decided: December 11, 1899.
LA ABRA SILVER MINING COMPANY
APPEAL FROM THE COURT OF CLAIMS.
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MR. JUSTICE HARLAN, after stating the case as above, delivered the opinion of the court.
In the light of this history of the claim of the La Abra
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Company we proceed to the consideration of such of the principal questions presented in argument as are essential to the disposition of the case.
I. If, as insisted by the appellants, the above act of December 28, 1892, was not so approved by the President as to become under the Constitution a law, it would be unnecessary to consider any other question raised by the pleadings; for that act is the only basis of jurisdiction in the Court of Claims to render a judgment that would be conclusive between the parties and which could be reviewed by this court. We must therefore first consider whether that act is liable to the constitutional objection just stated.
The ground of this contention is that having met in regular session at the time appointed by law, the first Monday of December, 1892, and having on the 22d day of that month (two days after the presentation of the bill to the President) by the joint action of the two Houses taken a recess to a named day, January 4, 1893, Congress was not actually sitting when the President on the 28th day of December, 1892, by signing it formally approved the act in question. The proposition, plainly stated, is that a bill passed by Congress and duly presented to the President does not become a law if his approval be given on a day when Congress is in recess. This implies that the constitutional power of the President to approve a bill so as to make it a law is absolutely suspended while Congress is in recess for a fixed time. It would follow from this that if both Houses of Congress by their joint or separate action were in recess from some Friday until the succeeding Monday, the President could not exercise that power on the intervening Saturday. Indeed, according to the argument of counsel the President could not effectively approve a bill on any day when one of the Houses, by its own separate action, was legally in recess for that day in order that necessary repairs be made in the room in which its sessions were being held. Yet many public acts and joint resolutions of great importance together with many private acts have been treated as valid and enforceable which were approved by the President during the recesses of Congress covering the
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Christmas holidays. In the margin will be found a reference to some of the more recent of those statutes.*fn1
Do the words of the Constitution, reasonably interpreted, sustain the views advanced for appellant?
That instrument provides:
"The Congress shall assemble at least once in every year, and such meeting shall be on the first Monday in December, unless they shall by law appoint a different day." Art. I, § 4.
"Neither House, during the session of Congress, shall, without the consent of the other, adjourn for more than three days, nor to any other place than that in which the two Houses shall be sitting." Art. I, § 5.
"Every bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a law, be presented to the President of the United States; if he approves, he shall sign it, but if not, he shall return it, with his objections, to that House in which it shall have originated, who shall enter the objections at large on the journal, and proceed to reconsider it. If after such reconsideration two thirds of that
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House shall agree to pass the bill, it shall be sent, together with the objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a law. But in all such cases the votes of both Houses shall be determined by yeas and nays, and the names of the persons voting for and against the bill shall be entered on the journal of each House, respectively. If any bill shall not be returned by the President within ten days (Sundays excepted) after it shall have been presented to him, the same shall be a law, in like manner as if he had signed it, unless the Congress, by their adjournment, prevent its return, in which case it shall not be a law." Art. I, § 7.
"Every order, resolution or vote, to which the concurrence of the Senate and House of Representatives may be necessary, (except on a case of adjournment,) shall be presented to the President of the United States; and before the same shall take effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the rules and limitations prescribed in the case of a bill." Art. I, § 8.
It is said that the approval by the President of a bill passed by Congress is not strictly an executive function, but is legislative in its nature; and this view, it is argued, conclusively shows that his approval can legally occur only on a day when both Houses are actually sitting in the performance of legislative functions. Undoubtedly the President when approving bills passed by Congress may be said to participate in the enactment of laws which the Constitution requires him to execute. But that consideration does not determine the question before us. As the Constitution while authorizing the President to perform certain functions of a limited number that are legislative in their general nature does not restrict the exercise of those functions to the particular days on which the two Houses of Congress are actually sitting in the transaction of public business, the court cannot impose such a restriction upon the Executive. It is made his duty by the Constitution to examine and act upon every bill passed by Congress. The time within which he must approve or disapprove
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a bill is prescribed. If he approve a bill, it is made his duty to sign it. The Constitution is silent as to the time of his signing, except that his approval of a bill duly presented to him -- if the bill is to become a law merely by virtue of such approval -- must be manifested by his signature within ten days, Sundays excepted, after the bill has been presented to him. It necessarily results that a bill when so signed becomes from that moment a law. But in order that his refusal or failure to act may not defeat the will of the people, as expressed by Congress, if a bill be not approved and be not returned to the House in which it originated within that time, it becomes a law in like manner as if it had been signed by him. We perceive nothing in these constitutional provisions making the approval of a bill by the President a nullity if such approval occurs while the two Houses of Congress are in recess for a named time. After a bill has been presented to the President, no further action is required by Congress in respect of that bill unless it be disapproved by him and within the time prescribed by the Constitution be returned for reconsideration. It has properly been the practice of the President to inform Congress by message of his approval of bills, so that the fact may be recorded. But the essential thing to be done in order that a bill may become a law by the approval of the President is that it be signed within the prescribed time after being presented to him. That being done, and as soon as done, whether Congress is informed or not by message from the President of the fact of his approval of it, the bill becomes a law, and is delivered to the Secretary of State as required by law.
Much of the argument of counsel seems to rest upon the provision in relation to the final adjournment of Congress for the session, whereby the President is prevented from returning, within the period prescribed by the Constitution, a bill that be disapproves and is unwilling to sign. But the Constitution places the approval and disapproval of bills, as to their becoming laws, upon a different basis. If the President does not approve a bill, he is required within a named time to send it back for consideration. But if by its action, after the
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presentation of a bill to the President during the time given him by the Constitution for an examination of its provisions and for approving it by his signature, Congress puts it out of his power to return it, not approved, within that time to the House in which it originated, then the bill falls, and does not become a law.
Whether the President can sign a bill after the final adjournment of Congress for the session, is a question not arising in this case, and has not been considered or decided by us. We adjudge -- and touching this branch of the case adjudge nothing more -- that the act of 1892 having been presented to the President while Congress was sitting and having been signed by him when Congress was in recess for a specified time, but within ten days, Sundays excepted, after it was so presented to him, was effectively approved, and immediately became a law, unless its provisions are repugnant to the Constitution.
II. It is said that the present proceeding based on the act of 1892 is not a "case" within the meaning of that clause of the Constitution declaring that the judicial power of the United States shall extend to all cases in law and equity arising under that instrument, the laws of the United States, or treaties made or which shall be made under their authority. Art. III, § 2. This Article, as has been adjudged, does not extend the judicial power to every violation of the Constitution that may possibly take place, but only "to a case in law or equity, in which a right, under such law, is asserted in a court of justice. If the question cannot be brought into a court, then there is no case in law or equity, and no jurisdiction is given by the words of the Article. But if, in any controversy depending in a court, the cause should depend on the validity of such a law, that would be a case arising under the Constitution to which the judicial power of the United States would extend." Cohens v. Virginia, 6 Wheat. 264, 405. In the same case, Chief Justice Marshall declared a suit to be the prosecution by a party of some claim, demand or request in a court of justice for the purpose of being put in possession of a right claimed by him and of which he was deprived.
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Referring to the provision defining the judicial power of the United States, the court in a subsequent case said: "This clause enables the judicial department to receive jurisdiction to the full extent of the Constitution, laws and treaties of the United States, when any question respecting them shall receive such a form that the judicial power is capable of acting on it. That power is capable of acting only when a subject is submitted to it by a party who asserts his rights in the form prescribed by law. It then becomes a case, and the Constitution declares that the judicial power shall extend to all cases arising under the Constitution, laws and treaties of the United States." Osborn v. United States Bank, 9 Wheat. 738, 819. In Murray v. Hoboken, 18 How. 272, 284, this court said that Congress can neither "withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty; nor, on the other hand, can it bring under the judicial power a matter which, from its nature, is not a subject for judicial determination." But in the same case it was observed by Mr. Justice Curtis, speaking for the court, that "there are matters involving public rights which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which Congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper." Of like import was the judgment in Smith v. Adams, 130 U.S. 167, 173, in which the court said that the terms "cases" and "controversies" in the Constitution embraced "the claims or contentions of litigants brought before the courts for adjudication by regular proceedings established for the protection or enforcements of rights, or the prevention, redress or punishment of wrongs."
The principles announced in the above cases are illustrated by the opinion prepared by Chief Justice Taney for the case of Gordon v. United States, 2 Wall. 561, and printed in 117 U.S. 697. That case was brought to this court from the Court of Claims, and related to a demand asserted against the United States. The principal question was whether this court had jurisdiction to review the final order made in the court
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below. The Chief Justice died before the case was decided and the opinion prepared by him in recess was not formally accepted. But if the court approved his views, as it undoubtedly did, the appeal was dismissed upon the ground that Congress could not authorize or require this court to express an opinion on a case in which its judicial power could not be exercised, and when its judgment would not be final and conclusive upon the rights of the parties. "The award of execution," Chief Justice Taney said, "is a part, and an essential part, of every judgment passed by a court exercising judicial power. It is no judgment, in the legal sense of the term, without it. Without such an award, the judgment would be inoperative and nugatory, leaving the aggrieved party without a remedy. It would be merely an opinion, which would remain a dead letter, and without any operation upon the rights of the parties, unless Congress should at some future time sanction it, and pass a law authorizing the court to carry its opinion into effect. Such is not the judicial power confided to this court in the exercise of its appellate jurisdiction; yet it is the whole power that the court is allowed to exercise under this act of Congress." In a more recent case this court dismissed an appeal from a final order made in the Court of Claims in virtue of a particular statute, observing: "Such a finding is not made obligatory on the department to which it is reported -- certainly not so in terms, and not so, as we think, by any necessary implication. We regard the function of the Court of Claims, in such a case, as ancillary and advisory only. The finding or conclusion reached by that court is not enforceable by any process of execution issuing from the court, nor is it made by the statute the final and indisputable basis of action either by the department or by Congress." In re Sanborn, 148 U.S. 222, 226; Interstate Commerce Commission v. Brimson, 154 U.S. 447, 483.
Under the principles established in the cases above cited, the objections urged against the jurisdiction of the Court of Claims and of this court cannot be maintained, if the present proceeding involves a right which in its nature is susceptible of judicial determination, and if the determination of it by
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the Court of Claims and by this court is not simply ancillary or advisory but is the final and indisputable basis of action by the parties.
The money in the hands of the Secretary of State was paid to the United States by Mexico pursuant to the award of the Commission. That tribunal dealt only with the two Governments, had no relations with claimants, and could take cognizance only of claims presented by or through the respective governments. No claimant, individual or corporate, was entitled to present any demand or proofs directly to the Commission. No evidence could be considered except such as was furnished by or on behalf of the respective governments. While the claims of individual citizens presented by their respective governments were to be considered by the Commission in determining amounts "the whole purpose of the convention was to ascertain how much was due from one government to the other on account of the demands of their respective citizens." And "each government, when it entered into the compact under which the awards were made, relied on the honor and good faith of the other for protection so far as possible against frauds and impositions by the individual claimants." Frelinghuysen v. Key, above cited. As between the United States and Mexico, indeed as between the United States and American claimants, the money received from Mexico under the award of the Commission was in strict law the property of the United States, and no claimant could assert or enforce any interest in it so long as the Government legally withheld it from distribution.
When the La Abra Company asked the intervention of the United States it did so on the condition imposed by the principles of comity recognized by all civilized nations, that it would act in entire good faith, and not put the government whose aid it sought in the attitude of asserting against the Mexican Republic a fraudulent or fictitious claim; consequently the United States, under its duty to that Republic, was required to withhold any sum awarded and paid on account of the Company's claim if it appeared that such claim was of that character. As between the United States and the
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Company, the honesty or genuineness of the latter's claim was open to inquiry in some appropriate mode for the purpose of fair dealing with the government against which such claim was made through the United States. We so adjudged in the Key case. The United States assumed the responsibility of presenting the La Abra claim and made it its own in seeking redress from the Mexican Republic. But from such action on its part no contract obligations arose with the La Abra Company "to assume their frauds and to collect on their account all that, by their imposition of false testimony, might be given in the awards of the Commission." Boynton v. Blaine, above cited.
These considerations make it clear that the act of 1892 is not liable to the objection that it subjected to judicial determination a matter committed by the Constitution to the exclusive control of the President. The subject was one in which Congress had an interest, and in respect to which it could give directions by means of a legislative enactment. The question for the determination of which the present suit was directed to be instituted was whether the award made by the Commission in respect to the claim of the La Abra Company was obtained as to the whole sum included therein or as to any part thereof, by fraud effectuated by means of false swearing or other false and fraudulent practices on the part of the Company, or its agents, attorneys or assigns. It cannot, we think, be seriously disputed that the question whether fraud has or has not been committed in presenting or prosecuting a demand or claim before a tribunal having authority to allow or disallow it is peculiarly judicial in its nature, and that in ascertaining the facts material in such an inquiry no means are so effectual as those employed by or in a court of justice. The Executive branch of the Government recognized the inadequacy for such an investigation of any means it possessed, and declared that Congress by its "plenary authority" ought not only to decide whether such an investigation should be made, but provide an adequate procedure for its conduct and prescribe the consequences to follow therefrom. The suggestion that the question of fraud be committed to the determination of a judicial
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tribunal first came from the Executive branch of the Government. Undoubtedly Congress, having in view the honor of the Government and the relations of this country with Mexico, could have determined the whole question of fraud for itself, and by a statute, approved by the President, or which being disapproved by him was passed by the requisite constitutional vote, have directed the return to Mexico, the other party to the award, of such moneys as had been paid into the hands of the Secretary of State. It is also clear that in the absence of any statute suspending the distribution of such moneys, the President could have ignored the charges of fraud and ordered the distribution to proceed according to the terms of the treaty and the award. But it does not follow that Congress was without power, no distribution having been made, to control the whole matter by plenary legislation.
It has been adjudged that Congress by legislation, and so far as the people and authorities of the United States are concerned, could abrogate a treaty made between this country and another country which had been negotiated by the President and approved by the Senate. Head Money cases, 112 U.S. 580, 599; Whitney v. Robertson, 124 U.S. 190, 194; Chinese Exclusion case, 130 U.S. 581, 600; Fong Yue Ting v. United States, 149 U.S. 698, 721. It is therefore difficult to perceive any ground upon which to question its power to make the distribution of moneys in the hands of the Secretary of State -- representing in that matter the United States and not simply the President -- depend upon the result of a suit by which the United States would be bound and in which the claimants to the fund in question could be heard as parties, and which was to be brought in a court of the United States by its authority, for the purpose of determining whether the La Abra Company, its agents or assigns had been guilty of fraud in the matter of the claim that it procured to be presented to the Commission. The act of 1892 is to be taken as a recognition, so far as the United States is concerned, of the legal right of the Company to receive the moneys in question unless it appeared upon judicial investigation that the
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United States was entitled, by reason of fraud practised in the interest of that corporation, to withhold such moneys from it. Here then is a matter subjected to judicial investigation in respect of which the parties assert rights -- the United States insisting upon its right under the principles of international comity to withhold moneys received by it under a treaty on account of a certain claim presented through it before the Commission organized under that treaty in the belief, superinduced by the claimant, that it was an honest demand; the claimant insisting upon its absolute legal right under the treaty and the award of the Commission, independently of any question of fraud, to receive the money and disputing the right of the United States upon any ground to withhold the sum awarded. We entertain no doubt these rights are susceptible of judicial determination within the meaning of the adjudged cases relating to the judicial power of the courts of the United States as distinguished from the powers committed to the Executive branch of the Government.
It remains, in our consideration of the question of jurisdiction, to inquire whether the judgment authorized by the act of 1892 to be rendered would be a final, conclusive determination, as between the United States and the defendants, of the rights claimed by them respectively, or only ancillary or advisory. In our opinion the act of Congress authorized a final judgment of the former character and therefore the judgment of the Court of Claims is reviewable by this court in the exercise of its appellate judicial power. If our judgment should be one of affirmance then the La Abra Company, and its legal representatives or assigns are barred of all claim, legal or equitable, to the money received by the United States from the Republic of Mexico on account of the award of the Commission. Such a determination would rest upon the broad ground that the United States in its efforts to protect the alleged rights of an American corporation had been the victim of fraud upon the part of that corporation, its agents or assigns, and was in law relieved from any responsibility to that corporation touching the claim in question
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or the moneys received on account of it. If, on the other hand, this court should find that the charges of fraud were not sustained or were disproved, and reverse the decree of the Court of Claims, then it would become the absolute legal duty of the Secretary of State to proceed in the distribution of the moneys in his hands according to the terms of the award. It was competent for Congress by statute to impose that duty upon him and he could not refuse to obey the mandate of the law.
Much was said in argument about the interference by the act of 1892 with the discharge by the President of his constitutional functions in connection with matters involved in the relations between this country and the Republic of Mexico. For reasons already given this contention cannot be sustained. It is without support in anything done or said by the eminent jurists who have presided over the Department of State since the controversy arose as to the integrity of the claim made by the La Abra Company. On the contrary, those officers have uniformly insisted that the authority of Congress was plenary to determine whether the award in respect of those claims was procured by fraud practised on the part of that Company and whether in that event the Company should be barred of any claim to the moneys received from the Republic of Mexico. Upon this question the legislative and executive branches of the Government have acted in perfect harmony. The question arises under the Constitution of the United States and a treaty made by the United States with a foreign country, is judicial in its nature, and one to which the judicial power of the United States is expressly extended. Both branches of the Government were concerned in the enactment subjecting that question to judicial determination, and it cannot properly be said that the President by approving the act of 1892 or by recognizing its binding force surrendered any function belonging to him under the supreme law of the land.
It was also said in argument that the act of Congress in some way -- not clearly defined by counsel -- was inconsistent with the principles underlying international arbitration, a
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mode for the settlement of disputes between sovereign States that is now more than ever before approved by civilized nations. We might well doubt the soundness of any conclusion that could be regarded as weakening or tending to weaken the force that should be attached to the finality of an award made by an international tribunal of arbitration. So far from the act of Congress having any result of that character, the effect of such legislation is to strengthen the principle that an award by a tribunal acting under the joint authority of two countries is conclusive between the governments concerned and must be executed in good faith unless there be ground to impeach the integrity of the tribunal itself. The act of 1892 is a recognition of the principle that "international arbitration must always proceed on the highest principles of national honor and integrity." Frelinghuysen v. Key, above cited. By that act the United States declares that its citizens shall not through its agency reap the fruits of a fraudulent demand which they had induced it to assert against another country. Such legislation is an assurance in the most solemn and binding form that the Government of this country will exert all the power it possesses to enforce good faith upon the part of citizens who, alleging that they have been wronged by the authorities of another country, seek the intervention of their Government to obtain redress.
We hold that the act of 1892 is not unconstitutional upon any of the grounds adverted to; that the Court of Claims had jurisdiction to render the decree in question; that such decree, unless reversed, is binding upon the parties to this cause; and that this court, in the exercise of its appellate power, has authority to re-examine that decree and make such order or give such direction as may be consistent with law.
III. The Court of Claims did not make a finding of facts. It is therefore contended on behalf of the United States that the appeal provided for by the act of 1892 does not authorize a reexamination of the evidence, as in equity cases generally; and that the present case comes within the rule prescribed by this court under the authority of the act of March 3, 1863, 12 Stat. 766, c. 92; Rev. Stat. § 708, providing that in connection
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with any final judgment rendered in the Court of Claims there shall be a finding of facts.
In its opinion on the demurrer to the bill the Court of Claims said: "The directions of the statute [the act of 1892] as to the character of the decree seem to be without doubt, and as the court in the trial of the cause is in the exercise of equity powers, it would find no difficulty in entering such a decree as will carry out the purpose of the statute." 29 C. Cl. 432, 522. In its opinion on the final hearing of the case the court below said: "This being a proceeding in equity, this court is not called upon to settle the facts by the finding of ultimate facts for the consideration of the Supreme Court, but the whole record is transmitted to that court, and the case is to be determined in the Supreme Court upon the law as it shall be adjudged and upon the facts as they shall be found by the decision of the Supreme Court. That would be so in a case of this kind arising under the ordinary jurisdiction of the Court of Claims, but it is especially true from the provisions of the statute giving us the special jurisdiction to determine the issues of this proceeding. The statute provides for a decree, and not for a money judgment." After citing Harvey v. United States, 105 U.S. 671, the court continued: "All the testimony being before the Supreme Court for the purpose of settling ultimate facts from such testimony, we have confined the limits of this opinion to questions of law, and the determination of the ultimate fact which is, whether the Company was compelled to abandon its mines because of the acts of the people of Mexico and the Mexican authorities." 32 C. Cl. 462, 515, 516.
In our judgment the Court of Claims properly interpreted the act of 1892. While that act does not, in express words, direct the Attorney General to institute a suit "in equity" or declare that this court on appeal should re-examine the entire case on both law and facts, a suit of that character was contemplated when Congress invested the Court of Claims with full jurisdiction to make "all interlocutory and final decrees therein as the evidence may warrant, according to the principles of equity and justice, and to enforce the same by injunction
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or any proper final process," and gave either party the right to appeal to this court from the final decision within ninety days "from the rendition of such final decree." This construction is not inconsistent with the direction that the Court of Claims should in all respects proceed in the suit brought by the Attorney General "according to law and the rules of said court, so far as the same are applicable," and that the appeal from its final decree should be taken "under the rules of practice which govern appeals from said court." Looking at the words of the act of 1892 and the peculiar nature of the important questions involved in any suit brought under it, we cannot suppose that Congress intended to relieve this court from the responsibility of determining for itself and upon its own view of all the evidence what were the ultimate facts bearing upon the inquiry as to the alleged fraud in bringing about the award in question. The present proceeding, we think, comes within the principle announced in Harvey v. United States, 105 U.S. 671, 691, where it was said that the rule in regard to findings of fact in the Court of Claims had no reference to a case "of equity jurisdiction conferred in a special case by a special act" in which "this court must review the facts and the law as in other cases in equity appealed from other courts." This principle was approved and applied in United States v. Old Settlers, 148 U.S. 427, 428, 465.
We are of opinion that the appeal provided for in the act of 1892 was one under which it is our duty to determine the rights of the parties as in a case in equity. The provision in the act expressly empowering the court below in the event it was found that the award in question was fraudulently obtained as to the whole or any part of the sum included therein by the La Abra Company, to bar and foreclose all claims in law or equity on its part, together with the provision authorizing the court to render such interlocutory and final decrees as the evidence may warrant, according to the principles of equity and justice, and to enforce the same by injunction, imports such jurisdiction in the Court of Claims as may be ordinarily exercised by courts of equity as distinguished from courts of law,
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and as entitled that court to send up the entire evidence for examination here.
IV. We come now to consider in the light of all the evidence whether the award in question was obtained by fraud effectuated by means of false swearing or other false and fraudulent practices on the part of the La Abra Company, its agents, attorneys or assigns.
In view of the exceptional character of the case, and that there may be no ground to misapprehend the basis upon which our decree will rest, we deem it appropriate to set forth in this opinion the principal facts bearing on the issue of fraud.
In its memorial presented to the Commission through the United States, the La Abra Company referred to the mines in Mexico of which it asserted ownership as being of extraordinary richness and historical interest.
It was stated in the memorial that after becoming the proprietor of those mines the Company with all possible dispatch proceeded to the working of them, and to that end sent intelligent agents to Mexico, employed miners, machinists and laborers, purchased mules, equipments, provisions, the best and most improved machinery which were transported on the backs of mules to the mines at heavy cost, and incurred other expenses necessary to the most extensive and successful working of the property; that they expended in the purchase of the mines and in their working the sum of three hundred and three thousand dollars, and as the result of this large expenditure were getting out a large amount of the richest ore and were in the act of realizing the extraordinary profit of a million dollars per annum when, by reason of unfriendly and illegal acts of the Mexican officials, they were compelled to abandon their mines, all their machinery and other property and over a thousand tons of ore obtained by the Company from the mines; that intense prejudice was constantly manifested by the civil and military authorities and by the Mexican populace against all Americans, and especially against those engaged in mining, this prejudice being intensified by the belief that the United States intended to annex Durango, Sinaloa and other States to its territory, and that the La
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Abra Company was assisting in that purpose; that the property of the Company and the persons and the lives of employes were threatened by the authorities and the people, and its superintendent was arrested without having given cause for offence, and fined and imprisoned without trial and without being informed of any offence; that when he applied to the authorities civil and military in Durango and Sinaloa for protection, his request was harshly refused, and acts of violence, encouraged by the authorities, were committed against the property and employes of the Company, which so alarmed the employes that it was impossible to keep them at work; that the authorities repeatedly seized its mule trains loaded with provisions and appropriated the same to their use, and large quantities of ore from the mines were taken from the Company, its employes being deterred by threats from resisting such spoliation; that things finally got to such a pass that an employe of the Company in charge of one of its trains was killed by the Liberal forces and the train seized, and that was made matter of boast by the Mexican officials, and the authorities at San Dimas openly avowed their purpose to drive out all American mining companies and get their property; that the one motive of this persecution was to compel the Company to leave, and thus permit the Mexicans to obtain possession of their valuable property; and that from such persecution, outrages and insecurity it became impossible for the Company to work the mines and they were abandoned as stated, such enforced abandonment utterly ruining the Company.
The memorial concluded by alleging that when the Company acquired the La Abra mines, though they were of immense richness, it was impossible from their neglected state to extract ores except by heavy expenditures; that in connection with the principal mines were buildings of great cost and other permanent structures, but owing to the abandoned condition of the mines they were of no present value; that the large expenditures made by the Company at the mines gave a very great value to them and to the buildings and other permanent structures, and they became and were of the value of
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$1,000,000; that the Company was obliged to abandon one thousand tons of silver ore already extracted, worth $500,000, which it was impossible for them to bring away, and which upon the abandonment of the mines were carried off by the Mexicans and lost to the Company; that when such abandonment occurred the Company was extracting large quantities of ore, and the profits would have been great if it had been permitted to work them; that the Company estimated its clear annual profits which it could have obtained from the mines at $1,000,000 per annum; that in addition to the expenditures in the mines as aforesaid, the Company had expended $30,000 in conducting its business; and that the mines and the improvements and machinery therein had become wholly lost to the Company, and its losses and damages because of the enforced abandonment were $3,000,030.
The memorial also stated that the Company had never received any indemnity for its claim, and its prayer was for an award against the Mexican Government for its damages with interest thereon.
It may be here observed that this memorial contained no hint or intimation that the abandonment by the Company of mining operations in Mexico was due in any degree to its inability or failure to supply the money necessary for the development of its property and to meet the expenses of mining operations.
That the La Abra Company ceased to work its mines in Mexico and practically abandoned them is undoubtedly true. But is it true that they did so in consequence of violence and outrages committed against it by the public authorities of the Republic of Mexico? The United States insists upon a negative answer to this question. It contends that the Company ceased to work its mines and abandoned its property for reasons wholly disconnected from anything done or omitted to be done by the authorities of Mexico and asserts that the La Abra Company suspended operations in that country not only because of want of funds necessary to develop its property, but because of the belief of stockholders that the mines were not of sufficient value to justify a larger expenditure of money;
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and that it was a pure afterthought to attempt by the agency of the United States to fasten upon Mexico responsibility for the losses incurred by the Company in the abandonment of its mining property.
The connection of the La Abra Company with these mines may be briefly stated as follows: In 1865 one Hardy went to the city of New York for the purpose of selling mining property in Mexico which he claimed to own or control and which constitutes part of the property now in question. He there met a person named Garth and exhibited to him some specimens of ore which he stated were taken from that property. Among those whose attention had been called to those mines -- precisely at what time or in what way does not appear -- was a person named Bartholow. Garth and Bartholow were sent to Mexico by New York capitalists to examine the mines. They were accompanied by Hardy and were joined by one who was reputed to be a California mining expert, named Griffith. The party arrived at the mines near Tayoltita, Mexico, in June, 1865. In his deposition taken June 22, 1874, Bartholow stated that after examining the property several mines with their improvements were purchased from the owners, Don Juan Castillo de Valle and Ygnacio Manjarrez, at the price of $57,000, gold coin. Twenty-two twenty-fourths of the La Abra mine, lying immediately contriguous to the mines purchased from de Valle and Manjarrez, were purchased from Hardy and one Luce, at the price of $22,000, gold coin. In the same deposition Bartholow stated: "We then reported said purchases, and all the facts exactly as they existed there, to said gentlemen, capitalists, all of whom were intimate acquaintances, and some of them personal friends and relatives of said Garth and myself, and thereupon they formed said Abra Silver Mining Company, and organized the same under the general mining laws of the State of New York, to work said mines in Mexico, which organization was perfected on the eighteenth day of November, 1865, and said mines and haciendas were duly conveyed to said company by said Garth and myself, we being amongst the very largest stockholders of the same. . . . After receiving the legal titles to all of
[ 175 U.S. Page 470]
said property, as we did, without any reserved interest to said former owners, the said Garth immediately returned to New York, and I proceeded to the city of San Francisco, California, and I there purchased, for and in the name of said Company, as the same had been determined upon by said Garth and myself, a ten-stamp mill, and other machinery and modern appliances for running or working the same at said mines; and I also purchased provisions and supplies of every kind and description, needed by the officers and employes, which could not be purchased to advantage in Mexico, and I shipped the same to the port of Mazatlan, Sinaloa, by steamships and sailing vessels, and from there said machinery and supplies were transported by mule trains, over the mountains of Sinaloa and Durango, to the said hacienda of La Abra Company, San Nicolas, near to Tayolitita, and I commenced, as superintendent, the work of erecting a mill house for said stamp mill, a new hacienda adjoining the old hacienda, San Nicolas, outhouses for officers and employes, and the opening of said mines, with general preparations for carrying on said mining enterprise on a large scale, as was anticipated by said stockholders. In the meantime the said Garth and myself had reported to said stockholders, at New York, our entire action and conduct in the matter of said purchases and preparations, which reports were accepted and fully approved by said stockholders, who, upon the organization of said Company, appointed me as the first superintendent of their said mining operations, and requested me to remain as such superintendent until said works were fairly started, and in successful operation. I had already requested said stockholders, and subsequently the Company, after its organization, to appoint a superintendent to relieve me, as my business in St. Louis was of greater importance to me than my interest in the mining enterprise. My successor was appointed, and relieved me at said mines in the month of May, 1866."
The successor of Bartholow as superintendent in charge of the mining property was Colonel Julian A. De Lagnel, formerly an officer in the Army of the United States. He had had no experience in mining, but was recognized by all --
[ 175 U.S. Page 471]
and properly, according to the evidence in this record -- as a gentleman of integrity and force of character. He left New York for the mines in March, 1866, and arrived there in April of that year. He discharged the duties of superintendent for about one year and until the spring of 1867 and was succeeded by a person named Exall. The latter remained in charge of the mines until about March or April, 1868, when he abandoned the property and returned to New York, and all work at the mines ceased. When Exall left Mexico for New York, the property was placed by him in charge of one Granger. The principal witnesses before the Commission on behalf of the La Abra Company were Bartholow and Exall. The Company did not take the testimony of De Lagnel, giving as a reason for not doing so the impossibility of ascertaining his whereabouts. That excuse is not sustained by the record before us.
During the entire period when Bartholow, De Lagnel and Exall were respectively superintendents at the mines, Garth was the executive officer and manager of the affairs of the Company at the city of New York, representing it in all correspondence with the different superintendents. Whatever omissions of duty were fairly chargeable against the Mexican authorities in respect of the Company's property necessarily occurred after Bartholow took charge at the mines and before Exall returned to New York. During that period of about three years there was a regular correspondence by letter between the respective superintendents and Garth in his capacity as representative of the Company at its chief office in New York. Neither the Commissioners nor the Umpire had those letters before them when the La Abra claim was examined by them. After the award in question, the letter-impression book in which the letters or reports of the superintendents were originally copied was discovered by Mexico and brought by its diplomatic representatives to the attention of the Department of State. Of the identity of that book, as containing the correspondence between the La Abra Silver Mining Company and its several Superintendents at the mines, no doubt can exist although it is insisted that some letters do
[ 175 U.S. Page 472]
not now appear in the book that were once in it. It was, we suppose, principally the evidence furnished by that correspondence that induced Secretary Evarts to report to the President that the honor of the United States required that the La Abra claim should be further investigated in order to ascertain whether its Government had not been induced to enforce against a friendly power claims of American citizens based upon or exaggerated by fraud and false swearing.
That there was before the Commission some evidence which, uncontradicted or unexplained, tended to support the allegations of outrage, violence and neglect of duty on the part of Mexican authorities may be admitted. That evidence came largely from Bartholow and Exall. But it is manifest that the Umpire could not possibly have reached the conclusion he did in respect to the La Abra claim if the letter book, giving detailed accounts from time to time of all that occurred at the mines while in charge of Bartholow, De Lagnel and Exall, had been in evidence when he rendered his decision. The reports made by the Company's superintendents as to the management of the property and of what occurred at the mines are utterly inconsistent with the statement that the Company's abandonment of mining operations and of its property was in consequence of the misconduct and violence of the Mexican authorities. Placing this letter book beside the evidence adduced before the Commission and the Umpire by the La Abra Company, it is clear that the material transactions and incidents which the Company's witnesses before the Commission detailed as establishing the charge against the Mexican authorities were misstated or grossly exaggerated. It now appears that much of the evidence upon which the Commission must have rested its conclusion was wholly without foundation and had its origin in a fraudulent purpose or plan to make it appear that the public authorities of Mexico were chargeable with a responsibility that could not fairly or justly be imputed to them.
Let us see how far this general statement is justified by the evidence adduced in the present case when examined in connection with the testimony brought before the Commission.
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In the memorial presented by the Company through the United States the principal specification of the outrages alleged to have been committed by the Mexican authorities was that "one of the personnel of the Company, in charge of one of its trains, was openly killed by the Liberal forces, and the train seized, and that was made matter of boast by the Mexican officials, and the authorities at San Dimas openly avowed their purpose to drive out all American mining companies and get their property." The particular matter here referred to was that of the killing during the superintendency of Bartholow of William Grove, an employe of the Company. We have already referred to the deposition of Bartholow taken June 22, 1874. It seems that prior to that date the Mexican Government had taken the deposition or affidavit of Pio Quinto Nunez and Cepomuceno Manjarrez. Nunez, who resided in the district where the mines were situated, among other things testified "that it is not true that these Americans abandoned their enterprise on account of the acts of Mexican officials, and that it is equally false that either the civil or military authorities, or the inhabitants of the district, made any prejudicial opposition to them, as they have alleged they did; that the deponent has never seen or heard it said that any superintendent was imprisoned, and much less does he believe that such superintendent complained to the civil or military authorities in Durango and Sinaloa, and was denied the protection thus solicited; that he has never known that the authorities have countenanced acts of violence against the interests and employes of the Company; that it is false that the authorities, as the Company allege, took possession of their mules and provisions, and appropriated the same to their own use; that the Company never had any ore taken from them, as they affirm, since that which they took out of their mines still exists, as before stated; nor have their employes ever been threatened by any Mexican with intention to rob them; that the Company has no reason to complain, in any way, against Mexico, because they did not abandon their operations on account of the Mexicans, but because they themselves did not understand how to carry on the working
[ 175 U.S. Page 474]
of the mines, as is proven by the unproductive manner in which they worked; that this is the cause of their abandonment, and not, as they say, from any want of security; that the reparation, which the Company claims of Mexico, is not founded in justice, because the allegations upon which it is based are false." Manjarrez, residing in the same district, testified to the same effect.
Now, when Bartholow's deposition was taken in 1874 he was asked whether the statements made by Nunez and Manjarrez and other witnesses for Mexico were true. He answered in the negative, saying they were wholly untrue. In response to an inquiry as to the circumstances of the murder of one of the employes of the Company in charge of mule trains or supplies, he then testified: "His name was William Grove; he was one of my most valued employes; he was murdered between the town of San Ignacio and Tayoltita; I afterwards recovered his body; it was badly mutilated by gunshot wounds, evidently produced by a volley of musketry. This occurred in January or February, 1866. At the time of the murder Mr. Grove was in the employ of the Abra Company as quartermaster, and was entrusted with the charge of one of our mule trains, used for transportation of supplies. Mr. Grove was murdered by soldiers of the Republican army. The train that was the special charge of Mr. Grove was taken possession of by the military authorities, with its entire outfit and supplies, all of which were totally lost to the Abra Company. The mule trains owned and worked by the Company, at that time, were three in number, aggregating about one hundred and fifty mules; the train so taken was one of the three here mentioned."
This was a very imposing statement in support of the charge in the Company's memorial as to the murder of one of its employes and the seizure of its property by the Mexican authorities. But the charge had no foundation in fact, if Bartholow's account of the affair as contained in his report made to the Company when all the circumstances were fresh in his mind was true. In his report to Garth as the representative of the La Abra Company, of March 7, 1866, -- which
[ 175 U.S. Page 475]
report appears in the letter book above referred to, -- he said: "In my last letter I informed you that one of my employes, Wm. Grove, Esq., formerly of Saline Co., Mo., was missing, and I feared had been waylaid and murdered; since then my worst fears have been realized, for after a search of two weeks his body was found buried in the sand on the bank of the Piastla River, some ten miles above the mouth of Candalaro Creek, near where he had been murdered. At the time of the discovery of the body it was in such an advanced state of decomposition that it was impossible to ascertain the manner in which he had been killed. His mule, pistol and clothing have not yet been found; the mule is, however, likely to turn up, as it had our hacienda brand 'U.S.' on the left shoulder. These facts were promptly laid before the commander of the Liberal troops at San Ignacio, Senor D. Jesus Vega, who took great interest in the matter and promised to use all the means in his power to discover the murderers and bring them to justice, and he has had arrested and placed in confinement two men charged with the crime, and his soldiers are in pursuit of the third. These we are assured will be tried by court martial, and if found guilty will be summarily executed. Mr. Grove, I think, lost his life by imprudence in talking; he had resided in Mexico for six or seven years, spoke the language quite fluently, and ought to have understood the character of the people. I had nominally purchased a train of pack mules in Mr. Grove's name and sent him to San Ignacio to obtain a permit for them to pack for me, and a guarantee that they would not be taken by the army; he succeeded in getting these documents and was on his way home to take possession of the mules and start them to packing; he passed the night previous to his death at the house of one Meliton, at Techamate, the place where you will recollect we stopped for dinner on our first trip up, where we had quite a quantity of watermelons. This man Meliton had a bad reputation, was some years ago convicted of murder and robbery and sentenced to be executed, but got clear by bribery. Grove told this man of his purchase of the pack train, and that he was to
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pay $4000 for it, and was on his way to take possession of it and start it to work, thus leaving the impression that he had this sum of money with him. Now, whilst I do not think that Meliton committed the murder, I have no doubt of his having planned it and arranged for it to be done, and the imprudence of Mr. G. in telling this man the circumstances above mentioned, in my opinion, was the cause which led to his murder, which was effected between Techamate and Tenchuguilita, about midway between the two places." In a subsequent report to Garth under date of April 10, 1866, he said: "I wrote you fully in my last letter detailing the circumstances of the murder of William Grove and the finding of his body. Since then the Liberal authorities have taken the matter in hand and arrested one of the murderers at this place. The villain was actually in our employ, doubtless for the purpose of ascertaining when an opportunity should offer to waylay and murder another of our men if the prospect for plunder was sufficient to warrant the risk. When the officers arrested him I had him conveyed to the blacksmith shop and securely ironed. The next day he was conveyed to San Ignacio and thence to Cosala, where he was tried. We failed to convict him for the murder of Grove, but he was convicted for the murder of a woman, whom he killed previously, and sentenced to be shot, and before the execution of the sentence he confessed the murder of Grove, and revealed the names of his two confederates; these two would have been arrested before this but for the expulsion of the Liberals from the country. Now we will have to wait for the Imperialists to put their officers in power before we can act any further in the matter."
These letters were not before the Commission. If they had been, that body could not have attached any importance whatever to the statement in Bartholow's deposition of 1874 to the effect that the murder of Grove was committed by soldiers of the Republican Army, or to the charge in the Company's memorial that such murder "was made matter of boast by Mexican officials."
Another of the outrages alleged to have been committed
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by the Mexican authorities and to have resulted in driving the La Abra Company from its property was described in the original evidence as the robber of Scott, one of its employes. That evidence indicated that the robbery was by the military authorities then in control in the locality of the mines. Referring to "the military authorities of the Republic" under the command of General Corona, Bartholow stated in his deposition of 1874: "One of the employes of the Company, who had been sent to Mazatlan on business, was robbed by said military authorities, near Camacho, in Sinaloa, while on his return from Mazatlan to the Company's works, of eleven hundred and seventy-eight dollars of the moneys of the Company, which amount never was repaid to the Company, nor was the Company ever indemnified for the same in any way. I recollect the exact amount taken, because I entered the same on the books of the Company, charging the same to the 'robbery account,' where other 'prestamos' and robberies were entered. The name of this employe who was so robbed of the Company's money was George Scott, commonly called 'Scottie.' This transaction was nothing less than highway robbery by said troops, and was in addition to the several 'prestamos' levied and enforced by the military authorities, which, I have said, ranged from three to six hundred dollars. The amount of cash 'prestamos,' so levied and enforced during my said superintendence, amounted to a little more than three thousand dollars, but the value of the mule trains and supplies so taken from the Company by the said military, while I was superintendent, was not less than twenty-five thousand dollars."
The same incident was described in an affidavit made in 1870 by a witness for the Company named Clark, who was a contractor for the Company while Bartholow was in charge of its property. He said that he knew "of other abuses of said Company by the military authorities aforesaid; that in the early part of 1866 an employe of said Company, whose name, deponent believes, was George Scott, (called 'Scottie,') who was on his way from Mazatlan to the works of the Company in Durango, was met in the road by an armed party of
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the said military between Mazatlan and deponent's residence in Camacho, and said armed party of troops, of the Republican army of Mexico, did, by force of arms, take from said Scott, or 'Scottie,' about twelve hundred out of three thousand dollars in gold coin, ($3000,) Mexican ounces, 187 1/2 ounces, which money belonged to said 'La Abra Silver Mining Company,' and was being transported to said Company by the said 'Scottie,' who appealed to deponent to visit, with him, the headquarters of the army in that district, and to ask General Guerra to return said money, or to receipt for it, in order that he might have something to return to said company; that deponent did so visit General Guerra's headquarters with the said 'Scottie,' but was informed by the commanding officer that he could not give up said money. After said Scottie had wasted two or three days to obtain some kind of acknowledgment of the taking of said money, he became disgusted, and returned to report the facts to his Company at Tayoltita."
How differently this affair was regarded at the time by Bartholow is shown by his report to Garth, to be found in the letter book, under date of April 10, 1866. In that report Bartholow spoke of the difficulties he had met and overcome, and stated that a demand for taxes amounting to three or four thousand dollars had been easily met, after corresponding with the collector of taxes, by the payment of thirty dollars, and that there was no necessity of troubling General Corona with the matter. He proceeded: "In consequence of the unsettled state of the country and the presence of bands of robbers on and near the roads leading from here to the port, I have had a great deal of trouble to get money from time to time transported to pay my hands and other expenses, and in consequence I was, of course, unwilling to risk any very large sum at one time: yet, when we were getting timber and doing other work which required a great many Mexican laborers, we frequently needed $1000 per week, and of course all that the proceeds of the sales of goods did not supply had to be brought from Mazatlan, but In so managed it that we never had more than from $1500 to $2000 at risk at one time, and all came through safe except in one case. This
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occurred some two weeks ago, when I sent Mr. Scott to San Ignacio to settle our taxes with the authorities. I gave him a check on Messrs. Echeguran, Quintana & Co., for $1000 to bring up. Besides this he had some money outside of this sum which was left after paying the taxes in San Ignacio. He got the money as directed and started out of Mazatlan to overtake a train which was bringing up some supplies for us and Mr. Rice, and when about twenty miles out from the port, near the town of Comacho, six or eight armed men sprang into the road and with their guns levelled upon him forced him to dismount, and robbed him of $1178 in money, his pantaloons and boots (the latter, however, being No. 12, were too large for any of the villains, and were returned). He immediately informed the nearest commander of the Liberal forces of the fact, who sent for him for the purpose of identifying the robbers. He complied, but could not find them, for the reason that the officer could not find even half his men. I also at the same time opened a correspondence with General Corona through the prefect, Colonel Jesus Vega, at San Ignacio, who by the way is, I think, one of the most perfect gentlemen I have met in the country, and I am of the opinion that but for the turn in military affairs which occurred a few days since, we would in some way or other have been reimbursed for the loss, but now I have no hopes whatever, and we may as well charge up $1178 to profit and loss."
Can the statements in that report be reconciled with the declaration in the affidavit of Clark and in the deposition of Bartholow that the robbery of Scott was by the military authorities of the Republic under General Corona? We think not. The affair as described in that letter could never have been made the basis of a finding that would place the responsibility for this robbery upon the public authorities then holding control in Mexico.
We now refer to a matter occurring during the superintendency of De Lagnel. It was referred to in argument as the Valdespino forced loan. Alluding to this exaction in his deposition, taken in rebuttal while the case was being prepared for the Commission, and being asked whether it was paid by
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him, and if not by whom, Exall said: "It is untrue that any part of it was paid by me, voluntarily or otherwise. I was not superintendent until September, 1866, and this loan was made in July, 1866, when Colonel De Lagnel was superintendent, as will be seen by the order addressed by said Valdespino to Colonel De Lagnel, and to the best of my recollection, the whole amount, $1200, was required of and paid by said De Lagnel." Granger, in whose charge the property was left by Exall in the spring of 1868, made an affidavit in 1870 which the Company used before the Commission in support of the charge that the Mexican authorities had imposed upon it forced loans or prestamos. He said: "Said Company was also forced to pay 'prestamos.' A letter was received by Colonel De Lagnel, superintendent of said Company, from Colonel Valdespino, of the Republican army of Mexico, dated July 27, 1866, and signed 'Jesus Valdespino,' which came into my possession as clerk of the Company, and which letter has never, since its receipt, passed out of my possession; and I now present the same to the consul, marked 'Exhibit Z.' This letter demands twelve hundred dollars ($1200) from said Company for the support of his forces, under his command. It is needless to say the demand was complied with."
Here we have a distinct assertion by the Company, through its witnesses, that this demand to pay $1200 was met by the Company. The fact was just the reverse, as must have been known to some of the representatives of the Company who were accredited by it to the Commission as witnesses having knowledge of the facts. On the day succeeding the receipt of Valdespino's letter Colonel De Lagnel wrote to the Gefe Politico of the San Dimas mines as follows: "In due time reached me your communication of yesterday in regard to a loan or tax which you exact from the residents of the district for the support of the forces of Colonel Valdespino, and having noticed the contents thereof I answer it forthwith. I send you part of the articles I have and which you ask me for, hoping that they be useful and acceptable to you. As regards the cash I am sorry to inform you that it is impossible for me to send you even a little, because I have not here the
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necessary amount to defray my many and constant expenses. I request you to consider that this hacienda has brought the country thousands and thousands of dollars, most of which have been spent among the needy people of this district, and a considerable part in duties paid into the treasury of the district, under whose flag Colonel Valdespino is serving. As it is public and well known, not a single dollar have we received of this sum up to date. I send you two pieces of blue mohair and two pieces of bleached cotton, valued at sixty-five dollars and seventy-five cents, of which amount be pleased to send me the corresponding receipt, in order that it may serve me as a voucher to the Company I have the honor to represent." At the same time De Lagnel wrote to Colonel Valdespino: "Your favor of yesterday informs me of the sad situation in which you find yourself for the lack of resources and of your intention to procure them preparatory to leaving the district. Understanding the great need that you are in and considering, as you yourself state, the many evils that we would suffer if you should bring your forces here, I do all I can to overcome the difficulties, and I have sent to the political chief of the district two pieces of mohair and two of bleached cotton, those being the only things among the necessary things mentioned which I have. It is impossible for me to contribute with money in order to provide you with what you need today. Be pleased to consider that our reducing works are not complete, and therefore unproductive, without reckoning the many expenses that we yet have to make, the proximity of the rainy season, the scarcity of money, and the abnormal political situation, which cannot but cause us serious damages. I am not, therefore, in a condition to accede, as you desire, to the wishes of the political chief, but have sent him what I have, hoping that they be accepted as a token of my good will. I suppose that having contributed with what I can I may, as a matter of course, resume my work without fearing the interruption that would be caused by the arrival of armed forces." But this is not all the evidence on this point. De Lagnel, under date of July 31, 1866, wrote to Rice, the superintendent of the Company at San Dimas, saying: "As to the
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forced, voluntary (?) loan, it was an impossibility to meet the demand, and I so stated in my note to the prefect."
If any additional evidence were needed to disprove the statement before the Commission that the Company by its agent had met and paid the levy of $1200 by Valdespino to be used in supporting his troops, it is found in De Lagnel's deposition taken in this cause. His attention being called to the reference in the letter book to this levy or forced loan, he said: "I received from the civil officer in San Dimas, and also at the same time from Colonel Valdespino, letters, both bearing on the same subject. He had come into the vicinity with a command of cavalry -- Liberal cavalry -- destitute. The mules were broken down by coming over the mountains. They wanted food and clothing and money, and they wrote to me, saying that they had apportioned it on the two mining companies, the one at San Dimas and the one with which I was connected, levying one quarter upon us, and the other half was to be borne by the citizens. I was advised to comply. They wanted $300, if I recollect right, in money. I didn't have the money to give them, and didn't intend to give it even if I had it. . . . I sent them a few goods -- some stuff they wanted, blankets, and hats. I sent them some goods, cotton goods, and wrote a courteous note to each one of them, expressing regret that I could not comply with their wishes, and stating that we had no money, because the mines had never turned out a dollar. They wrote me an acknowledgment and sent a receipt for the goods and courteous acknowledgments. That was the end of it."
There are many other specific matters discussed in the elaborate briefs of counsel. To consider each of them and show the grounds upon which our conclusions rest would extend this opinion far beyond all proper limits. There were undoubtedly some unpleasant occurrences, such as the affair between Exall and Perez, a local judge, growing out of a misunderstanding by the latter of Exall's order to him to keep out of a particular room at the mines. But none of those occurrences had any real connection with the abandonment by the Company of its mining property in Mexico; and as is
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evident from the new proof adduced in this cause, they were described by the Company and its witnesses in the testimony before the Commissioners in such exaggerated terms as to justify the charge of fraud made in the bill filed by the Government.
What does the letter-impression book disclose as the real cause of the Company's abandonment of its mines?
In the reports made by Bartholow, the first superintendent, to Garth of February 6, March 7 and April 10, 1866, no statement is made which even by inference showed that any difficulties were in his way that had their origin in the acts or conduct of the public civil or military authorities of Mexico. On the contrary, one letter shows that he obtained military protection for the mill transported from Mazatlan to the mines, and another one that he had pleasant relations with the civil and military authorities of the locality.
Looking next at the reports of De Lagnel, the second superintendent, we find a letter of July 6, 1866, from him to Garth, showing that there was then a heavy outstanding indebtedness against the Company that compelled the superintendent not only to lessen expenditures, but to reduce the working force nearly one half, and pay the workmen for their services one half in cash and one half in goods. Under date of October 8, 1866, De Lagnel wrote: "I am troubled exceedingly that better success has not attended my efforts, but the rainy season has proven a sore trial to my patience and been a serious drawback. I have striven to meet your wishes and expectations, and regret that my success has not been commensurate with my efforts to serve you and discharge my duties. As to sending a successor, I deem it best to tell you now that no money could tempt me to remain in this country longer than next 1st March." On the 17th of November, 1866, De Lagnel wrote from Mazatlan to Garth: "Had nothing occurred to interrupt the work, I feel sure that at this time the mill would be in operation, and the proofs at last being developed. Unfortunately, I was unable in September or October to communicate with this place; and the ready money giving out at the hacienda, the workmen (not miners)
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refused to continue and left, thus bringing the ditch-work to a standstill. . . . In the utter impossibility of obtaining aid here, I have, despite the tone of your letters, drawn upon you for the sum of seven thousand dollars. I feel sure that you will experience no greater feeling of annoyance in receiving the intelligence than I do in communicating the fact; but after debating the thing long and carefully, I am satisfied that it is the best course to pursue. Longer delay in executing the work would be most injurious, perhaps fatal. . . . At present the mine is, I may say, bare of metal. A few days before I left metal had been struck again, but in so small a quantity as to forbid much hope."
Under date of January 5, 1867, De Lagnel wrote again to Garth from Mazatlan: "In your latest letter, the 20 Nov'r, you there informed me that you can meet no further drafts upon you; yet I had already, about the 17 Nov'r, drawn on you as treasurer for the sum of seven thousand dollars. I wrote to you fully by the same mail, and hoped to be able to send the letter via Acapulco, and thus reach you before the draft. In this I was disappointed, and my letters having gone via S. Francisco will reach you at the same time that the d'ft comes in for payment. I trust that, despite what you say, you will find some way to satisfy the draft, for if it goes to protest it will be of incalculable injury to the best interests of the Co. To me the consequences of such a thing would be both mortifying and most embarrassing, but to the Comp'y's interest they would prove far more serious. It is therefore that I urge upon your serious consideration the interest at stake, and pray that a prompt settlement be given upon presentation."
De Lagnel was again in Mazatlan on February 5, 1867, and on that day wrote to Garth, saying: "I had hoped, and fully expected, to be able by this time to send forward some return for the outlay incurred by the Company in the prosecution of its enterprise; but am disappointed in not yet having succeeded in bringing on the water in sufficient quantity to drive all the machinery. . . . The supplies laid in during the past year being in great part exhausted, and a new supply
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being absolutely necessary to keep the mines, etc., going, and there being necessity for ready money in order to purchase the requisite supplies, I have drawn upon you for seven thousand five hundred dollars in favor of the Bank of California. This I would not have done had it been possible to do otherwise; but no assistance can be had in this country. I have satisfied myself on this point, and had only the alternative to stop operations or draw on you."
We come now to the period during which Exall was superintendent. His reports to Garth, as the representative of the Company, and Garth's letters to him, make it clear that its bankruptcy was all the time imminent, and that the time was near at hand when all work at the mines would be suspended, not because any obstacles were put in the way of the Company by the Mexican authorities, but solely because it was without money to employ in developing the property.
The first letter written by Exall shows that the financial situation at the mines was such as to require the utmost economy on the part of the Company's superintendent.
Under date of May 6, 1867, after De Lagnel departed for New York, Exall wrote: "I have, as far as I think safe, reduced the number of hands at the mines, keeping only a sufficient number to show that they are still being worked. I have a light force in the Christo; no improvement in the metal; a light force in the La Luz; the metal about the same. . . . I have discharged a greater portion of the Hacienda hands."
On the 10th of May, 1867, Garth wrote to Exall a letter in which, after expressing the hope that De Lagnel would soon arrive at New York, he said: "The affairs of the Company here are much embarrassed; a few of the directors have advanced all the money to carry on the operations and have been nearly ruined by it, and are not able to afford any further aid from here, and look anxiously to be reimbursed very soon from the products of the mine, and it is hoped that your best energies will be exerted to afford relief."
Again, under date of May 20, 1867, Garth wrote to Exall, and referring to De Lagnel's draft for $7500 said: "This draft
[ 175 U.S. Page 486]
arrived on 2d April last, and was paid by one of the directors of the Company, as it was considered that was surely the last that would be needed, and we expected to return the money by an early remittance of bullion from Mexico. You can judge of our surprise and chagrin, when the last steamer arrived, instead of bringing Colonel De L. with some fruits of our works, a draft for $5000 in gold was presented for payment by Lees & Waller, drawn by De Lagnel, favor Bank California, and dated 10th April last, and of which we had not received any notice or advice whatever, and have not yet received any. As I had so often and fully advised the superintendent of the condition of affairs here and requested him not to draw further, I was much surprised that he did so, and that without giving any notice or reason for so doing. As it was found impossible to raise the means to pay this draft, it was protested and returned unpaid, and you must make some provisions for its payment when it gets back. I do trust that before that date you will have plenty of means to do so. I would now again repeat that I have made every effort possible to raise the money here and have failed, and I have advanced all i can possible do, and the other directors have done the same; the stockholders will do nothing, and it is probable the Company will have to be sold out and reorganized."
This was followed by a letter from Garth to Exall of date May 30, 1867, in which it was said: "We wrote to you on the 20th instant, informing you that we had nothing from you or Colonel De Lagnel, but that a draft drawn by Colonel De L. from Mazatlan, 10th April last, had been presented, and there being no funds on hand, and no means here of meeting it, that it was protested and returned not paid; it is hoped by the time it gets back you will be prepared to meet it. Since my last letter Colonel De Lagnel has arrived and made known to us something of the state of things with you. I must confess that we are amazed at the results; it seems to me incredible that every one should have been so deceived in regard to the value of the ore, and I can but still hope that the true process of extracting the silver has not been pursued, and that before this time better results have been attained. . . . All expenses
[ 175 U.S. Page 487]
must be cut down to the lowest point, and you and Mr. Cullins must try and bring this enterprise into paying condition if the thing is possible -- at any rate, no further aid can be rendered from here, and what you need must come from the resources you now have. Neither must you run into debt; cut down expenses to amount you can realize from the mines. I cannot yet say what can be done in the future; no meeting of the stockholders has been held, and nothing done to pay off the debts here, now pressing on the Company. For the present, all I can say is that the whole matter is with you; take care of the interests and property of the Company; don't get it involved in debt, and advise us fully of what you are doing."
Garth wrote again, June 10, 1867: "We have not heard from you since Colonel De Lagnel left Mexico, but hope that you are well and getting along as well as could be expected. The account that Colonel De L. gave us of the quality of the ores on hand was most unexpected and a fearful blow to our hopes. We trust however that a fuller examination will show better results. We have in previous letters to you and to De Lagnel so fully informed you of the condition of affairs here that it is hardly necessary to say anything further on that subject. There is no money in the treasury, and we have no means of raising any, and a few of us have already advanced all that we can do, and you have been advised that the draft last drawn by De L., on 10th April, was returned protested, and I hope you will be able to take it up when it gets back promptly. Everything now depends upon you and upon your judgment, energy, prudence and good management of the resources in your hands, and we hope you will be able to command success."
So straightened were the circumstances of the Company at that time that it was sued in New York on promissory notes past due, (one of the notes being held by an assignee of Garth,) and it permitted judgment on them by default in July, 1867, for the sum of $53,653.50. Manifestly that suit was instituted with the consent, if not by the direction, of the officers of the Company who had charge of its affairs in New
[ 175 U.S. Page 488]
York, who were aware of its financial embarrassments and knew that it must soon suspend business and go into liquidation.
By a letter of June 11, 1867, Garth was informed by Exall that he had been compelled to draw on him for $3000. The latter's letter of July 13, 1867, expressed regret that the draft made by De Lagnel before he left for New York could not be paid, and stated: "All your previous letters to me were to follow out the instructions given to Colonel De L. I took charge of affairs at a time when the expenditure of money was absolutely necessary to purchase supplies for the rainy season. Colonel De L. left me with only moderate means to buy these various supplies; pay't of sundry bills which were coming due, and pay of the workmen who had accounts of three, four and six months' standing."
On the 10th of July, 1867, Garth wrote to Exall: "I had this pleasure on 30th May and 10th June last, after the return of Colonel De Lagnel, and we had learned something of the condition of affairs in Mexico. In these, as well as in preceding letters, you were fully advised of the condition of the Company here; that there had been no funds in the treasury for a long time; that appeals had been made in vain for aid to the stockholders, and that the parties here who had made heavy advances to the Company were anxious for its return, and refused to make any further payments; and that the draft for $5000 drawn on me as treasurer by Colonel De Lagnel, on the 10th April last, had been protested and returned to California, and, we suppose, to parties in Mazatlan who advanced the money on it, and who would have to look to you for payment of same; and we expressed the hope that by that time you would have taken out sufficient money to meet it and all other expenses, and hoped soon to have a remittance of bullion from you to aid in payment of the large indebtedness here. . . . You will see, from all my letters, that no further aid can be given you from here, and that you must rely upon the resources you now have, and which, we think, ought to be ample to pay off the debts and to sustain you in current expenses, which you should cut down to the
[ 175 U.S. Page 489]
lowest possible point. . . . Don't run into debt or get into difficulty with the authorities, if there are any such things existing; but at the same time be firm in maintaining your rights, and don't submit to imposition except by force, and then make a legal and formal protest as a citizen of the United States and as an American company duly organized and prosecuting a legitimate business under the protection of the law, and our rights will be protected by our Government."
Garth wrote again on the 20th of July, 1867: "The steamer is just starting, and I have only time to say that your letter of the 11th, by private hand, has been rec'd, advising us that you had drawn on me for $3000 gold. In former letters you will have learned the condition of things here, and that there is no money to pay same, and that former dr'ft of De Lagnel has been returned unpaid, and that you were urged to try and get along with what resources you had. These letters, no doubt, reached you in time to prevent your drawing, as no draft has been presented, and we hope by this time there is no necessity for doing so."
Under date of October 6, 1867, Exall wrote to Garth: "By this steamer I am in receipt of yours of 10th and 20th of July and 10th of August. I was much disappointed that my urgent demand for money was not favorably answered. I have complied with the requests in your various letters in reference to giving you exact information concerning affairs here. I now have to urge you to send me means. I have heretofore been keeping above water by using the stock which I fortunately had on hand; that is now entirely exhausted. I have neither money, stock or credit. This latter I would not use even if I had it, as in this country it is an individual obligation and no company affair. Now, you must either prepare to lose your property here or send me money to hold it (and that speedily) and pay off debts of the concern. I have worked as economically as possible and have cut down expenses to the lowest point. . . . I am working the mines with as few hands as possible. What little good metal is taken out amounts to almost nothing. The $5000 draft of De Lagnel's was sent to a house in this place to be collected, with instructions
[ 175 U.S. Page 490]
to seize the property in case it was not paid. It troubled me a great deal, and I had much difficulty in warding it off. The concern to whom the draft was sent showed me his instructions and also the original draft. Fortunately for the Company there was a flaw in the draft; De Lagnel failed to sign his position, as superintendent of the La Abra Silver Mining Company; simply signed his name, making it an individual affair. This was the only thing that kept them from seizing the property. I told them they could do nothing with the property here, as the Company were not obligated on the draft. I have exhausted all the ore that I had on hand that was worth working. That which I worked was very poor and the yield small. The La Luz, on the patio, won't pay to throw it into the river. I have had numerous assays made from all parts of each pile; the returns won't pay. Amparas are not now granted, and mines are to be held only by working. I am compelled to keep men in mines which yield nothing, merely to hold them. This I can do no longer, as I have nothing to give the men for their labor, and must now take the chances and leave the mines unprotected."
The same letter contains a statement as to the situation which contrasts most strangely with the charge that the Company was prevented from successfully working its mines by the conduct of the Mexican authorities. That statement was: "By next steamer will send you full statements of past months. The returns from Durango were small. I turned it over to E.P. & Co., as I was owing them. There is no difficulties about authorities, boundaries or anything else concerning the mines and hacienda, provided there is money in hand, and money must be sent. I hope I have urged this point sufficiently so that you may see fit to send me something to hold the mines. I should be sorry to see them lost on this account. Please telegraph me if you intend sending money? I fear that before I can get a reply to this something may have occurred. Of course, Colonel De Lagnel informed you the conditions and terms on which I took charge of affairs here, which was the same that he was getting, and if I had known at the time what difficulties I was going to have in procuring
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means to keep the concern in motion, I would have refused on any terms. I am much in need of money, as I wish to use it here. I will, in a month or so, draw on you through Wells, Fargo & Co., San Francisco, for $1500 -- please inform me by earliest opportunity that you will meet the draft. . . . I hope that before this reaches you some steps will have been taken to procure means to operate with."
On the 10th of October, 1867, Garth wrote to Exall: "I am very sorry to say that it is not possible to aid you from here, and that you must rely entirely upon the resources of the mines and mill to keep you going and to relieve you of debts heretofore contracted. It is not possible for us to direct any particular course for you, but only to urge you to try and work along as well as you can, cutting down expenses and avoid embarrassing yourself with debts. The Bank of California has again sent Colonel De Lagnel's draft here for collection, but it was not possible to pay same, and it will have to return to Mexico, and we do hope you will be able to make some satisfactory arrangement to pay it."
Under date of November 17, 1867, Exall wrote to Garth from Mazatlan: "Yours of the 30th September is just at hand, and contrary to my expectations, contains nothing of an encouraging nature. I expected after having previously written so positively in reference to the critical state of affairs with me, that you would have sent me by this mail some means to relieve me from my embarrassing position. I have in former letters laid before you the difficulties under which I was laboring and begged that you would send me means, and was relying much on the present mail, expecting that some notice would have been taken of my urgent demands for assistance to protect the property belonging to the Company. To add to my further embarrassment, Mr. Cullins, whose time expired on the 16th inst. -- since my leaving Tayoltita -- (I left there on the 10th for this point), intends to commence suit in the courts here for his year's salary. I am endeavoring to get him to delay proceedings until the arrival of the next steamer (don't know as yet if I will succeed in getting him to delay), when I hope you will have seen the necessity of acting
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decidedly and sending means to prosecute the works and pay off the debts of the Company, or abandoning the enterprise at once. Nothing can be done without a further expenditure of money. I am now doing little or nothing in the mines, and will, when I return, discharge the few men who are now at work in them. This I am compelled to do, as I have no money, and my stock is almost entirely exhausted, and I fear if money isn't very soon sent some of the mines will become open to denouncement. In my last letter I mentioned the amount required for immediate demands, $3000, which must be sent out. By next steamer Mr. Elder, Slone and Cullins, if paid off will sail for San Francisco; if not paid off, suit will be commenced, and as I have no means to defend the case, fear it will go against me. When these parties leave, the hacienda will be left almost entirely alone, there being only myself, Mr. Granger, who I am also owing, and I away most of the time. What you intend doing must be done promptly. Please send me Mr. Cullins' contract with you. The political state of the country just now is rather discouraging. I hope by the time this reaches you you will have rec'd statement sent. Everything at mines as it was when I last wrote, only more gloomy in appearance on ac't of not being able to employ the people and put things in operation. Please do something immediately, and inform me as speedily as possible."
Still relief did not come to Exall and he again wrote to Garth from Mazatlan, under date of December 18, 1867, a most urgent letter. It is here given in full: "I arrived here a few days since. Received by steamer yours of October 10, informing me of your inability to send me the means to operate with and meet my obligations. I have in previous letters expressed the condition of affairs with me, and begged that you would do something. Thus far I have been able to protect your interests here, but affairs have gotten to such a point that I am unable to do so longer without money. Mr. Cullins, who I informed you in a former letter would leave, insisted upon doing so by this steamer. He demands a settlement, otherwise he will immediately commence suit, and had made preparations to do so. To keep the matter from the courts
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I was compelled to borrow money to pay him off. The balance due him, and the amount I had to borrow here, was $1492. He has troubled me a great deal -- has been exceedingly unreasonable. On yesterday the agent of the Bank of California informed me that he received the draft by the last steamer (which arrived a few days ago), and would immediately commence legal proceedings, and sent the draft on to the courts here. I am utterly unable to oppose them; first, I have no means, and, again, I am not your agent here, never having received a power of attorney from you, which will be necessary, for I cannot act in these courts without it. The Bank of California and will do something to recover the amount of the draft before the amount is doubled by the expenses. For God's sake telegraph to pay them. Matters of this nature once getting in these courts it takes large sums to oppose them. The first steps taken by the courts will be to send some one to the hacienda to see to and secure everything there. This will, of course, stop everything and make it impossible for me to protect your interests. For your own sake in the matter pay them before things go further. My position is extremely embarrassing, and I know not what to do, and will have to be guided entirely by circumstances. I will, of course, do everything in my power, and may have to act in a very cautious manner, and will probably act in a manner which may occasion censure. Now, all I ask of you is to judge my actions justly, and consider my circumstances, and believe I am doing the best for your interests. I am doing nothing at the mines, and have only one person left with me. Please attend to this matter promptly. I am writing very hurriedly, as there is a war steamer just leaving for San Francisco, which will arrive there some days prior to the regular mail. I leave for the mines in a few hours. Attend to this at once and telegraph me."
Exall still failed to hear anything of an encouraging character from the Company. He again wrote most urgently to Garth on the 24th day of January, 1868, as follows: "I came down to meet steamer from San Francisco, in hopes of receiving letters from you; I received none, and now, being entirely
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out of funds and stock, and being sued by agents from Bank of California for the payment, have to let things take their own course, as I am unable longer to protect your interests here. In previous letters I have given you a full and detailed account of affairs here, and such frequent repetitions I find useless, and will simply state that I am doing nothing whatever at the mines, and cannot until I receive money to operate with. I haven't means to protest now and they are liable to be denounced at any moment. Some months since I wrote you for titles; the government demanded them; they have not been received. By steamer I sent you a telegram from San Francisco; no reply. The parties I sent the dispatch to in San Francisco sent it on to New York. I am owing considerable and no means of paying. What is your intention? Is it to let your interests here go to the dogs? You have either to do this or send money out to protect them. If by next steamer I receive no assistance from you, I intend leaving for East. I will go via San Francisco, will from there telegraph you what further steps I shall take. I have been doing everything in my power to keep the Bank of California from getting possession; thus far have succeeded, but can prevent them no longer, and fear they will eventually have their own way. Mr. Cullins (who is not the man he was represented to be) left by last steamer. I have only one man now; am compelled to keep some one. Please telegraph me in San Francisco, care of Weil & Co., immediately on receipt of this. You can judge by what has been done in New York and send me whether or not I may have left. Please let me know your intentions."
The situation had become financially so discouraging to Exall that he determined to leave the mines and return to New York.So under date of February 26, 1868, he wrote to James Granger, who sometimes called himself Santiago Granger and who was at the mines, this letter: "As circumstances are of such a nature as to compel me to leave for San Francisco, and probably for New York to inquire into the intentions of this company, I place in your hands the care and charge of the affairs of the La Abra S.M. Co.; together with
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its property. You are invested hereby with all power confided to me, of course, acting in all your transactions with an eye to the interests of the Company. This will, to you, should occasion require it, be ample evidence of the right possessed by you to act in their behalf." Notwithstanding the execution of this paper, Exall testified in his deposition taken before the Commission in 1874 as follows: "I did not leave said mines, hacienda or property in charge of said Granger, or any other person, nor did I give any charge, control, power or authority of or over the same, or any part of the same, to him, or any one else, and if he, or any other person, has taken charge or control of said mines, hacienda and property, or of any of it, or has sold, used or in any way disposed of any of it, each of such acts was without any power or authority, or right whatever to do so, so far as any act by me or for me, or on my part, as superintendent or otherwise, is concerned." We also find in the record a letter from Exall, written from New York to Granger under date of May 8, 1868, in which the writer says: "Of course, on the first day of my arrival here, I saw nothing of the Company. The day after I went down and saw Garth. Had a long talk concerning affairs, and, contrary to our expectations, gave me no satisfaction; didn't seem to intend to do anything more. I have seen him several times, but have got nothing from him of an encouraging nature. He seems disgusted with the enterprise, and, so far as regards himself, intends to do nothing more, or have nothing more to do with it. . . . I wish I could send you some means to get along with, knowing you must be having quite a rough time, but am unable. I expected to be paid up here; its not having been done plays the devil with my arrangements." Among the letters now produced in evidence is one from Granger, written from Tayoltita under date of August 12, 1868, to Senor Don Remegio Rocha. That letter was in these words: "I have received the communication calling upon this Company to pay $52.50 each month for taxes imposed by the legislature of the State, and presume it to be correct; but as I am only acting in the absence of the superintendent, and as there is no money nor
[ 175 U.S. Page 496]
effects to pay this tax, I beg you to wait until the month of November, at which time said superintendent is to come, and then the sums due by this Company on account of this tax will be paid."
From the above and other evidence in the record it is certain that before the La Abra Company ceased to work the mining property it had become utterly bankrupt, and that its abandonment of all operations at the mines was due to its inability from want of funds to carry them on and to the belief, founded upon the experience of two years and more, that the mines, if not entirely worthless, were not of sufficient value to justify its owners in proceeding further in their development. If the proper working of the mines while Bartholow, De Lagnel and Exall were successively in charge of them was prevented by the acts or omissions of duty on the part of the public authorities of Mexico, surely that fact would have been disclosed by the letters or reports made to the Company by its several superintendents. The demand made during that time by the Company's representatives in charge of the mines was not for military or civil protection, but for the money needed to develop the property and to meet the debts incurred at the mines during the progress of the work there. We do not doubt that the situation was accurately described by Exall when in the above letter to Garth of October 6, 1867, he reported that "there are no difficulties about authorities, boundaries or anything else concerning the mines and hacienda, provided there is money on hand, and money must be sent;" and when in his letter of November 17, 1867, he endeavored to impress Garth with "the necessity of acting decidedly and sending means to prosecute the works and pay off the debts of the Company, or abandoning the enterprise at once." In that condition of affairs, it is not strange that Exall in the letter of January 24, 1868, just before he left Mexico for New York, wrote to Garth: "I am owing considerable and no means of paying. What is your intention? Is it to let your interests here go to the dogs? You have either to do this or send money out to protect them." We have seen that Garth, as the representative of the Company, in
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a letter to Exall, dated July 10, 1867, warned him against running into debt and getting into difficulty with the authorities, "if there are any such things existing;" "but," he continued, "at the same time be firm in maintaining your rights, and don't submit to imposition except by force, and then make a legal and formal protest as a citizen of the United States and as an American company duly organized and prosecuting a legitimate business under the protection of the law, and our rights will be protected by our Government." New, it does not appear that there was any formal protest before the United States Consul at Mazatlan by any representative of the Company to the effect that the Mexican authorities had so acted or failed in duty as to compel it to abandon its property in Mexico. If the Company's superintendents had any such view of the situation when they returned to the United States and gave an account of their management of the property, how natural it would have been for the Company, in some formal way, to have promptly brought the whole matter to the attention of the Government of the United States, and sought its aid in order to have justice done to them by the Republic of Mexico. No such course was taken, and we cannot doubt, in view of the evidence adduced after the Commission made its award, in connection with the evidence before that tribunal, that the idea of attributing the losses of the Company to the wrongful conduct of the Mexican authorities never occurred to the Company until after the organization of the Commission, long after the arrival of Exall in New York. In March, 1870, the Company for the first time gave notice to the Department of State that it had any claim against the Republic of Mexico. It then claimed only $1,930,000. A few months later it increased its claim to $3,000,030, and before the Commission concluded its labors it amended its claim and fixed it at $3,692,000.
One point in connection with the letter-impression book cannot be passed without notice. It is contended that what passed between Garth and the superintendents in charge of the property, in the form of letters or reports by the latter to the former, was not admissible in evidence against the Company.
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This proposition cannot be sustained. The superintendents placed at the mines were its representatives in charge of the Company's property. What they did at the locality of the property in and about its management were the acts of the Company, so far as those acts were within the scope of the business entrusted to them. So what they said while engaged in managing and with reference to the management of the property, particularly what they reported to their principal in respect to the condition of the property and their acts in the course of the business, constitute, part of the res gestoe of the controversy between the parties. The vital inquiry in this cause is whether the Company's representatives at the mines were prevented by the Mexican authorities from developing and working them, whereby it was forced to abandon the property. Surely, what those representatives said and did or forbear to do at the mines, bearing upon that inquiry, would have been part of the res gestoe and admissible in evidence against the Company. Upon like ground, their written reports or letters to the Company while in charge of the property and in respect of its management are admissible in evidence so far as they bear upon the same inquiry and constitute a part of the res gestoe. The rule, we think, is accurately stated by Greenleaf, who, after saying that the act or declaration of each member of a partnership in furtherance of the common object of the association is the act of all, because by the very act of association each one is constituted the agent of all in respect of the common business, says: "A kindred principle governs in regard to the declarations of agents. The principal constitutes the agent his representative, in the transaction of certain business; whatever therefore the agent does, in the prosecution of that business, is the act of the principal, whom he represents. And 'where the acts of the agent will bind the principal, there his representations, declarations and admissions, respecting the subject-matter, will also bind him, if made at the same time, and constituting part of the res gestoe.' They are of the nature of original evidence, and not of hearsay; the representation or statement of the agent, in such cases, being the ultimate fact to be proved, and not an admission of
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some other fact. But, it must be remembered, that the admission of the agent cannot always be assimilated to the admission of the principal. The party's own admission, whenever made, may be given in evidence against him; but the admission or declaration of his agent binds him only when it is made during the continuance of the agency in regard to a transaction then depending et dum fervet opus. It is because it is a verbal act, and part of the res gestoe, that it is admissible at all; and therefore it is not necessary to call the agent himself to prove it: but wherever what he did is admissible in evidence, there it is competent to prove what he said about the act while he was doing it; and it follows that where his right to act in the particular matter in question has ceased, the principal can no longer be affected by his declarations, they being mere hearsay." 1 Greenl. Ev., § 113. See also Story on Agency, § 134.
Upon a careful scrutiny of all the evidence we are of opinion that so far from the Mexican Government being legally responsible for the losses falling upon the Company, its investment was without profitable results, because the Company did not have or did not furnish to its superintendents at the mines the funds required for their successful development, and did not find the property to be as valuable as they had supposed. All this is apparent from the reports made from time to time to the Company by its superintendents, duplicate originals of which are to be found in the letter-impression book which was not before the Commission. The identity of that book is fully established and the Mexican Republic is not fairly chargeable with negligence in not having discovered it sooner. It is certain that that Government, within a reasonable time after it received the book, delivered it to the Department of State, and called attention to the important and vital facts disclosed by it, so that the United States could take such action as its sense of duty suggested.
Our conclusion is that the question stated in the act of 1892 -- whether the award in question "was obtained as to the whole sum included therein, or as to any part thereof, by fraud effectuated by means of false swearing or other false
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and fraudulent practices on the part of the said La Abra Silver Mining Company, or its agents, attorneys or assigns" -- must be answered in the affirmative as to the whole sum included in the award. That Company placed before the Commission a state of facts that had no existence, and which we are constrained by the evidence to say its principal representatives must have known had no existence, but which being credited by the Commission under the evidence adduced before it brought about the result complained of in the bill. The whole story of losses accruing to that Company by reason of wrongs done by the authorities of Mexico, is, under the evidence, improbable and unfounded. We do not wish to be understood as saying that the Company did not meet with losses on account of its investments in this mining property. But we do adjudge that it had no claim which, upon any principle of law or equity, it was entitled to assert against the Republic of Mexico.
The decree below is
MR. JUSTICE GRAY did not hear the argument on the facts and took no part in their consideration. MR. JUSTICE McKENNA took no part in the decision.