Interesting Case in the Circuit Court of the United States
June 7, 1867
Recent controversy over the state of the Confederacy and money have caused the government to debate how legitimate the Confederate States were.Paper money from the Confederacy is no longer legitimate and debts are left in the hands of corporations.
Interesting Case in the Circuit Court of the United States -- Was the Confederate a de Facto Government? In Judge Underwood's Court yesterday morning, the complainants in the case of Meredith and Biddle (administrators of Mrs. C. C. Keppel) vs. the Richmond and Petersburg Railroad Company, filed a bill to recover certain dividends from the said company. General H. H. Wells, of Alexandria, appeared for the plaintiff, and William Green, Esq., of Richmond, for the defendants. As the question at issue in the suit is really whether the Confederate was or was not a de facto government, we give considerable space to a statement of the case. Mrs. Catherine C. Keppel, a resident of Philadelphia, owned three hundred and four shares of the Richmond and Petersburg Railroad Company's stock, the par value of which was 830,400. This stock she held during the late war, and her administrators now claim dividends amounting to one hundred and nine per cent., which were declared from time to time between 1860 and 1865. The defendants urge that under an order of the District Court of the Confederate States, the dividends in question were paid over to the agent of the Confederate Government, and a portion of the stock which was forfeited as the property of an alien enemy was sold. The company further insist that the earnings of the railroad were received in Confederate money, and that the plaintiffs, if entitled to anything, should be paid in the General Wells, for the plaintiff, delivered his argument yesterday, and the case was continued. He argued, "That the Confederate States authorized ties (so called), while regularly organized, holding possession of an extensive territory, bringing large armies into the field in defence of its claim of sovereignty, having an actual existence, and maintaining the attitude and semblance of a government was not a government de facto, in the sense referred to when we speak of a political power that has authority to confer civil rights and limit obligations, or, as applied to this case, that it could not relieve the defendant from a debt due to the complainant. "That whether the Confederate States (so called) were to be regarded as a political power, able to deal with civil and constitutional rights and obligations, is a political, and not a judicial question. It had only such character as the Government of the United States might concede to or recognize it as posessing. "It is not to be judged of nor measured by the rules found in the Law of Nations, because that code or body of unwritten law is a rule of conduct for, and applies only between, independent sovereign nations. Nor is the civil statute of the Confederate States to be determined or alleged by the view which may have been taken or the recognition given by foreign nations, for it is an internal question between a sovereign government and a portion of its own people, with which other governments have no right to meddle. "The United States has never recognized the Confederate States as being such a political power, or as possessing the rights and functions of a civil government. It did, however, extend, from motives of humanity, perhaps from necessity, certain belligerent rights; but at the same claimed to itself the full exercise of sovereign rights. And this granting to these States of such limited belligerent rights was not inconsistent with a total denial of civil rights, or of the validity of the acts of their organized legislatures. "The Confederate States claimed that they had a right to exercise the powers and functions of a civil government as fully as they had assumed the form of such a government, and this as an independent State or sovereignty. They appealed to the wager of battle for a settlement of the question. The decision was adverse to their claim. And now, to give the effect claimed by the defendant to the decree of the Confederate courts, is to claim for a defeat what a victory alone could achieve. "All American courts are bound to treat each and all of the insurrectionary States as integral parts of the Union, subject at all times to its laws and Constitution, and the United States statutes furnish this rule of decision. From the foregoing propositions, abundantly sustained as they are by authorities which have been cited, the following conclusions result: "The ordinances of secession are a nullity, for the allegiance which every citizen owed to the United States was so absolute that no State or convention, decree or ordinance, could relieve himfrom it. "The Confederate States, so-called, were not separately or in the aggregate, a body politic; therefore the Government could not declare war against them; it could not recognize them, separately or together, as capable of making a surrender, nor of legally performing any function hostile to the United States. "No general status of belligerency was or could be conceded, and while carrying on war the distinction was at all times preserved between acts of war and civil acts. "The acts of the organized Legislatures, the Congress, and the courts of the Confederate States, so called, were absolutely null and void, abenitio, affording no legal right, authority, or protection to the defendant. None of these proceedings, then, by their own force or authority, offer a justification for the non-payment by the defendant. "There are, however, a class of cases in which persons are excused from their wrongful acts, induced or resulting from a state of war; that is where they are not voluntary, but compulsory, the result of a vis major. "This is not such a case, for there was no actual force; there was simply a void order of an illegal court. There is no penalty affixed to its disobedience, for a corporation cannot, like a natural person, be seized and imprisoned. The only remedy is a 'writ of distringas,' tho purpose of which is to distrain the corporation of its goods and chattels. No such writ or other compulsory process was issued. "The only compulsion which, under such circumstances, would be a justification, 'is such actual overpowering force, present and exercised at the time when the act was done, as renders resistance impossible.' "The suggestion that the earnings of the road were received in Confederate notes, payable after six months after the recognition of the independence of the Confederate States by the United States, and that the complainant can now only demand payment in kind, has no foundation or authority in law; for the duty of the defendant was from time to time to declare dividends out of its net profits; and dividends, when declared, become a debt due to the stockholders; and if the money is placed in improper securities, or deposited in banks which fail, the loss falls upon the corporation, not the stockholder. It is not for the corporation to claim relief because it has done for or dealt with worthless or illegal funds."
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“Interesting Case in the Circuit Court of the United States,” Reconstructing Virginia, accessed October 16, 2018, https://reconstructingvirginia.richmond.edu/items/show/625.