McStea v. Matthews

By the Court *

The defendant Matthews claims that no recovery can be had against him in this action, first, because he was not at the time of the acceptance of the drafts, and the making of the promissory notes in suit, a member of the firm of Brander, Chambliss & Co., and second, because, if the partnership had been formed, it had been dissolved *354(1) by the war of the rebellion; (2) by the refusal of Brander, Senior, to sanction the.formation of the firm; (3) by the proclamation of Aug. 16th, 1861; (4) by the act of the parties and the notice of dissolution in October, 1861.

The fact that Matthews was a member of the firm of Brander, Chambliss & Co. would seem to be sufficiently established by the admissions of Matthews himself, contained in the power of attorney to Burke, dated April 26th, 1861, wherein he describes himself as a member of that firm. There is no pretense Jhat if that firm was ever formed, it was done at any other time than when the written articles of copartnership were signed on the 27th of March, 1861. In fact, the witness Burke testifies that Matthews took an active part in the formation of the partnership and in the management of the business after-wards, and that during the time that he remained in New Orleans, after its formation, he daily attended to its business, and that after he arrived in New York he wrote letters frequently in relation to the business of the firm. Burke further testifies that the firm went on in their business without waiting for the assent of James S. Brander, Senior. The draft of April 23d, 1861, was accepted under the personal supervision of Matthews. It would thus seem to be clear that the defendant Matthews was a member of the firm on the 23d of April, 1861, unless the firm had'been dissolved by the rebellion. This brings us to the consideration of the more difficult point in the case, what effect did the rebellion have upon agreements of this nature where the contracting parties resided in different sections. Are they dissolved by it, and if so, when ? I need not attempt to show that the breaking out of a war between two countries dissolves by the mere force and effect of war itself all existing partnerships between citizens or subjects of the two countries. (Griswold v. Waddington, 16 John, 438.) This principle has been so long settled that it is not now open for discussion.

In the case of the commencement of hostilities between two countries there is no difficulty in determining when a war began, and that is especially so as respects the United States of America, because the right of making war is lodged by our Constitution in Congress, and before it can exist, it must be re*355cognized or declared by the war-making power of the government. But in the case of a rebellion, civil war or insurrection, at first it might seem impossible to fix a general rule which wrould serve as a clear and safe guide to all persons who may have been engaged in commercial ventures in the district in which the rebellion or insurrection has arisen.

And this difficulty arises from determining when the insurrection attains the dignity of war.

Mr. Justice Nelson in his dissenting opinion in the Prize cases (2 Black, 635), has so ably and logically treated this subject that it only seems necessary to quote from that opinion in order to show what rule should govern the case now under consideration, He says “ In the case of a rebellion or resistance of a portion of the people of a country against the established government, there is no doubt if in its progress and enlargement the government thus sought to be overthrown sees fit, it may by the competent power recognize or declare the existence of a state of civil war, which will draw after it all the consequences and rights of war between the contending parties, as in the case of a public war.”

“ Mr. Wheaton observes, speaking of civil war, ‘But the general usage of nations regards such a war as entitling both the contending parties to all the rights of war as against each other and even as respects neutral nations.’ But before an insurrection against the established government can be dealt with on the footing of a civil war within the meaning of the law of nations and the constitution of the United States, and which will draw after it belligerent rights, it must be recognized or declared by the war making power of the government. No power short of this can change the legal status of the Government or the relations of its citizens from that of peace to a state of war or bring into existence all those duties and obligations of neutral third parties growing out of a state of war. The war making power of the Government must be exercised before the changed condition of the Government and people and of neutral third parties can be admitted. There is no difference in this respect between a civil or public war.”

After discussing at considerable length the provisions made *356by the constitution and acts of Congress for the suppression of insurrection, the learned judge continues: “The war carried on by the President against the insurrectionary districts in the Southern States, as in the case of the King of Great Britain in the American Revolution, was a personal war against those in rebellion, and with encouragement and support of loyal citizens, with a view to their co-operation and aid in suppressing the insurgents, with this difference, as the war making power belonged to the King, he might have recognized or declared the war at the beginning to be a civil war, which would draw after it all due rights of a belligerent; but in the case of the President no such power existed: the war, therefore, from necessity, was a personal war, until Congress assembled and acted upon this state of things.

“ Down to this period the only enemy recognized by the Government was the persons engaged in the rebellion, all others were peaceful citizens, entitled to all the privileges of citizens under the constitution. Certainly it cannot rightfully be said that the President has the power to convert a loyal citizen into a belligerent enemy or confiscate his property as enemy’s property.”

On the 13th of July, 1861, Congress having been assembled on the call for an extra session, passed an act authorizing the President by proclamation to interdict all trade and intercourse between all the inhabitants of States in insurrection and the rest of the-United States. In pursuance of the authority conferred upon him by that act, the President issued his proclamation on the 16th of August, 1861, embracing Louisiana and the other States in rebellion.

Mr. Justice Nelson observes that “ This act of Congress recognized a state of civil war between the government and the confederate States, and made it territorial. ’ The act of Parliament of 1776 which converted the rebellion of the colonies into a civil territorial war, resembles, in its leading features, the act to which we have referred. Government in recognizing or declaring the existence of a civil war between itself and a portion of the people in insurrection usually modifies its effects with a view, as far as practicable, to favor the innocent and loyal citizens or subjects involved in the war.”

*357From the foregoing it must inevitably follow that a state of war cannot exist between the United States and a foreign government or the United States and a portion of its own citizens, until a state of war is recognized by the war making power, which by our constitution is lodged in the Congress of the United States. It would thus appear that war under our system of government can exist only by act of Congress, which requires the action of two of the great departments of the government, the Executive and Legislative.

The insurrection in the Southern States did not therefore, before the passage of the act of Congress of July 13, 1861, attain to the dignity of war. This not only follows from our system of government, but the rule thus established commends itself to our good judgment as establishing a fixed and certain point of time, when every man may know when his engagements with the residents of' the districts in insurrection are dissolved by the mere force of the insurrection or war itself.

If any other rule is adopted, every person who may be engaged in business in that portion of the country in insurrection or who may have commercial relations with the residents of such districts, would be entirely at a loss to determine when commercial intercourse with the residents of the insurrectionary district became unlawful and when his engagements with such residents had become suspended by reason of such insurrection. He would be left to grope his way in the dark, without any guide whatever to aid him. It is not the policy oí the law to adopt a rule which involves uncertainty when preciseness can be as easily attained. The justice of the rule laid down by Mr. Justice Nelson commends itself to us, not only because it is most in accordance with the theory of our government, but also because it is the one which'will enable every man to act with certain knowledge as to the effects of his acts, and to ascertain when his commercial intercourse with the people in insurrection is illegal.

Applying these principles to the case now under consideration, it will be seen that the defendant Matthews is liable as a member of the firm of Brander, Uhambliss and Co., upon the draft for $8,050.06 dated New Orleans, April 23d, 1861, but *358that this firm being dissolved by the recognition by Congress of the existence of a state of war between the United States and the State of Louisiana and other Southern States, he is not liable upon the .other drafts and the note mentioned in the complaint. The judgment must be reversed with costs to abide the event unless the plaintiff stipulates to reduce his judgment to the amount of the first draft, in which case judgment is affirmed. ■

Judgment accordingly.