Tres Ritos Ranch Co. v. Abbott

• Decision Date: 23 September 1940
• Docket Number: No. 4537.,4537.
• Parties: TRES RITOS RANCH CO.v.ABBOTT, County Treasurer.SAMEv.BAMBERGER, County Treasurer.
• Court: New Mexico Supreme Court

44 N.M. 556

105 P.2d 1070

TRES RITOS RANCH CO.

v.ABBOTT, County Treasurer.SAME

v.BAMBERGER, County Treasurer.

No. 4537.

Supreme Court of New Mexico.

Sept. 23, 1940.

Appeal from District Courts, Otero and Lincoln Counties; Numa C. Frenger, Judge.

Actions by the Tres Ritos Ranch Company against George Abbott, Treasurer of Otero County, and O. W. Bamberger, Treasurer of Lincoln County, respectively, to recover taxes paid under protest. From judgments for respondents, petitioner appeals.

Affirmed.

A United States customs officer's or treasury department regulation's description of pasture as warehouse for storage of animals, within provisions of federal tariff act as to bonded warehouses for storage of imported merchandise, is not binding on court. Tariff Act of 1930, § 555, 19 U.S.C.A. § 1555.

Holt & Holt, of Las Cruces, for appellant.

M. A. Threet, of Las Cruces, and C. V. Clayton, of Tularosa, for appellees.

ZINN, Justice.

This is an appeal from judgments of the District Courts of Otero and of Lincoln Counties, consolidated for the purpose of this appeal. Suits were instituted below to recover taxes claimed to have been illegally assessed, and paid under protest, on cattle imported from Mexico in four shipments over a period of several months.

Under existing Acts of Congress (46 Statutes at Large 743, 19 U.S.C.A. § 1555) and regulations of the Secretary of the Treasury and of the U.S. Customs Service, the Tres Ritos Ranch Company, petitioner and appellant here, applied for and secured authority to establish its New Mexico ranch, covering some half million acres in Otero, Lincoln and Socorro Counties as a class 4 bonded warehouse. All of the cattle here in question entered the United States Customs at Port of Columbus, New Mexico, where they were inspected, weighed, counted and dipped, and then shipped from there by railroad to Three Rivers in Otero County, where petitioner maintained its headquarters. The cattle were shipped or driven across the international boundary by the owner, a Mexican corporation, consigned to itself. Thereupon, in the United States, the trial court found, the Mexican corporation sold and transferred said cattle to the petitioner.

The purpose of petitioner in placing these imported cattle on its ranch, as indicated by the evidence, was to graze them, fatten them, and to handle them for sale on the market, its plan being to bring such cattle out of Mexico as young as possible and to put weight on them on this side of the line. Appellant's ranch was “open range”; that is, not fenced in, so that cattle from other ranches could, and during 1936 and 1937 did, mingle at will with those belonging to the petitioner. In August, 1936, and again on January 1, 1938, petitioner sold and shipped from its ranch calves which were increase from the Mexican cattle. Bulls were imported from Texas and Colorado and commingled with the domestic cattle and the cattle imported from Mexico.

Appellant contends that the Mexican cattle were held as imports on his ranch as a government bonded warehouse under joint custody of the warehouseman and United States customs officials as provided for in the Tariff Act of 1930, and that they were not subject to taxation by or in either county under Art. 1, Sec. 10, of the Constitution of the United States until payment of duty and release by customs officials. The Act upon which appellant relies appears as Sec. 1555, Title 19, U.S.C.A. and provides: “Bonded warehouses. Buildings or parts of buildings and other inclosures may be designated by the Secretary of the Treasury as bonded warehouses for the storage of imported merchandise entered for warehousing * *. Such warehouses may be bonded for the storing of such merchandise only as shall belong or be consigned to the owners or proprietors thereof and be known as private bonded warehouses, or for the storage of imported merchandise generally and be known as public bonded warehouses. *** Except as otherwise provided in this chapter, bonded warehouses shall be used solely for the storage of imported merchandise and shall be placed in charge of a proper officer of the customs, who, together with the proprietor thereof, shall have joint custody of all merchandise stored in the warehouse ***.”

The trial court found that the cattle, nevertheless, had become incorporated with the mass of the property in the state and the county wherein they were kept and were subject to taxation and, further, that the petitioner had not complied sufficiently with the terms of the Act to designate the ranch as a private bonded warehouse.

Appellant raises sixteen points in its appeal dealing with the status of the cattle as imports, with the question of who imported the cattle, and questioning the jurisdiction of a state court to construe provisions of the Tariff Act under which appellant's bonded warehouse was said to have been established.

Major issue in the case is appellant's contention that the cattle retained their status as imports and that consequently they were not subject to state taxation under the provision of the Federal Constitution that: “No state shall, without the Consent of Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws.” Art. 1, Sec. 10, Const. U.S.

[1] After an article ceases to be an import by being mingled with other property in the state, it is subject to taxation by the State. Nathan v. Louisiana, 8 How. 73, 81, 12 L.Ed.992. This well known principle was first enunciated by Chief Justice Marshall in the leading case of Brown v. Maryland, 12 Wheat. 419, 441, 6 L.Ed 678, 686, in which he said: “When the importer has so acted upon the thing imported, that it has become incorporated and mixed up with the mass of the property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the state.”

As pointed out in the case of Mexican Petroleum Corporation v. City of South Portland, 121 Me. 128, 115 A. 900, 26 A. L.R. 965, the slight hesitation in announcing the rule as indicated by the word “perhaps” has entirely disappeared in subsequent decisions.

According to the definition of imports given in Marriott v. Brune, 9 How. 619, 632, 50 U.S. 619, 13 L.Ed 282, 288, imports can cover “nothing which is not actually brought into our limits.” We can readily visualize how a herd of young heifers or steers over a two-year period spent a-grazing on appellant's half million acre ranch would result in a material increase in weight, weight which was not brought into this state as an import. Yet, if we are to subscribe to appellant's view, since the original animals were imported, the State would be precluded from taxing even this increase produced in New Mexico under full protection of the laws of this state. The facts show, furthermore, that petitioner sold and shipped calves which were the increase from the cattle imported from Mexico, that cattle not owned by the petitioner were allowed to graze on the ranch and that bulls brought in from Texas and Colorado were allowed to mingle with them. On these facts it appears incontrovertible that the imported cattle became commingled with the other property of the State, just as much as a sack of imported grain when mixed with a sack of home grown grain loses its characteristics as an import and becomes subject to state taxation. We do not find that these cattle which were brought into the country, even if they were retained in the hands of the importer as appellant contends, remained in exactly the same form and shape as that in which they were imported, and that they were not commingled with the mass property within the state. See Low v. Austin, 13 Wall. 29, 80 U.S. 29, 20 L.Ed. 517.

[2] Neither do imported cattle retain their character as imports so as to be immune from taxation by the mere fact that they were held within “bonded warehouses”, if such indeed were the case, under provisions of the Tariff Act of 1930 (June 17, 1930, Chap. 497, Title IV, Sec. 551 et seq., U.S.C.A. Title 19, Sec. 1551 et seq.)

It is entirely illogical to contend that cattle can usually be “stored” like ordinary commodities. Storage connotes a certain degree of permanency and immobility, but grazing, or similar terms that are in use to denote the manner of harboring cattle, connote transcience. For a similar distinction, see Monument Garage Corporation v. Levy, 266 N.Y. 339, 194 N.E. 848. Storage, according to Webster's New International Dictionary, involves the safekeeping of goods. While there may be some small amount of diminution when goods are stored, it seems wholly improbable that it may include a material increase in the quantity of goods stored. Nor can it be effectively contended without straining the connotation of the word “merchandise” that it encompasses cattle or other live stock. See Brown v. United States, D.C., 298 F. 177; Jewell v. Board of Trustees of Sumner Township, 113 Iowa 47, 84 N.W. 973, 975.

[3] Even if it be conceded that a United States Customs officer or a Treasury department regulation describes a pasture as a warehouse for “storage of animals”, such an interpretation is not binding upon a court, even if it were one of long standing. The practice of placing imported cattle in bonded warehouses is of recent origin; hence,...