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Where a party purchased cotton of an agent of the government of the Confederate States, without knowing to whom the cotton belonged, it was held that the sale was void on the ground of public policy, being, in contemplation of law, an act in aid of rebellion.

MR. JUSTICE MILLER delivered the opinion of the court.

This is an appeal from the judgment of the court of claims against the appellant, rejecting his claim to the proceeds of the sale of cotton under the act in regard to captured and abandoned property. That court made the following finding of facts and conclusions of law:

I. At different times during the years 1864 and 1865 large quantities of cotton were purchased by the agents of the Confederate States for the treasonable purpose of maintaining the war of the rebellion against the government of the United States. Of cotton thus purchased by various agents in Claiborne County, Mississippi, three hundred bales were sold to the claimant by one agent in March, 1865, for ten cents a pound, in the currency of the United States. The sale was made by the agent as of cotton belonging to the Confederate States, and it was understood by the claimant at the time of the purchase to be the property of the rebel government, and was purchased as such. The agent had been specially instructed by the Confederate government "to sell any and all cotton he could for the purpose of raising money to purchase munitions of war and supplies for the Confederate army;" but the purpose of the sale was not disclosed to the claimant, whose purpose was not to aid the Confederate States, buying the cotton at its market value, and regarding it as a mere business transaction of "cotton for cash." The cotton was delivered to him at the time when the money was paid, he then being a resident of Claiborne County, within the Confederate lines.

II. The cotton was captured in May, 1865, and the proceeds or some portion thereof are in the treasury.

And the court of claims, upon the foregoing facts, decides as conclusions of law:

1. The government of the Confederate States was an unlawful assemblage without corporate power to take, hold, or convey a valid title to property, real or personal.

2. The claimant was chargeable with notice of the treasonable intent of the sale by the Confederate government, and the transaction was forbidden by the laws of the United States, and wholly void, so that the claimant acquired no title to the property which is the subject of suit.

We do not think it necessary to say anything in regard to the first proposition of law laid down by that court. Whether the temporary gov

Vol. II.]

SPROTT v. UNITED STATES.

[No. 1.

ernment of the Confederate States had the capacity to take and hold title to real or personal property, and how far it is to be recognized as having been a de facto government, and if so, what consequences follow in regard to its transactions as they are to be viewed in a court of the United States, it will be time enough for us to decide when such decision becomes necessary. There is no such necessity in the present case. We rest our affirmance of the judgment of the court of claims upon its second prop

osition.

It is a fact so well known as to need no finding of the court to establish it, a fact which, like many other historical events, all courts take notice of, that cotton was the principal support of the rebellion, so far as pecuniary aid was necessary to its support. The Confederate government early adopted the policy of collecting large quantities of cotton under its control, either by exchanging its bonds for the cotton, or, when that failed, by forced contributions. So long as the imperfect blockade of the Southern ports and the unguarded condition of the Mexican frontier enabled them to export this cotton, they were well supplied in return with arms, ammunition, medicine, and the necessaries of life not grown within their lines, as well as with that other great sinew of war, gold. If the rebel government could freely have exchanged the cotton of which it was enabled to possess itself for the munitions of war or for gold, it seems very doubtful if it could have been suppressed. So when the rigor of the blockade prevented successful export of this cotton, their next resource was to sell it among their own people, or to such persons claiming outwardly to be loyal to the United States, as would buy of them for the money necessary to support the tottering fabric of rebellion which they called a government.

The cotton which is the subject of this controversy was of this class. It had been in the possession and under the control of the Confederate government, with claim of title. It was captured during the last days of the existence of that government by our forces, and sold by the officers appointed for that purpose, and the money deposited in the treasury.

The claimant now asserts a right to this money on the ground that he was the owner of the cotton when it was so captured. This claim of right or ownership he must prove in the court of claims. He attempts to do so by showing that he purchased it of the Confederate government, and paid them for it in money. In doing this he gave aid and assistance to the rebellion in the most efficient manner he possibly could. He could not have aided that cause more acceptably if he had entered its service and become a blockade-runner, or under the guise of a privateer had preyed upon the unoffending commerce of his country. It is asking too much of a court of law sitting under the authority of the government then struggling for existence against a treason, respectable only for the numbers and the force by which it was supported, to hold that one of its own citizens, owing and acknowledging its allegiance, can by the proof of such a transaction establish a title to the property so obtained. The proposition that there is in many cases a public policy which forbids courts of justice to allow any validity to contracts because of their tendency to affect injuriously the highest public interests, and to undermine or destroy the safeguards of the social fabric, is too well settled to admit of dispute. That any person owing allegiance to an organized government can make

Vol. II.]

SPROTT v. UNITED STATES.

[No. 1.

a contract by which, for the sake of gain, he contributes most substantially and knowingly to the vital necessities of a treasonable conspiracy against its existence, and then in a court of that government base successfully his rights on such a transaction, is opposed to all that we have learned of the invalidity of immoral contracts. A clearer case of turpitude in the consideration of a contract can hardly be imagined unless treason be taken out of the catalogue of crimes.

The case is not relieved of its harsh features by the finding of the court that the claimant did not intend to aid the rebellion, but only to make money. It might as well be said that the man who would sell for a sum far beyond its value to a lunatic, a weapon with which he knew the latter would kill himself, only intended to make money, and did not intend to aid the lunatic in his fatal purpose. This court, in Hanauer v. Doane, 12 Wall. 342, speaking of one who set up the same defence, says: "He voluntarily aids treason. He cannot be permitted to stand on the nice metaphysical distinction that, although he knows that the purchaser buys the goods for the purpose of aiding the rebellion, he does not sell them for that purpose. The consequences of his acts are too serious to admit of such a plea. He must be taken to intend the consequences of his own voluntary act." This case, and the succeeding one of Hanauer v. Woodruff, 15 Wall. 349, are directly in point in support of our view and are of the case before us.

The recognition of the existence and the validity of the acts of the so called Confederate government, and that of the states which yielded a temporary support to that government, stand on very different grounds, governed by very different considerations.

The latter, in most, if not in all, instances, merely transferred the existing state organizations to the support of a new and different national head. The same constitutions, the same laws for the protection of property and personal rights, remained, and were administered by the same officers. These laws, necessary in their recognition and administration to the existence of organized society, were the same, with slight exceptions, whether the authorities of the state acknowledged allegiance to the true or the false federal power. They were the fundamental principles for which civil society is organized into government in all countries, and must be respected in their administration under whatever temporary dominant authority they may be exercised. It is only when in the use of these powers substantial aid and comfort was given or intended to be given to the rebellion, when the functions necessarily reposed in the state for the maintenance of civil society were perverted to the manifest and intentional aid of treason against the government of the Union, that their acts are void. Texas v. White, 7 Wall. 700.

The government of the Confederate States can receive no aid from this course of reasoning. It had no existence, except as a conspiracy to everthrow lawful authority. Its foundation was treason against the existing federal government. Its single purpose, so long as it lasted, was to make that treason successful. So far from being necessary to the organization of civil government, or to its maintenance and support, it was inimical to social order, destructive of the best interests of society, and its primary object was to overthrow the government on which these

Vol. II.]

MCDONALD V. SAGINAW VALLEY AND ST. LOUIS RAILROAD Co.

[No. 1.

so largely depended. Its existence and temporary power were an enormous evil, which the whole force of the government and the people of the United States was engaged for years in destroying.

When it was 'overthrown it perished totally. It left no laws, no statutes, no decrees, no authority which can give support to any contract, or any act done in its service, or in aid of its purpose, or which contributed to protract its existence. So far as the actual exercise of its physical power was brought to bear upon individuals, that may, under some circumstances, constitute a justification or excuse for acts otherwise indefensible, but no validity can be given in the courts of this country to acts voluntarily performed in direct aid and support of its unlawful purpose. What of good or evil has flown from it remains for the consideration and discussion of the philosophical statesman and historian.

The judgment of the court of claims is affirmed.

Mr. Justice CLIFFORD. I concur in the judgment of the court solely upon the ground that the purchase of the cotton and the payment of the consideration necessarily tended to give aid to the rebellion, and that all such contracts are void, as contrary to public policy. All such portions of the opinion as enforce that view have my concurrence, but I dissent from the residue of it as unnecessary to the conclusion.

Mr. Justice DAVIS. I concur in the judgment in this case on the grounds stated by Mr. Justice Clifford.

CIRCUIT COURT OF THE UNITED STATES. — EASTERN DISTRICT OF MICHIGAN.

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MCDONALD v. SAGINAW VALLEY & ST. LOUIS R. R. CO.

1. The statute (of Michigan) for the referring of cases at law having made no provision for preserving the testimony before the referee otherwise than by exceptions taken before the referee to its admissibility or to the finding of facts by the referee, testimony returned by the referee and filed with his report otherwise than in a bill of exceptions settled before and certified by him, will not be regarded or looked into by the court in deciding exceptions taken to the referee's conclusions of fact or law as contained in his report,

2. The referee having reported as findings of facts by him that the time of completion of the contract in question was waived by mutual consent, and that no new or other time was agreed on, and that the work agreed to be done was abandoned before completion by direction of the defendant, it not appearing by the report that such direction was on account of any fault on the part of the plaintiff, and the report being silent as to the quality of the work done, no damages by way of recoupment can be claimed for any of those causes.

Where a contract to build a railroad provides that the plaintiff shall increase his force when notified by defendant's engineer, and that in case of his failure to do so for ten

Vol. II.]

MCDONALD v. SAGINAW VALLEY AND ST. LOUIS RAILROAD Co. [No. 1.

days after such notice the defendant may put on a force of its own, or re-let the work and charge the expenses or loss, if any, to the plaintiff, the only damages that can be claimed by the defendant for a failure by the plaintiff in that regard is, the expense of such force put on by defendant, or the loss, if any, incident to the re-letting of the work.

When a contract by plaintiff to build a railroad provides that estimates of work done and materials furnished should be made from time to time by defendant's engineer, and that such estimates should be conclusive between the parties, and the report of the referee is silent as to whether his findings in favor of the plaintiff for work done and materials furnished were or were not based upon such estimates, or whether as such estimates were in fact before time, there is no basis for an exception to the report that such findings were not based upon such estimates.

ON exceptions by defendant to the report of the referee. The declaration consists of the common counts for goods, wares, and merchandise sold and delivered, work and labor done, and materials furnished, and money due on an account stated.

The defendant's notice of defence under the general issue sets up that the goods, wares, and merchandise, work and labor, materials and money, constituting plaintiff's claim as set up in his declaration, were sold and delivered, done, furnished, and paid out by the plaintiff in part performance by him of an agreement in writing between the parties for the construction by the plaintiff of defendant's railroad, which contract is fully set out in the notice. The defendant then alleges non-performance on the part of the plaintiff in not completing the work by the time specified in the contract, in abandoning the work while a large portion of it remained undone, and in doing what was done in an unworkmanlike, negligent, and imperfect manner, to defendant's damage a specified amount; which damage, in addition to fifteen per cent. of estimates of work, &c., claimed to be provided for in the contract as stipulated damages, the defendant claims to recoup against plaintiff's claim to the amount thereof, and asks for a judgment for the balance in his favor. The notice also alleges several matters by way of set-off.

The issue thus joined was referred by consent to Hon. Sanford M. Green, under chapter 186 of the Compiled Laws of Michigan, and the referee has made and filed his report. No exceptions appear to have been taken before the referee, and there is no bill of exceptions accompanying his report. After the filing of the report, however, exceptions to the conclusions of law stated in the report were filed in behalf of defendant. The exceptions appear in the opinion of the court.

The referee's conclusions of law stated in the report as deductions from the facts found by him, which are also stated, are, first, that the plaintiff is entitled to have allowed to him as a just claim against the defendant the several items specified, amounting in the aggregate to $54,486.20, subject, however, and subject only, to deductions for several specified items, amounting in the aggregate to $41,638.72, leaving a balance due the plaintiff at the time of the commencement of the suit of $12,874.28, which last mentioned sum, together with $1,236.59 for interest thereon from December 26, 1872, to May 11, 1874, making in all $14,083.87, the plaintiff is entitled to recover of the defendant as his damages in this action; second, that the defendant is not entitled to recoup for or on account of damages for any non-performance on the part of the plaintiff.

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