Replication of the United States of America to the answer of the Republic of Mexico in reply to the memorial relative to the Pious Fund of the Californias.

Sr. Don. Ignacio Mariscal, minister of foreign affairs of the Republic of Mexico, having offered to this honorable court an answer to the memorial of the United States, it has seemed incumbent upon the undersigned to present for the consideration of this tribunal what may be regarded as in the nature of a replication thereto, and in so doing the paragraphing of the answer will be followed.

I.

Under the head of Paragraph I, the distinguished secretary contends that no law later in date than October 24, 1842, granted to the Californias the right to receive and apply to their enterprises the annuity of the Pious Fund. The existence of a later law was not necessary, for, apart from the legal and equitable right of the bishop to administer the fund in question, the act of April 3, 1845, recognizes him as the proper beneficiary, and even before that date, during the continuance of the decree of October 24, 1842, and on April 23, 1844, and, as is believed, on other dates, payments on account of the income belonging to the Pious Fund of the Californias were ordered to be made to him (Transcript, p. 149). This sufficiently disposes of the suggestion that the Mexican Congress having, in the act of April 3, 1845, reserved the right to decide as to the proceeds of property sold, the bishop was not the proper recipient of funds chargeable on account thereof, for à practical interpretation covering the matters reserved in the law of April, 1845, had been given to the law of October, 1842, and further congressional action was needless, and none in fact took place.

II.

Even if no perfect right had existed in the Catholic Church of Upper California to administer the Pious Fund of the Californias, or to demand the perpetual interest thereon provided for by the Mexican decrees (a proposition we deny), nevertheless, in the eye of a court of equity dealing with the subject-matter upon broad principles of right, the Catholic Church, through its accredited officers, would have been the proper recipient of the interest upon the fund. And this equitable, and, as we contend legal, right also, was conclusively recognized by the Mexican Government, as has been fully discussed in the brief of the agent and counsel of the United States, pages 55 and 56. For further considerations relative to the question of legal right, we also refer to the argument of Messrs. Stewart and Kappler.

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III.

A. For the moment, under this heading, following the answer of Mexico, attention is invited to the fact that Sr. Mariscal in his statement in the answer of the trusts upon which the Pious Fund was held only included them in so far as he esteemed them as assisting to sustain the argument he desired to make. We have not believed that the court could be enlightened or brought to à proper conclusion by this method of treatment, and in the original brief we have fully stated the trusts, and, for the convenience of the court, we have repeated them in a footnote to the English copy of the answer. (See Exhibit A, hereto attached.) In the American view of the matter, a proper conclusion as to the meaning of the instrument in question can only be gained by a perusal of its essential parts, and any argument predicated upon partial and imperfect quotation must be erroneous in itself, and incidentally have a tendency to mislead the court.

To the point discussed under this paragraph subsequent reference will be made.

B. Under this heading, Sr. Mariscal renews the contentions made by him in his letter to Secretary Hay, of date November 28, 1900 (Diplomatic Correspondence, pp. 27 et seq.), insisting that only the decisory part of the judgment is to be regarded as res judicata. It will be noted, however, that in the letter above referred to he relied upon Laurent to sustain his contentions. That he was in error as to the effect of the legal citation he then employed, must, we think, appear fully by reference to the letter of Messrs. Ralston and Siddons (Diplomatic Correspondence, pp. 51 et seq.), wherein it is shown that the citation relied upon by Laurent for his statement was based upon a case not properly involving the principle laid down by him, while upon the very page from which the citation was taken, Laurent showed that if the matters necessary to be found to make up a judgment had been debated between the parties, the judgment of necessity in these respects had the force of res judicata. It will be borne in mind that before an award could have been given in the former controversy in favor of the bishops of California, it was necessary that the court should have found the existence of a fund, the possession of it by México, her obligation to pay interest thereon to the Catholic bishops, the yearly amount due by her on account of such obligation, and the number of years for which she was in default. Questions upon all of these matters were raised. They were made the subject of evidence and fully debated between the parties, and, as Laurent would indicate, having been so debated, the authority of the conclusions reached as res judicata “n’est point douteuse.”

Having therefore abandoned Laurent, he now discusses Savigny, and in the translation of the answer hereto attached (p. 23a) he quotes him as expressing his own opinion to the effect that “the force of res judicata does not exist except in the decisory part of the judgment.”

In making this statement Sr. Mariscal is manifestly in error. We hesitate to attribute to him want of care in his reading of Savigny, but the exact language of that author is as follows:

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It will be seen that the statement made by Savigny was not a pronouncement of his own ideas, as would be implied from the reading of the Mexican answer, but a deduction from the writings of others of their opinion.

With this statement as the foundation for his discussion, Savigny undertakes to disentangle what he denominates “the confused and erroneous ideas” entertained by the partisans of the doctrine cited for the purpose of discovering its foundation. In the course of his interesting and instructive discussion he arrives at the logical and impregnable position that—

Further pursuing the subject, he groups the “motifs” into two classes; those which are objective, or which constitute the elements necessary to be found before any judgment may be given, and those which are subjective, or which influence the mind of the judge to affirm or to deny the existence of these elements (p. 367). Then, stating the principle above given in other words, he declares that—

With this distinction in mind he finds no difficulty whatsoever in reconciling the divergencies of opinion and explaining the misunderstandings to be found among the various authors.

The conclusion of Savigny is summed up in these words (p. 376):

He further comments:

Further pursuing the citations made by Sr. Mariscal from Savigny, we beg to call attention to the fact that on page 25a (Exhibit A), hereto attached, of the answer of Mexico the following language is used:

In the above summary and citation occur two errors, to us entirely inexplicable. To understand their nature, let us cite the exact language used by Savigny, taking it from pages 458 and 459:

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Critical comparison of the answer of Mexico with the language of Savigny, which it purports to sum up, will show that Buchka exactly agreed with Savigny as to the present law (a fact overlooked by Mr. Mariscal), and in so far as he undertook to state the Roman law otherwise, he had, in Savigny’s opinion, reached a wrong conclusion (à tort); this commentary also being omitted.

There are contained in the answer of México three citations from Griolet, who has been correctly quoted as stating in opposition to the opinion of Savigny that neither the subjective or the objective reasons can share in the authority of the judgment, and that the authority of res judicata does not embrace the reasons (motifs). His positions, nevertheless, are not altogether clear, and it is not too much to say they are contradictory. For instance, after referring to the distinctions made by Savigny between subjective and objective “motifs,” he says (pp. 8 and 9):

Furthermore, in the application of the rules govering the subject, he furnishes us with references directly in point for the support of the contentions of the United States. To make clear his understanding of what is said to be his rule, and to furnish applications in point for our present consideration, we copy the following extracts:

Again, from page 104, we quote two paragraphs:

We add from page 105:

We add from page 131:

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We add in a note some references to recent Netherland decisions and authorities sustaining our propositions.a

We have heretofore referred to the elements entering into the judgment for which we claim the authority of res judicata. To deny to these elements, so bound up in the amount for which judgment was finally awarded, the force of res judicata, and to accept the position taken by the Mexican Government, would be to take the position that it is right to regard the quotient as res judicata, but we may not analyze that quotient into its two elements of multiplier and multiplicand and treat the judgment as determining the amount of the multiplicand.

We might cheerfully admit that in the subjective sense, so well pointed out by Savigny, the “motifs” are not to be regarded as entering into the thing adjudged, and, applying this doctrine, say simply [Page 61] that the reasons influencing the mind of the mixed commission to conclude that $43,080.79 was the multiplicand, rather than some other sum, and to conclude further that the Roman Catholic bishops of California were the proper plaintiffs, and had a right to demand the sum above indicated yearly, should be rejected as not entering into res judicata, leaving us simply to claim for the substantial elements of the judgment.

If we are not right in this contention, and the beneficiary, the number of installments for which judgment has been rendered, and the yearly amount of each installment do not form part of the decisory part of the award, and the judgment may not be inspected for the purpose of determining these various elements, so as to inform us as to what yearly claims would be satisfied by payment, then might the United States hereafter declare that, although a judgment had been obtained against Mexico for a gross sum, such judgment could not constitute a bar to another action for one of the factors of the old judgment, such as a particular yearly installment. Of course, such a suggestion would be regarded as absurd.

We have up to this time argumentatively assumed the possibility that the determination of the amount due per year and the number of years for which the mixed commission made their calculations might be classed among the “motifs” of the award. In point of fact, we submit that these elements are exactly embraced within its decisory part, the “motifs” being merely the reasoning conducive to the result. Referring to the award itself (Transcript, p. 609), we read as follows:

This is the finding of the umpire, and after some further remarks he adds:

The two clauses constitute at least part of the decisory portion or dispositif of the award, and so treating them, the award as res judicata upon the question of annual payments is free from even the doubt sought to be raised by Mexico on the supposed authority of Laurent, as first suggested by Sr. Mariscal and afterwards abandoned, and lastly upon the authority of Griolet, above analyzed and showed to be lacking in so far as it was used by the minister of foreign affairs to sustain his position.

Sr. Mariscal, further continuing his discussion of the subject of res judicata, refers to a letter from the American Secretary of State to the Spanish minister, Sr. Muruaga, to the effect that the findings of international commissions—

In a footnote to the appendix of this replication we have added at the appropriate place the full paragraph contained in the letter of Mr. Bayard, Secretary of State, quoted partially and imperfectly by Sr. Mariscal.

In making the reference last indicated, Sr. Mariscal has, we respectfully [Page 62] submit, committed the same error pointed out on page 55a of our first brief, under the head of “The doctrine of overru led cases.” He has once more confused stare decisis with res judicata. In the reference now made by him, Mr. Bayard, Secretary of State, refused to recognize the authority of a decision had between certain parties with relation to a given subject-matter, when it was invoked to control his action in a controversy having relation to an issue between other parties with a somewhat different subject-matter. In other words, of course, he refused to recognize the doctrine, not of res judicata, but of stare decisis. No reference other than this having been cited on behalf of the Mexican Government, believed by it to show that the doctrine of res judicata does not apply to arbitral tribunals, we may conclude that none exists.

We are fortunately able, in opposition to the suggestion of Sr. Mariscal that the decisions of arbitral tribunals have not the force of res judicata, to quote that gentleman himself, for in addressing Mr. Clayton, under date of November 28, 1900 (Diplomatic Correspondence, p. 31), he writes as follows:

Nowhere in the course of the present answer has Sr. Mariscal distinctly denied the jurisdiction of the mixed commission. Not having denied such jurisdiction, according to the citations given, its decisions have “the force of res judicata.”

That the Mexican commissioner (member of the mixed commission of 1868) believed the award would constitute res judicata is shown on pages 44 and 45b of brief of agent and counsel of the United States, and that Mexico’s former counsel agreed to the proposition is fully developed on page 14c of the brief of the Messrs. Doyle.

It is a matter of pleasure to be able to add to this replication a reference to the Civil Law of the Netherlands, edition of 1874, Part III, page 242, to the effect that as to res judicata, “Even the judgments of arbitrations are in precisely the same condition as judicial decisions.”

It may not be inappropriate at this moment to congratulate the present tribunal upon the fact that the first controversy submitted to arbitration under the provisions of The Hague Convention will enable this court, if in its judgment it be right, to declare once and for all time that to the findings of arbitral tribunals there attaches at least the same sanctity and conclusiveness as pertains to the judgments of the least important courts, passing upon the most trifling disputes likely to arise between man and man.

If the Permanent Court of Arbitration can give no greater degree of permanence and finality to its utterances than may be inferred from the present answer of Mexico through Sr. Mariscal, then indeed may the outlook for solemn and conclusive arbitration be considered as gloomy and discouraging. The United States adhere to a view which [Page 63] we believe will tell in the future in favor of the peace and well-being of the world, in that it will tend, if maintained, to insure absolutely the peaceful settlement of difficulties.

Under a further subheading of the present paragraph, it is contended by Sr. Mariscal that any right the claimants may have had in the beginning of the year 1848 was completely extinguished by the treaty of peace and friendship which was consummated February 2 of that year between Mexico and the United States; and this for the reason that Article XIV of that treaty declares that all debts and claims not decided up to that time, and which the citizens of the last-named country should hold against the former, would be considered ended and canceled forever.

The particular reason for the insertion of this article is found in the fact that some years previously, and before the breaking out of the war between the two countries, there had been a commission in session for the settlement of claims between the citizens of one country and the government of the other, respectively; that many of the claims had remained legally incomplete and unsettled, and that it was the design of both Governments to put an end to the old litigations. It could not have the slightest relation to the claims of those who became citizens from or at any time after the date of the treaty. The argument upon this point now being urged by Sr. Mariscal was presented by the Mexican Government in the litigation before the former mixed commission, and was passed upon unfavorably to the Mexican contentions, as certainly it could not have been the intention of Mexico, by a treaty had between it and the United States, to cancel claims against itself of those who up to the date of its signing had been its own citizens.

The further suggestion is made by Mexico that the claim is extinguished because, being in the nature of an annuity of one sort or another, it should be considered real property, subject to the legislation of the country in which it was held, and barred by the running of its statute of limitations.

It has never yet been held in international tribunals that a claim brought before them could be defeated by reason of the existence of a statute of this sort, such statute having no authority whatsoever over international courts. The purpose and effect of statutes of this kind, as is well known, is not to extinguish the right, but to bar the remedy. Their operation, therefore, may be waived by the defendants, and the very agreement to submit a claim to arbitration is a waiver.

By the terms of the protocol it is agreed between the two countries that reference be made specifically to determine whether the claim is within the governing principle of res judicata, and if not “whether the same be just,” and the award if against the Republic of Mexico must be for “such amount as under the contentions and evidence may be just.” Even without these specific clauses, which of themselves effectually prevent any appeal to a statute of limitations and offer a consideration absolutely determinative of the plea now presented by Mexico, international tribunals are controlled in their operations by broad principles of right and justice, and this tribunal can not, of course, recognize that injustice becomes justice by the simple efflux of time without culpable laches on the part of the creditor or by the act of debtor declaring the claim barred.

After the reasons above given, we may dismiss without further discussion [Page 64] the references made to Sala. Dro. Real de España, Tom. I, lib. 2, tit. 14; art. 1103, Civil Code; the decree of June 22, 1885, and Article XV of September 6, 1894, even if it were not true that the claim now under consideration, so far as it had then accrued, had been presented to Mexico before the last-named law had gone into effect, and on August 17, 1891. (Diplomatic Correspondence, p. 8.) Just about that time Mexico paid the last installment of the former judgment.

IV.

Messrs. Stewart and Kappler have so fully pointed out in the brief filed by them that the purpose of the Pious Fund was to maintain the Catholic Church and its missions, as well as to civilize and convert the Indians, that but little time need be spent over the point discussed by Mexico under this heading. We may, however, remark that Mexico’s position is largely predicated upon the asserted control by the Mexican Government over all the goods of the church and the assumption that since the separation of California from Mexico she had rightfully exercised this control, even though prejudicially to the California bishops.

In considering this argument, the fact is not to be lost sight of that at the time of the cession of Upper California to the United States Mexico was under an acknowledged obligation to pay a certain income, based upon the estimated values of the properties of the Pious Fund, to the bishops of California for church purposes. The bishop of Upper California very shortly after the transfer became a corporation sole under the American law. The obligation then existed on the part of Mexico to pay the income, at least in a proper proportion, to the bishop of California, as that country existed in the United States, and whatever might have been the power of Mexico to use the property of the Roman Catholic Church of Mexico for its own purposes, such power could not extend to property belonging to, or income payable to, a religious corporation which had become the citizen of another country, whose laws did not recognize the power, either in itself or in a foreign nation, to sequester the property of the church without just compensation. In other words, even though it be granted (and we do not make this concession) that Mexico had the right to sequester the property of its own religious corporations, no right could be exercised as against such corporations or bodies, citizens of the United States. To hold otherwise would be to give extraterritorial effect to the supposed right of sequestration or confiscation.

To explain at this point the legal position occupied by the bishop of California under the Mexican law, we refer to the argument of Señor Aspiroz, page 395, paragraph 126, of the Transcript, stating as follows:

The church, therefore, having a recognized legal existence and being possessed of certain rights under the laws of Mexico at the time of the cession of California to the United States, was, according to the [Page 65] principles of international law, entitled to maintain its legal existence under the new sovereignty, as was indicated in the opinion of the umpire. (Transcript, p. 606.)

To the suggestion made on behalf of Mexico that the nonexistence of uncivilized or idolatrous Indians should entail at the same time the withdrawal of the support offered the missionaries, we have to repeat our former remark to the effect that Mexico has apparently forgotten the first and principal purpose of the foundation deed, which was to support the Catholic Church and its missions, “so that even 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.” For this reason, the remark contained on page 13a of the answer, to the effect that “it is necessary to take into account that in Upper California there exist no tribes of uncivilized Indians whose subjugation to the secular power of New Spain and conversion to the Catholic faith was the principal object or direct end of the missions of the Jesuits, endowed with the properties of the Pious Fund of the Californias,” becomes immaterial, and any evidence tending to sustain this point incompetent and beside the purpose.

We desire, however, to be distinctly understood as denying the statement of fact last quoted in whatever form it occurs in the answer. There are, as we shall be prepared to show if material, many thousands of uncivilized Indians in Upper California, while the whole Roman Catholic Church of that territory is canonically recognized as missionary in character. Meanwhile the disappearance of the Indian population of Lower California is graphically shown by Exhibit C.

V.

It is contended in the corresponding paragraph of the answer that the Mexican Government possessed the exclusive right of investing the fund and applying its proceeds according to the intentions of the donors, and that this right had been recognized on the part of the claimants. We deny both these propositions.

The Mexican Government itself has in its legislation, as we have pointed out in another brief, and before in this, under the head of Paragraph I (pp. 1 and 2b), admitted that the proper person to apply the proceeds, according to the intention of the donors, was the bishop of the Californias. We further deny, as a matter of right, that any person other than the bishop could have properly administered the funds designed for the benefit of the church, in accordance with the wishes of the founders of the Pious Fund, and this position was fully recognized by Mexico in the several laws referred to in the course of this brief, as well as sustained by its established course of conduct.

The distinguished minister of foreign affairs of Mexico further errs, as we have said, in his statement that any exclusive right on the part of the Mexican Government to invest the fund and apply its proceeds has been recognized by the claimant. In reaching the conclusion maintained he has made (as shown by note to translation of answer attached hereto) a partial and entirely imperfect citation from a brief on behalf of the Roman Catholic bishops of California, omitting entire sentences and part of one sentence explaining and defining the position [Page 66] entertained by the bishops. Correcting the errors and supplying the omissions, it is manifest that the contention of the parties in interest was that Mexico, as trustee, had charged itself with the payment of a definite amount, fixed by the Mexican Government at a sum equal to 6 per cent upon the total capitalization of the Pious Fund; that Mexico had recognized the definite character of the claim against her for a certain annual charge; that having assumed a trust relation, and undertaken to pay an annuity to the bishop of California, she was not at liberty to disregard the undertaking. It may not, therefore, be said, and the language used on behalf of the bishops can not be tortured into an admission, that Mexico has been recognized as having a right to administer the fund and dispose of the proceeds otherwise than by delivery to the bishops of the Californias.

VI.

This paragraph of the reply of Mexico would convey the inference, to support or to contradict which discovery has been asked by the United States, that since 1848 Mexico has centered its care and protection, so far as the Pious Fund is concerned, on Lower California. We do not consider it in truth important whether this be the fact or not. The more important point is that the most considerable beneficiary (the Catholic Church of Upper California, and the missions subordinate thereto), has received no assistance from the fund, to the income of which it was the principal claimant, since 1848, except as the result of the decision of the mixed commission. To show the disappearance of the Indians of Lower California, we again refer to Exhibit C, hereto attached.

VII.

We are left at a disadvantage in replying to this paragraph of the answer of Mexico, the right being reserved by that country of presenting in the course of the proceedings a basis for a settlement, which, as it is said, Mexico has not yet found it possible to conclude. Nevertheless there are certain considerations which should be submitted.

Instead of the suggestion next made by Mexico that justice demands the privilege of payment in silver of any judgment against that country, we insist that justice would more naturally require that interest be charged against Mexico on every yearly installment from the 24th day of October of each year to the date of the protocol providing for the present court.

Mexico occupies the position of a trustee. The unquestionable duty of a trustee is to make payments to the beneficiary as they become due. A trustee who withholds payments therefrom is, and of right ought to be, chargeable with interest from the date of his default.

Mexico further charges the United States with having exaggerated the claim, because of the fact that in the former adjudication there was included in the basis of calculation of the court the property that belonged to the Marchioness de las Torres de Rada, and says that its assertions with relation thereto “will no doubt astonish the claimants, who have made a minute study with regard to the donations of said properties made to the Pious Fund; but it is to be observed that there has very recently been discovered in the general archives of the Republic important data which verifies the foregoing statement,” (the statement being that the value of the properties of the Marchioness de [Page 67] las Torres de Rada formed the greater part of the amount demanded, and that there was nevertheless no legal basis on which to claim it).

The claimants are astonished by this assertion, but not quite in the manner anticipated by Mexico. The facts contained in the volume of ancient records (Pleito de Rada) produced by Mexico were substantially all familiar to the claimants in the suit of Alemany v. Mexico, as will appear by reference to pages 518–521 of the Transcript. Therein will be found a history prepared by Pedro Ramirez, the agent of the bishop of California, substantially complete in all respects, and in general agreement with the volume Mexico now produces. For the purpose of the further enlightenment of the present tribunal we have added in the form of an appendix to this replication an abstract of the contents of the volume in question, together with a copy of the decree contained at its close, translated into English, the summary so added being supplemented as to some of its details by reference to the review of the litigation written by Ramirez and before referred to.

At the present time we shall direct the attention of the court to but one or two facts. The decree closing the volume in question was not a final decree settling the title of the property, as might fairly be implied from the Mexican answer. To the contrary, while determining the title to certain offices it remanded the cause to the lower court to settle the question of the rights in the other property of the Marchioness and her successors, together with the other litigants, “in order that they may make use of it as they see fit, according to the respective rights deduced in that audiencia where they shall execute it.” It thus appears that the record Mexico has now supplied to the court is incomplete and imperfect, and reference must be made to the statements of Ramirez for information as to the further course of the litigation. It is, however, apparent, taking the record and the statements of Ramirez in conjunction, that no order was ever passed declaring the Marchioness and her successors to be without interest in the lands claimed by them, but that there was finally granted simply a money judgment. No attempt seems ever to have been made to disturb the title of the Pious Fund to the Rada property, and the last step taken in the litigation was the levying of an attachment, not against the Rada and Villapuente property, but against the Ciénaga del Pastor and the house on Vergara street (Transcript, p. 520), both of which came to the Pious Fund from the property left by Madame de Arguëlles. It thus remains incorrect to say, in effect, as has been averred in the answer, that the Pious Fund had no legal basis on which to claim the properties that belonged to the Marchioness de las Torres de Rada, and this particularly in view of the fact that the fund was never disturbed in its possession thereof until it was sold by Mexico.

As to the money judgment in favor of the heirs of de Rada above referred to, it could have been settled prior to the reassumption of control by Mexico for the sum of $210,000 (Transcript, p. 521). Mexico thereafter sold this particular property, despite the attachment, for a price which yielded for the interest of the Pious Fund $213,750 (see copy Escritura de Venta, Exhibit D, hereto attached), and so far as the record discloses, no part of this money was ever paid out in settlement of any supposed claim against the fund, but Mexico received the exclusive benefit thereof, and failing to disclose this fact there was excluded from the calculations of the former commission (Transcript, opinion of Commissioner Wadsworth, p. 526, followed by Umpire, [Page 68] p. 609) the sum of about $200,000. Had all the facts with relation to the transaction been disclosed by Mexico to the mixed commission, there seems no doubt that a much larger award would then have been rendered against Mexico, but with the additional facts now before this court, in the event of the reopening of the former decision, the United States will insist strenuously upon the calculation of annuity in favor of the Pious Fund upon the additional amount of $213,750, as derived from the sale of Ciénaga del Pastor (the property so excluded) since 1848.

On behalf of the United States, I respectfully submit that the allegations and prayers of the memorial have not been met by the answer of Mexico.