
    LAPENE AND FERRE’S CASE. Jules Lapene et al., appellees, v. The United States, appellant.
    (6 Court of Claims R., 363; 17 Wallace R., 601.)
    
      On the defendant's Appeal.
    
    
      In 1862, all of Louisiana being within the Confederate lines, merchants in New Orleans send their cleric into the interior to collect debts and purchase cotton. They also transmit to him funds for the same purpose. Subsequently, Neto Orleans is captured and held by the United States, leasing the cleric within the Confederate and the principals unthin the United States lines. While thus separated, and xoithout any communications passing between them, the clei-lc, pursuant to his previous instructions, collects debts and purchases cotton for Ms principals. The funds transmitted, and collected, and usedin the purchase, were ■Confederate notes. The cotton is captured. The merchants bring suit to recover 
      
      the proceeds thereof in the Treasury. The court baloto decides that such a purchase, through an agent, pursuant to previous instructions, is not commercial intercourse across the military lines, nor between the residents of loyal or disloyal States. Judgment for the claimants. The defendants’ appeal.
    
    Where merchants residing in New Orleans send an agent, while the city is held hy the rebel forces, into the interior, to collects debts and purchase cotton for them, and subsequently the merchants pass within the United States lines by the capture of the city while the agent continues within the Confederate lines, the agency to purchase cotton is at an end, and subsequent purchases, though made with Confederate notes, are illegal and void, so that the merchants cannot acquire title to the cotton, and cannot maintain a suit for the i>rocoeds under the Abandoned and Cap-twed Property Act, through the agency to receive payment of the debts due may have continued.
    
      Miller and Field, JJ., dissenting.
    
      The llefortcnf statement of the ease :
    The facts found in the court below are fully set forth in the opinion of the Supreme Court.
    
      Mr. W. Venn Clarice for the claimants, appellees :
    The record'shows that the appellees, prior to and during the war, were merchants in the city of New Orleans, and that in February, 18 G2, while the whole territory of the State of Louisiana was in the possession of the rebels, they sent one of their clerks into the interior of the State to make collections of money due them there, with authority to purchase sugar and cotton for the firm. A little later, in March or February, they forwarded to this clerk, by one Avegno, the sum of $4,000 or $5,000, and requested him to assist the clerk iu making the said purchases of sugar and cotton. Avegno did pay over to the clerk of the appellees the sum of $5,000, and assisted him in buying for them the articles named. All this transpired before the capture of New Orleans, and while the whole State was rebel territory. So far there can be no pretense that there was anj"-tbing illegal in the transaction. All the parties were within the rebel lines, and, so far as appears, all were citizens or residents of the State of Lousiana. The agency thus created was strictly legal. It conflicted neither with the statute law nor the laws of war; and if it ever became illegal, it became so by the subsequent events, over wbicb the appellees and agents had no-control. In the case at bar, the parties all residing in a State in insurrection, according to the case first cited, were left entirely unrestricted in their right to trade. The agent was sent into the interior of the State primarily to collect debts, by the purchase, in payment of such indebtedness, of the products of the country, and in order to facilitate such collections he was furnished with funds. It is shown that the cotton was bought in small lots, and from the well-known mode of dealing in the South, by which merchants advance to planters on their crops, it is a fair inference that the cotton, was thus received in payment of debts due, the agent paying any difference between the amount of the indebtedness and the value of the crops. The funds were sent for the purpose of carrying out the primary object.of the agent’s business, and the whole transaction was a strictly commercial business — an attempt to close up a mode of dealing which existed prior to the commencement of hostilities. So, as between the principals and the agent, the agency was created before the war began, that is to say, before the territory of Louisiana was divided by the lines of the Union Army. If the principals had been in the interior of the State, where the agent then was, when New Orleans was captured, they could themselves legally have bought the cotton, and the agent, being there in violation of no law, and having had no illegal intercourse with them, was in no way disqualified from making the purchases for them. The agent and the property both were within the rebel lines until after the purchase, and both remained there until the Union forces penetrated the interior of the State, and thus brought the parties into lawful relations with each other. Thus the case is clearly within the principles above quoted, which are recognized in the Grossmayer Case.
    
    The two cases relied upon by the appellant are widely different from the case at bar. In the first case, the agency was created after the commencement of the war, and in clear violation of the Non-intercourse Act; and in the other, the right of the agent to act was not only questionable, but at the time of the pretended sale both the owner and the property were in the hostile territory. In the case at bar, the principals, the agent, and the property, and its owners, were all lawfully within the territory controlled by the rebel forces. They possessed the unrestricted right to trade. When the agent was appointed, there was no legal obstacle in the way. He was sent out to close np commercial- transactions, and to receive payment in money or property. By the action of the military forces he is cut off from his principals — an event not contemplated when he left New Orleans. By this action of the Army, the agent and his principals are placed in an attitude of hostility, and they hold no intercourse. And thus the very case arises which is recognized by Justice Strong in Montgomery’s Case, when he says: ‘‘A resident in the territory of one belligerent may have, in times ofwar, an agent residing in the territory of the other belligerent, to whom his debtor may pay the debt or deliver property in discharge of it. Such payments or deliveries involve no intercourse between enemies.”
    
      Mr. Solicitor-General Phillips for the United States, appellants :
    After thé capture of New Orleans, its inhabitants became, in law, enemies of the inhabitants of the parishes beyond the military lines of the United States. If, in point of fact, an instance of commercial intercourse occurred between these parties, respectively, the court will mark it as an instance of unfaithfulness to paramount public interests, and refuse to enforce any relation supposed to arise therefrom. To this general rule there is an exception, which is supposed by the court below to cover the case here. It is said that commercial business may be transacted between a citizen and a resident agent of a nonresident alien enemy, provided that such agent were appointed before the beginning of the war. We submit, that upon principle as well as authority, this exception is limited to the winding up of commercial relations antedating the war, and does not cover cases of a general running commercial business begun before the war. The leading American case upon this general question, Griswold, v. Waddington, (15 Johns., 57, and 1G Johns., 438,) decided that point upon principles which apply to running commercial transactions under any sort of agency; which principles, however, do not prevent the winding up of a partnership or the continuance of an agency limited to the settlement of existing relations. Authorities , impose a similar restriction upon this exception. In Grossmayer’s Case, (7 O.Cls. It., 129,) which was one of an appointment of an agent to receive a debt made after the war began, this court said, with caution : “ We are not disposed to deny the doctrine that a resident' iu 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 coulcl pay Ms debt in money, or deliver to Mm property in discharge of it.” In Montgomery’s Case, (8 C. Cls. R., p. 82,) one Burbridge, residing in New Orleans after its capture, as agent (created before the war) of Johnson, then within the enemies’ lines, sold to Montgomery, also resident at New Orleans, a large quantity of sugar, &c., at that time in Johnson’s hands. This sale was held to be void, the court laying down the exception to the general rule in the words previously used in Grossmayer’s Case, given above. We submit that Montgomery’s Case is in point here, as well for the principle of the decision as for the terms in which. the exception to the rule is laid down. That the eolleeting part of the clerk’s business continued to be legitimate after the capture is of no consequence, as the whole transaction of purchase is contaminated by that part of it which was illegal.
   Mr. Justice Hunt

delivered the opinion of the court:

This is an appeal from the Court of Claims. The facts neces-essary to be considered are the following, as found by that court:

<c On the 20th of February, 1862, while Louisiana was in the possession and under the control of the rebels, the claimants sent their traveling clerk from New Orleans into the interior of Louisiana, viz, the parishes of St. Martin and St. Landry, to collect moneys due them there, and gave him authority to purchase sugar and cotton for them.

“In March or April, 1862, the claimant, Lapene, requested one Avegno, who was then going from New Orleans to said parishes, to remit to the said clerk the sum of $4,000 or $5,000, and to assist said clerk in the business of buying sugar and cotton, which the said Avegno agreed to do, and, in pursuance of that agreement, delivered to said clerk, at New Iberia, in the parish of Iberia, then in the possession and under the control of the rebels, $5,000, consisting of ‘bank-notes, confederate money, and shin-plasters.’

“ While the said clerk and the said Avegno were in said parishes of St. Martin and St. Landry, viz, on the 27th day of April, 1862, the city of New Orleans ivas captured by the United States forces, and thenceforth through the whole period of rebellion was held 'by those forces.

“After said capture, the cotton, for tbe proceeds of which this suit is brought, was purchased by the said clerk with the said sum of $5,000 and other moneys collected by him in the said parishes, which parishes were, when the purchases were made, in the possession aud under the control of the rebels. It was purchased in nine or ten small lots, and left at the places whore it was purchased.

“The said clerk returned from those parishes to New Orleans on the 14th of July, 1862. There is no evidence of any communication having been had between him and the claimants, in relation to the said purchases of cotton, between the capture of New Orleans and the clerk’s return to that city, except the aforesaid delivery to him by Avegno of the said $5,000.

“ The cotton so purchased remained at the points at which it was purchased until April and May, 1863, when, it was captured by the United States military forces and shipped to and received by Col. S. B. Holabh’d, chief quartermaster, of Ike Department of the G-ulf, at New Orleans.”

The Court of Claims adjudged that the plaintiffs were entitled ' to the net proceeds of the cotton so seized by the United States.

All commercial contracts with the subjects or in the territory of the enemy, whether made directly by one in person, or indirectly through an agent, who is neutral, are illegal and void. This principle is now too well settled to justify discussion. (Woolsey, International Law, s. 117; Montgomery v. United States, 15 Wall., 395.) No property passes and no rights are acquired under such contracts.

In March, 1862, the whole of the State of Louisiana was in the military possession of the confederate forces. Intercourse between the inhabitants of the different portions thereof was legal, and contracts made between them were legal.

On the 27th of April, in the same year, the city of New Orleans was captured by the military forces of the United States, and thereafter remained under their control. From that time commercial intercourse between the inhabitants of that city and the inhabitants of other portions of the State of Louisiana which remained under the confederate rule became illegal. Ordinarily the line of non Intercourse is the boundary line between the territories of contending nations. The recent war in the United States was a civil war, in which portions of the same nation were engaged in hostile strife with each other. The State of Louisiana, although one of the United States, was under the control of the confederate government and their armies, an d was an enemy’s country. While the city of New Orleans was under such control it was a portion of an enemy’s country. When that city was captured by the forces of the United States, the line of non-intercourse was changed, and traffic before legal became illegal. This line was that of military occupation or control by the forces,of the different governments, and not that of State lines. This principle was expressly decided in Montgomery’s Case, above cited. There the cotton sold was in the parish of La Fourche, a parish of the State of Louisiana, and belonged to JohnsoD, an enemy domiciled in an enemy’s country, to wit, the parish of La Fourche, in the same State. The sale was made by an agent of Johnson, in the city ■of New Orleans, to Montgomery, a British subject. This court held the sale to be void, and that no title passed to Johnson.

Like that in Montgomery’s Case, the agency here was created while it was legal to create an agency. In each case, also, existed the important fact that the transaction of purchase took place after the parties became residents of hostile portions of the same State. Burbridge was appointed the agent of Johnson in Montgomery's Case, as was the agreement in this case made with Avegno, and the money advanced by him, while the parties were all residents of and under the control of the confederate government. But the cotton was sold by Burbridge, •as here the cotton was purchased by the clerk, after this relation had ceased. In each instance the purchase of the cotton was a transaction with an alien enemy.

The agency to purchase cotton was terminated by the hostile position of the parties. The agency to receive payment of debts due to Lapene & Co. may well have continued. But Avegno was no debtor to that firm. He advanced money to their agent when it was legal to do so. With this money, and other moneys belonging to them, while in an enemy’s country, the agent of the plaintiffs bought the cotton in question. This purchase gave effectual aid to the enemy, by furnishing to them the sinews of war. It was forbidden by the soundest principles of public law. The purchaser obtained no title to the cotton, and has no claim against the Government for its capture.

The judgment of the Court of Claims must be reversed.

Dissented, Mr. Justice Milled. and Mr. Justice Field,  