1. Under the Act of Congress of February 26, 1845, relative to
the recovery of duties paid under protest, a written protest,
signed by the party, with a statement of the definite grounds of
objection to the duties demanded and paid, is a condition precedent
to a right to sue in any court for their recovery.
2. Cases arising under the Revenue Laws, are not within the
jurisdiction of the Court of Claims.
An Act of Congress of February 26, 1845, [
Footnote 1] construing a former act relative to
duties paid under protest, says:
"Nor shall any action be maintained against any
collector, to
Page 74 U. S. 123
recover the amount of duties so paid under protest, unless the
said protest was made
in writing and signed by the
claimant, at or before the payment of said duties, setting
forth distinctly and specifically the grounds of objection to the
payment thereof."
In this state of the statute law, Nichols & Co., merchants
of New York, imported from abroad to that city, in 1847-51, certain
casks of liquor. Duties were imposed at the customhouse, at New
York, on the quantity invoiced; that is to say, on the amounts
which the casks contained when they were shipped. A portion of the
liquors, however, leaked out during the voyage, and being thus
lost, was never imported at all, in fact, into the United States.
Notwithstanding this circumstance, Nichols & Co. paid the
duties, as imposed; that is to say, duties on the amount as
invoiced,
making no protest in the matter. They now, July,
1855, by petition, setting forth their case, including the fact
that they had "omitted to protest," brought suit against the United
States for the overpayment, in the Court of Claims; a court which,
by the acts of Congress establishing it, has power to hear and
determine
"all claims founded upon any law of Congress, or upon any
regulation of an executive department, or upon any contract,
express or implied, with the government of the United States."
The petition asserted the law, as settled by this Court in
Lawrence v. Caswell, [
Footnote 2] to be, that duty was chargeable only on the
value of the liquors imported into the United States, and that the
quantity lost by leakage, on the voyage of importation, was not
subject to any duty. A view in conformity, as they alleged, with a
Treasury circular of January 30, 1847, directing that,
"if the quantity of any article falls short of the amount given
in the invoice, . . . an abatement of the duties to the extent of
the deficiency will be made. [
Footnote 3]"
As a reason for not presenting the claim to the Treasury
Department, the petitioners stated that they omitted to
protest.
The United States demurred to the petition, and the demurrer
Page 74 U. S. 124
being sustained, the petition was dismissed. The importers now
appealed.
Page 74 U. S. 125
MR. JUSTICE DAVIS delivered the opinion of the Court.
Two questions arise in this case:
1st. Was there any liability on the part of the government to
refund these duties prior to the act establishing the Court of
Claims?
Page 74 U. S. 126
2d. If not, has that act fixed any new liability on the
government?
The immunity of the United States from suit is one of the main
elements to be considered in determining the merits of this
controversy. Every government has an inherent right to protect
itself against suits, and if, in the liberality of legislation,
they are permitted, it is only on such terms and conditions as are
prescribed by statute. The principle is fundamental, applies to
every sovereign power, and but for the protection which it affords,
the government would be unable to perform the various duties for
which it was created. It would be impossible for it to collect
revenue for its support, without infinite embarrassments and
delays, if it was subject to civil processes the same as a private
person.
It is not important for the purposes of this suit, to notice any
of the acts of Congress on the subject of the payment of duties on
imports, anterior to the Act of February 26, 1845. [
Footnote 4] This act altered the rule
previously in force, and required the party of whom duties were
claimed, and who denied the right to claim them, to protest in
writing, with a specific statement of the grounds of objection.
Through this law Congress said to the importing merchant, you
must pay the duties assessed against you; but, as you say, they are
illegally assessed, if you file a written protest stating wherein
the illegality consists, you can test the question of your
liability to pay, in a suit against the collector, to be tried in
due course of law, and, if the courts decide in your favor, the
Treasury will repay you; but in no other way will the government be
responsible to refund.
The written protest, signed by the party, with the definite
grounds of objection, were conditions precedent to the right to
sue, and if omitted, all right of action was gone. These conditions
were necessary for the protection of the government, as they
informed the officers charged with the collection of the revenue
from imports, of the merchant's reasons for claiming exemption, and
enabled the Treasury Department
Page 74 U. S. 127
to judge of their soundness, and to decide on the risk of taking
the duties in the face of the objections. There was no hardship in
the case, because the law was notice equally to the collector and
importer, and was a rule to guide their conduct, in case
differences should arise in relation to the laws for the imposition
of duties. The allowing a suit at all, was an act of beneficence on
the part of the government. As it had confided to the Secretary of
the Treasury the power of deciding in the first instance on the
amount of duties demandable on any specific importation, so it
could have made him the final arbiter in all disputes concerning
the same. After the passage of the law of 1845, the duties in
controversy were paid.
The appellants say they were illegally exacted, because it was
decided by this Court, in
Lawrence v. Caswell, [
Footnote 5] that the duties ought to be
charged only upon the quantity of liquors actually imported, and
not on the contents stated in the invoices; but the Chief Justice
took occasion to observe in deciding that case,
"that where no protest was made the duties are not illegally
exacted in the legal sense of the term. If the party acquiesces,
and does not by his protest appeal to the judicial tribunals, the
duty paid is not illegally exacted, but is paid in obedience to the
decision of the tribunal (the Secretary of the Treasury) to which
the law had confided the power of deciding the question."
In view of this decision and the plain requirements of the law,
how can Nicholl & Co. complain? They knew by proceeding in a
certain way they could resort to the legal tribunals, and yet for a
series of years they imported liquors, and paid the duties demanded
without objection. They had an equal right, with the Secretary of
the Treasury, to construe the law under which the duties were
claimed, and as they chose not to appeal to the courts, they
adopted the construction which the secretary put on the law, and
are concluded by his decision. If a party who did not adopt that
construction placed himself in a way to contest it, and got a
decision that it was
Page 74 U. S. 128
erroneous, such decision cannot enure to the benefit of Nicholl
& Co., who by their conduct notified the government, so far as
they were concerned, they acquiesced in the secretary's
construction of the law. It may be their misfortune that they did
not appeal from the secretary's decision; but it is a misfortune
that occurs to any party, in a lawsuit, who refuses to appeal from
the decision of an inferior court, and afterwards finds, by means
of another's litigation, that if he had appealed the decision would
have been reversed.
If the duties demanded of Nicholl & Co. had been paid under
protest, their payment, in the sense of the law, would have been
compulsory, but as they were paid without protest it was a
voluntary payment, doubtless made and received in mutual mistake of
the law; but in such a case, as was decided in
Elliott v.
Swartwout, [
Footnote 6] no
action will lie to recover back the money. And so this Court has
repeatedly held. [
Footnote
7]
It is clear, therefore, that the appellants are without remedy,
unless a new liability has been imposed on the government by the
act creating the Court of Claims.
Does this act confer on the appellants any further or different
rights than they had prior to its passage? If not, there is an end
to this suit.
The Court of Claims has power to hear and determine all claims
founded upon any law of Congress, or upon any regulation of an
executive department, or upon any contract, express or implied,
with the government of the United States.
Conceding, that this jurisdiction draws to it cases arising
under the revenue laws, then it is contended, as this suit is
founded on one of the tariff acts of Congress, which has been
judicially interpreted so as to sustain the claim, therefore the
case of the appellants is brought within the first jurisdictional
clause of the act creating the Court of Claims. But this result
does not follow, for if the court has decided that the appellants,
if they had protested, would have been entitled
Page 74 U. S. 129
to be reimbursed for the excess of duties paid by them, it has
also decided, by not protesting they lost all right to ask for
repayment; and there has been no law of Congress passed since this
decision placing them in the position they would have been if they
had protested. Neither can they invoke to their aid a regulation of
the Treasury Department, which alone of all the departments deals
with the question of duties on imports, for there is no regulation
touching the subject, as is very evident from the averment in their
petition, that the Treasury Department would not pay them because
they omitted to protest.
Besides, if there had been a regulation of the department on the
subject, it could not affect the rights of the appellants, for such
a regulation cannot change a law of Congress.
It is insisted, however, if this suit cannot be sustained on
these grounds, it can be sustained on an implied contract springing
from the obligation of the government to refund all duties that are
illegally exacted. But we have seen that these duties were not
illegally exacted, were paid voluntarily, and there is no such
thing as an implied promise to pay against the positive command of
a statute. [
Footnote 8]
Enough has been said to show that if the Court of Claims could
take jurisdiction of this class of cases, its judgment was right on
the merits of this particular case.
But after all, the important subject of inquiry is did Congress,
in creating the Court of Claims, intend to confer on it the power
to hear and determine cases arising under the revenue laws?
The prompt collection of the revenue and its faithful
application is one of the most vital duties of government.
Depending as the government does on its revenue to meet not only
its current expenses but to pay the interest on its debt, it is of
the utmost importance that it should be collected with dispatch and
that the officers of the Treasury should be able to make a reliable
estimate of means, in order to meet liabilities. It would be
difficult to do this, if the receipts
Page 74 U. S. 130
from duties and internal taxes paid into the Treasury, were
liable to be taken out of it, on suits prosecuted in the Court of
Claims for alleged errors and mistakes, concerning which the
officers charged with the collection and disbursement of the
revenue had received no information. Such a policy would be
disastrous to the finances of the country, for, as there is no
statute of limitations to bar these suits, it would be impossible
to tell, in advance, how much money would be required to pay the
judgments obtained on them, and the result would be, that the
Treasury estimates for any current year would be unreliable. To
guard against such consequences, Congress has from time to time
passed laws on the subject of the revenue, which not only provide
for the manner of its collection, but also point out a way in which
errors can be corrected. These laws constitute a
system,
which Congress has provided for the benefit of those persons who
complain of illegal assessments of taxes and illegal exactions of
duties. In the administration of the tariff laws, as we have seen,
the Secretary of the Treasury decides what is due on a specific
importation of goods, but if the importer is dissatisfied with this
decision, he can contest the question in a suit against the
collector, if, before he pays the duties, he tells the officers of
the law, in writing, why he objects to their payment.
And an equal provision has been made to correct errors in the
administration of the internal revenue laws. The party aggrieved
can test the question of the illegality of an assessment, or
collection of taxes, by suit; but he cannot do this until he has
taken an appeal to the Commissioner of Internal Revenue. If the
commissioner delays his decision beyond the period of six months
from the time the appeal is taken, then suit may be brought at any
time within twelve months from the date of the appeal. [
Footnote 9] Thus it will be seen that
the person who believes he has suffered wrong at the hands of the
assessor or collector, can appeal to the courts; but he cannot do
this until he has taken an intermediate appeal to
Page 74 U. S. 131
the commissioner, and at all events, he is barred from bringing
a suit, unless he does it within a year from the time the
commissioner is notified of his appeal. The object of these
different provisions is apparent. While the government is desirous
to secure the citizen a mode of redress against erroneous
assessments or collections, it says to him, we want all
controverted questions concerning the revenue settled speedily, and
if you have complaint to make, you must let the Commissioner of
Internal Revenue know the grounds of it; but if he decides against
you or fails to decide at all, you can test the question in the
courts if you bring your suit within a limited period of time.
These provisions are analogous to those made for the benefit of
the importing merchant, and the same results necessarily follow. If
the importer does not protest, his right of action is gone. So, if
the party complaining of an illegal assessment does not appeal to
the commissioner, he is also barred of the right to sue, and he is
without remedy, even if he does appeal, unless he sues within
twelve months. Can it be supposed that Congress, after having
carefully constructed a revenue system, with ample provisions to
redress wrong, intended to give to the taxpayer and importer a
further and different remedy?
The mischiefs that would result, if the aggrieved party could
disregard the provisions in the system designed expressly for his
security and benefit, and sue at any time in the Court of Claims,
forbid the idea that Congress intended to allow and other modes to
redress a supposed wrong in the operation of the revenue laws, than
such as are particularly given by those laws.
Without pursuing the subject further, we are satisfied that
cases arising under the revenue laws are not within the
jurisdiction of the Court of Claims.
Judgment affirmed.
[
Footnote 1]
5 Stat. at Large 727.
[
Footnote 2]
54 U. S. 13 How.
488.
[
Footnote 3]
1 Mayo 391.
[
Footnote 4]
5 Statutes at Large 727.
[
Footnote 5]
54 U. S. 13 How.
488.
[
Footnote 6]
35 U. S. 10
Pet. 153.
[
Footnote 7]
Bend v.
Hoyt, 13 Pet. 268;
Lawrence
v. Caswell, 13 How. 488;
Curtis v.
Fiedler, 2 Black 461.
[
Footnote 8]
Cary v.
Curtis, 3 How. 236.
[
Footnote 9]
14 Stat. at Large 111, amendment to § 44; § 19, on p. 152.