The schooner San Felipe was purchased in New Orleans by Thomas F. McKinney to supply his tradinghouse in Quintana. The American-registered ship was coasting between Brazoria and New Orleans as early as March 23, 1835, when McKinney sailed on her to Louisiana. Lorenzo de Zavala arrived at Velasco aboard the San Felipe in July. In August 1835 Stephen F. Austin returned to Texas from his imprisonment in Mexico by way of New Orleans aboard the San Felipe, commanded by Capt. William A. Hurd. Although not a warship, the San Felipe was then heavily armed and laden with a cargo of munitions. Upon approaching Brazoria on September 1, she was taken in tow by the steamer Laura. Austin, his fellow passengers, and much of the San Felipe's cargo had been removed to the Laura for transshipment across the bar when she was approached by the Mexican revenue cutter Correo de México. The Mexican cutter attempted to come within cannon range of the San Felipe, and Hurd attempted to bring the San Felipe alongside the Mexican ship to board her. The ensuing heavy exchange of cannon and rifle fire lasted from about 8:00 P.M. until 9:00 P.M., a battle in which two of the Correo's guns were dismounted, most of the crew were wounded, and her captain, Thomas M. (Mexico) Thompson, was shot twice in the legs. Thereupon Thompson put to sea, and the San Felipe gave chase through the night. On the morning of September 2 the Laura towed the San Felipe into range of the Correo, and Thompson surrendered unconditionally. Hurd then escorted his prize back to New Orleans. Because Thompson did not have a copy of his commission on board, he and his crew were charged with piracy, and a comic-opera trial ensued.
In October the San Felipe returned to Brazoria, and when the Mexican schooner-of-war Montezuma appeared off the coast on the twenty-seventh, the Columbia Committee of Safety ordered Lt. William J. Eaton of the Texas militia to take charge of the San Felipe and give chase. Hurd's schooner overtook the Mexican ship in Matagorda Bay on November 3. The San Felipe, with a crew of seventy men (including McKinney) and a complement of seven cannons, attempted to close with the Montezuma but ran aground on the morning of November 4. A part of the crew returned overland to Brazoria; the rest remained with the ship. On November 6 the San Felipe became the target of the Mexican man-of-war's broadsides. "No blame can be attached to Captain Hurd either from want of skill or attention," wrote Franklin C. Gray, one of the ship's volunteer crewmen. The mate had, however, "indulged too freely with the bottle," Gray believed. The San Felipe's guns and part of its cargo were returned to Brazoria aboard the schooners Congress and William Robbins (later named Liberty), and the ship, at first reported as a total loss, was refloated on November 11 and arrived at Quintana on the fifteenth. Deprived of the protection of the San Felipe, the citizens of Brazoria fitted the William Robbins for war and retained the services of Captain Hurd as its commander. The San Felipe was the first ship to transport munitions into Texas after Stephen F. Austin made his decision to support the cause of Texas liberty. The duel between the San Felipe and the Correo was the first engagement in the Texas Revolution, and the victory of the San Felipe cleared the Texas coast of the Mexican naval presence, thus guaranteeing, at least for a time, the unhampered importation of arms and volunteers for the struggle for independence.