Source: https://www.legalcrystal.com/case/92160/thames-mersey-marine-ins-co-ltd-vs-united-states
Timestamp: 2019-04-22 04:51:26+00:00

Document:
Appellant Thames and Mersey Marine Ins. Co., Ltd.
United States v. Hvoslef, ante, p. 237 U. S. 1 , followed to effect that the requirement of § 5 of the Tucker Act, requiring the suit to be brought in the district in which claimant resides, is one of procedure which can be waived, and is waived by a general appearance.
Although the government may assert in its demurrer to an action brought in the district court for refund of taxes under the Tucker Act that it appears specially, a demurrer which raises not only the question of jurisdiction of the subject matter of the action, but also that of the merits, seeking to obtain a decision on the constitutionality of the tax, is in substance a general appearance, and amounts to a waiver of objection with respect to the district in which tho suit is brought.
Exportation is a trade movement and the exigencies of trade determine what is essential to the process of exporting.
Insurance against loss is an integral part of exportation, and is so vitally connected therewith that a tax on the policies is essentially a tax upon the exportation as such.
Taxes on policies of marine insurance on exports are within the prohibitions of § 9, Art. I, of the federal Constitution, prohibiting any tax or duty on articles exported from any state, and held that amounts paid for stamps on such policies under the War Revenue Act of 1898 were illegally exacted and recoverable under the Refunding Act of July 27, 1902.
The facts, which involve the construction of § 9, Article I, of the federal Constitution, prohibiting any tax or duty on exports and the validity of stamp taxes under the War Revenue Act of 1898 on policies of marine insurance on exports, are stated in the opinion.
The plaintiff in error is a corporation engaged in the business of underwriting policies of marine insurance. It brought this action to recover the amount paid as stamp taxes upon policies insuring certain exports against marine risks. The taxes were paid under the War Revenue Act of June 13, 1898, c. 448, 30 Stat. 461, and the recovery was sought under the provisions of the Act of July 27, 1912, c. 256, 37 Stat. 240, upon the ground that the tax was invalid, being in substance a tax upon exportation, and hence contrary to § 9, Article I, of the federal Constitution, prohibiting any tax or duty on articles exported from any state.
was not delivered until the vessel had sailed. Upon receiving each of the declarations, the company entered the amount and rate of the premium, and delivered to the shipper a certificate of insurance by which the goods described were insured for the voyage and upon the vessel specified. It was further averred that bills of exchange were drawn by the exporters on the consignees of the merchandise for the purchase price, and that the bills of lading and the certificates of insurance were by custom required as the necessary documents to enable the exports to be made and the bills to be discounted, and that these documents were actually forwarded to the foreign country to which the goods were shipped. At the end of each month, the company rendered to the insured a bill for the premiums which had accrued in accordance with the declaration, and, monthly, the company presented to the collector a book containing a summary of the premiums earned in respect of such insurance, and purchased the stamps required by the War Revenue Act. By direction of the collector, in accordance with the method prescribed for mutual convenience by the Commissioner of Internal Revenue, these stamps were affixed to the book, and then cancelled. In each case, the goods were in fact exported, and were insured during their transit by sea to the foreign ports. The claim for the refunding of the taxes was duly presented to the collector, it was alleged, under the Act of 1912, and was transmitted to the Commissioner of Internal Revenue, who refused payment.
The government demurred upon the grounds that the court had no jurisdiction of the defendant or of the subject of the action, and that the petition did not state facts sufficient to constitute a cause of action. The district court sustained the demurrer, holding the tax to be a valid one. 217 F. 685. Judgment was entered dismissing the petition, and this writ of error has been sued out.
"its principal office for conducting said business in the United States and its residence was and is in the Borough of Manhattan, City of New York, in said district."
of the tax, and hence of the insufficiency of the facts alleged to support a recovery. Such a demurrer is in substance "a general appearance to the merits," and is a waiver of objection with respect to the district in which the suit was brought. Western Loan Co. v. Butte Mining Co., 210 U. S. 368 , 210 U. S. 372 ; St. Louis &c.; Ry. v. McBride, 141 U. S. 127 , 141 U. S. 130 .
whether policies of insurance against marine risks during the voyage to foreign ports are not so vitally connected with exporting that the tax on such policies is essentially a tax upon the exportation itself.
"its recognized legal incidents, one of which is that the shipper fulfills his obligation when he has put the cargo on board and forwarded to the purchaser a bill of lading and policy of insurance, with a credit note for the freight, as explained by Lord Blackburn in Ireland v. Livingston, L.R. 5 H.L. 395, 406."
"necessary and expedient that the United States shall temporarily provide for the export shipping trade adequate facilities for the insurance of its commerce against the risks of war."
This is a very clear recognition of the fact that proper insurance during the voyage is one of the necessities of exportation. The rise in rates for insurance as immediately affects exporting as an increase in freight rates, and the taxation of policies insuring cargoes during their transit to foreign ports is as much a burden on exporting as if it were laid on the charter parties, the bills of lading, or the goods themselves. Such taxation does not deal with preliminaries, or with distinct or separable subjects; the tax falls upon the exporting process.
For these reasons, we must conclude that, under the established rule of construction, the tax as laid in the present case was within the constitutional prohibition. Fairbank v. United States, 181 U. S. 283 ; United States v. Hvoslef, ante, p. 237 U. S. 1 .

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