1. Corporations created by the legislature of a rebel state
while the state was in armed rebellion against the government of
the United States have power since the suppression of the rebellion
to sue in the federal courts if the acts of incorporation had no
relation to anything else than the domestic concerns of the state
and they were neither in their apparent purpose nor in their
operation hostile to the Union or in conflict with the
Constitution, but were mere ordinary legislation, such as might
have been had there been no war or no attempted secession, and such
as is of yearly occurrence in all the states.
2. Such corporations may in proper cases sue under the Captured
and Abandoned Property Act.
The Home Insurance Company and the Southern Insurance and Trust
Company, both being corporations created by the Legislature of
Georgia in 1861 and 1863, while the state was in armed rebellion
against the government of the United States, brought suit in the
court below against the United States under the Captured and
Abandoned Property Act (an act which, by its terms, gives a right
to sue only to persons who have borne true faith and allegiance to
the government and have never voluntarily aided, abetted, or given
encouragement to rebellion) to recover the proceeds of the sale of
cotton captured at Savannah, in 1864, and now in the Treasury of
the United States. The United States pleaded the general issue and
statute of limitations, but no other plea.
On the argument, however, of the case, the counsel of the
government set up that the courts of the United States would not
recognize the competency of those bodies known as the legislatures
of the insurgent states to create corporations, such as insurance,
banking, and trust companies, and as the plaintiffs in the court
below were incorporated under acts passed after the attempted
secession of Georgia from the Union and before the close of the
war, it was argued that they could have now no legal existence. The
question thus raised, in the argument -- the grounds made
Page 89 U. S. 100
by the pleas not having been at all supported by the evidence,
and, in fact, not pressed -- was accordingly whether such
corporations as were now suing could be recognized as having a
legal existence with capacity to own cotton and to sue in the Court
of Claims.
That court thought that they had, and gave judgment against the
government. The case, therefore, was now here on its appeal, the
same question being now presented here in the argument, along with
the further point that if these plaintiffs were competent to sue in
the federal courts, they could not sue under the Captured and
Abandoned Property Act, because as corporations, they could not
bear true faith and allegiance, that capability, as well as the
contrary one of voluntarily aiding, abetting or giving
encouragement to rebellion being predicable of natural persons
only, for whom and not for corporations the act must be meant. This
point, however, was not made in the court below nor its decision
thereon assigned for error. The errors assigned were that the court
erred:
"1st. In holding that the claimants had a legal existence;
and"
"2d. In holding that the rebel legislature of Georgia could
create a corporation capable of suing the United States after the
suppression of the rebellion."
MR. JUSTICE STRONG delivered the opinion of the Court.
It may well be doubted whether, under the pleadings in the court
below, the appellants have any right to raise the objection here
that the companies plaintiff have now no legal existence because
incorporated after the attempted secession of Georgia from the
Union and before the close of the war. There was no plea that
traversed directly the corporate existence of the plaintiffs. A
general denial of the averments of the petition was hardly
sufficient. Notwithstanding the old rule that a corporation suing
must
Page 89 U. S. 101
prove its corporate existence, it has been many times decided
that a plea of the general issue admits its capacity to sue, as
does going to trial upon the merits. [
Footnote 1] And such is the established practice in the
Court of Claims. [
Footnote
2]
We do not, however, rest our decision upon this ground. We
prefer answering the question which the appellants attempt to
raise. No doubt the Legislature of Georgia in 1861 and 1863, when
the enactments were made for the incorporation of these plaintiffs,
was not the legitimate legislature of the state. The state had
thrown off its connection with the United States, and the members
of the legislature had repudiated, or had not taken, the oath by
which the third section of the sixth article of the Constitution
requires the members of the several state legislatures to be bound.
But it does not follow from this that it was not a legislature the
acts of which were of force when they were made and are in force
now. If not a legislature of the state
de jure, it was at
least a legislature
de facto. It was the only lawmaking
body which had any existence. Its members acted under color of
office, by an election, though not qualified according to the
requirements of the Constitution of the United States. Now while it
must be held that all their acts in hostility to that Constitution,
or to the Union of which the state was an inseparable member, have
no validity, no good reason can be assigned why all their other
enactments, not forbidden by the Constitution, should not have the
force which the law generally accords to the action of
de
facto public officers. What that is was well stated by Kent in
the second volume of his Commentaries. [
Footnote 3] "In the case of public officers," he says,
"who are such '
de facto,' acting under the color of
office by an election or appointment not strictly legal, or without
having qualified themselves
Page 89 U. S. 102
by the requisite tests or by holding over after the time
prescribed for a new appointment, as in the case of sheriffs,
constables &c., their acts are held valid as it respects the
right of third persons who have an interest in them, and as
concerns the public, in order to prevent the failure of
justice."
And thus this Court has ruled in regard to the legislatures of
the insurgent states in several cases which have come up for our
decision. In
Texas v. White & Chiles, [
Footnote 4] Chief Justice Chase, in
delivering the opinion of the Court (while declining to attempt any
exact definition within which the acts of an insurgent state
government must be treated as valid or invalid), remarked:
"It may be said, perhaps with sufficient accuracy, that acts
necessary to peace and good order among citizens, such, for
example, as acts sanctioning and protecting marriage and the
domestic relations, governing the course of descents, regulating
the conveyance and transfers of property, real and personal,
providing remedies for injuries to person and estate, and other
similar acts which would be valid if emanating from a lawful
government must be regarded in general as valid when proceeding
from an actual though unlawful government, and that acts in
furtherance or in support of the rebellion against the United
States or intended to defeat the just rights of citizens, and other
acts of like nature, must in general be regarded as invalid and
void."
This language was intended only as an outline, but it
sufficiently indicates where is the line between valid and invalid
acts of the legislatures of the insurgent states. Similar opinions
were expressed in
Sprott v. United States, a case decided
at this term. [
Footnote 5]
There, when speaking of the powers of the insurgent states, our
language was
"It is only when in the use of these powers substantial aid and
comfort was given or intended to be given to the rebellion, when
the functions necessarily reposed in the state for the maintenance
of civil society were perverted to the manifest and intentional aid
of treason against the government of the Union, that their acts
are
Page 89 U. S. 103
void."
And with equal distinctness was it said in
Horn v.
Lockhart, [
Footnote 6]
"We admit that the acts of the several states [in insurrection]
in their individual capacities, and of their different departments
of government, executive, judicial, and legislative, during the
war, so far as they did not impair or tend to impair the supremacy
of the National authority or the just rights of citizens under the
Constitution, are in general to be treated as valid and binding.
The existence of a state of insurrection and war did not loosen the
bonds of society or do away with civil government or the regular
administration of the laws. . . . No one that we are aware of
seriously questions the validity of judicial or legislative acts in
the insurrectionary states touching these and kindred subjects when
they were not hostile in their purpose or mode of enforcement to
the authority of the national government and did not impair the
rights of citizens under the Constitution."
After these emphatic utterances, controversy upon this subject
should cease. All the enactments of the
de facto
legislatures in the insurrectionary states during the war which
were not hostile to the Union or to the authority of the general
government and which were not in conflict with the Constitution of
the United States or of the states have the same validity as if
they had been enactments of legitimate legislatures. Any other
doctrine than this would work great and unnecessary hardship upon
the people of those states without any corresponding benefit to the
citizens of other states and without any advantage to the national
government.
Tried by the rule thus stated, the enactments by which the
plaintiffs in these cases were incorporated must be treated as
valid. They had no relation to anything else than the domestic
concerns of the state. Neither in their apparent purpose nor in
their operation were they hostile to the Union or in conflict with
the Constitution. They were mere ordinary legislation such as might
have been had there been no war or no attempted secession, such as
is of
Page 89 U. S. 104
yearly occurrence in all the states of the Union. We hold,
therefore, that the Court of Claims correctly decided that the
plaintiffs were lawfully incorporated and that they had a legal
capacity to sue in that court.
It remains only to notice one other position taken by the
appellants during the argument. It is that even if the plaintiffs
below are corporations which this Court can recognize as such, they
cannot sue in the Court of Claims for the proceeds of the sale of
captured and abandoned property because, as it is argued the
Captured and Abandoned Property Act provides only for suits by
persons who could have given aid and comfort to the rebellion. It
is said corporations were incapable of giving such aid, and that
they cannot make proof that they have never given it. Nothing in
the assignments of error justifies the presentation of such an
argument. But were it otherwise, the argument would be plainly
unsound. The act of Congress confers the right to sue upon any
person claiming to have been the owner of the captured or abandoned
property. It makes no distinction between natural and artificial
persons, and it has not been doubted that corporations created
before the war commenced might sue. Many such actions have been
sustained. It is no objection to them that plaintiffs in all suits
are required to make proof that they have never given aid and
comfort to the rebellion. Such proof may be made as well by
artificial as natural persons. Corporations may have rendered very
substantial aid to the armed resistance to the laws of the United
States. They may have made loans or contributions to the
Confederate government. They may even have fitted out companies or
regiments of soldiers. It they have rendered no aid, the fact is
quite capable of proof.
Judgments affirmed.
MR. JUSTICE BRADLEY did not sit in this case.
[
Footnote 1]
Lehigh Bridge Company v. Lehigh Coal & Navigation
Company, 4 Rawle 9;
Sutton v. Cole, 3 Pickering 245;
Conard v. Atlantic
Insurance Co., 1 Pet. 450;
Society for the
Propagation of the Gospel v. Town of Pawlet, 4 Pet.
501.
[
Footnote 2]
Hebrew Congregation v. United States, 6 Ct.Cl. 244.
[
Footnote 3]
Page 295.
[
Footnote 4]
74 U. S. 7 Wall.
700.
[
Footnote 5]
87 U. S. 20 Wall.
459.
[
Footnote 6]
84 U. S. 17
Wall. 580.
