1. Intercourse during war with an enemy is unlawful to parties
standing in the relation of debtor and creditor as much as to those
who do not.
2. Conceding that a creditor may have an agent in an enemy's
country to whom his debtor there may pay a debt contracted before
the war, yet the agent must be one who was appointed before the
war. He cannot be one appointed during it.
3. A transaction originally unlawful -- such as a person's
unlawful trading in behalf of another with an enemy -- cannot be
made lawful by any ratification.
Elias Einstein, a resident of Macon, Georgia, was indebted, when
the late rebellion broke out, to Grossmayer, a resident of
Page 76 U. S. 73
New York, for goods sold and money lent, and while the war was
in progress a correspondence on the subject was maintained through
the medium of a third person who passed back and forth several
times between Macon and New York. The communication between the
parties resulted in Grossmayer's requesting Einstein to remit the
amount due him in money or sterling exchange, or, if that were not
possible, to invest the sum in cotton and hold it for him until the
close of the war.
In pursuance of this direction -- and, as it is supposed,
because money or sterling exchange could not be transmitted --
Einstein purchased cotton for Grossmayer, and informed him of it,
Grossmayer expressing
himself satisfied with the
arrangement. The cotton was afterwards shipped as Grossmayer's
to one Abraham Einstein at Savannah, who stored it there in his own
name in order to prevent its seizure by the rebel authorities. It
remained in store in this manner until the capture of Savannah in
December, 1864, by the armies of the United States, when it was
reported to our military forces as Grossmayer's cotton, and taken
by them and sent to New York and sold.
Grossmayer now preferred a claim in the Court of Claims for the
residue of the proceeds, asserting that he was within the
protection of the Captured and Abandoned Property Act.
That court considering that the purchase by Elias Einstein for
Grossmayer was not a violation of the war intercourse acts set
forth in the preceding case, decided that he was so, and gave
judgment in his favor. The United States appealed.
Page 76 U. S. 74
MR. JUSTICE DAVIS delivered the opinion of the Court.
Grossmayer insists that he is within the protection of the
Captured and Abandoned Property Act, but it is hard to see on what
ground he can base this claim for protection. It was natural that
Grossmayer should desire to be paid, and creditable to Einstein to
wish to discharge his obligation to him, but the same thing can be
said of very many persons who were similarly situated during the
war, and if all persons in this condition had been allowed to do
what was done in this case, it is easy to see that it would have
produced great embarrassment and obstructed very materially the
operations of the army. It has been found necessary, as soon as war
is commenced, that business intercourse should cease between the
citizens of the respective parties engaged in it, and this
necessity is so great that all writers on public law agree that it
is unlawful without any express declaration of the sovereign on the
subject.
But Congress did not wish to leave anyone in ignorance of the
effect of war in this regard, for as early as the 13th of June,
1861, it passed a Non-intercourse Act, which prohibited all
commercial intercourse between the states in insurrection and the
rest of the United States. It is true the President could allow a
restricted trade if he thought proper, but insofar as he did
Page 76 U. S. 75
allow it, it had to be conducted according to regulations
prescribed by the Secretary of the Treasury.
There is no pretense, however, that this particular transaction
was authorized by anyone connected with the Treasury Department,
and it was therefore not only inconsistent with the duties growing
out of a state of war, but in open violation of a statute on the
subject. A prohibition of all intercourse with an enemy during the
war affects debtors and creditors on either side, equally with
those who do not bear that relation to each other. We are not
disposed to deny the doctrine that a resident in the territory of
one of the belligerents may have, in time of war, an agent residing
in the territory of the other to whom his debtor could pay his debt
in money or deliver to him property in discharge of it, but in such
a case, the agency must have been created before the war began, for
there is no power to appoint an agent for any purpose after
hostilities have actually commenced, and to this effect are all the
authorities. The reason why this cannot be done is obvious, for
while the war lasts, nothing which depends on commercial
intercourse is permitted. In this case, if Einstein is to be
considered as the agent of Grossmayer to buy the cotton, the act
appointing him was illegal because it was done by means of a direct
communication through a messenger who was in some manner not stated
in the record able to pass, during the war, between Macon and New
York. It was not necessary to make the act unlawful that Grossmayer
should have communicated personally with Einstein. The business
intercourse through a middleman, which resulted in establishing the
agency, is equally within the condemnation of the law.
Besides, if, as is conceded, Grossmayer was prohibited from
trading directly with the enemy, how can the purchase in question
be treated as lawful when it was made for him by an agent appointed
after his own disability to deal at all with the insurgents was
created?
It is argued that the purchase by Einstein was ratified by
Grossmayer, and that being so, the case is relieved of difficulty;
but this is a mistaken view of the principle of ratification, for a
transaction originally unlawful cannot be made any better by being
ratified.
In any aspect of this case, whether the relation of debtor and
creditor continued or was changed to that of principal and agent,
the claimant cannot recover.
Page 76 U. S. 76
As he was prohibited during the war from having any dealings
with Einstein, it follows that nothing which both or either of them
did in this case could have the effect to vest in him the title to
the cotton in question.
Not being the owner of the property, he has no claim against the
United States.
The judgment of the Court of Claims is reversed and the
cause is remanded to that court with directions to enter an order
dismissing the petition.
