Sheldon & Co. v. United States

Smith, Judge, delivered the opinion of the Court: This appeal was taken from two separate decisions covered by one opinion of the Board of General Appraisers, dismissing two different protests filed by two different importers, and involves two distinct and independent importations. [216] Protest No. 808947 was filed by G. W. Sheldon & Co., and relates to out diamonds which were brought into the country from Switzerland in sealed packages by registered mail. The diamonds were discovered in the mails, and the collector of customs at the port of New York refused entry of the goods and declined to deliver them to the importers on the ground that diamonds were dutiable and that, therefore, their importation by mail was forbidden by the Universal Postal Convention. The case was apparently submitted to the United States attorney for the district, and he reported to the Secretary of the Treasury that the ends of justice did not call for the forfeiture of the merchandise and recommended that the diamonds be released to the importers on the payment of a fine equal to the duty, plus 20 per cent thereof. (See secs. 838, 3084, and 3087, Revised Statutes.) The Secretary of the Treasury approved the recommendation of the United States attorney and authorized the collector to release the diamonds on payment of a fine equal to the duty, plus 20 per cent of the duty. On May 31, 1916, G. W. Sheldon & Co., complying with the recommendation made by the United States attorney and approved by the Secretary of the Treasury, paid an amount equal to the estimated duty, plus 20 per cent thereof, and took delivery of the goods. On June 30, 1916, the company filed its protest, objecting to the refusal to permit entry of the goods and protesting against the payment of $4,021.84 exacted as regular duty and the payment of $804.37 exacted as a penalty. 'As an additional ground of protest, it was claimed that neither the sum of $4,021,84 nor the sum of $804.37, nor any other sum, could be lawfully demanded until after appraisement of the merchandise had been had in accordance with the provisions of the customs administrative act. Protest No. 809089 was presented to the collector by J. G. Jacobson and covered cut diamonds brought into the country from Cuba by mail in sealed packages for account of Jacques Goldstein. The diamonds were found in the mails, and having been seized by the collector they were refused entry and apparently reported to the United States attorney for proceedings in forfeiture. The United States attorney recommended that some of the goods be released to the importer on the payment of a fine equal to the duty, plus 20 per cent thereof, and held the rest of the consignment for further consideration. The collector concurred in the recommendation of1 the United States attorney, and delivery to the ultimate consignee of the goods recommended for release was authorized by the Secretary of the Treasury, upon the payment, within 30 days from notification, of a fine equal to the duty and 20 per cent added. . The fine was paid by the importers on June 9, 1916, and payment thereof protested on July 6, 1916. The first question to be resolved is whether the protests were filed in time and the solution of that problem depends on whether the [217] moneys demanded by tbe collector and paid by tbe importers were in fact duties of some other form of monetary exaction. If tbe moneys received by tbe collector represented duties, then tbe time to protest began to run from tbe date of tbeir ascertainment and liquidation, tbat is to say, from tbe day when the collector officially and' definitely fixed, settled, and determined tbe duties due. On tbe other hand, if tbe sum paid was not duties, but a nondutiable fee, charge, or other customs exaction, then tbe time to protest ran from tbe date of payment. Just why tbe time to protest begins to lapse from tbe date of ascertainment and liquidation in tbe one case and from tbe date of payment in the other may be a bit perplexing at first, but any doubt as to the reason for tbe distinction disappears once it is understood tbat tbe amount of duties due is definitely determined after the payment of estimated duties, whereas the amount of a non-dutiable fee, charge, or exaction is definitely settled and fixed, so far as tbe collector is concerned, when payment is made. Even if there were no reason for tbe distinction, it is enough for us to know tbat ■Congress has made it and hás maintained it for a period of more than 50 years. (Tariff act of 1864; secs. 2931 and 2932, Revised Statutes of 1878). In tbe tariff act of 1864 and tbe Revised Statutes of 1878, protests against duties were distinguished from protests against non-dutiable fees, charges, and exactions, and were provided for in separate sections. In tbe customs administrative act of June 10, 1890, as well as tbe tariff acts of 1909 and 1913, both classes of protests were in tbe same section or paragraph, nevertheless protests from duties and protests from nondutiable fees, charges, and exactions were just as separately and distinctly provided for in those acts as they were in tbe act of 1864 and in sections 2931'and 2932 of tbe Refused Statutes of 1878. Paragraph.N of section 3 of tbe tariff act of 1913 emphasizes tbe distinction between protests against duties and protests against fees, charges, and exactions by providing in effect that the former must be presented within SO days after, but not before, tbe ascertainment and liquidation of duties, and tbat tbe latter must be presented within 15 days after date of payment of such fees, charges, and exactions. It is evident, therefore, that under tbe present tariff act the protests in both cases now under consideration came too late unless tbe moneys paid to tbe collector were duties. In neither case were the importers permitted to enter the diamonds, and in neither case was any appraisement made of the merchandise. As all goods lawfully imported must be entered, .and as there can be no appraisement without an entry, and no certain determination or assessment of ad valorem duties without an appraisement (sec. 3, paragraphs C, D, E, and F of the tariff act of 1913, and arts. 572-582, Customs Regulations of 1915), the denial of entry and the non-appraisement of the merchandise, coupled with the seizure of the goods and the reference of the matter to the United States attorney [218] conclusively establishes, in our opinion, not only that the collector did not levy duty on the goods, but that he regarded the diamonds as illegally in the country and not subject to duty. It is true that the cohector, on the recommendation of the United States attorney, exacted the payment of a fine equal to the duty, plus 20 per cent, and made such payment a condition for the delivery of the goods. As there was no appraisement of the goods, howrever, and consequently no way of determining the duty, it is very evident that the collector’s demand meant nothing moi’e than a demand for a fine equal to the collector’s estimate of duties, plus 20 per cent. In fact, on its very face, the demand clearly demonstrates not only that he was not attempting to collect duties, but that he was holding the goods for the payment of a sum very much in excess of his own estimate of duties. Whether the sum which the collector required the importers to pay as a condition for the delivery of the merchandise was a fee, charge, or exaction within the meaning of those terms as used in paragraph N of section 3 of the present tariff act it is not necessary to decide. Conceding that the importers paid the money in satisfaction of a customs foe, charge, or exaction, their protest not having been filed within 15 days after such payment was too late, and from that it results the decision of the collector became final and conclusive against them. If the moneys received by the collector were paid to him as the representative of the United States attorney, or in compromise of a threatened suit in forfeiture and not in satisfaction of duties or of a customs fee, charge, or exaction, then no relief can be granted the importers in this proceeding, inasmuch as forfeitures and suits in forfeitures are beyond the jurisdiction of the Board of General Appraisers and of this court. In re Chichester (48 Fed., 281, 285-286). We conclude—■ First. That the amount paid by the importers was- a penalty the payment of which was exacted by the collector as a “fine” for what he conceived to be a violation of the customs laws, and exacted as a condition not for the delivery of goods subject to duties, but as a condition for the release of seized goods threatened with-forfeiture. Possibly it was not within the power of the collector to impose a fine, but whether it was or not the fact remains that the moneys required of the importers under color of official authority were not duties in fact and were neither demanded nor paid as duties. The importers, therefore, did not have 30 days within which to protest the payment made. Second. That if the amount paid be regarded as a customs fee, charge, or exaction, the protest came too late because it was presented more than 15 day's after payment was made. Third. That if the payment be regarded as made by way of compromise or settlement of forfeiture proceedings, threatened or [219] commenced, tbe Board of General Appraisers and tbis court are without jurisdiction of tbe subject matter and therefore can grant no relief. Tbe decision of tbe Board of General Appraisers is affirmed. ■