His Excellency Enclosure in No. 703. (Copy) Mr. McCreery to Mr. Mariscal. IGNACIO MARISCAL, EMBASSY OF THE UNITED STATES, Minister of Foreign Affairs. MR. MINISTER: Referring to the Ambassador's note, of December 19, 1899, this Embassy has the honor to bring again to the attention of Your Excellency's Government the claim known as "The Pious Fund of the Californias" against Mexico. The Government of the United States regards this claim as undoubtedly just, its essential justice having been already established by one arbitral hearing and decision, having the proper effect of res judicata. Merignhac, L'Arbitrage International, Section 306, speaking of the arbitral sentence, says: "The sentence, duly given within the limits of the Convention, "decides the question between the parties in a definitive manner "(Art. 25 of the Regulation of the Institute); it therefore has the "authority of chose jugée, like judgments rendered in the last resort "by the ordinary tribunals of a country." I have the honor to renew to Your Excellency the assurance of my most distinguished consideration. FENTON R. MCCREERY No. 532. Honorable JOHN HAY, EMBASSY OF THE UNITED STATES, Secretary of State, Washington, D. C. SIR: I have the honor to enclose, herewith, copy of my note to the Foreign Office transmitting a copy of your No. 263, of December 4th last, relating to the claim growing out of the "Pious Fund of the Californias" and stating that after the Minister has given consideration to the question as presented by the State Department, I shall be glad to be furnished with the views of the Mexican Government upon the same. Up to this time no answer has been received. I have the honor to be, Sir, Your obedient servant, POWELL CLAYTON. Enclosure: Mr. Clayton to Mr. Mariscal, December 19, 1899. Enclosure 1 in No. 532. (Copy). Mr. Clayton to Mr. Mariscal. EMBASSY OF THE UNITED STATES, His Excellency, IGNACIO MARISCAL, Mexico, December 19, 1899. Minister for Foreign Affairs. MR. MINISTER: Referring to our conversation yesterday, and in obedience to your request, I have the honor to enclose, herewith, a copy of my instruction, dated the 4th instant, relating to the claim growing out of the "Pious Fund of the Californias". After Your Excellency has given consideration to the question, as presented by the State Department, I shall be glad to be furnished with the views of the Mexican Government upon the same. I renew to Your Excellency the assurance of my high consideration. POWELL CLAYTON. SIR: Referring to Your Nos. 96 of September 1 and 152 of October 21, 1897, in relation to the "Pious Fund of the Californias" I now enclose a copy of a letter from Mr. John S. Doyle, dated San Francisco, 10th December last, presenting arguments and observations favorable to his contention, in response to the statements of Mr. Mariscal's note of October 4, 1897, that the proceedings of the Joint Commission organized pursuant to the convention of July 4, 1868, can have no bearing or force upon any claim which the Catholic Church of California may set up for interest falling due since February 1, 1869. Mr. Doyle's presentation of his client's case is commendable for its clearness and logical soundness. You report, that Mr. Mariscal remands the claimants to their judicial remedies before seeking diplomatic intervention, which for the present at least, he regards as premature. Still, it is believed Mr. Mariscal will accept in the spirit in which they are offered, the views expressed by Mr. Doyle in his memorandum, copy of which, you will take early opportunity to bring to the former's attention informally. Respectfully yours, JOHN SHERMAN. Enclosure: From Mr. Doyle, Dec. 10, 1897, with memorandum. Observations on the reply of His Excellency, Don Ignacio Mariscal, minister of foreign affairs of the Merican Republic, to the note of Hon. Powell Clayton, United States minister at Merico, of September 1, 1897, relating to the claim of the Catholic Church of Cali fornia against the Merican Republic for arrears of interest on the Pions Fund of the Californias. It will be seen that there is an obscurity in the second paragraph of the Mexican Minister's note to Mr. Clayton, where he says that the convention of July 4th, (1868) excluded claims which originated before the date on which it was signed, as well as claims not presented to said commission, and adds, "nor was it authorized to decide more than the claims for injuries caused, etc., etc., during the period, from the day on which the convention was signed to the date on which the exchange of the ratifications was effected." This I ascribe to some error in transcription, for I discover also an obvious omission of words in the fourth paragraph of the document. In the later place Señor Mariscal probably wrote "the twenty-one years included between the dates of the signature" of the treaty of Guadalupe Hidalgo and the "exchange of the ratifications of said convention" (of 1868) and the words above underlined have been casually omitted in transcribing. Notwithstanding the obscurity created by these clerical misprisions (which I note, not for the purpose of criticism, but that I would not be supposed to omit due attention to any portion of his excellency's communication) I believe that I do no injustice to his argument in considering the substance of it to be contained in the fifth and sixth paragraphs, (pp. 2 and 3 of his letter) viz: that "The debt or res adjudicata was extinguished" by the payment "of the sum awarded, and the claim of the Church against the Mexican government for installments coming due after February 2d, 1869, is not included among the claims for the settlement of which the convention of July 4th, 1868, was celebrated; that it was not nor could it be within the jurisdiction of the joint commission created by said treaty, nor can the decision pronounced November 11, 1875 (restricted to the claim that it decided) be invoked as a sentence rendered, under the authority of res adjudicata, in order to decide a subsequent demand regarding the new interest arising from the so called Pious Fund of the Californias." And again * * * * that It is "If it is now alleged that the reasons on which the said decision was founded justify an analogous claim, though subsequent to the one decided by it, such argument lacks the force attributed to it. well understood that only the conclusion of a sentence passes into authority of res adjudicata. The considerations that served it as premises are subject to controversy in the future; are perfectly impugnable, and therefore do not constitute the legal truth." These suggestions of Señor Mariscal proceed upon a misapprehension of the scope claimed for the doctrine of res adjudicata invoked by Mr. Powell Clayton in his communication to which the Mexican Secretary replies. That doctrine briefly expressed in the civil law maximRes adjudicata pro veritate occipitur" has been declared by eminent jurists to be a necessary concept of every jural society, and is accepted as axiomatic in every system of law which has ever prevailed in any civilized society. It has been so often invoked, defined, sustained and commented upon by the highest judicial tribunals of England and America, and expressed in the language of the most eminent jurists of the world, that it would be presumptuous in me to state it in language of my own. I shall therefore only note what we claim to have been established as res adjudicata by the decision of the Mixed Commission of 1868, and, in support of the claim that such determination is conclusive on the points so noted, quote the language of some of the eminent men, judges and text-writers, to whom I have alluded The claim of the Church of California submitted to and passed on by the Mixed Commission of 1868, was briefly this: That Mexico was then indebted to it, ex contractu, for twenty-one successive installments of interest on its share or proportion of the Pious Fund of the Californias, promised to be paid by the decree of October 24th, 1842, which incorporated the properties of the said fund into the public treasury of the nation, ordered them sold for the capital represented by their income, capitalized at six per cent. per annum, and promised thereafter to pay interest thereon at the rate named. Such was the claim put forward in our memorial, and in its support we submitted simultaneously a brief history of the Pious Fund, from its inception of 1697, down to its absorption into the public treasury by the decree of October 24th, 1842. This brief history was compiled from authentic con temporary sources and from published laws and public documents of the Mexican government. No denial of its truth was ever attempted; it was in fact so thoroughly supported by citations of contemporary Spanish and Mexican history and public documents of the highest authority, as to be unimpugnable. Notwithstanding the absence of any formal pleading on the part of Mexico, we assumed that the whole claim was to be deemed denied by the defendant, as by a common law plea of the general issue, and we submitted plenary proofs in support of it. The tribunal after full argument and deliberation decided in favour of the claimants, and in doing so had necessarily to determine the following questions, each one of which was necessarily involved in the case and without a determination of which in our favour we could not have prevailed in the controversy, viz.: I. Did the Mexican Republic take the Pious Fund into the public treasury, and was that taking accompanied by the promise to pay interest on the amount of its proceeds, as alleged by us? [This question the tribunal resolved affirmatively; the response to it was found in the decree of October 24th, 1842, published in the official compilation of Mexican laws and decrees made by B. J. Arrillaga.] II. What was the amount of the proceeds so taken into the public treasury pusuant to the decree in question? [To this the Mixed Commission answered as shown in the opinion of Mr. Commissioner Wadsworth, concurred in by the umpire. It was $1,436,033.] III. In what proportion should the interest on this capital at six per cent. be divided between Upper and Lower California? [On this question the tribunal, notwithstanding the great difference in our favor between them in area, population and importance, determined that an equal division was just. The computation of the interest at the rate promised, its division into equal moieties, and the multiplication of the result by the number of years covered by the adjudication,-mere mechanical processes, resulted in the sum of $904,700.79, which was the amount of the award.] IV. Were the Archbishop of San Francisco and the Bishop of Monterey (both being corporations, authorized by law to hold and possess the property of the Church of California) the proper representatives of the Catholic Church of California, in making the demand? [This question, too, the Commission resolved affirmatively.] In consequence, and only in consequence, of the determination of these questions in the manner above indicated and as the logical conclusion from them, the tribunal pronounced its judgment that the Mexican Republic should pay to the prelates named the sum of $904,700.79. It is now claimed, as I understand, by Señor Mariscal, that while it is true that this adjudication became conclusive evidence that Mexico was, at the time of its rendition, indebted to the Church, in the amount of money awarded, it does not prove any one of the coustituent facts from which alone that conclusion of indebtedness flowed, and that the taking of the Pious fund into the treasury, its amount, the promise to pay interest on it, &c., are all open to controversy between the parties to-day just as they were before the adjudication was pronounced. In this contention the honorable Secretary has unquestionably fallen into a serious error. The principle of res adjudicata renders the adjudication in question conclusive evidence in any future contest, between the same parties (or between parties deriving under them), not only of the ultimate conclusion of indebtedness existing at that time, but of each of the constituent facts from which that conclusion resulted. In fact it is apparent, on the least reflection, that such is the necessary logical result of its conclusiveness on the question of indebtedness. For indebtedness is not a primary fact, but is necessarily the result of other and antecedent facts. A man is indebted for money borrowed. Why? only because he borrowed the money. The tribunal which adjudges him indebted, must, of necessity, determine the cause of such indebtedness, i. e., the act of borrowing, and the amount borrowed; so that what decides the indebtedness, which is the consequence, necessarily determines also the fact of borrowing, and the amount of the loan which constitute the cause. Doubtless, as Señor Mariscal observes (page 5), the claim of the Church for installments maturing after October 24th, 1869, was not included among the claims for the settlement of which the convention of July 4th, 1868, was celebrated;" it could not have been, for it did not then exist so as to be capable of presentation. But the facts on which it arises and depends did exist, and they were presented for judicial ascertainment, in the case then considered. They were necessarily involved in the determination of the claim that was presented, which could not have been decided without determining them one way or the other; and therefore their determination, once made, being a judicial determination of them, by a competent tribunal, is conclusive on both parties forever thereafter. 66 Mr. Clayton, then, did not claim that the commission of 1868 decided that there was, in 1871, interest due and unpaid by Mexico accruing during the years between 1869 and 1897, for that precise question could not have been before the Commission. His claim was, and ours is, that the Commission referred to did ascertain and decide: I. That Mexico, in 1842, incorporated the Pious Fund into the Public Treasury, under a promise to pay interest on its amount at six per cent. per annum, as expressed in the terms of the decree of October 24th of that year. II. That the moiety of such annual interest corresponding to the share of Upper California amounted to $43,080.99 per annum (being one-half of six per cent. on $1,436.033, the ascertained capital), and that at that time twenty-one annual installments remained unpaid. From these ascertained facts it proceeded to deduce its judgment, which was a matter of simple arithmetical computation. Inasmuch as these constituent facts could not possibly be true in 1871, without being true at all times thereafter, Mr. Clayton rightly claimed that a judicial decision which established them as true then, necessarily determined them so forever. This is the very essence of the doctrine of res adjudicata, and is what Mr. Powell Clayton must be understood to claim in his note to which Señor Mariscal replies. His claim, so understood, is supported by the authority of all text writers and numerous adjudged cases on the subject. "The rule," says Mr. Burr W. Jones, in his essay on the law of evidence in civil cases, "is generally recognized among civilized nations, that when a matter has been adjudicated and finally determined by a competent tribunal, the determination is conclusive between the parties and privies. Interest Reipublicæ ut finis sit litium." And Greenleaf, in his treatise on the law of evidence (which I cite in preference to other works on the subject, because of its philosophic, rather than technical character) says (Lewis' edition): Section 522. "We proceed in the next place to consider the admis |