1. Where cotton was captured by the military forces of the
United States and sold and the proceeds were paid into the
Treasury, the claim of the owner against the government constitutes
property, and passes to his assignee in bankruptcy, though, by
reason of the bar arising from the lapse of time it cannot be
judicially enforced.
2. The Act of Congress of Feb. 20, 1853, 10 Stat. 170, to
prevent frauds upon the Treasury of the United States applies only
to cases of voluntary assignment of demands against the government.
The passing of claims to heirs, devisees, or assignees in
bankruptcy is not within the evil at which it aimed.
In January, 1873, the appellant brought suit in the Court of
Claims under the Captured and Abandoned Property Act, to recover
the proceeds of two hundred and eighty-three bales of cotton,
alleged to have belonged to him and to have been seized and taken
from his possession in Savannah in February, 1865, by the military
forces of the United States, and to have been sold by the agent of
the Treasury Department, and
Page 97 U. S. 393
the proceeds paid into the Treasury. After issue had been joined
in the suit and evidence on behalf of the claimant had been taken,
but before a hearing was had,
Haycraft v. United
States, 22 Wall. 81, was decided by this Court, in
which it was held that the Court of Claims had no jurisdiction to
hear and determine any claim arising under the provisions of that
act unless suit upon the same was commenced within two years after
the suppression of the rebellion. It had been previously decided
that, within the meaning of the act, the rebellion was to be
considered as suppressed throughout the whole of the United States
on the 20th of August, 1866, the day on which the President, by his
proclamation, had declared it suppressed in Texas, the last of the
states in insurrection.
United States v.
Anderson, 9 Wall. 56.
Upon learning of the decision mentioned, the appellant
petitioned Congress for relief, and, in compliance with his
petition, a statute was passed which became a law in February,
1877, authorizing the Court of Claims to take jurisdiction of his
claims under the Captured and Abandoned Property Act, "which
claims," said the statute,
"were, by accident or mistake of his agent or attorney, and
without fault or neglect on his part, as is claimed, not filed
within the time limited by said act."
19 Stat. 509.
After its passage, the appellant filed in the Court of Claims an
amended petition setting forth the act and averring that Congress
intended by it to confer upon the court jurisdiction to hear and
determine his claims, as stated in his original petition.
It appears from the findings of the Court of Claims that in
December, 1864, the appellant was possessed of the cotton described
in his petition; that it was taken from his possession by the
military forces of the United States and sold, and the proceeds
thereof paid into the Treasury; that in December, 1868, he was a
member of the firm of Erwin & Hardee, of Savannah; that during
this month, that firm became insolvent and presented a petition in
bankruptcy to the District Court in Georgia; that in due course of
proceedings, the partners were adjudged bankrupts; that an assignee
of their estate was appointed, and that their property was passed
to the assignee. The schedule
Page 97 U. S. 394
of the individual property of the appellant annexed to the
petition set forth among his assets "a claim on the United States
government for three hundred and eighty-two bales of cotton,
captured by General Sherman in Savannah in December, 1864." In
March, 1872, the assignee presented a petition to the judge of the
district court stating that he had in his possession a great many
outstanding debts and demands belonging to the estate of the
bankrupts which could not be collected without inconvenient delay,
and praying for leave to sell at auction certain notes and accounts
mentioned, among which was this item: "All uncollected open
accounts on the books." The court gave the assignee leave to sell
at auction "such notes, accounts, and other debts" due to the
estate as in his judgment would be for the interest of the
creditors of the bankrupts, but as he and the creditors afterwards
came to the conclusion that the property, if sold as proposed,
would bring a mere nominal amount, no such sale was made, and in
December, 1872, he accepted an offer of $2,500, made by the
appellant, for the assets, exclusive of the notes of one Henry
Schaben. The assets, with that exception, were accordingly sold to
him and a memorandum given to him by the assignee acknowledging the
receipt of the money "in full for all the remaining assets of the
late firm of Erwin & Hardee." It also appears from the findings
that the copy of the bankrupts' schedules, prepared by the register
in bankruptcy for the use of the assignee, contained a sheet
setting forth as an asset the claim mentioned against the United
States for three hundred and eighty-two bales of cotton, but that
the sheet was removed by some person unknown, and that the assignee
had no personal knowledge that such an asset existed when he made
this sale to the appellant.
The Court of Claims dismissed the petition, and from its
decision Erwin appealed to this Court.
MR. JUSTICE FIELD, after stating the case, delivered the opinion
of the Court.
The purpose of the statute passed for the relief of the
appellant,
Page 97 U. S. 395
as is manifest on its face, was to remove the bar of the
Captured and Abandoned Property Act, which had arisen without his
fault, or rather to confer jurisdiction upon the Court of Claims
over his case, which otherwise would not have existed. It was not
intended to enlarge or affect his title to the claim or to change
his position in court from what it would have been had he
instituted his suit within the two years prescribed by that act.
His claim must therefore be considered like the claims of other
suitors both with respect to its original validity as a demand
against the government and with respect to his title. If the proof
fail in either of these particulars, no recovery can be had.
There is no question made as to the appellant's ownership of the
cotton at the time of its seizure or as to its proceeds being in
the Treasury of the United States, nor is any point raised against
his status in court from his former connection with the rebellion
as an officer in the Confederate army, the disability thus created
having been removed by the President's proclamation of pardon and
amnesty.
The point in dispute relates to the validity of his title. His
contention is, 1st, that his claim against the United States for
the proceeds of the cotton never passed to the assignee in
bankruptcy, and, 2d, that if it did thus pass, he afterwards became
the owner of it by purchase of the assets at the sale
mentioned.
Upon the first point, the argument of the appellant is
substantially this, that the claim, at the time the petition in
bankruptcy was filed, did not constitute an enforceable demand
against the government, and was not, therefore, in its nature
assignable property, and that if the claim constituted a demand
against the government in the nature of property, it was incapable
of assignment under the Act of Congress of Feb. 26, 1853, 10 Stat.
170, and the decision of this Court in
United States v.
Gillis, 95 U. S. 407, and
that in either view the appellant stands in his original position
before proceedings in bankruptcy were instituted, with his rights
or equities respecting such claim unaffected by them.
This argument is unsound. When the appellant filed his petition
in bankruptcy, his claim against the government was property,
though of uncertain value. It was a claim for the proceeds
Page 97 U. S. 396
of goods which once belonged to him, and of the possession of
which he has been deprived by the action of the government. Whether
this was done rightfully or wrongfully does not affect the
character of the claim as property, though it may affect its
validity and value. Claims for compensation for the possession,
use, or appropriation of tangible property constitute personal
estate equally with the property out of which they grow, although
the validity of such claims may be denied, and their value may
depend upon the uncertainties of litigation, or the doubtful result
of an appeal to the legislature. A demand of a bankrupt which is
outlawed must go to the assignee, for contingencies may arise in
many ways which will give value to it. Demands against the
government, if based upon considerations which would be valid
between individuals, such as services rendered or goods taken, are
property, although there be no court to investigate and pass upon
their validity and their recognition and payment may depend upon
the caprice or favor of the legislature.
In
Comegys v. Vasse, reported in 1 Peters, this Court
said, speaking through Mr. Justice Story, that it might in general
be affirmed that vested rights
ad rem and
in re,
possibilities coupled with an interest, and claims growing out of
and adhering to property, will pass by assignment, and it was there
held that a claim against the Spanish government by a bankrupt for
damages arising from the capture of vessels and cargoes of which he
was the underwriter and which were abandoned to him passed to his
assignee in bankruptcy. "The right," said the Court,
"to indemnity for an unjust capture, whether against the captors
or the sovereign, whether remediable in his own courts, or by his
own extraordinary interposition and grants upon private petition,
or upon public negotiation, is a right attached to the ownership of
the property itself, and passes by cession to the use of the
ultimate sufferer,"
and is in its nature capable of assignment to others. The
Bankrupt Act of 1800, under which the case arose, provided that
"All the estate, real and personal, of every nature and
description, to which the bankrupt might be entitled, either in law
or equity" should go to his assignee, and the court held that the
words were broad enough to cover every description of
Page 97 U. S. 397
vested right and interest attached to and growing out of
property; that under them, the whole property of a testator would
pass to his devisee, and whatever an administrator could take in
case of intestacy would go to him. The language of the act under
which the appellant here filed his petition in bankruptcy is
equally comprehensive as to the property of a bankrupt which shall
go to his assignee. It declares that all his estate, real and
personal, and all his rights in equity and choses in action, shall
vest in the assignee, and the terms are broad enough to embrace any
claim the party may have against the government for property taken
belonging to him. Rev.Stat., secs. 5044, 5046.
The Act of Congress of Feb. 26, 1853, to prevent frauds upon the
Treasury of the United States, which was the subject of
consideration in the
Gillis Case, applies only to cases of
voluntary assignment of demands against the government. It does not
embrace cases where there has been a transfer of title by operation
of law. The passing of claims to heirs, devisees, or assignees in
bankruptcy is not within the evil at which the statute aimed, nor
does the construction given by this Court deny to such parties a
standing in the Court of Claims.
Upon the second point, that the claim in controversy was
purchased by the appellant at the private sale of the assignee, we
think the evidence insufficient. It appears from the copy of the
schedules of the bankrupts' property, prepared by the register for
the use of the assignee, that the sheet showing the claim against
the United States for three hundred and eighty-two bales of cotton
had in some unexplained way been removed, so that he had no
knowledge of the existence of the claim when he sold the remaining
assets to the appellant. The receipt given by him shows that he
considered that he was selling the assets of the firm only, and not
of either of the separate partners. We are clear that it was not
his intention to sell the claim against the government. There was a
want of concurrence of minds to any such transaction, which was
essential to give it validity.
Judgment affirmed.
