Baldy v. Hunter

delivered the opinion of the court.

'William H. Baldy, a citizen of Georgia, died in that State prior to the civil war, leaving several children, one of whom was Marianne J. Baldy who became of full age on the 21st day of February, 1875.

In 1857 Dr. E. H. W. Hunter was appointed her guardian,

By an act of the legislature of Georgia, passed on the 16th day of December, 1861, guardians, trustees, executors and administrators were authorized to invest any funds held by them in the bonds issued by the Confederate States, or in lands and negroes — an order to that effect being first obtained from a judge of the Superior Court, who was empowered to consider and pass such applications, either in term time or vacation. Georgia Laws, 1861, p. 32.

On the 25th day of April, 1863, the Superior Court of Jefferson County, Georgia, passed an order granting leave to the guardian of Miss Baldy to invest certain funds then in his hands in Confederate bonds. This order was granted upon the petition of the guardian, who expressed the opinion that such funds should be so invested. On the 'same day the investment was made.

The legislature of Georgia, by an act approved March 12,' 1866, No. 121, entitled “An act for the relief of administrators, executors, guardians and trustees, and for other purposes,” declared that all administrators, executors, guardians and trustees, who, in pursuance of an order, judgment or decree of any court having jurisdiction, or of any law of that State, bona fide invested the funds of the estate they represented in the bonds, notes or certificates of the State of Georgia or of the Confederate States, “ be and they are hereby relieved from all the penalties of mismanagement, misappropriation or misapplication of the funds of the estates they represent, by reason of such investments;” and that all administrators, executors, guardians and trustees, claiming the benefit of the provisions of that act, should, before their final settlement, make oath before the Ordinary of the county in which they had theretofore made their returns, “showing what funds of the estates they represent they have so invested, and shall also swear that the notes, bonds or certificates, so held by them, are the same kind of currency which they received for the estates they so represent.” Laws Georgia, 1865-66, p. 85.

On the 2d day of July, 1866, the guardian made a return

In 1876 Hunter received from the Ordinary of Jefferson County letters of dismissal as guardian of the several children of William H. Baldy. He died nine years thereafter, in 1885, and this suit was brought in 1893 against his executor in the name of Marianne J. Baldy by her next friend, she having become of unsound mind as far back at least as 1875, and being at the time this suit was brought in a lunatic asylum.

At the trial below the plaintiff asked the court to instruct the jury that “ ah investment by a guardian of money of his ward during the Confederate war, and while both guardian and ward were residing within the Confederate territory, in bonds of the Confederate States, was unlawful, and the guardian is responsible to the ward for the sum so invested ; ” and that no act of the legislature of the State “ passed during the late war, authorizing the guardian to invest the funds of his ward in Confederate bonds, and no order of any court of the State granted in pursuance of said act of the legislature, would authorize such investment.” Both of these instructions were refused.

It is not contended that the case involves any question as to the statute of limitations.

It was agreed at the trial that the only matter in issue was as to the liability of Hunter’s estate by reason of his having invested the ward’s money in 1863 in bonds of the Confederate States. This appears from the charge to the jury in which the trial court, after observing that its duty was to follow the decisions of the Supreme Court of. Georgia, said: “ In the present case I am authorized to say that it is agreed between counsel that the investment was made bona fide, and

The verdict was made the judgment of the trial court, and that judgment was affirmed by the Supreme Court of Georgia. The latter court, after referring to some of its former decisions, held that “ a guardian who, during the war between the States, in good faith invested the funds of his ward in bonds of the Confederate States, under an order of the judge of the Superior Court properly obtained under then existing laws, was protected thereby, and is not liable to the ward for the value of the money invested.”

The case is now before this court on writ of error to the Supreme Court of Georgia.

The plaintiff in error contends that the principles to be deduced from our former decisions require the reversal of the judgment. As this proposition is disputed,- it is necessary to examine the cases heretofore determined by this court.

Referring to the government established in 1862 in Texas in hostility to the United States, and which at that time wns in the exercise' of the ordinary functions of administration, this court in Texas v. White, 7 Wall. 700 , 773, said: “ It is not necessary to attempt any exact definitions within which the acts of such a state government must be treated as valid, or invalid. It may be said, perhaps with sufficient accuracy, that acts necessary to peace and good order among citizens, such, for example, as acts sanctioning and protecting marriage and the domestic relations, governing the course of descents, regulating the conveyance and transfer of property, real and personal, and providing remedies for injuries to person and estate, and other similar acts, which would be valid if emanat

In Thorington v. Smith, 8 Wall. 1 , 7, 10-12, the question arose whether a contract for the payment of Confederate notes, which was made during the civil war between parties residing within the so called Confederate States, could be enforced in the courts of the United. States. Upon 'that question, which was recognized as by no means free from difficulty, the court said: “ It cannot be questioned that the Confederate notes were issued in furtherance of an unlawful attempt to overthrow the Government of the United States by insurrectionary force. Nor is it a doubtful principle of law that no contracts made in aid of such an attempt can be enforced through the courts of the country whose governm ent is thus assailed. But, was the contract of the parties to this suit a contract of that character ? Can it be fairly described as a contract in aid of the rebellion ? ” After referring to United States v. Rice, 4 Wheat. 246 , 253, relating to the occupancy of Castine, Maine, in the war of 1812 by the British forces, and Fleming v. Page, 9 How. 603 , 614, relating to the occupancy,during the Mexican war, of Tampico, Mexico, by the troops of the United States — they being described as “cases of temporary possession of territory by lawful and regular governments at war with the country of which the territory so possessed was part,” and during which possession, the obligations of the inhabitants to their respective countries were held to have been suspended, although not abrogated • — • this court said : “ The central government established for the insurgent States differed from the temporary governments at Castine and Tampico in the circumstance that its authority did not originate in lawful acts of regular war, but it was not, on that account, less actual or less supreme. And we think it must be classed among the governments of which these are examples. It is to be observed that the rights and obliga

In Delmas v. Insurance Co., 14 Wall. 661 , 665, upon writ of error to the Supreme Court of Louisiana, one of the questions presented was whether a judgment, which was otherwise conceded to be a valid prior lien for the party in whose favor it was rendered, was void because the consideration of the contract on which the judgment was rendered was Confederate money. This court said: “ This court has decided, in the case of Thoringion v. Smith, 8 Wall. 1 , that a contract was not void because payable in Confederate money.; and notwithstanding the apparent division of opinion on this question in thp case of Hanauer v. Woodruff, 10 Wall. 482 , we are of opinion that on the general principle announced in Thoringion v. Smith, the notes of the Confederacy actually circulating as money at the time the contract was made may constitute a valid consideration for such contract.” So, in Planters' Bank v. Union Bank, 16 Wall. 483 , 499, it was a question whether Confederate treasury notes had and received by the defendants for the use of the plaintiffs were a sufficient consideration for a promise, expressed or implied, to pay anything; and-it was held upon the authority of Thorington v. Smith, above c.ited, that “ a promise to pay in Confederate notes, in consideration of the receipt of such notes and of drafts payable by them, cannot be considered a nudum factum or an illegal contract.”

Horn v. Lockhart, 17 Wall. 570 , 573, 575, 580, was a suit for an accounting as to funds in the hands of an executor, and to enforce the payment to legatees of their respective shares. One of the questions in the case was whether the defendant'

In the Confederate Note case, 19 Wall. 548 , 555-557, in which it was held that parol evidence was admissible to prove that the word “ dollars ” in a contract made during the civil ■war meant, in fact, Confederate notes, the court said : “The treasury notes of the Confederate government were issued early in the war, and, though never made a legal tender, they soon, to a large extent, took the place of coin in the insurgent States. Within a short period they became the principal cur-. rency in which business in its multiplied forms was there transacted. The’ simplest purchase of food in the market, as well as the largest dealings of merchants, were generally made in this currency. Contracts thus made, not designed to aid the insurrectionary government, could not, therefore, without manifest injustice to the parties, be treated as invalid between them. Hence, in Thorington v. Smith this court enforced a contract payable, in these notes, treating them as a currency imposed upon the community by a government of irresistible force. As said in a later case, referring to this decision, ‘ It would have been a cruel and oppressive judgment, if all the transactions of the many millions .of people composing the inhabitants of the insurrectionary States, for the several years

Sprott v. United States, 20 Wall. 459 , 460, 462, was a suit against the Government in the Court of Claims under the Captured and-Abandoned Property Act of March 12, 1863, c. 120, 12 Stat. 820 , one of the provisions of which was that a claimant, before being entitled to recover the proceeds of the property, must prove that he had never given aid or comfort to the rebellion. ’ It appeared that the cotton in question was sold to the claimant by an agent of the Confederate Statés as “cotton belonging to the Confederate States, and it was understood by.the claimant at the time of the purchase to be the property of the rebel government, and was purchased as such.” After observing that the cotton had been in the possession, and under the control of the Confederate government, with claim of title, and that it was taken by. the Union forces during the last days of the existence of that government, sold, and' the proceeds deposited in the Treasury, this court said : “ The claimant now asserts a right to this money on the ground that he was the owner of the cotton when it was so captured. -This claim of right or ownership he must prove in the Court of Claims. He attempts to do so by showing that he purchased it of the Confederate government and paid them for it in money. In doing this he gave aid and assistance to the rebellion in the most, efficient manner he possibly could.

From these cases it may be deduced —

That the transactions between persons actually residing wúthin the territory dominated by the government of the Confederate States were not invalid for the reason only that they occurred under the sanction of the laws of that government or of any local government recognizing its authority;

That, within such' territory, the preservation of order, the maintenance of police regulations, the prosecution of crimes, the .protection of property, the enforcement of contracts, the celebration of marriages, the settlement of estates, the transfer and descent of property, and similar or kindred subjects, were, during the war, under the control of the local governments constituting the so called Confederate States;

That what occurred’ or was done in respect of such matters under the authority of the laws of these local defacto governments should not be disregarded or held to be invalid merely because those governments were organized in hostility to the Union established by the national Constitution; this, because the existence of war between the United States and the Confederate States did- not relieve those who were within the insurrectionary lines from the necessity of civil obedience, nor destroy the bonds of society, nor do away with civil government or the regular administration of the laws, and because transactions in the ordinary coursfe of civil society as organized within the enemy’s territory, although they may have indirectly or remotely promoted the ends of the de facto or unlawful government organized to effect a dissolution of the Union, were without blame “ except when proved to have' been entered into with actual intent to further invasion or insurrection; ” and,

Applying these principles to the case before us, we are of opinion that the mere investment by Hunter, as guardian, of the Confederate funds or currency of his ward in bonds of the Confederate States should be deemed a transaction in the ordinary course of civil society, and not, necessarily, one conceived and completed with an actual intent thereby to aid in the destruction of the Government of the Union. If contracts between parties resident within the lines of the insurrectionary States, stipulating for payment in Confederate notes issued in furtherance of the scheme to overturn the authority of the United States within the territory dominated by the Confederate States, were not to be regarded, for that reason only, as invalid, it is difficult to perceive why a different principle should be applied to the investment by a guardian of his ward’s Confederate notes or currency in Confederate bonds — both 'guardian and ward residing at that time, as they did from the commencement of the civil war, within the Confederate lines and under subjection to the Confederate States.

As to the question, of the intent with which this investment was made, all doubt is removed by the agreement of the parties at the trial that the investment was bona fide, and that the only question made was as to its legality. We interpret this agreement as meaning that the guardian had in view only the best financial interests of the ward in the situation in which both were placed, and that he was not moved to make the investment with the purpose in that way to obstruct the United States in its efforts to suppress armed rebellion. We are unwilling to hold that the mere investment in Confederate States bonds — no actual intent to impair the rights of the United States appearing — was illegal as between the guardian and ward.

It was, of course, intended that this language of the court

Besides, it is distinctly stated in the opinion in that case that the sums which Lamar used in the purchase of bonds of the Confederate States were moneys of the wards in his hands “arising either from dividends which.he had received in their behalf, or from interest with which he charged himself upon sums not invested,” 112 U. S. 476 , which is a very different thing from reinvesting (as in the present case) in

Affirmed.