American Insurance v. 356 Bales of Cotton

26 U.S. 511 (____) 1 Pet. 511

THE AMERICAN INSURANCE COMPANY, AND THE OCEAN INSURANCE COMPANY, (OF NEW-YORK,) APPELLANTS,
vs.
356 BALES OF COTTON, DAVID CANTER CLAIMANT AND APPELLEE.

Supreme Court of United States.

The case was argued by Mr. Ogden for the appellants, and by Mr. Whipple and Mr. Webster for the claimants.

Mr. Ogden &mdash.

Mr. Chief Justice MARSHALL delivered the opinion of the Court. —

The plaintiffs filed their libel in this cause in the District Court of South Carolina, to obtain restitution of 356 bales of cotton, part of the cargo of the ship Point a Petre; which had been insured by them on a voyage from New-Orleans to Havre de Grace, in France. The Point a Petre was wrecked on the coast of Florida, the cargo saved by the inhabitants, and carried into Key West, where it was sold for the purpose of satisfying the salvors; by virtue of a decree of a Court, consisting of a notary and five jurors, which was erected by an Act of the territorial legislature of Florida. The owners abandoned to the underwriters, who having accepted the same, proceeded against the property; alleging that the sale was not made by order of a Court competent to change the property.

David Canter claimed the cotton as a bona fide purchaser, under the decree of a competent Court, which awarded seventy-six per cent. to the salvors, on the value of the property saved.

The District Judge pronounced the decree of the territorial Court a nullity, and awarded restitution to the libellants of such part of the cargo as he supposed to be identified by the evidence; deducting therefrom a salvage of fifty per cent.

The libellants and claimant both appealed. The Circuit Court reversed the decree of the District Court, and decreed the whole cotton to the claimant, with costs; on the ground that the proceedings of the Court at Key West were legal, and transferred the property to the purchaser.

From this decree the libellants have appealed to this Court.

The cause depends, mainly, on the question whether the property in the cargo saved, was changed by the sale at Key West. The conformity of that sale to the order under which it was made, has not been controverted. Its validity has been denied, on the ground that it was ordered by an incompetent tribunal.

The tribunal was constituted by an Act of the territorial legislature of Florida, passed on the 4th July 1823, which is inserted in the record. That Act purports to give the power which has been exercised; consequently the sale is valid, if the territorial legislature was competent to enact the law.

The course which the argument has taken, will require, that, in deciding this question, the Court should take into view the relation in which Florida stands to the United States.

The Constitution confers absolutely on the government of the Union, the powers of making war, and of making treaties; consequently, that government possesses the power of acquiring territory, either by conquest or by treaty.

The usage of the world is, if a nation be not entirely subdued, to consider the holding of conquered territory as a mere military occupation, until its fate shall be determined at the treaty of peace. If it be ceded by the treaty, the acquisition is confirmed, and the ceded territory becomes a part of the nation to which it is annexed; either on the terms stipulated in the treaty of cession, or on such as its new master shall impose. On such transfer of territory, it has never been held, that the relations of the inhabitants with each other undergo any change. Their relations with their former sovereign are dissolved, and new relations are created between them, and the government which has acquired their territory. The same Act which transfers their country, transfers the allegiance of those who remain in it; and the law, which may be denominated political, is necessarily changed, although that which regulates the intercourse, and general conduct of individuals, remains in force, until altered by the newly created power of the state.

On the 2d of February 1819, Spain ceded Florida to the United States. The 6th article of the treaty of cession, contains the following provision — "The inhabitants of the territories, which his Catholic majesty cedes to the United States by this treaty, shall be incorporated in the Union of the United States, as soon as may be consistent with the principles of the federal Constitution; and admitted to the enjoyment of the privileges, rights, and immunities of the citizens of the United States."

This treaty is the law of the land, and admits the inhabitants of Florida to the enjoyment of the privileges, rights, and immunities, of the citizens of the United States. It is unnecessary to inquire, whether this is not their condition, independent of stipulation. They do not, however, participate in political power; they do not share in the government, till Florida shall become a state. In the mean time, Florida continues to be a territory of the United States; governed by virtue of that clause in the Constitution, which empowers Congress "to make all needful rules and regulations, respecting the territory, or other property belonging to the United States."

Perhaps the power of governing a territory belonging to the United States, which has not, by becoming a state, acquired the means of self-government, may result necessarily from the facts, that it is not within the jurisdiction of any particular state, and is within the power and jurisdiction of the United States. The right to govern, may be the inevitable consequence of the right to acquire territory. Whichever may be the source, whence the power is derived, the possession of it is unquestioned. In execution of it, Congress, in 1822, passed "an Act for the establishment of a territorial government in Florida;" and, on the 3d of March 1823, passed another Act to amend the Act of 1822. Under this Act, the territorial legislature enacted the law now under consideration.

The 5th section of the Act of 1823, creates a territorial legislature, which shall have legislative powers over all rightful objects of legislation; but no law shall be valid, which is inconsistent with the laws and Constitution of the United States.

The 7th section enacts "That the judicial power shall be vested in two Superior Courts, and in such inferior Courts, and justices of the peace, as the legislative council of the territory may from time to time establish." After prescribing the place of cession, and the jurisdictional limits of each Court, the Act proceeds to say; "within its limits herein described, each Court shall have jurisdiction in all criminal cases, and exclusive jurisdiction in all capital offences; and original jurisdiction in all civil cases of the value of one hundred dollars, arising under and cognizable by the laws of the territory, now in force therein, or which may, at any time, be enacted by the legislative council thereof."

The 8th section enacts "That each of the said Superior Courts shall moreover have and exercise the same jurisdiction within its limits, in all cases arising under the laws and Constitution of the United States, which, by an Act to establish the judicial Courts of the United States, approved the 24th of September 1789, and an Act in addition to the Act, entitled an Act to establish the judicial Courts of the United States, approved the 2d of March 1793, was vested in the Court of Kentucky district."

The powers of the territorial legislature extend to all rightful objects of legislation, subject to the restriction, that their laws shall not be "inconsistent with the laws and Constitution of the United States." As salvage is admitted to come within this description, the Act is valid, unless it can be brought within the restriction.

The counsel for the libellants contend, that it is inconsistent with both the law and the Constitution; that it is inconsistent with the provisions of the law, by which the territorial government was created, and with the amendatory Act of March 1823. It vests, they say, in an inferior tribunal, a jurisdiction, which is, by those Acts vested exclusively in the Superior Courts of the territory.

This argument requires an attentive consideration of the sections which define the jurisdiction of the Superior Courts.

The 7th section of the Act of 1823, vests the whole judicial power of the territory "in two Superior Courts, and in such inferior Courts, and justices of the peace, as the legislative council of the territory may from time to time establish." This general grant is common to the superior and inferior Courts, and their jurisdiction is concurrent, except so far as it may be made exclusive in either, by other provisions of the statute. The jurisdiction of the Superior Courts, is declared to be exclusive over capital offences; on every other question over which those Courts may take cognizance by virtue of this section, concurrent jurisdiction may be given to the inferior Courts. Among these subjects, are "all civil cases arising under and cognizable by the laws of the territory, now in force therein, or which may at any time be enacted by the legislative council thereof."

It has been already stated, that all the laws which were in force in Florida while a province of Spain, those excepted which were political in their character, which concerned the relations between the people and their sovereign, remained in force, until altered by the government of the United States. Congress recognises this principle, by using the words "laws of the territory now in force therein." No laws could then have been in force, but those enacted by the Spanish government. If among these, a law existed on the subject of salvage, and it is scarcely possible there should not have been such a law, jurisdiction over cases arising under it, was conferred on the Superior Courts, but that jurisdiction was not exclusive. A territorial Act, conferring jurisdiction over the same cases on an inferior Court, would not have been inconsistent with this section.

The 8th section extends the jurisdiction of the Superior Courts, in terms which admit of more doubt. The words are "That each of the said Superior Courts, shall moreover have and exercise the same jurisdiction, within its limits, in all cases arising under the laws and Constitution of the United States, which, by an Act to establish the judicial Courts of the United States, was vested in the Court of the Kentucky district."

The 11th section of the Act declares "That the laws of the United States, relating to the revenue and its collection, and all other public Acts of the United States, not inconsistent or repugnant to this Act, shall extend to, and have full force and effect, in the territory aforesaid."

The laws which are extended to the territory by this section, were either for the punishment of crime, or for civil purposes. Jurisdiction is given in all criminal cases, by the 7th section, but in civil cases, that section gives jurisdiction only in those which arise under and are cognizable by the laws of the territory; consequently, all civil cases arising under the laws which are extended to the territory by the 11th section, are cognizable in the territorial Courts, by virtue of the 8th section; and, in those cases, the Superior Courts may exercise the same jurisdiction, as is exercised by the Court for the Kentucky district.

The question suggested by this view of the subject, on which the case under consideration must depend, is this: —

Is the admiralty jurisdiction of the District Courts of the United States vested in the Superior Courts of Florida under the words of the 8th section, declaring that each of the said Courts "shall moreover have and exercise the same jurisdiction within its limits, in all cases arising under the laws and Constitution of the United States," which was vested in the Courts of the Kentucky district?

It is observable, that this clause does not confer on the territorial Courts all the jurisdiction which is vested in the Court of the Kentucky district, but that part of it only which applies to "cases arising under the laws and Constitution of the United States." Is a case of admiralty of this description?

The Constitution and laws of the United States, give jurisdiction to the District Courts over all cases in admiralty; but jurisdiction over the case, does not constitute the case itself. We are therefore to inquire, whether cases in admiralty, and cases arising under the laws and Constitution of the United States, are identical.

If we have recourse to that pure fountain from which all the jurisdiction of the Federal Courts is derived, we find language employed which cannot well be misunderstood. The Constitution declares, that "the judicial power shall extend to all cases in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority; to all cases affecting ambassadors, or other public ministers, and consuls; to all cases of admiralty and maritime jurisdiction."

The Constitution certainly contemplates these as three distinct classes of cases; and if they are distinct, the grant of jurisdiction over one of them, does not confer jurisdiction over either of the other two. The discrimination made between them, in the Constitution, is, we think, conclusive against their identity. If it were not so, if this were a point open to inquiry, it would be difficult to maintain the proposition that they are the same. A case in admiralty does not, in fact, arise under the Constitution or laws of the United States. These cases are as old as navigation itself; and the law, admiralty and maritime, as it has existed for ages, is applied by our Courts to the cases as they arise. It is not then to the 8th section of the territorial law, that we are to look for the grant of admiralty and maritime jurisdiction, to the territorial Courts. Consequently, if that jurisdiction is exclusive, it is not made so by the reference to the District Court of Kentucky.

It has been contended, that by the Constitution the judicial power of the United States extends to all cases of admiralty and maritime jurisdiction; and that the whole of this judicial power must be vested "in one Supreme Court, and in such inferior Courts as Congress shall from time to time ordain and establish." Hence it has been argued, that Congress cannot vest admiralty jurisdiction in Courts created by the territorial legislature.

We have only to pursue this subject one step further, to perceive that this provision of the Constitution does not apply to it. The next sentence declares, that "the Judges both of the Supreme and inferior Courts, shall hold their offices during good behaviour." The Judges of the Superior Courts of Florida hold their offices for four years. These Courts, then, are not constitutional Courts, in which the judicial power conferred by the Constitution on the general government, can be deposited. They are incapable of receiving it. They are legislative Courts, created in virtue of the general right of sovereignty which exists in the government, or in virtue of that clause which enables Congress to make all needful rules and regulations, respecting the territory belonging to the United States. The jurisdiction with which they are invested, is not a part of that judicial power which is defined in the 3d article of the Constitution, but is conferred by Congress, in the execution of those general powers which that body possesses over the territories of the United States. Although admiralty jurisdiction can be exercised in the states in those Courts, only, which are established in pursuance of the 3d article of the Constitution; the same limitation does not extend to the territories. In legislating for them, Congress exercises the combined powers of the general, and of a state government.

We think, then, that the Act of the territorial legislature, erecting the Court by whose decree the cargo of the Point a Petre was sold, is not "inconsistent with the laws and Constitution of the United States," and is valid. Consequently, the sale made in pursuance of it changed the property, and the decree of the Circuit Court, awarding restitution of the property to the claimant, ought to be affirmed with costs.