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Matter of The UNITED STATES v. EIGHTY-FOUR BOXES OF SUGAR: TUFTS & CLARK

January 1, 1833

MATTER OF THE UNITED STATES
v.
EIGHTY-FOUR BOXES OF SUGAR: TUFTS & CLARK, CLAIMANTS.



MOTION for a Mandamus to the judge of the District Court of the district of East Louisiana. In the port of New Orleans, eighty-four boxes of sugar, imported from Matanzas, were entered as brown sugar, and were seized by the officers of the customs for having been so entered, the same being alleged to be white sugar, and therefore, forfeited to the United States; a libel was filed against the whole importation, but afterwards, a part of the cargo was released, and the proceedings in the libel were against the remaining eighty-four boxes. The whole parcel had consisted of one hundred and fifty-five boxes, of which seventy-one were marked B, and eighty-four marked C. The seventy-one boxes released were marked C, and of the eighty-four remaining, seventy were marked B, and fourteen were marked C.

In the answer of the claimants, all fraudulent intention was denied, and the character of the sugar, as entered, was asserted; and the claimants also alleged, that if the contrary should be adjudged by the court, the just conclusion should be, that a mistake had been committed, and not that a fraud was meditated.

The sugars, while under seizure, were appraised by two officers of the customs, at $2602.51. After their condemnation, they were sold by the marshal of the United States, at a public sale, for $2338.48, leaving $2150.06, after deducting the costs and charges attending the suits and sale. Upon the sugars, whether white or brown, the duties amounted to a sum sufficient to reduce the net proceeds below $2000; considering the sugars as white sugars, these proceeds would be $1388.36.

Testimony was taken as to the real nature and description of the sugars, all of which was set forth in the record of the proceedings in the district court, and which is particularly referred to in the opinion of this court. The district court condemned the sugars as forfeited to the United States, for having been entered under a false denomination; the entry stating them to have been brown sugars, and the court having adjudged them to have been white sugars.

The claimants prayed an appeal, which the district court refused to allow, taking the ground, that the value of the property in dispute was not above $2000; and insisting, that to ascertain the value, the duties must be deducted from the amount of sales, which deduction would leave a sum much below $2000. Upon this refusal, notice was given to the district judge and district-attorney, of an application to this court for a mandamus, for the allowance of appeal. And the case came before the court upon a motion for such mandamus. The record in court being full, it was, to avoid delay, agreed, that if this court shall consider that the case admits of an appeal, it might, on the present transcript, proceed to decide the merits of the cause.

The case was argued by Mayer, for the appellants; and by Taney, Attorney-General, for the United States.

For the appellants, Mayer contended: 1. That the value of the property in suit, in reference to the right of appeal, is the amount of money into which it is convertible; and that the sales made in this case, are the best test of the value of the sugar, and decide the value of property in dispute to be above $2000; that in such a case, to learn the value, the court ought not to make any deduction for the amount of duties–a subject, as regards value, entirely collateral to the goods; the protective capacity of the goods to yield the amount for paying the duties, being, in itself, a part of their essential value. On the merits, he contended:––

1. That the testimony shows that the sugars ought to be considered brown.

2. That whether adjudged brown or white, there is no ground for forfeiture of the sugars; the testimony exhibiting justification for a belief that the sugars should be, or might be, denominated brown; and the court's opinion, if to the contrary, only settling a doubt, and at most establishing an error of judgment, and not a wilful deception. That no presumption of fraudulent representation necessarily arises from showing a specification of an entry to be incorrect in regard to the commercial character or designation of an article, when that incident of the article is speculative, or may be variously interpreted, or when, at all events, as in this case, it is variously defined by the opinions and experience of commercial witnesses.

3. That the testimony of the custom-house officers is incompetent; that it is inadmissible, at least, as to declarations of Mr. Tufts; and that, under any view, it is entitled to but little weight, since it must have been governed by the prepossessions which led them to seize the sugar, and comes in aid of their act of seizure.

On the point of jurisdiction, Mr. Mayer argued, that the value of the property in question, in reference to the right of appeal, is commensurate with the party's interest, and is the amount of money into which the subject-matter is convertible; that the sales made in this case, are the best test of the value of the sugar, and decide the value of property in dispute to be above $2000; that, to learn the value, the court ought not to make any deduction for the amount of duties, a subject, as regards value, entirely collateral to the goods; the productive capacity of the goods to yield the amount for paying the duties themselves being in itself a part of their essential value. The lien of the United States on imported goods for the duties, gives the government no property in them, and does not impair in any degree the proprietary interest of the individual throughout the whole property. No lien would have such an effect, in regard to the owner's interest; but the lien for duties is not one of as proprietary a character as the lien of mortgage, or a seaman's lien, or a judicial lien of any kind. The existence of the lien in no case extinguishes the personal liability. It does not, in case of duties; because, no matter what may be the fate of the goods held for the duties, the personal liability continues.

A mortgagor may insure the vessel mortgaged, without specifying his interest as incumbered, and recover as owner. 2 Caines 19; 2 Caines Cas. 124; 1 Johns. 385. Even a mortgage of land is not, in effect, regarded as giving an interest in the land, even at law; but is looked on as a mere chattel interest. 11 Johns. 534; 15 Ibid. 319. The utmost, in respect of the duty claim, to be pretended by the United States, is an interest in the proceeds of the goods liable to duty; but such an interest is not an interest in the property. In case of an insurance, an averment of interest in the property would not be sustained by proof of right to the proceeds. 11 Johns. 302.

Under the poor laws, in England, property, though mortgaged, will support a claim of settlement, at its full value, as if not mortgaged. 6 T. R. 755; 1 W. Bl. 598. A mortgagor of a ship cannot commit barratry, because deemed the owner. Marsh. Ins. 528. A mortgage of a ship is regarded as only a right, by means of the ship, to enforce payment of the mortgage debt; the mortgagor is liable for the ship's repairs, as if no mortgage were made. 1 H. Bl. 117; Abbott 117.

The question of duties was not involved in this case, in the court below. The claim for the duties was not, therefore, to be recognised by the court. The pretensions of the United States in the case, were paramount to all ownership or claim of duties, as the government demanded the whole property, under the charge of unlawful importation. The obligation and the claim for duties are incidental only to lawful importation. It is, therefore, contradictory to the very nature of such a case as the present, to assume, that the claim for amount of duties can be judicially known and regarded in it. But in the very question of duties, the owner of the goods has an interest, and it may be a subject of judicial controversy; and what is the value of that interest but the amount of the duties? It is no answer, to say, that the property has been here condemned and sold; and that the claimant can be restored only to the amount of sales remaining, after deducting for the duties. For the purposes of the appeal only, the judgment complained of, and not the acts done in pursuance of the erroneous judgment, is to be regarded. The appellate court can take notice of the execution of the erroneous judgment, only after reversing the judgment, and to determine the mode of doing justice to the appellant on the reversal. The consequences of the judgment constitute the ground of the complaint against it, and cannot come in to sustain it. As regards the present question, the sugars are to be treated as in their original specific condition. It is a cause of complaint, that they were not allowed to remain so; but were converted into money, by adverse proceedings. Suppose, the importer had wished to use the merchandise himself, would it not be deemed to be of the value to him of the cost and the amount of duties? Or suppose, that he intended to export the property and receive the drawback; where, in such case, is the proprietary interest to the amount of duties of government in the merchandise? Are not these to be considered by the court as rights, and rights of property in the importer, respected by our revenue system? But the theory of the district court in this case would contravene all this privilege, on every fair inference to be drawn from its existence. It may also be said, too, that in reference to sales of merchandise, even for home consumption, the amount of the duties is part of its worth, its value. It has been decided, that the importer is liable for duties, although another, to whom he has sold the merchandise before entry, has given bond and security for the duties. 1 Mason 482. If the merchandise, while held at the custom-house for duties, is destroyed, still the owner would be liable for the duties. Do not all these liabilities constitute an interest to the extent of the amount of duties involved in them? and, if so, that amount is part of the value of the property as concerns the owner of it.

On the merits, it was contended, that in a proceeding of forfeiture like this, the rules of evidence applying to penal or criminal proceedings are to be observed; and that, accordingly, fraudulent intention must be proved. Unexplained discrepancy between the entry and the package may testify the sinister purpose; but still, the court must be satisfied of that purpose having existed, before it will condemn in a case of this description. 9 Wheat. 430; 3 Ibid. 232; 6 Ibid. 120; 2 Mason 48; 12 Wheat. 480; 1 Paine 129, 499. Whether adjudged brown or white, there is no ground for forfeiture of the sugars, the testimony exhibiting justification for a belief that the sugars should, or might be, determined brown, and the court's opinion to the contrary only settling a doubt, and at most establishing an error of judgment and not a wilful deception: no presumption of fraudulent representative necessarily arises from showing a specification of an entry to be incorrect, in regard to the ...


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