Bend v. Hoyt

Mr. Justice Thompson,

dissenting.

The amount in controversy in this case is too small to attach mucn importance to it, on that account. But the principle involved in the' decision, and the practical effect it is to have upon the course of business at the customhouse, between the merchant and collector; must be my excuse for' publicly dissenting from the opinion of the Court, in a case apparently of so little importancé in itself.

t fully concur imf^at part of the opinion which exempts the goods in question-(silk hosiery) from the payment of any-duty; but dissent from that part which exonerates the collector from an ac-tion to recover back, the duties received by him. without any auíft'ffrity '-warrantedby law.

TheK>nly question presented oy the point certified to tliis Court, is whether the plaintiff is entitled to recover from the collector a sum of money, admitted to have been paid to him by mistake* without *274the least colour or suspicion of fraud or misconduct on the part off the plaintiff; and the mistake made known to the collector before the money was actually paid, and a claim interposed to have it deducted from his bond. The opinion of the Court upon the other, point certified, settles the question that the-silk hosiery on which the duty was paid, was not subject to duty. The money was therefore iii the hands of the collector, without any right whatever to hold it, and 'exacted in violation Of law; not a voluntary payment, but demanded under the penalty,of a loss of credit at the customhouse, if the bond was not paid. If, under such circumstances, the money cannot be recovered back, it must rest upon some stern and unyielding principles of law or public-policy, against the manifest justice of the case. But, in my judgment, there are no principles of law or public policy that-can uphold such a course-on- the part of the pollector.

■ But it may be proper to state, a little more particularly, the circumstances under which the money was paid to the collector. Upon ' the trial in the Circuit Courty an affidavit of the plaintiff was produced and-read in evidence by the defendant^ and he cannot now: be permitted to deny the truth of the facts therein., stated. In this affidavit, the plaintiff states, that in March, 1837, heimported from Liverpool, in the ship Roscoe, eight cases and casks of hosiery and gloves, owned by Barker and Adams, manufacturers of Nottingham in England, and consigned by them to him for sale. That his clerk no.t being able to ascertain from the wording of the invoice, which - packages contained gloves and which hosiery, and knowing , that 'cotton gloves and cotton hosiery paid, the same duty; he entered' them all at the customhouse as cotton gloves, and a duty of twenty-five per cent, -was- charged upon them by the collector, and he gave bonds for the payment of the duties. That upon an examination of the goods contained in one of the cases, marked B 45,he found them td.be spun silk hosiery, and not cotton gloves, as entered at the' customhouse. That the goods -are. called upon the original invoice passed at the customhouse, “spun knots,” a term well known ñrthe trade to be applied to hosiery of silk only; and that he verily be-lieved, that the error of entry of the said case as paying duty, arose from the ignorance of the clerk who made the entry. That he did ■not upon this, nor does, he upon any occasion examine whether the customhouse entries made by his clerk are correct. And he further swears, that he had never sold any part of that case; and that, to the best of his' knowledge and belief, nothing had'been taken from-or added .to it, but that it was in every respect in the same condition as it was when he received it.

This deposition establishes, beyond all controversy, that the entry was a pure mistake. .And suppose it arose from the ignorance of the-clerk in not understanding the kind of goods called spun knots ?- It was. equally the ignorance of the customhouse officer who received the" entry; for not only the oath upon which the entry was made, states that the original invoice was presented to the collector, upon Which the article is. denominated spun knots; but it is required by *275law, that the original invoice should be produced to the collector at the time the entry is made, 1 Story, 606, s. 36. He had. therefore the same means of knowing what the cases contained, as the clerk who made the entry, the cases not having been opened or examined. It was, therefore, a case of mutual error or mutual ignorance. There are no grounds whatever for charging the plaintiff with negligence in this case. He pursued the ordinary course of business. Entries at the customhouse are usually made by clerks. But if no mistake made by a clerk can be corrected, every merchant will be obliged to submit in silence to all losses occasioned by mistakes, or attend in person to make his entries; which will be entirely changing the course of business. But suppose the plaintiff himself had ihade the mistake; can it be that it is beyond the reach of the law to correct such mistakes. The rule now laid down by the Court would equally extend to such a case. If there are any grounds whatever-to .suspect fraud or imposition, it is open to inquiry. But to close the door against correcting innocent mistakes, on any suppqsed ground of public, policy,' is applying a very severe rule to the transaction of business at the .customhouse, ,and one that, in my judgment, is not called for to protect' the revenue of the country. And the very form of the oath required by law to he made on the entry, presupposes that mistakes may be committed, and provides for the correction of them. The person on whose oath the entry is made, swears that the invoice and bill of lading presented to the collector, is the true, and only invoice of the goods received, and that the entry con-, tains' a just and true account of the goods according to the invoice' and bill of lading, and that nothing to his knowledge has -been suppressed or concealed, whereby the United States may be defrauded of any part of the-duty lawfully due oh the said goods; and that if at any time thereafter, he discovers any error in the invoice, or in the account rendered of the goods, &c., he will immediately make thejrsame known to the collector. There is nothing in this case to take it out of the rule of law applicable to ordinary innocent mis-, takes.

. The original invoice was produced and laid before the collector as'by law required, to be examined and compared with the entry; in which invoice the goods aré denominated spun knots. If, therefore, there was any supposed error in the clerk in-entering them as gloves, it was the duty of the collector to have corrected the-error; and he is as much chargeable with negligence as the, clerk. But, the 'reason why.no notice was taken of.it, doubtless, was, that'it was altogether unimportant, in the view of the collector: for he; considered the duty chargeable upon the goods as hosiery, and that it was perfectly immaterial whether-it was cotton or silk hosiery..

There is nothing in the case to show that the error or mistake was not immediately made known to the collector, as soon as it .was discovered; of that the collector made any .objection to correcting it on that account. And it was in proof that it was made known tp himv before the duties wer& paid.' It having been settled by this *276Court, that according to the true construction of the acts of Congress, no duties could be demanded upon this hosiery, there can be no doubt that if the plaintiff had not pMd the duties, but suffered his bond to bé prosecuted, this mistake in the estimate of duties might have been set up by way of defence, and deduction from the bond. ' The bond is not given for the payment of any sum certain for the duties; but in á penalty sufficient to cover the supposed amount, with a Condition to pay the amount of duties to b.e ascertained upon the goods in the entry referred to, 1 Story, 689, s. 68: and the question.is therefore-open to inquiry, what was the amount due upon the goods contained in such entry, if any error or mistake has occurred. But the obligors in the bond cannot permit themselves to be sued, with-, out forfeiting their- credit at the customhouse; for the act of Congress declares, that no person whose bond has' been received either as principal or surety for-the payment of' duties, and which bond may be due and unsatisfied, shall be allowed a future credit for duties, until such bond shall be fully paid or satisfied. And the merchant had better submit to the imposition of paying illegal duties, especially if. they are of small amount, than to have his credit suspended at the customhouse until he can try the question in a suit upon the bond. Money exacted under such circumstances, is but little short of duress, if the collector is protected from any suit to .recover it back. I cannot believe that there is any principle of law or public policy, that can be permitted to work such injustice. Due notice was given to the collector before the bond fell due of the mistake, and a claim to have the deduction made upon the bond; and no pretence on the part of the collector that the notice.came too late, or any suggestion of fraud or unfair conduct .en the.párt of the .plaintiff The collector therefore acted with full knowledge of all the facts — and indeed under an implied admission of the mistake.' For he.professéd to act under the instructions of the comptroller of. the treasury, that no errors of fact could be corrected after the merchan-< dise had passed beyond the. control of the officers of the customs. If such be the rule of the customhouse, no errors or mistakes can be corrected, unless every’package of goods shall be opened and examined at the-public stores before- being delivered to the merchant, which would be contrary to the uniform course of business. ' But I .trust the instructions of the comptroller ■ are net to be .assumed as law.

Although instructions from the treasury department may afford an apology for the collector, and exonerate him from any intentional violation of duty, yet it can ne^er be admitted, that they can shield him from all responsibility, when not warranted by the rules and principles of law. If any authority is nécessáry to. support- this position, it-will be found in the case of Elliot vs. Swartwout, 10 Peters, 153, where it is expressly laid down, that instructions from the treasury department cannot change the law or affect the. rights Of the parties: that the collector is. not bound to take and adopt such instructions, but is->at liberty to' judge “for' himself,-and act *277accordingly. And, in that case, the personal, responsibility of the collector is full]' examined; and his liability held to be governed by the fact, whether he has paid over the money to the treasury before any notice of a claim to have ,'it refunded has been given to him. And it is there settled, that where the.money has been paid over to the treasury, without any notice or objection to its being pbid over, it is to be considered a purely voluntary payment; and no suit can be maintained against the' collector to recover it back': but when, at the time of payment, notice is given to the collector that the. duties are charged too high, and accompanied with a declaration, by the party paying the money, that he intends to prosecute him to recover back the amount erroneously paid, in such case' the collector- is personally- liable. . And the Court add; that such must necessarily bé the rule, unless the broad proposition can be maintained, that no action will lie against a collector to recover back ah excess of duties paid -him, but that recourse must be had to the government for redress. Such a principle, say the Court, would be extending an exemption to. a public officer, beyond any protection sanctioned by any principle of law or sound public policy. And numerous cases ih the English Courts are referred to, where suits have been maintained against public officers, to recover back money-paid to obtain a release and discharge of goods- seized, -which were not liable to seizure: the Courts observing, that the revenue laws ought not to be made the means of. oppressing the subject. - And if. an action would lie to recover back money paid to obtain possession of goods illegally seized, the same principle will sustain an action to recover back money illegally exacted, under the penalty of' forfeiting all credit at the customhouse, due notice having been given to the collector not to pay it over tó the treasury. The true doctrine on this subject is laid down in the case of Bize vs. Dickason, 1 Term. Rep. 286. - Lord Mansfield there said the rule had always-been, that if a man has paid what the law would not have compelled him to pay, but what in equity and conscience he ought to pay; he cannot recover it back in an action for money had and received: but where money is paid under a mistake, which there was no ground to claim in conscience, the party may recover it back again in this kind of action. If this be the true rule, of which I think there can be no doubt, the plaintiff - has • a right to recover back the money in this case. It is fully proved that it was included in his bond by mistake, and was held by the collector, without any right in law or conscience to retain it; and-payment of the bond was exacted under the penalty of forfeiture of credit at the customhouse. If an action against the collector cannot be maintained to recover back money paid under such circumstances, it is difficult-to conceive a case that Would sustain an action.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the southern district of New York ; and on the points and questions on which the judges *278of the said Court were opposed in opinion, and which were certified to this Court for its opinion, agreeably to the act of Congress in such case made and, provided; and was argued , by counsel. On consideration whereof, it is the opinion of this Court, First, that upon the facts stated in the case, the plaintiff, Bend, is not entitled to recover back the excess pf duties paid by him on the package number 45, as mentioned in the case. And, Secondly, that silk hose is entitled to be admitted to entry free of duty,'under the act of the 2d of March, 1833, entitled, An act to modify the act of the 14th of July, 1832, and all other acts imposing duties on imports which declares that. all., manufactures of silk, or of which silk is the component material of chief value, coming from this side of the dape of Good Hope, except sewing silk, shall be free of duty. Whereupon it is ordered and adjudged by this Court, that it be so certified to the said Circuit Court; and that this cause be remanded to'ffhe .said Court, that further proceedings may be had therein according to law.