were public property of the government at the time of the outbreak, such right being in no way affected by the wrongful seizure of the property by the usurping government. But with respect to property which has been voluntarily contributed to, or acquired by, the insurrectionary government in the exercise of its usurped authority, and has been impressed in its hands with the character of public property, the legitimate government is not, on its restoration, entitled by title paramount, but as successor only (and to that extent recognizing the authority) of the displaced usurping government; and in seeking to recover such property from an agent of the displaced government can only do so to the same extent, and subject to the same rights and obligations, as if that government had not been displaced and was itself proceeding against the agent."

"Therefore, a bill by the United States government, after the supression of the rebellion, against an agent of the late Confederate government, for an account of his dealings in respect of the Confederate loan, which he was employed to raise in this country [England], was dismissed with costs, in the absence of proof that any property to which the plaintiffs were entitled in their own right, as distinguished from their right as successors of the Confederate government, ever reached the hands of the defendant, and on the plaintiff declining to have the account taken on the same footing as if taken between the Confederate government and the defendant as the agent of such government, and to pay what, on the footing of such account might be found due from them." 2 Phillimore's International Law (3d Ed., 1882) p. 154.

"In war, the public property of an enemy captured on land becomes, for the time being at least, the property of the conqueror. No judicial proceeding is necessary to pass the title. Usually the ultimate ownership of real property is settled by the treaty of peace, but so long as it is held and not surrendered by a treaty or otherwise it remains the property of the conqueror.

"This well-settled principle in the law of war was recognized by this court

SOCIETY FOR THE PROPAGATION OF THE GOSPEL IN FOREIGN PARTS v. TOWN OF NEW HAVEN et al.

(Supreme Court of the United States, 1823. 8 Wheat. 464, 5 L. Ed. 662.) This case came before the court upon a certificate of a division in opinion of the judge of the Circuit Court for the District for Vermont. It was an action of ejectment, brought by the plaintiffs against the defendants, in that court. The material facts, upon which the question. of law arose, were stated in a special verdict, and are as follows:

By a charter granted by William III, in the 13th year of his reign, a number of persons, subjects of England, and there residing, were incorporated by the name of "The Society for the Propagation of the Gospel in Foreign Parts," in order that a better provision might be made for the preaching of the Gospel, and the maintenance of an orthodox clergy in the colonies of Great Britain. The usual corporate powers were bestowed upon this society, and, amongst others, it was authorized to purchase estates of inheritance to the value of £2000. per annum, and estates for lives or years, and goods and chattels, of any value. This charter of incorporation was duly accepted by the persons therein named; and the corporation has ever since existed, and now exists, as an organized body politic and corporate, in England, all the members thereof being subjects of the king of Great Britain.

On the 2d of November, 1761, a grant was made by the governor of the province of New Hampshire, in the name of the king, by which a certain tract of land, in that province, was granted to the inhabitants of the said province, and of the king's other governments, and to their heirs and assigns, whose names were entered on the grant. The tract so granted was to be incorporated into a town, by the name of New Haven, and to be divided into sixty-eight shares, one of which was granted to "The Society for the Propagation of the Gospel in Foreign Parts." The tract of land, thus granted, was divided among the grantees by sundry votes and proceedings of a majority of them; which, by the law and usage of Vermont, render such partition legal. The premises demanded by the plaintiffs, in this ejectment, were set off to them in the above partition, but they had no agency in the division, nor was it necessary, by the law and usage of Vermont, in order to render the same valid.

On the 30th of October, 1794, the legislature of Vermont passed an act, declaring, that the rights to land in that state, granted under the authority of the British government, previous to the revolution, to

in United States v. Huckabee, 16 Wall. 434, 21 L. Ed. 457 (1872), as applicable to the late civil war. At the close of that war there was no treaty. When the insurrection was put down the government of the insurgents was broken up and there was no power to treat with. Hence the title to all captured property of the confederate government then became absolute in the United States." Chase, C. J., in Titus v. U. S., 20 Wall. 475, 481, 482, 22 L. Ed. 400 (1874). See, also, Whitfield v. U. S., 92 U. S. 165, 23 L. Ed. 705 (1875).

"The Society for the Propagation of the Gospel in Foreign Parts," were thereby granted severally to the respective towns in which such lands lay, and to their use forever. The act then proceeds to authorize the selectmen of each town, to sue for and recover such lands, if necessary, and to lease them out, reserving an annual rent, to be appropriated to the support of schools. Under this law, the selectmen of the town of New Haven executed a perpetual lease of a part of the demanded premises, to the defendant, William Wheeler, on the 10th of February, 1800, reserving an annual rent of $5.50; immediately after which, the said Wheeler entered upon the land so leased, and has ever since held the possession thereof. Similar donations were made, about the same time with the above grant, to the plaintiffs, of lands lying within the limits of Vermont, by the governor of New Hampshire, in the name of the king; but the plaintiffs never entered upon such lands, nor upon the demanded premises, nor in any manner asserted a claim or title thereto, until the commencement of this suit.

The verdict found a number of acts of the state of Vermont respecting improvements or settlements, and also the limitation of actions; but as the discussions at the bar did not involve any questions connected with those acts, those parts of the special verdict need not be more particularly noticed.

Upon this special verdict, the judges of the court below were divided in opinion upon the question, whether judgment should be rendered for the plaintiffs or defendants, and the question was thereupon certified to this court. * * *

February 15, 1822. Hopkinson, for the plaintiffs.

Webster, contra.

* * * (Arguments of counsel in this case are elaborate and of permanent value. Unfortunately they are too long to print.]

Mr. Justice WASHINGTON 34 delivered the opinion of the court, and, after stating the case, proceeded as follows:

It has been contended by the counsel for the defendants: 1st. That the capacity of the plaintiffs, as a corporation, to hold lands in Vermont, ceased by, and as a consequence of, the Revolution;

2dly. That the society being, in its politic capacity, a foreign corporation, it is incapable of holding land in Vermont, on the ground of alienage; and that its rights are not protected by the treaty of peace;

3dly. That if they were so protected, still the effect of the last war. between the United States and Great Britain was to put an end to that treaty, and, consequently, to rights derived under it, unless they had been revived by the treaty of peace, which was not done.

1. Before entering upon an examination of the first objection, it may be proper to premise, that this society is to be considered as a private eleemosynary corporation, although it was created by a charter from

34 The statement of facts is abridged.