Semmes v. City Fire Insurance

| U.S. Circuit Court for the District of Connecticut | Jun 12, 1869

Shipman, J.

This is a suit on a policy of insurance agáinst fire issued to William R. Luckett, of Mississippi, dated August 3d, 1860, upon a building situated at the Artesian Springs, Madison County, in that state. It is conceded that a total loss occurred on the 5th of January, 1861, and . during the life of the policy, that the assured subsequently died, and that the defendants are liable to his administrator in this suit unless the right to recover is barred by lapse of time.

Among the conditions attached to, and making part of, the policy, is the following

' “ It is furthermore expressly provided, that no suit or action of any kind against said company, for the recovery of any claim upon or by virtue of this policy, shall be sustainable in any court of law or chancery, unless such suit or action shall be commenced within the term of twelve months next after any loss or damage shall occur; and in case, any such suit or action shall be commenced against said company after the expiration of twelve months next after such loss or damage shall have occurred, the lapse of timé shall be taken and deemed conclusive evidence against the validity of the claim thereby so attempted to-be enforced.” .

The present suit was commenced on the 31st of October, 1866, and the defendants have pleaded in bar the condition of the policy above cited. To this plea the plaintiff has filed his replication, setting up the following matters by way of answer thereto:

First.—That though the loss happened on the 5th of January, 1861, yet the defendants by the terms of the policy were to have sixty days after notice and proofs of loss within which to make payment, and that the assured, though then in life, could bring no action on the policy till after the lapse of the sixty days.'

. Second.—That the policy was delivered and the contract therein made and to be performed in the state- of Mississippi, where the assured continued to reside until his death, and where liis administrator has since resided; and that the policy was made and delivered under and with express reference to a certain statute of said state whereby it was the duty of the defendants to keep, during the life of the policy, an agent in that state upon whom service of suit might he made, and also funds in the same state from which any loss that might occur might he paid or collected; that the defendants in January, 1861, wrongfully revoked and discontinued their agency in that stat.e, and withdrew all their funds therefrom, and from that time to the commencement of this suit have had neither agent nor funds therein, whereby the plaintiff has been wrongfully deprived of all means of instituting or prosecuting any action in that state, and of procuring therein any adjustment or satisfaction of the loss.

Third.—That the assured, down to the time of his death, was a resident and citizen of the state of Mississippi, and that the plaintiff, during his whole life, has been aud still is a resident and citizen of the same state ; that from April 15th, 1861', to April 2d, 1866, a state of war between the so-called Confederate States, including the state of Mississippi, and the United States, existed, whereby all right of the assured during his life, and of his administrator since his death, to maintain any action against the defendants, was by law suspended during all that time.

This replication the defendants have traversed.

By stipulation this case was tried to the court instead of the jury. Upon the proofs, and the admissions of the parties made in open court, I find the following facts :

First.—That the assured, from the date of the policy till his death, April 6th, 1865, was a citizen of and actually resided in the state of Mississippi; and that the plaintiff is his administrator, duly appointed and qualified in said state, and has during all his life been a citizen of, and actual resident therein.

Second.—That the plaintiff has taken out ancillary letters of administration in the state of Connecticut.

Third.—That the loss against which the policy provided occurred on the 5th of January, 1861, and has never been paid.

Fourth.—That the notice and proofs of loss required by the policy were duly furnished the defendants, and that the sixty days thereafter expired April ,11th, 1861.

Fifth.—That, from the date of the policy down to the 23d of January, 1861, the defendants had an agent and funds in Mississippi as required hy the law of that state, and that on the last-named date they revoked the powers of their agent so far as they could legally revoke the same, and never have appointed any other; that on said 2Sd of January, 1861, they withdrew all their funds from said state, and since then have had therein no funds, nor any agent authorized to accept service of process, unless that power of their former agent continued notwithstanding the defendants’ formal revocation thereof.

I will now proceed to state the legal conclusions to which I have arrived on the foregoing state of facts.

I pass the question whether the year in which the plaintiff or his intestate was hound by the condition in the policy to commence suit or be 'barred a recovery, commenced to' run upon the lapse of sixty days after the proofs of loss were furnished, as the result to which I have arrived renders it immaterial.

The fact alleged in the replication and found by the court, that the defendants revoked, or rather attempted to revoke, the power of their agent in Mississippi to accept service, may also be dismissed. If I should assume, as the plaintiff claims, that the law of Mississippi on the subject controls the rights of the parties under the contract on this point, it'would not support the inference which the plaintiff seeks to' draw. There is no allegation that the agent personally left the state. The presumption therefore is that he remained there. If the’ law of Mississippi is binding on the defendants, requiring’ them to continue an agent in that state empowered to accept service, or upon whom service might be made, during the life' of this policy, and until the loss under it is paid, then the agent in question must be deemed to possess that' power. The defendants conferred it upon him, .and he continued to represent them in that capacity till January 23d, 1861, as is conceded on all hands. But it is found that they revoked this power of their agent on the last-named date, so far as they could. Yet if the plaintiff’s claim, that the statute of Mississippi on this subject made part of this contract of insurance, is good, then the defendants could not revoke this part of the agent’s authority. One party alone cannot change a stipulation in a contract, either express or implied, which is to enure to the benefit of another. Assuming then, merely for the purposes of this question, that the main legal proposition of the plaintiff on this point is correct, it follows that the power of the agent, or to speak more accurately, his character as the representative of the defendants in this matter, still remained, notwithstanding their attempt to revoke it. Service that would have bound the defendants could still have been made on him. The suit could have been brought in Mississippi within the twelve months, as provided in the condition, free from any difficulty on this point.

■ Then as to the withdrawal of their funds by the defendants. Whatever embarrassments this would have caused the plaintiff or his intestate, it could not prevent or delay him from bringing his suit, and thus complying with the condition. He could have merged his claim in a judgment, and then pursued satisfaction in any other forum where property could be found, unembarrassed by this twelve months’ restriction. I have thus adverted but briefly to these points as they were not pressed on the argument.

But a question of much more magnitude and difficulty remains to be considered. The replication sets up the late rebellion, and alleges that a state of war existed between the organization known as the Confederate States, including the state of Mississippi, and the United States, from the 15th of April, 1861, to the 2d of April, 1866, whereby it is claimed that this contract and all right to sue upon it was, during all that time, suspended. There is no allegation that the courts of Mississippi, or the national . courts in that state, were closed for any specific length of time, nor that the plaintiff, or his intestate, labored under any personal disability arising out of his actual participation in the war, nor that he was under the control of any vis major, beyond what the law implies from the state of war. The whole question, therefore, turns on the legal consequences of the war in their operation on this contract, and the length of time these consequences continued.

It is, of course, conceded that a state of war, recognized as such by and between the belligerent parties, suspends all contracts in existence between the citizens of the respective belligerents at the time the war commences. The authorities are uniform on this subject. The general rule is well stated by Mr. Justice Nelson in The Prize Cases, 2 Black’s Rep., 687. “ The legal consequences resulting from a state of war between two countries at this day are well understood, and will be found described in every approved work on the subject of international law. The people of the two countries become immediately the enemies of each other,—all intercourse, commercial or otherwise, between them unlawful,—all contracts existing at the commencement of the war suspended, and all made during its existence utterly void.” This doctrine has been repeatedly recognized and applied to our late civil war by the courts of this country, both state and national. Hanger v. Abbott, 5 Wall., 532; Tucker v. Watson, 15 Am. Law Reg., 22; Jackson Ins. Co. v. Stewart, id., 732; Conn. Mat. Life Ins. Co. v. Hall, 16 id., 606.

It is equally well settled that, upon the termination of the war, obligations contracted before its commencement between the respective subjects, though the remedy for their recovery is suspended during the war, are revived. Lawrence’s Wheaton, 877, and the cases above cited. In Hanger v. Abbott, and Jackson Ins. Co. v. Stewart, this doctrine was applied to the statutes of limitation. In the former case Mr. Justice Clifford, speaking for the court, says: “ When a debt has not been confiscated, the rule undoubtedly is that the right to sue revives on the restoration of peace, and Mr. Chitty says that with the return of peace we return to the creditor the right and the remedy. .Unless we return the remedy with the right, the pretense of restoring the latter is a mockery, as the power to exercise it with effect is gone by lapse of time during which both the right and the remedy were suspended.”

Applying these doctrines to the present case, it follows that the war, in which the people of Mississippi on one side, and those of Connecticut on the other, participated, suspended this contract with all its incidents, including the condition set up in har of this action, and all rights of action under it. In view of the result to which I have come, it is unnecessary to determine the precise date of the beginning of the war, when this suspension commenced. It is immaterial whether we take the 15th of April, as stated in the replication, the date of the President’s proclamation calling for volunteers ; or the 19th of April, when by proclamation he declared that an insurrection had broken out in certain states, including’ Mississippi, and declared his purpose to blockade their ports; or the 16th of August, 1861, when in pursuance of the act of Congress of July 13th, 1861, he, by proclamation, formally declared the inhabitants of those states in insurrection, and announced the prohibition of all commercial intercourse between them and the inhabitants of the other parts of the United States. It is conceded on all hands that at least from August 16th, 1861, this contract was suspended, both by the inevitable legal effect of the state of war, and by the interdiction of intercourse announced by the proclamation oi that date. The rules of public law, as well as the act of Congress referred to, lead to this result. Therefore, as the twelve months within which a suit could be legally brought on this policy had not expired when the war commenced, and thus imposed a disability on the assured, it becomes essential to determine whether this disability has been removed, and if so, when that removal took place. It is conceded in this case that the disability has been removed, and the right to sue revived. The plaintiff not only admits, but must maintain, that this took place before October 31st, 1866, when he brought this suit; otherwise he could have no standing in court. As the contract and all remedies under it were absolutely suspended by the war, no suit could have been brought while that suspension continued. But the plaintiff goes further, and alleges, in effect, in his replication, that the war ended, so far as the state of Mississippi and its inhabitants are concerned, on the 2d of April, 1866, the date of the President’s proclamation to that effect, and not before. On the other hand, the defendants insist that it ended as early as June 13th, 1865, when the President, by proclamation, appointed a Provisional Governor over the state of Mississippi, and directed the United States District Judge for that judicial district to proceed to hold the courts.

Now, it must be remembered, that though this was a war between belligerents, attended while it continued by those legal consequences which public law always attaches to all legitimate warfare, yet it was a civil war in which the revolted party was defeated, and its organization as a de facto government under the name of the Confederate States of America, politically annihilated. No treaty of peace in the ordinary sense of that term could be negotiated, as but one of the parties which had waged the war was in existence as a treaty-making power at its close. Therefore no such treaty has drawn the line where the war ended, and suspended contracts revived. We must therefore look to the acts of the only surviving party to ascertain when those disabilities, legally imposed by the state of war, ceased. It is hardly necessary for me to say that the principle here stated lends no support to the doctrine put forth in some quarters, and which that distinguished jurist, Mr. Justice Sprague, characterized as a “grave and dangerous error,”—that the suppression of the rebellion conferred upon the United States the rights of conquest,—the right to treat the states included in the rebellion as foreign territory acquired by arms, and permanently divest them and their inhabitants of all political privileges. 2 Sprague’s Decisions, 147. That notion has nothing to do with the' point now under consideration. The United States, in suppressing the rebellion, destroyed the political organization known as the Confederate States, and not the individual states as political communities. But though the states remained after the contest ended, the belligerent power known as the Confederate States which had represented them in the war, disappeared at its close. Neither of the states which remained had the power, or attempted, to negotiate a treaty of peace with the United States. In determining, therefore, when the rights suspended by the war revived, we must look to the action of the only power in existence which could effectually deal with that subject. This power was the government of the United States.

■ It is a settled rule with the courts, of the United States, in ascertaining whether or not war exists, to look to the action of those departments of the government to which that subject is confided by the constitution. Courts never inquire, when investigating questions of this character, when active hostilities ceased. The termination of war, and the establishment of the relations of peace, are political acts, to be performed exclusively by the departments of the government to which political powers and duties are entrusted. The action of these departments, when within the authority conferred by the constitution, is conclusive and binding on the. courts as well as citizens. When war has existed between the .United States and a foreign country, its termination is easily ascertained by a reference to the treaty of peace which follows it, and which is consummated by the President acting by and with the advice and consent of two-thirds of the Senate. As no such treaty did, or could, mark the close of this civil war, we must look to the action of the President, or Congress, or both, and from that action ascertain when the war ended, and when the legal consequences which flowed from it ceased to act in any given case.

I have already shown that by the rules of public .law universally recognized among civilized nations, as well as by the decisions of our own courts, the existence of this war suspended all contracts between the citizens of the respective belligerents, entered into before it commenced. It rendered, for the time being, all commercial intercourse between the citizens of the two sections unlawful, and converted them into enemies. But in addition to this, Congress passed an act July 13th, 1861, authorizing the President in certain cases by proclamation to declare the inhabitants of a state in insurrection against the United States, whereupon all commercial intercourse by and between the same and the citizens thereof and the citizens of the rest of the United States should become unlawful. In pursuance of this statute the President, on the 16th of August, 1861, issued his proclamation declaring the inhabitants of certain states, including Mississippi, in insurrection against the United States. By force of this proclamation, then, and the statute authorizing it, as well as by the legal effect of the war then existing, all pre-existing contracts between the people of the respective belligerents, including the right to enforce them by judicial proceedings, were thenceforth suspended. In progress of time hostilities ceased, and the executive department of the United States commenced a series of acts recognizing a change in the relations of the government towards the inhabitants of the states lately in rebellion. May 22d, 1865, the President issued a proclamation raising the blockade of most of the closed ports, and removing “ all restrictions upon trade heretofore imposed in the territory of the United States east of'the Mississippi River, save those relating to contraband of war, to the reservation of the rights of the United States to property purchased in the territory of an enemy, and to the twenty-five per cent, upon purchases of cotton.” The same proclamation declared that all provisions of the internal revenue law should be carried into effect by the proper officers.

May 29th, 1865, the President proclaimed amnesty and pardon to all persons in the late revolted states, except certain specified classes, with restoration of all rights of property except slaves, and in cases where legal proceedings had been commenced for the confiscation of property of persons engaged in rebellion, on condition that they should take and subscribe a certain oath.

On the same day he issued a proclamation appointing a Provisional Governor for North Carolina, and prescribing his duty and authority. ‘

June 13th, 1865, he issued a similar proclamation relating to Mississippi.

On the same day he issued a proclamation appointing a Provisional Governor over Tennessee, and declaring, among other things, “ that all restrictions upon internal, domestic, and coastwise intercourse and trade, and upon the removal of the products of states heretofore declared in insurrection, reserving and excepting only those relating to contraband of war, as hereinafter recited, and also those which relate to the reservation of rights of the United States to property purchased in the territory of an enemy, heretofore imposed on ihe territory of the United States east of the Mississippi River, are annulled, and I do hereby direct that they be forthwith removed.” The other provisions of this proclamation it is not necessary to notice here.

April 2d, 1866, the President issued a proclamation formally declaring the insurrection that had existed in certain states, including Mississippi, at an end, and to be thenceforth so regarded.

It should be remarked that there was no executive declaration that the insurrection was ended, before that of April 2d, 1866, in any state except Tennessee. On the 13th of June, 1865, he did, in the proclamation already cited, declare it terminated in the last-named state. In a proclamation of the same date relating to Mississippi, and in the one of May 29th, 1865, relating to North Carolina, he spoke of the _ armed forces of the rebellion as having been “ almost entirely overcome.”

We must now inquire into the legal character of the proclamations of the President restoring commercial intercourse to and with the states which had been engaged in the rebellion, and the rest of the United States. And, first, as to his authority to issue such proclamations. I think there can be no doubt on that point. The Supreme Court of the United States recognized the power of the. President to, in effect,’ declare the inhabitants of the disaffected states in a state of insurrection as early as April 19th, 1861, when he set on foot the blockade of certain ports, including those in Mississippi. The Prize Cases, 2 Black’s Rep., 670. In the opinion in these cases Mr. Justice Grier, speaking for a majority of the court, says : “ Whether the President in fulfilling his duties as Commander-in-Chief, in suppressing an insurrection, has met with such armed hostile resistance, and a civil war of such alarming proportions, as will compel him to accord 'to them the character of belligerents, is a question to be decided by Am, and tliis court must be governed by the decisions and acts of the political department of the government to which this power was entrusted. He must determine what degree of force the crisis demands. The proclamation of blockade is itself official and conclusive evidence to the court that a state of war existed which demanded and authorized a recourse to such a measure, under the peculiar circumstances of the case.” There had been no declaration of war. Congress can alone declare war, but the court held in the same cases that that body could not declare war against a state, or any number^pf states, by virtue of any clause in the constitution. It also held that the President had no power to declare or initiate a war, either against a foreign nation or a domestic state.'. It, however, distinctly decided that the President could, and did, recognize a state of war as actually existing, and that the courts were bound to accept such recognition of the fact as conclusive. Of course they must recognize the legal consequences which flow from the state of war. It would seem to follow that if the President has the power to recognize a state of war as an existing fact, and that this recognition is binding on the courts, he must equally have the power’to recognize a state of peace as an-existing fact, and that the courts are equally bound by such recognition. Especially would this seem to be the case in this civil war, where no formal treaty of peace could mark the line where war ended and peace commenced, and where there was no declaration of the legislature inconsistent with the proclamation of the executive.

But whether this is the true doctrine or not, it must be remembered that the act of Congress of July 13th, 1861, authorized the President to declare certain states in insurrection, whereupon all commercial intercourse was to become unlawful. On the 16th of August following he issued such a proclamation. Prom that time forward the interdiction of commercial intercourse had the double sanction of public law and a special act of Congress operating from the date of the pfoclamation. Now, it may be said with some force, that inasmuch as commercial intercourse became unlawful under this act of Congress, ipso facto, on the declaration of the President of the fact of insurrection, it must have continued unlawful until the insurrection was by him, or Congress, declared ended; and that, therefore, he could not legalize free intercourse between the citizens of the two sections without first declaring the rebellion suppressed. But this would be a very narrow and technical view to take of a great public question, relating to an anomalous condition of public affairs, and bearing' upon interests of infinite diversity and great magnitude. The act of July 13th, 1861, by its express terms, was to be operative as an interdiction of intercourse only through a proclamation of the President. • Congress left it to his discretion to put the interdiction in force. I think, by fair implication, it left with him the power to withdraw it. There were reasons of the highest public import why this power should remain with him. The war had commenced during a recess of Congress. It was necessary for the President to act promptly, and he called for troops and set on foot a blockade some time before Congress could assemble. Hostilities might cease, and the war be substantially terminated, also, during a recess of Congress, when prompt action by the President might be of the highest importance both to our foreign and domestic commerce. This power of the executive to restore pacific intercourse seems to have been practically conceded without dissent from any quarter. Neither Congress, nor the executive, nor the people have acted upon the assumption that intercourse between the people of the two sections in private civil affairs has been unlawful since June 13th, 1865. On the contrary, by the common consent of all departments of the government, such intercourse was substantially free and unrestrained after that date as well as after the 2d of April, 1866. Business began to seek its old channels ; new contracts were made; old ones litigated and enforced in the courts of both sections, and money invested at the south in various enterprises. No doubt would ever have arisen as to the validity of the President’s proclamation removing all restrictions upon ordinary pacific intercourse between the people, but for the subsequent struggle between Congress and the executive department as to the political status of the southern states. But that controversy has no proper relation to the question now under consideration. Congress has never, even by implication, declared commercial and pacific intercourse of any kind unlawful since the President assumed to remove the restriction, June 13th, 1865. On the contrary, its silence on this subject, when legislating on the purely political questions involved in what is called “ reconstruction,” supports the inference that the ordinary civil pursuits of the people, and all the rights incident to them, including the right to free intercourse between the citizens of both sections, and the right to resort to legal civil remedies, were considered by Congress itself as no longer under the ban of war. I am, therefore, satisfied that the authority of the President to issue the proclamation of June 13th, 1865, restoring free intercourse, was full and ample, and that its exercise has been acquiesced in by the national legislature.

We are next to consider what was the legal effect of that proclamation. Its language has already been cited. Beyond all question it embraces all contracts thereafter to be made, and delivers them from the invalidating effect of public law, as well as from the effect of the statute of July 13th, 1861, and the proclamation made in pursuance thereof, August 16th, following. Such contracts being valid, the right to enforce them in the courts necessarily followed. A citizen of one section could sue a citizen of the other on such a contract without having his suit defeated on the ground that it was invalid either by public or statute law,- or abated under the plea of alien enemy. Both the right and the remedy on such a contract, were complete.

The question then arises, in what condition were the numerous contracts existing when the war commenced, left by the proclamation of June 13th, 1865 ? Were they still suspended, and the parties without any right to enforce them ? Undoubtedly unpaid debts contracted before the war could have been lawfully paid by citizens of one section to those of the other at any time after the date of this proclamation. This would he exercising one of the privileges of “ domestic intercourse,” restored in express terms by that proclamation^ It would seem to follow that the right to enforce payment through ordinary legal remedies must have been restored also. It would be absurd to contend that the proclamation removed the prohibition to enter into new contracts, and left those entered into before, and existing at, the commencement of the war, suspended. Such a distinction would be unjust as well as absurd. It would be a distinction between rights of the same class, and could rest upon no principle of natural justice, good sense, or sound policy. No such construction should be given to a state paper like this proclamation. It was made in the interests of peace, and its ordinary beneficent pursuits, and in furtherance of the rights of the people of both sections of a common country. No possible advantage in the way of convenience, interest, or security to the public or to individuals, consistent with justice, requires that its operation and legal effect should thus be contracted. It should, therefore, receive a liberal, rather than a narrow and technical interpretation.

For the plaintiff, H. K. W. Welch and W. Hamersley. For the defendants, A. P. Hyde and C. R. Chapman.

It follows from these principles that the contract upon which this suit is founded, though suspended during the war, while intercourse between the citizens of the belligerent sections was unlawful, revived on the 13th of June, 1865, and from that date was in Ml force. Prom that time there has been no legal obstacle to its enforcement. Whether Mississippi was without civil tribunals during any portion of the time since the contract revived, is neither averred in the replication nor was it proved on the trial. This court cannot take judicial knowledge of that point. But it is immaterial. The plaintiff could have resorted to the state tribunals of Connecticut, or to this court, at any time since his appointment as administrator. Not having brought his suit within the time limited by the policy, exclusive of the whole period of disability, the plea in bar is a conclusive answer to his right to recover. Judgment must, therefore, be entered for the defendants.