Case ID: us-ct-cl_40/html/0495-01.html
Source: Caselaw Access Project
Author: {"author": "Peelle, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GALBAN AND COMPANY, A CORPORATION, v. THE UNITED STATES.
    [No. 24207.
    Decided October 30, 1905.]
    
      On the Proofs.
    
    An American corporation doing business in Cuba during the military occupation of the United States imports merchandise from the United States after the treaty of Paris, upon which it is required to pay duties by the military government. The money is not paid into the Treasury of the United States, but is expended for the necessary governmental purposes incident to the occupation of Cuba. The claimant seeks to recover back the money so paid.
    I.Merchandise imported into Cuba from the United States by an American citizen during the military occupation of the island, between March 31, 1900, and May 20, 1902, was not exempt from the payment of duties imposed and collected by the military government for necessary governmental purposes incident to the occupation of Cuba by the United States.
    II.The obligations assumed by the United States in respect to Cuba were limited by the treaty of Paris, December 10, 3898 (Art. XVI),to the time of occupation. During the period of occupation the United States assumed the obligations resulting therefrom under international law.
    III. The right of the United States to intervene to stop the effusion of blood in Cuba and protect the lives and property of their citizens there has passed beyond judicial inquiry and become a rule of international law.
    IV. It has been judicially determined that Cuba was foreign territory during its military occupation by the United States, but that, as between Cuba and the United States, the island was territory held by the United States in trust for the inhabitants thereof.
    
      V. During the period of occupation the President had the right to prescribe rules and regulations, having the force of law, for the government of the island; but he had no authority to, practically, so extend the Union that a citizen of the United States should be exempt from the payment of duties.
    VI. The powers and duties of the United States in Cuba were those of a trustee for the protection and security of persons and property. It would, have -been a violation of their obligations as trustee to allow their own citizens to import merchandise free of the duties necessarily imposed for the purposes of government. The statutes, treaty, proclamations, etc., relating to the occupation of Cuba reviewed.
    
      The Reporters’ statement of the case:
    This case having been heard by the Court of Claims, the court upon the evidence makes the following findings of fact:
    I. The claimant herein is a corporation duly organized under the laws of the State of New Jersey for the purpose of carrying on a general merchandise business in the island of Cuba; it has béen carrying on such business at Sagua la Grande and other points in Cuba since March 1, 1899, and is now engaged there in such business.
    II. For about three years prior to April 20, 1898, there was an insurrection in the island of Cuba against the Gov-' eminent of Spain, during which time the insurrectionists made determined efforts by force of arms to secure the freedom of the people of that island. On said date the Congress of the United States adopted a joint resolution for the recognition of the independence of the people of the island and demanding that the Government of Spain relinquish its authority and government over said island, copy of which resolution is made a part of the petition herein.
    III. Following the-adoption of the resolutions referred to, the United States waged war with Spain for the purposes aforesaid until August 12,1898, when a protocol of an agreement embodying the basis for the establishment of peace between the two countries was entered into, after which hostilities between the two countries were suspended until the final treaty of peace was concluded at Paris December 10, 1898, the ratifications of which were exchanged in the city of Washington December 11, 1898, and the treaty proclaimed by the President on the same day, a copy of Avhich treaty is set forth in the petition and made part thereof.
    IV. On December 13, 1898, the United States, pursuant to the terms of the treaty, entered into the occupancy of the island of Cuba, on which, day, by military-order, the Division of Cuba was created, consisting of the geographical departments and provinces of the island, with headquarters in the city of Habana. The division so created was placed under the command of Maj. Gen. John It. Brooke, U. S. Army, who was also directed by the President to exercise the authority of military governor of the island, after which the United States, through the military forces, as aforesaid, and during the entire period of their occupation of the island, performed the duties and obligations devolving upon them under the treaty and under international laAv. Laws were established by military orders, instructions, regulations, commands, and decrees; the government Avas divided into various departments, each with a secretary; pfficers were appointed aaTlo discharged their official duties; courts of justice were established and maintained; taxes, customs duties, and internal-revenue taxes were levied and collected, and such other duties and public functions were performed as Avere necessary for the purposes of the occupation, all of .which Avere done by command of the military governor under the direction of the President of the United States until May 20, 1902, Avhen, by direction of the President, the military governor was directed to transfer to the President and Congress of the Republic of Cuba the government and control of the island, as set forth in the letter of the President of the United States addressed to the President and Congress of the Republic of Cuba under date of May 10, 1902, and the letter of the military governor addressed to the same under date of May 20, 1902, both set forth and made a part of the petition herein.
    V. During the occupation of Cuba by the military forces of the United States, to wit, on March 31, 1900, the President, as Commander in Chief of the Army and Navy of the United States, ordered and directed the leA^y and collection of certain tariff and duties in all ports and places in the island of Cuba, which order is as follows:
    “ Executive Mansion-,
    
      “March 31,1900.
    
    “ 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 the following tariff and duties shall be levied and collected in all ports and places in the island of Cuba and all islands in the West Indies west of the seventy-fourth degree west longitude, evacuated by Spain, on and after June 15, 1900, and shall remain in force one year from the date of promulgation without change.
    “ All questions arising in the administration of the customs regulations shall be referred to the collector at the port of Habana for decision, and there shall be no appeal from such decision except in cases where the collector may find it expedient to ask for special instructions of the War Department on the points involved.
    “ Importers who are dissatisfied with the valuation or classification of merchandise as fixed by the collector of the port shall pay the duties imposed, but may file at the time of payment a written protest and appeal stating briefly the value or classification'which it is claimed should have been established.
    “ Said protest and ajipeal shall forthwith be transmitted by the collector, through the chief of customs service, to the military governor of the island, who will review, and either' affirm, reverse, or modify the action complained of. .
    “ 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.”
    Under and pursuant to the order aforesaid impost duties were collected on goods imported into the various ports of said island from the United States, including the duties collected on goods imported by the claimant herein from the United States to the port of Sagua la Grande, amounting in the aggregate to $51,104.20, no portion of which has been repaid or refunded to the claimant. No objection or protest was made by the claimant to the collection of said duties or any part thereof.
    
      The various communications, orders, resolutions, and regulations referring to and authorizing the government and control of the island by the military forces of the United States are set forth in the petition and made a part thereof, to which reference is hereby made as fully as if set forth herein; and the facts set forth in said petition, so far as they are facts, are hereby adopted as facts in the case.
    
      Mr. L. T. MicJiener and Mr. Barry Mohun for the claimant:
    1. The second paragraph of Article I of the treaty is a declaration on the part of the United States which committed this Government to the exercise of sovereignty in the islands, and therefore it did exercise such sovereignty for the purposes therein mentioned, namely, “ for the protection of life and property.” These are incidents of' sovereignty, and the exercise of such powers can emanate from the sovereign alone, as is well said by the Attorney-General in his opinion addressed to the Secretary of War September 8, 1900 (23 Opinions, 222, 226) :
    “ All the usual incidents of sovereignty and jurisdiction pertain to the military occupation originally granted by force of arms and now maintained in pursuance of the treaty of peace. It is true that that sovereignty and jurisdiction are exercised by the United States as a trustee for the benefit of the people of Cuba, but the United States has a distinct and well-defined duty and purpose in connection with Cuba, namely,' to govern and control the island, to ‘ exercise sovereignty, jurisdiction, and control over it ’ (to use the language of the resolution) for its pacification. No limitation upon the ordinary power of a conqueror . over conquered territory is created by this trust.”
    It appears, therefore, that it was the intention of the United States, as declared in the treaty and reiterated by her officers, that the sovereignty of the people, and the title to the island of Cuba, were lodged in the United States, and connected with Avhich sovereignty and title there was the self-imposed condition of trusteeship. There was, however, as stated by the Attorney-General, “ no limitation upon the ordinary power of a conqueror over conquered territory.” That power is absolute, complete, sovereign.
    
      2. The sovereignty of the people of the island of Cuba and the title to the island being in the United States, the imposition of customs duties upon merchandise imported into the island from the United States without express authority from Congress was unlawful and illegal.
    To sustain this contention, we think it is only necessary to quote from the opinion of Mr. Justice Brown, in the case of Dooley v. United States (182 U. S., 222, 233) :
    “'Different considerations apply with respect to duties levied after the ratification of the treaty and the cession of the island to the United States. Porto Rico then ceased to be a foreign country, and, as we have just held in De Lima v. Bidwell, the right of the collector of New York to exact duties upon imports from that island ceased with the exchange of ratifications. We have no doubt, however, that, from the necessities of the case, the right to administer the government of Porto Rico continued in the military com- ' mander after the ratification of the treaty and until further action by Congress. (Gross v. IIarrisan, above cited.) At the same time, while the right to administer the government continued, the conclusion of the treaty of peace and the cession of the island to the United States were not without their significance. By that act Porto Rico ceased to be a foreign country, and the right to collect duties upon imports from that island ceased.”
    There was no Congressional legislation which authorized the imposition and collection of the duties in the case at bar. Congress alone had the power to authorize the collection of such duties or taxes. Congress did not give the authority needed, hence the duties were wrongfully and unlawfully collected, and the petitioner is entitled to judgment for the amount paid.
    ■ Mr. Assistant Attorney-General Pradt for the defendants:
    Counsel for claimant take unnecessary pains to assert and reiterate that, during the occupancy of the island of Cuba, growing out of the war with Spain, the United States Government exercised sovereignty therein, for this may safely be admitted. But the real question is, What was the character of the sovereignty thus exercised? It certainly was not a sovereignty following upon any claim of complete and exclusive title to the island of Cuba which could in any sense constitute the island a part of the territory of the United States. It was a purely temporary sovereignty growing primarily put of the attitude of the United States toward the relations between Spain and Cuba, expressed by Congress in the joint resolution of April 20, 1898. In that resolution the United States explicitly “ disclaims any disposition or intention to exercise sovereignty, jurisdiction, or control over said island, except for the pacification thereof, and asserts its determination when that is accomplished to leave the government and control of the island to its people.” This promise was faithfully and literally carried out by the United States. Out of the temporary sovereignty which was thus necessarily exercised in the island of Cuba bj7 the United States solely for the benefit of the Cuban people it would seem impossible for the most ingenious mind to deduce the fact, absolutely essential to recover in this case, that Cuba thereby became a part of the domestic territory of the United States and ceased to be foreign territory within the meaning of the tariff acts of the United States and the decisions of the Supreme Court in the insular cases. (182 U. S.)
    “ It is true that as between Spain and the United States— ' indeed, as between the United States and all foreign nations — Cuba, upon the cessation of hostilities with Spain and after the treaty of Paris was to be treated as if it were conquered territory. But as between the United'States and Cuba that island is territory held in trust for the inhabitants of Cuba, to whom it rightfully belongs and to whose exclusive control it will be surrendered whe,n a stable government shall have been established by their voluntary action.” {Neely v. Ilenhel (No. 1), 180 U. S., 120.)
    It will be seen from the foregoing that at the most Cuba, during its occupation by the United States, became conquered territory of the United States, although this statement must be modified by the fact that after the treaty of Paris this conquered territory was held, not for the benefit of the United States, but in trust for the Cuban people. But conquered territory is not domestic territory. {Fleming v. Page, 9 I-Iow., 615.)
    It is usually the country of the enemy in possession of the conquering power or, as in the unique case of Cuba, is territory conquered from the enemy and held in trust for the inhabitants pf that territory.
    Moreover, and finally, this question of the territorial status of Cuba during the period under discussion seems to be set absolutely at rest by the decision of the Supreme Court in the case of Neely v. Henkel, supra. In that case the court was called upon to determine the application to Cuba during its occupation by the United States of the extradition statute of the United States, section’ 5270, Revised Statutes, as amended by the act of June 6, 1900, adding thereto the following proviso:
    “Provided, That whenever any foreign country or territory, or any part thereof, is occupied by or under the control of the United States, any person who shall violate, or who has violated, the criminal laws in force therein, by the commission of any of the following offenses [enumerating them], * * * and who shall depart, or has departed, from justice therein to the United States, shall be liable to the provisions of extradition in said section.”
    In deciding this question the court, after reciting.various historical facts surrounding the occupation of Cuba by the United States, held as follows:
    “ The facts above detailed make it clear that within the meaning of the act' of June 6,1900, Cuba is foreign territory. It can not be regarded in any constitutional, legal, or international sense a part of the territory of the United States ” (p. 119.)
    This apparently conclusive decision has probably escaped the attention of counsel for the claimant.
   Peelle, J.,

delivered the opinion of the court:

This action is for the refund of impost duties collected in the ports of Cuba during the occupation of that island b}? the military forces of the United States on goods imported thereto from the United States by a citizen of the United States after the treaty of Pa.ris.

By reason of the failure or inability of the Spanish Government for a number of years to subdue and pacify the insurrectionists in the island of Cuba, and to protect the property of American citizens therein, the peace and commerce of the United States became endangered. As the conflict ensued it beeame more evident that some decisive action would have to be taken by the United States, of a self-defensive character, looking to the liberation of the Cuban people from the rule of the Spanish Government. With that purpose in view the Congress passed the following joint resolution, approved April 20, 1898 (30 Stat. L., 738) :

“ Whereas the abhorrent conditions which have existed for more than three years in the island of Cuba, so near our own borders, have shocked the moral sense of the people of the United States, have been a disgrace to Christian civilization, culminating, as they have, in the destruction of the United States battle ship, with two hundred and sixty-six of its officers and crew, while on a friendly visit in the harbor of Havana, and can not longer be endured, as has. been set forth by the President of the United States in his message to Congress of April eleventh, eighteen hundred and ninety-eight, upon which the action of Congress was invited: Therefore,
“Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, First, That the people of the island of Cuba are, and of right ought to be, free and independent.
“ Second. That it is the duty of the United States to demand, and the Government of the United States does hereby demand, that the Government of Spain at once relinquish its authority and government in the island of Cuba and withdraw its land and naval forces from Cuba and Cuban ■waters.
“ Third. That the President of the United States be, and he hereby is, directed and empowered to use the entire land and naval forces of the United States, and to call into the actual service of the United States the militia of the several States, to such extent as may be necessary to carry these resolutions into effect.
“ Fourth. That the United States hereby disclaims any disposition or intention to exercise sovereignty, jurisdiction, or control over said island except for the pacification thereof, and asserts its determination, when that is accomplished, to leave the government and control of the island to its people.
“Approved, April 20, 1898.”

The next day (April 21) war began between the United States and the Kingdom of Spain, as declared by the Congress in the act of April 25, 1898 (30 Stat. L., 364). And the following day (April 22) the President, on the authority of said joint resolution, deeming “ it necessary to set on foot and maintain a blockade on the north coast of Cuba,” issued his proclamation therefor (30 Stat. L., 1769), and such blockade was established and effectively maintained and war was prosecuted between the belligerent Governments until a protocol for the establishment of peace was signed by their respective representatives at the city of Washington August 12, 1898 (30 Stat. L., 1742), after which hostilities viere suspended and so continued until the final terms of peace were agreed upon by the treaty of Paris of December 10, 1898, the ratifications of which were exchanged in the city of Washington on the 11th day of April, 1899, and the treaty proclaimed by the President on the same day (30 Stat. L.,1754).

By Article I it was provided:

“ Spain relinquishes all claim of sovereignty over and title to Cuba.
“ And as the island is, upon its evacuation by -Spain, to be occupied by the United States, the United States null, so long as such occupation shall last, assume and discharge the obligations that may under international law result from the fact of its occupation, for the protection of life and property.”

The obligations assumed by the United States in respect to Cuba were by Article XVI of the treaty limited to the time of its occupation thereof.”

It will thus be observed that by the terms of the treaty, as well as in conformity with the resolutions aforesaid, Spain relinquished “ all claim of sovereignty over and title to Cuba,” and that upon the occupation thereof by the United States they assumed, during such occupancy, the obligations resulting therefrom “ under international law ” for the protection of life and property.

International law is a system of rules founded upon long-established customs and acts of states and international agreements, not inconsistent with the principles of natural justice, which Christian and civilized states recognize as obligatory in their relations and dealings with each other, as well as with the citizens and subjects of each.

That the .United States had the right to intervene to stop the effusion of blood and to protect tbe peace and commerce of the United States, as well as the lives and property of their own citizens in Cuba, has passed beyond the domain of forensic debate, as well as beyond judicial inquiry, and has become, if it was not before, a rule of international law.

The United States intervened, and did so through the President by authority of the resolutions, which were in substance and effect embodied in the treaty, the result of all which was the occupation of Cuba by the military forces of the United States.

In the case of Neely v. Henkel (180 U S., 109, 117) the objects of that occupation are shown by reference to a proclamation issued by the military governor and major-general commanding the division of Cuba to be “ to give protection to the people, security to persons and property, to restore confidence, to encourage the people to resume the pursuits of peace, to build up waste plantations, to resume commercial traffic, and to afford full protection in the exercise of all civil and religious rights.

In furtherance of those objects and by authority of the President, the military governor, by order, established various civil departments, each under the charge of a secretary ; and later, by separate orders, created a supreme court, with jurisdiction throughout the island, and defined the jurisdiction of the ordinary criminal courts.

In speaking of the relation of Cuba to the United States and the character of its occupation thereby, the court, in the case of Neely v. Henkel (supra), page 120, says:

“ Cuba is none the less foreign territory, within the meaning of the act of Congress, because it is under a military governor appointed by and representing the President in the work of assisting the inhabitants of that island to establish a government of their own, under which, as a free and independent people, they may control their own affairs without interference by other nations. The occupancy of the island by troops of the United States was the necessary result of the Avar. That result could not have been avoided by the United States consistently with the principles of international laAv or with its obligations to the people of Cuba.
“ It is true that as between Spain and the United States— indeed, as between the United States and all foreign nations — Cuba, upon the cessation of hostilities with Spain and after the treaty of Paris was to be treated as if it were conquered territory. But, as between the United States and Cuba, that island is territory held in trust for the inhabitants of Cuba, to whom it rightfully belongs and to whose exclusive control it will be surrendered when a stable government shall have been established by their voluntary action.”

Therefore it has been judicially determined, first, that Cuba was during the occupation thereof by the military forces of the United States foreign territory, and, second, that as between the United States and Cuba the island was held in trust “ for the inhabitants of Cuba,” to whom the island, says the court, “ rightfully belongs.”

This being so, we might stop here, as the theory of the claimant is'that when the Kingdom of Spain relinquished all sovereignty over and title to Cuba they at once vested in the United States, all else having been taken by force of arms; and that as Cuba thereby became territory of the United States the decisions of the Supreme Court in the cases of De Lima v. Bidwell and Dooley v. United States (182 U. S. R., 1 and 222) are controlling. But the theory that sovereignty over and title to Cuba vested in the United States upon the relinquishment thereof by Spain is negatived bjr the language of the treaty which follows the words of the relinquishment, i. e., “And as the island is, upon its evacuation by Spain, to be occupied by the United States, the United States will, so long as such occupation shall last, assume and discharge the obligations that may under international law result from the fact of its occupation, for the protection of life and property.”

In the present case, as the United States expressly disclaimed any intention to exercise sovereignty, jurisdiction, or control over the island, “ except for the pacification thereof,” the ownership of the island, upon the relinquishment by Spain of her sovereignty over it, immediately passed to the inhabitants of Cuba, who, in the resolutions referred to, were declared to be free and independent, and in whom, therefore, abstractly considered, sovereignty resided.

Had the language been “ Spain cedes to the United States the island of Cuba,” as by Article II she did Porto Pico, that Avould have divested her of all title to and, by consequence, all sovereignty over Cuba, both of which would then immediately have passed to the United States, as they did in the case of Porto Rico; subject, however, to the rights of the people. True, when, pursuant to the treaty, the United States occupied the island, the inhabitants thereof during such occupancy undoubtedly owed allegiance to the United States, i. e., fidelity and obedience for the protection they received, but that did not divest them of their inherent rights.

The President, as Commander in Chief of the Army and Navy, had the undoubted right to prescribe rules and regulations having the force of law for the peaceable government of the island during the occupation by the military forces, but he had no authority to extend the Union so as to embrace within it territory acquired either by treaty or conquest without authority from the legislative branch of the Government. (Fleming et al. v. Page, 9 How., 603.)

In that case the United States, by the President as military commander, pursuant to authority of Congress, during the war with Mexico conquered, took possession of, and held the port of Tampico, but the Supreme Court held that such territory did not thereby become a part of the Union, but remained a foreign port, and the duties collected upon goods imported therefrom into the United States were properly levied, and hence no recovery could be had for a refund of the duties so collected. That case comes near being analogous to the present case.

During the occupation the people of the island were for a brief time, and while in preparation therefor, denied the right of self-government, but when the people had by their " voluntary action ” organized a stable government ” the United States withdrew and left “ the government and control of the island to its people,” the rightful owners. The territory being foreign, and occupied for a specific purpose, the United States could exercise no right of ownership, jurisdiction, sovereignty, or control which would operate to make the island territory of the United States. To have done so would have been a violation of their trust and an act of bad faith toward the Cuban people. The powers and functions which were exercised by the United States were strictly in line with their duties as a trustee for the protection and security of persons and property, having in view the restoration of confidence, and the encouragement of the people to resume the pursuits of peace. In furtherance of that trust it became, among other things, necessary, and there were collected from May 30, 1900, to April 29, 1902, at Sagua La Grande, Cuba, as set forth in the findings, duties aggregating $51,104.20 on goods, and merchandise imported thereto from the United States by the claimant corporation, a citizen of the United States.

The levy and collection of taxes for the support of government may in a sense be said to be the precursors of civilization, as they are the essential and material forces for the establishment of that social order from which man’s improved condition results, and without which the trustee in this case Avould have been hindered, if not prevented, from executing its trust. That the trust might be effectively and in good faith carried out, the President, as Commander in Chief of the Army and Navy of the United States, issued the order of March 31, 1900, set forth in the findings, directing that after June 15, 1900, there be levied and collected, under the supervision of the War Department, such tariff and duties as might be necessary for the purpose of the occupation. The order was issued by the President as Commander in Chief of the Army and Navy of the United States, and was therefore a war measure to enable them to discharge the functions and obligations which, by virtue of the treaty and the vicissitudes of war, devolved upon them.

It was a trust of the most solemn and sacred character, undertaken for the liberation of a people struggling for self-government and having for its object the establishment of a republic founded upon the consent of the governed.

Such being the case, should the merchandise of a citizen of the United States imported into Cuba from the United States have been exempted from the payment of such duties because the United States were, for the pacification thereof, exercising the functions of government over the island ?

To have done so would have been an act of bad faith toward the people of Cuba, as they were entitled not only to have the revenues honestly collected, but were entitled to have all the revenues accruing to the island, from whatever source, applied to the pacific object of the occupation.

The duties of an ordinaiw trustee are to render to his cestui qiie trust an accurate account of his doing's, showing receipts and disbursements made by him, including all money , which he might with diligence have received, and any loss occurring through his negligence he must make good. While that rule may not in strictness be applicable to the United States in the exercise of governmental functions as a trustee over the island, still in the forum of public conscience, as well as under the test of those rules of international law to which I have referred, the United- States would be held responsible for an honest and accurate account of their doings. That account they rendered, and on May 20, 1902, transferred to the duly' elected representatives of the people in the Congress of the Republic the government and control of the island. No protest was made- by the Republic of Cuba to the manner in which the United States had governed the island, nor did the claimant, either at the time, of the collection of the impost duties which he seeks to have refunded or at any subsequent time until the bringing of this action, object to or protest against the collection thereof. What was done by the United States was lawfully done, and hence'no right can be founded thereon in the claimant’s favor for the recovery of the duties so collected, and his petition is dismissed.