While these cases excited much attention -•at the time of their trial, both from the extensive character of the frauds perpetrated, .and from the general acquaintance with the parties concerned, yet, on account of the paucity of legal principles developed, and the .grcai similiarity of all the cases, it has not been thought advisable to report each in detail. The great straggle took place in regard to the cloths claimed by Taylor and the Blackburnes. This case, therefore, has been inserted at length; and a general history of the whole transaction, drawn from official sources, has been thought a sufficient notice of the other suits.
The goods in controversy in these cases, were all from the district of Saddleworth, in "Yorkshire, in England, and had been entered .at the custom-house by persons from that district, whose business in this country was the importation and sale of woollen goods. By far the greater portion of the cloths and cas-.simers of low and medium prices, imported into the United States for many years past, had been manufactured in this district of Sad-dleworth. It is inhabited principally, or to a .great extent, by xiersons engaged in the manufacture of such articles. The goods made there, which are intended for the British market, are generally sold in the bank or unfinished state, at the cloth hall in Huddersfield. The goods which are finished in Sad-•dleworth, were generally sent to this country, the local sales being so limited that the district is rarely resorted to by purchasers from other places. With occasional exceptions, this appears to have been the state of ■things in Saddleworth in 1S3S and 1S39, when the goods in controversy were exported, and for many years previous. The high rate of duties in this country on imported woollens afforded a strong temptation to persons in .Saddleworth, and their associates in this country, to resort to measures for the evasion or reduction of their amount. The character and extent of the measures to which they resorted for this purpose, will hereafter be stated. Their effect was to drive other importers out of the market, and secure a sort of monopoly to these parties — some of whom privately declared that they could import goods at such rates as to render competition with them impossible, even on the part of skilful and experienced importers, who had partners or agents residing in England, qualified in every manner to take advantage of the most favorable opportunities of purchasing. It was testified that a member of the house of William Blackburne & Co., a partnership of whom mention will be made presently, at a time when the duties on cloths and cassimeres were not less than 41 per cent, on their value, declared that he could buy .them in England, and have them delivered at his warehouse in Philadelphia, in such a manner that only 25 per cent, duty should be paid on them, and no questions asked.
Early in the summer of 1S39. the attention of then collector of New York was called, by the secretary of the treasury, to reported frauds in the importation of British woollens. In the same summer the case of U. S. v. Wood [Case No. 10,751], tried at New York, and that of U. S. v. Bottomley, at Boston [Cases Nos. 1,GSS and 1,6S9], made it a matter of public notoriety that there had existed, for years, a combination, between certain parties residing in Saddleworth, and persons from the same district who were temporary residents in this country, to pass goods through the custom-house at New York, by means of fictitious invoices, most of them representing sales of the goods to have been made by the parties abroad to those in this country, at prices greatly below the market value of the goods in England. In the case at Boston it appeared that a corrupt understanding had existed between the importer and an officer of the revenue at New York; and there was some ground to believe that the success of the fraud had been facilitated by a lax practice in England of permitting the export duty to be paid upon a fictitious representation of the value of the goods exported, which corresponded neither with their actual value on the one hand, nor on the other hand with the value or price alleged in the invoice by which it was intended that they should be entered in tiffs country. In the case of Wood at New York, however, the developments were of an astonishing character. The father of the importer had failed in England, and his assignees, under a commission of bankruptcy, had placed the counsel for the prosecution in possession of the letters from the son relating th.e course of his transactions, and referring incidentally to similar transactions on the part of other importers of the same class. Of the persons whom ho thus incidentally named as parties to sim-
Shortly after tbe decision of tbe two prosecutions at New York and Boston above-men-tioued, tbe attention of persons in Philadelphia was turned toward certain commission and auction bouses, of whom it was known, that their principal or entire business was tbe sale of goods imported into New York from Saddlewortk. Private information was obtained that on a Sunday, in tbe early part of August, 1S39, B. Broadbent, of Saddlewortk, formerly an importer at New York, afterward in tbe employment of Mr. P. Brady, one of tbe agents referred to, and at that time a partner in tbe firm of Davis, Broadbent & Co., who were also concerned in similar agencies, bad visited Jeremiah Ads-head, formerly of Saddlewortk, and stating bis apprehensions lest tbe store of Davis, Broadbent & Co., should be visited and searched by custom-house officers, had requested tbe assistance of Mr. Adshead, who was a rapid writer, in altering tbe marks upon certain goods in their store. Mr. Ads-head accompanied him, and assisted in making tickets with numbers different from those on tbe original tickets. On that day, these new tickets -were, to a considerable extent, substituted for tbe original ones. It seems that Mr. Broadbent exercised a discrimination in altering tbe marks of goods received from certain importers, and leaving unchanged tbe marks of those received from others. It did not appear whether be used tbis discrimination in consequence of communications with any of the parties, or from a knowledge that some of them had already altered tbe marks in New York, as was tbe fact, or from what other reason. In the same and in tbe succeeding week, other goods were received by Davis, Broadbent & Co., from New York, of some of which tbe marks were altered in like manner. Adsliead, the person who on the Sunday referred to had assisted in tbis operation, was one of tbe proprietors of an estabbsbment to which tbe agents of tbe Saddlewortb importers had' been in tbe practice of sending dofbs to be refinisked, or cut and beaded. With the privity of tbe same Mr. Broadbent, this person caused goods which had been sent to his manufactory to be secreted elsewhere. Some of these goods were placed in tbe upper' story of a small grocery store; another portion in one of tbe bed-rooms of a tavern, in tbe cellar of which another portion was placed in an old oil cask, and covered with vegetables. Similar measures of concealment were likewise pursued by other agents of these importers. Batturs, Okie & Co., an auction bouse, sent some goods, of the importation of John Platt and William Bottom-ley, to a hardware store, with a request that they should be kept out of view. In all the places mentioned, when tbe officers of tbe customs afterward came to search for tbe goods, tbe persons in possession of them denied that they bad any cloths or cassimeres in their possession. Persons privy to some of these measures of concealment, disclosed a portion of what bad occurred, to parties through whom information was communicated to tbe district attorney, that certain goods, which had been fraudulently passed through the custom-house at New York on false invoices, were believed to be in Philadelphia in the hands of agents of the importers. He immediately made a requisition upon the collector of New York, to send to-Philadelphia an officer by whom the suspected goods of New York importation might be identified. The collector of New York despatched upon this duty an officer, who-arrived in Philadelphia on the 19th of August, 1839, and, under the direction of the-district attorney, applied for instructions to Mr. Wolf, then collector of the port of Philadelphia. On the same day, under the direction of Governor Wolf, one thousand pieces of cloths and cassimeres, of New York importation, and thirty-one pieces, which afterward appeared to have been brought from Ganada, and entered at Rouse’s roint, were-seized at the store of Davis. Broadbent & Co. Two days afterwards, on the 21st of August, a visit was made, by officers of the revenue collection service, to the store of William Blackburne & Co., in the same neighborhood. William Blackburne & Co. were the principal receivers and sellers in this city of goods which John Taylor, Jr., imported to a large extent through New York. John Taylor, Jr., was of Saddlewortk, and received his impor tations thence through Abel & Thomas Shaw, a son of whom was a member of the firm of William Blackburne & Co., and to whom all the other members of this firm were related or connected by marriage. Mr. Taylor-also received some goods from other parties in England. His annual importations were of very large amount. It appeared that Mr. Blackburne rented a store in Church alley, No. 24. in Philadelphia; that the adjoining store, No. 2d, was rented by Mr. Worrell, and
Informations were filed in due course, al leging as causes of forfeiture, under several different counts, what may be resolved into the substantial charge of the goods having been falsely invoiced with intent to defraud the revenue. To the goods thus libelled forty-four several claims were interposed, under which as many distinct issues were joined. The parties making these forty-four claims were twenty-four persons, some of whom claimed goods at each of two or more different places. The result of the trials as to the twenty-five hundred and eighty-four pieces of New York importation was, that as to twenty-three hundred and forty-two pieces there were verdicts for the United States. Of the remaining two hundred and forty-two pieces, there were entries of nolle prose-qui as to one hundred and twelve pieces in one case, and two pieces in another case. In regard to these one hundred and fourteen pieces, the claimants offered to admit on the record that there was probable cause for the prosecution; and the district attorney did not think that the evidence on the part of the United States, would have justified the asking for more than a certificate to this effect. It certainly was not so strong as to warrant the urging the condemnation of the goods. As to one hundred and eighteen pieces, embraced in nine cases, in each of which they formed a portion only of the goods in controversy, there were verdicts for the defendants, with a certificate of the court that there was probable cause for the prosecution. Of the fifty-eight pieces believed to have been imported at Philadelphia, forty-two pieces were condemned, and sixteen pieces acquitted, the court certifying, as to the latter, that there was probable cause for the prosecution. The thirty-one pieces imported through Rouse’s Point, were the stibject of a correspondence between the deputy collector at that place, and the late collector at New York. The person who had entered them
The first ease tried was that of a claim interposed by John Taylor, Jr., and William Blackburne & Co., to the goods concealed as above at William Blackburne & Co.’s, Mr. Taylor alleging himself to be the owner and importer, and William Blackburne & Co., as his factors, alleging that they had advanced to him fifty-nine thousand dollars upon the goods. Upon the trial, the United States proved the concealment of the goods, and attendant facts detailed above, and proved a variety of circumstances tending to show that Tayior was not really a purchaser of the goods in the fair and proper sense of the term, but had received them under some secret understanding or arrangement, the result of a combination between him and the parties in England, under which the goods of his importation were invoiced at prices lower than those of the English market. It was also proved by importers of cloths and cassi-meres, as to the goods in question, that the prices mentioned in the invoices were generally much lower than those ordinarily paid by purchasers in England at the same period. There was other evidence tending to prove that there were fictitious deductions inserted in the invoices. A point was raised and insisted upon, as will be seen in the following report of the case, that the goods having been passed through the custom-house at New York, and duties assessed and paid on the footing of the invoices being correct, it was afterwards too late to allege the contrary as a cause of forfeiture. As regarded the law of the question, it was a sufficient answer, that if the invoice on which the importer had obtained a permit for his goods was a false one, and had been the means of practising a deception upon the officers who had passed the goods, the fraudulent party should not be allowed to take advantage of his own wrong, and rely upon the fraud itself as a shield and protection against the penalties imposed upon the very act on which he relied for his immunity. Of this opinion was the judge. He left the facts to the jury, who, after a protracted trial of several weeks’ duration, returned a verdict for the United States. Shortly before this trial, some of the claimants had obtained at New York, from Chancellor Kent, an opinion, which was circulated extensively through the newspapers, that “when the duties have been paid and the goods fairly passed through the government offices into the general mass of the circulating commerce of the country,” the collector had no right to seize goods for any of the causes of forfeiture set forth in the revenue collection acts. The context of that part of his opinion which contains this important word “fairly” was, by many persons, supposed to indicate the opinion of this eminent jurist, that a permit, though obtained by fraud, would operate as an irrevocable exemption of the goods from prosecution for any forfeiture previously incurred. This can scarcely have been his meaning; because, thus understood, his opinion would be opposed to the whole course of judicial decisions on the subject. Nevertheless, this view of the law had been pressed with such earnestness, that, after the trial, the judge acceded to a request on behalf of the claimants that the trials of the remaining eases should be postponed until after a decision of this point by the supreme court. After this, no case involving this precise point under the same enactments on which the informations were framed, came before the supreme court, until it was decided in Wood v. U. S., 16 Pet. [41 U. S.] 342.
The opinion of the supreme court, delivered on the 7th March, 1842, resolved the doubt, if there ever was one, upon this subject The court said: “The second instruction of the court is, in effect, that if the invoices of the goods now in question, 'were fraudulently made, by a false valuation to evade or defraud the revenue, the fact that they had been entered, and the duties paid or secured at the custom-house at New York upon those invoices, was no bar to the present information. This instruction was certainly correct,
The case of Joseph Wrigley at first appeared to involve peculiar considerations. A ■widowed mother, two daughters, and three sons, in Saddleworth, were said to have delayed their support for about 20 years from doing journeywork in different branches of the woollen manufacture. The mother died in 1S36 or 1S37, and the sons, in partnership, continued the business in which they had been engaged in her lifetime — which was making cassimeres, — by doing a part of the work themselves, and getting the other parts of the manufacture performed by artisans in the neighborhood, as they could afford to pay for it — some of the members of the family working in the mean time, at intervals, for neighboring manufacturers. In January, 1S39, the importer of the goods in question came to the United States, when it was arranged that the former establishment of the family should be broken up. Of the daughters, one married, and the other left the family residence. The other two brothers were to remain in partnership at the homestead, with a portion of the mother’s furniture and effects, for which they were to be charged, and the rest were to be sold at auction. The brother who came to America left behind him his share of these effects, and a sum of money, in the hands of the two other brothers, the whole amount of which, except a small invoice of shawls, which he took out with him, was to be worked up into cas-simeres, which he was to receive at the cost of manufacture, in payment of what should be found due to him upon the settlement of the concern, which was to take place after his departure. Accordingly, in April, 1SB9, an invoice was made out of 17 pieces of black eassimere, as sold by one of the brothers in England to the brother in this country, by whom they were entered, and passed through the New York custom-house, on the 28th May following, as purchased goods. Of these 17 pieces, 14, seized in August, 1839. at Davis, Broadbcnt & Co’s., where he had placed them for sale, formed the subject of controversy. In October. 1839. the two brothers who had remained in Saddleworth. dissolved their partnership. One of them
On following rapidly with the questions, which naturally arose upon this observation, it appeared that for many years, in the lifetime of the mother, and subsequently, the family bad been in the habit of occasionally sending goods to this country, some or all of which had been sold here for them, as he said, by an importer of Saddleworth, residing in New York, who had accounted to them for the proceeds. The whole theory of the supposed accidental character of the importation in question was thus destroyed,, and the attempted explanation of the manner in which such low prices had been inserted in it, and of the reason for giving the transaction the form of a purchase, entirely failed. The court left to the jury the question whether they believed the invoice to have been made out at low prices with intent to evade the payment of a part of the duties to which the goods were justly liable, saying that if it was really a sale as between the parties, the small amount of the price was otherwise no cause of forfeiture. Under this instruction the verdict was for the United States. This case is since divested of all doubt, and therefore of all sympathy, by the ascertainment of what might have been anticipated from the evidence on the trial, viz.: that the same party in New York who was testified by the witness to have previously received consignments for account of this family, had in 1838 entered as sold by them to him at least two previous invoices: of packages marked W 96 and 97, and it is-highly probable that other importations of the series with this mark could be traced on a further examination in the customhouse at New York.
Another case, in which evidence of the actual purchase and price of the goods was offered, was that in which James Mallalieu was the claimant. The goods imported by him were invoiced as sold to him by different persons, four of whom were examined under a commission. Two were his brothers, the other two his brothers-in-law. Each of them testified that the respective goods were actually sold to him at the prices mentioned in the respective invoices, nine in number, which bore date at different periods in the winter and spring of 183S, ’39, and that the witness had no interest, direct or indirect, in the goods or their proceeds, and had received the prices mentioned in the respective invoices, but had not received, and was not to receive anything more. In the interrogatories in chief, each -witness was asked to “state under what contract or order from the said claimant, if any, or under what arrangement, if any, the said bale or bales of goods were sold or pm-chased,” and to “state the manner of the sale or purchase as aforesaid of such goods, and whether for cash or on credit,” &c.; and as to any verbal contract, order or arrangement, to which he might testify, was in a cross-interrogatory requested to state -whether he was in person present when it was made, &e. In answer to these interrogatories, each witness testified that the goods mentioned in the respective invoices were sold upon credit, under a verbal contract made by the claimant with each of
In all the cases, except two, it was an undisputed fact, that the goods in controversy were still in the hands of the original importers, or their immediate agents. But two parties, namely, James Lynd, Jr. & Co.,' and Daniel Deal & Co., pleaded in bar of the in-formations, that they were purchasers of the goods claimed by them, respectively, for a valuable consideration, without any notice of the frauds of the importers. This plea was in neither case tenable in point of fact, as will appear presently. But, if true in fact, it could not avail the defendants in point of law. The plea in each case was, therefore, demurred to, and the demurrers were sustained by the court, on the authority of Wood v. U. S., 10 Pet. [41 U. S.] S42, and previous decisions of the supreme court. Wood v. U. S. arose upon an information similar to the informations in question. On page 302, the court say that the 60th section •of the act of 1709 [supra] “supposes an entry at the custom-house upon false invoices, with intent to evade the payment of the proper duties, and the forfeiture attaches immediately upon such an entry upon such invoices with such intent” And again, on page 305, that, under this section, “the forfeiture immediately attaches to every entry of goods falsely and fraudulently invoiced.” In Gelston v. Hoyt, 3 Wheat. [16 U. S.] 311, upon a question under the act of 1794 [1 Stat. 383], imposing a forfeiture of a vessel fitted out and armed, to be employed in the service of a foreign state hostilely against another foreign state, it was held to be the doctrine of the English courts, which had been previously recognised and enforced by the supreme court of the United States, that the forfeiture attached at the moment of the commission of the offence, and that the title of the party incurring it was completely divested from that moment. The previous de. cisión referred to was U. S. v. Certain Bags of Coffee, 8 Crunch [12 U. S.] 398, where it was decided that the forfeiture of goods for the violation of the non-intercourse act of 1809 [2 Stat 529] took place upon the commission of the offence, and avoided a subsequent sale to an innocent purchaser, although the duties had been paid, and the goods delivered under a formal permit. Thus the language of the court in 16 Pet. is traced back to a case in which the forfeiture was held to defeat the title of a purchaser. In delivering judgment on the demurrer, the court relied on these authorities, and cited English decisions to the same effect But neither of the two eases in which this point arose, were instances of purchases, in the proper sense of the term. To constitute a party a purchaser, entitled as such to protec. tion against what would be otherwise a better title, it is indispensable at law, and in equity, that the price or consideration should have been paid away and absolutely parted with before notice of the adverse claim. In one of the cases, James Dynd, Jr. & Co'., the alleged purchasers, had bought the goods from William Blackburne & Co., on terms of credit which, as to about two-thirds in value of the sales, had not expired when the seizure was made, and, shortly before the seiz. ure, had failed in business, indebted to William Blackburne & Co., the alleged sellers, in an amount greatly exceeding the price of the whole of the goods. The real parties in. terested were, therefore, William Blackburne & Co. and John Taylor, Jr., the importers, whose fraudulent practices in reference to the revenue, were not denied or deniable. The other case was that in which Daniel Deal & Co., the claimants, alleged themselves to have been purchasers of the same John Taylor, Jr., and William Blackburne & Co. Here, however, no part of the price had been paid for any of the goods.