United States v. Stevenson

The citation for this case is 27 Fed. Cas. 1329, Case No. 13,396. It was decided in the District Court for the Southern District of New York on January 12, 1869 and in the Circuit Court for the Southern District of New York in October of 1869. Samuel Blatchford was the District Judge in the case, and Justice Samuel Nelson was the Circuit Justice. At the end of the Civil War, Vernon K. Stevenson, president of the Nashville and Chattanooga Railroad, came into possession of 1,000 bales of cotton he bought, as well as cotton that was owned by others. The United States alleged it had belonged to the confederate government, but presented no proof at trial that this was so. He brought the cotton to New York and sold it, keeping the profit. The United States sued him for the amount he made on the sale. Related to this case is a decision by Judge Blatchford on a motion to dissolve an attachment on the defendant’s property. That’s at 27 Fed. Cas. 1326, Case No. 16,395. Since it doesn’t concern any issues dealing with the Civil War, we’re not going to consider it.

In his charge to the jury, Judge Blatchford said, “As early as the year 1814, in the case of Brown v. U. S., 8 Cranch [12 U. S.] 110, it was held by the supreme court of the United States, that the seizure of enemy property a prize of war, on land, jure belli, is not authorized by the law of nations, and can only be upheld by the municipal laws of the nation which seeks to enforce the forfeiture. That decision and the doctrine of it were cited and approved by Mr. Justice Nelson, in the circuit court of the United States for this district, in May, 1865, in the case of U. S. v. 1756 Shares of Capital Stock [Case No. 15,961]. … In his opinion in that case, Mr. Justice Nelson, speaking of those acts, remarks, that they expressly provide that the proceedings under them shall conform to the proceedings in admiralty and revenue cases; and the conclusion he draws, and it is one which applies to all the confiscation acts relied on in this case, from the act of 1861 down, is, that these acts are nothing but an extension, by act of congress, to enemy property captured on land, of the rule which, according to international law, had always been applied to enemy property captured at sea, and that the same rules must be applied in both cases. It necessarily follows, that the right which the United States are seeking to enforce in this suit, and the rights which they would seek to enforce by a suit in rem, if they had seized this cotton under these laws, are rights which rest wholly upon statute law.” [27 Fed. Cas. 1329]

He quotes the Supreme Court in another example: “It has been held by the supreme court of the United States, in the case of The Reform, 3 Wall. [70 U. S.] 617, that the act of July 13, 1861 (12 Stat. 255). which is one of the acts on which the government relies for a recovery in this case, was not a mere temporary act; and that, although the restrictions upon commercial intercourse prescribed by that act were limited in duration to the period of the existence of hostilities, still, forfeitures incurred under it during the continuance of hostilities may be enforced afterwards. Therefore, in a proper case, the government could now enforce a forfeiture incurred by the defendant in respect to property, notwithstanding the proclamations of the president in regard to the cessation of hostilities. But the difficulty in the present ease lies here, that the government has failed to prove the first material allegation in the information; and that is, that they are entitled to the possession of this cotton in such a manner that they have a right to enforce that right of possession in this action.” [27 Fed. Cas. 1329, 1329-1330]

Judge Blatchford then considers the first statute at issue: “The 5th section of the act of July 13th, 1861, declares that all property in transit to or from any insurrectionary state or section shall be forfeited to the United States. It was held in one case by Chief Justice Taney, in the Maryland district (U. S. v. 2,000 Bushels of Wheat, cited in U. S. v. The Francis Hatch [Case No. 15,158]), that the proper interpretation of that 5th section is, that no property can be condemned under it unless such property be actually seized while in such transit. But, without passing upon that point, I am entirely satisfied (notwithstanding the declaration, in the 5th section of the act, that, for the offence defined therein, the property shall be forfeited to the United States), that, inasmuch as the title of the United States must be based wholly upon the statute, the whole statute must be construed together. The 9th section must be construed in connection with the 5th section. The 9th section provides, ‘that proceedings on seizures for forfeitures under this act may be pursued in the courts of the United States in any district into which the property so seized may be taken and proceedings instituted; and such courts shall have and entertain as full jurisdiction over the same as if the seizure was made in that district.’ My view of this statute is, that it clearly contemplates that the forfeiture declared in the 5th section is to be enforced only by a seizure of the property; and that such forfeiture cannot be enforced in any other manner. Inasmuch as the whole right is statutory, if congress has seen fit to limit the statutory right to a forfeiture to be enforced only by a seizure of the property, the United States are so limited; and, inasmuch as that is their only right, if they are unable to seize the property, their right does not come into being, but remains an imperfect right. Congress has not seen fit to go any farther than to say: ‘You shall have this forfeiture if you seize the property.’ But if, for any reason, whether from the act of the defendant himself, or from any cause whatever, the government cannot seize the property, it cannot enforce the forfeiture.” [27 Fed. Cas. 1329, 1330]

Next, he looks at the Act of May 20, 1862: “I now pass to the act of May 20, 1862 (12 Stat. 404). Even if the regulations of the secretary of the treasury, made under the acts of 1861 and 1862 and other acts are to be considered as matters of which the court can take judicial notice, because they are expressly referred to by their dates, and adopted, in the third section of the act of July 2, 1864 (13 Stat. 376), and even assuming that this cotton would have been forfeitable by virtue of regulations made by the secretary of the treasury in pursuance of the act of 1862, still that act is subject to the same construction as the act of 1861; and, although the 3d section of that act declares that property which shall be transported in violation of the act, or of any regulations of the secretary of the treasury established in pursuance thereof, shall be forfeited to the United States, yet the 4th section of the act says, that ‘the proceedings for the penalties and forfeitures accruing under this act’ (covering those accruing under regulations to be established by the secretary of the treasury, as well as those accruing under the act itself), ‘may be pursued * * * in the modes prescribed by the 8th and 9th sections of the act of July 13th, 1861, to which this act is supplementary.’ Therefore, in this respect, the construction of the act of 1862 must be the same as that of the act of 1861. The proceedings for a forfeiture under the act of 1862 must be pursued in the manner prescribed by the 9th section or the act of 1861, that is, by seizure, and in no other way.” [27 Fed. Cas. 1329, 1330-1331]

Next is the August 6, 1861 act. “The next statute is the act of August 6th, 1861, before referred to. That act provides, that if any person, during an insurrection, after the president shall have declared by proclamation that there is an insurrection, shall acquire, sell, or give any property to aid the insurrection, the president shall cause such property to be seized, confiscated, and condemned, and that the condemnation shall take place in the district or circuit court of the United States having jurisdiction of the amount, or in admiralty, in any district in which it may be seized, or into which it may be taken and proceedings first instituted. The statute does not declare any forfeiture at all. It merely provides that the president may cause any property to be seized; and, unless he causes it to be seized, the statute does not cover it at all. Therefore, it is plain that there can be no suit or recovery founded on that act, unless the property is first seized.” [27 Fed. Cas. 1329, 1331]

There is only one statute left to consider now: “The remaining act is the act of July 17th, 1862, before referred to, the 5th section of which provides, that ‘to insure the speedy termination of the present rebellion, it shall be the duty of the president of the United States to cause the seizure of all the estate and property, money, stocks, credits, and effects of the persons hereinafter named in this section,’ (including persons thereafter acting as officers of the army or navy of the rebels in arms against the government of the United States,) ‘and to apply and use the same and the proceeds thereof for the support of the army of the United States.’ No forfeiture is declared by that act, in any other language, it merely states that the president may seize the property and apply it to the support of the army of the United States.” [27 Fed. Cas. 1329, 1331]

Judge Blatchford then tells us the cotton had not been seized, which is key to the case. “The theory upon which the information in this case proceeded when it was filed, if that theory can be judged of from the information and the affidavit appended to it—for, the information refers to and embodies the affidavit as a part of the information, and the affidavit refers to and embodies the information as a part of the affidavit—is, that this cotton was the property of the public authorities concerned in the rebellion, and that the United States, by virtue of their sovereign right, became the owners of the cotton, eo instanti, at the very, moment the rebel authorities claimed to own it. Such a right in the United States, if it existed in this case, would not at all depend upon any of the statutes which have been cited; and, if it were shown, in point of fact, by the testimony in this case, that this cotton belonged to the acting public authorities who were carrying on the rebellion, and calling themselves the Confederate government, the right of the United States, by virtue of their being the sovereign power, and by reason of such acting public authorities being rebel authorities, would come into operation over the property, by virtue of the constitution of the United States, and of their sovereign authority, irrespective of any, statute, so as to make the subsequent conversion of the property by the defendant a tort, as against the immediate right of possession of the United States. But there is no such testimony in the case. The evidence is quite clear that none of the cotton, for the proceeds of which the government sues in this ease, was the property of this so-called ‘Confederate Government,’ or of any of its subordinate governments acting in rebellion and hostility to the United States. Therefore, as I before remarked, the right which lies at the threshold of the claim of the government to recover in this case, being a right resting wholly on the statute, and such right not being supported by any statute, even conceding all the facts to be as shown by the government, it is the duty of the court to instruct you, upon the facts and the law, that the government cannot recover, and that the defendant is entitled to your verdict.” [27 Fed. Cas. 1329, 1331]

The jury returned a verdict in favor of the defendant, and the United States appealed the decision to Justice Nelson, the Circuit Justice. Justice Nelson wrote, “The act of July 13th, 1861 (section 5), made it lawful for the president of the United States, where a state of insurrection existed, to declare it by proclamation, and provided that, thereupon, all commercial intercourse by and between the same, and the citizens thereof, and the citizens of the rest of the United States, should cease and be unlawful, &c, and the goods, &c, coming from said state or section into other parts of the United States, &c, should be forfeited to the same. 12 Stat. p. 255. The act supplementary, passed May 20th, 1862, (12 Stat. p. 404,) section 3, confers on the secretary of the treasury the power, upon satisfactory grounds of belief that the goods, &c, are intended for any place in the possession or under the control of the insurgents, in all eases where he may deem it expedient to do so, to require security that they will not be carried to such place, nor used to give aid or comfort to the insurgents; and provides that a transportation in violation of the act or of the regulation, shall work a forfeiture. The act of August 6, 1861 (12 Stat. p. 319, § 1), provides that, during the insurrection, goods purchased or sold with intent to use or employ the same, &c, in aiding or promoting the insurrection, shall be subject of prize and capture, and it is made the duty of the president to cause the same to be seized and confiscated. The act of July 17, 1862 (12 Stat. p. 591, § 6), makes the property of persons engaged in rebellion, who will not return to their duty in sixty days after warning by proclamation of the president, subject to seizure, and it is made the duty of the president to seize, &c. The only remaining act that is material to refer to is that of March 3, 1863, § 1. (12 Stat. p. 820,) which authorizes the appointment of agents to collect captured and abandoned property. I need hardly say, that neither of these statutes, or any provision in them, has any bearing on the facts, as disclosed in the case, or affords any ground for an inference or conclusion that the cotton in question, sold and converted to his own use by the defendant, belonged to the United States. Certainly not, unless all the property of citizens or people in the Confederate States belonged to the United States during the war.” [27 Fed. Cas. 1329, 1332]

Justice Nelson affirmed Judge Blatchford’s decision.

The case is of interest because of what it reveals regarding the operation of confiscation. The United States failed to prove the cotton had belonged to the confederate government, so ownership of the cotton didn’t transfer to the United States. Since the United States hadn’t seized the cotton before it was sold, the confiscation acts didn’t apply to the proceeds.

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