Cleveland v. McClung

This case presents the following facts: D. W. McClung held the office of collector of customs and surveyor of the port of the city of Cincinnati, under the laws of the United States, and J. L. Wartman was employed by him, with the approval of the secretary of the treasury, as deputy collector of customs. As such deputy Wartman acted as the cashier of the collector. Section 10 of the act of June 10, 1880, c. 190, (21 St. 175,) is as follows: 'That whenever the proper officer of the customs shall be duly notified in writing of the existence of a lien for freight upon imported goods, wares, or merchandise in his custody, he shall, before delivering such * * * merchandise to the importer, owner, or consignee thereof, give reasonable notice to the party or parties claiming the lien; and the possession by the officers of customs shall not affect the discharge of such lien, under such regulations as the secretary of the treasury may prescribe; and such officer may refuse the delivery of such merchandise from any public or bonded warehouse, or other place in which the same shall be deposited, until proof to his satisfaction shall be produced that the freight thereon has been paid or secured; but the rights of the United States shall not be prejudiced thereby, nor shall the United States or its officers be in any manner liable for losses consequent upon such refusal to deliver. If merchandise so subject to a lien, regarding which notice has been filed, shall be forfeited to the United States and sold, the freight due thereon shall be paid from the proceeds of such sale in the same manner as other charges and expenses authorized by law to be paid therefrom are paid.' This is part of 'An act to amend the statutes in relation to immediate transportation of dutiable goods.'

The Cleveland, Columbus, Cincinnati & Indianapolis Railroad Company was a common carrier, and as such designated by the secretary of the treasury for the purpose of receiving and transporting dutiable goods from the port of arrival to the port of destination under this act of congress. As such carrier, so designated, this company carried to Cincinnati large quantites of dutiable goods, the freight and charges upon which amounted in the aggregate to $8,477.50, and placed them in the custody and control of McClung as collector of customs and surveyor of the port, and, as is claimed, notified him in writing of its lien as carrier for such freight and charges. Wartman, as deputy collector, had charge, under McClung, of the collection of customs payable at the port of Cincinnati, and of the delivery of imported merchandise to the consignees thereof. He received the freight and charges due the company from the consignees of these goods at the same time that he received the duties, and delivered the goods to the consignees without notifying the company. The charges were never paid by him either to the company or to McClung.

Such being the conceded facts, this suit was brought against McClung in the superior court of Cincinnati. In the petition it is averred that McClung was collector, etc.; that the railroad company had carried and delivered the goods to him under the act, charged with a lien thereon for freight, of which due notice was given to him in writing, as provided in the act; and 'that it became and was the duty of the defendant, as such officer, to refuse to deliver the said goods and merchandise until such freight thereon had been paid to the common carrier.' It is then averred that the consignees paid the charges due the company to the defendant, 'and the defendant then and there received' the same 'for the account and benefit of the said * * * company, and the defendant then and thereupon caused the said goods and merchandise to be delivered to the consignees, * * * without notice to the railroad company, whereby its lien for said freight was lost;' and that 'the defendant, though often requested, has not paid said' money to the plaintiff, but the same, 'with interest from September 8, 1881, is now due and unpaid from the defendant to the plaintiff.'

Summons in the action was served on McClung, March 21, 1882, and on the seventh of November following he hiled, in the circuit court of the United States for the Southern district of Ohio, his petition, under section 643 of the Revised Statutes, for a writ of certiorari to the state court, requiring that court to send to the circuit court the record and proceedings in the cause, on the ground that, 'at the time the said acts charged in such petition are alleged to have been done, he was, and still is, an officer of the United States, appointed and acting under the authority of the revenue laws of the United States, * * * and all his acts, in connection with the receipt and delivery of the merchandise described in said petition, were done by him under color of his said office.' Upon this petition a writ of certiorari was issued, and the record and proceedings removed. Upon the entry of the cause in the circuit court the railroad company moved that it be remanded, 'for the reason that this court has no jurisdiction of the person or subject-matter of the action.' This motion was denied November 15, 1882, and on the twelfth of February, 1883, McClung answered the petition in the suit denying that he had been notified of the lien, or that it had ever become his duty to refuse to deliver the goods until the greight was paid, and also denying that he had ever received the freight for the benefit of the company.

Upon the trial it was shown that the freight and charges were paid to Wartman at the same time with the duties, and that, upon such payment, the goods were delivered to the consignees, without notice to the carriers. The plaintiff also offered further evidence 'tending to prove that it had been the general usage and custom prevailing at the custom-office at Cincinnati for ten years prior to the appointment of the defendant, and was the general usage and custom at the said office after the defendant's appointment, on March 18, 1881, and down to the eighth of September, 1881, for the consignees of imported goods, brought to the port of Cincinnati by all the common carriers who are authorized under said act to transport imported merchandise to the port of its destination, to pay the freight due to such common carrier at the office of the collector and of the cashier deputy of the surveyor of the port when a * * * notice in writing of the existence of a lien thereon in favor of the carrier had been given to the deputy collector at such office, and that such payments were exacted and required by the deputy collector as a precedent condition to the delivery of such goods by the surveyor of the port to the owners and consignees thereof, and that such freights were paid, together with the duties due upon such imported goods, to such deputy collector, sometimes in money, but most generally in checks, which included duties due to the government and the freights due for the carriage of said goods, and which checks were drawn by the consignees in favor of the surveyor of the port by name, or of the 'collector' or 'surveyor' of customs at the port of Cincinnati, which checks were indorsed and collected by such deputy collector for the collector or surveyor in his official capacity, and were collected in the usual course of business by such deputy collector; and that, upon the receipt of such money or checks in payment of duties and freight, the goods were, by the order of said deputy, with the acquiescence of the surveyor of the port, delivered to the respective consignees; and that the deputy collector, in his official capacity, accounted with and paid over the freights so collected to the common carrier of such imported goods, from time to time, as the same were demanded.' There was also evidence tending to prove that the payments in this case were made in accordance with this custom, and upon the demand of Wartman.

McClung was sworn as a witness in his own behalf, and testified that Wartman was acting as deputy when he came into office, and attending to the receipt of duties, and was continued in the same service by him; that he was never authorized to sign or indorse checks, and that he (McClung) was not aware that he had ever done so. He also testified that he had no knowledge whatever of the fact that Wartman was receiving freight moneys until September 6, 1881, which was after all these payments were made, and that there was not kept in the office any account of moneys received for freights.

At the close of the testimony the court charged the jury, among other things, as follows:

'In order to authorize a recovery against the defendant for failing to give the seasonable notice to the plaintiff required by the statute, before delivering the goods to the owners or consignees, an averment that the freights due plaintiff, and for which it had a lien, were owing and unpaid, is necessary. There is no such averment in the plaintiff's petition in this case. On the contrary, it distinctly avers that the consignees did pay the freights to the defendant, and, while it does not say in express terms that it authorized such payments to be made, by demanding and suing for the same, as it has done, ratifies and confirms the payment, and claims that the money was received for its account and benefit, and demands judgment therefor. This is, in fact, the gravamen of its complaint,-the theory upon which its suit rests, and the court instructs that you are here to try this case upon the hypothesis that the freights due from the consignees to the plaintiff for the carriage of the goods in question were paid before the goods were delivered by the defendant to the consignees, and that the defendant was therefore under no legal duty to give the plaintiff notice of his intention to make such delivery.

'It was competent for the parties, by express contract, or by a tacit understanding resulting from an established course of business, for the benefit and convenience of both parties, to agree that the defendant should receive the freights due the carrier for the account of the latter, and, upon receipt thereof, deliver the goods to the owners or consignees, and that such receipts by him should be in lieu of the notice which the law required him to give the carrier in the contingency described by the statute. It may be that such tacit or implied agreement existed between these parties in this case. This is the question for you to determine. The defendant was under no official or legal obligation to undertake to thus act for the plaintiff. If he did so, he was but acting in his private capacity, and not in the discharge of any official duty. It not being an official duty, his deputy could not thus act by reason of his official relations to his superior, and the defendant would not be liable for such extraofficial action unless he had in some way authorized his deputy so to act, or unless he has so acted as to estop him from denying that the deputy was, in the specific matter complained of, acting by his authority for him.

'If defendant had knowledge of this custom, acquired from observation from the business and books of his office, or through other sources, and acquiesced therein, and permitted the plaintiff to make its collections through his deputy in the belief that he was acting for and as his agent, or by his acts or declarations represented or held him out as his agent in the matter, the plaintiff and defendant, both understanding and tacitly or otherwise agreeing that the freights due the plaintiff should be paid in this way, in lieu of the notice which the statute in the contingency described required the defendant as collector to give to the plaintiff, he would be liable to the plaintiff for all sums so paid to the deputy for the plaintiff's use.

'If the deputy acted without authority from the defendant, and the defendant did not know of his said action, nor hold him out to the plaintiff as his agent, nor do nor say anything to mislead the plaintiff nor its officers noragents, nor undertake nor assume to collect plaintiff's freight, he would not be liable to plaintiff's demand, and your verdict ought to be in his favor.'

To all this the railroad company excepted. There were other instructions to which exceptions were also taken, but they were all substantially embraced in the above, and it is unnecessary to repeat them here.

The jury returned a verdict for the defendant, upon which a judgment was entered, and the case is now here for review. The errors assigned are (1) that the court overruled the motion to remand; and (2) that it instructed the jury as above stated.

E. W. Kittredge and S. H. Holding, for plaintiff in error.

''Benj. Butterworth'', for defendant in error.

WAITE, C. J.