Texas v. White

74 U.S. (7 Wall.) 700 (1869)

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Nature of the Case

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Facts

On February 1, 1861, the Texas secession convention drafted and approved an Ordinance of Secession. It w approved by both the state legislature and a statewide referendum. Texas had received $10 million in United States bonds in settlement of border claims as part of the Compromise of 1850. The legislature authorized the sale of the remaining bonds. It repealed the requirement for the governor's endorsement in order to hide the origin of the bonds. The Treasury discovered the sale ran a legal notice in the New York Tribune that it would not honor any bonds from Texas unless they were endorsed by the prewar governor (Sam Houston). Knowing of the warning 136 bonds were purchased by a brokerage owned by George W. White and John Chiles (Ds). The written confirmation of the transaction was not executed until January 12, 1865. The bonds had been resold to several individuals, who were able to successfully redeem them. Texas was under a Military Reconstruction Government. Chiles (D)argued that he could not be sued because Texas lacked evidence. The United States Treasury Department became aware of the situation and refused to bonds sold by Ds. Texas determined that the bonds had been sold to finance the rebellion against the United States. Texas filed a lawsuit under Article III, Section 2 of the United States Constitution which granted original jurisdiction to the Supreme Court in all cases 'in which a State shall be a party.' If the Supreme Court accepted jurisdiction, many believed it would nullify the Military Governments put in place after the War. Texas' attorneys disputed the legitimacy of the Confederate state legislature. They argued that if the original transfer to Ds was invalid, then the subsequent transfers were also invalid. Ds argued that Texas was not a state and was subject to military rule and had no constitutional rights. Ds argued the sale was for the benefit of the people of the state, and the people, simply because they now had a different government, could not decide to invalidate the predecessor government's actions. D rejected the argument that the people of the state and the state itself were legally separate entities.