The question was raised under the following state of facts:

An American naval officer was assigned, from July 11, 1899, until August 15, 1899, to duties of a higher character than those ordinarily imposed on an officer of his rank, and brought this suit to recover the difference in pay for the period in question. The provisions of the statute, under which he sued, authorizing such pay, were only applicable for services rendered “in time of war." The war with Spain ceased with the ratification of the treaty on April 11, 1899, before the rendition of the services claimed for, but the insurrection had not ended.

Numerous rulings of the war department were cited holding that a state of war did exist in the Philippines after the ratification of the treaty with Spain and during the insurrection.

The court held that

"while the question is not free from doubt because of the absence of a war technically, or in an international sense," still "the insurrection which resulted in a condition of war in the Philippine Islands was such as to bring the claimant's services within the terms of the statute as having been rendered 'in time of war.'"

THE PHILIPPINE SUGAR ESTATES DEVELOPMENT COMPANY (LIMITED)

V. THE UNITED STATES.

1904

39 Court of Claims Reports, 225

This was an action for the recovery of rent for the use and occupation of certain buildings and a tramway in the Philippine Islands. The property was owned by the order of Dominican friars, who made a contract for its sale to one Richard Henry Andrews, a British subject, now deceased. Andrews acquired title August 8, 1898, and transferred his interest to the plaintiff company, which was incorporated in January, 1900. The authorities of the United States came into the possession of the premises after the insurgents (who had previously taken forcible possession), and occupied and used the parcels set forth in the findings. No compensation or rental was paid for the use, but at no time has any claim of title or equity been asserted by the United States. Claims for rent of the property were recognized as just, but doubts as to the true ownership having been suggested by various military and civil officers of the government, compensation had been withheld until the doubt as to the title could be determined.

Under these circumstances there was no express contract for the government to pay, but the court held that a promise would be implied to pay a reasonable rent to the true owner.

The defendants first set up a want of jurisdiction, claiming that the right to bring an action given by $1068 of the Revised Statutes of the United States, did not include individuals in the colonies of those nations, although the citizens or subjects of the same nations domiciled at home had the right to sue. The statute referred to reads as follows:

Aliens, who are citizens or subjects of any government which accords to citizens of the United States the right to prosecute claims against such government in its courts, shall have the privilege of prosecuting claims against the United States in the court of claims, whereof such court, by reason of their subject-matter and character, might take jurisdiction.

The court, however, said:

We are unable to see any reason why an alien, whether citizen of France or subject of Spain, possessing the right to prosecute claims in this court under the statute cited should be denied the right to sue if residing in the colonies of such governments.

And further, that

the statute makes no distinction between natural and artificial persons.

But the court denied that the plaintiff company was a foreign association, and held that the

national character of a corporation arises from the jurisdiction in which and in accordance with the laws of which it is organized.

The plaintiff company was organized according to the local laws of the Philippines and domiciled at the place of incorporation; all the requirements of the local laws in such cases made and provided were met, and the company was, therefore, domestic. Moreover, the recitals in the articles of incorporation as to the presence of foreigners would not operate to make the company foreign, for it would be legally presumed that the company was composed of citizens of the state which created it. Said the court:

In the controversy between the present parties the fact that the articles of association show the presence of foreigners is not sufficient to change a domestic company into a foreign body politic, and the national character of the company which brings this action must be determined from the local jurisdiction which gave it being, irrespective of the individual incorporators.

Another point made by the defendants was that the company, legaily considered, had no power to acquire or manage real property in the Islands, and an opinion of the attorney-general of the Philippines was cited in support of the argument. For the purpose of answering this point, the court assumed that the presence of foreigners among the individual incorporators made the company foreign in character. On

this assumption, the court held that power to acquire, hold, and dispose of real property was a civil right secured to foreign persons, both natural, and "judicial," by the laws of Spain. But it was argued that the Maura decree, promulgated February 13, 1894, forbade plaintiff, if a foreign. corporation, to hold property; to which the court replied:

The Maura decree was an administrative law for the benefit of the state. It ought not to be held to abrogate a civil right by implication because civil rights are not regulated by administrative laws. The decree was not meant to regulate civil rights, but pertained solely to the acquisition, classification, and tenure of state lands. As the civil code conferred upon foreigners equality of civil rights with natives, and specifically conferred upon foreign corporations domiciled in Spain the nationality of Spain, we do not think that a law relating to lands of the crown superseded or was intended to supersede rights conferred by the civil code.

It was then contended by the defendants that the local authorities were not competent to create the plaintiff a corporation. The treaty with Spain ceding the Philippines was ratified in April, 1899, and the company was organized in January, 1900, under the Spanish laws claimed to be in force in the Philippines after the treaty of Paris. The ground of the defendants' contention was that at the time of the cession of the archipelago, only such laws were continued in force as did not involve a sovereign grant-the right to any kind of a charter under local regulations being included. On this point the court, after citing the general rule of international law in regard to all conquered or ceded territory, that the old laws continue until repealed by the proper authorities, quoted the following passage from the decision of Chief Justice Marshall in American Insurance Company v. Canter (1 Peters, 511):

On such transfer of territory it has never been held that the relations of the inhabitants with each other undergo any change. Their relations with their former sovereign are dissolved and new relations are created between them and the government which has acquired their territory. The same act which transfers their country transfers the allegiance of those who remain in it; and the law, which may be denominated political, is necessarily changed, although that which regulates the intercourse and general conduct of individuals remains in force until altered by the newly created power of the state.

A distinction was then drawn between special privileges granted by the ceding sovereignty to a particular person or body and those granted under general municipal laws. The court said:

Special privileges, grants, or franchises flowing from the grace and pleasure of the sovereign in favor of some one particular person or body distinguished from the general body of the inhabitants are the things forbidden. It needs no reference to international law to say that any exercise of authority by the ceding sovereignty, after cession, could not have force with reference to such things as grants of land, or the

bestowal of special franchises, such as the construction of roads, the keeping of ferries, and the erection of bridges with the right to collect toll upon them. These are grants by the authority of the state as particular privileges which look to the promotion and protection of the public good. But the municipal laws promulgated during the time the ceding authority existed and which are generally recognized as necessary to the peace and good order of the community remained in full force and effect. Any other rule would hold in abeyance civil functions with respect to the use, enjoyment, and transfer of private property that would lead to results harmful to the inhabitants of the ceded territory and injurious to the best interests and authority of the new sovereign as well. This is something that has not been tolerated in modern times.

The court finally held that the existence of a state of insurrection at the place of incorporation would not affect the validity of judicial acts (which would include the incorporation of this association under the municipal law), which were not hostile in their purpose or method of enforcement to the authority of the national government.

Judgment was therefore given for the plaintiff

WARNER, BARNES AND CO. (LTD) V. THE UNITED STATES. 1904

40 Court of Claims Reports, 1

The facts of this case were as follows:

The plaintiff, an English corporation engaged as a general commission mercantile trading house in the port of Manila and other ports in the Philippine Islands, imported, as a part of its business, certain goods from the United States, after the ratification of the treaty between Spain and the United States but before the end of the Filipino insurrection, upon which goods the military authorities of the United States in control of the islands levied tariff duties as military contribution, not under the authority of the general laws of the United States, but under authority of the orders of the president, the proceeds of which duties were used in suppressing the insurrection.

The plaintiff now sues for the recovery of these duties on the ground that when the treaty with Spain was ratified, the war in the Philippines ceased and the government passed into the hands of the civil authorities of the United States, thus making illegal the war contributions exacted by the military authorities.

After reviewing the operations of the United States forces in the Philippines and the resistance offered by the insurgents, the court decided that notwithstanding the ratification of the treaty of peace with Spain, a state of war did exist in the Philippines until the United States had suppressed armed resistance to its authority. The court said:

That such war did exist before and after the exchange of ratifications of the treaty with an armed military power in said islands is beyond dispute, and whether such war was declared or recognized in a particular manner or not, it seems to us, is but to beg the question.

The court then proceeded to hold that the question of war is one to be determined by the political department of the government, and that the president and congress did once and again recognize a condition of war in the archipelago.

Continuing, the court said:

The vital point is that until the military forces of the United States had suppressed armed resistance against its authority and established its sovereignty in the islan is. the government could not give the effect to the treaty contemplated by the high contracting parties.

In holding that the levying of the duties in question were, therefore. legal, the court said:

In time of war, within the military district of its operation, no restrictions are placed upon the power and authority of the military commander except such as are imposed by the common consent of all civilized people. His power is absolute within the radius of his jurisdiction. He may prohibit or restrict all trade or commerce within his lines. As a condition to commerce within his military district he may impose contribution to assist in the expenses of the war or in giving such care to indigent non-combatants as humanity may require. These principles are, it seems to us, elementary and have their existence in long-established and universal usage. They pervade the pages of history. Authorities are unnecessary to prove their existence, but recognition has been given them in Matthews v. McStea (91 U. S., 9); Prize Cases (2 Black.. 635); Hamilton v. Dillin (21 Wall., 73).

GALBAN AND COMPANY, A CORPORATION, V. THE UNITED STATES. 1905

40 Court of Claims Reports, 495

This is a case where an American corporation doing business in Cuba during the military occupation of the United States imported merchandise from the United States after the treaty of peace between the United States and Spain, upon which it was required to pay duties by the military government. The duties were imposed under the authority of the president as commander-in-chief of the army. The money was expended for the necessary governmental purposes incident to the occupation of Cuba. The claimant brought this suit to recover back the money so paid.

The claimant's contention is based upon the ground that by Article I of the treaty with Spain the sovereignty of the people of the island of Cuba and the title to the island passed to the United States, and, there