As the statement of the case tells us, “During the late rebellion, cotton having been an object whose acquisition was desired by the people of the North, its purchase within the Confederate lines was resorted to not unfrequently by a certain class of traders from the loyal States. Such trading was unlawful as trading with an enemy, and was moreover made void by statute. But trading in a prescribed form, under certain conditions, within the insurrectionary region, if the same had been brought within the lines of the National military occupation, was made lawful by treasury regulation, if the trading was carried on under a permit from certain officers of the Treasury Department.” [76 US 766, 766-767]
A man named Daniel Shepherd who lived in Arkansas bought 144 bales of cotton from a man named Josiah Maples. Shepherd claimed to be acting as an agent for a company called H. E. Bridge & Company, which operated out of Memphis. Bridge & Company were composed of men named William Butler and W. T. Hicox, among others. Memphis was under Federal occupation and confederate forces were not anywhere near where Shepherd or Maples lived. Shepherd was able to move 54 bales, but 90 bales were burned before he could move them. Maples went to Memphis and saw Hicox, who denied Shepherd was an agent of the company and refused to pay for the cotton that had been burned, though he did agree to pay for the 54 bales that arrived in Memphis. Maples then saw Shepherd, who said Hicox had been lying. Maples then sued Butler, Hicox, et al. in court to be paid for the cotton that had been burned. Evidence was presented to show Bridge & Co. had a permit to deal in the cotton and that Shepherd was their agent. The judgment went to Maples, and the appeal reached the Supreme Court.
Justice William Strong, a Grant appointee, wrote the Court’s opinion. In his opinion, he said there was no controversy and no question regarding Shepherd saying he was an agent for Bridge & Company. However, “the authority of Shepherd to make the contract for the defendants and bind them to its performance was stoutly denied, and it is now strenuously insisted that the court erred in the instructions given to the jury respecting the evidence of his agency. The defendants insist the court erred in charging that the written agreement between him and Bridge & Co. constituted him their general agent. We do not find that the court did thus instruct the jury, though it must be admitted the charge may have been thus understood. The jury was instructed that if Shepherd held himself out as the general agent of Bridge & Co., the defendants were bound by the contract he made with the plaintiff for the cotton, though in making the contract he transgressed the instructions he had received, and secret limitations of his authority, which instructions and limitations were not revealed to the plaintiff. It is true, as has been noticed, there was other evidence of a general agency beyond that which the agreement furnished, but as it was parol evidence, its force and effect were for the jury, and hence the court could not rightly have charged that the defendants were bound by the contract unless the agreement did itself constitute Shepherd a general agent. But did it not? The distinction between a general and a special agency is in most cases a plain one.” [76 US 766, 773]
Butler, et al., raised a number of other objections to the instructions given to the jury in the original trial, and Justice Strong addressed each in turn, explaining why the objections were incorrect. In the end, Justice Strong upheld the judgment of the original court.
This case established that buying cotton through an insurrectionary area through an agent licensed by the Treasury Department was legal.