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June, 1865, the cotton was shipped from Havana to Liverpool, consigned to the defendants Fraser, Trenholm & Co. (Prioleau being the English member of the firm), and was of the value of 40,0001. Fraser, Trenholm & Co. had made a contract with one M’Rae, general European agent of the Confederate government, to build eight steamships to be employed in transporting cotton and other produce from the Confederate States. They were to receive all consignments of said merchandise and sell the same according to the instructions they should receive for that purpose. The company were to advance the expenses of transportation, and were then to recoup themselves out of the proceeds of the consignments. They had already expended 20,0001 for sailing expenses, to say nothing of the cost of the ships.

When this consignment of cotton arrived in Liverpool, the Confederate government had been dissolved, and the Confederate States had submitted to the authority of the United States government; and the latter government filed a bill praying to have the cotton delivered up to them, and for an injunction and receiver.

Judgment.— WOOD, V. C.: “ There are one or two points which, I think, are tolerably clear in this case. The first point is with reference to the right of the United States of America, at this moment, to the cotton, subject to the agreement. I treat it first in that way. It has scarcely been disputed on the present argument, and could hardly be disputed at any further stage of the inquiry, that the right is clear and distinct, because the cotton in question is the admitted result of funds raised by a de facto government, exercising authority in what were called the Confederate States of America; that is to say, several of those states which, in union, formerly constituted the United States, and which now, in fact, constitute them ; and that de facto government, exercising its powers over a considererable number of states (more than one would be quite enough), raises money-be it by voluntary contribution, or be it by taxation, is not of much importance. The defendant Prioleau, in cross-examination, admits that they exercised considerable power of taxation; and with those means, and claiming to exercise that authority, they obtained from several of the States of America funds by which they purchased this cotton for the use of the de facto government. That being so, and that de facto government being displaced, I apprehend it is quite clear that the United States of America (that is to say, the government which has been successful in displacing the de facto government, and whose authority was usurped or displaced, or whatever term you may choose to apply to it), the authority being restored, stand, in reference to this cotton, in the posi. tion of those who have acquired, on behalf of the citizens of the United States, a public property; because otherwise, as has been well said, there would be no body who could sue in respect of, or deal with, property that has been raised, not by contribution of any one sovereign state (which might raise a question, owing to the peculiar constitution of the Union, if it had been raised in Virginia or Texas, or in any given State), but the cotton is the product of levies, voluntary or otherwise, on the members of the sereral states which have united themselves into the Confederate States of America, and which are now under the control of the present plaintiffs, and are represented, for all purposes, by the present plaintiffs. That being so, the right of the present plaintiffs to this cotton, subject to this agreement is, I think, clear, because the agreement is an agreement purporting to be made on behalf of the then de facto existing government, and not of any other persons. That case of

The King of the Two Sicilies and the case of The King of Spain, and other cases of the same kind, which it is not necessary to go through, show that whenever a government de facto has obtained the possession of property, as a government, and for the purposes of the government de facto, the government which displaces it succeeds to all the rights of the former government, and, among other things, succeeds to the property they have so acquired.

“Now I come to the second head of the question, and I confess at this moment, as at present advised, I do not feel much doubt on the subject, namely, the question whether or not, taking this property, they must or must not take it subject to the agreement. It appears to me, at present, they must take it subject to the agreement. It is an agreement entered into by a de facto government, treating with persons who have a perfect right to deal with them. I apprehend if they had been American subjects they might do so. One of them. Prioleau, is not an American subject; he is a naturalized British subject; he would have a perfect right to deal with a de facto government; and it cannot be compared with any one of those cases Mr. Gifford put, of persons taking the property of arother with knowledge of the rights of that other. That is a species of argument that cannot be applied to international cases of this description, and for a very good reason; if so, there would be no possibility during the existence of a government de facto of airy person dealing with that government in any part of the world. The courts of every country recognize a government de facto to this extent, for the purpose of saying—you are established de facto, if you are carrying on the course of government, if you are allowed by those whom you affect to govern to levy taxes on them, and they pay those taxes, and contribution is made accordingly, or you are acquiring proprety, and are at war, having the rights of belligerents, not being treated as mere rebels by persons whɔ say they are the authorized government of the country. Other nations can have nothing to do with that matter. They say we are bound to protect our subjects who treat with the existing government; and we inust give to those subjects, in our country, every right which the government de facto can give to them, and must not allow the succeeding government to assert any right as against the contracts which have been entered into by the government de facto; but, as expressed by Lord Cranworth in the case referred to, they must succeed in every respect to the property as they find it, and subject to all the conditions and liabilities to which it is subject and by which they are bound. Otherwise, I do not see any answer to Mr. James's illustration, and I do not see why there should not have been a bill filed to have the Alabama delivered up; * * * because on the theory of the present plaintiffs, it was their property just as much as their cotton is now. If the case had been this (and it is the only case I can consider as making any difference, but that difference would be fatal to the plaintiffs' case in another point of view): if they had been a set of marauders, a set of robbers (as was said to be the case in the kingdom of Naples, truly or untruly), devastating the country, and acquiring property in that way, and then affecting to deal with your subjects in England, it would not be the United States, but the individuals who had been robbed and suffered, who could come as plaintiffs. The United States could only come to claim this because it has been raised by public contribution; and although the United States, who are now the government de facto and de jure, claim it as public property, yet it would not be public property unless it was raised, as I have said, by exercising the rights of government, and not by means of mere robbery and violence.

“I confess, therefore, I have so little doubt, that this agreement is one that would be binding on the plaintiffs, that I cannot act against these gentlemen without securing to them the reasonable benefit of this agreement; and I cannot put them under any terms which would exclude them from the reasonable benefit of what they are entitled to, and must be held entitled to, as I think, at the hearing of the cause.”

[The Vice Chancellor then proceeds to decree that the cotton was now the property of the United States Government, but that they must take it subject to the obligations entered into respecting it by the de facto Confederate Government.

The defendant Prioleau was appointed receiver, with power to sell the cotton, but he was required to give security for its value ultra the 20,0001., the amount of the defendant's lien.']



(Wheaton's International Law, 3d Ed., 242.)

“ The territory of the state includes the lakes, seas, and rivers, entirely inclosed within its limits. The rivers which flow through the territory also form a part of the domain from their sources to their mouths, or as far as they flow within the territory, including the bays or estuaries formed by their junction with the sea. * * *

“ Things of which the use is inexhaustible, such as the sea and running water, cannot be so appropriated as to exclude others from using these elements in any manner which does not occasion a loss

1 In the case of the United States of America v. McRae, 1869, L. R. 8 Eq. 69, JAMES, V. C., held, “that, upon the suppression of a rebellion, the restored legitimate governinent is entitled, as of right, to all moneys, goods, and treasure which were public property of the government at the time of the outbreak, such right being in no way affected by the wrongful seizure of the property by the usurping government.

“But with respect to property which has been voluntarily contributed to, or acquired by, the insurrectionary government in the exercise of its usurped authority, and has been impressed in its hands with the character of public property, the legitimate government is not, on its restoration, entitled by title paramount, but as successor only (and to that extent recognizing the authority) of the displaced usurping government, and in seeking to recover such property from an agent of the displaced government can only do so to the same extent, and subject to the same rights and obligations, as if that government had not been displaced and was itself proceeding against the agent.

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

or inconvenience to the proprietor. This is what is called an innocent use. Thus we have seen that the jurisdiction possessed by one nation over sounds, straits, and other arms of the sea, leading through its own territory to that of another, or to other seas common to all nations, does not exclude others from the right of innocent passage through these communications. The same principle is applicable to rivers flowing from one state through the territory of another into the sea, or into the territory of a third state. The right of navigating, for commercial purposes, a river which flows through the territories of different states, is common to all the nations inhabiting the different parts of its banks; but this right of innocent passage being what the text writers call an imperfect right, its exercise is necessarily modified by the safety and convenience of the state affected by it, and can only be effectually secured by mutual convention regulating the mode of its exercise."


(Wheaton's International Law, 3d Ed., 247.)

“ By the treaty of peace concluded at Paris, in 1763, between France, Spain, and Great Britain, the province of Canada was ceded to Great Britain by France, and that of Florida to the same power by Spain, and the boundary between the French and British possessions in North America was ascertained by a line drawn through the middle of the river Mississippi from its source to the Iberville, and from thence through the latter river and the lakes of Maurepas and Pontchartrain to the sea. The right of navigating the Mississippi was at the same time secured to the subjects of Great Britain from its source to the sea, and the passages in and out of its mouth, without being stopped, or visited, or subjected to the payments of any duty whatsoever. The province of Louisiana was soon afterwards ceded by France to Spain; and by the treaty of Paris, 1783, Florida was retroceded to Spain by Great Britain. The independence of the United States was acknowledged, and the right of navigating the Mississippi was secured to the citizens of the United States and the subjects of Great Britain by the separate treaty between these powers. But Spain having become thus possessed of both banks of the Mississippi at its mouth, and a considerable distance above its mouth, claimed its exclusive navigation below the point where the southern boundary of the United States struck the river. This claim was resisted, and the right to participate in the navigation of

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