Campbell v. United States (107 U.S. 407)/Opinion of the Court

The fourth section of the act to provide increased revenue from imports to pay interest on the public debt, and for other purposes, approved August 5, 1861, reads as follows:

'That from and after the passage of this act there shall be     allowed, on all articles wholly manufactured of materials      imported, on which duties have been paid, when exported, a      drawback equal in amount to the duty paid on such materials,      and no more, to be ascertained under such regulations as      shall be prescribed by the secretary of the treasury,      provided that 10 per centum on the amount of all drawbacks so      allowed shall be retained for the use of the United States by      the collectors paying such drawbacks respectively.' 12 St. 292.

On the twenty-second of January, 1862, the secretary established such regulations as he deemed appropriate, the first of which is this:

(1) 'To entitle the exporter to such allowance of drawback,     he must, at least six hours previous to the putting or lading      any of the articles intended to be exported by him for      benefit of drawback on board any vessel or other conveyance      for exportation, lodge with the collector of customs for the      district from which such exportation is to be made, an entry      setting forth his intention to export such articles, and the      marks, numbers, and a particular description of the same,      with their quantity and value, and designating the      manufacturer thereof, the place where deposited, the name of      the vessel or other conveyance in or by which, and the port      or place to which, the same is intended to be exported, and      also describing in such entry the material or materials      severally from which he claims the articles to have been manufactured, designating when, where, whence,      by whom, and in what vessel or other conveyance the same was      or were imported, and specifying the quantity and value      thereof used in the manufacture. This entry shall, upon     presentation, be verified by the oath or affirmation of the      proprietor and the foreman of the manufactory in which such      articles were made.'

Other regulations require the collector and the surveyor to make the necessary examination to ascertain if the articles described in this entry be as stated, and to mark and designate them accordingly, and to verify the weight, gauge, measure, or amount, and to superintend the lading for export, etc. All this having been done, and the oath of the exporter and his bond, with condition prescribed by the rules, being given, the collector is to give a certificate of the amount to which the party is entitled as drawback, on which he is to receive the money. The appellants in this case sued in the court of claims for a drawback on account of large amounts of linseed cake made by them out of linseed imported from a foreign country, and which cake they exported to London. Their petition was dismissed by that court, on the ground, as stated in their opinion, that it was not a case of which they had jurisdiction. The court, however, did entertain jurisdiction of the case; an answer was filed on behalf of the United States denying the allegations of the petition, testimony was taken, and a full and elaborate finding of facts was made, and on this the court, as a conclusion of law, find that for want of jurisdiction of the subject-matter the petition is dismissed. This finding of facts shows that in the months of September, October, November, and December, 1870, claimants imported from Calcutta large quantities of linseed, for which they oil and linseed cake, of the latter pounds according to law, which was by them, without intermixture with any other linseed or other material, manufactured into linseed oill and linseed cake, of other of which article there was produced therefrom 5,156,585 pounds. It was for the exportation of part of this latter product that the drawback is claimed in this suit. As, however, this was done by several shipments at different times, and as the finding of facts is precisely the same in the case of each shipment, except as to date, quantity, and the name of the vessel, we give here verbatim the finding as to the first:

'On the nineteenth day of January, 1871, the claimants and     said Ludlow D. Campbell were the owners of and had in their      possession 447,712 pounds of linseed cake, being parcel of      the aforesaid 5,156,585 pounds, and desiring and intending to      export the same from New York to London for the benefit of      the drawback authorized by the fourth section of the 'Act to      provide increased revenue from imports to pay interest on the      public debt, and for other purposes,' approved August 5,      1861, duly presented to and lodged with the collector of      customs for the port of New York, before putting or lading      any of the said cake on board any vessel for exportation, an      entry of said linseed cake for export by the ship Sterling      Castle, which was accompanied with the certificate and oath      required by, and was in all respects in conformity with, the      regulations prescribed by the secretary of the treasury, in      pursuance of the requirement of the fourth section of said      act, and the said claimants and said Ludlow D. Campbell in      all respects conformed to such regulations in respect to      drawback, which allowance had been by said regulations fixed      at 17 cents per 100 pounds, and made payable to the United      States 30 days after clearance of the vessel by which      exportation was made, but the said collector, acting under      instructions from the secretary of the treasury, given on the      fifth day of December, 1870, wholly refused to perform or      cause to be performed in any manner any other act than the      receipt of said entry prescribed by said regulations to be      done, or caused to be done, by a collector of customs under      the said fourth section of said act.

'Thereafter, in the month of January, 1871, the said 447,712     pounds of linseed cake were shipped by the claimants and said      Ludlow D. Campbell on the said ship Sterling Castle, which      vessel, with said linseed cake on board, cleared at the      custom-house at the port of New York, for London, on the      thirtieth day of January, 1871, and said cake was thereupon      exported and carried by said vessel from New York to the port of London,      in England, and there discharged and delivered, and no part      thereof has been at any time relanded in any port or place      within the limits of the United States.'

The argument of counsel for the United States, and the opinion of the court of claims, is that, until the officers of the customs comply with all the regulations of the secretary of the treasury, and the collector issues the drawback certificate, the law imposes upon the United States no obligation to pay anything for such drawback; that the law conferred upon the secretary the right to make the regulations, and the collector the power to make the certificate for payment of drawback, and that the refusal of the collector to perform the duties imposed upon him preliminary to making his certificate, and then refusing the certificate, totally defeats the claim of the party, who, by the law, is guarantied a right to his drawback, and who has complied with all that the law requires of him to secure and enforce it. It would be a curious thing to hold that congress, after clearly defining the right of the importer to receive drawback upon subsequent exportation of the imported article upon which he had paid duty, had empowered the secretary by regulations, which might be proper to secure the government against fraud, to defeat totally the right which congress had granted. If the regulations of themselves worked such a result, no court would hesitate to hold them invalid as being altogether unreasonable. But the regulations in this case are not unreasonable; nor do they interpose any obstacle to the full assertion and adjustment of plaintiffs' right. It is the order of the secretary of the treasury forbidding the collector to proceed under these regulations, or in any other mode, which is the real obstacle. Is that order a defense to this action? Can the secretary, by this order, do what he could not do by regulations repeal or annul the law? Can he thus defeat the law he was appointed to execute, by making regulations, and then, by ordering his officers not to act under them, and not to act at all, place himself above the law and defy it? We think the court of claims has jurisdiction of such a claim: (1) Because it is founded on a law of congress; and (2) because the facts found in this case raise an implied contract that the United States will refund to the importer the amount he paid to the government. The finding of the court is that, by the regulations, this allowance of drawback had been fixed at 17 cents per hundred pounds.

The act of congress having declared that on exportation there shall be allowed a drawback equal in amount to the duty paid on such material, and the secretary having established by a regulation that, as regarded the cake resulting from the manufacture of the linseed into oil and cake, the latter represents, at 17 cents per hundred pounds, the duty on the imported seed so converted into cake, there resulted a contract that when exported the government would refund, repay, pay back, this amount as a drawback to the importer. If this be not so, it is because it is impossible to make a contract when the details of its execution or performance are left to officers who refuse to carry them out. So it is equally clear that this claim is founded on the law allowing drawback. The court of claims makes the mistake of supposing that the claim is founded on the regulations of the secretary of the treasury. This view cannot be sustained. It is the law which gives the right; and the fact that the customs officers refuse to obey these regulations cannot defeat a right which the act of congress gives. The second section of the act of September 20, 1850, granting all the overflowed and swamp lands to the states in which they lie, declares:

'That it shall be the duty of the secretary of the interior,     as soon as may be practicable after the passage of this act,      to make out an accurate list and plats of the lands granted      as aforesaid and transmit the same to the governor of the      state, and, at the request of said governor, cause a patent      to be issued to the state therefor; and on that patent the      fee to the lands shall vest in the state.' 9 St. 519.

This duty was almost wholly neglected by the secretary.

In the case of Railroad Co. v. Smith, 9 Wall. 95, it was insisted that the failure of the secretary to act made these lands subject to a grant for railroad purposes of a date subsequent to the swamp-land act. This proposition was thus answered by this court:

'Must the state lose the land, though clearly swamp land,     because that officer has neglected to do this? The right of     the state did not depend on his action, but on the act of      congress, and though the state might be embarrassed in the      assertion of this right by the delay or failure of the      secretary to ascertain and make out a list of these lands,      the right of the state to them could not be defeated by this      delay.

'Any other rule results in this: that because the secretary     of the interior has failed to discharge his duty in      certifying these lands to the state, they therefore pass      under a grant from which they are excepted beyond doubt, and      this when it can be proved, by testimony capable of producing      the fullest conviction, that they were of the class excluded      from plaintiff's grant,'--

That is, was granted to the state as swamp lands.

And in French v. Fyan, 93 U.S. 173, the court, reaffirming Railroad Co. v. Smith, said:

'There was no means, as this court has decided, to compel him     (the secretary) to act, and if the party claiming under the      state in that case could not be permitted to prove that the      land conveyed to him by the state as swamp land was in fact      such, a total failure of justice would occur, and the entire      grant to the state might be defeated by this neglect or      refusal of the secretary to perform his duty.'

The application of this reasoning to the present case is too clear to need illustration. It is an error to suppose that the officers of customs, including the secretary, are in regard to this law created a special tribunal to ascertain and decide conclusively upon the right to drawback. Their function is entirely ministerial. They are authorized to pass upon no question essential to the claimant's right so as to conclude him in a court of competent jurisdiction. From the moment he presents his sworn entry, they simply ascertain quantities, identify and mark packages, accept bonds and sureties, see that the exported article leaves the port in the ship. These and like duties being discharged, it is the collector's duty, a mere ministerial function, to give the certificate of drawback. The amount of it is fixed at 17 cents per 100 pounds by the regulation; he has nothing to do but to calculate the amount at that rate on the number of pounds shipped. He exercises no judicial or quasi judicial function. He concludes nobody's rights, and has no power to do so. The rights which the law gives cannot be defeated by his refusal to act, nor by his decision that no drawback was due. Neither the act of congress, nor any rule of construction known to us, makes the claimant's right, when the facts on which it depends are clearly established, to turn upon the view which the collector, or the secretary, or both combined, may entertain of the law upon that subject, and much less upon their arbitrary refusal to perform the services which the law imposes on them.

A suggestion is made that the right to enforce the drawback in the court is affected by the fact that it is a gratuity. It has never been supposed that there was a gratuity in all the cases where imports are free of duty. The purpose of the drawback provision is to make duty free, imports which are manufactured here and then returned whence they came or to some other foreign country-articles which are not sold or consumed in the United States. The linseed in this case was bought abroad and imported for the purpose of being manufactured, and the product immediately sent out of the country. The drawback provision was simply a mode of making the linseed so imported and exported without distribution in the country duty free, and we see no gratuity in the case. But if it were a free gift, it is not for the officers of the government to defeat the will of congress on this subject by refusing to execute the law.

We are of opinion that the facts found by the court of claims established the right of appellants to recover a judgment for the exported cake at the rate of 17 cents per 100 pounds; and the case is remanded with directions to enter such a judgment.