Or what should restrain a state from taxing any article passing through it from one state to another, for the purpose of traffic? or from taxing the transportation of articles passing from the state itself to another state for commercial purposes? These cases are all within the sovereign power of taxation, but would obviously derange the measures of congress to regulate commerce, and affect materially the purpose for which that power was given. We deem it unnecessary to press this argument farther, 7 or to give additional illustrations of it, because the subject was taken up, and considered with great attention, in M'Culloch v. The State of Maryland, (4 Wheaton's Reports, 316,) the decision in which case is, we think, entirely applicable to this.

It may be proper to add that we suppose the principles laid down in this case to apply equally to importations from a sister state. We do not mean to give any opinion on a tax discriminating between foreign and domestic articles.

We think there is error in the judgment of the court of appeals of the state of Maryland, in affirming the judgment of the Baltimore city court, because the act of the legislature of Maryland, imposing the penalty for which the said judgment is rendered, is repugnant to the constitution of the United States, and, consequently, void. The judgment is to be reversed, and the cause remanded to that court, with instructions to enter judgment in favor of the appellants.

12 Wh. 449.

AMERICAN INSURANCE COMPANY AND OTHERS v. CANTER.

JANUARY TERM, 1828.

[1 Peters's Reports, 511–546.]

THE American Insurance Company insured certain bales of cotton from New Orleans to France. The vessel in which it was shipped was wrecked on the coast of Florida, but the cotton was saved, and sold in order to pay the claim of those who saved it. This sale was made under the order of a territorial court of Florida. The owners having abandoned to the Insurance Company, the Company claimed part of the cotton which went to Charleston, and commenced suit for it in the United States district court, and obtained a judgment in their favor. Canter, who had bought at the sale in Florida, appealed to the circuit court, which reversed the decree of the district court; whereupon the Insurance Company appealed to the supreme court, the opinion of which was delivered by Chief Justice Marshall, as follows:

THE plaintiffs filed their libel in this cause in the district court of South Carolina, to obtain restitution of three hundred and fifty-six bales of cotton, part of the cargo of the ship Point à Petre, which had been insured by them on a voyage from New Orleans to Havre de Grâce, in France. The Point à Petre was wrecked on the coast of Florida, the cargo saved by the inhabitants, and carried into Key West, where it was sold for the purpose of satisfying the salvors, by virtue of a decree of a court, consisting of a notary and five jurors, which was erected by an act of the territorial legislature of Florida. The owners abandoned to the underwriters, who, having accepted the same, proceeded against the property; alleging that the sale was not made by order of a court competent to change the property.

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David Canter claimed the cotton as a bona fide purchaser, under the decree of a competent court, which awarded seventysix cent. to the salvors on the value of the property saved. The district judge pronounced the decree of the territorial court a nullity, and awarded restitution to the libellants of such part of the cargo as he supposed to be identified by the evidence; deducting therefrom a salvage of fifty per cent.

The libellants and claimant both appealed. The circuit court reversed the decree of the district court, and decreed the whole cotton to the claimant, with costs, on the ground that the proceedings of the court at Key West were legal, and transferred the property to the purchaser.

From this decree the libellants have appealed to this court.

The cause depends, mainly, on the question, whether the property in the cargo saved was changed by the sale at Key West. The conformity of that sale to the order under which it was made has not been controverted. Its validity has been denied, on the ground that it was ordered by an incompetent tribunal.

The tribunal was constituted by an act of the territorial legislature of Florida, passed on the 4th July, 1823, which is inserted in the record. That act purports to give the power which has been exercised; consequently, the sale is valid, if the territorial legislature was competent to enact the law.

The course which the argument has taken will require, that, in deciding this question, the court should take into view the relation in which Florida stands to the United States.

The constitution confers absolutely on the government of the union the powers of making war, and of making treaties; consequently, that government possesses the power of acquiring territory, either by conquest or by treaty.

The usage of the world is, if a nation be not entirely subdued, to consider the holding of conquered territory as a mere military occupation, until its fate shall be determined at the treaty of peace. If it be ceded by the treaty, the acquisition is confirmed, and the ceded territory becomes a part of the

nation to which it is annexed; either on the terms stipulated in the treaty of cession, or on such as its new master shall impose. On such transfer of territory, it has never been held that the relations of the inhabitants with each other undergo any change. Their relations with their former sovereign are dissolved, and new relations are created between them and the government which has acquired their territory. The same act which transfers their country transfers the allegiance of those who remain in it; and the law which may be denominated political is necessarily changed, although that which regulates the intercourse and general conduct of individuals remains in force, until altered by the newly created power of the state.

On the 2d of February, 1819, Spain ceded Florida to the United States. The sixth article of the treaty of cession contains the following provision: "The inhabitants of the territories, which his Catholic majesty cedes to the United States by this treaty, shall be incorporated in the union of the United States, as soon as may be consistent with the principles of the federal constitution, and admitted to the enjoyment of the privileges, rights, and immunities of the citizens of the United States."

This treaty is the law of the land, and admits the inhabitants of Florida to the enjoyment of the privileges, rights, and immunities, of the citizens of the United States. It is unnecessary to inquire whether this is not their condition, independent of stipulation. They do not, however, participate in political power; they do not share in the government, till Florida shall become a state. In the mean time Florida continues to be a territory of the United States, governed by virtue of that clause in the constitution which empowers congress "to make all needful rules and regulations respecting the territory, or other property, belonging to the United States."

Perhaps the power of governing a territory belonging to the United States, which has not, by becoming a state, acquired the means of self-government, may result necessarily from the facts that it is not within the jurisdiction of any particular state, and

is within the power and jurisdiction of the United States. The right to govern may be the inevitable consequence of the right to acquire territory. Whichever may be the source whence the power is derived, the possession of it is unquestioned. In execution of it, congress, in 1822, passed "An Act for the Establishment of a territorial Government in Florida ;" and on the 3d of March, 1823, passed another act to amend the act of 1822. Under this act, the territorial legislature enacted the law now under consideration.

The fifth section of the act of 1823 creates a territorial legislature, which shall have legislative powers over all rightful objects of legislation; but no law shall be valid which is inconsistent with the laws and constitution of the United States.

The seventh section enacts, "That the judicial power shall be vested in two superior courts, and in such inferior courts, and justices of the peace, as the legislative council of the territory may from time to time establish." After prescribing the place of session, and the jurisdictional limits of each court, the act proceeds to say: "Within its limits, herein described, each court shall have jurisdiction in all criminal cases, and exclusive jurisdiction in all capital offences, and original jurisdiction in all civil cases of the value of one hundred dollars, arising under, and cognizable by, the laws of the territory, now in force therein, or which may at any time be enacted by the legislative council thereof."

The eighth section enacts, "That each of the said superior courts shall, moreover, have and exercise the same jurisdiction, within its limits, in all cases arising under the laws and constitution of the United States, which, by an Act to establish the Judicial Courts of the United States, approved the 24th of September, 1789, and an Act in addition to the Act entitled an Act to establish the Judicial Courts of the United States, approved the 2d of March, 1793, was vested in the court of Kentucky district."

The powers of the territorial legislature extend to all rightful