The local government of a conquered country being destroyed, the
conqueror may set up its own authority and make rules and
regulations for the conduct of temporary government, and to that
end may collect taxes and duties to support the military authority
and carry on operations incident to the occupation.
An occupation giving the right to the conqueror to exercise
governmental authority must be not only invasion, but also
possession of the enemy's country.
Messages and papers of the Presidents may be referred to by the
court as matters of public history.
The military occupation by the United States, during and after
the war with Spain, of the Philippine Islands, and the conduct of
the military government thereof, did not extend to places which
were not in actual possession of the United States until they were
reduced to such possession.
Executive orders regarding the collection of duties on goods
imported into the Philippine Islands during the military occupancy
thereof by the United States did not apply to any ports, such as
Cebu, during the time that they were not in the possession and
under the control of the United States.
The principles of international law were recognized by the
Executive in issuing orders concerning the government of the
Philippine Islands during military occupancy thereof, and this
Court will not construe an order directing payment of duties on
imports as relating to goods brought into ports in the possession
of the
de facto government of the insurgents.
Page 229 U. S. 417
The fact that the importer of goods brought into a port of the
Philippine Islands which had not been reduced to possession by the
United States but was still under control of a
de facto
government of the insurgents resided in Manila, which was under
military occupancy, did not make him subject to the executive order
of July 12, 1898, to pay duties on such goods.
A State of war, as to third persons, continued during and after
the war with Spain until the ratification of the treaty of
peace.
The Act of June 30, 1906, c. 3912, 34 Stat. 636, ratifying
executive acts imposing duties, does not apply to duties collected
at points which the United States had not occupied and which were
in possession of insurgent
de facto governments.
United States v. Heinszen, 206 U.
S. 370, distinguished.
Statutes relating to territory occupied by the military forces
of the government should be construed in the light of the purpose
of the government to act within the principles of international
law, the observance of which is essential to the peace and harmony
of nations.
Duties collected by the United States on cargoes imported at
ports in the Philippine Islands which had not been reduced to
possession by the United States but were in possession of the
de facto government of insurgents were an illegal and
unwarranted exaction covered neither by the order of the President
nor the ratifying acts of Congress.
45 Ct.Cl. 339 reversed.
The appellant, William Stewart MacLeod, surviving partner of
MacLeod & Company, brought suit in the Court of Claims to
recover from the United States the amount of certain duties paid by
the firm under protest upon a cargo of rice imported into the
island of Cebu at the city and port of the same name, in the
Philippine Islands, on January 29, 1899. The Court of Claims
decided in favor of the United States and rendered judgment
dismissing the petition. 45 Ct.Cl. 339. The case was then appealed
to this Court.
The Court of Claims made findings of fact, the substance of
which is as follows:
The claimant firm, comprised of the appellant (the survivor) and
two others, all citizens of Great Britain, had its head office at
Manila, and was engaged in doing a
Page 229 U. S. 418
general mercantile business there and elsewhere in the Orient.
On January 13, 1899. the claimants chartered an American steamship,
the
Venus, at Manila, and cleared her in ballast for
Saigon, China, whence she sailed for the port of Cebu with a cargo
of rice of January 22d carrying the usual consular papers. Prior to
that time, it had been the practice of the military authorities at
Manila to require importers, residing in that city and shipping
rice to points in the Philippines not actually occupied by the
United States forces, to present certified manifests covering their
cargoes, and to pay the duties thereon to the United States
military collector of customs at Manila, which practice was a
matter of common knowledge and discussion among the businessmen in
that city, but there is no other evidence charging the claimants
with knowledge of the fact.
The collector at Manilla was informed by competitors of the
claimants that the latter proposed to ship the cargo to Cebu
without paying duty at Manila, and that, as they complied with the
requirements of the United States authorities, they would be unable
to compete, under such unfair conditions, with the claimants, and
the collector received confirmation of such report from the consul
at Saigon on the twenty-first of January, and on the twenty-third
officially notified the claimants that a certified manifest must be
presented and duties paid on the cargo at the custom house at
Manila. The next day, one of the claimants presented in person to
the collector a letter stating that there had been no secret as to
the movement of the
Venus; that she had been openly
dispatched to Saigon to load a cargo of rice for the Philippines,
and that the captain had instructions to secure consular papers, if
ordered to Cebu, in case that port should be in the possession of
the United States authorities upon his arrival, and that they
presumed his papers were in order; that, according to their advice,
Cebu was in the hands of the republican government,
Page 229 U. S. 419
whose authorities would exact the payment of duties, the same in
amount as under the Manila tariff; that, in selling the cargo, they
had been required to guarantee that the duties would not exceed
those under the Manila tariff; that the claimants protested against
paying the duties twice, as it was through no fault of theirs that
the duties went to the Cebu authorities, and that, desiring to
respect the notification, they would, if instructed, request their
Cebu friends to protest against the payment in Cebu because,
according to the notification, the Cebu customs were under the
control of the United States. At the same time, the collector was
informed that a ship of the claimants was about to leave Manila for
Cebu, which should arrive in time to head off the
Venus
(which did in fact sail from Manila that day and arrived in Cebu
before the
Venus); that their intention in so advising the
collector was that he might take the steps he thought most
expedient, but that the claimants, unless otherwise ordered by the
United States, intended to carry out their contract with the
purchasers of the cargo, even if required to pay double duties.
Upon the arrival of the
Venus at Cebu January 29, 1899,
the native government demanded the payment of duties on the cargo,
and refused to allow its discharge until such payment was made. On
February 4, 1899, the duties were paid and the cargo delivered to
the purchasers. Upon the arrival of the
Venus thereafter
at Manila, with a cargo from Cebu, she was at first prevented from
discharging her cargo without paying the duties involved in this
case, but later was permitted to do so. Subsequently the collector
refused to receive further business from the claimants until the
duties in question were paid, and because of such refusal, and in
order to transact further business with the collector, the
claimants, involuntarily and under protest, paid the duties
demanded.
Page 229 U. S. 420
War was declared with Spain on April 25, 1898, and on May 1,
1898, the forces of the United States captured Manila Bay and
harbor. The following order of the President was thereafter
promulgated:
"Executive Mansion, July 12, 1898"
"By virtue of the authority vested in me as Commander in Chief
of the Army and Navy of the United States of America, I do hereby
order and direct that, upon the occupation and possession of any
ports and places in the Philippine Islands by the forces of the
United States, the following tariff of duties and taxes, to be
levied and collected as a military contribution, and regulations
for the administration thereof, shall take effect and be in force
in the ports and places so occupied."
"Questions arising under said tariff and regulations shall be
decided by the general in command of the United States forces in
those islands."
"Necessary and authorized expenses for the administration of
said tariff and regulations shall be paid from the collections
thereunder."
"Accurate accounts of collections and expenditures shall be kept
and rendered to the Secretary of War."
"WILLIAM McKINLEY"
The protocol of August 12, 1898, provided that
"the United States will occupy and hold the city, bay, and
harbor of Manila, pending the conclusion of a treaty of peace which
shall determine the control, disposition, and government of the
Philippines."
Manila was opened as a port of entry on August 20, 1898, and
Cebu on March 14, 1899. The Executive order of July 12, 1898, was
not proclaimed in Cebu until February 22, 1899, or later. The
treaty of peace was signed on December 10, 1898, but ratifications
were not exchanged until April 11, 1899. The Spanish forces
evacuated the island of Cebu on December 25, 1898, having first
appointed a provisional governor. Shortly thereafter, the native
inhabitants, formerly in insurrection
Page 229 U. S. 421
against Spain, took possession of the island, formed a so-called
republic, and administered the affairs of the island until
possession was surrendered to the United States on February 22,
1899, prior to which time no authorities of the United States had
been in the island, and the United States had not been in
possession or occupation of the island, it having been up to that
time in the actual physical possession of the Spanish and the
people of the island.
Page 229 U. S. 424
MR. JUSTICE DAY, after making the foregoing statement, delivered
the opinion of the Court.
When the Spanish fleet was destroyed at Manila, May, 1, 1898, it
became apparent that the government of the
Page 229 U. S. 425
United States might be required to take the necessary steps to
make provision for the government and control of such part of the
Philippines as might come into the military occupation of the
forces of the United States. The right to thus occupy an enemy's
country and temporarily provide for its government has been
recognized by previous action of the executive authority, and
sanctioned by frequent decisions of this Court. The local
government being destroyed, the conqueror may set up its own
authority, and make rules and regulations for the conduct of
temporary government, and to that end may collect taxes and duties
to support the military authority and carry on operations incident
to the occupation. Such was the course of the government with
respect to the territory acquired by conquest and afterwards ceded
by the Mexican government to the United States.
Cross v.
Harrison, 16 How. 164.
See also in this
connection,
Fleming v.
Page, 9 How. 603;
New York
v. Steamship Co., 20 Wall. 387;
Dooley v.
United States, 182 U. S. 222; 7
Moore's International Law Digest, §§ 1143
et seq., in
which the history of this government's action following the Mexican
War and during and after the Spanish-American War is fully set
forth, and also Taylor on International Public Law, chapter IX.;
Military Occupation and Administration §§ 568
et seq., and
2 Oppenheim on International Law, §§ 166
et seq.
There has been considerable discussion in the cases and in works
of authoritative writers upon the subject of what constitutes an
occupation which will give the right to exercise governmental
authority. Such occupation is not merely invasion, but is invasion
plus possession of the enemy's country for the purpose of holding
it temporarily, at least. 2 Oppenheim, § 167. What should
constitute military occupation was one of the matters before The
Hague Convention in 1899, respecting laws and customs of war on
land, and the following articles were adopted
Page 229 U. S. 426
by the nations giving adherence to that Convention, among which
is the United States (32 Stat. 1821):
"Article XLII. Territory is considered occupied when it is
actually placed under the authority of the hostile army."
"The occupation applies only to the territory where such
authority is established and in a position to assert itself."
"Article XLIII. The authority of the legitimate power having
actually passed into the hands of the occupant, the latter shall
take all steps in his power to reestablish and insure, as far as
possible, public order and safety, while respecting, unless
absolutely prevented, the laws in force in the country."
A reference to the Messages and Papers of the Presidents, to
which we may refer as matters of public history, shows that the
President was sensible of and disposed to conform the activities of
our government to the principles of international law and practice.
See 10 Messages and Papers of the Presidents 208,
Executive order of the President to the Secretary of War, in which
the President said (p. 210):
"While it is held to be the right of a conqueror to levy
contributions upon the enemy in their seaports, towns, or provinces
which may be in his military possession by conquest, and to apply
the proceeds to defray the expenses of the war, this right is to be
exercised within such limitations that it may not savor of
confiscation. As the result of military occupation, the taxes and
duties payable by the inhabitants to the former government become
payable to the military occupant, unless he sees fit to substitute
for them other rates or modes of contributions to the expenses of
the government. The moneys so collected are to be used for the
purpose of paying the expenses of government under the military
occupation, such as the salaries of the judges and the police, and
for the payment of the expenses of the army. "
Page 229 U. S. 427
To the same effect, Executive order of the President to the
Secretary of the Treasury, in which the President said (p.
211):
"I have determined to order that all ports or places in the
Philippines which may be in the actual possession of our land and
naval forces by conquest shall be opened, while our military
occupation may continue, to the commerce of all neutral nations, as
well as our own, in articles not contraband of war, upon payment of
the rates of duty which may be in force at the time when the goods
are imported."
And the like Executive order of the President to the Secretary
of the Navy (p. 212).
In pursuance of this policy, the order of July 12, 1898, was
framed. By its plain terms, the President orders and directs the
collection of tariff duties at ports in the occupation and
possession of the forces of the United States. More than this would
not have been consistent with the principles of international law,
nor with the practice of this government in like cases. While the
subsequent order of December 21, 1898, made after the signing of
the treaty of peace, is referred to in the brief of counsel for the
government, it was not alluded to in the findings of fact of the
Court of Claims; but we find nothing in that order indicating a
change of policy in respect to the collection of duties. While the
signing of the treaty of peace between the United States and Spain
on December 10, 1898, was stated, the responsible obligations
imposed upon the United States by reason thereof were recited and
acknowledged, and the necessity of extending the government with
all possible dispatch to the whole of the ceded territory was
emphasized, no disposition was shown to enlarge the number of ports
and places in the Philippine Islands at which duties should be
collected so as to include those not occupied by the United States,
and the President said (p. 220):
Page 229 U. S. 428
"All ports and places in the Philippine Islands in the actual
possession of the land and naval forces of the United States will
be opened to the commerce of all friendly nations. All goods and
wares not prohibited for military reasons, by due announcement of
the military authority, will be admitted upon payment of such
duties and other charges as shall be in force at the time of their
importation."
The occupation by the United States of the city, bay, and harbor
of Manila pending the conclusion of a treaty which should determine
the control, disposition, and government of the Philippines was
provided for by the protocol of August 12, 1898, and the necessity
of further occupation, until the exchange of ratifications by the
governments of Spain and the United States, was recognized by the
President in the order of December 21, 1898. We have been unable to
find anything in the Executive of congressional action prior to the
importation of the cargo now in question having the effect to
extend the executive order as to the collection of duties during
the military occupation to ports and places not within the
occupation and control of the United States.
The statement of the facts shows that the insurgent government
was in actual possession of the customhouse at Cebu, with power to
enforce the collection of duties there, as it did. Such government
was of the class of
de facto governments described in 1
Moore's International Law Digest, § 41, as follows:
"But there is another description of government, called also by
publicists a government
de facto, but which might,
perhaps, be more aptly denominated a government of paramount force.
Its distinguishing characteristics are (1) that its existence is
maintained by active military power within the territories, and
against the rightful authority of an established and lawful
government, and (2) that, while it exists it must necessarily
be
Page 229 U. S. 429
obeyed in civil matters by private citizens who, by acts of
obedience rendered in submission to such force, do not become
responsible, as wrongdoers, for those acts, though not warranted by
the laws of the rightful government. Actual governments of this
sort are established over districts differing greatly in extent and
conditions. They are usually administered directly by military
authority, but they may be administered, also, by civil authority,
supported more or less directly by military force."
Thornington v.
Smith, 8 Wall. 1,
75 U. S. 9.
The attitude of this government toward such
de facto
governments was evidenced in the Bluefields case, a full account of
which is given in 1 Moore's International Law Digest, pp. 49
et
seq. In that case, General Reyes had headed an insurrectionary
movement at Bluefields and acquired actual control of the Mosquito
territory in Nicaragua. His control continued for a short time
only, February 3 to February 25, 1899, and after the
reestablishment of the Nicaraguan government at Bluefields, it
demanded of American merchants the payment to it of certain amounts
of duty which they had been compelled to pay to the insurgent
authorities during the period of their
de facto control.
The American government remonstrated, and the duties demanded by
the Nicaraguan government were by agreement deposited in the
British consulate pending a settlement of the controversy. The
Department of the United States, upon receiving sworn statements of
the American merchants to the effect that they were not accomplices
of Reyes, that the money actually exacted was the amount due on
bonds which then matured for duties levied in December, 1898,
payments being made to the agent of the titular government who was
continued in office by General Reyes, that payment was demanded
under threat of suspension of importations, and that from February
3 to February 25 General Reyes was in full control of the civil and
military
Page 229 U. S. 430
agencies in the district, expressed the opinion that to exact
the second payment would be an act of international injustice, and
the money was finally returned to the American merchants with the
assent of the government of Nicaragua.
A similar case appears in 1 Moore's International Law Digest, p.
49, in which our government was requested by Great Britain to use
its good offices to prevent the exaction by the Mexican government
of certain duties at Mazatlan, which had been previously paid to
insurgents. The then Secretary of State, Mr. Fish, instructed our
Minister to Mexico as follows:
"It is difficult to understand upon what ground of equity or
public law such duties can be claimed. The obligation of obedience
to a government at a particular place in a country may be regarded
as suspended at least, when its authority is usurped, and is due to
the usurpers if they choose to exercise it. To require a repayment
of duties in such cases is tantamount to the exaction of a penalty
of the misfortune, if it may be so called, of remaining and
carrying on business in a port where the authority of the
government had been annulled. The pretension is analogous to that
upon which vessels have been captured and condemned upon a charge
of violating a blockade of a port set on foot by a proclamation
only, without force to carry it into effect."
See also Colombian Controversy, 6 Moore's International
Law Digest, pp. 995
et seq.
While differing somewhat in its circumstances, the case of
United States v.
Rice, 4 Wheat. 246, is an instructive case. In that
case, during the War of 1812, the port of Castine, Maine, was
captured by the British forces, and during its occupation, the
British government exercised civil and military authority over the
people, established customhouses, and collected duties on goods.
After peace and the reestablishment of the American government
Page 229 U. S. 431
at Castine, the collector of customs claimed the right to
collect duties upon the goods, and this Court held that the duties
could not be collected a second time. Mr. Justice Story, delivering
the opinion of the Court, after stating that the British government
was in full control of the port, and authorized to collect duties,
said (p.
17 U. S.
254):
"Castine was therefore during this period, so far as respected
our revenue laws, to be deemed a foreign port, and goods imported
into it by the inhabitants were subject to such duties only as the
British government chose to require. Such goods were in no correct
sense imported into the United States. The subsequent evacuation by
the enemy and resumption of authority by the United States did not,
and could not, change the character of the previous transactions.
The doctrines respecting the
jus postliminii are wholly
inapplicable to the case. The goods were liable to American duties
when imported, or not at all. That they are so liable at the time
of importation is clear from what has been already stated, and
when, upon the return of peace, the jurisdiction of the United
States was reassumed, they were in the same predicament as they
would have been if Castine had been a foreign territory ceded by
treaty to the United States, and the goods had been previously
imported there. In the latter case, there would be no pretense to
say that American duties could be demanded; and, upon principles of
public or municipal law, the cases are not distinguishable. The
authorities cited at the bar would, if there were any doubt, be
decisive of the question. But we think it too clear to require any
aid from authority."
We observe that the learned justice puts the case of the
importation of goods into a foreign territory afterwards ceded to
the United States as one which under no pretense would afford an
authority to collect duties upon goods previously imported there.
We do not think that it was
Page 229 U. S. 432
the purpose of the Executive order under which the government at
Manila was instituted and maintained at the time of this
importation to direct the collection of duties at ports not in the
occupation of the United States, and certainly not at one actually
in the possession of a
de facto government, as is shown in
this case.
It is said, however, that the claimants resided and were doing
business at Manila, and therefore were subject to the military
authority there, and the authority of a conquering power,
recognized in
New Orleans v. Steamship Company, supra,
87 U. S. 394,
to regulate trade with the enemy and in its country is cited in
support of the proposition. That there is such general authority
there can be no doubt. It is, however, not without limitation, and
a local commander is certainly bound by the orders of the President
as commander in chief, which in this case had limited tariff
collections to ports and places occupied by the United States. And
such authority is subject to the laws and usages of war (
New
Orleans v. Steamship Co., supra, p.
87 U. S. 394)
and, we may add, to such rules as are sanctioned by established
principles of international law.
A state of war as to third persons continued until the exchange
of treaty ratifications (
Dooley v. United States,
182 U. S. 222,
182 U. S.
230), and, although rice, not being contraband of war,
might have been imported (7 Moore's International Law Digest, pp.
683, 684), the authority of the military commander, until the
exchange of ratifications, may have included the right to control
vessels sailing from Manila to trade in the enemy's country, and to
penalize violations of orders in that respect. But whatever the
authority of the commander at Manila, or those acting under his
direction, to control shipments by persons trading at Manila, and
in vessels sailing from there of American registration, such
authority did not extend to the second collection of duties upon a
cargo from a foreign port to a port occupied by a
de facto
government
Page 229 U. S. 433
which had compulsorily required the payment of like duties.
It is further contended that, if the collection of duties was
originally without authority, it was ratified by the Act of June
30, 1906, 34 Stat. 636, c. 3912, which provides:
"That the tariff duties, both import and export, imposed by the
authorities of the United States or of the provisional military
government thereof in the Philippine Islands prior to March eighth,
nineteen hundred and two at all ports and places in said islands,
upon all goods, wares, and merchandise imported into said islands
from the United States, or from foreign countries, or exported from
said islands, are hereby legalized and ratified, and the collection
of all such duties prior to March eighth, nineteen hundred and two,
is hereby legalized and ratified and confirmed as fully to all
intents and purposes as if the same had, by prior act of Congress,
been specifically authorized and directed."
The history of this act and others growing out of the
Spanish-American War is fully set forth in
United States v.
Heinszen, 206 U. S. 370.
This Court had held that the President had no authority to order
the imposition of duties subsequent to the ratification of the
treaty, with reference to Porto Rico (
Dooley v. United States,
supra), and with reference to the Philippine Islands
(
Fourteen Diamond Rings v. United States, 183 U.
S. 176). The Act of July 1, 1902, 32 Stat. 691, c. 1369,
was then passed by Congress, ratifying the action of the President
in making the order of July 12, 1898, whereby duties had been
collected at "all ports and places in the Philippine Islands upon
passing into the occupation and possession of the forces of the
United States," and amendments of that order, and ratifying such
action of the authorities in the Philippines as was done in
accordance with the orders of the President. In
Lincoln v.
United States and
Page 229 U. S. 434
Warner, Barnes & Co. v. United States, 197 U.
S. 419,
affirmed on rehearing in
202 U. S. 202 U.S.
484, the Act of July 1, 1902, was construed to apply only to duties
collected prior to April 11, 1899 (when the treaty became
effective). In this situation, the month following the decision of
this Court in
202 U. S. 202 U.S.
484,
supra, (affirming the
Lincoln and
Warner, Barnes & Co. cases), Congress passed the
ratifying act now in question.
United States v. Heinszen,
supra, 206 U. S.
381.
Conceding that the act is broad enough in terms to cover tariff
duties exacted under the authority of the President's orders before
the ratification of the treaty, it is expressly limited to tariff
duties, import and export, imposed by the authorities of the United
States and of the provisional government of the islands prior to
March 8, 1902 (the date of the Act of Congress temporarily
providing revenue for the Philippine Islands, 32 Stat. 54, c. 140),
and there is no expression of purpose in the statute to enlarge the
Executive orders of the President, which limited the collection of
duties during our military occupation to ports and places actually
held and occupied by the forces of the United States, or to ratify
collections made where goods had been entered at a port not under
American control, and in possession of a
de facto
insurrectionary government, as is here shown.
The statute should be construed in the light of the purpose of
the government to act within the limitation of the principles of
international law, the observance of which is so essential to the
peace and harmony of nations, and it should not be assumed that
Congress proposed to violate the obligations of this country to
other nations, which it was the manifest purpose of the President
to scrupulously observe, and which were founded upon the principles
of international law.
The act has the scope given to it in the case of
United
States v. Heinszen, 206 U. S. 370 --
namely, to ratify
Page 229 U. S. 435
"the collection of the duties levied under the order of the
President," which, as we have seen, were tariff duties imposed at
ports in the occupation and possession of the United States. The
tariff duties upon the cargo of rice here in question were paid to
the
de facto authorities at Cebu, where the cargo was
entered, and the payment made at Manila was not a tariff duty, but
an illegal and unwarranted exaction in the nature of a penalty,
covered by neither the orders of the President nor the ratifying
acts of Congress.
We think that the Court of Claims was in error in holding the
duties collectible at Manila under the circumstances related, and
in adjudging that the Act of June 30, 1906, ratified the conduct of
the military authorities at Manila in compelling such payment. Its
judgment will therefore be reversed, and the case remanded to the
Court of Claims, with instructions to enter judgment for the
claimant.
Reversed.
