Stewart v. Kahn

The citation for this case is 78 US [11 Wall.] 493.

On August 10, 1860 the New Orleans trading firm of Bloom, Kahn & Company took out a promissory note to the New York firm of A. T. Stewart & Company, and promised to pay $3,226.24 at maturity of the note, which would be on March 13, 1861. They refused to pay, and then the rebellion began the following month.

On June 11, 1864, the US Congress passed a law called, “An Act in relation to the limitation of actions in certain cases” [13 US Statutes 123]

US forces took control of New Orleans in May of 1862, and at some point after that US courts began to operate in the city again. On April 16, 1866, Stewart & Company sued Bloom, Kahn & Company for payment on the note. Louisiana at this time had a state law called “the prescription of five years,” which was in essence a statute of limitations, which kept any action from proceeding once five years elapsed. The local court found for the defendants, citing the prescription of five years, as did the state’s supreme court. The state supreme court said, “This is an action upon a promissory note. The defendants pleaded the prescription of five years. The note fell due on the 13th of March, 1861, and the citations were served on the 18th day of April, 1866. More than five years having elapsed after the maturity of the note before the citations were served on the defendants, the plea of prescription must be sustained. It is therefore ordered, adjudged, and decreed, that the judgment of the lower court be affirmed, and that the appellant pay the costs of the appeal.” [78 US 493, 495] The plaintiffs cited the 11 June 1864 act, but the state courts held the act applied only to federal courts, not to state courts. The plaintiffs then appealed to the Supreme Court. The case was decided on December 1, 1870, with Associate Justice Noah Swayne delivering the Opinion of the Court.

In the opinion, Justice Swayne wrote, “In Hanger v. Abbott, this Court held that the time during which the courts in the states lately in rebellion were closed to the citizens of the loyal states is, in suits since brought, to be deducted from the time prescribed by the statutes of limitations of those states respectively, although the statutes themselves contain no such exception, and this independently of the act of Congress of 1864. In the case of The Protector, the same rule was applied to the acts of Congress of 1798 and 1803 fixing the time within which appeals shall be taken from the inferior federal tribunals to this Court. The case before us was decided prior to the decision of this Court in Hanger v. Abbott, with which is in direct conflict. But apart from the act of 1864, it would present no ground of federal jurisdiction. Hanger v. Abbott came into this Court under the 22d section of the Judiciary Act of 1789, or if that section is superseded, under the second section of the amendatory act of 1867. Its determination, therefore, depends necessarily upon the construction and effect to be given to the act of 1864.” [78 US 493, 503]

He also wrote, “But it has been insisted that the act of 1864 was intended to be administered only in the federal courts, and that it has no application to cases pending in the courts of the states. The language is general. There is nothing in it which requires or will warrant so narrow a construction. It lays down a rule as to the subject, and has no reference to the tribunals by which it is to be applied. A different interpretation would defeat, to a large extent, the object of its enactment. All those who could not sue in the courts of the United States, including the loyal men who were driven out by the insurrection and returned after it ceased, and those of the same class who remained at home during the war, would be deprived of its benefits. The judicial anomaly would be presented of one rule of property in the federal courts and another and a different one in the courts of the state, and debts could be recovered in the former which would be barred in the latter. This would be contrary to the uniform spirit of the national jurisprudence from the adoption of the Judiciary Act of 1789 down to the present time.” [78 US 493, 505-506]

Justice Swayne next goes into the effect of Congress’ war powers on the law. “The Constitution gives to Congress the power to declare war, to grant letters of marque and reprisal, and to make rules concerning captures on land and water; to raise and support armies, to provide and maintain a navy, and to provide for calling forth the militia to execute the laws of the Union, suppress insurrections, and repel invasions. The President is the commander-in-chief of the army and navy, and of the militia of the several states when called into the service of the United States, and it is made his duty to take care that the laws are faithfully executed. Congress is authorized to make all laws necessary and proper to carry into effect the granted powers. The measures to be taken in carrying on war and to suppress insurrection are not defined. The decision of all such questions rests wholly in the discretion of those to whom the substantial powers involved are confided by the Constitution. In the latter case, the power is not limited to victories in the field and the dispersion of the insurgent forces. It carries with it inherently the power to guard against the immediate renewal of the conflict and to remedy the evils which have arisen from its rise and progress. This act falls within the latter category. The power to pass it is necessarily implied from the powers to make war and suppress insurrections. It is a beneficent exercise of this authority. It only applies coercively the principle of law of nations, which ought to work the same results in the courts of all the rebellious states without the intervention of this enactment. It promotes justice and honesty, and has nothing penal or in the nature of confiscation in its character. It would be a strange result if those in rebellion, by protracting the conflict, could thus rid themselves of their debts, and Congress, which had the power to wage war and suppress the insurrection, had no power to remedy such an evil, which is one of its consequences. What is clearly implied in a written instrument is as effectual as what is expressed. The war power and the treatymaking power, each carries with it authority to acquire territory.  Louisiana, Florida, and Alaska were acquired under the latter, and California under both. The act is within the canons of construction laid down by Chief Justice Marshall.” [78 US 493, 506-507] The 1864 law, then, was constitutional, and it was constitutional for Congress to apply it to the states as well as to federal cases. As a result of this, the Supreme Court reversed the state supreme court’s decision and remanded the case back with direction to proceed with the case.

This case shows once again the supremacy of US laws over state laws as well as an aspect of the Congressional warmaking power.

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