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REPORTS OF THE DECISIONS

of the

Supreme Court of the United States.

April 12, 1869


THE STATE OF TEXAS

V.

GEORGE W. WHITE, JOHN CHILES, JOHN A. HARDENBERG,
SAMUEL WOLF, GEORGE W. STEWART,
THE BRANCH OF THE COMMERCIAL BANK OF KENTUCKY,
WESTON F. BIRCH, BYRON MURRAY, JR., AND SHAW.

(See S. C., 7 Wall., 700-743.)


[The Civil War produced three constitutional amendments. None dealt with secession. In 1869, Chief Justice Salmon Chase used the opportunity of a boring case involving government bonds to rule on the illegality of secession and make the illegality a part of constitutional doctrine. Richard McLaren, now in federal prison, of our present secessionist Republic of Texas organization mentioned Texas v. White with hostility as he acted out his secessionist/libertarian fantasies in a hostage-taking situation in 1997. It also gets hostile mention on the Sons of Confederate Veterans site.

This case is long, dense, mind-numbing, and difficult to decipher, but it is of monumental significance. The "personal right" that the district court has found in US v. Emerson has secessionist implications for the individual. The right to secession applied even to individuals is a plank in the Libertarian Party Platform.]

[Part 1: Statement of the Case. 17K.
Part 2: Attorneys for the Complainant. 16K.]

Part 3: Attorneys for the Defendants. THIS FILE

[Part 4: Opinions of Chief Justice Salmon Chase and Justice Robert Grier and Justice Noah Swayne. 61K.]


Messrs. Albert Pike, Robert W. Johnson, and a James Hughes, for Chiles, defendant:

If Texas is not a State, or, being a State, is a 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. No State can, without its consent, be deprived of its equal suffrage in the Senate. Every State included within this Union is entitled to be represented; and if deprived of representation, is excluded from the Union.

It is not one of the United States, because it is not permitted to have a voice in the election of President and Vice-President of the United States; a right of which, like that of representation, a State of the Union cannot be deprived.

It is not one of the United States, 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. A subjugated State held in bondage, governed by a military proconsul, 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. It constituted Louisiana and Texas, the 5th military district, and made it subject, not to civil authority, but to the military authority of the United States. Over each military district an officer, not below the rank of Brigadier-General, was placed in command, with power to protect all persons in their rights of person and property, to suppress insurrections, disorder and violence, and punish, or cause to be punished, all criminals and disturbers of the public peace. He might allow the local civil tribunals to take jurisdiction of and try offenders, or organize military commissions and tribunals for that purpose. This provision abrogated the Constitution of the State, in respect to the judicial power, and deprived the people of their dearest right— that of trial by jury. It excluded Texas from the Union, because it deprived the people of that State of the benefits of the first and sixth amendments of the Constitution.

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 the authority of the acting Legislature. The court must determine whether the Slate existed and acted during the war, and if so, what acts done by it were valid.

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. 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. 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?

If we concede that the formal and deliberative attempt of eleven of the States of the Union to dissolve the political bonds that had connected them with the other States; if we concede that a movement of such magnitude, so almost unanimous and made with so much cool ness and deliberation, was not in law the movement and action of the States in question, but only of so many of their people as united in it, still we invite the earnest attention of the court to the grave and serious question, whether the action of the people of each State could be treated as a rebellion, and in point of law was such, after it had assumed the proportions of a great public war.

No tribunal ever had before it for its decision a question of greater gravity and importance; for it not only affects vast numbers of men and concerns their rights of property, and their civil and political franchises, but also communities and States, their contracts, their laws, the judgments of their courts, their good faith and honor.

It is insisted that all Acts done by the Slate 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.

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. Nor, 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.

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 bound to be governed by 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 declaration 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.

The people of Texas, who, in the language of Mr. Justice Iredell, in Chisholm v. Georgia, 2 Dali., 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 Justice Wilson, in the same case (ld, 455), the State is subordinate; the people, the complete body of whom united together in the State and cannot be denied to be so, nor their deliberate act not to be its act 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 de facto 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 taus instrumental in putting upon the market, in order that it may be repaid by the United States what otherwise, by the fortune of war, it would have lost.

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 against the consent of the people of the State, the case would be very different; but it neither was so, nor is any such allegation made to the bill; and what is not alleged cannot be proven.

Again; if the contract was an unlawful one, made by the people, through the agency of the 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 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 in 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 delicto with those to whom they sold the bonds. Texas has chosen to allege that the purpose was unlawful, and it cannot have relief on the ground that its own allegation is untrue. Can any such fiction as that there was a State of Texas in January, 1865, distinct and different from the people of Texas, and from the State of Texas actually existing and waging war, contracting and legislating, 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 by their chosen and trusted officers, while they are 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 that State, so as to be responsible for the acts of the government of the State; but a mere fiction without the law, and one which is very far from being in furtherance of justice.

Mr. J. M. Carlisle, for Hardenberg, defendant:

Mr. Hardenberg's case is wholly unconnected with that of either of the other defendants, except by the fact that, as to all the bonds purchased by him except one, they were at the time held by White and Chiles, under the contract of January, 1865, exhibited with the bill. Under this title, or as the complainant must admit, at I least color of title and possession, followed the contract. It now appears that White and Chiles disposed, among others, of the Hardenberg bonds; but when, where, and to whom, or what consideration Is not alleged or proven, or possible to be inferred from the record. That they treated the bonds as their own under the contract, and did dispose of them, and have now no pretense of claim to the Hardenberg bonds, is admitted by them in this suit.

Hardenberg knew nothing of the bonds, except what appeared on their face and from the published official Treasury Report, that similar bonds of the same issue had been paid and redeemed at the Treasury of the United States, notwithstanding the secession of Texas, and the civil war and rebellion, which had been suppressed, In point of fact, more than a year and a half before his purchase. He had no knowledge or information that Texas had, at any time, assumed to alter the terms of the contract of the United States, as expressed on the face of the bonds, so as to expunge from them the express declaration that they were payable to "bearer," and the repeated declaration to the same effect, that the bonds passed "by delivery." He, therefore, was not affected by the fact that the bonds were not indorsed by the Governor of Texas (if that alteration of the tenor of the bonds had any legal efficacy), and was wholly ignorant that such indorsement had been authorized or required by Texas for its security against fraud, or for any other purpose.

He had no knowledge or information that the bonds purchased by him had ever been held or claimed by White and Chiles, or either of them; or that any such contract as that set up by the 1 bill had been made. In brief, he was a perfect stranger to all and singular the matters alleged 1 by the bill as affecting the title to the bonds,

He found them in open market, in the City of New York, in November, 1866, and bought them in good faith and for their full market value, of brokers and others of high standing, in the usual and regular course of business, not only without knowledge or notice, but without 1 suspicion, or reason to know or suspect that there was any infirmity in the title of his respective vendors, or any of them.

It is a misnomer and a confusion of ideas to call the Government of Texas at the date of the contract with White and Chiles, a defacto government, it was the Government of the State; the only embodiment of the abstract idea of a State which had ever been it existence for an instant, since its admission into 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 a contract was valid and binding upon the State so governed, and is valid and binding on the 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.

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 and (Chiles failed to perform its stipulations on their part.

Their second proposition is, then, in effect, the want of consideration for the transfer. At most, the fact of the transfer of a bill or note when overdue, is to subject it, in the hands of the holder, to all its equities; to all the equities with which it is incumbered at the time of the transfer.

An original absence of consideration is not one of those equities which attach on an instrument and defeat the title of an indorsee for value of an overdue bill, although with notice of the fact. Charles v. Marsden, 1 Taunt., 224; Sturtsvant v. Ford. 4 M. & G., 101; Lazarus v. Gowie, 3 Q. B., N. S., 459; Stein v. Yglesias, 1 C. M. &R.. 565.

Mr. P. Phillips, for White, defendant:

We are first to inquire as to the status of the complainant.

This question involves the consideration, whether at the filing of the bill Texas was a State, within the meaning of that clause of the Constitution which confers original jurisdiction in this court, where a State is a party.

In Hepburn v. Ellzey, 2 Cranch, 452, it was strenuously contended that a citizen of this District was a citizen of a State in the constitutional sense, so far as to enable him to maintain a suit in the circuit court; that Columbia was a distinct political society and, therefore, a State, according to the definition of writers on general law.

This definition is declared by Judge Marshall not applicable to the Constitution, which, by its several provisions, shows that those political bodies only who were entitled to representation in the Senate and House of Representatives, and the appointment of electors, were intended.

This doctrine was applied in the case of New Orleans v. Winter, 1 Wheat., 91, to a citizen of a Territory; the court holding, that though a Territory may differ from the District of Columbia in many respects, neither of them is a State in the sense in which the term is used. 5 How., 379.

Now, what is the condition of Texas? It is denied the right of representation in Congress, and all power to appoint electors. Its State Government is declared to be illegal. All authority to govern it is lodged in a military commander; civil tribunals are made subservient to his dictation; the regulation of the right of suffrage is assumed by Congress; a provisional governor is appointed by the President to act in subserviency to military authority. This condition of things is wholly inconsistent with the idea that there remains with the people of Texas any political power whatever, or that they are entitled to any of the guaranties of the Constitution of the United Stales.

Our next inquiry is, as to the terms of the agreement.

The bill alleges that, admitting that the contract was made with a de facto government— yet, as Its conditions and stipulations were not performed, the complainant is entitled to a restoration of the bonds.

The answer is:

1. This is not a case of dependent covenants. There was an absolute sale and delivery of the bonds. Then the other side stipulates to deliver certain commodities. These are two separate contracts. 2 Pars. Cont., 44).

2. For the performance of this contract, security was given according to the stipulation of the parties. 3. The parties agreed upon the mode by which a default should be paid.
Invalidity of the Agreement.
First. It is alleged that the contract is illegal, the object being to overthrow the Government of the United States.

On its face, there Is nothing Illegal nor immoral in the agreement. To supply a State with cotton cards and medicines is not only innocent but legitimate.

But it is sought to attach an illegal intent to what is fair in itself.

It is not sufficient that in such a case the illegal motive should have existed on the part of the State of Texas, but to affect the defendant, it must be clearly established that it entered into his intention and design; that the articles furnished should be used for an illegal purpose and that, in point of fact, they were so used. Hodgson v. Temple, 5 Taunt., 181.

Bare knowledge on the part of the vendor, that the vendee intends to put the goods or money to an illegal use will not vitiate the sale or loan and deprive the vendor of a remedy for the purchase money. Dater v. Earl, 3 Gray, 482.

A contract is, therefore, not void, because there may be in its surroundings or connection something illegal, though it is void when the consideration is illegal.

The distinction may be Illustrated by two Cases:

Goods were sold to one who intended to smuggle them, and the vendor, who knew of the design, recovered the price. Holman v. Johnson. Cowp., 454.

But where goods were sold, and the vendor not only knew that they were to be smuggled, but put them up in a particular manner so ai to enable it to be done, it was held that the price could not be recovered. Biggs v. Lawrence, 3 T.R., 454.

But, assuming the illegality, what is the position of the complainant in a court of justice?

1. If the bill can be maintained on the assumption that Texas is a State, then, for the purposes of the case, it is the same State that existed when this contract was entered into.

The State being essentially the same, has no standing in court to assert the invalidity of its own agreement.

2. "In pari delicto, melior est conditio possidentia," is a maxim of public policy, equally respected in courts of law and equity.

Thus no recovery can be had for premium paid for insurance to cover a trading with the enemy; nor for property placed In the hands of another to be smuggled. Broom, Leg. Max., 565, 566, 567; Adam. v. Berrett, 5 Geo., 404.

Second. The right to recover those bonds Is based upon the allegation that there was no authority in Texas competent to enter into an agreement during the rebellion.

This proposition maintains that from the date of the Ordinance of Secession to the adoption of the present Constitution, there existed no competent public authority capable of entering into a contract. If this be true, there was no power of legislation, no executive or judicial authority; and all that has been done on the assumption of such authority is absolutely null and void. No contract, however solemn in its nature, which depends for its consummation on official sanction, can be sustained.

Marriages are to be held null because the marriage ceremony was performed or the marriage license granted by an officer without authority; judgments of courts, in civil and criminal cases to be held for naught for the like reason, and all concerned in their execution to be made responsible, civilly and criminally, as for usurpation of power.

The shocking consequences of such a doctrine is itself its best refutation, The civilized world recognizes the necessity of government at all times; and no authority on the law of nations holds any language inconsistent with this necessity.

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. Bk. of Ky., 11 Pet., 318.

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 that it could transfer a valid title by such a contract as that set out in this case."

The bill 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 United States.

There is no allegation that the illegal intent was shared in by the defendant. There is not a title 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."

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 were 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 Taunt,. 181, 503; Carman v. Bryce. 3 B. & Al., 179; Holmam v. Johnson,, Cowp., 341; Dater v. Earl, 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. Bartle v. Coleman, 4 Pet., 188; Creath v. Sims, 5 How.. 204 Randall v. Howard, 2Black, 588 (67 U. S. XVII, 270).

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 individuals. I know of no case where a distinction has been made.

Bank of U. S. v. Planters' Bank, 9 Wheat., 904; Brisco v. Bk. of Ky., 11 Pet., 324; U. S. v. Bk. of Metropolis, 15 Pet., 892; Bk. of U. S. v. U. S., 2 How., 782.

When, therefore, the State comes into court with the allegation that the contract, which it seeks to set aside, was entered into by it for the purpose of obtaining means to overthrow the Government of the United States, it states a transaction which at once deprives it of all aid from courts of justice.

Messrs. S. S. Cox and J. W. Moore, for Weston F. Birch, Byron Murray, and others, defendants.


Part 1: Statement of the Case. 17K.
Part 2: Attorneys for the Complainant. 16K.

[TOP, Part 3, THIS FILE]

Part 4: Opinions of Chief Justice Salmon Chase and Justice Robert Grier and Justice Noah Swayne. 61K.


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