Thames Mersey Marine Insurance Company v. United States

• Decision Date: 05 April 1915
• Docket Number: No. 616,616
• Citation: 237 U.S. 19,35 S.Ct. 496,59 L.Ed. 821
• Parties: THAMES & MERSEY MARINE INSURANCE COMPANY, Limited, Plff. in Err., v. UNITED STATES
• Court: U.S. Supreme Court

237 U.S. 19

35 S.Ct. 496

59 L.Ed. 821

THAMES & MERSEY MARINE INSURANCE COMPANY, Limited, Plff. in Err.,

v UNITED STATES.

No. 616.

Argued January 13, 1915.

Decided April 5, 1915.

Mr. Everett P. Wheeler for plaintiff in error.

Solicitor General Davis and Mr. Theodor Megaarden for defendant in error.

[Argument of Counsel from pages 20-21 intentionally omitted] Mr. Justice Hughes delivered the opinion of the court:

The plaintiff in error is a corporation engaged in the business of underwriting policies of marine insurance. It brought this action to recover the amount paid as stamp taxes upon policies insuring certain exports against marine risks. The taxes were paid under the war revenue act of June 13, 1898 (chap. 448, 30 Stat. at L. 461); and the recovery was sought under the provisions of the act of July 27, 1912, (chap. 256, 37 Stat. at L. 240, Comp. Stat. 1913, § 6370), upon the ground that the tax was invalid, being in substance a tax upon exportation, and hence contrary to § 9, article I, of the Federal Constitution, prohibiting any tax or duty on articles exported from any state.

It was alleged that the policies were issued, in the following manner: Open policies were executed by the insurance company, containing an agreement that the company would insure all cargoes which the insured should ship in the foreign trade during the life of the policies, and that the shipper would procure such insurance, and from time to time would pay the premiums according to the regular rates for the particular voyages. When the shipper had a cargo of goods ready for export, 'designated and set apart from all other goods for shipment on a particular ship,' he filled up certain blank forms of declaration (furnished to him by the company) in accordance with the facts of each case, and delivered the declaration to the company at or about the time of the sailing of the vessel with the cargo on board. In many cases the declaration was not delivered until the vessel had sailed. Upon receiving each of the declarations, the company entered the amount and rate of the premium, and delivered to the shipper a certificate of insurance by which the goods described were insured for the voyage and upon the vessel specified. It was further averred that bills of exchange were drawn by the exportors on the consignees of the merchandise for the purchase price, and that the bills of lading and the certificates of insurance were by custom required as the necessary documents to enable the exports to be made and the bills to be discounted; and that these documents were actually forwarded to the foreign country to which the goods were shipped. At the end of each month, the company rendered to the insured a bill for the premiums which had accrued in accordance with the declaration; and, monthly, the company presented to the collector a book containing a summary of the premiums earned in respect of such insurance, and purchased the stamps required by the war revenue act. By direction of the collector, in accordance with the method prescribed for mutual convenience by the Commissioner of Internal Revenue, these stamps were affixed to the book, and then canceled. In each case, the goods were in fact exported, and were insured during their transit by sea to the foreign ports. The claim for the refunding of the taxes was duly presented to the collector, it was alleged, under the act of 1912, and was transmitted to the Commissioner of Internal Revenue, who refused payment.

The government demurred upon the grounds that the court had no jurisdiction of the defendant, or of the subject of the action, and that the petition did not state facts sufficient to constitute a cause of action. The district court sustained the demurrer, holding the tax to be a valid one. 217 Fed. 685. Judgment was entered dismissing the petition, and this writ of error has been sued out.

The government seeks to support the judgment by denying the jurisdiction of the district court upon the ground that it was not shown that the petitioner resided within the district (act of March 3, 1887, chap. 359, § 5, 24 Stat. at L. 506, Comp. Stat. 1913, § 1575), as it was not set forth that the petitioner was incorporated in the state of New York (Shaw v. Quincy Min. Co. 145 U. S. 444, 36 L. ed. 768, 12 Sup. Ct. Rep. 935). It was alleged that the petitioner was a corporation, and that 'its principal office for conducting said dusiness in the United States and its residence was and is in the borough of Manhattan, city of New York, in said district.' On behalf of the company, it is asserted in argument that it is a foreign corporation, that is, foreign to the United States, and hence it is insisted that the provision of § 5 of the Tucker act is inapplicable, citing in Re Hohorst, 150 U. S. 653, 660, 37 L. ed. 1211, 1214, 14 Sup. Ct. Rep. 221. This question is not here, as the record does not show the place of incorporation. But the contention of the government is inadmissible for the reason that it does not appear that the objection as to the district was raised below, and the decision of the district court which has jurisdiction 'concurrent with the court of claims' of the subject-matter of such an action within the prescribed limit as to amount (Judicial Code, § 24, ¶20 [36 Stat. at L. 1093, chap. 231, Comp. Stat. 1913, § 991 (20)]) was invited upon the merits. The requirement of § 5 of the Tucker act, which was saved from repeal (Judicial Code, § 297), is one of procedure, which could be waived (United States v. Hvoslef, 237 U. S. 1, 59 L. ed. ——, 35 Sup. Ct. Rep. 459), and the question of jurisdiction submitted under the demurrer was deemed by the district court to be the same as that which had been considered and decided in the Hvoslef Case (217 Fed. 680, 682, 683); that is, as to the authority to entertain a suit against the United States under the act of July 27, 1912, supra. While the government asserted in its demurrer that it appeared specially, it raised by that pleading not simply the question of the jurisdiction of such a suit against the United States, but also that of the merits, seeking, and thus obtaining, a decision as to the constitutionality of the tax, and hence of the insufficiency of the facts alleged to support a recovery. Such a demurrer is in substance 'a general appearance to the merits,' and is a waiver of objection with respect to the district in which the suit was brought. Western Loan & Sav. Co. v. Butte & B. Consol. Min. Co. 210 U. S. 368, 372, 52 L. ed. 1101, 1103, 28 Sup. Ct. Rep. 720; St. Louis & S. F. R. Co. v. McBride, 141 U. S. 127, 130, 35 L. ed. 659, 660, 11 Sup. Ct. Rep. 982.

The other preliminary questions being identical with those determined in United States v. Hvoslef, supra, we come at once to the application of the constitutional provision; and upon this point it is unnecessary again to review the decisions establishing the governing principle. There the question...