North German Lloyd S.S. Co. v. Hedden

• Decision Date: 21 May 1890
• Citation: 43 F. 17
• Parties: NORTH GERMAN LLOYD S.S. CO. v. HEDDEN, Collector. SAME v. MAGONE, Collector.
• Court: U.S. District Court — District of New Jersey

43 F. 17

NORTH GERMAN LLOYD S.S. CO. v. HEDDEN, Collector.

SAME v. MAGONE, Collector.

United States Circuit Court, D. New Jersey.

May 21, 1890

Samuel F. Bigelow and Henry C. Nevitt, for plaintiff.

Howard W. Hayes, Asst. U.S. Dist. Atty., for defendants.

WALES J.

The plaintiff, a duly-organized corporation under the laws of the Hanseatic republic of Bremen, which is a part of the German empire, is the owner of a line of ocean steam-ships, plying regularly between the ports of Bremen and New York, and brings these actions, under section 2931, Rev. St. U.S., to recover the amount of certain tonnage dues, alleged to have been unlawfully collected from said ships during the period extending from June 26, 1884, to July 28, 1888, and while the defendants were successively collectors of customs at the last-named port. The vessels cleared from Bremen for New York via Southampton, Eng., stopping at or near the latter place temporarily, to discharge cargo and passengers, and to take on board additional cargo, passengers, and mails. The consignees of the vessels paid the dues, in every instance under protest, and the plaintiff appealed to the secretary of the treasury, and finally, at the suggestion of the latter officer and with the concurrence of the department of justice, brought these actions to determine the authority of the defendants.

The right of the plaintiff to recover depends upon the following statement of the law and facts: Prior to the act of congress of June 26, 1884, entitled 'An act to remove certain burdens on the American merchant marine and encourage the American foreign carrying trade,' tonnage tax was imposed upon German and all other vessels arriving in the United States from foreign ports, at the rate of 30 cents per ton per annum, and up to July 1st, of that year, it had been collected in a lump sum for a year at a time. But section 14 of the act of 1884 changed the rate and mode of collection as follows:

'That in lieu of the tax on tonnage of thirty cents per ton per annum, heretofore imposed by law, a duty of three cents per ton, not to exceed in the aggregate fifteen cents per ton in any one year, is hereby imposed at each entry on all vessels which shall be entered in any port of the United States from any foreign port or place in North America Central America, the West India islands, the Bahama islands, the Bermuda islands, or the Sandwich islands, or Newfoundland; and a duty of six cents per ton, not to exceed thirty cents per ton per annum, is hereby imposed at each entry upon all vessels which shall be entered in the United States from any other foreign ports.' 23 U.S.St. 57.

This section was amended by section 11 of the act of congress of June 19, 1886, entitled 'An act to abolish certain fees,' etc. 24 U.S.St. 81. The amendment consisted in adding the following words to those just quoted:

'Not, however, to include vessels in distress or not engaged in trade: provided, that the president of the United States shall suspend the collection of so much of the duty herein imposed on vessels entered from any foreign port as may be in excess of the tonnage and light-house dues, or other equivalent tax or taxes, imposed in said port on American vessels, by the government of the foreign country in which such port is situated, and shall, upon the passage of this act, and from time to time thereafter as often as it may become necessary, by reason of changes in the laws of the foreign countries above mentioned, indicate by proclamation the ports to which such suspension shall apply, and the rate or rates of tonnage duty, if any, to be collected under such suspension: provided, further, that such proclamation shall exclude from the benefits of the suspension herein authorized, the vessels of any foreign country in whose ports the fees or dues of any kind or nature imposed on vessels of the United States, or the import or export duties on their cargoes, are in excess of the fees, dues, or duties imposed on the vessels of the country in which such port is situated, or on the cargoes of such vessels; and sections 4223 and 4224 and so much of section 4219 of the Revised Statutes as conflict with this section are hereby repealed.'

Section 4219, tit. 48, c. 3, Rev. St., referred to in the foregoing sub-proviso, provides that 'nothing in this section shall be deemed * * * to impair any rights * * * under the law and treaties of the United States relative to the duty of tonnage on vessels. ' Section 4227 of the same title and chapter is in these words:

'Nothing contained in this title shall be deemed in any wise to impair any rights and privileges which have been or may be acquired by any foreign nation under the laws and treaties of the United States, relative to the duty on tonnage of vessels, or any other duty on vessels.' By article 9 of the treaty of December 20, 1827, between the United States and the Hanseatic republics, 'the contracting parties * * * engage mutually not to grant any particular favor to other nations, in respect of commerce and navigation, which shall not immediately become common to the other party. ' Public Treaties, 400. Article 9 of the Prussian-American treaty of May 1, 1828, (Pub. Treaties, 656,) contains a like stipulation. These treaties have been held by both the American and German governments to be valid for all Germany. On the 26th of January, 1888, the president, in virtue of the authority vested in him by section 11 of the act of June 19, 1886, issued his proclamation, wherein, after reciting that he had received satisfactory proof that no tonnage or light-house dues, or any equivalent tax or taxes whatever, are imposed upon American vessels entering the ports of the German empire, either by the imperial government or by the governments of the German maritime states, and that vessels belonging to the United States are not required, in German ports, to pay any fee or due of any kind or nature, or any import duty higher or other than is payable by German vessels or their cargoes, did 'declare and proclaim that from and after the date of this my proclamation shall be suspended the collection of the whole of the duty of six cents per ton * * * upon vessels entered in the ports of the United States from any of the ports of the empire of Germany, * * * and the suspension hereby declared and proclaimed shall continue so long as the reciprocal exemption of vessels belonging to citizens of the United States and their cargoes shall be continued in the said ports of the empire of Germany, and no longer. ' The commissioner of navigation, in his circular letter No. 19, dated February 1, 1888, and approved by the secretary of the treasury, addressed to the collectors of customs and others, decided that the president's proclamation does not apply to vessels which entered before the date of the proclamation, and that only those German vessels 'arriving directly from the ports of the German empire may be admitted under the proclamation without the payment of the dues therein mentioned. ' The commissioner of navigation claims authority to make this decision by virtue of section 3 of the act of congress of July 5, 1884, entitled 'An act to constitute a bureau of navigation in the treasury department,' which reads as follows:

'That the commissioner of navigation shall be charged with the supervision of the laws relating to the admeasurement of vessels, and the assigning of signal letters thereto, and of designating their official number; and on all questions of interpretation, growing out of the execution of the laws relating to these subjects, and relating to the collection of tonnage tax, and to the refunding of such tax when collected erroneously or illegally, his decision shall be final.'

The plaintiff's vessels were German vessels, and on the 19th day of June, 1886, and thereafter until now, the government of Germany exacted no tonnage tax or taxes whatever on vessels of the United States arriving in German ports.

Upon this statement of the law and the facts, the plaintiff's counsel contend (1) that as to the dues collected between June 26, 1884, and June 19, 1886, the plaintiff's vessels should not have been charged more than the lower rate of tonnage tax fixed by the act of 1884, under the favored nation clause of the treaties, whereas the defendants charged six cents per ton; (2) that the dues collected after the passage of the act of June 19, 1886, and prior to the president's proclamation, were excessive, for the same reason; (3) that no tonnage tax whatever could be lawfully collected of the vessels of the plaintiff, after the passage of the act of June 19, 1886, because that act went into effect immediately, and without waiting for the president's proclamation; (4) that the act of July 5, 1884, in so far as it confers on the commissioner of navigation the power of deciding finally on all questions of interpretation, growing out of the execution of the laws relating to the collection of tonnage tax, and the refund of the same when illegally or erroneously collected, is unconstitutional and void.

As introductory to their argument, plaintiff's counsel referred to the policy of our government in relation to the subject of navigation, which, it is claimed, has been from the beginning to establish entire reciprocity with other nations. The practice has been to ask for no exclusive privileges and to grant none, 'but to offer to all nations and to ask from them entire reciprocity in navigation.' 1 Kent, Comm. 34, note. This policy has been judicially recognized by the supreme court in Oldfield v Marriott, 10 How. 146; and it is asserted that congress had it in view in enacting the acts of 1884 and 1886, imposing the tonnage taxes. The review presented by counsel of...