Erhardt v. Schroeder

• Decision Date: 12 November 1894
• Docket Number: No. 31,31
• Citation: 15 S.Ct. 45,39 L.Ed. 94,155 U.S. 124
• Parties: ERHARDT, Collector, v. SCHROEDER et al
• Court: U.S. Supreme Court

155 U.S. 124

15 S.Ct. 45

39 L.Ed. 94

ERHARDT, Collector,

v SCHROEDER et al.

No. 31.

November 12, 1894.

Asst. Atty. Gen. Whitney, for plaintiff in error.

Edwin B. Smith, for defendants in error.

Mr. Justice SHIRAS delivered the opinion of the court.

The defendants in error commenced this action in the superior court of the city of New York on May 6, 1889, against Joel B. Erhardt, collector of the port of New York, to recover the sum of $32,040.60, which amount they alleged had been unlawfully exacted from them by that officer as customs duties on leaf tobacco. The case was removed by certiorari into the circuit court of the United States for the Southern district of New York, in which court the complaint was filed, and the case proceeded to trial before the court and a jury.

As appears by the bill of exceptions, the defendants in error, partners as Schroeder & Bon, on November 5, 1888, imported from Amsterdam, and entered at the port of New York for warehouse, 429 bales of leaf tobacco, described in the invoice as Sumatra tobacco. The protest filed in this case related to 398 of those bales, but on the trial a recovery was abandoned of duties paid on such bales of the invoice as were withdrawn before May 6, 1889, for the reason that those duties had been paid to the predecessor in office of the defendant.

On that day, as the bill of exceptions further shows, the importers withdrew from warehouse 5 bales of the tobacco, upon one of which they paid duty at the rate of 75 cents a pound on 125 pounds of the tobacco in the bale, and 35 cents a pound upon 54 pounds thereof, and upon 4 of which bales they paid a duty of 75 cents a pound. On the following day they withdrew 5 more bales, upon all of which they paid duty at the rate of 75 cents a pound.

The importers, contending that they should have been compelled to pay but 35 cents a pound on all of the 10 bales, asserted that the amount constituting the difference between duties at that rate and at the rate of 75 cents a pound had been exacted from them unlawfully by Erhardt, and that amount, with interest, or $708.12, was sought on the trial to be recovered.

The evidence introduced by the importers showed that within 10 days after the liquidation of their warehouse entry they had filed with the collector a protest against his decision, assessment, and liquidation of the duties; that within 30 days from the liquidation of the entry they had duly appealed to the secretary of the treasury, and that, that officer having decided against them on appeal, they had within 90 days after his decision brought suit to recover the duties alleged to have been erroneously exacted.

It appeared from the invoice and the testimony of the examiner of tobacco at the appraisers' stores, called as a witness for the importers, that upon the entry of the tobacco the collector had designated 5 of the 429 bales for examination at the public stores; that subsequently, upon the request of the appraiser, 25 additional bales, and no more, had been sent to the public stores for examination; that of the plantation lots, about 13 in number, of which the invoice was composed, 4 plantation lots, containing respectively 10, 27, 20, and 10 bales, were represented in the 10 bales in controversy,—2 of these 4 lots being represented by 4 bales from each, and 2 of the 4 lots by 1 bale from each; that among the 30 bales sent to the public stores was 1 bale from each of the said 4 plantation lots; that 1 of the bales there examined was, and that the other 3 were not, among the 10 bales in controversy; and that this 1 bale belonged to one of the plantation lots containing 10 bales, and was the bale upon which the importer paid duty at the rate of 75 cents a pound upon 125 pounds thereof and 35 cents a pound upon 54 pounds thereof. Other testimony was introduced to show the actual character of the tobacco.

On the trial, after all the testimony on both sides had been introduced, the collector moved the court to direct a verdict in his favor on the ground that the importers had not established facts sufficient to constitute a cause of action, which motion was denied. The collector excepted to this ruling, and asked to be allowed to go to the jury generally upon the issues of the case, and upon the court's refusal of this request the collector asked that the case might to go the jury upon the question whether there had been one package examined of the bales in controversy, claiming that, although there was not 1 bale in 10 of the entire invoice sent to the public stores, yet, as there were only 10 bales in question, representing 4 plaintation rots, and as 4 bales representing those 10 bales had been actually examined at the public stores, there was a sufficient compliance with the statute. The court refused to submit this question to the jury, to which refusal the collector excepted. The importers then moved for the direction of a verdict in their favor, and the court granted the motion, and directed a verdict for them for the sum of $708.12, to which action of the court the collector excepted. Judgment in favor of the importers, for the said amount, was duly entered on June 20, 1890, and subsequently the collector brought the case to this court by a writ of error.

The protest filed by the importers contained, among other things, an allegation that there had been no legal appraisal of the tobacco, for the reason that the provisions of section 2939 of the Revised Statutes had not been complied with. That section is as follows:

'The collector of the port of New York shall not, under any circumstances, direct to be sent for examination and appraisement less than one package of every invoice, and one package at least out of every ten packages of merchandise, and a greater number should he, or the appraiser, or any assistant appraiser, deem it necessary. When the secretary of the treasury, however, from the character and description of the merchandise, may be of the opinion that the examina- tion of a less proportion of packages will amply protect the revenue, he may, by special regulation, direct a less number of packages to be examined.'

It seems, from the nature of a part of the evidence introduced on the trial, that the importers contended in the court below that the effect of the examination by the customs officers of less than one bale in ten of the invoice had the effect of invalidating the assessment of the higher tax upon the tobacco, provided for in paragraph 246 of the tariff act of 1883, and made it dutiable at the lower rate, as prescribed in paragraph 247 of that act.

The same ground of contention is presented in this court, the collector asserting that the provisions of section 2939, Rev. St., are in the nature of instructions to the officers of the customs, intended solely for the protection of the revenue, and, therefore, that no benefit from a violation of the statute could be taken by an importer. The importers insist, on the other hand, that inasmuch as the examination may have the effect of fixing a higher duty upon a given invoice of tobacco than that collectible upon leaf tobacco of the kind more extensively imported, the importer might be injured if the characteristics of the tobacco necessary to justify the exaction of the higher tax were determined by an examination different from that prescribed by section 2939, which enactment, therefore, they believe to be intended as well for the protection of the importer as the government, and hence mandatory. Collateral to the argument upon this point is the discussion by the parties as to whether the incident of the actual examination in this case of one of the ten bales in controversy, and the examination of one bale from each of four plantation lots represented by the ten bales, was equivalent to a substantial compliance with the statute.

Whether a statute is mandatory or directory is frequently a question of a great deal of importance to taxpayers, for the reason that errors in taxation are often susceptible of correction only by pointing to the nonobservance of some law which, strictly followed by an officer, might have prevented the errors complained of. The acts of assessors, for instance in matters relating to general municipal and state taxation, are, if legally performed, usually conclusive upon the taxpayer, unless some means of relief has been provided by the legislature, and often this relief is narrow. Very rarely, if ever, is there power in the judiciary to enter into all the questions affecting the legality of a charge for taxes, and therefore, in general, a statute, even though not in express terms mandatory, is treated as being so if its literal observance might afford substantial protection to the party complaining, and a failure of such observance by an officer is considered to render his act void. French v. Edwards, 13 Wall. 506, 511.

In the case of customs duties, however, a party dissatisfied with the classification of imports may apply to the courts to have examined and reviewed everything involving the legality of the demand which has been made upon him by a collector, and statutes containing directions to government officials, as to the manner in which they shall become informed of the dutiable character of merchandise, afford importers an altogether different kind of protection from that just mentioned. At most, a neglect of such provisions operates to no greater disadvantage to a party...