Case Name: SCHMALZ'S CASE. GOTLIEB SCHMALZ v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1869-12
Citations: 5 Ct. Cl. 294
Docket Number: 
Parties: SCHMALZ’S CASE. GOTLIEB SCHMALZ v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 5
Pages: 294–302

Head Matter:
SCHMALZ’S CASE. GOTLIEB SCHMALZ v. THE UNITED STATES.
On the Proofs.
A case of jewelry is seizedby the collector at the port of New Yorlc, on the supposed ground that it is invoiced helow its value. Proceedings in rem are instituted by the United States, which, after much delay, result in a verdict in favor of the owner. The goods are demanded, but it then appears that they have been lost in the public store, or in their removal to the seizure room of the custom-house. This suit is brought to recover their value. Upon a former hearing upon demurrer the record showed no probable cause of seizure, and on that ground as ivell as others, the demurrer was sustained. Thisdefeetis now supplied by a certificate of the District Court showing probable cause for the seizure.
Where goods are seized by a collector of customs, with probable cause for the seizure, as certified by the district court, under the Act 2d March 1799, (1 Stafc. L., p. 677,) and the goods are subsequently lost while in custody of the collector, the Government is not liable for their loss. Under the 66th section of the act, where the “ collector shall suspect” that the goods “ are not invoked at a sum equal to that for which they have usually been sold in the place or country from tohence they were imported, it shall be the duty of such collector to talce the said goods into his possession, and retain the same with due and reasonable care, at the rislc and expense of the owner.”
Mr. E. Delafield Smith and Messrs. Weed & Clark for the claimant:
The claimant institutes this suit to recover the value of a case of jewelry seized by the revenue officers of the United States, for an alleged under-valuation in the invoice, upon which the duties payable thereon were assessed.
1st. On the 13th day of July, 1859, a libel of information was filed in the United States District Court for the southern district of New York, by the United States district attorney for said district, in which, among other things, it was alleged, referring to said case of jewelry, that—
“ Said goods, wares, and merchandise being subject to the payment of ad valorem duty, caused the said package of goods, wares, and merchandise to be examined, inspected, and appraised according to the provisions of the several acts of Congress in such case made and provided; and that upon such examination, inspection, and appraisement the said invoice, and the said package were found to have been made up, and the same were in fact made up, with intent, by a false valuation, to evade and defraud the revenue of the United States, in this, that the said goods, wares, and merchandise contained in the said package were charged in the said invoice at a less value and amount than the actual market value or wholesale price of the same in the principal markets of the country whence the same were imported into the United States, at the time of the exportation of the same into the United States, thereby intending to defraud the United States by paying less duty on the said package of goods, wares, and merchandise than the amount which by law the said package of goods, wares, and merchandise was required to pay on the importation thereof into the United States/7
2d. That upon the trial of said cause, the claimant herein having intervened and claimed said goods, there was a verdict in said court in his favor, on the 5th day of December, 1867. And that afterward, on the 17th day of December, 1867, the following order and decree was entered in said cause by said court, to wit:
u Therefore it is considered that the said plaintiffs take nothing by their said libel of information, and on motion of the attorney for the claimant, it is ordered that the above-mentioned goods, wares, and merchandise bo delivered to the claimant on payment of costs chargeable against said claimant, and filing a certificate of the payment of the duties chargeable on said goods.”
Judgment signed December 17, 1807.
3d. That afterward, in said court, on the 23d day of December, 1807, the following additional order -was made by said court in said cause, to wit:
“ This case having been heard on a motion for a certificate of probable cause of seizure on affidavits in favor of, and in opposition thereto, and argued and submitted by the advocates for the respective parties, and due deliberation being had in the premises, it is now ordered, adjudged, and decreed by the court that a certificate of probable cause of seizure, &c., v. the same, is hereby granted in the above-entitled suit.”
4th. That the claimant has complied with the order upon which the restoration of said goods to him was conditioned. He has paid the duties legally assessed thereon, and the costs of said proceeding.
5th. That said case of jewelry has not been delivered to said claimant in pursuance of said order, and that said goods were of the value stated in claimant’s petition, to wit, the sum of two thousand two hundred and ten dollars.
II. Since this case was heard upon the demurrer, and judgment rendered thereon, the petition has been amended by averring that a certificate of probable cause of seizure issued in said cause as stated in the amended petition herein. The principle asserted in the decision of the court upon the demurrer is substantially the same as that announced in Story on Agency, (Bennett’s Ed.,) see 319.
The case cited by the learned author comes far short of sustaining the principles so stated. In the case of United States v. Kirhpatrieh, (9 Wheat. It. 720, 723,) the suit was claimed upon an official bond, executed by a collector of taxes. It was claimed by the sureties on the bond that they were released from liability, because tbe proper Government officials neglected to compel tbe collector to account for funds in bis bands, as required by law. We have no disposition to controvert tbe correctness of tbis proposition. Tbe sureties were liable to tbe extent of tbeir bond for all moneys that came to tbe collector’s bands. ^
We do not rest tbis case entirely upon that ground. We are armed with something more tban tbe mere obligation which would require tbe Government to return us our goods, should it appear that they bad been erroneously seized. Tbe statute under which they were seized provided for that return in tbe following terms:
Section 69 of tbe act (Brightley’s Digest, ]>. 410,) reads as follows:
“ All goods, wares, or merchandise which shall be seized by virtue of tbis act shall be put into and remain in the custody of tbe collector, or such other persou as be shall appoint for that purpose, until such proceedings shall be bad, as by this act are required, to ascertain whether tbe same have been forfeited or not; and if it shall he adjudged that they are not forfeited, they shall he forthwith restored to the owner or owners, claimant or claimants, thereof.”
It is no answer for the Government to say that it has not these goods in its possession; that they have been lost or have gone out of its custody, in consequence of tbe negligence of some subordinate agent. If tbe Government had elected to have hired these goods to be stored at a private warehouse, instead of storing them as they did, and they bad been lost while so stored, would tbe bailee have been able to avoid paying tbeir value, upon a suit brought by tbe Government, upon tbe plea that be bad not got them; that they bad been lost, and be could not produce them ? Clearly tbis defense would not avail him.
Tbe Government is not liable for tbe malfeasance, misfeasance, or nonfeasance of its agents, is tbe defence made to tbis claim. Tbis proposition clearly contemplates that the Government shall not be held liable for tbe acts of its agents not in tbe line of tbeir duty. If, however, tbe agent acts within tbe line of bis duty and in good faith, and injury results from such action, tbe Government, for whom tbe agent acts, must assume tbe responsibility.
Tbe court, by its certificate of probable cause of seizure is sued in this case, has judicially declared that the agent was acting in good faith, and in the line of his duty. When this certificate is issued, the statute itself affords protection to the agent, for it provides that—
“ If it shall appear to the court before whom such prosecution shall be tried that there was a reasonable cause of seizure, the court shall cause a proper certificate or entry to be made thereof, and in such case the claimant or claimants shall not be entitled, to costs, nor shall the person who made the seizure, or the prosecutor, be liable to action, suit, or judgment, on account of such seizure or prosecution.” (1 Stat. at Large, p. 627, sect. 89.)
The agent would have been- protected without this certificate, if he acted in the line of his duty and in good faith. (Otis v. Watlcins, 9th Oranch, 339: Oroioell v. McFadden, 8th Oranch, 94.)
The agent was not a wrong doer. He was acting for the benefit of the Government, and it accepted and received the advantage resulting from his action. He is not liable to this claimant, although the loss to him was the direct result of his act in seizing the goods. The . claimant can show no personal misfeasance on the part of the officer seizing his goods, and without that no personal responsibility attaches to him. (Brissae et al. v. Lawrence, 2 Blatch. B., 121.)
Mr. T. S. Talbot (with whom was the Assistant Attorney General) for the defendants:
Against this claim the points of defence are as follows :
1. The statute directing the restoration of these goods to the claimant (2 March, 1799, section 69, 1 Stat., 677, B. 410,) not constituting a contract between the United States and this claimant, furnishes no ground of recovery, nor even of jurisdiction in this court. (United States v. Kirlcpatrielc, 9 Wheat., 736 5 same v. Van Zandt, 11 Wheat., 190; Leming’s case, 1 0. Cls. B., p. 191.)
To construe such statutes as implying contracts of guarantee that they never shall be violated, wrests them from their purpose, and makes opportunity for inevitable abuse; more so than even the practice of indemnifying officers for the legal consequences of their own wrong doing. As to which see Brissae v. Latorenee, 2 Blatchford, O. O. B., p. 124.
II. If tbe act complained of were tbe act of tbe Doited' States, still it is a tort and not a basis of contract, and therefore not Avitbin tbe jurisdiction of this court. (Dennis v. United States, 2 C. 01s. B., p. 212.)
Tbe United States have received no benefit whatever from tbe same.
III. But the act complained of is not tbe act of tbe United States, but of one of its agents; and for tbe wilful trespass or misfeasance of an agent tbe principal is not liable, unless tbe principal assent thereto. Tbe failure to keep and restore in this case was a wilful trespass, a misfeasance or omission of duty of an agent, forbidden, not authorized, by bis principal. (McManus v. Crickett, 1 Bast., 105; Jones v. Hart, 2 Salkeld, 441; Lane v. Cotton, 12 Mod., 488; Perkins v. Smith, 1 Wilson, 328; Sehroyer y. Lynch, 8 Watts, 459; Foster v. Fssex Bank, 17 Mass., 508, 509; Blackstone’s Com., 1,429; Middleton v. Fowler, 1 Salkeld; Paley’s Agency, Dunlap’s ed., 306.)
What instructions bad tbe principal in this matter given to its agent ?
1. To seize and detain, March 2,1799, sections 66 and 69, 1 Stat., 677, B. 409, 410; yet at bis own hazard. (See Burke v. Trevitt, 1 Mason, 101.)
2. In case tbe libel was not sustained to restore tbe seized goods to the claimant. (See second clause of section 69, above cited.)
3. Thus tbe omission complained of was not within but against tbe instructions which this defendant as principal bad given to its agents.
TV. The government, more than any other principal, is exempted from responsibility for unauthorized acts or omissions of its agents. (Story on Agency, section 319; Connell v. Voor-hes, 13 Ohio, 542; United States v. Kirkpatrick, 9 Wheat., 720 ; United States v. Van Zandt, 11 Wheat., 188.)
For further extension of this principle see Whitfield v. Be Despencer, Cowper, 766; Baily v. The Mayor 2T. Y., 3 Hill, 538; Shakspeare, Henry V, act 4, scene 2.
Y. Tbe claimant has an adequate remedy through tbe ordinary jurisdiction of tbe court in which tbe libel was filed, and also by action at law against tbe keeping officer for any negligence or misfeasance. (Burke v. Trevitt, 1 Mason, 101, 2.)
This latter remedy is made more efficient by tbe requirement of an official bond. (2 March, 1799, section 1,1 Stat., 704, B. 321; 24 September, 1789, section 27, 1 Stat., 87, B. 595.)
YI. If there were no such negligence or misfeasance, (which exculpation the claimant endeavors to avail himself of, but does nob show,-) then the damage befalling the claimant is without injustice, and no one should be held to answer for it.

Opinion:
Milug-AN, J.,
delivered the opinion of the court:
This case has been once tried on a demurrer to the petition, on which judgment was rendered for the defendants.
Subsequently, on' leave of the court, the claimant amended his petition and produced further evidence, and the cause is now on trial on the merits.
The facts of the ease are fully stated in the opinion of the court, (4 G. Gis. B., p. 142,) and need not be here at length repeated. It is sufficient to state that the action is founded on the 69th section of the Act 2 March, 1799, (1 Stat. L., p. 627,) which provides that goods seized thereunder shall " remain in the custody of the collector, or such other person as he shall appoint for .that purpose, until such proceedings shall be had as by this act are required, to ascertain whether the same have been forfeited or not, and if it shall be adjudged that they are not forfeited, they shall be forthwith restored to the owner or owners, claimant or claimants."
The goods of the claimant — a case of jewelry — were seized by the collector at the port of New York, on the supposed ground that it was invoiced below its value. Proceedings in rem were instituted by the United States, which, after much delay, resulted in a verdict in favor of the owner. The goods were demanded, but they appear to have been lost while in the public store of the custom-house, or in their removal to the seizure room, and cannot be produced; and this suit was brought to recover their value from the United States.
On the former trial the record showed no probable cause of seizure, and on that ground, as well as others mentioned in the former opinion, the claim was refused.
The defect in the rebord on the first trial has now been supplied, and we are therefore asked to give judgment for the value of the jewelry against the United States.
The case has been elaborately argued, and with much inge unity on botli sides. But we aeed not follow tlie arguments of counsel, or pass upon the interesting points of discussion raised by the Assistant Attorney General. As the case stood on the former hearing, without a certificate of reasonable cause of seizure, we held, under the authority of the act of 1799, and the construction put upon it by the Supreme Court of the United States in the uAppollon, Edam, claimant," (9 Peters, 362,) that the remedy lay directly against the collector, or person making the seizure, and not against the United States. Now the "certificate of probable cause," by the same authority, shelters the collector from prosecution. But the 66th section of the Act 2cl March, 1799, (1 Stat. L., p. 677,) interposes a complete bar to this action. The words of the section are: " That if any goods, wares, or merchandise, of which entry shall have been made in the office of a collector, shall not be invoiced according to the actual cost thereof at the place of exportation, with design to evade the duties thereupon, or any part thereof, all such goods, wares, or merchandise, or the value thereof, to be recovered of the person making entry,- shall be forfeited; and in every case in which the said collector shall suspect that airy such goods, wares, or merchandise are not invoiced at a sum equal to that for which they have usually been sold in the place or country from whence they were imported, it shall. be the duty of such collector to take the said goods, wares, and merchandise into Ms possession, and retain the same with due and reasonable care, at the risk and expense of the owner or owners, consignee or consignees thereof, until their value at the time and place of importation shall be ascertained by two reputable merchants, to be chosen and appointed as in case of damaged goods, or goods not accompanied with an invoice, and until the duties arising according to such valuation shall be first paid, or secured to be paid, as required by this act in other cases of importation: Provided, That in case of a prosecution for the forfeiture aforesaid, such appraisement shall not be construed to exclude other proof upon the trial of the actual and real cost of the said goods at the place of exportation."
This section of the act of 1799 is held to be still in force, and when applied in this case, ends all controversy. (Wood v. The United States, 16 Peters, p. 342; The United States v. Sixty-seven Packages of Dry Goods, 17 Howard, p. 85; The United States v. Nine Cases of Silk Hats, Ibid., p. 97; The United States v. One Package of Merchandise, Ibid., p. 98; see, also, 99.)
The claimant having failed to avail himself of the provisions of the 89th section of the act of 1799, noticed in the former opinion, or of the 6Gth section hereinbefore quoted, he cannot now hold the United States responsible for the loss of his goods. The seizure, as he now shows himself, was under reasonable grounds of suspicion, and the goods, by the plain terms of the law, were at his own risk, until the judgment of the district court in the action for forfeiture.
The defendants are therefore entitled to judgment, and the petition is dismissed.