United States v. Lane
75 U.S. 185

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U.S. Supreme Court

United States v. Lane, 75 U.S. 8 Wall. 185 185 (1868)

United States v. Lane

75 U.S. (8 Wall.) 185

Syllabus

1. The 8th section of the Act of July 2, 1864, which enacts that it shall be lawful for the Secretary of the Treasury, with the approval of the President, to authorize agents to purchase for the United States any products of states declared in insurrection, did not confer the power to license trading within the military lines of the enemy

2. In connection with the regulations of the Treasury Department and an executive order of the President issued in accordance with the act, it authorized the insurgents to bring their cotton within our lines, without seizure and with a promise on our part to buy it from them, with liberty on theirs to go to the nearest Treasury agent in an insurrectionary district to sell it, or if they preferred to leave it under the control of someone who could go to such agent and sell it for them, with leave to them also, by way of further inducement, to purchase such articles of merchandise as they needed, not contraband of war, to the extent of one-third of the aggregate value of the products sold by them and to return with them under a safe conduct.

3. By the regulations issued under the act, the purchasing agent could not act at all until the person desiring to sell the Southern products made application in writing stating that he owned or controlled them, stating also their kind, quality, and location, and even then the power of the purchasing agent before the delivery of the products was limited to a stipulation (the form was prescribed) to purchase and to the giving a certificate that such application was made and to requesting safe conduct for the party and his property.

4. A record of a judgment on the same subject matter, referred to in a finding, cannot be set up as an estoppel when neither the record is set forth nor the finding shows on what ground the court put its decision whether for want of proof, insufficient allegations, or on the merits of the case.

Appeal from the Court of Claims, the object of the suit having been to recover damages against the United States for an alleged breach of contract made by George Lane

Page 75 U. S. 186

with one Risley, who was at the time the Treasury agent at Norfolk, Virginia, for the purchase of the products of insurrectionary states.

The case, which depended in part on statutes, regulations of the Treasury and a proclamation of the President, was thus:

ACTS OF 1861 AND 1863

By Act of July 13, 1861, section 5, "all commercial intercourse" by and between states declared in insurrection and the citizens thereof and the citizens of the rest of the United States was declared unlawful except such as should be licensed by the President and conducted under the regulations made by the Treasury Department.

An Act of March 12, 1863, authorized agents of the Treasury Department to collect "all abandoned and captured property," &c., and enacted that "all property coming" into any of the United States not declared in insurrection

"from within any of the United States declared in insurrection, through or by any person other than a Treasury agent or under a lawful clearance by the proper Treasury officer, shall be confiscated."

TREASURY REGULATIONS OF MARCH 31st, 1863

The Treasury regulations issued March 31, 1863, by their section 7, ordered thus:

"No permit shall be granted to transport to or from, or to sell or purchase in any place or section whatever, not within the military lines of the United States Army."

Regulation 8, as revised and published September 12, 1863, declared:

"Commercial intercourse with localities beyond the lines of military occupation by the United States forces is strictly prohibited, and no permit will be granted for the transportation of any property to any place under the control of insurgents against the United States."

ACT OF 1864

By the 4th section of an Act of July 2, 1864, the prohibitions of the Act of July 13, 1861, were extended to

"commercial

Page 75 U. S. 187

intercourse by and between persons residing or being within the lines of national military occupation, in such districts declared in insurrection, whether with each other or with persons being within such insurrectionary districts, but not within our military lines."

Section 8 of this act provided that the Secretary of the Treasury might authorize agents

"to purchase for the United States any products of states declared in insurrection at such places therein as shall be designated by him, at such price as shall be agreed on with the seller, not exceeding the market price thereof at the place of delivery nor exceeding three-fourths of the market value thereof in the City of New York at the latest quotations known to the agent purchasing."

Section 9 of this act repealed so much of section 5 of the Act of July 13, 1861, as made it lawful for the President to license or permit such trade by private citizens and traders except to supply necessaries to loyal persons within the federal lines, and to authorize persons within the federal lines to bring or send to market in loyal states products of their own labor or of the labor of freedmen or others in their employment.

TREASURY REGULATIONS OF JULY 29th, 1864

On the 29th of July, 1864, rules were promulgated by the Secretary of the Treasury, and by one of which

"commercial intercourse with localities beyond the lines of actual military occupation by the United States forces is absolutely prohibited, and no permit will be granted for the transportation of any property to any place under the control of insurgents against the United States."

TREASURY REGULATIONS OF SEPTEMBER 24th, 1864

On the 24th of September, 1864, general regulations for the purchase, on government account, of products of insurrectionary states were made by the Secretary of the Treasury, approved by the President, by which Norfolk was made a purchasing point and the special agent was required (by Regulation 7), to the extent of the funds at his command,

Page 75 U. S. 188

to purchase all products offered to him (of the character which by his instructions he was authorized to buy),

"but no liability of any character shall be authorized or assumed by any agent for or on account of the government previous to the actual delivery of the products other than a stipulation to purchase products owned or controlled by applicants, at a price to be agreed upon at the place and date of delivery."

The form of this stipulation is given, and consists of a certificate by the Treasury agent that he has "agreed to purchase" from C. D. property &c., "which he stipulates shall be delivered to me, unless prevented from so doing by the authority of the United States," with a "request" for "safe conduct."

By Rule 8,

"Whenever any person shall make application to the purchasing agent in writing, setting forth that he 'owns or controls' products, stating the kind, quantity, and location thereof, or the date at which they will be delivered at some specified location accessible to transportation,"

the purchasing agent was directed to give a certificate that such application had been made, and request safe conduct for such party and his necessary transportation to the location specified, and for himself and products from the location specified to the purchasing agent. (The form of this certificate is given.) Rule 9 provided that parties, having sold and delivered products, shall, upon their request, be furnished by the purchasing agent with a certificate stating the character and quantity of articles purchased, the price paid, the aggregate amount of payment, the place whence and the route by which the property was transported.

PRESIDENT'S PROCLAMATION, SEPTEMBER 24, 1864

On September 24, 1864, the President issued his proclamation reciting that Congress had authorized the purchase for the United States of products of states declared in insurrection and that the Secretary of the Treasury had designated Norfolk and other places named therein as places of purchase and had made regulations for such purchases, and he therefore proclaimed that all persons, except those in the service of the government, "having in their possession" such

Page 75 U. S. 189

products (and which said agents were authorized to purchase), "and all persons owning or controlling such products," are authorized to convey them to either of said places of purchase, and "such products, so destined, shall not be liable to detention, seizure, or forfeiture, while in transitu or awaiting transportation." And that

"any person having the certificate of a purchasing agent, as prescribed by Treasury Regulation 8, is authorized to pass with means of transportation to the points named in said certificate, and to return therefrom with the products required for the fulfillment of its stipulations."

And that "any person having sold, and delivered to a purchasing agent products of an insurrectionary state,"

"and having in his possession a certificate of the fact, stating the character and quantity of products, and the aggregate amount paid therefor, as prescribed by Regulation 9, shall be permitted . . . to purchase from any authorized dealer,"

at the place of sale, or any other place in a loyal state, any "articles not contraband of war, nor prohibited by the War Department, . . . to an amount not exceeding in value one-third of the aggregate value" of products sold by him as certified by the agent; and

"such articles may be transported by the same route and to the same place, from and by which the said products sold and delivered, reached the purchasing agent,"

and such goods

"shall have safe conduct, and shall not be subject to detention, seizure, or forfeiture while being transported to the places and by the route set forth in said certificate."

Generals and military officers commanding districts, posts, or detachments, and officers commanding fleets, flotillas, and gunboats,

"will give safe conduct to persons and products, merchandise, and other articles duly authorized as aforesaid and not contraband of war, or prohibited by order of the War Department, or the orders of such generals commanding, or other duly authorized military or naval officer made in pursuance thereof."

The facts of the case, as found by the Court of Claims, were essentially these:

The claimant, Lane, entered into contracts with the Treasury

Page 75 U. S. 190

agent at Norfolk, Virginia, for the delivery to the agent of a large quantity of cotton, which was upon the Chowan River, in the State of North Carolina, and within the lines held by the insurrectionary forces. The commander of the military district gave safe conduct to the claimant, his vessel and crew, to bring out the cotton. The claimant also had a license to take out certain articles, a schedule of which was attached to the safe conduct given by the military commander.

The purchasing agent of the Treasury Department of Norfolk appointed a sub-agent to proceed on board of the vessel and to be in charge of the outward cargo contained in the schedule, and not deliver the same to the claimant until he should have delivered to such agent on board the vessel three times its value in cotton. The outward voyage was made without hindrance, and having arrived at Chowan River, the claimant delivered the cotton to the sub-agent on board the vessel.

On her return voyage, the vessel and the cargo were seized by order of a naval commander on duty in the inland waters of North Carolina. After being detained several days, the vessel and cargo were released. She again set off on her course towards Norfolk, and before arriving there was again seized by the order of the admiral commanding the squadron in those waters.

The vessel was afterwards sent to Washington, D.C., where she was libeled, at the instance of the United States, in the Supreme Court of the District of Columbia, sitting in admiralty, where, however, a decree, with costs, passed for the claimant. No record of that suit, however, was produced here.

No proceedings were ever taken against the cotton, and it was ultimately, though after some months' detention, restored to the claimant. It was then taken to New York, but the price of the article had greatly fallen during the detention, and the price received on the sale of it was correspondingly less than if the voyage had not been arrested and if the cotton had been sold on its prompt completion.

The United States were now called on in the suit to make

Page 75 U. S. 191

good the loss caused by the wrongful conduct of its naval officers.

Upon the facts, the Court of Claims ruled, among other things:

That the contracts with the agent of the Treasury, for the sale and delivery of the cotton, were valid and lawful contracts.

That the seizure and detention of the claimant's vessels and cargo by the officers of the navy were unlawful and unauthorized.

That the judgment of the court of admiralty was conclusive; that the voyage was a lawful and proper one, and conducted according to the prescribed regulations of the trade in which the claimant and his vessel were engaged.

That such acts constituted a breach of the contracts between the claimant and the United States, and entitled him to such damages as he sustained thereby.

Page 75 U. S. 194

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