
    WHITFIELD’S CASE. Gaios Whitfield v. The United States.
    
      On the Proofs.
    
    
      The claimanl, residing in the insurrectionary distriol, sells cotton to the Confederate'government., and receives 8 per cent. C. S. bonds in payment. Tie retains the cotton not as security, hut subject to future delivery. While still in his possession the war ends. In September, 1865, a Treaswry agent seines it. The claimant remonstrates. He is employed by the Treasury agent to put it in order, and receives one-third for his services. He now brings his suit as owner of th e rent aining two-thirds for th e proceeds in the Treasury.
    
    A vendor who sold cotton to the Confederate government, which remained ■ in his possession till the end of the war and was then captured, cannot maintain a suit for the proceeds in the Treasury on the ground that the Confederate government became insolvent, that he still holds its bonds unpaid, and that he exercised the right of stoppage in transituA
    
      The Reporters’ statement of tbe case:
    In. this case the court found the facts to be as follows:
    The claimant was, during the war of the rebellion, a resident of Marengo County, Alabama.
    While said war was in progress, he sold to the so-called Confederate States of America 177 bales of cotton, agreeing to accept in payment therefor eight per cent, bonds of said Confederate States, and retaining possession of the cotton, subject to future delivery. The price for which the cotton was sold was $15,651.60, which was paid to claimant by a cotton agent of the Confederate government in January, 1865, on a certificate previously given to claimant, the terms of which do not appear. The said payment was made by delivering to claimant bonds, of the description aforesaid, to the amount of $15,500, and paying- him $113.72 in confederate money, and charging him with $37.88 interest, which sums together made the aforesaid amount of the price of the cotton. Upon what the charge of interest was made against bim does not appear. The said cotton agent, at the time of said payment, made a memorandum on the bonds showing the 'mode of the settlement. The claimant kept the bonds aforesaid in his possession, and at the trial of this case produced them in open court.
    The said bonds were of the amounts, dates, and times of maturity as follows: Fifteen, of five hundred dollars each, dated March 3, 1863, and payable to bearer on the first day of July, 1868; one of five hundred dollars, dated January 15,1863, payable to bearer on the first day of January, 1880; and five of one thousand dollars each, dated January 15, 1863, payable to bearer on the first day of January, 1871; all with coupons attached for the interest.
    The said cotton remained in claimant’s possession till about the first of September, 1865, when it was seized by Leslie Ellis, an assistant special agent of the Treasury Department of the United States. Upon the claimant’s remonstrating against the seizure, and appealing to the supervising special agent, that officer authorized said Ellis to. contract with claimant for the putting of said cotton in good order and the delivery of two-thirds thereof to said Ellis for the United States, the claimant retaining one-third thereof. In pursuance of this authority the said Ellis, on the 13th of November, 1865, directed the claimant to deliver to the captain of the steamer Huntsman 118 bales of Government cotton, being so much of the said 177 bales, which was done the next day; when the said Ellis delivered to claimant a receipt therefor in the following terms:
    «Office Assistant Supervising- Special Ag-ent,
    ' «Demopolis, November 14, 1865.
    « Received of Col. Gaius Whitfield one hundred and eighteen (118) bales Government cotton, being two-thirds (§ds) of the amount of his indebtedness to the' Government, as per contract with Joseph R. Dillin, supervising special agent; and Mr. Whitfield is now released of all obligations for cotton sold to the so-called confederate government.
    “LESLIE ELLIS,
    
      «Assistant Supervising Special Agent Treasury Department.”
    The said'118 bales of cotton were shipped to New York, and sold by Simeon Draper, cotton agent of the United States, and the net proceeds thereof, amounting- to $14,817.26, paid into the United States Treasury.
    Upon the foregoing facts the court holds, as a conclusion of law, that the sale of the cotton in question by the claimant to the so-called Confederate Statesof America divested the claimant’s title thereto, and that he was therefore not the owner of the cotton when it passed into the possession of the agent of the Treasury Department, and is therefore not entitled to recover the proceeds thereof.
    
      Mr.\P. Phillips for the claimant:
    Long after the war had closed, to wit, in September, 1865, the agent of the Treasury sent a mili tar y force to claimant’s plantation , which seized and carried away 177 bales of his cotton. By a subsequent arrangement one-third of this was returned to him, to wit, 59 bales. The remaining 118 bales were sold by the agent and the proceeds paid into the Treasury, to wit, $14,817.26, stated by the Secretary. In filing his petition the claimant has frankly-stated all the facts, to wit, that he had agreed to sell this cotton to the Confederate States; that he had received therefor a certificate for bonds, and subsequently the bonds themselves. These bonds are filed in court, and their identity is proven.
    Wehave, then, this case: A vendor of personal property, who had received the bond of the vendee for the purchase-money, but who had never parted with the actual possession of the property; the vendee becomes utterly insolvent; the bond given by him is still in the possession of the vendor, ready to be tendered to him. Can the vendee, or any one claiming through or under him, lawfully take possession of the property without payment of the purchase-money ? When a government enters into a contract of purchase or other mercantile operation, it puts off its sovereignty, and in such transactions its rights and obligations are regarded in court as standing on no higher grounds than like transactions between individual citizens. (United States v. Barker, 12 Wheat., p. 559; United States v. Bank of the Metropolis, 15 Pet., p. 337; Bank United States v. United States, 2 How., p. 711; Swain v. United States, Dev. C. Cls. B., p. 35; Gilbert y. United States, 1C. Cls. B., p. 28; Curtis v. United States, 2 C. Cls. B.,p. 144.) So if the United States take lands within a State to secure a debt, it holds it as any other corporation, an d cannot clai m the immunities of a sovereign in respect thereto. Elliott v. Van Voorst, (3 Wall., Jr., C. C.) So the United States, as owners of property, have the same rights and remedies, and are subject to the same liabilities, as natural persons. (858 Bales of Cotton, Blatch. Pr. Ca., p. 325.) So if the Government purchase avessel for the revenue service, it takes subject to existing liens, which may be enforced by the ordinary method. {Fox v. Revenue Cutter, 8 Am. L. Rep., p. 459; 21 L. Rep., p. 281.) So a lien may be asserted as against the Government in the absence of any positive law to the contrary. The rights of the Confederate government, as purchasers, passedtotheUnited States, but with them also passed its obligations. The obligations of the vendor to the Confederate government have been transferred to the United States, but in the assertion of those ■obligations the United States are bound to respect all the rights and liens which the law has conferred upon the vendor. It is admitted in the discussion that when the terms of a sale are .agreed on, and everything the seller has to do with the goods is complete, the contract of sale becomes absolute between the parties without actual payment or delivery, and the property and the' risk of accident to the goods vest in the buyer. When the sale is for cash the vendee, though he acquires a right of property by the contract of sale, does not' acquire the right of possession until he pays or tenders the price. When the sale is on a credit the vendee, in the absence of stipulation, is entitled to immediate possession, as the right of possession and the right of property vest at once in him. But this doctrine is subject to the important qualification that this right of possession is not absolute, and toill be defeated if the buyer becomes insolvent before he obtains the actual possession. For though the buyer has the property vested in him, so as to subject him to the risk of any accident, he has not an indefeasible right to the possession; and his insolvency, without payment, defeats that right equally after the transits has begun as before the seller has parted with the actual possession. Bloxham v. Saunders, (6 Barn. & Ores., p. 941.) Says Shaw, C. J.: “ íhere is manifestly a marked distinction between those acts, which, as between vendor and vendee, go to make a constructive delivery, and vest the property in the vendee, and that actual ■delivery which puts an end to the right of the vendor to hold the goods as security for the price.” (Arnold v. Delano, á Gush., p. 38.) We trace this right in the foundations of the civil law, where it is declared that “ if the seller is in manifest danger of losing the price, through the insolvency of the buyer, or for other causes, he may keep the thing sold, by way of pledge, until the buyer has given him security for payment.” (2 Dom. O. L., p. 206.)
    There is a strong leaning in the courts to enforce this right. “It is a leaning,” says Lord Kenyon,“in furtherance of justice.” {Northey v. Meld, 2 Esp., p. 613.) In .another case it is said that the right is based “ on the plain reason of justice and equity, that one man’s goods shall not be applied to the payment of another man’s debts.” {IPAguila v. Lambert, 2 Eden, p. 77.) Again, it is declared that “ this right does not depend on the fact that the vendor, having parted with the lien, may get it back if he can stop the goods in transitu; but it is described as a right arising out of Ms relation to the goods, quasi vendor, which is greater than a lien. Factors are entitled to liens, but they have no right of stoppage.” (Kinloch v. Craig, 3 T. K>., p. 119.) It may, perhaps, be proper to refer to the leading case of Mason v. Lickbarrow, (1H. Black., p. 357,) in which this right of the vendor is very fully described by Lord Loughborough, whose decision has been followed in England to this day, and is fully sustained by the American authorities. “ I take it,” says he, “to be a clear proposition, that the vendor of goods not paid for may retain possession against the vendee, not by aid of any equity, but on grounds of law. Our oldest books consider the payment of the price, day not being given, as a condition precedent, and implied in the contract of sale. If day had-been given for the payment, and the vendee could have sustained an action of trover against the vendor, the price unpaid must be deducted from the damages, in the same manner as if he had brought an action on the contract for non-delivery. The sale is not executed before delivery; and in the simplicity of former times a delivery into the actual possession of the vendee was always supposed. A destination of the goods by the vendor to the use of the vendee, the marking them or making them up to be delivered, the removing them for the purpose of being delivered, may all entitle the vendee to act as £ owner,’ to assign or maintain an action against a third person into whose hands they may have come. But the title of the vendor is never 
      
      entirely divested until the goods have come into the possession of the vendee. He has, therefore, a complete right, for just cause,. to retract the intended delivery, and stop the goods in transitu. The cases in our courts of law have confirmed this doctrine, and the same law obtains in other countries.” Nor is the right of the vendor affected by the fact that he had received the note or bond of the vendee in payment of the price.
    It is said by Gibson, Oh. J., one of the ablest judges that this country has produced, that “ nothing but an extinguishment of the debt is satisfaction between the buyer and seller. A power to check for a deposit in bank would not be payment, to suspend the vendor’s right. The liability on the original contract is not supplanted by a security given for the price, as is instanced by the buyer giving his own note or bill, which, though it operates as an extension of credit, extinguishes not the original contract, nor are the bills of a third person an absolute satisfaction unless declared to be so by the terms of bar-gainP (Bell v. Moss, 5 Whart., p. 204.) In the sale of real estate, the lien for purchase-money is asserted even as against third persons. The purchase-money is regarded as a valid in-cumbrance, attaching to the property. We do not think any distinction should now be maintained in the application of this principle to personal estate, so long as the question rests solely between the vendor and the vendee.
    But, however this may be, there is no authority remembered which marks any difference between real and personal property as to the effect on the vendor’s lien in accepting the bond or bill of vendee in payment. Still farther: this right is held to be unaffected even by part payment of the price, and the acceptance of a bill of exchange which has been indorsed over to a third person. (.llsly v. Stubbs, 9 Mass., p. 69; Neioall v. Vargos, 13 Maine, p. 93; Donath v. Broomhcnd, 7 Barr., p. 301; Frese v. Wray, 3 Bast., p. 93; Fdioards v. Brewer, 2 M. & W., p. 375; Miles v. Groton, 2 G. & M., p. 511.) Nor is the vendor’s lien lost by an express agreement with the vendee that the vendor will retain the goods for him, either with or without rent. In the case of Toionley v. Crump, (4 Ad. & Ellis., p. 63,) a party, having goods in his warehouse, sold them, and gave the vendee the following order: “We hold to your order 39 pipes, &c., rent free to the 25th of November next.” In this case, there was-also proof of a usage that such an order in the hands of the-
    
      vendee would enable him to obtain credit as having the possession of the goods. The goods remained in tbe warehouse until the purchaser became bankrupt. Trover was brought by the as-signee in bankruptcy, and the plaintiff’s counsel relied on the decision of Story, J., made on the circuit, in Berret v. Goddard, (3 Mass., p. 107.) After a C. A. V., Lord Tenderden, C. J., held that the lien was not lost. “ Cases,” said he, “ have been cited, but none where the question arose between the original vendor and vendee.”
    In Miles v. Groton, (2 C. & M., p. 511,) the goods were sold under an invoice, which expressed that they remained with the vendee at rent. The vendor also accepted a bill of exchange for the price, drawn by the vendor — the bill he had negotiated. While the bill was running, the vendee sold apart, and' gave an order on the vendor for the same. The vendor delivered this part to the subvendee, and charged him the proportionate rent. Subsequently the vendee became bankrupt, the bill was dishonored, and the assignee in bankruptcy brought trover to recover the property. Bailey, B., said: “ It is insisted that the hill is still outstanding. That is true, and it may perhaps operate to prevent the seller from having a complete right to the goods, so as to be able to give a valid title by re-selling to a third party. But the only question in the present caséis whether hekad not the right to hold them until the price is paid. But it is said that the warehouse rent was charged upon these goods. I am of the opinion this fact malees no difference.” After distinguishing this from the case of Surry v. Mangles, (1 Camp., p. 442,) the decision proceeds: “ Here the effect is not to make (as has been argued) the warehouse of the vendor the warehouse of the vendee, but to make it a part of the contract that the goods were not to be delivered, until not only the price but the rent is paid.” Vaughn, B.: “It is said that the warehouse rent makes a difference and constitutes a delivery. In Winlces v. Sassals, (9 Barn. & Cres., p. 372,) Mr. Justice Littledale said: ‘The charge of warehouse rent does not, I think, constitute such a delivery as to give a plaintiff the right to maintain an action.7” Gurney, B., concurred.
    ;;f>' Again, though the general rule is that, when once the actual possession is delivered, the vendor’s lien is extinguished, the •law so highly favors the equity of this lien, that where the possession had actually passed, and the vendor, by a tort, retakes the possession, he is still protected for the unpaid purchase-
      money. In such a case of tortious retaking, the vendee may bring his action of trespass or trover, but the decisions limit his recovery of damages by the deduction of the amount of the unpaid purchase-money. (Stephens v. Wilkinson, 2 B. & Adol., p. 320; Page v. Gowasjee, L. E. 1, P. C., App., p. 127.) These decisions would seem fully.to warrant the assertion, that in the case stated, tried by the most technical rules, the proprietary interest of the vendor remained with the possession, and that the bankruptcy of the confederate government, the purchaser, entitled the vendors to retain their property, aud that, as against it, as well as the Government of the United States, its successor, the vendors cannot be deprived of their property without payment. As this cotton was neither captured nor abandoned there was no authority in the agents of the Treasury to seize it, and they might have been sued as trespassers, and the whole value of the cotton recovered. But the 3d section of the Act 21th July, 1868, exempts such, agents from action, when acting under color of authority of the Act 12 th March, 1863, and gives this court exclusive jurisdiction of all claims arising from such seizure, and confines the claimant’s recovery to the. net proceeds in the Treasury.
    
      Mr. Alexander Johnston (with whom was the' Assistant Attorney-General) for the defendants.
    
      
       But inasmuch as Peale and Noü, JJ., did not take part in the decision, while Zoring, I., dissented, and Milligan, J., concurred “ with hesitation and doubt,” no point cm be deen ed to ha-\ o hem detem ined by this case.
    
   Dbake, Oh. J.,

delivered the opinion of the court:

In'his petition, the claimant avers that he was the owner of the cotton, the proceeds of which are heroin claimed; but at the trial the case was not rested upon the mere ground of ownership. The sale of the cotton by him to the rebel government was not denied; but it was insisted that he has a legal right to reclaim the proceeds thereof, because, after the sale and before the cotton came into the possession of the agents of the United States, the rebel confederacy became insolvent, and therefore the bonds received by him in payment for the cotton were valueless, and he therefore has a right of stoppage in transitu to enforce his lien as a vendor for the unpaid purchase-money.

This is a new application of the doctrine of stoppage in trans-itu. We have always supposed that the right existed only as to the goods sold, and have not before known it to be claimed to extend to the proceeds of the property after its conversion into money by the vendee or those claiming under him.

The right of stoppage in transitu is, moreover, a right growing out of contract. This court has no jurisdiction of any contract but such as the United States have entered into; but here is an attempt to enforce in this forum a contract alleged to have been entered into between the claimant and the rebel government. Of such contracts this court has no jurisdiction.

The right to enforce a vendor’s lien for the purchase-money of personal property sold rests upon the vendor’s not having been paid for the property. If he has been paid for it, there is no lien, and hence no right of stoppage. If the vendor knowingly accepts in payment that which is worthless, or accepts that which is at the time of value but afterward becomes worthless, he does not in either case, by the fact of worthlessness, acquire a right to reclaim the property sold.

It seems clear to us that the claimant had sold the cotton in question, and received payment in full for it according to his own agreement with the rebel government. When it was captured, he was holding it “subject to future delivery,” that is, subject to delivery whenever called for by that government; and if it had been so called for, he could not have withheld delivery. While the property was in this condition, the United States succeeded, by conquest, to all the rights of property of the rebel confederacy, and in virtue of that succession was entitled to seize this cotton and to sell it. And it is clear, from his own acts, that the claimant did not consider himself the owner of it, for he agreed with the United States Treasury agent to put the 177 bales in order, and receive one-third thereof as compensation for his services in that regard.

The petition of the claimant must be dismissed.

Milligan, J.,

concurring:

The legal question presented in this record is of great delicacy and interest, and, under the English authorities, when viewed purely as an individual and commercial transaction, the-decision, as it seems to me, ought to be for the claimants. But as the record presented to us involves, in some degree, the right of the National Government to succeed to the movable property controlled by the Confederate States for war purposes at the time of their overthrow, I yield to the opinion just read by the Chief Justice, but with hesitation and doubt.

Boeing, J.,

dissenting:

I think this case is within the rule of commercial law shown by the English and American authorities cited by the learned counsel for the petitioner.

And that rule is that, in a sale of specified goods on credit or for negotiable notes, bonds, &c., on time, the insolvency of the buyer before the notes, bonds, &c., are due or negotiated authorizes the seller, if in possession of the goods, to retain them as security for the price.

This rule transcends the rule of the common law, that gives an unpaid vendor a lien for the price, because it acts where both the right of property and the right of possession have vested in the buyer; and it differs from the right of stoppage ira trcms-iiu, because it acts only when the seller has retained the actual possession of the goods, while the right of stoppage in transitu .acts only when the seller has parted with the actual possession ■of the goods.

The rule is referred in the books to the civil law, as are many of the rules of our commercial law, and it arose from the system of sales on credit and for negotiable instruments, which created commerce. And the reason of the rule is, that a sale on credit implies between the parties that the buyer shall keep his credit good for the transaction in reference to which the credit is given; so that the unpaid vendor has a stronger equity .against the goods still in his hands than the creditors of the buyer in other transactions. ^

Of the cases cited in the argument on this point that most analogous to this is the case of Arnold v. Delano, (4 Cush., p. 33,) in which the opinion of the court was read by Chief Justice Shaw, whose professional practice and whose judicial eminence belonged especially to commercial law.

In that case the defendant, Delano, sold sixty-five cords of wood, which were on his laud, and part of a larger quantity, to Sowerby & Grant; the wood was piled, measured and staked off, to show the extent of the sixty cords, and a negotiable note, at six months, was given for the price, and a bill of sale of the wood was given by the seller, receipted thus : u Received payment by note at six months, at Northampton Bank.” And it was agreed that the buyers might remove the wood at their convenience at any time within a year.

Afterward Sowerby & Grant, the buyers, dissolved partnership, and Sowerby assumed the debts and took, by transfer, the property of the firm ; and before the woo.d was removed or the note was due or negotiated he became insolvent. His assignee in insolvency brought the suit for the wood, and the seller claimed the right to retain it till payment or its equivalent.

Chief Justice Shaw thus states the legal result of the facts and the question raised by them :

“In the present case the wood was marked off and identified, and the vendees had a license for one year to come on the vendor’s land and to take it away. This was a complete sale, and a constructive delivery, to vest the property in Grant and Sow-erby ; and on their dissolution and transfer it vested in Sow-erby, and by the assignment in his assignee. Then the question is, whether the defendant had, under the circumstances, a lien for the price, and we think he had.”

And the chief justice proceeds to argue on the facts thus : “ The vendees did not enter and take the wood; it remained on the vendor’s land and in his possession in the same manner as before and at the time of the sale. The vendor acted in no new capacity; he was to receive nothing for the keeping; he was precisely in the condition of a vendor who has not parted with' the possession and custody of the goods sold. And this was the state of things when Sowerby went into insolvency, upon which event we think the vendor was remitted to his right to keep possession of the wood as a security for the price. Such a vendor in possession is regarded as having a higher equity to-retain for the price than the assignee of a debtor who has not paid for the property has to claim it for the general creditors.”

And the chief justice states the abstract rule of law thus : “ The law, in holding that a vendor who has thus given credit for goods waives his lien for the price, does so on one implied condition, which is, that the vendee shall keep his credit good. If, therefore, before payment, the vendee becomes bankrupt or insolvent, and the vendor still retains the custody of the goods or any part of them, * * * then his lien is restored, and he may hold the goods as security for his price.”

In the case cited and in this before us the material facts were the same; in both the sale was complete and the property vested in the buyer, and the negotiable paper given was secured expressly as payment. In both the property sold was in the possession of the vendor, free of rent and subject to the disposition of the buyer, who could immediately, and before the paper given had become due, have taken it into his possession, and in both he became insolvent before the paper given in payment became due.

And on the rule of law affirmed iu the case cited, I think that the petitioner, on the insolvency of the Confederate government, had the right to hold the cotton against them as security for the price, and that he has the same right as against the United States, claiming as successors of the Confederate government.

And I think it immaterial that, in arranging the payment by the bonds with the Confederate government, a small sum was paid in cash to the petitioner. The bonds were on interest, and when the January coupons were detached did not make the precise price of the cotton, and the money was paid to make tip that price precisely, and this fractional payment could not of itself entitle the Confederate government, after its insolvency, to the delivery of the cotton sold to them.

And I think it immaterial that, after the cotton was seized, it was agreed between the agent of the Treasury Department and the petitioner that the latter should put the cotton in order for sale. Such arrangement grew out of the circumstances of the case.

The cotton had been seized, and the petitioner had notified the Department of his claim in July, 1865. In September, 1865, the cotton was not to be returned to him, but was to be sold under the statute, and its net proceeds paid into the Treasury, and the title to those adjudicated here. It was for the interest of both parties that the cotton should be put in order for sale, and under the arrangement made, if the claim of the petitioner was sustained here, he would have put his own cotton in order at his own cost. If the title was adjudged in the United States, they would have paid the petitioner for the service received from him. The arrangement made, therefore, was a consequence of the petitioner’s claim, and not evidence of its abandonment.

Nott, J., did not sit in this case, and took no part in the decision.  