United States v. Auffmordt, 122 U.S. 197 (1887)

U.S. Supreme Court

United States v. Auffmordt, 122 U.S. 197 (1887) United States v. Auffmordt

Argued April 26, 1887

Decided May 27, 1887

122 U.S. 197

ERROR TO THE CIRCUIT COURT OF THE UNITED

STATES FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

Under § 2839 of the Revised Statutes, there can be no recovery by the United States for a forfeiture of the value of imported merchandise, the property of its foreign manufacturer, against the person to whom he had consigned it for sale on commission, and who entered it as such consignee, the forfeiture being claimed on the ground that the merchandise was entered at invoice prices lower than its actual market value at the time and place of exportation.

Section 2839 applies only to purchased goods.

Page 122 U. S. 198

Section 2839, so far as it provides for a forfeiture of the value of merchandise, is repealed by the provisions of § 12 of the Act of June 22, 1874, c. 391, 18 Stat. 188.

The amendment made to § 2864 by the Act of February 18, 1875, c. 80, 18 Stat. 319, by inserting the words "or the value thereof" did not have the effect of enacting that the value of merchandise is to be forfeited under § 2864 notwithstanding the Act of June 22, 1874, c. 391. The object and effect of the amendment were only to correct an error in the text of § 2864 and to make it read as it read when in force on the 1st of December, 1873, as part of § 1 of the Act of March 3, 1863, c. 76, 12 Stat. 738.

This is an action brought by the United States in the District Court of the United States for the Southern District of New York against Clement A. Auffmordt, John F. Degener, William Degener, and Adolph William Von Kessler, composing the firm of C. A. Auffmordt & Co., to recover the sum of $321,519.29, with interest. The complaint alleges violations by the defendants of statutes of the United States in respect to entries of imported merchandise made by the defendants in 1879, 1880, 1881, and 1882, the value of such merchandise being the above-named sum, and claims that, by reason of the acts of the defendants alleged in the complaint, the defendants have forfeited such value to the United States. The defendants put in an answer containing a general denial, and the case was tried in the district court before a jury.

After the case was opened to the jury on the part of the United States and before any testimony was offered, the defendants moved upon such opening that the court direct a verdict for the defendants on the ground that there was no statute of the United States whereby the value of the merchandise could be recovered by reason of the acts alleged to have been committed by the defendants as consignees of the goods, which was the capacity in which they received and entered the goods, the goods being the property of the manufacturers of them in Switzerland, and being consigned to the defendants for sale on commission. The facts sought to be proved against the defendants were that they, knowingly and with intent to defraud the revenue, entered the goods at invoice

Page 122 U. S. 199

prices lower than their actual market value at the time and place of exportation. The court ruled that there was no existing statute of the United States under which the plaintiff could recover upon any possible proof, and that a verdict must be directed for the defendants. 19 F. 893. The plaintiffs excepted to this ruling.

Page 122 U. S. 202

MR. JUSTICE BLATCHFORD delivered the opinion of the Court.

The two sections of the Revised Statutes upon which the United States base their right of recovery in the case are §§ 2839 and 2864. Section 2839 was originally enacted as a part of § 66 of the Act of March 2, 1799, c. 22, 1 Stat. 677, and reads as follows:

"SEC. 2839. If any merchandise of which entry has been made in the office of a collector is not invoiced according to the actual cost thereof at the place of exportation,

Page 122 U. S. 203

with design to evade payment of duty, all such merchandise, or the value thereof, to be recovered of the person making entry shall be forfeited."

Section 2864 was originally enacted as a part of § 1 of the Act of March 3, 1863, c. 76, 12 Stat. 738, and reads as follows:

"SEC. 2864. If any owner, consignee, or agent of any merchandise shall knowingly make or attempt to make an entry thereof by means of any false invoice or false certificate of a consul, vice-consul, or commercial agent, or of any invoice which does not contain a true statement of all the particulars hereinbefore required, or by means of any other false or fraudulent document or paper, or of any other false or fraudulent practice or appliance whatsoever, such merchandise, or the value thereof, shall be forfeited."

The bill of exceptions contains the following statement as to the proceedings after the above ruling of the court:

The plaintiffs asked leave to prove successively that items contained in the invoices mentioned in the complaint and bill of particulars were undervalued within the meaning of the last clause of after the above ruling of the court, which reads as follows:

"Anything contained in any act which provides for the forfeiture or confiscation of an entire invoice in consequence of any item or items contained in the same being undervalued, be, and the same is hereby, repealed;"

that the defendants, being consignees of the merchandise mentioned in the complaint, knowingly made entries thereof by means of false invoices; that the defendants, being agents of the merchandise mentioned in the complaint, knowingly made entry thereof by means of false invoices; that the defendants, being consignees of the merchandise mentioned in the complaint, knowingly made entry thereof by means of invoices which did not contain a true statement of the particulars required in that part of the Act of March 3, 1863, preceding the

Page 122 U. S. 204

provision of the act which was reenacted as § 2864 of the Revised Statutes; that the defendants, being agents of the merchandise mentioned in the complaint, knowingly made entry thereof by means of invoices which did not contain a true statement of the particulars required in that part of the Act of March 3, 1863, preceding the provision of the act which was reenacted as § 2864 of the Revised Statutes; that the defendants, being the consignees of the merchandise mentioned in the complaint, knowingly made entry thereof by means of false and fraudulent documents and papers, and that the defendants, being the agents of the merchandise mentioned in the complaint, knowingly made entry thereof by means of false and fraudulent documents and papers. These requests being successively denied, the plaintiffs excepted to each refusal. The jury, under direction of the court, found a verdict for the defendants, to which direction the plaintiffs excepted. After a judgment for the defendants, the plaintiffs took the case to the circuit court by a writ of error, where the judgment was affirmed, and they have brought the case to this Court by a writ of error.

The main contentions on the part of the defendants are that section 2839 relates only to purchased goods, and not to consigned goods, and that section 2864 is superseded by § 12 of the Act of June 22, 1874, c. 391, 18 Stat. 188. These contentions were sustained by the district court in its opinion.

Section 2839 provides for the forfeiture of merchandise, or the value thereof, "to be recovered of the person making entry," where the merchandise is "not invoiced according to the actual cost thereof at the place of exportation, with design to evade payment of duty." This section, originally enacted in 1799, is applicable only to goods which are required to be invoiced according to their actual cost at the place of exportation. Alfonso v. United States, 2 Story 421, 429, 432. By § 2841 of the Revised Statutes, originally § 4 of the Act of March 1, 1823, c. 21, 3 Stat. 730, 732, forms of oaths on the entry of goods are prescribed, one for the "consignee, importer, or agent," one for the "owner in cases where merchandise has been actually purchased," and a third for the "manufacturer or owner in cases where merchandise has not been actually purchased." In the first form of oath, the oath is that the invoice "exhibits the actual cost (if purchased) or fair market value (if otherwise obtained)" at the time and place of procurement. In the second form of oath, the oath is that the oath contains "a just and faithful account of the actual cost."

Page 122 U. S. 205

In the third form of oath, the oath is that the goods were not actually bought by the importer or consignee or by his agent in the ordinary mode of bargain and sale, but that nevertheless the invoice "contains a just and faithful valuation of the same at their fair market value" at the place of procurement.

Section 2845, originally § 8 of the Act of March 1, 1823, c. 21, 3 Stat. 733, provides that

"No merchandise subject to ad valorem duty, belonging to a person not residing at the time in the United States, who has not acquired the same in the ordinary mode of bargain and sale, or belonging to the manufacturer, in whole or in part, of the same, shall be admitted to entry unless the invoice thereof is verified by the oath of the owner, or of one of the owners, . . . certifying that the invoice contains a true and faithful account of the merchandise at its fair market value at the time and place when and where the same was procured or manufactured, as the case may be."

Section 2854, originally a part of § 1 of the Act of March 3, 1863, c. 76. 12 Stat. 737, provides as follows:

"All such invoices [that is, all invoices of merchandise imported from any foreign country] shall at or before the shipment of the merchandise be produced to the consul, vice-consul, or commercial agent of the United States nearest the place of shipment, for the use of the United States, and shall have endorsed thereon, when so produced, a declaration signed by the purchaser, manufacturer, owner, or agent setting forth that the invoice is in all respects true; that it contains, if the merchandise mentioned therein is subject to ad valorem duty, and was obtained by purchase, a true and full statement of the time when and the place where the same was purchased, and the actual cost thereof, and of all charges thereon, and that no discounts, bounties or drawbacks are contained in the invoice but such as have actually been allowed thereon, and, when obtained in any other manner than by purchase, the actual market value thereof at the time and place when and where the same was procured or manufactured, and, if subject to specific duty, the actual quantity thereof, and that no different invoice of the merchandise mentioned in the invoice so produced has been or will be furnished to anyone. If the

Page 122 U. S. 206

merchandise was actually purchased, the declaration shall also contain a statement that the currency in which such invoice is made out is the currency which was actually paid for the merchandise by the purchaser."

It is quite clear from the above provisions that where imported goods are the property of their manufacturer, the invoice need only state the fair market value of the goods at the place of manufacture, and it need not state "the actual cost thereof at the place of exportation." Therefore an invoice of goods which belong to their manufacturer is not, nor is an entry of such goods, within the purview of § 2839 so as to make the person entering them with design to evade payment of duty liable to a forfeiture of their value.

The most serious question arises in respect to § 2864, which is alleged to have been superseded by § 12 of the Act of June 22, 1874. The two statutes are here placed one below the other:

"Section 2864, Revised Statutes, 2d ed."

"If any owner, consignee, or agent of any merchandise shall knowingly make or attempt to make an entry thereof by means of any false invoice, or false certificate of a consul, vice-consul, or commercial agent, or of any invoice which does not contain a true statement of all the particulars hereinbefore required, or by means of any other false or fraudulent document or paper, or of any other false or fraudulent practice or appliance whatsoever, such merchandise, or the value thereof, shall be forfeited."

"Section 12 of the Act. of June 22, 1874."

"That any owner, importer, consignee, agent, or other person who shall, with intent to defraud the revenue, make or attempt to make any entry of imported merchandise by means of any fraudulent or false invoice, affidavit, letter, or paper, or by means of any false statement, written or verbal, or who shall be guilty of any willful act or omission by means whereof the United States shall be deprived of the lawful duties, or any portion thereof, accruing upon the merchandise, or any portion thereof, embraced or referred to in

Page 122 U. S. 207

such invoice, affidavit, letter, paper, or statement, or affected by such act or omission, shall, for each offense, be fined in any sum not exceeding five thousand dollars nor less than fifty dollars, or be imprisoned for any time not exceeding two years, or both; and, in addition to such fine, such merchandise shall be forfeited; which forfeiture shall only apply to the whole of the merchandise in the case or package containing the particular article or articles of merchandise to which said fraud or alleged fraud relates, and anything contained in any act which provides for the forfeiture or confiscation of an entire invoice in consequence of any item or items contained in the same being undervalued, be, and the same is hereby, repealed."

Assuming that the language of § 2864, declaring that the merchandise or its value shall be forfeited, would authorize a suit in personam, without a seizure of the merchandise, and also assuming that the suit for a forfeiture of the value may be brought against the owner, consignee, or agent, the question for determination is whether the provision in § 2864 for a forfeiture of the value is superseded by the enactment of § 12 of the Act of June 22, 1874, which provides only for a forfeiture of the merchandise, and does not provide for any forfeiture of its value.

Section 13 of the Act of June 22, 1874, provides that any merchandise entered by any person violating § 12, but not

Page 122 U. S. 208

subject to forfeiture under that section, may, while owned by him or while in his possession, "to double the amount claimed, be taken by the collector, and held as security for the payment of any fine or fines incurred as aforesaid." Section 14 provides that the omission, without intent thereby to defraud the revenue, to add, on entry, to the invoice, certain specified charges shall not be a cause of forfeiture of the goods, "or of the value thereof." Section 16 provides that in suits to enforce the forfeiture of goods, "or to recover the value thereof," no fine, penalty, or forfeiture shall be imposed unless the jury shall find that the alleged acts were done with an actual intention to defraud the United States. Section 26 repeals all acts and parts of acts inconsistent with the provisions of that act. There is not in the act any other repealing provision except that contained in the concluding words of § 12, above quoted.

The Act of June 22, 1874, was passed on the same day with the Revised Statutes, § 5595 of which declares that the Revised Statutes embrace the general and permanent statutes of the United States which were in force on the first day of December, 1873. Section 5601 declares that the enactment of the revision is not to affect or repeal any act of Congress passed since the first day of December, 1873; that all acts passed since that date are to have full effect as if passed after the enactment of the revision, and that, so far as such acts vary from or conflict with any provision contained in the revision, they are to have effect as subsequent statutes, and as repealing any portion of the revision inconsistent therewith. The Act of June 22, 1874, is therefore a subsequent statute to the Revised Statutes, and repeals any portion thereof which is inconsistent with such subsequent statute.

On a full review of the above-recited provisions of the Act of June 22, 1874, and of its other provisions, it is apparent that so far at least as the act subject to the penalties denounced in § 2864 are concerned, they are entirely covered by the provisions of § 12 of the Act of June 22, 1874. There is no act denounced by § 2864 that is not embraced, both as to person and character of act, by the provisions of § 12. The latter section adds, as a punishment for the offense, fine or

Page 122 U. S. 209

imprisonment, or both, and a forfeiture of the merchandise in addition to the fine. It leaves out a forfeiture of the value of the merchandise, and forfeiture of such value is inconsistent with the terms of § 12, and is therefore repealed by it. The absolute forfeiture of the merchandise provided for by § 12 is inconsistent also with the alternative forfeiture of the merchandise or its value provided for by § 2864. The provisions of the two statutes cannot stand together. Norris v. Crocker, 13 How. 429, 54 U. S. 438; United States v. Tynen, 11 Wall. 88, 78 U. S. 92; Murdock v. City of Memphis, 20 Wall. 590, 87 U. S. 617; United States v. Claflin, 97 U. S. 546, 97 U. S. 552-553; King v. Cornell, 106 U. S. 395, 106 U. S. 396; Pana v. Bowler, 107 U. S. 529, 107 U. S. 538.

The considerations covered by the foregoing views are so well discussed and enforced in the opinion of the district judge in this case that it is not deemed necessary further to enlarge upon them.

Section 2864 of the Revised Statutes, when originally enacted on the 22d of June, 1874, did not contain the words "or the value thereof," after the words "such merchandise." By the Act of February 18, 1875, c. 80, 18 Stat. 319, entitled "An act to correct errors and to supply omissions in the Revised Statutes of the United States," and which act states

"That, for the purpose of correcting errors and supplying omissions in the act entitled 'An act to revise and consolidate the statutes of the United States in force on the first day of December, Anno Domini one thousand eight hundred and seventy-three,' so as to make the same truly express such laws, the following amendments are hereby made therein,"

it is provided as follows:

"Section two thousand eight hundred and sixty-four is amended by inserting in the last line, after the word 'merchandise,' the words 'or the value thereof.'"

Section two of the act directs the Secretary of State, "if practicable, to cause this act to be printed and bound in the volume of the Revised Statutes of the United States."

It is contended for the United States that this amendment to § 2864, made by the Act of February 18, 1875, can be reasonably accounted for only upon the theory that at the date it was made, which was after the passage of the Act of June

Page 122 U. S. 210

22, 1874, c. 391, Congress regarded § 2864, as thus amended, as a valid existing law, particularly in respect to the amendment, and intended to declare that the value of the merchandise should be forfeited under § 2864, notwithstanding the passage of the Act of June 22, 1874 c. 391. But we are of opinion that the amendment made by the Act of February 18, 1875, did not have the effect contended for. Its sole object was to correct errors and supply omissions in the text of the Revised Statutes, as its title indicates, so as to make the same truly express the statutes in force on the first of December, 1873, and it made special reference to the printed volume of the Revised Statutes. It was in no respect new legislation nor a new law enacted to take effect from the date of its passage in such wise as to alter any enactment made since the passage of the Revised Statutes. The intention was to make § 2864 read as it ought to have read in the printed volume, in the shape in which it was in force on the first of December, 1873, as a part of § 1 of the Act of March 3, 1863, c. 76, 12 Stat. 738. It left the Act of June 22, 1874, c. 391, to have its full effect in respect to § 2864, in like manner as if the words "or the value thereof" had been contained in that section in the printed volume of the Revised Statutes. There was a law in force on December 1, 1873, and subsequently thereto, down to June 22, 1874, authorizing a forfeiture of the value of merchandise for the causes stated in § 2864, and the fact that forfeitures of such value might have been incurred during the intervening period between December 1, 1873, and June 22, 1874, was a sufficient reason for the correction made in § 2864.

The judgment of the circuit court is affirmed.