American Insurance Company v. Canter
26 U.S. 511

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U.S. Supreme Court

American Insurance Company v. Canter, 26 U.S. 1 Pet. 511 511 (1828)

American Insurance Company v. Canter

26 U.S. (1 Pet.) 511

Syllabus

The Constitution of the United States confers absolutely on the government of the Union the power of making war and of making treaties. Consequently, that government possesses the power of acquiring territory either by conquest or by treaty.

The usage of the world is, if a nation be not entirely subdued, to consider the holding of conquered territory as a mere military occupation until its fate shall be determined at the treaty of peace. If it be ceded by treaty, the acquisition is confirmed, and the ceded territory becomes a part of the nation to which it is annexed, either on the terms stipulated in the treaty of cession or on such as its new master shall impose. On such transfer of territory, it has never been held that the relations of the inhabitants with each other undergo any change. Their relations with their former sovereign are dissolved, and new relations are created between them and the government which has acquired their territory. The same act which transfers their country transfers the allegiance of those who remain in it, and the law, which may be denominated political, is necessarily changed, although that which regulates the intercourse and general conduct of individuals remains in force until altered by the newly created power of the state.

The treaty with Spain by which Florida was ceded to the United States is the law of the land, and admits the inhabitants of Florida to the enjoyment of the privileges, rights, and immunities of the citizens of the United States. They do not, however, participate in political power; they do not share in the government until Florida shall become a state. In the meantime, Florida continues to be a territory of the United States, governed by virtue of that clause in the Constitution which empowers "Congress to make all needful rules and regulations respecting the territory or other property belonging to the United States."

The powers of the Territorial Legislature of Florida extend to all rightful objects of legislation, subject to the restriction that their laws shall not be "inconsistent With the laws and Constitution of the United States."

All the laws which were in force in Florida while a province of Spain, those excepted which were political in their character, which concerned the relations between the people and their sovereign, remained in force until altered by the government of the United States. Congress recognizes this principle by using the words "laws of the territory now in force therein." No laws could then have been in force but those enacted by the Spanish government. If among them there existed a law on the subject of salvage, and it is scarcely possible there should not have been such a law, jurisdiction over it was conferred by the act of Congress relative to the Territory of Florida on the superior court, but that jurisdiction was not exclusive. A territorial act conferring jurisdiction over the same cases as an inferior court would not have been inconsistent with the seventh section of the act, vesting the whole judicial power of the territory in two superior courts and in such inferior courts and justices of the peace as the legislative council of the territory may from time to time establish.

Page 26 U. S. 512

The eleventh section of the act declares

"That the laws of the United States relating to the revenue and its collection, and all other public acts not inconsistent or repugnant to the act, shall extend to and have full force and effect in the Territory of Florida."

The laws which are extended to the territory by this section were either for the punishment of crimes or for civil purposes. Jurisdiction is given in all criminal cases by the seventh section, but in civil cases that section gives jurisdiction only in those which arise under and are cognizable by the laws of the territory. Consequently all civil cases arising under the laws which are extended to the territory by the eleventh section are cognizable in the territorial courts by virtue of the eighth section, and in those cases the superior courts may exercise the same jurisdiction as is exercised by the Court for the Kentucky District.

The Constitution and laws of the United States give jurisdiction to the district courts over all cases in admiralty, but jurisdiction over the case does not constitute the case itself.

The Constitution declares that

"The judicial power shall extend to all cases in law and equity arising under it, the laws of the United States and treaties made or which shall be made under their authority, to ail cases affecting ambassadors, other public ministers and consuls, to all cases of admiralty and maritime jurisdiction."

The Constitution certainly contemplates these as three distinct classes of cases, and if they are distinct, the grant of jurisdiction over one of them does not confer jurisdiction over either of the other two. The discrimination made between them is conclusive against their identity.

A case in admiralty does not in fact arise under the Constitution or laws of the United States. These cases are as old as navigation itself, and the law admiralty and maritime, as it existed for ages, is applied by our courts to the cases as they arise. It is not, then, to the eighth section of the territorial act that we are to look for the grant of admiralty and maritime jurisdiction in the territorial courts of Florida. Consequently, it that jurisdiction is exclusive, it is not made so by the reference in the act of Congress to the

District Court of Kentucky.

The judges of the superior courts of Florida hold their offices for four years. These courts, then, are not constitutional courts in which the judicial powers conferred by the Constitution on the general government can be deposited. They are incapable of receiving it. They are legislative courts, created in virtue of the general right, of sovereignty which exists in the government or in virtue of that clause which enables Congress to make laws regulating the territories belonging to the United States. The jurisdiction with which they are invested, is not a part of that judicial power which is defined in the Third Article of the Constitution, but is conferred by Congress in the exercise of its powers over the territories of the United States.

Although admiralty jurisdiction can be exercised in the states in those courts only which are established in pursuance of the Third Article of the Constitution, the same limitation does not extend to the territories. In legislating for them, Congress exercises the combined powers of the general and state governments.

The act of the Territorial Legislature of Florida erecting a court which proceeded under the provisions of the law to decree for salvage the sale of a cargo of a vessel which had been stranded, and which cargo had been brought within the territorial limits is not inconsistent with the laws and Constitution of the United States, and is valid, and consequently a sale of the property made in pursuance of it changed the property.

Page 26 U. S. 513

The libel filed in this cause in the District Court of South Carolina on 18 April, 1825, alleged that 584 bales of cotton insured by the libellants were shipped on board the ship Point a Petre on a voyage from New Orleans to Havre de Grace in France, and was in February, 1825, wrecked on the coast of Florida, from which it was saved and carried into Key West in the Territory of Florida, where it was sold, without any previous adjudication by a court of competent jurisdiction, for the ostensible purpose of satisfying a claim for salvage, amounting to seventy-six percent of the property saved. That the cotton thus insured was abandoned to the underwriters, the libellants, and the abandonment was accepted by them on 10 March, 1825. That part of the cargo, amounting to one hundred and forty bales, subsequently arrived in the port of New York and was there proceeded against by the libellants as their property under the abandonment. That another part of the cargo, amounting to between 300 and 356 bales, had arrived in the port of Charleston, within the jurisdiction of the court, in the possession of one David Canter, and was fraudulently sold in Charleston at auction on 13 April, 1825. Restitution of this last-mentioned part was therefore prayed by the libellants, and process was issued against the said Canter in personam.

The marshal returned to the warrant that he had taken 160 bales of cotton, and the person of Canter. 54 bales of the cotton, specifically brought into court, were ordered to be sold and the proceeds paid into the registry, and the supposed value of the remainder in dispute, to be secured by stipulation.

David Canter filed his answer claiming 356 bales of cotton as a bona fide purchaser under a sale at public auction at Key West by virtue of the decree of a certain court consisting of a notary and five jurors, proceeding under an Act of the Governor and Legislative Council of Florida passed 4 July, 1823, which decree awarded to the salvors seventy-six percent on the net proceeds of sale.

The testimony of witnesses was taken and other evidence produced relating to the title of the libellants under the insurances and abandonments thereon and to the proceedings in the court at Key West.

The district judge pronounced the proceedings in the court at Key West a nullity, but decreed restitution to the libellants of 39 bales of the cotton only, deducting a salvage of

Page 26 U. S. 514

fifty percent, considering the evidence of the identity of the residue as insufficient to establish their proprietary interest.

The libellants and claimant both appealed from this decree to the circuit court.

Further testimony was taken in the circuit court, and at the hearing the decree of the district court was reversed and the entire cotton decreed to the claimant with costs upon the ground that the proceedings of the court at Key West were legal and transferred the property to the alleged purchaser under them.

From this decree the libellants appealed to this Court.

The documents exhibited and evidence taken in the case showed that three 333 bales of the cotton on board the Point a Petre were insured by the American, and 351 by the Ocean office. The whole cargo of the ship consisted of 891 bales, but to whom the other 317 bales belonged did not appear. The ship sailed on the voyage insured on 17 February, 1825, and was wrecked on Carysforth Reef on the east coast of West Florida, about eight miles from the shore. She filled with water and was abandoned by the captain and crew.

In the depositions taken in the cause it was stated that when the vessel was first seen, she was filled with water, abandoned, bilged, and lying on her broadside. The cotton was taken out of her, hove into the sea, rafts made of it, towed inside of the reef, and then put on board of vessels. The captain of the ship was picked up on the shore with his men about fourteen miles from the wreck, and he went with the salvors to Key West, where the property saved was carried, and the proceedings for salvage were at Key West, carried on, as was alleged, with the cooperation and concurrence of the master of the ship.

The danger in saving the property was said to have been very great, the weather to have been stormy, some of the men were injured, and the saving was done during the night as well as the day; most of the cotton was much injured.

After the sale, the agent of the appellants, Mr. Ogden, came on from New York to Key West for the purpose of attending the sale, and he expressed his willingness to pay to the purchasers of the cotton a considerable sum beyond what had been paid for it at the sale.

It was also in evidence that the marks on the cotton were defaced, and that the efforts to ascertain the particular marks on that imported into Charleston by the appellee were to a great extent without success. A large portion of the cotton brought to Charleston by the claimant was sold at auction as

Page 26 U. S. 515

damaged cotton. An agreement between the two insurance companies, the appellants, was made previous to the institution of the suit that the same should be for their joint benefit. David Canter, the appellee, claimed 356 bales of the cotton as a bona fide purchaser under the decree of the court of Key West, instituted by and proceeding under a law of the Legislative Council of Florida passed 4 July, 1823, which decree awarded seventy-six percent to the salvors of the net proceeds of the sale.

Page 26 U. S. 541

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