Nichols v. United States

• Citation: 7 Wall. 122,74 U.S. 122,19 L.Ed. 125
• Parties: NICHOLS v. UNITED STATES
• Decision Date: 01 December 1868
• Court: United States Supreme Court

74 U.S. 122

19 L.Ed. 125

7 Wall. 122

NICHOLS v. UNITED STATES.

December Term, 1868

APPEAL from the Court of Claims.

An act of Congress of February 26, 1845,¹ construing a former act relative to duties paid under protest, says:

'Nor shall any action be maintained against any collector, to recover the amount of duties so paid under protest, unless the said protest was made in writing and signed by the claimant, at or before the payment of said duties, setting forth distinctly and specifically the grounds of objection to the payment thereof.'

In this state of the statute law, Nichols & Co., merchants of New York, imported from abroad to that city, in 1847-51, certain casks of liquor. Duties were imposed at the customhouse, at New York, on the quantity invoiced; that is to say, on the amounts which the casks contained when they were shipped. A portion of the liquors, however, leaked out during the voyage, and being thus lost, was never imported at all, in fact, into the United States. Notwithstanding this circumstance, Nichols & Co. paid the duties, as imposed; that is to say, duties on the amount as invoiced, making no protest in the matter. They now, July, 1855, by petition, setting forth their case, including the fact that they had 'omitted to protest,' brought suit against the United States for the over-payment, in the Court of Claims; a court which, by the acts of Congress establishing it, has power to hear and determine 'all claims founded upon any law of Congress, or upon any regulation of an executive department, or upon any contract, express or implied, with the government of the United States.'

The petition asserted the law, as settled by this court in Lawrence v. Caswell,² to be, that duty was chargeable only on the value of the liquors imported into the United States, and that the quantity lost by leakage, on the voyage of importation, was not subject to any duty. A view in conformity, as they alleged, with a Treasury circular of January 30, 1847, directing that, 'if the quantity of any article falls short of the amount given in the invoice, . . . an abatement of the duties to the extent of the deficiency will be made.'³

As a reason for not presenting the claim to the Treasury Department, the petitioners stated that they omitted to protest.

The United States demurred to the petition, and the demurrer being sustained, the petition was dismissed. The importers now appealed.

Mr. William Allen Butler, for the appellants, contended, that the case was within the jurisdiction of the Court of Claims, for the claim was founded upon——

1st. A law of the United States, to wit, the Tariff Act, in operation at the time of the importations; an act which had regulated the assessment of duties on the liquors; upon——

2d. A regulation of an executive department, to wit, the Treasury; which sort of regulation the circular of January 30, 1847, was; a regulation as to deficiencies; and upon——

3d. An implied contract of the United States, springing from the obligation of the government to refund, irrespective of protests, the duties, if illegally exacted.

Viewed in the light in which the claim was placed by the act creating the Court of Claims, and by the decision in Lawrence v. Caswell, it was to be judged according to the rules of law applicable to cases where a party sues to recover money paid to another, in order to obtain possession of his goods from the latter, who has withheld them upon an illegal demand, colore officii. In such cases the law forces upon the wrongdoer the promise, in invitum, to pay the money to the party entitled to it. The Court of Claims has decided that this class of cases come within the provisions of the acts conferring jurisdiction upon the court.⁴

Neither was a written protest, made at the time before the collector, a pre-requisite to maintain suit here. There was no law requiring importers, overcharged by collectors of customs, to pursue the remedy authorized by the act of February 26, 1845, viz.: payment of the duties under protest, and suit against the collector. They might, if they so elected, apply to Congress, by petition, for an act directing the return of the duties. So they might come into this court and ask its relief. It was only where the importer exercised his right of action against the collector, that the absence of protest in writing could affect the question of the legality of the exaction. If the exaction was wrongful, and an obligation existed on the part of the government, the principal receiving money, to repay it, that obligation, when sought to be enforced directly against the government, could not be impaired by a condition made by it, for mere security perhaps, respecting the mode of enforcing a liability for the same obligation against its agents.

Mr. Evarts, Attorney-General, and Mr. Talbot, contra:

This appeal assumes as true that, at common law, the appellant has, against the United States, a right of action to recover the moneys claimed in his petition, which right was made available by the statutes establishing the Court of Claims, under no limitations save those prescribed for proceedings in that court. The assumption is false. The common law implies no contract on the part of the government to repay money erroneously collected into the public treasury for public dues. This point sustained, the appeal fails. But further:

1. No new liability on the part of the government, in this respect, has been created by the statutes establishing or relating to the Court of Claims. This appears by the statutes themselves.

2. What the revenue statutes define to be a compulsory payment in a case like this, and that alone, is such. Everything else is voluntary.

3. At common law the payment alleged by the petition is not compulsory.⁵

Mr. Justice DAVIS delivered the opinion of the court.

Two questions arise in this case:

1st. Was there any liability on the part of the government to refund these duties prior to the act establishing the Court of Claims?- 2d. If not, has that act fixed any new liability on the government?

The immunity of the United States from suit is one of the main elements to be considered in determining the merits of this controversy. Every government has an inherent right to protect itself against suits, and if, in the liberality of legislation, they are permitted, it is only on such terms and conditions as are prescribed by statute. The principle is fundamental, applies to every sovereign power, and but for the protection which it affords, the government would be unable to perform the various duties for which it was created. It would be impossible for it to collect revenue for its support, without infinite embarrassments and delays, if it was subject to civil processes the same as a private person.

It is not important for the purposes of this suit, to notice any of the acts of Congress on the subject of the payment of duties on imports, anterior to the act of February 26, 1845.⁶ This act altered the rule previously in force, and required the party of whom duties were claimed, and who denied the right to claim them, to protest in writing, with a specific statement of the grounds of objection.

Through this law Congress said to the importing merchant, you must pay the duties assessed against you; but, as you say, they are illegally assessed, if you file a written protest stating wherein the illegality consists, you can test the question of your liability to pay, in a suit against the collector, to be tried in due course of law, and, if the courts decide in your favor, the treasury will repay you; but in no other way will the government be responsible to refund.

The written protest, signed by the party, with the definite grounds of objection, were conditions precedent to the right to sue, and if omitted, all right of action was gone. These conditions were necessary for the protection of the government, as they informed the officers charged with the collection of the revenue from imports, of the merchant's reasons for claiming exemption, and enabled the Treasury Department to judge of their soundness, and to decide on the risk of taking the duties in the face of the objections. There was no hardship in the case, because the law was notice equally to the collector and importer, and was a rule to guide their conduct, in case differences should arise in relation to the laws for the imposition of duties. The allowing a suit at all, was an act of beneficience on the part of the government. As it had confided to the Secretary of the Treasury the power of deciding in the first instance on the amount of duties demandable on any specific importation, so it could have made him the final arbiter in all disputes concerning the same. After the passage of the law of 1845, the duties in controversy were paid.

The appellants say they were illegally exacted, because it was decided by this court, in Lawrence v. Caswell,⁷ that the duties ought to be charged only upon the quantity of liquors actually imported, and not on the contents...