1. 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 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.
2. 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 organised under a government sanctioned and
limited by a written constitution, and established by the consent
of the governed.
3. 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.
4. 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 "to form a more perfect
Union."
5. 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. 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.
6. 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.
7. 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
Page 74 U. S. 701
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.
8. 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.
9. 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.
10. 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.
11. 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 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
12. 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.
13. 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.
14. The several executives of Texas, partially, at least,
reorganized under
Page 74 U. S. 702
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.
15. Public property of a State, alienated during rebellion by an
usurping State government for the purpose of carrying on war
against the United States, may be reclaimed by a restored State
government, organized in allegiance to the Union, for the benefit
of the State.
16. 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 be 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, be regarded as invalid and void.
17. 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.
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 cases 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 herself "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 and Chiles, one Hardenberg, a
certain firm, Birch, Murray & Co., and some others, [
Footnote 1] citizens of New York and
other States; praying
Page 74 U. S. 703
an injunction against their asking or receiving payment 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 complainant, 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 No. 1 to No.
5,000, and thus making the sum of $5,000,000 -- to the State of
Texas, in arrangement of certain boundary claims made by that
State. The bonds, which were dated January 1st, 1851, were coupon
bonds, payable, by their terms, to the State of Texas or bearer,
with interest at 5 percent 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.
[
Footnote 2]
In pursuance of an act of the legislature of Texas, the
controller 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 be disposed of "
as may be provided by
law;" and enacting further, that no bond, issued as aforesaid
and payable to bearer, 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
paid on presentation by the United States prior to 1860. A part of
them, however, -- appropriated by act of 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
Page 74 U. S. 704
in which the close of it left her, are necessary to be 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, reassembled. 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
Page 74 U. S. 705
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 Confederate States at Montgomery,
Alabama, and electors for a president and vice-president of these
States appointed. War having become necessary to complete the
purposed 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 her
borders. The oath of allegiance of all persons exercising public
functions was to both the State of Texas, and to the Confederate
States of 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 ordnance for the
military defences 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 further 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 defence of the State;"
and passed an additional act
repealing the act
Page 74 U. S. 706
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 New 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 New 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."
Page 74 U. S. 707
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 him 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 New York and other places spoke to
Mr. Paschal, who had caused it to be inserted in the Tribune, about
it. 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 the 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 States 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
Page 74 U. S. 708
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. R. 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
Page 74 U. S. 709
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 their 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 courses 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
de jure or
de facto, it had
authorized the
Page 74 U. S. 710
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
and 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 percent, 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
same. 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
Page 74 U. S. 711
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 New 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 had probably 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.
Hardenberg's own account of the matter, as declared by his
answer, was thus:
"That he was a merchant in the city of New 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 1.15 percent, on the 6th of November,
1866, when gold was at the rate of $1.47 1/4, and declining; that
when he purchased the same, he made no inquiries of
Page 74 U. S. 712
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. R. 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 National Bank of Wilmington, North Carolina; that he
purchased on the 8th of November, 1866, thirty of said bonds,
amounting to the sum of $32,475, of J. S. Hennessey, 29 Warren
Street, New York City, doing business as a commission merchant, who
informed him that, in the way of business, they were sent him by
Hugh Douglas, of Nashville, Tennessee; that he paid at the rate of
120 cents at a time, to-wit, the 8th of November, 1866, when gold
was selling at 146 and declining; that the three other bonds were
purchased by him on the 8th of November, 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 New 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 120 cents, on said 8th day of November, 1866, when gold was
selling at 146 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 mentioned, in regard to Hardenberg's bonds,
that they were sold by his (White's) broker;
Page 74 U. S. 713
that he, White, had no knowledge of the name of the real
purchaser, who, however, paid 115 percent for them;
"that, at the time of the 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 [
Footnote 3] 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 books 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
Controller 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 Hardenberg's and of some
others. The agents, on the same day that the controller made his
report,
Page 74 U. S. 714
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 afterwards, 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 19th. On the 15th of the 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 bill having then,
nor until the 27th following, been served on Hardenberg, Mr.
Tayler, Controller 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.
Next, as respected the bonds of BIRCH, MURRAY & Co. 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
Page 74 U. S. 715
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 was apparently, 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 and 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. R. 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,
Page 74 U. S. 716
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 (I cant't
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:"
"NEW YORK, June 25th, 1865."
"HON. J. R. BARRET."
"DEAR SIR: In reply to your question about Texas indemnity bonds
issued by the U.S., I can assure you that they are perfectly good,
and the gov't 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's
answer as to whether sufficient authority was shown
Page 74 U. S. 717
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 CHIEF JUSTICE 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 percent bonds, each for the sum of
$1000; 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
Page 74 U. S. 718
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, [
Footnote 4] 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 defence of the State by means of any bonds in
the treasury, upon any account, to the extent of $1,000,000.
[
Footnote 5] The defence
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 and Chiles
received from the military board one hundred and thirty-five of
these bonds, none of which were indorsed 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
Page 74 U. S. 719
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 actual 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 he
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.
Page 74 U. S. 720
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, [
Footnote 6] 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.
Page 74 U. S. 721
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, and
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.
Page 74 U. S. 722
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, [
Footnote 7] a convention, called without authority but
subsequently sanctioned by the legislature regularly elected,
adopted an ordinance to dissolve the union 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 [
Footnote 8] and by an act of the legislature
[
Footnote 9] 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
Page 74 U. S. 723
appointed a committee of public safety 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. [
Footnote 10] 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. [
Footnote 11]
These transactions took place between the 2d and the 18th of
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
Page 74 U. S. 724
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 of 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.
Nor was any officer of the United States permitted to exercise any
authority whatever under the National 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
Page 74 U. S. 725
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 "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
"the 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." [
Footnote 12] 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.
Page 74 U. S. 726
When, therefore, Texas became one of the United States, she
entered into an indissoluble relation. 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
her 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 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
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 her citizens to be citizens of the Union.
If this were otherwise, the State must have become foreign, and her
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
Page 74 U. S. 727
government, so far as 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 her
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 performed are
essentially different from those which arise when they are
disregarded and set at nought. And the same must necessarily be
true of the obligations and relations of States and citizens to the
Union. No 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 her legislature, or
representatives elected by her citizens, were entitled to seats in
Congress, or that any suit instituted in her 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 her 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 reestablishing 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 National 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.
Page 74 U. S. 728
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 should 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 [
Footnote 13] by President Lincoln in December, 1863,
and by President Johnson in May, 1865. [
Footnote 14] 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. [
Footnote 15]
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
Page 74 U. S. 729
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 reestablishment 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.
Page 74 U. S. 730
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 Rhode Island, [
Footnote 16] 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 38th Congress had
expired. The 39th Congress, which assembled in December, 1865,
followed by the 40th 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
Page 74 U. S. 731
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 Representatives 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, [
Footnote 17] 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
Page 74 U. S. 732
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 and 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 her 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 to the
alienee.
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. But was it
valid?
The legislature of Texas, at the time of the repeal, constituted
one of the departments of a State government, established in
hostility to the Constitution of the United States. It cannot be
regarded, therefore, in the courts of the United States, as a
lawful legislature, or its acts as lawful
Page 74 U. S. 733
acts. And yet it is an 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.
What, then, tried by these general tests, was the character of
the contract of the military board with White and Chiles?
That board, as we have seen, was organized not for the defence
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 defence, 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.
Page 74 U. S. 734
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 and 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 a 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 and
Chiles obtained possession of the bonds,
Page 74 U. S. 735
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. [
Footnote 18]
We held in that case that the purchaser 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 and 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. [
Footnote 19]
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
redeemability and payability is made by law and shown on the face
of the bonds, requires the application of the rule respecting
overdue 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 redeemable before
the date of the contract with White and Chiles, and all bonds of
the same issue which have the indorsement of
Page 74 U. S. 736
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 and
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. [
Footnote 20]
Page 74 U. S. 737
[
Footnote 1]
These were Stewart, Shaw, &c., who made no resistance by
counsel at the argument.
[
Footnote 2]
For a particular account of these bonds,
see Paschal's
Annotated Digest, Arts. 442-450.
[
Footnote 3]
See this last,
infra, foot of p.
74 U. S.
742.
[
Footnote 4]
Acts of Texas, 1862, p. 45.
[
Footnote 5]
Texas Laws 55.
[
Footnote 6]
Mr. Justice Paterson, in
Penhallow
v. Doane's Admrs., 3 Dallas 93.
[
Footnote 7]
Paschal's Digest Laws of Texas 78.
[
Footnote 8]
Id., 80.
[
Footnote 9]
Laws of Texas, 1859-61, p. 11.
[
Footnote 10]
Paschal's Digest 80.
[
Footnote 11]
Texas Reports of the Committee (Library of Congress) 45.
[
Footnote 12]
County of Lane v. The State of Oregon, supra, p.
74 U. S. 76.
[
Footnote 13]
13 Stat. at Large 737.
[
Footnote 14]
Ib. 758.
[
Footnote 15]
Ib. 774-5.
[
Footnote 16]
Luther v.
Borden, 7 Howard 42.
[
Footnote 17]
14 Stat. at Large 428.
[
Footnote 18]
69 U. S. 2
Wallace 118.
[
Footnote 19]
Brown v. Davies, 3 Term 80;
Goodman v.
Simonds, 20 How. 343,
61 U. S.
366.
[
Footnote 20]
See the decree,
infra, p.
74 U. S.
741.
Mr. Justice GRIER, dissenting.
I regret that I am compelled to dissent from the opinion of the
majority of the court on all the points raised and decided in this
case.
The first question in order is the jurisdiction of the court to
entertain this bill in behalf of the State of Texas.
The original jurisdiction of this court can be invoked only by
one of the United States. The Territories have no such right
conferred on them by the Constitution, nor have the Indian tribes
who are under the protection of the military authorities of the
government.
Is Texas one of these United States? Or was she such at the time
this bill was filed, or since?
This is to be decided as a
political fact, not as a
legal fiction. This court is bound to know and notice the
public history of the nation.
If I regard the truth of history for the last eight years, I
cannot discover the State of Texas as one of these United States. I
do not think it necessary to notice any of the very astute
arguments which have been advanced by the learned counsel in this
case to find the definition of a State, when we have the subject
treated in a clear and common sense manner by Chief Justice
Marshall, in the case of
Hepburn & Dundass v. Ellxey.
[
Footnote 2/1] As the case is
short, I hope to be excused for a full report of it as stated and
decided by the court. He says:
"The question is whether the plaintiffs, as residents of the
District of Columbia, can maintain an action in the Circuit Court
of the United States for the District of Virginia. This depends on
the act of Congress describing the jurisdiction of that court. The
act gives jurisdiction to the Circuit Courts in cases between a
citizen of the State in which the suit is brought and a citizen of
another State. To support the jurisdiction in this case, it must
appear that Columbia is a State. On the part of the plaintiff, it
has been urged that Columbia is a distinct political society, and
is therefore a 'State' according to the
Page 74 U. S. 738
definition of writers on general law. This is true; but, as the
act of Congress obviously uses the word 'State' in reference to
that term as used in the Constitution, it becomes necessary to
inquire whether Columbia is a State in the sense of that
instrument. The result of that examination is a conviction that the
members of the American Confederacy only are the States
contemplated in the Constitution. The House of Representatives is
to be composed of members chosen by the people of the several
States, and each State shall have at least one representative. 'The
Senate of the United States shall be composed of two senators from
each State.' Each State shall appoint, for the election of the
executive, a number of electors equal to its whole number of
senators and representatives. These clauses show that the word
'State' is used in the Constitution as designating a member of the
Union, and excludes from the term the signification attached to it
by writers on the law of nations."
Now we have here a clear and well defined test by which we may
arrive at a conclusion with regard to the questions of fact now to
be decided.
Is Texas a State, now represented by members chosen by the
people of that State and received on the floor of Congress? Has she
two senators to represent her as a State in the Senate of the
United States? Has her voice been heard in the late election of
President? Is she not now held and governed as a conquered province
by military force? The act of Congress of March 2d, 1867, declares
Texas to be a "rebel State," and provides for its government until
a legal and republican State government could be legally
established. It constituted Louisiana and Texas the fifth military
district, and made it subject not to the civil authority, but to
the "military authorities of the United States."
It is true that no organized rebellion now exists there, and the
courts of the United States now exercise jurisdiction over the
people of that province. But this is no test of the State's being
in the Union; Dacotah is no State, and yet the courts of the United
States administer justice there as they do in Texas. The Indian
tribes, who are governed by military force, cannot claim to be
States of the Union. Wherein does the condition of Texas differ
from theirs?
Page 74 U. S. 739
Now, by assuming or admitting
as a fact the present
status of Texas as a State not in the Union politically, I
beg leave to protest against any charge of inconsistency as to
judicial opinions heretofore expressed as a member of this court,
or silently assented to. I do not consider myself bound to express
any opinion judicially as to the constitutional right of Texas to
exercise the rights and privileges of a State of this Union, or the
power of Congress to govern her as a conquered province, to subject
her to military domination, and keep her in pupilage. I can only
submit to
the fact as decided by the political position of
the government, and I am not disposed to join in any essay to prove
Texas to be a State of the Union when Congress have decided that
she is not. It is a question of fact, I repeat, and of fact only.
Politically, Texas is not
a State in this Union.
Whether rightfully out of it or not is a question not before the
court.
But conceding now the fact to be as judicially assumed by my
brethren, the next question is whether she has a right to repudiate
her contracts? Before proceeding to answer this question, we must
notice a fact in this case that was forgotten in the argument. I
mean that the United States are no party to this suit, and refusing
to pay the bonds because the money paid would be used to advance
the interests of the rebellion. It is a matter of utter
insignificance to the government of the United States to whom she
makes the payment of these bonds. They are payable to the bearer.
The government is not bound to inquire into the
bona fides
of the holder, nor whether the State of Taxes has parted with the
bonds wisely or foolishly. And although, by the Reconstruction
Acts, she is required to repudiate all debts contracted for the
purposes of the rebellion, this does not annul all acts of the
State government during the rebellion, or contracts for other
purposes, nor authorize the State to repudiate them.
Now whether we assume the State of Texas to be judicially in the
Union (though actually out of it) or not, it will not alter the
case. The contest now is between the State of Texas and her own
citizens. She seeks to annul a contract
Page 74 U. S. 740
with the respondents, based on the allegation that there was no
authority in Texas competent to enter into an agreement during the
rebellion. Having relied upon one fiction, namely, that she is a
State in the Union, she now relies upon a second one, which she
wishes this court to adopt, that she was not a State at all during
the five years that she was in rebellion. She now sets up the plea
of insanity, and asks the court to treat all her acts made during
the disease as void.
We have had some very astute logic to prove that judicially she
was not a State at all, although governed by her own legislature
and executive as "a distinct political body."
The ordinance of secession was adopted by the convention on the
18th of February, 1861, submitted to a vote of the people, and
ratified by an overwhelming majority. I admit that this was a very
ill-advised measure. Still, it was the sovereign act of a sovereign
State, and the verdict on the trial of this question, "by battle,"
[
Footnote 2/2] as to her right to
secede, has been against her. But that verdict did not settle any
question not involved in the case. It did not settle the question
of her right to plead insanity and set aside all her contracts,
made during the pending of the trial, with her own citizens, for
food, clothing, or medicines. The same "organized political body,"
exercising the sovereign power of the State, which required the
indorsement of these bonds by the governor also passed the laws
authorizing the disposal of them without such indorsement. She
cannot, like the chameleon, assume the color of the object to which
she adheres, and ask this court to involve itself in the
contradictory positions that she is a State in the Union and was
never out of it, and yet not a State at all for four years, during
which she acted and claims to be "an organized political body,"
exercising all the powers and functions of an independent sovereign
State. Whether a State
de facto or
de jure, she
is estopped from denying her identity in disputes with her own
citizens. If they have not fulfilled their
Page 74 U. S. 741
contract, she can have her legal remedy for the breach of it in
her own courts.
But the case of Hardenberg differs from that of the other
defendants. He purchased the bonds in open market,
bona
fide and for a full consideration. Now it is to be observed
that these bonds are payable to bearer, and that this court is
appealed to as a court of equity. The argument to justify a decree
in favor of the commonwealth of Texas as against Hardenberg is
simply this: these bonds, though payable to bearer, are redeemable
fourteen years from date. The government has exercised her
privilege of paying the interest for a term without redeeming the
principal, which gives an additional value to the bonds. Ergo, the
bonds are dishonored. Ergo, the former owner has a right to resume
the possession of them, and reclaim them from a
bona fide
owner by a decree of a court of equity.
This is the legal argument, when put in the form of a logical
sorites, by which Texas invokes our aid to assist her in the
perpetration of this great wrong.
A court of chancery is said to be a court of conscience, and
however astute may be the argument introduced to defend this
decree, I can only say that neither my reason nor my conscience can
give assent to it.
[
Footnote 2/1]
6 U. S. 2 Cranch
452.
[
Footnote 2/2]
Prize
Cases, 2 Black 673.
Mr. Justice SWAYNE.
I concur with my brother Grier as to the incapacity of the State
of Texas, in her present condition, to maintain an original suit in
this court. The question, in my judgment, is one in relation to
which this court is bound by the action of the legislative
department of the government.
Upon the merits of the case, I agree with the majority of my
brethren.
I am authorized to say that my brother MILLER unites with me in
these views.
|74 U.S. 700dec|
THE DECREE
The decree overruled the objection interposed by way of plea, in
the answer of defendants to the authority of the solicitors of
Page 74 U. S. 742
the complainant to institute this suit, and to the right of
Texas, as one of the States of the National Union, to bring a bill
in this court.
It declared the contract of 12th January, 1865, between the
Military Board and White and Chiles void, and enjoined White and
Chiles from asserting any claim under it, and decreed that the
complainant was entitled to receive the bonds and coupons mentioned
in the contract, as having been transferred or sold to White and
Chiles, which, at the several times of service of process, in this
suit, were in the possession, or under the control of the
defendants respectively, and any proceeds thereof which had come
into such possession or control, with notice of the equity of the
complainant.
It enjoined White, Chiles, Hardenberg, Birch, Murray, Jr., and
other defendants, from setting up any claim to any of the bonds and
coupons attached, described in the first article of said contract,
and that the complainant was entitled to restitution of such of the
bonds and coupons and proceeds as had come into the possession or
control of the defendants respectively.
And, it appearing -- the decree went on to say -- upon the
pleadings and proofs, that before the filing of the bill, Birch and
Murray had received and collected from the United States the full
amount of four other bonds, numbered, &c., and that Hardenberg,
before the commencement of the suit, had deposited thirty-four
bonds, numbered, &c., in the Treasury Department for
redemption, of which bonds he claimed to have received payment
Page 74 U. S. 743
from the Secretary of the Treasury before the service of process
upon him in this suit, in respect to which payment and the effect
thereof the counsel for the said Birch and Murray, and for the said
Hardenberg respectively, desired to be heard, it was ordered that
time for such hearing should be given to the said parties.
Both the complainant and the defendants had liberty to apply for
further directions in respect to the execution of the decree.
