The payment of money to a customs official to avoid an onerous
penalty, though the imposition of that penalty may have been
illegal, is sufficient to make the payment an involuntary one.
The compulsory insertion by an importer of additional charges
upon the entry and invoice, which necessarily involve the payment
of increased duties, makes the payment of those duties
involuntary.
The general rule that the valuation of merchandise made by a
customs appraiser is conclusive if no appeal be taken therefrom to
merchant appraisers, is subject to the qualification that if the
appraiser proceed upon a wrong principle, contrary to law, and this
be made to appear, his appraisement may be impeached.
A statute which requires the dutiable value of imported goods to
be reached by adding to the market value of the goods the cost of
transportation, and other defined charges, does not authorize an
appraiser to reach the
Page 132 U. S. 18
amount of such cost and charges by an estimate or percentage,
and an importer who pays duties on an importation thus calculated
may, in an action brought to recover such as were illegally
exacted, show wherein such estimate or percentage was illegal and
excessive.
This was an action to recover duties alleged to have been
illegally exacted. Verdict for the plaintiff, and judgment on the
verdict. The defendant sued out this writ of error. The case is
stated in the opinion.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
This is an action to recover for an alleged overcharge of duties
on imports. The goods imported were bananas brought from Aspinwall.
The duty was ten percent
ad valorem. The plaintiffs
offered evidence tending to show the market value of the bananas at
the port of shipment, which was claimed to be only fifty cents
apiece for the large bunches, and twenty-five cents apiece for the
small bunches. The invoices received with the cargo exhibited this
as the true market value, and added certain charges for labor and
consul fees. The appraisers required the plaintiffs to add fifty
percent of these amounts as transportation charges for bringing the
bananas into Aspinwall, and also certain shipping charges and
commissions. The plaintiffs protested against this as an unjust
addition, but whenever it was omitted, the charge was added by the
appraiser, and a penalty of twenty percent of the whole duty was
imposed and exacted, and the officers declared that this would be
done whenever the addition should be omitted. To avoid this penalty
and to get immediate possession of their goods, which are of a
perishable nature, the plaintiffs made the addition required and
paid the increased duties that resulted, but always under protest,
as before stated.
Page 132 U. S. 19
The form of the entries and invoices, with the additions, was as
follows, the additions being in italics:
"
Entry:"
Merchandise imported by Frank Brothers Company in the
steamship Alsa, whereof Seymour is master, from Aspinwall
to New York, Feb. 23, 1882. Marks, F. B.
"Two bins of bananas, containing 4,132 large bunches at sixty
cents, pesos, 2,479.20, 3,463 small bunches at thirty cents,
1,038.90 pesos."
"Charges, two hundred and thirty-nine pesos."
"
Shipping charges added, as required by the appraiser, to
make five cents Colombian currency per bunch, 140.38
pesos."
"
Transportation charges added, as required by appraiser, on
4, 132 large bunches at 25 cents, $1,033, and 3,463 small bunches
at 12 1/2 cents, $432.87."
"
Invoice:"
"Invoice of merchandise shipped by the Frank Bros. Co. on board
the Alsa, Sansome, master, bound for New York, and consigned to
Frank Bros. Co.; Colon, Feb. 11, 1882, 2 bins, containing --"
4,202 bunches bananas at 60 . . . . . 2,521.20 pesos
3,564 bunches bananas at 30 . . . . . 1,069.20 "
Charges for labor . . . . . . . . . . 239.37 "
Consul fee. . . . . . . . . . . . . . 3. "
--------------
3,832.77 "
"
The Frank Bros. Company:"
4,132 large bunches at 60 . . . . . . 3,479.20 "
3,463 small bunches at 30 . . . . . . 1,038.90 "
Charges . . . . . . . . . . . . . . . 239.37 "
Shipping charges added, as
required by the appraiser,
to make 5 cents Colombia
currency per bunch. . . . . . . . 140.38 "
---------------
3,897.85 "
---------------
Page 132 U. S. 20
Reduced to U.S. currency. . . . . . . $3,207.93
Transportation charges added,
as required by the appraiser,
on 4, 132 large bunches at 25
cents . . . . . . . . . . . . . . 1,033.
3,463 small bunches at 12 1/2 cents 432.87
---------------
$4,673.80
Commission, 2 1/2 percent. . . . . . . 116.84
---------------
$4,790.64
The appraiser's return endorsed thereon was as follows: "Value
correct, with importer's additions."
It was contended by the counsel for the government at the trial,
and is contended here, that the payment of the duties complained of
was a voluntary payment inasmuch as the plaintiffs themselves made
the additions to the entries and invoices, and that therefore they
cannot recover back any part of the money so paid, and they
requested the court below to instruct the jury to render a verdict
for the defendant. This the court refused to do, and left it to the
jury to decide, upon the evidence, whether the making of the
additions was a voluntary act on the part of the plaintiffs, or
done under constraint, in view of the penalty sure to be imposed in
case it was not done. On this point, the judge, in his charge to
the jury, speaking of the entry and the additions made by the
plaintiffs or their agent, said:
"He says he put them on there because he was compelled to. If
that is so, he ought not to be estopped from recovering, and here
is a question for you on that subject, and you will decide it in
this way: if those statements and figures were put on there because
he thought that was the best way, on the whole; if, exercising his
own judgment freely, he thought that it was the best way to get
along with this to put it on there are let it go -- he can't take
it back; . . . he can't recover anything back. The verdict will
have to be for the defendant anyway if that is so, because it was
his own act in putting it on there. The collector assessed the duty
just as he made it, and he can't complain. But . . . if
Page 132 U. S. 21
he was required to do it, or given to understand by some officer
in the collector's department that it would be the worse for him
seriously if he didn't -- as for instance if the appraiser told him
if he didn't put those on there, the collector's office would, that
the appraiser would, and that he would be exposed to a penalty that
would be assessed against him; if he was given to understand by the
collector's department, or some officer of it, that, if he didn't
put these figures on there, they should, and make it the worse for
him because he didn't, and he would thereby be exposed to a penalty
of a larger duty which he would have to pay for not doing it, and
he was in that way, for the sake of saving himself from the penalty
which they would put upon him beyond what would otherwise be
chargeable, induced to put them on, then he is not bound by it. . .
. If you find he did not do it freely, then you can look further
and see if there was anything put on there that ought not to be. If
he was compelled to do it, it ought not to go on, and if he was,
the plaintiffs are entitled to recover. And if you decide he is
bound by putting that on, that will end the case; you must give a
verdict for the defendant. If not, you may look and see if he was
compelled to pay more than he ought, if he was compelled to pay
transportation charges more than he ought to, and, if so, find a
verdict for the right amount. If they were compelled to pay labor
charges more than they ought to pay, find the verdict for the
plaintiffs for the right amount of that. If they didn't pay any
more than they ought to, transportation or labor charges, then the
verdict is for the defendant."
Under this charge, of course, the jury, in finding for the
plaintiffs, must have found that they acted under constraint --
under moral duress -- in making the additions for transportation
and labor. We do not see how the verdict can be set aside for error
in the charge on this point unless the law be that virtual or moral
duress is insufficient to prevent a payment made under its
influence from being voluntary. This point was discussed in
Maxwell v.
Griswold, 10 How. 242,
51 U. S. 256,
and in
Swift Co. v. United States, 111 U. S.
22,
111 U. S. 28. In
Maxwell v. Griswold, an appraisement was erroneously
Page 132 U. S. 22
made as to the point of time of the valuation, and the importer
paid the consequent excess of duties. The government contended that
this was voluntary. But this Court said:
"This addition and consequent payment of the higher duties were
so far from voluntary in him that he accompanied them with
remonstrances against being thus coerced to do the act in order to
escape a greater evil, and accompanied the payment with a protest
against the legality of the course pursued toward him."
"Now it can hardly be meant in this class of cases that to make
a payment involuntary, it should be by actual violence or any
physical duress. It suffices if the payment is caused on the one
part by an illegal demand, and made, on the other part, reluctantly
and in consequence of that illegality, and without being able to
regain possession of his property except by submitting to the
payment."
"All these requisites existed here. We have already decided that
the demand for such an increased appraisal was illegal. The
appraisement itself as made was illegal. The raising of the invoice
was thus caused by these illegalities in order to escape a greater
burden in the penalty. The payment of the increased duties thus
caused was wrongfully imposed on the importer, and was submitted to
merely as a choice of evils."
"He was unwilling to pay either the excess of duties or the
penalty, and must be considered therefore as forced into one or the
other by the collector
colore officii through the invalid
and illegal course pursued in having the appraisal made of the
value at the wrong period. . . ."
"The money was thus obtained by a moral duress not justified by
law, and which was not submitted to by the importer except to
regain possession of his property withheld from him on grounds
manifestly wrong. Indeed it seems sufficient to sustain the action,
whether under the Act of February 26, 1845 [Rev.Stat. § 3011], or
under principles of the common law, if the duties exacted were not
legal, and were demanded, and were paid under protest."
In that case, it is true, the fact that the importer was not
Page 132 U. S. 23
able to get possession of his goods without making the payment
complained of was referred to by the court as an important
circumstance; but it was not stated to be an indispensable
circumstance. The ultimate fact, of which that was an ingredient in
the particular case, was the moral duress not justified by law.
When such duress is exerted under circumstances sufficient to
influence the apprehensions and conduct of a prudent businessman,
payment of money wrongfully induced thereby ought not to be
regarded as voluntary. But the circumstances of the case are always
to be taken into consideration. When the duress has been exerted by
one clothed with official authority or exercising a public
employment, less evidence of compulsion or pressure is required, as
where an officer exacts illegal fees or a common carrier excessive
charges. But the principle is applicable in all cases according to
the nature and exigency of each. In
Swift Co. v. United
States, 111 U. S. 22, the
plaintiffs, who were manufacturers of matches and furnished their
own dies for the stamps used by them, and were thereby entitled to
a commission of ten percent on the price of such stamps, accepted
for a long period their commissions in stamps (which of course were
worth to them only ninety cents to the dollar), and they did this
because the Treasury Department would pay in no other manner. We
held that the apprehension of being stopped in their business by
noncompliance with the Treasury regulation was a sufficient moral
duress to make their payments involuntary. Mr. Justice Matthews,
delivering the opinion of the Court, said:
"The question is whether the receipts, agreements, accounts, and
settlements made in pursuance of that demand of necessity were
voluntary in such sense as to preclude the appellant from
subsequently insisting on its statutory right. We cannot hesitate
to answer that question in the negative. The parties were not on
equal terms. The appellant had no choice. The only alternative was
to submit to an illegal exaction or discontinue its business. It
was in the power of the officers of the law, and could only do as
they required. Money paid or other value parted with under such
pressure has never been regarded as a voluntary act within the
meaning
Page 132 U. S. 24
of the maxim
volenti non fit injuria. The cases
referred to by Justice Matthews abundantly support the position
taken, and need not be repeated here. In our judgment, the payment
of money to an official, as in the present case, to avoid an
onerous penalty, though the imposition of that penalty might have
been illegal, was sufficient to make the payment an involuntary
one. It is true that the thing done under compulsion in this case
was the insertion of the additional charges upon the entries and
invoices, but that necessarily involved the payment of the
increased duties caused thereby, and in effect amounts to the same
thing as an involuntary payment."
But it is contended that the act of the appraiser in making or
requiring to be made the additional charges for transportation and
labor was final and conclusive, and cannot be made the subject of
inquiry. It is undoubtedly the general rule that the valuation of
merchandise made by the appraiser, unappealed from to merchant
appraisers, is conclusive, but while this is the general rule, it
is subject to the qualification that if the appraiser proceed upon
a wrong principle, contrary to law, and this be made to appear, his
appraisement is not unimpeachable. This qualification applies to
the acts of many other officials charged with duties of a similar
character, such as assessors of the value of property for taxation,
commissioners for appraising lands taken for improvements, or
damages sustained by owners of land, and the like. What is
complained of in the present case is that the plaintiffs were
required to add to the market value of the goods at the places from
which they were exported transportation charges and expenses for
labor which were never incurred. If that complaint is well founded,
such additions cannot be maintained, for while the appraisers are
not limited to the actual cost of articles exported, but may place
upon them their market value at the places from which they were
imported, and their estimate of that market value is conclusive,
they could not, while the law required the addition to that market
value of additional charges of transportation, etc., exercise any
discretion as to those charges, but were confined to the actual
cost thereof, when
Page 132 U. S. 25
such cost could be shown. It was "cost," not "value," which was
required in that part of the estimate of dutiable values. The
sections of the Revised Statutes which regulated this matter in
1881 and 1882, when the transactions involved in the present suit
took place, were §§ 2906 and 2907; the latter of which was repealed
by the Act of March 3, 1883, 22 Stat. 523.
Section 2906, which is still in force, declares that
"When an
ad valorem rate of duty is imposed on any
imported merchandise, or when the duty imposed shall be regulated
by, or directed to be estimated or based upon, the value of the
square yard, or of any specified quantity or parcel of such
merchandise, the collector within whose district the same shall be
imported or entered shall cause the actual market value, or
wholesale price thereof at the period of the exportation
to the United States, in the principal markets of the country from
which the same has been imported, to be appraised, and such
appraised value shall be considered the value upon which duty shall
be assessed."
Section 2907 declared that
"In determining the dutiable value of merchandise, there shall
be added to the cost, or to the actual wholesale price or general
market value at the time of exportation, in the principal markets
of the country from whence the same has been imported into the
United States, the cost of transportation, shipment, and
transshipment, with all the expenses included, from the place of
growth, production, or manufacture, whether by land or water, to
the vessel in which shipment is made to the United States; the
value of the sack, box, or covering, of any kind, in which such
merchandise is contained; commission at the usual rates, but in no
case less than two and one-half percentum, and brokerage, export
duty, and
all other actual or usual charges for putting
up,
preparing, and packing for transportation or shipment.
All charges of a general character incurred in the purchase of a
general invoice shall be distributed
pro rata among all
parts of such invoice, and every part thereof charged with duties,
based on value, shall be advanced according to its proportion, and
all wines or other articles paying specific duty by grades
Page 132 U. S. 26
shall be graded and pay duty according to the actual value so
determined."
Now while under the first of these sections (2906) the estimate
of the market value of the goods, made by the appraiser, is in
general unimpeachable, it is plain that the items to be added to
that value under § 2907 did not depend upon estimation, but upon
the actual truth of the case -- namely, the cost of transportation,
shipment, etc., to the vessel in which shipment is made. This cost
may be something; it may be nothing. In the present case, the
appraiser required fifty percent of the market value of the goods
to be added as cost of transportation. The plaintiffs disputed this
item. Evidence was gone into on the subject, and the matter was
left fairly to the jury. The only question for us to determine is
whether the matter was open to evidence and could lawfully be left
to the consideration of the jury, or whether the determination of
the appraiser on this subject was conclusive. We think with the
court below that this was a question open for examination. In
Oberteuffer v. Robertson, 116 U.
S. 499, we decided that since the act of 1883, repealing
§ 2907 of the Revised Statutes, it is not lawful for the appraiser
to add to the market price of the goods the cost or value of the
cartons or boxes in which they are packed, either by themselves or
as part of the market value. In the principle involved, that case
is similar to the present. If, since the repeal of § 2907, the
appraiser cannot lawfully add the cost of packing boxes to the
appraised value of the goods, before such repeal he could not
lawfully add more than that cost, and if he did it was a matter for
examination and correction. To the same effect is the case of
Badger v. Cusimano, 130 U. S. 39, where
the collector caused an appraisement to be made in which a portion
of the charges for packing and transportation of the goods imported
was deducted from that category and added to the invoice value of
the goods themselves. We held that in the absence of fraud on the
part of the importer, this could not lawfully be done, and that
such an appraisement is not lawful or conclusive.
We are satisfied not only on the authority of these cases,
Page 132 U. S. 27
but from the reason of the thing, and the proper application of
the principles of the law, that the course pursued in the court
below was free from error.
These are all the questions which it is deemed important to
discuss, and the result is that
The judgment must be affirmed, and it is so
ordered.