Ricaud v. American Metal Co.

Background

A Texas lawsuit was brought by a party who says they bought a large shipment of lead bullion from a Mexican mining company and that the metal is theirs. The bullion was seized in 1913 in Mexico by General Pereyra, a commander acting for Carranza’s forces, who gave a receipt promising payment after the revolution. Pereyra sold the bullion to a buyer in Mexico, who later sold it to a buyer in El Paso. The metal was in a bonded warehouse in El Paso and the U.S. Collector of Customs was holding it. The original buyer sued in a U.S. district court to stop the Collector from delivering the bullion to the later purchasers.

Reasoning

The central question was whether a U.S. court could decide who owned the bullion when it was taken and sold by Carranza’s forces during the Mexican revolution. The Court said the U.S. government had formally recognized Carranza’s government, and that recognition requires American courts to accept the acts of that government within its territory. That does not strip courts of the power to hear the case, but it does mean the courts must treat the Mexican government’s wartime seizure and sale as effective. As a result, the seizure and sale are treated as transferring title even if the prior owner was an American who was not living in Mexico.

Real world impact

This ruling means Americans whose property was seized and sold by a recognized foreign government during wartime cannot relitigate that seizure’s validity in U.S. courts. Any claim the opinion suggests must be pursued in the foreign country’s courts or through the U.S. political branches. The decision makes clear that U.S. trial courts will accept recognized foreign governments’ wartime acts as conclusive when deciding ownership.