Early in 1865, both sides in Texas agreed to a gentlemen's agreement that there was no point to further hostilities. Why the needless battle even happened remains something of a mystery—perhaps Union Colonel Theodore H. Barrett had political aspirations. He certainly had little military experience. Barrett instructed Lieutenant Colonel David Branson to attack the rebel encampment at Brazos Santiago Depot near Fort Brown outside Brownsville.
Of note, most Union troops had pulled out from Texas for campaigns in the east. The Confederates were concerned to protect what ports they had for cotton sales to Europe, as well as importation of supplies. Mexicans tended to side with the Confederates due to a lucrative smuggling trade.
Union forces marched upriver from Brazos Santiago to attack a Confederate encampment, and were at first successful. Then the rebels drove them back. The next day, the Union counterattacked, again to initial success and later failure. Ultimately, the Union retreated to the coast.
There were over 115 Union casualties killed, wounded and missing—four officers and 111 men. Confederate casualites were "a few dozen" wounded, none killed. Nothing was really gained on either side; like the war's first big battle (First Bull Run to the Union, First Manassas to the Confederates), it is recorded as a Confederate victory. Texas armies formally surrendered on May 26, 1865; Confederate general Kirby Smith surrendered his forces in the Trans-Mississippi Department on June 2nd.
It is worth noting that private John J. Williams of the 34th Indiana Volunteer Infantry was the last man killed at the Battle at Palmito Ranch, and probably the last of the war. Fighting were white, African, Hispanic and native troops. Reports of shots from the Mexican side are unverified, though many witnesses reported firing from the Mexican shore.