Westray v. United States

ERROR to the Circuit Court for the Southern District of New York; the case being thus:

'An act to increase duties on imports,' &c., passed June 30th, 1864, enacts:

'SECTION 14. That on the entry of any merchandise, the decision of the collector of the customs at the port of importation and entry, as to the rate and amount of duties to be paid on such merchandise, shall be final and conclusive against all persons interested therein, unless the owner, importer, consignee, or agent of the merchandise shall, within ten days after the ascertainment and liquidation of the duties by the proper officer of the customs, as well in cases of merchandise entered in bond as for consumption, give notice in writing to the collector on each entry, if dissatisfied with his decision, setting forth therein, distinctly and specifically, the grounds of his objection thereto, and shall, within thirty days after the date of such ascertainment and liquidation, appeal therefrom to the Secretary of the Treasury, whose decision on such appeal shall be final and conclusive. And such merchandise shall be liable to duty accordingly, unless suit shall be brought within ninety days after the decision of the Secretary of the Treasury on such appeal, for any duties which shall have been paid before the date of such decision on such merchandise, or within ninety days after the payment of duties paid after the decision of the secretary.'

This act being in force, Westray & Co. imported into New York a cargo of rice; the duty on which article, when in the form commercially known and designated as 'uncleaned,' is two cents per pound, and when in the form commercially known and designated as 'cleaned' is two and a half cents per pound. The rice was entered for warehouse in October, 1864, and the usual warehouse bond given on that day by the importer. The bond was in $25,049.90, and was conditioned that the importer should,

'On or before the expiration of one year, to be computed from the date of importation,. . . pay. . . into the collector of the customs, &c., the sum of $12,524.95, OR the amount of duties to be ascertained under the laws now existing, or hereafter to be enacted, to be due and owing, &c., OR shall in the mode prescribed by law, on or before the expiration of three years from date of said importation, withdraw said goods from the bonded store or public warehouse where they may be deposited,. . . and actually export the same beyond the limits of the United States, OR shall within three years. . . transport said merchandise in bond to any port of the Pacific or western coast of the United States.'

Westray & Co. within a year after giving the bond withdrew the rice for consumption, and paid thereon two cents per pound as upon 'uncleaned rice;'

Thus paying, as it turned out, the sum of $12,352 15

Or less by 172 80

Than the sum conditioned named in the bond, $12,524 95

The rice was afterwards appraised as 'cleaned rice,' and on entry the collector liquidated the same as such, and the dutiable rate thereof at two and a half cents per pound. The additional half cent, thus charged, made a difference of $2111.17 between the sum which had been paid and that with which the rice as cleaned rice was now chargeable.

It did not appear that the collector had at any time given notice to Westray & Co., the importers, of the liquidation, nor did the importers within ten days after the ascertainment and liquidation give any notice of their dissatisfaction, nor make any appeal to the Secretary of the Treasury.

In this state of things the United States brought suit on the bond, alleging as breach that though the time of one year mentioned in it had expired, Westray & Co. had not within the said year paid the $12,524.95 OR the amount, when ascertained, of the duties imposed by laws then existing, &c. Plea, nil debet.

On the trial the defendants offered in evidence samples of the rice, and offered to prove that it was in fact and as commercially designated 'uncleaned rice,' and, therefore, liable to pay no more duty than two cents per pound, which the government admitted had been paid within one year from date of importation, and that by the said payment of two cents per pound the bond became void.

The government objected to this evidence on the ground that by the act of Congress, above quoted, the decision of the collector was final and conclusive as to the rate and amount of duties, no notice of dissatisfaction with such decision having been given to him within ten days after the liquidation, and no appeal therefrom having been made to the Secretary of the Treasury.

The court sustained the objection, and held that the defendants could give no evidence respecting the character of the rice or its commercial designation in trade, or the rate of duty chargeable thereon. The defendants excepted.

The defendants then requested the court to rule that, there being no evidence that notice of the aforesaid liquidation by the collector was at any time given to them, or that they ever had knowledge of such liquidation, the time within which to serve notice of dissatisfaction upon the collector, and to appeal from his decision to the Secretary of the Treasury, if required by law, as ruled by the court, did not run till notice of liquidation was given to defendants, or till they had knowledge of the same.

The court refused thus to rule, on the ground that the collector was not bound to give any notice of his liquidation to the defendants, nor to bring his decision to the defendants knowledge, and that the time within which to give notice of dissatisfaction as aforesaid, and appeal, must run from the date of such liquidation, whenever made. To which decision the defendants excepted.

The defendants then requested the court to admit the evidence offered by them as to the commercial designation of the rice, on the grounds that the collector had given no notice of liquidation as aforesaid, and that, therefore, they were not debarred by the limitations of the statute from giving such notice of dissatisfaction and appeal, as required by the ruling of the court.

The court refused to admit the evidence, on the ground that, having ruled that no notice of liquidation from the collector to the defendants was required, the defendants were barred, and the evidence inadmissible. To which decision the defendants excepted.

The defendants then requested the court to instruct the jury that it was a condition of the bond that the same should be cancelled upon the payment of $12,524.95, within one year from date of importation, and as it was admitted that $12,352.15 had been paid within one year, that the jury could lawfully find no greater amount of damage than the difference between these two amounts, and interest on this difference.

The court refused to so instruct the jury. To which decision the defendants excepted.

The court then directed the jury to bring in a verdict for the plaintiffs for $2111.77, gold, with interest, to which direction of the court the defendants excepted.

Verdict and judgment having gone for the United States, the defendants brought the case here.

Mr. Ethan Allen, for the plaintiffs in error:

The liquidation of the duties, and the decision of the collector is a secret proceeding, so far as the merchant is concerned. No date is fixed when the act shall be done. The appraiser notes his classification of the merchandise on the invoice when his convenience permits, and his clerk extends in figures on the entry the amount of the duty according to this classification; and this constitutes the decision of the collector, of which, according to the ruling of the court below, no notice whatever need be given to the importer, although from the moment this decision is made, the ten days limitations begin to run within which the importer must protest and appeal. As this statute takes away the common-law right of the citizen to defend himself, as in this case, against an alleged illegal exaction, it is a severe statute, and should be interpreted liberally. Indeed the treasury department, by regulations adopted in 1869, directs notice to be given to the merchant of the time when the decision of the collector is made, by ordering collectors to 'keep a daily record of the entries liquidated,' &c., and to 'give notice of the liquidation of such entries by posting a transcript of such record in some conspicuous place in the custom-house, &c., for ten days.' As these regulations, however, were issued in 1869, and as the bond upon which this suit is brought was made in 1864, these regulations do not cover this case. They show, however, that the treasury recognizes it as a duty to give notice to the merchant of the decision of the collector. Before this regulation was made, it was the custom for the collector to send a special notice to the importer, informing him of any decision made. This notice, however, was not given to the importers in this case, as was admitted on the trial.

2. In an action on a bond, of many separate conditions-like the one in suit-the performance of either one of which cancels the bond, the maker of the bond is entitled to choose which condition he will fulfil in satisfaction of it.

In part fulfilment of the first condition, it was admitted on the trial that $12,352.15 had been paid within one year. The only breach, then, on the part of the importers, was in not paying the balance of $172.80 within the year. Had this balance been paid within the year, clearly the importers could have demanded cancellation of the bond.

The condition of an obligation is considered as the language of the obligee, and so is construed in favor of the obligor, and shall always be taken most favorably for the obligor. The law never overcomes by implication the express provisions of parties. Nor will equity enforce the penalty, the party being ready and desirous fully to perform any one of several alternate conditions.

Mr. G. H. Williams, Attorney-General, and Mr. S. F. Phillips, Solicitor-General, contra.

Mr. Justice STRONG delivered the opinion of the court.