would have been no embarrassing difficulties in thus using the ordinary process, in rem, of the civil law, if the state law had given the lien in general terms, without specific conditions or limitations inconsistent with the rules and principles which governed implied maritime liens. On the contrary, such process would have promoted the convenience and facilities of trade and navigation by the promptness of its proceedings, and would have disposed at once of the whole controversy, without subjecting the party to the costs and delay of a proceeding in the chancery or common-law courts of the state to obtain the benefit of his lien.

In many of the states, however, it was soon discovered that these laws, by which liens were thus created, did not harmonize with the principles and rules of the maritime code. Certain conditions and limitations were annexed to them; and these conditions and limitations differed in different states; and it became manifest that if the process in rem was to be used wherever the local law gave the lien, it would subject the Admiralty Court to the necessity of examining and expounding the varying laws of every state, and of carrying them into execution, and that, too, in controversies where the existence of the lien was denied, and the right depended altogether on a disputed construction of a state statute, or, indeed, in some cases of conflicting claims, under statutes of different states, when the vessel had formerly belonged to the port of another state, and had become subject to a lien by the state law. Such duties and powers are appropriate to the courts of the state which created the lien, but are entirely alien to the purposes for which the admiralty power was created, and form no part of the code of laws which it was designed to administer.

The proceeding, therefore, in rem, upon the ground that the local law gave the lien where none was given by the maritime code, was found upon experience to be inapplicable to our own mixed form of government. It was found to be inconvenient in most cases and absolutely impracticable in others; and the rule which sanctioned it was therefore repealed. The repealing rule provides that, "In all suits by material-men for supplies or repairs or other necessaries for a foreign ship, or for a ship in a foreign port, the libellant may proceed against the ship and freight in rem, or against the master or owner alone in personam. And the

like proceedings in personam, but not in rem, shall apply to cases of domestic ships for supplies, repairs, or other necessaries."

The consequence is, that in cases of domestic ships, for supplies furnished at a home port, a lien created by a state law is one which a court of admiralty can neither recognise nor enforce.

Hence it follows, that in this case, The Hoboken Coal Company have no standing in court, have no right to intervene, either for their own interest or to contest the claims of the libellants, and that the testimony taken on their behalf must be stricken out. Let judgment be entered in favor of the libellants, with costs as against the intervenors.

Supreme Court of Tennessee.

R. A. GRAHAM v. MERRILL ET AL.

When the United States forces, during the late war, acquired firm occupation of part of an insurrectionary state, the citizens of that part so occupied were restored to their relations as citizens of the United States, and contracts between them and other citizens became valid.

The Act of July 13th 1861, and the Proclamation of the President of August 16th 1861, authorized, 1. Unrestricted commercial intercourse between the citizens of loyal states and of those parts of insurgent states in occupation of the Federal forces; and 2. Intercourse between citizens of the loyal and insurgent states, subject to the license of the President and the regulations prescribed by the Secretary of the Treasury; and the President's order of February 28th 1862 was a general license to such intercourse. But by the President's Proclamation of March 31st 1863, the distinction was abolished, and all intercourse between the citizens of loyal and insurgent states was made subject to license by the President and the regulations of the Secretary of the Treasury.

It was not necessary to the lawfulness of such intercourse that the party engaging in it should have a special license to himself by name under the President's own sign manual. The President's power to license might be delegated or might be exercised by a general proclamation, such as those of February 28th 1862 and March 31st 1863.

APPEAL from decree of the Chancellor overruling demurrer to complaint.

On May 24th 1864, Graham, a citizen of New York, on the one side, and Merrill and Cliffe, citizens of Williamson county, Tennessee, on the other, entered into articles of partnership to

engage in the business of buying and selling cotton. The place where the partners contemplated and agreed to buy cotton, was in that portion of the state of Tennessee within the military lines of and held in firm occupation by the national army. Cotton so bought, the articles stipulated, should be sent to and sold in the city of New York. At the time of making the contract, Graham had a license or permit from "the proper officer of the Government of the United States" to engage in the contemplated trade, and so informed Merrill and Cliffe. It was contemplated and agreed that the trade should be carried on "in strict conformity with the laws and regulations of the United States, regulating commercial intercourse" between the loyal and insurrectionary states. Graham furnished Merrill and Cliffe with large sums of money, and they bought and shipped to him much cotton, the proceeds of sales of which fell largely short of the money furnished.

The articles stipulated that each party was to have one-half the net profits, and to bear one-half the losses.

This was a bill for an account and contribution.

H. G. SMITH, J.-At the time of the making of the contract, the enemy relation did not subsist between the parties; and, therefore, they had the capacity to contract together, and their contract is not void by reason of enemy relation.

The national army had firm occupation of the country of the residence of Merrill and Cliffe. Such occupation established the dominion and government of the United States over that country, and restored the inhabitants to the relation of citizens of the United States. The previous enemy relation between the parties to the contract was thus ended, and their incapacity to contract with each other, by reason of their previous enemy relation, was also ended: The Venice, 2 Wall. 277; The Ouachita Cotton, 6 Id. 531.

It is another question, whether the subject-matter of the contract was lawful; a contract for commercial intercourse between a loyal state and a part of an insurrectionary state. If such trade was unlawful the contract was illegal and void. Generally, commercial intercourse between the loyal and disloyal states during the war of the Rebellion was unlawful. It was so made by the Act of Congress of July 13th 1861 (12 St. at Large 251),

and by the several proclamations of the President in conformity with the act, and also probably by the laws of war. But though generally prohibited as to all the insurrectionary states, excep tions were authorized by the Act of Congress and the proclamations of the President. Under the proclamations of August 16th 1861 (12 Statutes at Large 1262), unrestricted trade was authorized between the loyal states and such parts of the insurrectionary states as "from time to time should be occupied and controlled by the national forces engaged in the dispersion of the insurgents." Trade, also, was authorized between the loyal states and the disloyal states, by virtue of license granted by the President, and through and under regulations and restrictions prescribed by the Secretary of the Treasury and approved by the President. Such license was granted by the President, by order of date February 28th 1862, which recites: "Considering that the existing circumstances of the country allow a partial restoration of commercial intercourse between the inhabitants of those parts of the United States heretofore declared to be in insurrection, and the citizens of the loyal states of the Union, and exercising the authority and discretion confided to me by the Act of Congress approved July 13th 1861, entitled 'An Act to provide for the collection of duties on imports and for other purposes,' I do hereby license and permit such commercial intercourse, in all cases within the rules and regulations which have been or may be prescribed by the Secretary of the Treasury for the conducting and carrying on of the same, on the inland waters and ways of the United States."

Intercourse thus authorized and regulated, continued until March 31st 1863. On that day the President issued a further proclamation in regard to commercial intercourse between the loyal and disloyal states. The change made by that proclamation was to prohibit the unrestricted trade between the loyal states and the parts of disloyal states held and occupied by the national forces, which was authorized by the original proclama tion. Such parts of the disloyal states were placed on the same footing as to trade as the residue and unoccupied parts of the disloyal states. The whole insurrectionary country was placed in the same condition, as to commercial intercourse with the loyal states. All were prohibited, except under license granted by the President "through the Secretary of the Treasury," and regula

tions prescribed by the Secretary of the Treasury and approved by the President. But trade, in conformity with such license and regulations, was lawful in whatsoever part of the insurrectionary country it was carried on: The Venice, 2 Wall. 278.

The contract between the parties here was made after the proclamation of the President of March 31st 1863, and is therefore dependent, as to the validity of the trade agreed on, upon the condition of the law as it then was, by virtue of the Act of Congress and the proclamation last mentioned. The fact that the trade contemplated was between a loyal state and part of an insurrectionary state in the firm occupation of the national forces, does not seem to be of vital, if even of material consequence. The military occupation of the country, wherein the cotton was to be bought, does not appear to give the trade any lawful quality, other than it would have in a region of country not so occupied. It is thus apparent that there was a trade which might be lawfully carried on between inhabitants of the insurrectionary country and residents of the loyal states. Such trade the parties in this case agreed to engage in. It follows that their contract to engage in such trade was lawful.

It was not necessary to the legality of the trade that the party engaging in it should have a special license to himself by name, from the President himself, under his sign manual. A fair construction of the Act of Congress of July 13th 1861, does not exact that the trade which the President, under the regulations of the Secretary of the Treasury, was authorized to license, should be carried on by special and individual licenses, under his sign manual. And such was not the practice at the time. Nor was it the construction put upon the act at the time by the President and Secretary of the Treasury, who were charged by the act with the duty and authority to allow trade, that the license must be issued by the President, directly to the individual licensed, or by authority of the President granted by himself in each particular case, upon his discretion exercised in each particular case, as to the individual to whom the grant of license was to be made. The act authorizes the President in his discretion to license and allow the trade. Nothing in it exacts, as of necessity, that the discretion was not in any manner or to any extent delegable. On the contrary, the fact that the trade licensed was to be conducted in pursuance of regulations made by the Secretary of the Trea