Foreign Relations of the United States, 1902, United States vs. Mexico, In the matter of the case of the Pious Fund of the Californias, Appendix II

Supplemental brief on behalf of the United States.

[Prepared by Mr. Garret W. McEnerney.]

The memorial presented to the former Arbitral Court by the Archbishop and the Bishop of California (Transcript, p. 9) was accompanied by a “Brief history of the Pious Fund of the Californias,” prepared by Mr. John T. Doyle, who has had professional charge of the matter since 1853. This history will be found in the Transcript, pages 17–22. Mr. Doyle also prepared, and there was likewise presented to the former Arbitral Court, a collection of the extracts necessary to sustain the citations of certain historical and other authorities referred to in the “brief history” in support of its text. (For these “extracts” in the original French, Italian, Spanish, and German, but untranslated, see the Transcript, pages 187–221. The United States has prepared an English translation of these extracts for the use of the court.)

The “brief history” was in no way impeached by Mexico at the hearing of the former arbitration, nor upon the argument thereof.

Upon the contrary, it was in all its essential features confirmed by the text of the written argument of Don Manuel de Azpiroz, counsel for Mexico, and by the appendixes attached to his argument. (Transcript—English, pp. 369–462; Spanish, pp. 222–369.)

We might therefore safely rely upon the “brief history” for a full, fair, and undisputed statement of our case. But during the progress of the former arbitration the accuracy of the “brief history” was often confirmed by additional and later investigation as well as by evidence produced by Mexico.

We think that the proof obtained from these two sources will materially assist in properly presenting the facts of the case to the court.

We shall not be content, therefore, merely to refer the court to the “brief history” for the facts of the case. But we shall, in considering the propositions hereinafter made, refer the court to the particular facts which we consider appropriate to illustrate the point or enforce the argument with which we may be dealing at the moment.

I.

THE PIOUS FUND OF THE CALIFORNIAS HAD AN UNBROKEN AND GENERALLY RECOGNIZED EXISTENCE FROM 1697 DOWN TO THE CESSION OF UPPER CALIFORNIA TO THE UNITED STATES OF AMERICA BY MEXICO IN THE TREATY OF GUADALUPE HIDALGO (OR OF QUERETARO) OF FEBRUARY 2, 1848.

The period from 1697 to 1716.

It has come to be an accepted fact that “the Pious Fund of the Californias” had its origin in 1697 in money collected from charitable people to enable Fathers Salvatierra, Kuhn (Kino), Ugarte, and Piccolo to commence their missionery efforts in California.

While but two of these four missionaries actually labored in the Californias, nevertheless all four were engaged in the missionary enterprise.

Attached to the argument of Señor de Aspiroz will be found the permission of the viceroy, dated February 6, 1697, whereby the missionaries were granted permission “to penetrate into the provinces of California and convert the Gentiles there residing, upon the terms and conditions set forth in this instrument.” (Transcript—English, pp. 401–403; Spanish, pp. 254–255.)

In his argument Señor de Azpiroz said that “the conquest of California was commenced by the Society of Jesus upon the charitable contributions collected by Fathers Salvatierra and Ugarte, at the beginning of 1697, and was thus continued for some time without becoming a burden upon the royal treasury, which was one of the conditions contained in the permission authorizing it.” (Transcript—English, p. 374; Spanish, p. 226.)

He also mentions a number of contributions to the fund made as early as 1703, which aggregate $55,000. (Transcript—English, p. 374; Spanish, p. 227.)

Señor de Azpiroz also states upon the pages last cited that—

Up to this time (that is, the year 1716) the means belonging to those (that is, the missions) already established had not been delivered to the society; the founders retained it in their possession and paid the annual interest, which reckoned for each of them from the date of their establishment. * * * Father Salvatierra in 1717 requested and obtained permission to receive the capitals and invest them in real estate, which he did through Father Romano, the attorney of the missions. THIS permission was indispensable, because the Society of Jesus was not competent to acquire temporalities.

Accepting this statement as true—we have no information by which we are able to affirm or deny it—it will be seen that until 1716 the principal donations for the propagation and maintenance of the Catholic religion in California had a close analogy to what is known in English and American jurisprudence as “a covenant to stand seized to the use of another.”

The chief contributors to this fund, beginning with the year 1697 and running down to the year 1716, in substance covenanted to hold to the use of the missions the capital of their contributions, and of course to pay over, from time to time, the income or interest thereon.

It may be said, therefore, that the twenty years intervening between 1697 and 1717 saw the origin and early growth of the Pious Fund and the delivery of the capital thereof to the Jesuits for administration.

The period from 1717 to 1768.

The Jesuits had possession of this fund and administered it during the next fifty years; that is, from 1717 until their expulsion from Mexico in 1768, under royal decree of Charles III, dated February 27, 1767, which will be found in the Transcript—English, page 410; Spanish, page 262.

During this period of fifty years the fund grew to great proportions.

Minor contributions amounted in 1731 to $120,000. (Statement and brief on behalf of the United States, p. 8.)

In 1735 there were conveyed to the missions by deed of the Marquis de Villapuente and the Marquesa de las Torres de Rada estates of great area and value. The estates comprised 450,000 acres of land and were estimated to be of the value of $408,000. The deed by which this enormous benefaction was conferred upon the missions was evidently drawn with much skill and care. It is to be found in English on pages 104 and 452 of the Transcript, and in Spanish on pages 99 and 309.

In the deed (Transcript, foot of p. 104) it is recited that the Marquesa de Rada is indebted to the Marquis de Villapuente in the sum of $204,000, “whereby our rights in the premises are just and equal.” This recital shows that the grantors formally estimated the estates conveyed at the value of $408,000.

The legacies of the Duchess of Gandia to the fund amounted, it is supposed, to $120,000. The account of this benefaction is taken from Clavigero’s History of California (Venice, 1789). The extract, in Italian, is to be found in the Transcript, page 198. It is also to be found in English in the translation of extracts, pages 8 and 9. The translation reads as follows:

Two things were needed to advance the missions to the northward as the missionaries desired, namely, the capital to found them and the locations to establish them in, and there was no hope of the one or the other until God moved the mind of an illustrious and most noble benefactress. This was the Duchess of Gandia, Doña María Borja, who, having heard an old servant of hers who had once been a soldier in California speak of the sterility of that region, the poverty of the Indians there, and the apostolic labors of the missionaries, thought that she could not do anything more pleasing to God than to devote her fortune to the aid of these missions. She therefore ordered in her will that there be provided out of her ready money those large annuities which she left her servants during their lives, and that all the rest of her estate should go to the missions of California, together with the capitals of the above-mentioned annuities after the death of those who enjoyed them; and that a mission, consecrated to the honor of her beloved ancestor, St. Francis Borgia, be founded in said peninsula. The sum of money acquired from this legacy by these missions amounted in 1767 to $60,000, and a like amount ought to be obtained after the death of the pensioned servants over and above some very large debts which there was hope of recovering. With such a large capital many missions could be founded in California, as in fact they would have been founded if the Jesuits had not been obliged in the above-mentioned year to abandon that peninsula. (Id., pp. 139, 140.)

Under the will of Señora Arguelles, who died before the expulsion of the Jesuits, and through power to appoint to missionary uses, exercised by the Spanish Crown in favor of the Pious Fund of the Californias, the fund received a benefaction of $600,000.^a (Transcript, p. 467.)

The will of Señora Arguelles was the subject of litigation for more than twenty-five years, and the fund did not receive this benefaction until after the close of the litigation, which occurred in 1793. (Transcript, annexes 16 and 17 to the argument of Señor de Azpiroz—Spanish, pp. 315, 317; English (memorandum), pp. 456–457; see also Payno’s report, Transcript, pp. 23–24.)

In speaking of the Arguelles benefaction, Mr. Doyle said in his argument before the former arbitral court (Transcript, p. 467):

On May 29, 1765, Doña Josepha Paula de Arguelles, a wealthy lady of Guadalaxara, executed her will, wherein she bequeathed $10,000 to a foundling hospital at Manila, one-fourth of the residue of her property to the Jesuit College of St: Thomas Aquinas, in Guadalaxara, and the other three-quarters to the missions in China and New Spain. She died about a year and a half thereafter, leaving an estate of about $600,000.^b The Jesuits, at that time pressed by a storm of obloquy in Spain and Portugal, renounced the legacy in their favor, and the heirs of the deceased lady brought an action to have her declared intestate as to all her estate save the small legacy to the foundling hospital. The Crown intervened in the action, claiming the portion bequeathed for missions, and one Agustin de Mora in like manner put forward a claim for “sustitucion vulgar” with respect to the quarter bequeathed to the college, but on behalf of what institution or in what right I have been so far unable to discover. It will be remembered that at this time the missions, both in New Spain and the Philippines, were in the hands of the Jesuits, so that if their renunciation could affect the bequests in favor of the missions in their charge, the heirs had as clear a case as to the three-fourths bequeathed to the latter as they had for the quarter bequeathed to the college. The case, after going through the lower courts, came before the “Audiencia Real” of New Spain on appeal, which tribunal on June 4, 1783, gave judgment denying Mora’s claim for the “sustitucion vulgar” as to the quarter bequeathed to the college, and declared the deceased, in consequence of the renunciation of the Jesuits, intestate as to that quarter. As to the other three-quarters, however, it decided that the missions took under the will, and declared that said three-quarters, therefore, vested in the Crown,c to be employed in the conversion of the infidels in this Kingdom and the Philippines (one-half in each) under the orders of the King, whom it especially concerns; and that a report be made to His Majesty to the end that he may be pleased to determine what may be his sovereign will with respect to the direction, consistency, and security of the funds so destined for the pious work of missions. This decree simply vested in the Crown a power of appointment as to what particular missions should be supported out of the bequest, subject to the sole condition that one-half should be destined to Asia and the other to America.

The Crown exercised its power of appointment by ordering one-half of the three-quarters so devised to be aggregated to the Pious Fund of California, and the other half to the missionary fund of the Philippine Islands. The decree was carried by appeal before the council of the Indies, where the fiscal defensor del fondo piodoso de las Missiones de California was made respondent, and where the judgment was finally affirmed. The Crown then directed the property to be sold and invested at 5 per cent per annum in the best real estate securities, para invertir sus productos en la subsistencia y aumento de dichas missiones. The sums derived from this bequest are enumerated in the treasury report contained in Manuel Payno’s work on Mexico and her financial questions, which has been heretofore referred to and put in evidence. In that report three-eighths, i. e., one-half of three-quarters of each sum as received in the treasury is credited to the Philippine Missions; other three-eighths belonged and were credited to the Pious Fund of California, and the remaining one-fourth to the heirs of the decedent, who, as to that one-fourth, were decreed to take ab intestato.”^a

A reference to Manuel Payno’s report (pp. 22–24) will show that there was received into the treasury of New Spain for the account of the California missions, arising out of the Arguelles benefactions, $306,901. This report of Manuel Payno’s is a publication made by authority of the Mexican Government, as will be seen from the deposition of Mr. Payno (Transcript, p. 36). It is stated in the report (Transcript, p. 22) that it was prepared in anticipation of a financial arrangement then about to be made between the Republic of Mexico and “the commission of the three allied powers.” It seems clear that the three allied powers referred to were France, Great Britain, and Spain, for on October 31, 1861, these powers entered into a convention for concerted action against Mexico upon claims due to their subjects. (2 Moore’s International Arbitrations, pp. 1289–1291.)

During the period we have been now considering, from 1717 to 1768, thirteen missions were founded in Lower California, as follows (Transcript, p. 150):

San José del Cabo, Santiago de los Coras, N. S. de Loreto, San José Comondu, La Purisima de Cadegomo, N. S. de Guadalupe, Todos Santos, Francisco Xavier, Santa Rosa de Muleje, San Ignacio, Santa Gertrudes, San Francisco de Borja, Santa Maria de los Angeles.

The period from 1768 to 1821.

The independence of Mexico is regarded to have been achieved in 1821 (2 Moore’s International Arbitrations, p. 1209), although the treaty by which Spain recognized that independence was not concluded until December 28, 1836.

From the expulsion of the Jesuits in 1768 until Mexico achieved her independence the fund was administered by the Crown of Spain through officials appointed for that purpose.

The trust character of the fund and its inviolable dedication to the establishment and maintenance’ of the Catholic religion in the Californias were always recognized.

In the royal decree of the 27th February, 1767, concerning the banishment of the Jesuits, it is said (Transcript, p. 411, subdivision 5):

I further declare that the taking possession of the temporalities belonging to the order embraces their property real and personal, as well as the ecclesiastical revenues which legally belong to it, within the Kingdom, but without prejudice to such charges as may have been imposed upon them by their endowers.

In the course of his argument before the former arbitral court Señor de Azpiroz, counsel for Mexico, said:

Upon the expulsion of the regulars the King took possession of their temporalities within his dominions, and among these was included the Pious Fund of the Californias. Nevertheless, this was separately administered and its proceeds continued to be employed for the purposes for which they were instituted by the civil officers of the Crown. (Transcript, p. 375, par. 33.)

In an official report on the state of the missions, made in obedience to a royal order dated January 31, 1784, it is stated:

Each missionary receives a stipend of $350 per annum, which is paid out of the gross of the Pious Fund acquired by the Jesuit Fathers, and to which I will refer in its proper place. (Transcript, p. 420, par. 19.)

They receive no contributions or duties, but each mission receives a stipend of $400 per annum drawn from the Pious Fund left by the extinct regulars. One thousand dollars from the same fund is also furnished both to the Fernandinos and Dominicans, respectively, for the establishment of each new mission. (Transcript, p. 423, par. 38.)

We learn from the official archives kept by Spain and preserved by Mexico, which contain an official history of “the Pious Fund of the Californias” (see anexo No. 6 to the argument of Señor de Azpiroz, par. 3: English, p. 425; Spanish, p. 277), that the Spanish Crown—

without losing sight of the pious purpose to which they were devoted, by order of the 12th October, 1768, directed Fernando Mangino, the director of temporalities, to pay special attention to the examination of the property destined for the propagation of the faith in that peninsula, which worthy object demanded, every care.

In the same official history (from which we have just quoted) it appears that the annual salaries for the administration of the fund were fixed at $1,000, “with which the fund was charged.” Furthermore, it is therein recited that “to such religious ends as the propagation of the faith there were, and still remain, dedicated the extensive estates” of which the Pious Fund was comprised. It proceeds to name them. (Transcript, p. 136, pars. 4, 5.)

We also, find in the official history a “statement of funds on hand, exceptional deposits and bonds, which constituted the Pious Fund on the 16th of November, 1792, together with the yearly income estimated by periods of five years, the expenses of the missions, and other ordinary expenses of the fund.” (Transcript, p. 432.)

The total amount of the fund is said to have been at that time $828,936.14. The gross income is fixed at $55,177.38. The expenses of the missions are $22,550 and the other expenses $24,150. This leaves an annual excess of income over expenditure amounting to $8,473.37. It is said in this official history “that this yearly excess ought to be applied to the establishment of a college as a place of rest for the missionaries, according to the wishes of the Marquis de Villapuente, the pious endower of the missions, and although more than $100,000 has been gotten together for this purpose, it became necessary to invest this amount in various indispensable works erected at the hacienda of Arroya Zarco.” (Transcript, pp. 432–433.)

From the same official history, paragraphs 7 and 9, we learn (Transcript: English, p. 426; Spanish, p. 278) that an agreement was made, March 21, 1772, between the board of war and treasury department on the one hand and the Dominicans and Franciscans on the other, by which it was agreed that the Dominicans should have charge of the missionary work in Lower California and that the Franciscans should have charge of the missionary work in Upper California.

Before this time, however, to wit, on the 8th of April, 1770, His Majesty the King of Spain, by royal order, had directed a division of the missions between the Dominicans and Franciscans. (Transcript—English, p. 426; Spanish, p. 278.)

The missionary labors of the Franciscans in the Californias began earlier than 1770, for we find that in 1769 they journeyed overland from Lower California to Upper California, and on their way thither founded in the same year the Mission of San Fernando de Villacata, which was then the most northerly mission in Lower California. (Transcript, p. 19.)

The action of the Spanish Crown in relation to the missions and their conduct by the Dominicans and Franciscans, make it clear that there was no intention on the part of that Government to divert or attempt to divert the Pious Fund from the support of the missions in California. It is obvious that but for this Fund the missionary work in that country would have been abandoned. It was impossible to carry on the work without the financial support derived from the Pious Fund, which was relied upon by the Franciscans and Dominicans.

It is idle therefore to stop to consider whether the Spanish Crown would have had the power to divert these funds or not. If it had any such power it never exercised it; on the contrary, if there was any power exercised it was one of renewed dedication of the Pious Fund to the missions of the Californias.

It must also be kept in mind that neither the Franciscans nor the Dominicans could have engaged in this missionary work without the consent of the Holy See. Also that the Holy See is the ecclesiastical superior of all religious orders and of all the clergy of the Roman Catholic Church. In the matter of the administration of the religion and worship of that church it must be conclusively presumed that the orders of the church consent to what the Holy See requires to be done.

By the year 1823 the Franciscans had established in Upper California 21 missions, which, with the mission founded by them in Lower California in May, 1769, as already stated, made their foundations in the Californias 22 in number.

The 21 missions founded by the Franciscans in Upper California, with the date of the foundation of each, is as follows (Transcript, p. 150):

Name.	Date.	Name.	Date.
San Diego	1769	La Purisima	1787
San Carlos or El Carmelo	1770	San Luis Rey	1790
San Gabriel	1771	La Soledad	1791
San Antonio	1771	Santa Cruz	1791
San Fernando	1771	San Miguel	1797
San Luis Obispo	1772	San Juan Bautista	1797
San Juan Capio	1776	San José.	1797
San Francisco Assis	1776	San Ynez	1804
Santa Clara	1777	San Rafael.	1817
San Benaventura	1782	San Francisco Solana	1823
Santa Barbara	1786

In the report of the treasury of Mexico which relates to “The Pious Fund,” compiled June 17, 1793 (Transcript—English, pp. 135–146; Spanish, pp. 124–135), we find repeated acknowledgments of the trust character of the fund.

It also therein appears that His Majesty the King of Spain directed that “the administration of the said fund shall be kept with entire separation” (Transcript, p. 143, sec. 20), also that on October 1, 1781, the viceroy communicated to the director of the temporalities a royal decree, shortly before that time made, whereby it was provided that the director of temporalities “shall proceed immediately to the sale of those (i. e., the properties) of the Pious Fund, and that you shall secure the amount thereof in favor of the missions, giving due advice thereof to the department under my (the viceroy’s) charge.” (Transcript, p. 143, sec. 22.)

It having been brought to the attention of His Majesty, however, that such a sale was contrary to the expressed wish and will of the Marquis de Villapuente, another royal decree was made on December 14, 1785, whereby, in view of these facts, His Majesty “has been pleased to order that, for the present, the sale shall be suspended and the administration continued,” and whereby, furthermore, His Majesty “bearing in mind the instructions of the Marquis of Villa Puente, who gave his estates for that purpose, has been pleased to order that the surplus money shall be invested in safe landed property for the increase of the funds.” (Transcript, p. 144, sees. 26, 28.)

The period from 1821 to November 2, 1840.

From some date which can not be ascertained with precision (but which occurred after the achievement of Mexican independence in 1821) until the surrender of the properties of the Pious Fund of the Californias by Mexico to Bishop Francisco Garcia Diego, on November 2, 1840 (Transcript, p. 520), these properties were under the care and control of Mexico.

There is, however, no claim that she ever disputed the trust character in which she held them.

Indeed, it is claimed in the answer of Mexico to our memorial upon the present arbitration (Replication, p. 20), that—

The Mexican Government, which succeeded the Spanish Government, was, as the latter had been, trustee (comisario) of the fund, and in this conception, successor of the Jesuit missionaries, with all the rights granted to them by the founders.

It will be seen, therefore, that it is an admitted fact in this case that Mexico always held and administered the Pious Fund as a trust estate.

She herself claims, in the answer already mentioned, that she had all of the rights of the Jesuits. This argument necessarily concedes that she, Mexico, had all the duties of the Jesuits in respect of the Fund.

We shall hereafter consider precisely what the duties of Mexico were with respect to the Fund.

But for our immediate purpose we rely upon the deliberate admission of Mexico that she held the Pious Fund as trustee. (The law of May 25, 1832.)

Among the proofs of her recognition of her duties as trustee is that contained in the legislative act of Mexico, dated May 25, 1832, which provides that the rural properties belonging to the Pious Fund of the Californias should be leased.

The full text of the act is as follows:

Law: That the Government proceed with the lease of the rural property belonging to the Pious Fund of the Californias.

• Article 1. The Government shall proceed to rent the rural property belonging to the Pious Fund of the Californias for a term which shall not exceed seven years.
• 2. These leases shall be contracted at public auction in the capitals of the States or Territories or in the Federal city, according to the location of the property.
• 3. These leases shall be announced by the public crier within three months of the date of this decree for thirty days, and at least for the same period shall be announced by printed notices in the Federal city, in the capitals of the States and Territories, and in the principal places of the districts, departments, or region in which the properties may be situate, and in such other places as the Government may deem expedient, and these announcements shall be inserted in at least one newspaper of the Federal city.
• 4. The conclusion of any lease shall, within three months, be announced by the public crier, or, if there be no lessee, the announcement shall be made every six months.
• 5. The making of the lease shall be subject to the approval of the Government, to which the papers in the case shall be submitted for this purpose within fifteen days after the making thereof.
• 6. The proceeds of such properties shall be deposited in the treasury of the Federal city, to be solely and exclusively destined for the missions of the Californias.
• 7. The direction and management of these properties, not only with respect to their administration, but with respect to the collection and employment of their proceeds, shall be under the charge of a board accountable to the Government through the office of the secretary of foreign affairs.
• 8. This board shall be composed of three persons, appointed by the Government, one of them to be an ecclesiastic. Commencing with the member last appointed, one of the board shall be retired, and a person appointed in his place each year; the members are eligible for reappointment.
• 9. This board shall have a secretary, with a compensation of 600 dollars per annum, payable from the funds in question.
• 10. The powers of the board shall be as follows:
  • First. To see that the rural and city properties belonging to the Pious Fund in question be suitably leased.
  • Second. To submit to the Government the conditions under which the leases should be made, and the minimum sum to which the rent of each estate should amount.
  • Third. To examine the papers relative to the making of the leases, and to advise the Government if the leases should be approved or if the propositions made by some other applicant are more advantageous.
  • Fourth. To submit to the Government the number of persons that it deems absolutely necessary for the administration of the rural properties when the said properties can not be leased for want of bidders.
  • Fifth. To submit the amount of compensation of the administrators and of the bond with which each must guarantee his management.
  • Sixth. To see to it that the lessees or administrators submit information as to the qualifications of their respective sureties and the certification of survivorship.
  • Seventh. To lay before the auditor-general a general account of the proceeds of the properties of the Pious Fund accompanying those of the administrators, if any, for which purpose these accounts shall be seasonably demanded from the latter.
  • Eighth. To see to it that the lessees and administrators on their part shall in their turn and at the proper time verify the deposits in the treasury.
  • Ninth. To name to the Government the amounts which may be remitted to each one of the Californias in accordance with their respective expenses and available funds.
• 11. The secretary shall keep a journal of the proceedings of the board, statement of moneys deposited in the treasury, the entries in which shall be supported by the vouchers delivered by the superintendent of said treasury, and another book of the amounts which are drawn against the same. All the entries, whether of debit or credit, in the treasury shall be signed by the members of the board.
• 12. The superintendent of the treasury shall receive 1 per cent premium on the amounts that may be deposited with him, shall be responsible for the same, and such payments only shall be credited to him as he may make under warrants signed by the members of the board, authorized by the secretary of the said board, and with the approval of the secretery of foreign affairs.
• 13. The board shall, within three months after its organization, frame its internal regulations and submit the same to the approval of the Government.

The first important point in that act which should be noted is that Mexico expressly declares that the rural properties belong to the Pious Fund.

Secondly, there is no power exercised, nor is any power claimed, to dispose of the property, except to remit “to each one of the Californias, in accordance with their respective expenses and their available funds.” (Sec. 10, subdivision 9.)

There are other legislative evidences that Mexico recognized her duty as a trustee throughout the period under consideration. These need not, however, be cited. It is sufficient for the present controversy that it is an undisputed proposition, made so by the answer of Mexico, that she never made any claim of title to this property, except as a trustee thereof.

the law of september 19, 1836.

The law of September 19, 1836, “concerning the erection of a bishopric in the two Californias” (Transcript, p. 580), with which the court is already familiar, is another recognition by Mexico of its duty with respect to the Pious Fund.

In that act it is provided that “the property belonging to the Pious Fund of the Californias shall be placed at the disposal of the new bishop and his successors, to be by them managed and employed for its objects or other similar ones, always respecting the wishes of the founders of the Fund.”

The full text of that act is as follows:

Law: For the establishment of a bishopric in the two Californias.

• Article 1. The Government, after hearing such parties as by law may be entitled to a hearing on the subject, and such other persons as it may think proper to hear, shall thereupon make a report with regard to the necessity of creating a bishopric in the two Californias.
• Art. 2. If the report should show that there is such a necessity, the Holy See shall be duly informed of the report, for it to approve of it and create such a see.
• Art. 3. The Government shall select from three nominees, presented by the archbishop’s council, the person whom it thinks most suitable, and submit his name for appointment to His Holiness.
• Art. 4. The person elected shall receive from the public revenues six thousand dollars per annum, until such time as the bishopric shall be in receipt of a sufficient income.
• Art. 5. During a continuation of the same circumstances the public revenue shall furnish a subsidy of three thousand dollars for despatching the bulls and the traveling expenses of the episcopate.
• Art. 6. The property belonging to the Pious Fund of the Californias shall be placed at the disposal of the new bishop and his successors, to be by them managed and employed for its objects or other similar ones, always respecting the wishes of the founders.

By the enactment of this law, and by the subsequent surrender of the property belonging to the Pious Fund to the Bishop of California, presently to be mentioned, Mexico simply discharged its clear duty as a trustee in possession of the fund.

the law of april 1, 1837.

On April 1, 1837, Mexico enacted the following law:

Law: The Government is authorised to negotiate a loan, which shall not exceed $60,000, for one year, with the least possible interest, by a mortgage of the fund of the Californias.

• Article I. The Government, by means of the directive board of the Pious Fund of the Californias, shall negotiate a loan for a sum which shall not exceed $60,000, for one year, with the least possible interest.
• Art. II. For its payment the said Government shall deliver over to the board orders for the whole sum against the maritime custom-houses, which are not exclusively assigned to the support of the army in Texas, over which it will not subsequently give preference to others; moreover, it will mortgage said fund, coming upon this point to an agreement with the ecclesiastical authority.
• Art. III. No sum derived from the loan or order of which there is mention made in foregoing articles shall be devoted to any other employment than to put in order the department of the Californias, or to discharge said debt, the Government rendering an account to Congress, with respect to the first purpose, every three months, and the board, with respect to the second, every six.

On April 27, 1840, His Holiness Gregory XVI, upon the petition of Mexico, erected Upper and Lower California into a diocese and appointed as its first bishop Francisco Garcia Diego, at that time and for some time before president of the missions of the Californias. (Transcript, p. 182.) Bishop Diego was consecrated on October 4, 1840. (Transcript, p. 21.) On November 2, 1840, the properties of the Pious Fund were surrendered to him by Mexico in conformity to its duty as trustee, recognized by its legislative act of September 12, 1836 (Transcript, pp. 495, 520).

Upon the surrender of properties of the Pious Fund by Mexico to Bishop Diego, he appointed as his agent to manage these estates in Mexico (his see in Monterey in Upper California being several hundred miles distant) Don Pedro Ramirez. He also appointed as special agent for the rural estates Miguel Balanzaran. Mr. Ramirez received the rents, paid the expenses, and attended generally to all the business of the Pious Fund. He was apoderado or attorney in fact. (Transcript, p. 149.)

The period from November 2, 1840, to February 2, 1848.

From November 2, 1840, until the cession of Upper California to the United States under the treaty of Guadalupe Hidalgo of February 2, 1848, in consideration of $18,250,000, Mexico took no measures with respect to the properties of the Pious Fund, except those to be hereinafter noted.

On January 26,1842, the minister of justice wrote to Señor Ramirez requesting him that he pay out of the Pious Fund to the English consul at Tepic $2,000, advanced for an expedition which took settlers to Upper California. (Transcript, p. 499.) Mr. Ramirez replied to this letter under the date of January 28, 1842, and suggested, among other things, that as the Government was indebted to the bishop of the Californias in the sum of $8,000 and over on account of the salary assigned to him for his support, it (the Government) should itself pay the $2,000 on account of the $8,000 due. (Transcript, p. 500.)

The only reply to this letter was one of February 5, 1842, wherein the minister of justice says:

It being necessary for this ministry to know all the goods and properties constituting the Pious Fund of Californias, I hope you will be pleased to transmit immediately the corresponding information. (Transcript, p. 501.)

On the same day Mr. Ramirez replied, giving a brief report of the properties of the Pious Fund. (Transcript, p. 501.)

The next communication was a notice from the minister of justice to Mr. Ramirez under the date of February 8, 1842, that President Santa Anna had made the decree of February 8, 1842. (Transcript, p. 502.)

the decree of february 8, 1842.

The decree of February 8, 1842, reads as follows:

Decree of the Government: The Government reassumes the administration and investment of the Pious Fund of the Californias.

Antonio Lopez de Santa Anna, etc., know ye:

That whereas all the purposes for which the Pious Fund of the Californias is intended are truly of a general and national importance, and should therefore be under the immediate care and management of the supreme government as it formerly was, I have made the following decree:

• Article 1. The sixth article of the law of the 19th of September, 1836, by which the Government relinquished the management of the Pious Fund of the Californias, and the same was then placed at the disposal of the right reverend bishop of the new diocese is hereby repealed.
• Art. 2. The administration and employment of this property shall therefore again become the charge of the supreme government, in such way and manner as it shall direct, for the purpose of carrying out the intention of the donor, in the civilization and conversion of the savages.

Wherefore I, order the present to be printed, published, circulated, and duly observed.

It will be seen that Mexico did not repudiate the trust character of the property, bat expressly recognized it. She also expressly engaged in the act to administer the property “for the purpose of carrying out the intention of the donor in the civilization and conversion of the savages.”

the appointment of general valencia, february 21, 1842.

On February 21, 1842, President Santa Anna appointed General Gabriel Valencia, chief of staff, as “general administrator of said goods (that is, the properties of the Pious Fund) upon the same terms and with the same powers as were conferred to the board (junta) of the same department (ramo) by the decree of the 25th of May, 1832.” (Transcript, p. 505.)

Thereupon some correspondence was exchanged between Valencia and Ramirez looking to the surrender of the properties. On February 28, 1842, Pedro Ramirez forwarded to General Valencia a full and detailed statement of the condition of the Pious Fund and its properties. The receipt of this statement was acknowledged by General Valencia under the date of March 4, 1842. (Transcript, p. 508.)

The detailed account of the condition of the Pious Fund and the list of the properties thereof which was delivered to General Valencia by Mr. Ramirez is also contained in the Transcript, pages 512–523.

All of the documents, books, and papers concerning the Pious Fund and the properties were surrendered on April 8, 1842, by Mr. Ramirez to Mr. Ignacio de Cubas, who had been appointed “secretary in the administration of the goods of the Pious Fund of the missions of the Californias.” (Transcript, pp. 510, 512.)

the decree of october 24, 1842.

The decree of October 24, 1842, recites that the decree of February 8, 1842, “was intended to fulfill most faithfully the beneficent and national objects designed by the founders without the slightest diminution of the properties destined to the end.”

The act then provides that all of the properties “belonging to the Pious Fund of the Californias are incorporated into the national treasury,” and also provides that “the revenue from tobacco is specially pledged for the payment of the income corresponding to the capital of the said fund of the Californias.”

The act furthermore provided that “the department in charge of the revenues from tobacco will pay over the sums necessary to carry on the objects to which the said fund is destined, without any deductions for costs, whether of administration or otherwise.”

The text of the decree is as follows:

Decree of the Government respecting the incorporation into the public treasury of all the properties of the Pious Fund of the Californias.

Antonio Lopez de Santa Anna, etc., know ye:

That whereas the decree of February 8 of the present year, directing that the administration and care of the Pious Fund of the Californias should redevolve on and continue in the charge of the Government, as had previously been the case, was intended to fulfill most faithfully the beneficent and national objects designed by the foundress without the slightest diminution of the properties destined to the end; and whereas the result can only be attained by capitalizing the funds and placing them at interest on proper securities, so as to avoid the expenses of administration and the like which may occur; in virtue of the power conferred on me by the seventh article of the Bases of Tacubaya, and sanctioned by the nation, I have determined to decree as follows:

• Article 1. The real estate, urban and rural, the credits, and all other property belonging to the Pious Fund of the Californias are incorporated into the national treasury.
• 2. The minister of the treasury will proceed to sell the real estate and other property belonging to the Pious Fund of the Californias for the capital represented by their annual product at 6 per cent per annum, and the public treasury will acknowledge an indebtedness of 6 per cent per annum on the total proceeds of the sales.
• 3. The revenue from tobacco is specially pledged for the payment of the income corresponding to the capital of the said fund of the Californias, and the department in charge thereof will pay over the sums necessary to carry on the objects to which said fund is destined without any deduction for costs, whether of administration or otherwise.

Wherefore, etc.

the treasury order of april 23, 1844.

It appears by the testimony of Father Rubio (Transcript, p. 149) that in or about the year 1845 he saw in the Diario de Mexico an official notice, dated April 23, 1844, an order made by the minister of the treasury, from which it appeared that the President of Mexico had given an order on the custom-house of Guaymas, payable to the representative of Bishop Diego, “for the sum of $8,000 on account of the income belonging to the Pious Fund of California, the properties of which were incorporated into the national treasury.” (For the text of this official notice in Spanish see Transcript—English, p. 149; Spanish, p. 88.)

Neither its genuineness nor authenticity was disputed upon the former arbitration.

It must therefore be taken to be conceded that as late as April 23, 1844, the Mexican Government affirmatively recognized its obligation to the missions arising out of the facts above stated.

the act of april 3, 1845.

On April 3, 1845, Mexico passed a law concerning the restitution of debts and properties of the Pious Fund of the Californias. (Transcript, p. 581.)

The act reads as follows:

Law: For the restitution of the interests and properties of the Pious Fund of the Californias.

The most excellent president ad interim has been pleased to forward to me the following decree:

José Joaquin de Herrera, general of division and president ad interim of the Mexican Republic, to the inhabitants thereof:

Know ye that the general Congress has decreed and the executive sanctioned the following:

The credits and other properties of the Pious Fund of the Californias which are now unsold shall be immediately returned to the reverend bishop of that see and his successors, for the purposes mentioned in article 6 of the law of September 29, 1836, without prejudice to what Congress may resolve in regard to the property that has been alienated.

The foregoing are the only material facts which need necessarily be stated in connection with the proposition we have hereinabove had under consideration, viz, that the Pious Fund of the Californias had an unbroken and generally recognized existence down to the cession of Upper California to the United States of America by Mexico, under the treaty of Guadalupe Hidalgo (sometimes called Queretaro), dated February 2, 1848.

II.

AT NO TIME DURING ITS EXISTENCE, BEGINNING WITH 1697 AND CONTINUING TO FEBRUARY 2, 1848, “THE PIOUS FUND OF THE CALIFORNIAS” CONSIDERED TO BE OTHER THAN A TRUST FUND, ITS CHARACTER AS SUCH WAS CONTINUOUSLY AND REPEATEDLY RECOGNIZED, FIRST BY SPAIN AND THEREAFTER BY MEXICO.

We have unavoidably dealt with this proposition under the one lastly considered.

We think it has been already sufficiently shown that “The Pious Fund of the Californias,” a name by which these properties became known shortly after the expulsion of the Jesuits (1768), was always treated as a trust fund by Spain.

We submit that it also appears that it was likewise so treated by Mexico.

It is true that the two decrees of 1842, i. e., of February 8 and October 24, imply that at that time Mexico claimed the right to manually possess and conserve these properties. But there is nothing in either decree which involves a repudiation by her of the idea that the properties were dedicated to the purposes of the founders, which purposes were to convert to the Catholic faith the inhabitants of the territory known as the Californias, and, after their conversion, to continue to maintain and support the Catholic religion in that country.

In addition to having already shown this, we again call attention to the fact that it is expressly conceded by Mexico in her answer to our memorial that the property was given in trust, and that its trust character was never disavowed.

The following we quote from the answer of Mexico (Replication, pp. 19, 20):

The claimants agree with the Government of Mexico in admitting the following facts, proved by irrefutable documents:

• First. The Jesuits were the original trustees or administrators of the properties which constituted the Pious Fund of the Californias up to the year 1768, when they were expelled from Spanish dominions.
• Second. The Spanish Crown, in place of the Jesuits, took possession of the properties, which constituted the aforesaid Pious Fund, and administered them by means of a royal commission until the independence of Mexico was achieved.
• Third. The Mexican Government, which succeeded the Spanish Government, was, as the latter had been, trustee (comisario) of the fund, and in this conception successor of the Jesuit missionaries, with all the rights granted to them by the founders.

III.

THE TRUST PURPOSE OF THE PIOUS FUND OF THE CALIFORNIAS WAS THROUGHOUT ITS EXISTENCE THE CONVERSION OF THE NATIVES OF THE TWO CALIFORNIAS, UPPER AND LOWER, AND THE ESTABLISHMENT, MAINTENANCE, AND EXTENSION OF THE CATHOLIC CHURCH, ITS RELIGION AND WORSHIP, IN THAT COUNTRY. THIS PURPOSE MEXICO CONSISTENTLY RECOGNIZED.

It is conceded by Mexico that the trust purposes of the Pious Fund of the Californias was the conversion of the natives of the two Californias, Upper and Lower. It is stated in paragraph 4 of Mexico’s answer (Replication, p. 30):

The claimants state that the object of the Pious Fund of the Californias was to provide for the conversion of the Indians and for the support of the Catholic Church in the Californias. This being a double object, it is necessary to distinguish between the two parts which constitute it. The first part, the conversion of the pagan Indians to the Catholic faith and to the obedience of Spanish authority, is unquestionable, and must be considered as the principal and direct object of the missions intrusted to the Society of Jesus by the Catholic King, indorsed by the founders of the Pious Fund, and subsidized by the public treasury of Mexico. The other part of the object—that is, the support of the church of California—was not the principal or direct object of the establishment of the fund, but the means of carrying out the spiritual conquest of uncivilized Indians through the religious missionaries.

We do not concede, as is claimed by Mexico in the foregoing extract, that the Pious Fund had for its object the conversion of the pagan Indians to obedience to Spanish authority, nor that the fund was ever subsidized to the extent of a single dollar “by the public treasury of Mexico.”

These propositions, heretofore and now advanced by Mexico, were considered (Transcript, pp. 463–468, pars. I, II) in the arguments upon the former arbitration and are referred to in other arguments for the claimant submitted to this court; they need not be dwelt upon here.

It will be seen that the extract from the answer of Mexico, above quoted, states that one of the objects of the Pious Fund was “the conversion of the pagan natives to the Catholic faith.” Mexico says that this proposition “is unquestionable.” Mexico likewise concedes that another purpose of the Pious Fund was “the support of the church in California.” She concedes this point, although she also claims that, this purpose was subordinate to the spiritual conquest of the uncivilized Indians.

Mexico therefore does concede, and we have hence very justly claimed that one of the purposes of the donors of the Pious Fund was “the support of the church in California”

Even without this admission the proof upon the point is complete.

The Pious Fund of the Californias was, as its name implies, a fund to be devoted to pious uses in the Californias.

The object of all missionary endeavor is, first, to establish religion, and thereafter to maintain it.

The purpose of the donors of the Pious Fund was to bring the inhabitants of the Californias, present and future, within the fold of the Catholic faith, and thereafter to maintain such inhabitants in that faith.

It is absurd to suppose that they could have intended to create a benefaction for the foundation of religion and have also intended to withdraw the benefaction so soon as the religion had gained a foothold, rendering nugatory by such a withdrawal the work already accomplished.

The deed of the Marquis de Villapuente and the Marquesa de la Torres de Rada has been called the foundation deed of the fund.

It is the foundation deed of this fund in a historical sense only. The donation granted by the deed was one of the largest, if not the largest, ever made for missionary work in the Californias. The intention of the grantors was primarily to establish and maintain the missions of the Californias.

The donors had a clear and definite religious object, which manifests itself in every line of the instrument.

The Villapuente deed is the only formal instrument which we have wherewith to indicate in a definite manner the purpose of any one of the chief contributors to this fund. This deed was executed in 1735, when the contributions to the fund were inconsiderable in amount if compared to the benefactions which it subsequently received.

In 1731 the fund amounted to only $120,000. Of this $120,000, $40,000 had been contributed by the Marquis de Villapuente. The benefactions, therefore, which preceded the deed of 1735 constituted a small fraction (viz, only $120,000) of the fund as it existed from 1821 to 1842, and of this the Marquis de Villapuente had contributed one ($40,000).

The Villapuente deed may be truly said to have been a declaration, made at the very origin of the fund, of the religious objects in the Californias for which the fund was created.

The contributions which followed the magnificent endowments of the Marquis de Villapuente and the Marquesa de la Torres de Rada were necessarily given for the same religious objects as those for which the Villapuente donation had been made. Every inference to be drawn from the history of the fund demonstrates its homogeneity of religious purpose. There is not even a suggestion that any part of the fund was to be devoted to purposes other than those which formed the object of the remainder.

It is proper therefore that the deed of the Marquis de Villapuente and the Marquesa de las Torres de Rada should be looked to for a reasonably definite knowledge concerning the religious purposes of the remaining donors in making their contributions to so publicly recognized a religious purpose.

As already pointed out, this deed was drawn with much precision and care.

Construing the deed according to English and American jurisprudence, it would appear that the missions themselves were the grantees of the donations.

The language of the habendum clause is “to have and to hold to said missions founded and which hereafter may be founded, in the Californias.” (Transcript, p. 106.)

(This clause tends to confirm the claim put forward at the former arbitration that, according to the law of Spain and of Mexico, each mission, parish, bishop, and religious institution was deemed to have a corporate capacity).

It may be that the legal effect of this deed according to the law of Spain was to pass the title to the missions as religous institutions having capacity to take under the law of New Spain; or it may have been a conveyance which vested the title in the Society of Jesus, or it may have been a conveyance in the nature of a covenant to stand seized to the missions or to the Society of Jesus.

We are not concerned with any of these questions in connection with the point we now have under consideration, nor do we admit this question to have any bearing on the case.

We have pointed out, however, that the habendum clause of the Villapuente deed is to the “Missions founded and which hereafter may be founded in the Californias” to show that it was the intention of the grantors in that instrument to confer the benefaction in the first instance upon the missions of the Californias, or to grant it for their use.

We will consider later in this brief the effect of that clause of the deed whereby, in a given contingency, the reverend father provincial of the Society of Jesus in New Spain would have power to devote these properties to other missions.

We assume, therefore, that the gift of the Marquis de Villapuente was to the “missions founded, and which hereafter may be founded, in the Californias.”

Let us now consider what the religious purposes were for which the donations were made.

The deed is clear upon this subject.

The purposes were “for the maintenance of their religious, and to provide for the ornament and decent support of divine worship; * * * in case of all California being civilized and converted to our holy Catholic faith, the profits of said estates shall be applied to the necessities of said missions and their support.”

The deed furthermore provides (Transcript, foot p. 106) that for all time and in all events the “rents and profits shall be applied to the purposes and objects herein specified—i. e., the propagation of our holy Catholic faith.”

The Villapuente deed therefore leaves no room for discussion about the intention of the Marquis de Villapuente, and the Marquesa de Rada. They granted their estates to “the propagation of our holy Catholic faith.”

This is equally true of the two other chief historical donations to the fund.

We learn from Clavigero, in the extract already quoted, that the Duchess of Gandia, “having heard an old servant of hers who had been a soldier in California speak of the sterility of that region, the poverty of the Indians there, and the apostolic labors of the missionaries, thought that she could not do anything more pleasing to God than to devote her fortune to the aid of these missions. She therefore ordered in her will that * * * all the rest of her estate go to the missions of California.” The historian estimated that this gift amounted to at least $120,000.

It can not be doubted that these moneys so given to the missions of California were given to the support of religion in that country.

The same is likewise true of the Arguelles benefaction. That donation was appointed by the King of Spain to the Pious Fund of the Californias. The Arguelles benefaction was therefore, equally with the Villapuente-and Gandia benefactions, given for the propagation of religion in that country.

It will now be seen that the Pious Fund of the Californias was, from the beginning of the eighteenth century, an historical and religious benefaction of very remarkable amount. It must necessarily have been familiar to all throughout the dominion of Mexico; and we believe we have demonstrated that it had for its object pious uses to be achieved in the Californias—pious uses which had been clearly and definitely determined.

All contributions to the fund were therefore made with the purpose of serving those religious objects in the Californias which have already been accurately defined.

We therefore submit that we have established the proposition lastly under consideration, which was that the trust purpose of the Pious Fund of the Californias always was the conversion of the natives of the two Californias, Upper and Lower, and the establishment, maintenance, and extension of the Catholic Church, its religion and worship, in that country.

IV.

THE SOCIETY OF JESUS HAS HAD NO ESTATE IN THE PROPERTIES OF THE PIOUS FUND SINCE 1773, NOR HAS IT HAD SINCE THAT TIME ANY INTEREST THEREIN SUCH AS WOULD IN ANY MANNER INTERFERE WITH THE LEGAL OR MORAL RIGHT OF THE UNITED STATES OF AMERICA TO DEMAND FROM MEXICO THE AWARD WHICH IS HERE SOUGHT.

It was claimed by Mexico before the former arbitral court that the archbishop and the bishop of California were not entitled to demand from Mexico the moneys asked for and recovered before that court; and Mexico claimed this upon the ground, among others, that the archbishop and the bishop did not “profess to derive title by any act of the Jesuits” (Transcript, p. 69).

In speaking of this argument it was said by Messrs. Phillips and Wilson, on behalf of the archbishop and the bishop of California, that—

If to “derive title” it is necessary to show a regular chain of conveyances from the Jesuits to the present corporators, there will be some force in the objection when the time properly arrives for the hearing of such an exception.

No such derivation of title, however, need be looked for in such a case as this. The nature of the property, as well as the character of the tenure, render all such technical conveyances not only needless but inappropriate. The property was held by the Jesuits not in their own right, but in trust. They held it not in their individual names, but in the official relation they bore to the Catholic Church.

Thus when they were expelled they did not carry away either the property or the title to the same. Nor did their expulsion work any forfeiture. The property and its proceeds remained. The trust estate continued, though the trustee was no longer in condition to carry out the trust. In such a case as this equity would appoint a new trustee, and those who remained at the head and in control of the church became the proper parties to give effect to the dedication of the property. (Transcript, p. 74.)

In answer to this same argument, which was based by Mexico on the Villapuente deed, it was said by Mr. Doyle:

On the face of this deed it needs no argument to show that the Jesuits were mere trustees and administrators of the funds and property donated; true, they were trustees in whom the donors reposed unbounded confidence, and to whom they meant to intrust the largest powers and discretion; hut it is incontestable that the missions of California founded, and which thereafter might be founded, were the beneficiaries or cestuis que trust under the deed, and entitled to the beneficial use and enjoyment of the funds. A change of the trustees by death, dissolution, forfeiture, or the like would work no change in the beneficial ownership of the cestui que trust. This is a principle of universal law, indeed, of common honesty, and it has never yet been denied by either Spain or Mexico that it was applicable to this property and to the trust attached to it. On the contrary, while the Spanish Crown, on the expulsion of the Jesuits, took to itself the property of the order, it distinctly recognized the trust character of the Pius Fund and administered it as a trustee, succeeding to the estate, duties, and powers of the original donees, the Jesuits, down to the cessation of Spanish rule in Mexico. Mexico, succeeding to the sovereignty of Spain over its own territory, succeeded to the property and the trust, and continued the administration in the same way as trustees only. (Transcript, pp. 80, 81.)

It seems to us that these two quotations fully dispose of the point made by Mexico before the former arbitral court. This was evidently the opinion of that tribunal, for the archbishop and the bishop of California obtained an award against Mexico.

The point was therefore necessarily decided in their favor and against the contention of Mexico.

It is said, however, that there is a provision in the Villapuente deed which reserves to the Society of Jesus power to apply the profits of the Villapuente and De Rada estates to missions in other parts of the world, and hence that the society has an interest in the fund, and that those who demand the income of those estates for application to pious uses must claim through the Society of Jesus.

The particular clause in the Villapuente deed upon which this argument is based is to be found at the foot of page 106 in the Transcript, and reads as follows:

And in case that the reverend Society of Jesus, voluntarily, or by compulsion, should abandon said missions of the Californias, or [which God forbid] the natives of that country should rebel and apostatize from our holy faith, or in any other such contingency, then, and in that case, it is left to the discretion of the reverend father provincial of the Society of Jesus in this new Spain, for the time being, to apply the profits of said estates, their products and improvements to other missions in the undiscovered portions of this North America, or to others in any part of the world, according as he may deem most pleasing to Almighty God; and in such ways that the dominion and government of said estates be always and perpetually continued in the reverend Society of Jesus and its prelates, so that no judge, ecclesiastical or secular, shall exercise any control thereon, or intervene in or about the same; and all such rents and profits shall be applied to the purposes and objects herein specified, i. e., the propagation of our holy Catholic faith. (Transcript, p. 106.)

To this argument we make the following replies:

(a) The contingency mentioned in the above-quoted clause of the Villapuente deed never occurred within either the letter or the spirit of that conveyance.

The decree for the expulsion of the Jesuits by Charles III., King of Spain, is dated February 27, 1767. (Transcript, p. 410.) The order was suppressed by a papal bull of Pope Clement XIV dated July 21, 1773. (Transcript, p. 461.) From the time of its suppression until its restoration by Pope Pius VII, on August 17, 1814, the Society of Jesus had no existence whatever. It is true that those who were its priests at the time of its suppression continued to be priests of the Roman Catholic Church, for, as is needless to say, a priest of the Roman Catholic Church, once ordained, is a priest forever. But there was no congregation of the Society of Jesus. In 1801, indeed, Pius VII., at the request of the Czar of Russia, as it is said, did permit a group of former Jesuits to live in community in Russia under the name of the “Congregation of the Sacred Heart,” and shortly after, at the request of Ferdinand, King of Naples, he also permittted a second body to live in community in Naples under the same title; but for forty-one years the Society of Jesus had no existence whatever, and during all that time it continued to be under decree of banishment from all the Spanish dominions.

Keeping these facts in mind, we feel more than safe in maintaining the claim that the contingency comtemplated by the Villapuente deed never happened. It is therein provided that in a given event, namely, the voluntary or compulsory abandonment of the missions in the Californias by the Society of Jesus, then the father provincial of the Society of Jesus “in this New Spain” shall have power to divert the funds of the missions of the Californias and apply them to missions elsewhere.

The contingency specified by the grantors in the Villapuente deed clearly contemplated the continued existence of the Society of Jesus as a religious body and its continued domicile “in this New Spain,” but by the decree of Charles III, and the papal bull of suppression of Pope Clement XIV, the Society of Jesus, as we have already seen, ceased to exist as a religious order, either “in this New Spain” or indeed in any other quarter of the world.

It is evident, therefore, that as regards the contingencies necesarily contemplated by the Marquis de Villapuente and the Marquesa de Rada, to wit, the compulsory abandonment of the missions on the part of the Jesuits, accompanied by their continued existence as a religious body and continued domicile in New Spain, these contingencies never occurred. It is submitted, therefore, that the contingency upon which turns the clause giving power of diverting the income of the Villapuente and de Rada estates from the missions of the Californias to missions in other parts of the world never took place.

(b) The power granted to the “reverend father provincial of the Society of Jesus in this New Spain” to divert the income of the estates to missions in other parts of the world was ineffective from the banishment and suppression of the Jesuits (1767 and 1773) for want of the religious person designated to exercise the power. From 1773 there was no father provincial in New Spain, nor elsewhere, and no Jesuit or Jesuit mission in all the world.

(c) Even if the power to divert these funds from the missions of the Californias, to whose use they were granted in the deed, did survive to the Society of Jesus and its reverend father provincial “in this New Spain” they renounced the right by failing ever to put forward a claim to its enjoyment. It is not suggested that since 1768, now one hundred and thirty-four years ago, the Society of Jesus has put forward a claim of power over or right or title in the property of the Pious Fund of the Californias.

It may be asserted, therefore, that by a long, unbroken, and unequivocal course of conduct the Society of Jesus, its officers, and members, have renounced their right, if it ever existed, to divert to missions in other parts of the world the moneys of the Pious Fund dedicated to the support of the missions of the Californias.

(d) The power granted to the Society of Jesus in the Villapuente deed of applying the profits of the estates to missions in other parts of the world, under the specified conditions—that power was religions in its nature, and personal to the Jesuits. It proceeded from two sources: The purely religious intention of the donors, and the unlimited confidence specially reposed in the Jesuits by the Marquis de Villapuente and the Marquesa de Rada. This double intention is explicit and patent in clause after clause of the deed.

No one could be substituted in the place of the Jesuits in the exercise of the discretion to divert the fund from the missions of the Californias to missions in other portions of the world, without doing great violence to the intentions and desires of the donors of the Villapuente donation.

We therefore respectfully insist that this power of diversion was personal to the Society of Jesus and did not survive the royal banishment and the papal suppression of that society.

(e) Even if it be conceded that if the contingency contemplated by the deed did occur, and even if the power to divert was not personal to the Society of Jesus, but did survive to and devolve upon the Spanish Crown, then we answer that the power to divert these funds from the missions of the Californias to missions in other parts of the world was never exercised by Spain. On the contrary, the dedication of the properties as a fund for the maintenance of the missions in the Californias was repeatedly confirmed by Spain, and all power to divert them to other parts of the world was waived and abandoned. Indeed, the earliest royal decrees of Spain, following the banishment of the Jesuits, recognized and affirmed the devotion of the properties to the support of the missions of the Californias. The very division of the missions between the Franciscans and the Dominicans, with the consent and approval and by the direction of the Spanish Crown, and the entire treatment of the problem of the missions in Upper and Lower California by Spain was based upon the idea that the Pious Fund belonged to the missions of the Californias. If this fund had not been treated by Spain as a fund for the support of the missions of the Californias, upper and lower, those missions of necessity would have had to be abandoned.

(f) The Villapuente deed, in which this power is reserved to the Jesuits, constituted only a portion of the Pious Fund, and by the course of history, and with the concurrence and by the direction of two Governments, Spain and Mexico, the Villapuente and De Rada properties were merged in the other properties of the fund, and for three-quarters of a century (from 1768 to 1842) all of these properties were treated as constituting the Pious Fund of the Calif ornias—a fund devoted, as its name implies, to pious uses to be achieved in the Californias.

(g) The court will remember that the religious orders of the Roman Catholic Church are not purely self-existent bodies. They are each of them attached to the See of Rome in a particular manner, and that See is for each of them the ultimate superior. The acts of the Holy See in respect of the functions of any particular order have not only the general authority recognized in the See of Rome by all Catholics, but they have also a particular authority, and may be regarded as acts undertaken by the order itself.

The whole history of the religious orders, including that of the Society of Jesus, will show no exception to the rule that they all regard this particular authority of the Holy See, and submissive concurrence in its commands, as a necessary condition of their very existence. It conclusively follows from this universally admitted principle that whatever the Holy See directs or permits in the case of a religious order may be presumed to be an act of that order itself; nor could a better example of this principle be adduced than the submission of the Jesuits themselves to the papal bull of 1773.

The Franciscans and Dominicans could not have taken over the administration of the missions of the Californias without the consent of the Holy See, a consent to which the Jesuits (not yet suppressed when the missions were taken over) must be deemed, from the principle enunciated above, to have been a party.

The same is true of every subsequent act, authorized or permitted, by the Holy See in connection with the administration of the missions and the application of the Pious Fund of the Californias to their use. It will also be evident that as the archbishop and the bishop of California were permitted to present the claim which they made before the former arbitral court, the validity of that claim was implicitly conceded and agreed to by the Society of Jesus. Another evidence of this concurrence is the acceptance by the Society of Jesus of the sum of $20,000, under the apportionment by the Holy See, on March 4, 1877, of the recovery in the former arbitral court.

The present claim made by the United States of America on behalf of the archbishop and the bishop of California (these latter necessarily acting with the leave of the Holy See), will be conclusively presumed to have been made with the active and passive concurrence of the Society of Jesus. And it will be furthermore presumed as a part of this final suggestion that any act of that society necessary to perfect the claim here urged has been duly had and taken in due season by said society.

(h) The Dominicans and Franciscans, and after them Bishop Diego and his successors in title and interest, acquired prescriptively the title of the Society of Jesus. This was done with the expressed and consent of Spain and Mexico, seasonably made.

Herbert on Prescription, pp. 12–20.

Wheaton’s (Boyd) International Law, sec. 164.

(i) The title, if any, and whatever its character, was abandoned by the Society of Jesus; whether compulsorily or not is not important.

Abandonment is one of the means by which titles may be lost.

In this connection read the argument of Messrs. Phillips and Wilson at page 74 and that of Mr. Doyle at pages 80–81 of the Transcript. These we have quoted at pages 25 and 26 of this brief.

V.

THE QUESTION WHETHER EITHER SPAIN OR MEXICO MIGHT HAVE DIVERTED THE FUND TO OTHER MISSIONS IS NOT INVOLVED IN THIS CASE, AND IS THEREFORE PURELY ACADEMIC. WERE SUCH A POSITION MAINTAINED, IT COULD BE CONCLUSIVELY ANSWERED BY THE FACT THAT NEITHER SPAIN NOR MEXICO EVER DID SO DIVERT THE FUND AND NEITHER OF THEM EVER CLAIMED THE RIGHT TO DO SO.

Our position with respect to the effect of the act of October 24, 1842, is well stated in one of the arguments of Messrs. Phillips and Wilson before the former arbitral court, where it is said:

By the act of 1842 the Mexican Government had taken to itself private property contributed to the church for a special purpose, and bound itself to make good by paying a certain annual interest. Can there be a doubt that the church in California was then entitled to receive from the Government this annual payment, to be applied to the purpose for which the fund was originally created? We find nothing to indicate at this time any intent to repudiate its obligation by any direct act, or by the adoption of any such arguments as are now urged to this end.

On the contrary, the Government acknowledged its indebtedness in the most formal and solemn manner, in the very act by which it placed in its treasury the proceeds of this property. The obligation thus assumed by Mexico toward a portion of its citizens was as perfect and binding upon it as if the same had been contracted by an individual. Nor is the obligation at all impaired by its own default in making payment, nor by the fact that, owing to its sovereign character, there were no means to enforce payment by judicial process. No suit can be maintained in the courts of the country against the United States, and yet its public debt constitutes an obligation as binding upon it as if judgment and execution could be invoked to enforce it.

When, by the treaty of 1848, California was ceded to the United States full guaranties were given for the protection of the rights of persons and property. The allegiance of the inhabitants was changed. But in no wise was any change made in legal liabilities between Mexico and the inhabitants.

If any were debtors to the Mexican Government, the obligation remained unimpaired by the transfer of dominion. So, if the Mexican Government was debtor to them while Mexican citizens, the indebtedness was not canceled by their becoming American citizens. (Transcript, pp. 75–76.)

It was argued, however, by Señor de Azpiroz that the fund might have been diverted by Spain or Mexico. This position, which we suppose will be reasserted in the present controversy, is so well answered by Mr. Doyle that nothing can be added to his argument on the point, which was as follows:

In view of the clear recognition by Mexico in the decree of October, 1842, of a debt equal to the proceeds and value of the property taken into the treasury, and of the promise to pay interest thereon at 6 per cent, I have deemed it unnecessary to notice many points in the argument of Don Manuel Azpiroz based on matters long antecedent to that date—such as the alleged incapacity of the Society of Jesus to acquire property; the suggestion that their estates were confiscated on their expulsion from the Spanish dominions, and that the Pious Fund came to-the monarch’s hands as a temporality; that the validity of the constitution of the Pious Fund required the sanction of the Pope; that portions of the fund, derived from bequests destined by the donors to missions in general, were not necessarily applicable to California missions in particular, and hence were properly incorporated into the Pious Fund of California; questions whether the church of California could have complained if the funds destined for the propagation of the gospel here had been, while the sovereignty of Mexico yet extended over the country, diverted to missions in other parts of the Republic; whether, if the Pious Fund had remaind invested in real estate down to the time of the treaty of Quer taro, it could have been successfully claimed by the church of California, which, by that treaty lost its status of Mexican citizenship, and the like—because, as it seems to me, none of these questions can affect the decision of this claim. It is not disputed that the Jesuits did in fact receive these donations in trust for the pious purposes designed by the founders, and neither the binding force of the trust nor their right and duty to administer it was ever questioned by Spain or Mexico. The legality of the additions made to it were also unquestioned at the time, and have since remained so, and it is not denied that they were in fact made.

The acquiescence of the Government and of all others interested for a long series of years entitles us to a presumption, juris et de jure, that all these things were rightly done and legal, as no doubt they were. Nor is it disputed that the Crown received the funds on the expulsion of the Jesuits, and assumed to succeed to the same title, rights, and duties as had previously devolved on them, and administered the trust thereunder down to the epoch of independence, when Mexico succeeded in like manner to Spain, and continued to administer in the same way down to the year 1836. Neither power, during this long period of over a hundred years, raised any of these questions, and I submit with entire confidence that it is too late to entertain them here and now.

So the question whether either Spain or Mexico might have diverted the fund to other missions is conclusively answered by the fact that they never did so, and never claimed the right to do so. The decree of October 24, 1842, was practically a purchase of the properties of the fund by the Government at the price represented by their income capitalized at 6 per cent, and a promise to pay therefor by an annuity equal to that interest. By it the real estate of the Pious Fund was sold and converted into personal property in the form of a demand on the treasury for the annual payments. And as all this occurred some years before the cession of California to the United States, it seems unimportant to inquire what would have been the status of the parties or the question between them had the fund remained invested in real estate down to that event. (Transcript, pp. 471–472, par. VI.)

We therefore submit that neither Mexico nor Spain ever claimed the right to divert or attempted the diversion of the Pious Fund. It is hence unnecessary for us to debate the purely academic point as to whether Spain or Mexico ever possessed the right suggested.

VI.

THE RIGHTS OF THE BENEFICIARIES OF THE PIOUS FUND OF THE CALIFORNIAS WHICH ARE ASSERTED HERE ARISE OUT OF THE PROMISE MADE BY MEXICO ON OCTOBER 24, 1842, AND THE DUTY OF MEXICO TO THOSE BENEFICIARIES AS A TRUSTEE OF THE FUND.

When Mexico made her decree of October 24, 1842, she promised to pay 6 per cent upon the capital of the Pious Fund for the uses and purposes to which the fund had been dedicated by the donors. This engagement was no mere gratuity. There is not only a sufficient but an ample consideration for the promise. She incorporated the entire Pious Fund into her national treasury. The least she could do in honor was to promise to pay interest upon the fund. Mexico not only agreed to pay the interest, but she agreed to pay it to the religious objects specified and intended by the founders of the fund, which, as we have already pointed out, were the conversion of the natives of the Californias, Upper and Lower, and the establishment, maintenance, and extension of the Catholic Church, its religion and worship, in that country.

At the time she made the engagement Mexico sustained the relation of a trustee to the beneficiaries and to the fund. This, as we have pointed out, is conceded in her answer to our memorial. Her promise therefore is to be read in the light of her duty as trustee. The promise which Mexico made was to pay an annuity in perpetuity. Her promise was also to pay it to certain religious purposes to be accomplished in Upper California and certain religious purposes to be accomplished in Lower California. Upon the cession of Upper California to the United States by Mexico, for a consideration of $18,250,000, the obligation to pay the equitable portion due for application to the religious purposes to be accomplished in Upper California was not canceled. It survived for the benefit and behoof of the inhabitants and citizens of the ceded territory, whose American citizenship, as it was to be thenceforth, entitled them to demand performance through the interposition of the United States. It is this demand which they made with success under the convention of 1868 and which they are now endeavoring to make with the same success before this court.

VII.

ALL OF THE EVENTS PRECEDING OCTOBER 24, 1842, ARE IN THE NATURE OF MATTERS OF INDUCEMENT, AS THAT TERM IS USED IN ENGLISH AND AMERICAN JURISPRUDENCE. THE OBLIGATION OF OCTOBER 24, 1842, IS TO BE READ IN THE LIGHT OF THESE EVENTS, IN ORDER THAT IT MAY BE PROPERLY INTERPRETED. BUT MEXICO’S OBLIGATION ARISES OUT OF ITS LEGISLATIVE DECREE OF OCTOBER 24, 1842, AND ITS PRECEDENT TRUSTEESHIP.

In the law of pleading, as it is established in American and English jurisprudence, we have what are known as “matters of inducement.” These are matters appropriately to be stated in a pleading, in order that the court to which the pleading is submitted may the more intelligently appreciate the force of the particular transaction out of which arises the cause of action or the matter of defense. In this case the cause of action upon which the claims are made is the engagement in the light of the historical circumstances which preceded it. These circumstances enable one to appreciate the exact legal and moral obligation which Mexico assumed by the act of October 24, 1842, whereby she incorporated all the property of the Pious Fund into the Mexican treasury, and agreed to pay 6 per cent thereon annually and in perpetuity.

It is not necessary therefore to dwell upon the power Spain or Mexico might or might not have exercised with respect to the Pious Fund. We are not concerned with the powers which might have been exercised by these countries. We are claiming under the power which Mexico did exercise. She took our property and agreed to pay for it in an annuity. We are here demanding performance of that promise.

VIII.

IT WAS THE DUTY OF MEXICO, DURING THE PERIOD WHEN IT MANAGED THE PIOUS FUND OF THE CALIFORNIAS, PRIOR TO THE APPOINTMENT OF THE BISHOP OF THE CALIFORNIAS, TO PAY OVER THE INCOME THEREOF TO THE MISSIONARIES IN CHARGE OF THE MISSIONS, IN FURTHERANCE OF THE PURPOSE OF THE DONORS.

The Pious Fund was devoted, during the early period of its history, to the payment of very modest salaries to the missionaries ($350 per annum). The payment of these salaries (Transcript, p. 420, sec. 19) and the erection of suitable houses of worship and abodes for the missionaries, with additional conveniences for the housing and care of the inhabitants of the Californias, were the specific purposes to which the fund, in pursuance of the purposes of the donors, were necessarily limited in the early history of its administration.

From the very nature of the case there was no means of devoting the income to the conversion of the natives and to the establishment, maintenance, and extension of the Catholic Church, its religion and worship, except to pay over the income so to be applied to the missionaries and officiating priests laboring in the country under the direction and with the sanction of the church. The donations in the beginning were committed to the charge of the Jesuits for investment and conservation, and necessarily for direct application to the pious uses, because it was impossible directly to apply the moneys and property of the fund to these uses except by paying the same over to the Jesuits, who constituted the sole medium by which those pious uses were achieved.

Upon their expulsion and the subsequent division of the missionary labors between the Franciscans and the Dominicans, the moneys were paid by Mexico to the Franciscans and the Dominicans.

The act of May 25, 1832, already quoted, provided that the governing board having charge of the “rural property belonging to the Pious Fund of the Californias” should “name to the Government the amounts which may be remitted to each one of the Californias, in accordance with their respective expenses and their available funds.” (Laws of Mexico, pamphlet, p. 5, ninth subdivision.)

There was no one else to whom the remittance could have been made except the missionaries. From the very circumstances of the case there was no one else who could possibly apply the fund to its religious objects. These missionaries were, therefore, until the erection of the Californias into a bishopric, the only persons who, from the nature of the case, could apply the funds to the purposes intended by the donors.

It follows as a consequence that these missionaries, until the erection of the Californias into a diocese with a regularly appointed bishop, had the right to demand the payment to them of the fund and of its income, for its application by them to the pious uses of the donors. As they were the only persons who could apply it to these uses, they were the only ones, necessarily, who had the right to demand its payment.

The one necessarily follows from the other.

IX.

THIS DUTY WAS SOLEMNLY RECOGNIZED BY MEXICO AND WAS NEVER REPUDIATED.

By the act of May 25, 1832, creating a board for the control of the rural property belonging to the Pious Fund of the Californias, it was provided that that board should “name to the Government the amounts which may be remitted to each one of the Californias, in accordance with their respective expenses, and their available funds.” (Laws of Mexico, pamphlet p. 5, ninth subdivision.)

It will be seen from this provision that the moneys were to be remitted to the Californias with due regard to the needs and funds of each of them.

This provision for remittance can have no other meaning imputed to it than that the remittance was to be to the missions.

The act of September 19, 1836, is a similar recognition of the duty owed by Mexico to the Catholic Church, its prelates, clergy, and fold, to pay over the income, and, indeed, the capital, to the officials of the church, in conformity with the purposes of the donors of the fund. This duty was furthermore impliedly, if not expressly, recognized by the decree of February 8, 1842, which expressly declared it to be the purpose of the Mexican Government to administer the fund in conformity to the will of the donors.

The same recognition is manifested in the appointment on February 21, 1842, of Don Gabriel Valencia, chief of staff, to be general administrator of the goods of the Pious Fund of the Californias, “upon the same terms, and with the same powers as were conferred to the board (junta) of the same department (Ramo) by the decree of the 25th May, 1832.” (Transcript, p. 505.)

The act of April 3, 1845, directing that the debts due to, and the unsold properties of, the Pious Fund should be delivered to the bishop of the Californias is a further legislative recognition of this duty.

So likewise is the order made by the minister of the treasury of Mexico on April 3, 1844, whereby he commanded the custom-house of Guaymas to pay to the bishop of the Californias “the sum of $8,000 belonging to the Pious Fund, the properties of which were incorporated into the national treasury.” (Transcript—English, p. 149; Spanish, p. 88.)

X.

FROM THE CONSECRATION OF FRANCISCO GARCIA DIEGO AS FIRST BISHOP OF THE CALIFORNIAS, UPPER AND LOWER, WHICH OCCURRED OCTOBER 4, 1840, THE PROPER PERSONS TO RECEIVE THE INCOME OR INTEREST UPON THE PIOUS FUND HAVE BEEN THE BISHOP OF THE CALIFORNIAS AND HIS SUCCESSORS IN TITLE AND INTEREST.

On April 27, 1840, Francisco Garcia Diego was appointed bishop of the Californias. (Transcript, p. 183.) Bishop Diego was consecrated on October 4, 1840. (Transcript, p. 91.) He died on April 30, 1846. (Transcript p. 182.) His successor, Joseph Sadoc Alemany, was appointed on May 1, 1850. (Transcript, p. 183.) He was consecrated on June 30, 1850 (Transcript, pp. 12, 182), and arrived in California in December, 1850 (Transcript, p. 182).

From the death of Bishop Diego on April 30, 1846, to the appointment and consecration of Bishop Alemany the bishopric was administered by the Very Reverend Joseph Gonzalez Rubio (Transcript, pp. 12, 148), who, however, during that period, enjoyed and exercised the faculties of a bishop.

Changes have been made from time to time in the geographical boundaries of the diocese of California, and the diocese has been divided several times.

The claimants before the former arbitration as well as those upon whose behalf the Government of the United States negotiated the convention upon which this court is organized are the successors in title and interest to Francisco Garcia Diego, first bishop of the Californias.

We have pointed out above that while the missions were in the charge of one of the orders of the church, called in canon law the regulars, the very necessities of the case demanded that the moneys appropriated to the use of the missions of the Californias should be paid to those regulars. We believe we have shown that it was impossible for anyone else to apply the income to the pious purposes of the donors, and that from the very necessities of the case the income of the fund was legally and morally payable to such regulars.

Upon the consecration of Bishop Diego, in 1840, the control of the spiritual direction of the missions and the management of their temporaries passed to him, as the bishop of the diocese.

He was entitled by virtue of his office to control the spiritual management of his church, and had necessarily to apply the funds devoted to that purpose. From his appointment, therefore, it is clear that the duty of the person in charge of the administration of the fund was to pay over its income to him. It follows as a consequence that the like duty continued in favor of his successors in title and interest.

Mr. Doyle’s argument upon this point is to be found in the Transcript, pages 86–92; also 471, Paragraph V. Particular attention is called to the decision of the United States Land Commission for settlement of land titles in the State of California, treated of by Mr. Doyle at pages 89–92 of the Transcript, and again at page 564. The settlement made by Mexico with Spain in 1844, for moneys due to the Philippine missions, depending upon practically the same facts as those relating to the missions of the Californias, is discussed by Mr. Doyle in the Transcript, pages 14, 92, 474.

XI.

THE CESSION OF UPPER CALIFORNIA TO THE UNITED STATES BY MEXICO DID NOT DESTROY THE RIGHT OF THE BISHOP OF THE CALIFORNIAS TO DEMAND THE PROPORTION OF THE INTEREST EQUITABLY CORRESPONDING TO UPPER CALIFORNIA FOR DEVOTION IN THAT COUNTRY TO THE PIOUS OBJECTS OF THE DONORS.

We deem this proposition to be beyond the need of discussion. It is supported by a very early decision of the United States Supreme Court, now be to considered.

It appeared in Terrett v. Taylor (9 Cranch, U. S., 43), that while Virginia was a colony of Great Britain, and the Episcopal Church was the established religion, certain glebe lands-came into possession of the church. Virginia, after the Revolution had established its independence, undertook to pass an act authorizing the overseers of the poor of each parish to sell these glebe lands and appropriate the proceeds to the use of the poor. (Transcript, p. 586.)

In commenting on this, the Supreme Court of the United States says in its opinion, which was written by Mr. Justice Joseph Story, on behalf of Chief Justice John Marshall, and his associates:

Be however the general authority of the legislature as to the subject of religion as it may, it will require other arguments to establish the position that at the Revolution all the public property acquired by the Episcopal churches, under the sanction of the laws, became the property of the State. Had the property thus acquired been originally granted by the State or the King there might have been some color (and it would have been but a color) for such an extraordinary pretension. But the property was, in fact and in law, generally purchased by the parishioners, or acquired by the benefactions of pious donors. The title thereto was indefeasibly vested in the churches, or rather in their legal agents. It was not in the power of the Crown to seize or assume it nor of the Parliament itself to destroy the grants, unless by the exercise of a power the most arbitrary, oppressive, and unjust, and endured only because it could not be resisted. It was not forfeited, for the churches had committed no offense. The dissolution of the Regal Government no more destroyed the right to possess or enjoy this property than it did the right of any other corporation or individual to his or its own property. The dissolution of the form of government did not involve in it a dissolution of civil rights, or an abolition of the common law under which the inheritances of every man in the State were held. The State itself succeeded only to the rights of the Crown, and, we may add, with many a flower of prerogative struck from its hands. It has been asserted as a principle of the common law that the division of an empire creates no forfeiture of previously vested rights of property. (Kelly v. Harrison, 2 John C., 29; Jackson v. Lunn, 3 John C., 109; Calvin’s case, 7 Co., 27.) And this principle is equally consonant with the common sense of mankind and the maxims of eternal justice. (Transcript, p. 586.)

XII.

THE UNITED STATES IS THE CLAIMANT HERE. IF ANY OF ITS CITIZENS ARE BENEFICIALLY INTERESTED IN THIS FUND OR ENTITLED TO RECEIVE THE WHOLE OR ANY PART OF IT OR TO HAVE IT LAID OUT OR EXPENDED TO THEIR USE, THE UNITED STATES FULLY REPRESENTS THEM AND IS ENTITLED TO URGE THE CLAIM UPON THEIR BEHALF.

If it be once established that Mexico is bound to pay over an equitable proportion of the Pious Fund, considering the relative rights of Upper and Lower California, all other questions are foreign to the case.

It must be assumed that the United States will act in good faith and in accordance with the rights of all persons in interest in distributing the award, if one be made in this case.

It is for that Government to say which of its citizens are entitled to the moneys awarded, and in what proportions. And if it be necessary juridically to establish the persons and the proportions in which they are to share in it, the United States can do that by appropriate legal remedies pursued according to the jurisprudence which obtains in that country.

XIII.

THE AMOUNT OF THE PIOUS FUND AND THE PROPERTIES OF WHICH IT CONSISTED ON OCTOBER 24, 1842, AS FIXED BY THE FORMER ARBITRAL COURT, WERE DEFINITELY ESTABLISHED BY THE PROOFS PRESENTED TO THAT COURT. IF THE CASE IS NOT CONTROLLED BY THE PRINCIPLE OF RES JUDICATA, WE CLAIM THAT THE TOTAL AS FIXED BY THE FORMER ARBITRAL COURT SHOULD BE INCREASED BY $381,518.15.

The amount of the Pious Fund and its condition on October 24, 1842, were proved in the former arbitration by the inventory delivered by Pedro Ramirez, agent of the Right Rev. Francisco Garcia Diego, bishop of the Californias, to Gen. Gabriel Valencia on February 28, 1842. (Transcript, p. 508.)

This report is called “a detailed statement” and is to be found in English in the Transcript, pages 512–518.

It is also set forth in the record in Spanish. (Transcript, pp. 488–493, 169–175.)

In deciding the case, Mr. Wadsworth, the American commissioner (Transcript, p. 525), said:

I take the report of Pedro Ramirez of February 28, 1842, upon the condition of the fund, made to Ygnacio de Cubas, Exhibit A to the deposition of José Maria de Romo, as a sufficiently accurate and satisfactory account.

(Ygnacio de Cubas was secretary to General Valencia in the administration of the Pious Fund. Transcript, p. 510.)

This opinion of the American commissioner as to the amount of the Pious Fund was approved by the umpire. If the case is not controlled by the award of the former arbitral court, operating as res judicata, then it is claimed by us that the following items should be added to the capital adjudged by the American commissioner and the umpire.

1. The Cienaga del Pastor was sold November 29, 1842, by Mexico, for $213,750, under the decree of October 24, 1842. (Replication, p. 47.) This estate was not calculated as a part of the capital of the Pious Fund by the former arbitral court, for the reason that it appeared by the report of Pedro Ramirez that the property had been attached, “and there is no evidence in this record that the Government ever obtained the property or derived any benefit from it.” (Transcript, p. 526.) In the present arbitration we have produced proof that the Cienaga del Pastor was sold by Mexico under the decree of October 24, 1842. (Replication, p. 47.) We are therefore entitled to have added to the capital of the Pius Fund.	$213,750.00
2. Personal property belonging to the Pious Fund sold with the Ciénaga del Pastor (Replication, p. 47) for	3,000.00
3. A debt of the Mexican Government rejected by the former arbitral court because it was supposed to have been given up as a bad debt by Pedro Ramirez. In point of fact the debt was secured by collateral which Pedro Ramirez said was bad. Hence the mistake. (Transcript, p. 515)	7,000.00
4. Moneys borrowed from the Pious Fund by Mexico for colonization purposes, for the particulars of which see Ramirez-Valencia correspondence (Transcript, English, p. 500; Spanish, pp. 478–479, 160).	22,763.15
5. Payment by Mr. Ramirez (Transcript—English, p. 500; Spanish, pp. 478–479, 160), on account of a loan of $60,000 to the Mexican Government, secured by a mortgage made by it on the Pious Fund. A law passed by Mexico April 1, 1837, provides for the execution of the mortgage (see p. 16 of this brief)	$30,000.00
6. There was paid into the general treasury for the account of the Pious Fund of the Californias from the estate of Señora Argüelles $306,901.64. (Payno’s report, Transcript, pp. 23–24.) Of this sum we received credit in the Ramirez inventory and from the former arbitral court (Transcript, pp. 517, 526) for the sum of $201,896.75, and no more. The difference between these two sums, which we now claim, is	105,004.89
	381,518.15

XIV.

IT IS A WELL-ESTABLISHED PRINCIPLE OF JURISPRUDENCE THAT A LITIGANT IS TO BE JUDGED BY THE PROOF WHICH IT IS WITHIN HIS POWER TO PRODUCE, COMPARED WITH THE PROOF WHICH HE IN FACT PRODUCES. THE PRESUMPTION IS THAT PROOF WITHHELD WOULD BE ADVERSE TO THE PARTY WITHHOLDING IT IF IT WERE PRODUCED.

These principles are applicable to the present case.

In the former arbitration Mexico disputed our claim with respect to the amount of the Pious Fund. But while she did so, she did not produce from her records and archives the proofs which must certainly have existed there. Mexico certainly had accounts from which it would appear to the smallest fractional coin of her currency precisely what amounts were received by her for the property of the Pious Fund.

It is proper, therefore, for us to invoke the principle stated above.

It is a presumption that the proof which Mexico has in her possession, and which she deemed it proper not to present, would have been adverse to her case here if it had been produced.

We have already shown that a board was appointed under the act of May 25, 1832, for the administration of the rural properties of the Pious Fund. (Statement and brief on behalf of the United States, pp. 11–14.)

We have also pointed out that General Valencia was appointed administrator of the fund with the same powers as the board of May 25, 1832. (Transcript, p. 505.)

The provisions of sections 11 and 12 of the act of May 25, 1832, read as follows:

11. The secretary shall keep a journal of the proceedings of the board, statement of moneys deposited in the treasury, the entries in which shall be supported by the vouchers delivered by the superintendent of said treasury, and another book of the amounts which are drawn against the same. All the entries, whether of debit or credit, in the treasury shall be signed by the members of the board.

12. The superintendent of the treasury shall receive 1 per cent premium on the amounts that may be deposited with him, shall be responsible for the same, and such payments only shall be credited to him as he may make under warrants signed by the members of the board, authorized by the secretary of the said board, and with the approval of the secretary of foreign affairs.

It will be seen from these provisions that the accounts of the administration of the Pious Fund were required by law to be kept.

The accounts of both administrations of the Pious Fund must exist among the archives of Mexico. That we are not able to obtain the accounts from the archives of Mexico is our misfortue; but while we suffer therefrom, we are entitled to have the countervailing advantages arising from the application, in the consideration of this case, of the salutary and just presumption which we here invoke.

XV.

IT IS CONCEDED BY MEXICO THAT THE PRINCIPLE OF RES JUDICATA APPLIES TO INTERNATIONAL ARBITRATIONS.

In his letter addressed to Mr. Powell Clayton, American minister to Mexico, under date November 28, 1900, Mr. Mariscal, minister of foreign affairs of Mexico, concedes that the principle of res judicata does apply to the awards of international arbitrations.

He contends, however, that the award of the arbitral court created under the convention between the United States and Mexico of July 4, 1868, has not the force of res judicata for two reasons:

(a) The award was not pronounced within the limits of the jurisdiction of the arbitral court created under the convention of July 4, 1868.

(b) Res judicata is limited in its application to the condemnatory portions of judgments and does not embrace the premises upon which such portions are based.

We quote the language of Mr. Mariscal (Diplomatic Correspondence, p. 31):

That res judicata pro veritate accipilur is a principle admitted in all legislation and belonging to the Roman law certainly no one will deny. Nor is it denied that a tribunal or judge established by international arbitration gives to its decisions “pronounced within the limits of its jurisdiction” (in the language of the authority cited by Mr. McCreery) the force of res judicata; but to give in practice the same force, as that directly expressed in the decision to close the litigation, to the considerations or premises not precisely expressed as points decided by the judge, but simply referred to by him in the bases of his decision, or assumed as antecedents necessary for the party in interest, who interprets the decision, is a very different thing, and can not be considered in the same way.

The first letter in the Diplomatic Correspondence in which the claim is made that the decision of the former arbitral court is res judicata is one addressed to Mr. Mariscal, minister for foreign affairs of Mexico, by Mr. Clayton, American minister to Mexico. It is dated September 1, 1897. (Transcript Diplomatic Correspondence, p. 6.)

The United States addressed a number of communications to the foreign office of Mexico in connection with this claim from 1891 to 1897. No answer was made to any of them until Mr. Clayton wrote the above-mentioned letter to Mr. Mariscal. To this Mr. Mariscal replied, under date of October 4, 1897, that the propositions laid down in the decision made in the former arbitration “are not exact in the historical conception, nor reasonable in the juridical.” (Transcript Diplomatic Correspondence, p. 5.)

Mr. Mariscal’s letter was the subject of a reply laid before the Secretary of State of the United States by Mr. John T. Doyle. (Transcript Diplomatic Correspondence, p. 12.) This reply by Mr. Doyle was forwarded by the Secretary of State of the United. States to Mr. Clayton March 10, 1898 (Transcript Diplomatic Correspondence, p. 12), and was laid before Mr. Mariscal by Mr. Clayton in an informal way on or before May 4, 1898. (Transcript Diplomatic Correspondence, p. 3.)

No reply having been received from Mexico, Mr. Hay, Secretary of State, under date December 4, 1899, addressed a letter of instructions to Mr. Clayton setting forth the views of the United States with respect to res judicata in this matter. (Transcript Diplomatic Correspondence, p. 46.) These views were laid before Mr. Mariscal by Mr. Clayton in a conversation which took place between them on December 18, 1899. On the following day, December 19, 1899, Mr. Clayton forwarded to Mr. Mariscal a copy of the letter of Mr. Hay, dated December 4, 1899. (Transcript Diplomatic Correspondence, p. 11.)

On June 7, 1900, Mr. Hay forwarded to Mr. Clayton an authority on the law of res judicata. (Transcript Diplomatic Correspondence, p. 47.) This authority was laid before Mr. Mariscal by Mr. McCreery on June 14, 1900. (Transcript Diplomatic Correspondence, p. 11.) To this Mr. Mariscal made reply in a letter to Mr. Clayton dated November 28, 1900. (Transcript Diplomatic Correspondence, p. 27.) It is from this letter that the extract above quoted is taken. To the arguments of Mr. Mariscal contained in his letter replies were made and laid before the Secretary of State on February 21 and 22, 1901, by Messrs. Ralston & Siddons and Messrs. Doyle & Doyle, respectively. (Transcript Diplomatic Correspondence, pp. 51–66.)

These replies to Mr. Mariscal’s argument were forwarded to Mr. Clayton in a letter written to Mr. Clayton by Mr. Hay, Secretary of State, under date July 18, 1901. (Transcript, Diplomatic Correspondence, p. 48.)

In this letter is contained a suggestion that the claim should be submitted to a new tribunal which should be empowered and required to decide upon the two questions which, by the protocol of May 22, 1902, are submitted to this court for decision. This was agreed to early in December, 1901. (Transcript, Diplomatic Correspondence, pp. 44, 45.) The result was the organization of this court for the decision of the controversy.

An examination of this correspondence will show that Mr. Mariscal objected to the application of the principle of res judicata to the present controversy upon two grounds only:

(a) He questions the competence of the former arbitral court to pronounce the decision which was rendered in favor of the archbishop and the bishop of California and against the Republic of Mexico.

(b) He also contends that the principle of res judicata applies only to the condemnatory part of a judgment, and not to the fundamental bases thereof.

These two objections, urged by Mr. Mariscal against the application of the principle of res judicata to the dispute at present before the court, will now receive our attention.

XVI.

THE AWARD OF THE ARBITRAL COURT CREATED UNDER THE CONVENTION OF JULY 4, 1868, WAS WITHIN THE LIMITS OF ITS JURISDICTION.

There are five grounds upon which we claim that the decision of the arbitral court created under the convention of July 4, 1868, had jurisdiction to make the award which it did make in favor of the archbishop and the bishop of California and against the Republic of Mexico.

We will state these five grounds in their order:

1. The first ground upon which we support this proposition is that the arbitral court created under the convention of July 4, 1868, did decide that it had jurisdiction and had the power so to decide, because such power is inherent in such an arbitral court. In fact, it is almost axiomatic that the basic proposition which a court decides in every case which it proceeds to try is that it has jurisdiction of that case. In many instances this decision is not final, but is open to review by some other tribunal.

such review is impossible in the case of an international arbitral court.

This point is very ably supported in the statement and brief on behalf of the United States (pp. 22, 29), and we shall not here enlarge upon the argument thereof.

There is, however, an additional authority which we desire to quote.

This authority arises out of the first convention between the United States and Mexico for the settlement of claims.

The convention was signed April 11, 1839 (2 Moore’s International Arbitrations, 1218).

A question arose before the commission whether certain claims for damages said to have resulted from the seizure on the high seas of the schooner Topaz were within the jurisdiction of the court.

In answer to a formal inquiry by the Mexican commissioners to the Secretary of State of the United States, Daniel Webster, who then filled that office, said (2 Moore’s International Arbitrations, 1242) that—

“While it was not the province of the Executive of the United States to express an opinion upon the business which the convention has confided to the board of commissioners,” yet he would add for the purpose of information that “if all claims of citizens of the United States involved in the case of the schooner Topaz, or in any other cases embraced by the first article of the convention, shall be considered and disposed of by the board according to the terms of the convention, it is certain that this Government will not deem them a subject for any further negotiation with that of the Mexican Republic.” “The Mixed Commission under the convention with that Republic,” said Mr. Webster, “has always been considered by this Government essentially a judicial tribunal, with independent attributes and powers in regard to its peculiar functions. Its right and duty, therefore, like those of other judicial bodies, are to determine upon the nature and extent of its own jurisdiction, as well as to consider and decide upon the merits of the claims which might be laid before it.”

In considering the character and nature of the Commission created by the convention of April 11, 1839, Mr. Moore says (2 International Arbitration, 1242):

The same position was maintained by Mr. Webster in other cases. On June 21, 1841, one of the claimants, named Santangelo, requested him to direct the diplomatic representatives of the United States in Mexico to ask the Government for certain papers which the Commission had, on an equal division, refused to demand. Mr. Webster declined to grant the request, saying that the functions of the Department of State in relation to the claims were “expressly limited by the convention to the transmission to the board of commissioners of such documents as the Department may receive.” Subsequently when the request was renewed he declared that the Executive of the United States had “no right to interfere for the redress of our citizens who may suppose themselves to have been aggrieved by decisions of the commissioners under the convention with the Mexican Republic. That body is in effect a judicial body, and it belongs to its members alone to determine the rights of claimants under the convention.”

2. Our second point is that Mexico expressly stipulated in Article III of the convention of July 4, 1868, that (appendix, p. 32)—

It shall be competent for the commissioners conjointly, or for the umpire, if they differ, to decide in each case whether any claim has or has not been duly made, preferred, and laid before them, either wholly or to any and what extent, according to the true intent and meaning of this convention.

In other words, it was the duty of the commission, and it was given power by the agreement of the contracting parties—Mexico and the United States—to decide whether any claim came properly within the true intent and meaning of this convention.

The question of jurisdiction raised by Mr. Mariscal is whether the claim upon which the former award was made came within the true intent and meaning of the convention of July 4, 1868.

As we shall hereafter show, he does not deny the jurisdiction of the former arbitral court upon any other ground.

Article 48 of the Hague Convention, for which see appendix, page 78, reads as follows:

The tribunal is authorized to declare its competence in interpreting the “compromise as well as the other treaties which may be invoked in the case, and in applying the principles of international law.

We claim that this article is a mere codification of the law and does not establish any new rule in whole or in part. We furthermore insist that the authority granted to the tribunal under the Hague Convention is not more comprehensive (if, indeed, it be as comprehensive) than that conferred upon the tribunal created by the convention of July 4, 1868, by the above-quoted provision of that convention.

3. The memorial of the archbishop and the bishop of California was filed with the Commission under the former convention on December, 31, 1870.

After that time Mexico entered into several conventions with the United States, all of which were supplementary to that of July 4, 1868.

By the terms of these conventions Mexico expressly stipulated for a continuance of the Commission for the decision of cases undecided, and in one of these supplementary conventions she stipulated to revive the Commission after it had expired by the limitation expressed in the preceding convention.

The commission was so revived to decide the undecided causes.

By agreeing for the extension of the life of the Commission and for its revival after it had expired by limitation, in order to enable it to decide cases then not decided, Mexico expressly and solemnly agreed that the commission had power to decide and should decide the cases before it.

It was suggested upon the oral argument, by Sir Edward Fry, that these supplementary conventions implied, or might imply, that the arbitral court had power to decide some cases, but not necessarily all cases at the time before it. We submit that as all of the cases were before the court, and as the arbitral court was engaged in the consideration of them, that the powers entering into the supplementary convention must be held to have covenanted each with the other that the arbitral court had power to decide all the cases; for it was the duty of the powers, if they claimed, or ever intended thereafter to claim, that the arbitral court had no power to decide any particular case or cases, to withdraw these cases from the consideration of the tribunal.

Mexico is bound by those express engagements.

Moreover, she must be presumed to have intended the ordinary consequences of her acts.

4. The jurisdiction of an arbitral court is created by the agreement of parties. The maxim that consent can not give jurisdiction has no application to a tribunal which is created and whose jurisdiction is defined by agreement or consent of the parties litigant.

It is a universally recognized principle of jurisprudence that ratification, which is after the fact, is equivalent to precedent authorization.

If Mexico had power to confer jurisdiction upon the commission of 1868, she had power to ratify the exercise of jurisdiction by the commission.

Her ratification might have been in express words or it might have been implied by a course of conduct.

Her course of conduct might have created against her what is known in English and American jurisprudence as an estoppel in pais. By such an estoppel she would be prevented from asserting that the court had no jurisdiction.

We invoke all of these principles in support of our present point.

Mexico made no objection whatever to the jurisdiction of the arbitral court formed under the convention July 4, 1868, until the writing of Mr. Mariscal’s letter on November 28, 1900. (Diplomatic Correspondence, p. 27.)

Mr. Cushing’s motion to dismiss the claim “because the injuries complained of were done before February, 1848, and this commission has no jurisdiction of the claim” (Transcript, p. 68), implied that the commission had the power to hear and determine the question whether the injuries complained of were within the true intent and meaning of the convention of July 4, 1868. The very submission of the motion to the commission implied the power and duty of the commission to decide it.

The objection was not to the jurisdiction of the court to decide upon the claim, although it was stated in that form, but it was a claim by Mexico that the demand of the archbishop and the bishop of California were not within the provisions of the convention. The motion of Mr. Cushing was therefore not an attack upon the jurisdiction of the court. On the other hand, it was an affirmation of its jurisdiction to decide whether the particular claim here involved came within the intent and meaning of the convention of July 4, 1868.

During the pendency of the case before the former arbitral court it was not intimated by Mexico that she claimed, or would claim, that the former commission had not power to decide this case.

In the correspondence which took place between the two Governments subsequent to the award of the former arbitral court (Transcript, Diplomatic Correspondence, pp. 77–83) it will be seen that the jurisdiction of the former arbitral court was not called in question. Mexico represented to the United States that—

Though the final award in the case only refers to interest accrued in a fixed period, said claim should be considered as finally settled in toto, and any other fresh claim in regard to the capital of said fund or its interest, accrued or to accrue, as forever inadmissible. (Transcript, Diplomatic Correspondence, p. 78.)

In his letter of reply the Secretary of State of the United States said:

I must decline, however, to entertain the consideration of any question which may contemplate any violation of or departure from the provisions of the convention as to the final and binding nature of the awards or to pass upon or by silence to be considered as acquiescing in any attempt to determine the effect of any particular award. (Transcript, Diplomatic Correspondence, p. 79.)

To this Mexico replied that the writer intended by this letter “to avoid if possible a future claim from the interested parties through the United States Government, but does not pretend to put in doubt the present award” (Transcript, Diplomatic Correspondence, p. 80.)

Thus after the decision of the former arbitral court Mexico recognized the binding force of the award and in express words confirmed its validity.

In his argument for revision Señor Avila does indeed make a point that the claim insisted upon before the umpire differed in some of its features from the claim presented to the Secretary of State of the United States by Mr. John T. Doyle, July 20, 1859 (Transcript, pp. 6–8) and by Mr. Eugene Casserly, March 30, 1870 (Transcript, pp. 8, 9).

This argument is to the effect, practically, that there was a variance between the memorial and the two communications referred to, but Señor Avila never suggested that the court did not have jurisdiction of the matter.

The most that can be said for Señor Avila’s argument is that the commission should have decided for Mexico upon the ground of variance of decision.

Variance is one thing, want of jurisdiction is quite another thing.

Jurisdiction involves the power to commit error.

And this proposition of a variance was not suggested until after the umpire had made his award.

Throughout the litigation, therefore, both preceding the umpire’s decision and subsequent to it, Mexico impliedly and by a uniform course of conduct conceded to the former commission the power to decide this case.

Mexico accepted the opportunity of success with its accompanying chances of defeat. She will not now be heard to say, having lost, that the tribunal had no jurisdiction to render the decision.

Whatever jurisdiction the tribunal had it obtained through the consent of Mexico.

Mexico is therefore estopped from claiming that it did not have the jurisdiction which she necessarily conceded to it and assumed it to possess by her course of conduct at the time.

5. By the convention of July 4, 1868, it is provided that “all claims on the part of corporations, companies, or private individuals, citizens of the United States, upon the Government of the Mexican Republic, arising from injuries to their persons or property by the authorities of the Mexican Republic” which had been presented to the United States for its interposition with Mexico since February 2, 1848, should be referred to the commission.

The ratification of this convention of July 4, 1868, took place on February 1, 1869.

It was therefore competent, under the terms of the convention, to present to the commission all claims for injuries to the persons or property of citizens of the United States accruing between February 2, 1848, and February 1, 1869, a period of exactly twenty-one years. The claim here submitted to the former arbitral court was called to the attention of and presented to the United States on July 20, 1859, and again on March 30, 1870, by the communications already mentioned. (Transcript, pp. 5–9.)

The claim urged before the former commission was that there had accrued to American citizens on October 24, 1848, and on that day of every year thereafter to February 1, 1869, an annual obligation on the part of Mexico to pay the proportion due to Upper California of the annual interest upon the Pious Fund.

This payment Mexico has withheld.

The withholding by Mexico of an obligation to an American citizen, when due, was an “injury” within the meaning of the convention, according to all accepted definitions of that word.

This point is argued to completion by Mr. Doyle in his reply to Mr. Cushing. (Transcript, pp. 93–99.)

Mr. Doyle there takes the incontrovertible position that “injury” in law corresponds to the Latin “injuria” and that “any violation or denial of legal right is ‘injury’ both by the common law and the civil law.” (Transcript, p. 96.)

It is not to be supposed that two countries would provide for the settlement of claims ex delicto and not for the settlement of claims ex contractu.

It is evident that in concluding the convention of July 4, 1868, the United States did not intend to restrict the scope of the commission to claims ex delicto.

We find that as early as April 6, 1861 (seven years before the convention of July 4, 1868), Mr. Seward, then Secretary of State of the United States, said in a letter of instruction addressed to Mr. Corwin, then United States minister to Mexico (2 Moore’s International Arbitrations, 1291):

I find the archives here full of complaints against the Mexican Government for violation of contracts and spoliations and cruelties practiced against American citizens. These complaints have been lodged in this Department from time to time during the long reign of civil war in which the factions of Mexico have kept that country involved, with a view to having them made the basis of demands for indemnity and satisfaction whenever Government should regain in that country sufficient solidity to assume a character for responsibility. It is not the President’s intention to send forward such claims at the present moment. He willingly defers the performance of a duty which at any time would seem ungracious until the incoming Administration in Mexico shall have had time, if possible, to cement its authority and reduce the yet disturbed elements of society to order and harmony. You will, however, be expected, in some manner which will be marked with firmness as well as liberality, to keep the Government there in mind that such of these claims as shall be found just will in due time be presented and urged upon its consideration.

It is hardly to be expected in view of such circumstances that the United States would agree to a convention for the settlement of claims ex delicto and omit from the consideration of the convention claims ex contractu.

Nor is it to be presumed that Mexico had any such thought in mind.

It is interesting to note in this connection that Mr. Moore says (2 International Arbitrations, 1292) that an examination of the provisions of the convention of July 4, 1868, “will disclose the fact that it was framed on the lines of the convention between the United States and Great Britain, February 8, 1853, which Mr. Seward, in view of the success of the London convention, adopted as a model for his claims treaties.”

We have no doubt that a reference to the proceedings of the London convention will show that a large number of the claims there considered were claims ex contractu, and it is undoubtedly true that many of the claims considered and decided before the arbitral court created under the convention of July 4, 1868, were demands ex contractu.

The convention of July 4, 1868, contained the following clause (Appendix, p. 32):

It is agreed that no claim arising out of a transaction of a date prior to the 2d of February, 1848, shall be admissible under this convention.

By the supplemental convention of February 8, 1872, the United States and Mexico gave this clause a binding interpretation. It is recited in the supplementary convention that the convention of 1868 was “for the settlement of outstanding claims that have originated since the signing of the treaty of Guadalupe Hidalgo on the 2d of February, 1848.” (Appendix, p. 36.)

This is the true construction of the convention of 1868, and it is the one which was adopted by Sir Edward Thornton in this case, and also in the case of Belden v. Mexico, also decided by him. (Transcript, p. 588.)

The former arbitral tribunal had power to interpret the convention of 1868. If it had no such power, it would follow that the moment there was a suggestion made that a particular claim was not within the convention, that moment the arbitral court would cease to entertain the claim. For, if the court had no power to decide that the claim came within the convention, it had no power to decide that it did not come within the convention. But, as we have above shown, it was expressly agreed between Mexico and the United States that the umpire had power to decide in each case whether any claim “has or has not been duly made, preferred, and laid before them, either wholly or to any and what extent, according to the true intent and meaning of this convention.” (Appendix, p. 32.)

We therefore submit upon the five grounds above stated that the commission organized under the convention of July 4, 1868, had jurisdiction to make the award which it did in favor of the archbishop and the bishop of California and against the Republic of Mexico.

XVII.

IT IS A SETTLED RULE OF ENGLISH AND AMERICAN JURISPRUDENCE THAT THE PRINCIPLE OF RES JUDICATA APPLIES NOT ONLY TO THE THING DIRECTLY ADJUDGED BUT ALSO TO ALL MATTERS NECESSARILY INVOLVED THEREIN, i. e., IN THE THING DIRECTLY ADJUDGED.

The leading case in English jurisprudence on the law of res judicata is the Duchess of Kingston’s case. This is accepted in America as the leading case in the jurisprudence of that country. By the decision in the Duchess of Kingston’s case it is expressly decided that the principle of res judicata applies not only to the thing directly adjudged but as well to all matters necessarily included therein.

This rule has been very fully discussed upon the adjudged cases in English and American jurisprudence in the statement and brief filed on behalf of the United States, and no argument need be added thereto.

It is well, however, in considering this case to keep in mind that the value of the principle of res judicata would dwindle into insignificance if the principle were limited to the thing expressly adjudged and did not include the matters necessarily involved in it, i. e., the thing directly adjudged. Nearly all the litigation in America involving the principle of res judicata arises out of cases where the principle is invoked, not with respect to the thing directly and explicitly adjudged, but with respect to matters necessarily and organically included therein.

This may be well illustrated by a hypothetical case.

The judgments of the courts of the American States respecting real property never possess any extra territorial effect. They are not operative as enforceable judgments beyond the limits of the State in which they are rendered.

There is a provision of the Constitution of the United States, however, whereby it is provided that full faith and credit must be given in each of the American States to the proceedings of courts in the other States.

It results from this provision that the judgments of the courts of one American State have in all other American States the same force of res judicata as have the domestic judgments of the courts of the several States within their own limits.

In this juridical matter they are not regarded as foreign states, although their courts are those of independent states and pronounce judgments having no extra territorial effect.

It frequently happens that a citizen of the United States possesses real property in several or many of the States of the American Union. When he dies, it is a question of frequent dispute to whom his property should descend. Let us assume a case where he is believed to be a widower and is known to have left a number of children by a deceased wife. A woman comes forward in one of the States of the American Union, say New York, and claims to be the widow of the deceased; her claim is disputed by the children. As the alleged widow, she claims an undivided interest in the real property of the deceased. She brings an action of ejectment in New York against all the children of the deceased to recover an undivided interest in the real property in that State. It is impossible for her to bring an action in New York for the recovery of real property in California. Her action in New York, therefore, is limited to real property situated within that State. Her claim of widowhood, however, if established, would entitle her to an interest in real property in California. But upon the trial of the action of ejectment in New York, where the whole controversy is waged over the question of her widowhood, it is decided that she was not the widow of the deceased, and hence not entitled to any interest in his real property in New York. In that action of ejectment the matter directly adjudged would be that she was not entitled to recover possession of any interest in the real property in New York. The matter necessarily included in the, thing directly adjudged would be that she was not the widow of the deceased.

And it is the law, according to the American jurisprudence, that the judgment in the action in New York would include res judicata as to her widowhood and could be so pleaded against her in an action of ejectment involving an interest in real property in California claimed by her under her alleged widowhood.

This rule is based upon the idea that the question of widowhood is necessarily included in the thing directly adjudged in and by the former judgment, although that judgment simply determined that she had no interest in the real property in the State of New York, which alone was sued for in the action.

If this application of the principle of res judicata were not the true one, we should be overwhelmed with litigation.

The office and function of the principle of res judicata is to put an end to disputes. It is to the interest of society that when a judgment has once been pronounced between two litigants that judgment should be forever final as to all matters necessarily therein decided.

Nor is this the only, though the most direct, interest which society enjoys from the principle of res judicata. The existence of that principle is necessary to the stability of all juridical systems and to the maintenance of respect for judicial officers. Courts and judges are not the fountains but the expositors of the law. In theory and according to the acceptance of universal jurisprudence courts declare but do not make the law. It would be impossible to maintain the theory upon which judicial tribunals are now sustained if one court were to decide a case one way upon a controversy between two parties and another court of equal rank and dignity were thereafter to decide the case the other way upon the same question between the same parties.

It is said by Mexico in the diplomatic correspondence and in her answer that the reasons for a decision are not res judicata. We concede this point. The reasoning of the judge is not res judicata according to either the English or American system.

But there is a very great distinction between the reasoning of the judge and his determination on points which are necessarily, that is to say, organically, involved in the judgment.

As to those points so necessarily or organically included, the judgment has the force of res judicata. As to all points other than those necessarily and organically included, and as to the reasoning by itself (which is something quite distinct from such matters), there is no res judicata.

For an exhaustive consideration of the law on this subject we refer the court to Chand on Res Judicata (pp. 1–4, 40, 46, 48–51, 60, 65, and 127–136).

XVIII.

THE OBJECTIONS URGED BY MEXICO AGAINST THE DECISION OF THE FORMER ARBITRAL COURT DO NOT, AS SHE MAINTAINS, IMPEACH THE JURISDICTION OF THAT TRIBUNAL, BUT RATHER ATTACK THE JUSTICE OF THE DECISION UPON THE MERITS.

We have already considered the question whether the award of the former arbitral court was within the limits of its jurisdiction; and we believe that we have shown the award to be within these limits upon five different grounds.

We shall now directly, but briefly, refer to the points advanced by Mr. Mariscal upon which he makes the claim that the decision of the former arbitral court was beyond the limits of its jurisdiction.

His argument on this point is contained in his letter of November 28, 1900. (Transcript, Diplomatic Correspondence, p. 27.)

The particular portion to which we desire to call attention will be found at the foot of page 28.

Mr. Mariscal there advances the claim that the decision should have been in favor of Mexico on several different grounds. Now, this argument is not, as he claims, an argument against the jurisdiction of the court but obviously an argument that the case was improperly decided on its merits.

Jurisdiction is defined in all systems of jurisprudence as the power to hear and determine a case. The existence of jurisdiction does not depend upon its rightful exercise. A case may be within the jurisdiction of a court whether correctly or incorrectly decided. This very obvious proposition has been overlooked by Mexico.

XIX.

NEITHER THE CLAIM PRESENTED TO THE FORMER ARBITRAL COURT NOR THE CLAIM PRESENTED HERE WAS BARRED BY THE TREATY OF GUADALUPE HIDALGO.

It was urged by Mexico before the former arbitral court that the claim presented there was barred by the treaty of Guadalupe Hidalgo.

This point was decided against Mexico by the former tribunal and its decision, operating as res judicata, is conclusive now that she attempts to renew the same argument.

Even though the question were an open one, it would not be difficult to show that there is no merit in this argument which Mexico advances.

The two points upon which it was shown to the former court on behalf of the archbishop and bishop of California that their claim was not barred by the treaty were these:

1. By the treaty of Guadalupe Hidalgo the Government of the United States only released Mexico from claims (a) brought by citizens of the United States (b) if those claims had arisen previously to the second day of February, 1848.

The political status of the Roman Catholic Church in Upper California was that of a Mexican citizen, certainly (and at the very earliest), till the exchange of ratifications at Queretaro, which exchange occurred on May 30, 1848. Whatever claims existed in favor of the prelates, clergy, and laity of that church, arising out of the existence of the Pious Fund, and held by them to the tune of the treaty of Guadalupe Hidalgo, existed in favor of Mexican citizens. Hence they were not released by that treaty.

2. The claim presented to the former arbitral court accrued after the ratification of the treaty of Guadalupe Hidalgo on May 30, 1848. This is evident, for the demand presented to the former arbitral court was one for interest which accrued on October 28, 1848, and upon the 24th of that month in each year thereafter up to and including 1868, twenty-one years in all.

This matter was argued by Mr. Doyle before the former arbitral court (transcript, pp. 93–99), and to that argument we desire to refer the court.

In examining this point we may consult with profit the history of the arbitrations between Mexico and the United States, preceding that of July 4, 1868, which will be found in Moore’s International Arbitrations (Vol. II, pp. 1209–1286).

XX.

OF THE FACTS NECESSARY TO AN AWARD IN FAVOR OF THE UNITED STATES THE ONLY ONE WHICH IS NOT RES JUDICATA UNDER THE JUDGMENT OF THE FORMER ARBITRAL COURT IS THAT OF NON-PAYMENT OF THE ANNUAL INTEREST SINCE FEBRUARY 1, 1869. THIS FACT IS CONCEDED BY THE PROTOCOL. THE WHOLE CASE IS THEREFORE CONTROLLED BY THE PRINCIPLE OF RES JUDICATA.

If we are correct in our contention that res judicata applies not only to the thing directly adjudged, but to all matters necessarily included therein, there is nothing to be decided in this case, except to apply the principle in the present matter. For all questions necessary to sustain our case here were necessary to sustain our case before the former arbitral court.

A matter is said to be necessarily included in a thing directly adjudged if the thing directly adjudged could not have been so decided without deciding the matters claimed to be necessarily included therein.

No one of the claims brought forward upon the present arbitration could have been decided against the claimants in the former arbitration without defeating their application for an award. If Sir Edward Thornton, as umpire at the former arbitration, had decided any one of the points against us for which we now contend, his decision would have been against us and in favor of Mexico. But his decision was against Mexico and in our favor.

Hence all of the propositions upon which we rely here for an award were included in the thing which he directly adjudged.

It being conceded in the protocol that the installments have not been paid since February 1, 1869, we are entitled by the force of res judicata to the award which we demand in our memorial.

XXI.

THE DEFENSE OF THE STATUTE OF LIMITATIONS IS NOT OPEN TO MEXICO.

Mexico claims in her answer to our memorial that this claim is barred by section 1103 of her Civil Code and by an act passed September 6, 1894, whereby she barred all debts which had not been presented to her for examination and funding under a decree of June 22, 1885.

In article 4 of the convention of July 4, 1868 (Appendix, pp. 432–433), provision was made for the payment of the awards made under that convention by annual installments of amounts not exceeding $300,000 in any one year. The awards against Mexico having exceeded those against the United States, Mexico was compelled under the treaty to pay the difference, in accordance with the above-mentioned provision of the treaty.

Her first payment was made January 31, 1877. (2 Moore’s International Arbitrations, p. 1321.) The second payment was made January 31, 1878. (2 Moore’s International Arbitrations, p. 1322.)

The last payment was made on January 21, 1890.

On March 1, 1890, Senator William M. Stewart, counsel for the bishops of California, addressed to the Department of State of the United States a request for the interposition of that Government with Mexico for payment of the interest from February 1, 1869. (Transcript, Diplomatic Correspondence, foot p. 23.) On August 3, 1891, Mr. Thomas Ryan, then United States minister to Mexico, was directed by the Department of State of the United States to forward this claim or demand against the Republic of Mexico to its foreign office. (Transcript, Diplomatic Correspondence, p. 23.) This Mr. Ryan did on August 17, 1891, as will appear by his letter to Mr. Mariscal of date August 17 (Transcript, Diplomatic Correspondence, p. 8), and his report to that effect to the Secretary of State of the United States under the same date. (Transcript, Diplomatic Correspondence, p. 8.)

Several representations were made by the minister of the United States to Mexico during the following six years; but no answer thereto was ever made until the letter of Mr. Mariscal to Mr. Clayton of October 4, 1897. (Diplomatic Correspondence, p. 4.)

It will be seen, therefore, that there has been no laches in the prosecution of this demand. The last payment under the old award was January 21, 1890. The bishops within forty days thereafter requested the intervention of their Government. In less than two years from the last payment under the former arbitration the matter had already become the subject of renewed diplomatic representation to Mexico by the United States.

We submit further that the statute of limitations is not open to Mexico and we base our proposition upon the reasons here below stated:

1. Such a plea is not now allowable under the protocol of May 22, 1902.

By that convention two questions have been submitted for decision:

(a) Is the claim as a consequence of the former decision within the governing principle of res judicata? and

(b) If not, is the same just?

A claim barred by limitation is as much a just claim as one not so barred. If a system of jurisprudence withholds a remedy through the operation of a statute of limitations it is not upon the theory that the right has been extinguished, but in pursuance of a policy by which it is in effect declared that the law assists those who are vigilant, and not those who sleep upon their rights. The statute of limitations is generally admitted to be one of repose, and not one of presumption. The enactment of a statute of limitations is based upon the idea that sound public, policy requires disputes to be brought to a close within a reasonable period.

But it is not presumed that the obligation has been canceled and therefore should not be the subject of litigation.

The function of this tribunal (if the case be not controlled by the principle of res judicata) is to decide whether the claim here made is just or not.

It is not its function to undertake to determine what the courts of Mexico would have decided had we taken our case to those courts, as suggested by Mr. Mariscal. (Diplomatic Correspondence, pp. 33, 34.)

2. A statute of limitations is a law of the forum. In this case whatever the statute of limitations may be in Mexico, it is a law for Mexican tribunals alone, and not for international courts.

3. We submit that it ought not to be, and that it is not allowable under the law of nations for a sovereign, while the claim of a citizen of another sovereign is the subject of diplomatic negotiation between the powers, to pass a law of limitation and thereby bar or attempt to bar the claim. This claim became the subject of diplomatic negotiation on August 17, 1891. (Transcript, Diplomatic Correspondence, P. 8.)

And yet Mexico claims in her answer that the claim became barred by a statute of limitations enacted by her September 6, 1894. (Replication, p. 30.)

4. There is no statute of limitations in international law except such as may be agreed to exist for a particular case by provision in a convention between two or more powers.

5. The statutes of limitations of Mexico have no extraterritorial effect and can not destroy the claim of nonresident creditors.

6. If Mexico had desired to avail herself of the plea of her statute of limitations, she should have declined to arbitrate or (failing that) she should have insisted upon a provision in the protocol whereby she could have obtained the decision and judgment of the court upon the question whether this claim was effectively barred in an international tribunal by a law peculiar to Mexico, territorially limited, and enacted to control proceedings and remedies in her own domestic courts. She failed to take either of these steps.

7. Lastly, there is nothing to show that the legislation referred to by Mexico in her answer does bar the claim or demand urged here.

XXII.

THE DEFENSES ATTEMPTED TO BE SET UP BY MEXICO IN HER ANSWER ARE NOT SUFFICIENT TO DEFEAT THE AWARD CLAIMED BY THE UNITED STATES.

We now turn to the consideration of Mexico’s answer.

In her answer filed here Mexico undertakes to set forth certain propositions of fact and law to defeat the award claimed by the United States in its memorial.

The answer is to be found in the replication (pp. 19 to 36).

In some of the paragraphs a number of objections are made to the case of the United States.

We shall proceed to state these propositions in the order in which Mexico states them.

1. The defense made by Mexico in paragraph (I) of her answer is that the archbishop and the bishop of California have no title by which they are authorized to make the present demand. Mexico argues that she succeeded the Spanish Government and “was, as the latter had been, trustee (comisario) of the fund and, in this conception, successor of the Jesuit missionaries, with all the rights granted to them by the founders.”

The claim of Mexico is that unless the archbishop and the bishop show title in succession and interest to that formerly held by the Mexican Government they are without standing.

Mexico then proceeds to argue that the archbishop and the bishops claim title by succession through the law of Mexico dated September 19, 1836, but that this title is without validity; and, furthermore, that the act was repealed on February 8, 1842. It is further suggested by Mexico that as the act of April 3, 1845, is limited to unsold properties, the archbishop and the bishop could derive no title through that act.

These arguments of Mexico show that she does not appreciate the claim made by the United States upon behalf of the archbishop and the bishop.

That position was plainly set forth in this litigation as early as January 1, 1875. We find, in a reply of the claimants to the argument of Señor de Azpiroz (one made before the former arbitral court by Mr. John T. Doyle), the following (Transcript, pp. 470, 471):

To avoid misunderstanding, I repeat here explicitly that I do not claim and never have claimed the ownership of this fund for the bishops plaintiffs. The ownership of it was never in their predecessor, Bishop Diego. It was from the time of its creation a trust fund devoted by its founders to the extension and support of the Catholic Church in California. The first trustees were the Jesuits; it will not be denied that they acknowledged the trust character of the estate. They were succeeded by the Crown of Spain, which took of necessity, and to prevent a failure of the trust, just as in England the Crown takes a trust estate where the trustee dies without heirs, but took cum onere, and acknowledging the trust, as has been shown by the Pandectas Hispano-Mexicanas and other authorities. Then came the Republic of Mexico, which succeeded to the sovereign rights of Spain; she still held and administered the fund as a trustee. She devolved the administration of it on the bishop by the act of 1836, and resumed it to herself by that of February, 1842. During all these changes of the trustees, there was none whatever in the objects to which the incomes were to be applied, nor any pretense of such, nor any claim of a right to make such. The church of California—missionary during its infancy, as all churches were, afterwards fully organized by the appointment of a bishop—was the beneficiary throughout, and neither Spain nor Mexico ever denied the fact until it was questioned for the first time in this proceeding by the learned and distinguished counsel who defends the Mexican Republic.

This same point is enforced in the Diplomatic Correspondence (p. 49) wherein Mr. Hay, Secretary of State of the United States, in his letter of July 18, 1901, addressed to Mr. Clayton, minister of the United States to Mexico, declares that the archbishop and the bishops are themselves, in their right to exact this fund, trustees “for its beneficiaries, the object of the bounty of the founders of the charity.”

In answer to this position of Mexico, we may further reply:

(a) That the former arbitral court decided the archbishop and the bishop have the right to insist upon the payment to them of the interest due to Upper California, and we maintain that this decision is conclusive.

(b) That the archbishop and the bishop had and have, for the reasons stated in Point X of this brief, the rights claimed for them before the former arbitral court and before this court.

(c) That in order to establish that the United States has a right to the award claimed in this case, it is not necessary to establish that the archbishop and the bishop had the right to demand this interest. If it appears that Mexico was under an obligation to devote this money to the support of Catholicism in the Upper and Lower Californias, the United States has the right to demand the portion due for application in Upper California and to distribute it according to its own jurisprudence.

(d) That the bishops do not claim that they derive their title under the act of September 19, 1836. They claim that the act of September 19, 1836, did not create the rights of the bishop, which are therein granted to him. He held these rights before the act was passed. The act was simply an act of recognition.

(e) That it is true (as Mexico says) that the act of April 3, 1845, is limited to the debts and the unsold properties of the Pious Fund, and does not include properties that had been sold. But Mexico loses sight of the fact that this act is itself a legislative recognition by Mexico herself of the right of the bishop and his successors to receive whatever was due to the Pious Fund on account of properties which were sold. The act is not a grant with respect to properties which had been sold, but it is evidence of a general right, being itself an admission by Mexico.

Its value as far as property sold is concerned is evidentiary.

2. The second paragraph of Mexico’s answer is devoted to stating its claim that the Catholic Church of Upper California was never made the beneficiary of the Pious Fund either by the founders or by the Jesuits, and hence that Mexico had the uncontrolled discretion to use these funds for the support of missions in countries other than Upper California.

Our answers to these propositions are numerous:

(a) The former arbitration court decided that Mexico had no such power, and this decision is conclusive here.

(b) We have maintained elsewhere that Mexico had no such power. The power was granted to the Society of Jesus and was personal in character. Upon their banishment from the dominions of Spain and upon their suppression by papal bull this power of appointment became incapable of execution. The Jesuits never undertook to exercise it. It was in the nature of a right of reentry upon breach of condition subsequent.

No advantage was taken by the Jesuits or by anyone else of the occurrence of the condition specified, which condition happened, if at all, in 1768.

Our rights arise out of an occurrence which took place in 1842, seventy-four years after the expulsion of the Jesuits.

The Spanish Government never undertook to exercise any discretion to bestow these properties elsewhere than to the missions of the Californias, but on the contrary the properties were known from the time of the expulsion of the Jesuits to the cession of Upper California to the United States as “The Pious Fund of the Californias.”

What better name could have been given them? None.

They were devoted to pious uses.

These pious uses were to be achieved in the Californias.

It is true that there was an alternative power of appointment which governmental and papal power had rendered ineffective, which was never exercised, and under which no claim was ever made.

In English and American jurisprudence presumptions have been indulged after undisputed recognition of title for seventy-five years that the title is supported by a lost deed. This has been done even in cases where the circumstances tended to support the idea that the deed had never been executed. The fiction was indulged for the sake of justice.

(c) If Mexico had any power or discretion to appoint these funds to missions other than those of the Californias, she never exercised the power. On the contrary, her entire course of conduct from 1821 to 1848 was an uninterrupted recognition that these moneys were legally and morally applicable to the support of religion in the Californias, Upper and Lower. These were existing rights recognized by Mexico at the moment of the cession of Upper California to the United States. That act did not destroy the rights.

(d) The case bears analogy to, and may be properly controlled by, the reasoning of the United States Supreme Court in Terrett v. Taylor (9 Cranch, 43), which we have already cited.

A statement of the facts of the case, and the quotation which makes clear the conclusion of the court, will be found in the Transcript (p. 586).

3. Paragraph III of the answer of Mexico is devoted to sustaining seven positions.

They are these:

(a) The Villapuente deed confers no rights upon the claimants.

(b) “The immutability of a judgment and its force as res judicata belong only to its conclusion.”

(c) The claim for the interest demanded in this court could not have been considered under the treaty of July 4, 1868.

(d) The demand here made, as well as the demand upon which the award was made at the former arbitral court, were discharged by the treaty of Guadalupe-Hidalgo, of February 2, 1848.

(e) The claim here demanded was barred by acts passed by Mexico in 1856 and 1859, disentailing and nationalizing church property.

(f) The claim demanded is barred by the statute of limitations.

We shall consider these points in the order in which they are stated.

(a) The claim of Mexico that the Villapuente deed confers no rights upon the archbishop and the bishop of California has been considered in other places in this brief, and need not here be dwelt upon.

(b) The proposition of Mexico that “the immutability of a judgment and its force as res judicata belong only to its conclusion” has also been considered elsewhere and will not now be dwelt upon.

(a) Mexico claims that “the interest demanded in this court could not have been considered under the treaty of July 4, 1868.” The argument is that the convention of July 4, 1868, was limited to claims which accrued between February 2, 1848, and February 1, 1869—a period of exactly twenty-one years. This is the view the counsel for the claimants have always taken. We have never assumed that the former arbitral court had power to award more interest than that which accrued between those two dates. In fact, that was the theory upon which the case before the former arbitral court was tried and decided. It was conceded in the diplomatic correspondence that this is the correct interpretation of the convention of 1868. (Transcript, p. 15.)

We may therefore concede that the arbitral court did not award any interest for a period subsequent to February 1, 1869. And of course the claim here urged is for interest which has accrued since that date.

(d) The claim of Mexico that both the present demand and the former demand made before the arbitral court of 1868 should be barred by the treaty of Guadalupe-Hidalgo is briefly considered elsewhere in this brief, and is fully answered in the brief of Mr. John T. Doyle in reply to Mr. Cushing’s motion to dismiss the claim. (See Points IV and V, Transcript, pp. 93–99.)

(e) The claim of Mexico that the acts passed by her in 1856 and 1859 (eight and eleven years, respectively, after the cession of Upper California to the United States), disentailing and nationalizing church property, had the effect of destroying this claim hardly needs any reply. If the claim existed in favor of the church in perpetuity from the cession of that territory to the United States by Mexico, it was not within the power of Mexico to pass any act whereby the right of property was barred.

(f) The seveuth point made by Mexico under Paragraph III of her answer is that the claim is barred by the statute of limitations. That point we have already considered and shall not now dwell upon.

4. The fourth paragraph of Mexico’s answer is devoted to the proposition that the Pious Fund was created to provide a fund for the conversion of Indians, and that the Indians have become extinct. Mexico assumes from these premises that the trust purpose has failed, and that the obligation of the trustee can no longer be enforced.

We have always insisted and heretofore contended in this brief that the trust purpose of the Pious Fund of the Californias was, throughout, the conversion of the natives of the two Californias, upper and lower, and the establishment, maintenance, and extension of the Catholic Church, its religion and worship, in that country.

We have pointed out that it would be absurd to suppose that the missions were to be founded for the establishment of Catholicism, and should, to achieve the purpose of the donors, be abandoned upon the conversion or extinction of the natives.

It is hardly open to Mexico, moreover, to claim that, because the natives were unconverted and extinguished for want of the funds which she should have paid promptly, that therefore she should not pay at all.

In point of fact, however, as the proofs abundantly show, the Indians have not become extinct.

In the course of this paragraph of her answer (IV) it is admitted by Mexico that among the objects of the Pious Fund was “the support of the church,” but it is said that this “was not the principal or direct object of the establishment of the fund, but the means of carrying out the spiritual conquest of uncivilized Indians through the religious missionaries.”

At the time the great contributions to this fund were made the country was in an uncivilized condition, and inhabited by uncivilized tribes. The gift was to the missions of the Californias. Those missions had not for their sole object the conversion of the natives. They were religious foundations designed to endure as long as the see of Rome (to which they owed religious fealty) continued to exist.

It is not true, as claimed in this paragraph, that the purpose of the Pious Fund was the conversion of the pagan Indians “to the obedience of Spanish authority.”

At the former arbitration the argument was made that the Californian missions were political institutions. It is quite the dominant note in Señor de Azpiroz’s argument.

To that argument Mr. Doyle made a full and effective reply (Transcript, pp. 463–466, Par. I). We may rely upon this reply to show that the missions were not political institutions. Once resolved that they were not political institutions, it follows that it was not the object of the missionaries nor of those who contributed to the fund to subject the natives to Spanish authority.

In this paragraph of the answer (IV) Mexico also renews the argument that the discretion lay with her to give or to withhold the income of the Pious Fund from the missions. This claim is contrary to repeated legislative recognitions; among others to the provisions of the law of May 25, 1832, in which it is provided (sec. 6) that the proceeds of such properties shall be deposited in the treasury of the Federal city, to be solely and exclusively destined for the missions in the Californias; also, by the provision in the same act which authorizes the board of administration (junta) to “name to the Government the amounts which may be remitted to each one of the Californias, in accordance with their respective expenses and available funds,” the only provision in the act for the disbursement of the fund.

5. The fifth paragraph of the answer of Mexico is to the point that the right of investing the Pious Fund and applying the proceeds according to the intentions of the donors of the properties were legitimately exercised by the Mexican Government.

This claim upon the part of Mexico is largely, if not entirely, academic. Mexico did invest the fund. She did administer it. She did control it. But to the time of the cession of Upper California to the United States (February 2, 1848) she never disputed her duty to pay over these moneys to the support of the missions of the Californias.

And when she passed the act under which we claim on October 24, 1842, she provided that:

The revenue from tobacco is specially pledged for the payment of the income corresponding to the capital of the said fund of the Californias, and the department in charge thereof will pay over the sums necessary to carry on the objects to which said fund is destined, without any deduction for costs, whether of administration or otherwise.

By an examination of the act of May 25, 1832, already quoted, we find that these properties were “solely and exclusively destined for the missions of the Californias.” The provision in the act of October 24, 1842, whereby it was provided that “the department in charge will pay aver the sums necessary to carry on the objects to which said fund is destined” admits, therefore, of no other meaning than that these sums were to be paid over to the missions of the Californias, Upper and Lower.

The two acts must be read together, and as by the act of May 25, 1832, the property “was solely and exclusively destined for the missions of the Californias,” the provision of the decree of October 24, 1842, directing the payment of the income to “the objects to which said fund is destined” is a legislative direction to pay that income to the missions or to their use.

In either event the result is the same in this case. An obligation to pay to the missions is enforceable by the claimants here. An obligation to pay to the use of the missions is likewise enforceable by them.

It may be added in passing that when reading the act of May 25, 1832, in conjunction with the act of October 24, 1842, it is well to keep in mind that the Government of Mexico as late as February 21, 1842, appointed Gen. Gabriel Valencia to be general administrator of the properties of the Pious Fund of the Californias upon the same terms and with the same powers as were conferred on the board (junta) bythe same department (ramo) by the decree of the 25th of May, 1832. (Transcript, p. 505.)

We submit, therefore, that Mexico, by her act of October 24, 1842, directed the income to be paid to the missions.

She did not nullify the obligation prior to the cession of Upper California to the United States, and the right which appertained to the citizens of the ceded territory passed with them into their new citizenship.

We may fairly ask, as was asked in one of the arguments at the the former arbitration (Transcript, p. 586):

Can any Government free itself of its obligations to administer a trust by the simple process of denationalizing the cestuis que trust, and transferring them to the jurisdiction of a foreign government?

6. The proposition advanced by Mexico in Paragraph VI of her answer is the same as that advanced by her in other paragraphs thereof. It is to the effect that she had the right, as trustee to the fund, in succession to the Jesuits, to apply the fund to other missions. We have replied to that point in several rejoinders we have made to various paragraphs of Mexico’s answer, wherein she advanced the same argument.

Whatever power Mexico had in the matter may be laid out of view. She exercised certain powers. In the exercise of these powers she made certain agreements. Those agreements we are endeavoring to enforce against her.

7. The seventh paragraph of Mexico’s answer (VII) is devoted to three propositions:

(a) That the award in this case, if any be made, should be made payable in Mexican silver dollars.

(b) That the division claimed by the United States of 85 per cent to Upper California and 15 per cent to Lower California is unfair.

(c) That after the Marquis of Villapuente and the Marquesa de las Torres de Rada had conveyed their estates to the missions in 1735, the title of the Marquesa acquired in the administration of the estate of her husband, viz, the Marquis de Rada, was invalidated, and hence the donation to the Pious Fund failed.

These propositions we shall treat in the order named.

(a) This point is dealt with in the brief of Messrs. Doyle and Doyle (pp. 25, 26) and in that of Messrs. Stewart and Kappler (pp. 21, 22), and need not detain us.

(b) This point is likewise dealt with in the briefs of Messrs. Doyle and Doyle (pp. 22–25) and Messrs. Stewart and Kappler (pp. 23 and 24), and we shall not discuss it.

(c) It is not claimed by Mexico that she did not sell the properties belonging to the Pious Fund, including those which had been derived under the Villapuente deed. But she offers in evidence a volume to show that the title conveyed by the grantors to the missions failed in litigation which arose concerning it.

Even if this were so, Mexico would still be answerable for the prices realized upon the sale of the properties. These properties were in the possession of the bishop in 1842. The decree which Mexico now invokes to defeat the award asked for here bears date 1749, ninety years before the incorporation of the fund in the national treasury. This defense by Mexico is offered in her answer as though the matter were new to this controversy. It is to be found dealt with, however, in the Ramirez-Valencia correspondence. (Transcript, pp. 518–523.) The whole history of the litigation is stated by Pedro Ramirez in a communication which he address to three lawyers of the City of Mexico, asking their opinion upon the matter. If this statement for an opinion submitted by Mr. Ramirez, with the opinion of the attorneys, is examined it will be found that the facts relied upon by Mexico do not warrant the conclusion which she seeks to draw from them.

A synopsis of the facts which appear in the “Pleito Rada” are stated as Exhibit B to the Replication (pp. 37–44).

The facts of this litigation were these:

The Marquis de Rada died on April 23, 1713. Appraisers were appointed and proper inventories of his estate returned to the probate court. His widow, the Marquesa de Rada, claimed the entire estate, “founded on her dowry and the tutorship of the children of her first marriage,” as well as on account of other obligations due to herself from her deceased husband.

The court awarded the entire estate to the Marquesa de Rada on September 9, 1713. (Replication, p. 38.) In 1718 the heirs of the Marquis de Rada claimed that there had been concealment of goods and undervaluation by the appraisers, and that the estate of the Marquis was more than sufficient to satisfy the demands of the Marquesa against it. They also insisted that there should be a surplus, to which they were entitled as heirs. These claims of the heirs were rejected in several of the courts through which the litigation passed.

It will therefore be seen that the question in the litigation was whether there was an excess or a deficiency of assets. In the meantime the property which had been surrendered to the Marquesa de Rada under the original award of the court passed to the Pious Fund of the Californias.

The controversy was appealed to the Royal and Supreme Council of the Indies at Madrid. By that court the inventories were canceled, and all persons in interest were remitted to the court of first instance for further hearing and proofs. Its decree was made April 16, 1719.

On the return of the case to the court of first instance the cause was retried, and finally decided on January 31, 1829. By the judgment of January 31, 1829, it was decreed that the missions should pay to the heirs of the Marquis de Rada $158,175, reserving questions concerning rents covering a certain period.

This judgment, in effect, was a decree that the properties of the Marquis which had been taken over by his widow, the Marquesa, and conveyed to the Pious Fund, were more than sufficient to discharge all of her rights by the sum of $158,175, and that accordingly her grantee should pay this sum to the persons legally entitled to the excess. This judgment had not been paid by the year 1842, and at that time certain property held by the Pious Fund was seized.

The properties seized were the estate of Cienaga del Pastor and the Vergara street houses, which were derived, not through the Villapuente donation, but through the Arguellas donation. (Transcript, p. 520.)

The record does not show how this judgment of $158,175 was discharged, nor, indeed, that it ever was discharged, nor whether the litigation was prosecuted to other courts and the judgment of January 31, 1829, reversed or annulled; but the record does show that the right of the missions as successors in interest to the Marquesa were recognized, subject to a lien of $158,175.

A clear idea of this litigation will be derived from the reading of the document in the transcript (Transcript, pp. 518–523) and Exhibit B, in the replication (pp. 37–44).

The former arbitral court refused to make any allowance in the amounts decreed to be the principal of the Pious Fund on account of the Cienaga del Pastor, upon the ground that it had been attached to satisfy the above-mentioned lien of $158,175, besides interest, “and there is no evidence in this record that the Government (of Mexico) ever obtained the property or derived any benefit from it. (Transcript, p. 526.)

By proof produced before this court through discovery from Mexico, we have shown that the Cienaga del Pastor was sold by the Government of Mexico November 29, 1842, for $213,750, and the personal property thereof for $3,000. (Replication, p. 47.)

As hereinabove stated, we seek to charge Mexico with these two sums in the event that the whole case is not deemed res judicata.

It will be seen from the foregoing that the properties of the Pious Fund devoted by the Marquis de Villapuente and the Marquesa de Rada were never lost to it. The only damage which it sustained was to labor under an attachment of $158,175 and interest. Whether that attachment was paid or otherwise discharged does not appear by the record.

It is respectfully submitted that the award of this court should be for the amount asked for in the memorial of the United States, based upon the idea of the principle of res judicata controls here, and failing that, that the award should be for the United States, based upon the demand stated in its memorial as the true amount due in the event that the principle of res judicata is held to not control the decision of this court.

Garret W. McEnerney,
Of Counsel for the United States.

The Hague, September 25, 1902.

1. After the lapse of so long a time it is impossible to state with exactness the value of the Arguelles estate or the amount of the benefaction received therefrom by the Pious Fund of the Californias. At one time it was supposed that the entire estate amounted to only $600,000. In a report by the district attorney of the circuit court at Guadalajara, made for the Mexican Government on August 25, 1871, for use before the former arbitral court, it is said that the Arguelles estate amounted to more than $800,000, and that the inventories were in Spain. (Transcript, pp. 458–459.)

   It is now believed that the benefaction received by the Pious Fund alone amounted to a sum variously estimated from $450,000 to $600,000. We know that there was paid to the public treasury from the Arguelles estate for the account of the Pious Fund $306,901. (Transcript, p. 24.) The Cienaga del Pastor was sold by Mexico on November 29, 1842, for $213,750, and the personal property thereon sold for $3,000 more. (Replication, p. 47.) This property came from the Arguelles estate.

   The houses on Vergara street, which likewise came from the same estate, were rented for $3,500 per annum. (Transcript, pp. 512–513.) The Pious Fund owned a three-fourths interest. Three-fourths of $3,500 capitalized at 6 per cent corresponds to $43,750. The sum total of the four principal amounts above mentioned is $567,401.

   It is possible that some undivided interest in the Cienage del Pastor and in the houses on Vergara street were purchased by the Pious Fund with surplus moneys on hand. (Brief of Messrs. Doyle & Doyle, p. 27.) If so, the amount of the Arguelles benefaction could be ascertained with reasonable definiteness by subtracting from the $567,401 the sum paid for the acquisition of interests held by other persons and secured by the Pious Fund. In any event, however, the amount received by the Pious Fund by way of benefaction from the Arguelles estate ranged in value from $450,000 to $600,000.

2. This decree passed after the expulsion, indeed after the suppression of the Jesuits; hence the trust devolved of necessity on the Crown as parens patria.

3. The money received for the heirs is conceded to be a trust fund coming into the treasury as one of its ramos ajenos. That received from the Philippine missions was in the same category, and on demand of the King of Spain the arrearages were paid to Father Moran, representing the president and chief ecclesiastical authority of those missions, as the proper person to demand and receive it. How can the demand of the bishops of California for the remaining three-eighths be resisted? “Ubi eadem est ratio idem jus.”

   Other legal corollaries are suggested by these legal proceedings. Why was the renunciation of the Jesuits effectual as to the quarter bequeathed to the college, and otherwise as to the bequest in favor of the missions in their charge? Obviously, because the former was their private foundation and property, while the latter belonged to the beneficiaries for whom they were but trustees, and whose right they could neither renounce nor forfeit.