The American Insurance Company, and the Ocean Insurance Company of Appellants v. 356 Bales of Cotton, David Canter Claimant and Appellee

CourtUnited States Supreme Court
Citation1 Pet. 511,7 L.Ed. 242,26 U.S. 511
Docket NumberNEW-YORK
Decision Date01 January 1828

26 U.S. 511
1 Pet. 511
7 L.Ed. 242
January Term, 1828

[Syllabus from pages 511-513 intentionally omitted]

Page 513

APPEAL from the Circuit Court of the United States, for the District of South Carolina.

The libel filed in this cause in the District Court of South Carolina, on the 18th April, 1825, alleged that five hundred and eighty-four bales of cotton insured by the libellants, were shipped on board the ship Point a Petre, on a voyage from New-Orleans to Havre de Grace in France, and was in February, 1825, wrecked on the coast of Florida; from which it was saved, and carried into Key West, in the territory of Florida, where it was sold, without any previous adjudication by a Court of competent jurisdiction, for the ostensible purpose of satisfying a claim for salvage, amounting to seventy-six per cent. of the property saved. That the cotton thus insured, was abandoned to the underwriters, the libellants, and the abandonment was accepted by them on the 10th March, 1825.—That part of the cargo, amounting to one hundred and forty bales, subsequently arrived in the port of New-York, and was there proceeded against by the libellants, as their property under the abandonment. That another part of the cargo, amounting to between three hundred and three hundred and fifty-six bales, had arrived in the port of Charleston, within the jurisdiction of the Court, in the possession of one David Canter, and was fraudulently sold in Charleston, at auction, on the 13th of April, 1825. Restitution of this last mentioned part was therefore prayed by the libellants, and process was issued against the said Canter in personam.

The marshal returned to the warrant that he had taken one hundred and sixty bales of cotton, and the person of Canter. Fifty-four bales of the cotton, specifically brought into Court, were ordered to be sold and the proceeds paid into the Registry; and the supposed value of the remainder in dispute, to be secured by stipulation.

David Canter filed his answer claiming three hundred and fifty-six bales of cotton, as a bona fide purchaser, under a sale at public auction at Key West, by virtue of the decree of a certain Court, consisting of a Notary and five Jurors, proceeding under an Act of the Governor and Legislative Council of Florida, passed the 4th of July, 1823, which decree awarded to the salvors seventy-six per cent. on the nett proceeds of sale.

The testimony of witnesses was taken, and other evidence produced, relating to the title of the libellants under the insurances and abandonments thereon, and to the proceedings in the Court at Key West.

The District Judge pronounced the proceedings in the Court at Key West a nullity; but decreed restitution to the libellants of thirty-nine bales of the cotton only, (deducting a salvage of

Page 514

fifty per cent.;) considering the evidence of the identity of the residue, as insufficient to establish their proprietary interest.

The libellants and claimant both appealed from this decree to the Circuit Court.

Further testimony was taken in the Circuit Court; and at the hearing, the decree of the District Court was reversed, and the entire cotton decreed to the claimant with costs; upon the ground that the proceedings of the Court at Key West were legal, and transferred the property to the alleged purchaser under them.

From this decree the libellants appealed to this Court.

The documents exhibited and evidence taken in the case, showed that three hundred and thirty-three bales of the cotton, on board the Point a Petre, were insured by the American, and three hundred and fifty-one by the Ocean office. The whole cargo of the ship consisted of eight hundred and ninety-one bales, but to whom the other three hundred and seventeen bales belonged, did not appear. The ship sailed on the voyage insured on the 17th February 1825, and was wrecked on Carysforth Reef, on the east coast of West Florida, about eight miles from the shore. She filled with water, and was abandoned by the captain and crew.

In the depositions taken in the cause, it was stated, that when the vessel was first seen, she was filled with water, abandoned, bilged, and lying on her broad side. The cotton was taken out of her, hove into the sea, rafts made of it, towed inside of the reef, and then put on board of vessels. The captain of the ship was picked up on the shore with his men, about fourteen miles from the wreck, and he went with the salvors to Key West, where the property saved was carried; and the proceedings for salvage were at Key West, carried on, as was alleged, with the co-operation and concurrence of the master of the ship.

The danger in saving the property was said to have been very great, the weather to have been stormy, some of the men were injured, and the saving was done during the night as well as the day; most of the cotton was much injured.

After the sale, the agent of the appellants, Mr. Ogden, came on from New York to Key West, for the purpose of attending the sale, and he expressed his willingness to pay to the purchasers of the cotton, a considerable sum, beyond what had been paid for it at the sale.

It was also in evidence, that the marks on the cotton were defaced, and that the efforts to ascertain the particular marks on that imported into Charleston by the appellee, were, to a great extent, without success. A large portion of the cotton brought to Charleston by the claimant, was sold at auction as

Page 515

damaged cotton. An agreement between the two insurance companies, the appellants, was made previous to the institution of the suit, that the same should be for their joint benefit. David Canter, the appellee, claimed three hundred and fifty-six bales of the cotton, as a bona fide purchaser under the decree of the Court of Key West, instituted by, and proceeding under a law of the Legislative Council of Florida, passed 4th July 1823; which decree awarded seventy-six per cent. to the salvors, of the net proceeds of the sale.

The appellants filed the following 'reasons of appeal.'

That the decision of the Circuit Court is erroneous, inasmuch as the said tribunal at Key West was not legally organized, nor of competent jurisdiction in the premises.

1st. Because the Constitution and laws of the United States are of full force and effect within the territory of Florida.

2d. Because jurisdiction of salvage was not a rightful subject of legislation, with the Floridian government; and the wrecking law enacted by the same, is, in various respects, inconsistent with the said Constitution and laws.

3d. Because the Superior Courts of the said territory are vested with plenary and exclusive jurisdiction over all admiralty and maritime cases; and this was a case of that description.

4th. Because, even if the jurisdiction of the said Courts were confined to 'cases arising under the Constitution and laws of the United States,'—this was a case of that class.

5th. Because the said Superior Courts were vested with original cognizance in all cases, where the amount in issue exceeded the value of one hundred dollars.*

Page 516

David Canter claimed all the cotton except thirty-nine bales on the ground:-

Page 517

First, That he was in the possession of it, not tortiously, but as a bona fide purchaser, and that that possession, thus acquired,

Page 518

is good against all but the person who proves a better title to this identical cotton.

Page 519

Second.—That the salvors had a rightful lien upon the cargo saved; that the captain of the Point a Petre was agent for the

Page 520

underwriters, and had authority to settle the amount of that claim, either by agreement, or an award of third persons; that

Page 521

he applied to these third persons, and agreed to their proceedings, and to the sale; that the sale was afterwards ratified by Ogden, the special agent of the underwriters.

Page 522

Third.—He claims the whole three hundred and fifty-six bales, on the ground of a sale by a Court of the territory of Florida.

Page 523

Fourth.—That was a foreign Court, acting under a municipal law, and having the property within its reach; its jurisdiction cannot be inquired into.

Fifth.—If the jurisdiction of that Court can be inquired into, they contend that jurisdiction was conferred upon it:

Sixth.—With the 8th section of the Act of Congress of the 3d March 1823, which is in these words: '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 27th September 1789, and an Act in addition to said Act, approved the 2d of March 1793, was vested in the Court of Kentucky District.'

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

Mr. Ogden——

The great question in this case is the validity of the proceedings of the territorial Court; and upon the threshold of this inquiry it is asked, how far it is competent for this Court to examine the constitutionality of the Court at Key West, and the legality of its proceedings.

The libel filed in the District Court, sought the restoration of the cotton, subject to a reasonable salvage. The claimant asserts his right to it under a sale, and the inquiry is, whether the property was changed by the proceedings directing the sale. The decision upon this inquiry, rests upon the right of the Court to take jurisdiction of the subject matter.

The common law rule is, that when a Court acts within its powers, its acts are binding on all the world; but if beyond them, they are entirely void. It is therefore necessary to look into the constitution of the Court. Abbot on...

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