Court Opinion

ID: 6607261
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:14:50.033389+00
Date Added: 2024-06-11T15:58:03.858515
License: Public Domain

DISSENTING OPINION
Bland and- Garrett, JJ.:
We must respectfully but vigorously dissent from the conclusion and reasoning in the majority opinion, and in doing so we think we should call attention to the error of the lower court in order that we may more clearly present our views in connection with those of the majority.
The lower court states that the contention of the importers would be proper “if the wool in question had been finally determined to be. entitled to free entry.” Agreeable to this statement we are of then opinion that this was the correct test. . Later in the decision, however,,, the trial court states, as a reason why the goods in question were not., free of duty at thé time of entry, that the second judgment, of this'; . court in United States v. Stone & Downer et al., 12 Ct. Cust. Appls. 557, T. D. 40784 (which did not involve the merchandise at bar),. was a nullity and that, therefore, the Supreme Court of the United . States, having held the merchandise in the latter case dutiable, the ■ merchandise in the former case was, therefore, dutiable. The; majority of this court, as we understand it, disagree with botbj statements. We disagree only with the last one.
We think the question should be approached from a different' angle. It must be conceded that were it not for the provisions of section 319 of the Tariff Act of 1922, there would be no contention here that the Government could collect any duty on the wool involved in the first Stone & Downer Co. case before this court, irrespective of any holding of the Supremo Court reversing the judgment of this court in the second Stone & Downer Co. case.
*270It is conceded on every hand that section 319 of the Tariff Act of 1922 only applies to dutiable goods, and that the warehousing privilege therein provided for was not intended for free merchandise. The following query is immediately presented: In an instance where the Government claims merchandise to be dutiable and will not permit the importer to make entry and take the same- without payment of duty, can the importer make a warehouse entry of the same pending litigation of his claim for a free of duty status and later obtain possession of it under a court judgment holding it to be free, if he permits the merchandise to remain in bonded warehouse until after the passage of a new act containing provisions such as are in section 319, supra,*!
The above query may be divided into two questions: First, Can the importer make a warehouse entry under a statutory provision which is intended for dutiable goods and later be heard to contend that they are free? Second, If he can do so, and a new act is passed while the goods are in warehouse, are the goods in the warehouse under such circumstances as will permit the application of section 319 in event he wins in his contention that the-goods-are free?
The pertinent warehousing statute, in force and effect when the merchandise involved was imported and warehoused, is section 2962 of the Revised Statutes. The portion of the same which is important to this case reads:
Any merchandise subject to duty * * * may bo entered for warehousing and be deposited in a bonded warehouse * * *.
Article 240 of the Customs Regulations of 1915 provided “free goods * * * can not be entered for warehouse.”
We do not believe that Congress by the phrase “merchandise subject to duty” intended to deny the warehouse privilege provided for to merchandise which the Government claimed to be dutiable and the importer claimed to be free, and which was, on account of this contention, to become the subject matter of litigation between the parties. The fact that the importer warehoused his goods rather than pay the duty on the same, when he was contending that they were free of duty, is in no wise to be regarded as a binding admission of the character of the goods. The inference of the majority appears to be to the contrary.
It is our opinion that to the first part of the query the answer should be that goods which have a status such as those at bar may be legally warehoused and that such warehousing does not, of itself, remove such goods from a free status and make them dutiable.
In answer to the second question, we must conclude that it logically follows from what we have.already said that if goods which arc in fact free of duty are in the warehouse under such circumstances as are at bar, section 319, supra, would not apply to them. In other words, *271if the goods are free goods, section 319 does not make them dutiable, and the mere fact that they are in the warehouse when the new act is passed does not change their status as free goods.
The majority opinion states that the appellants contend here that the goods were not subject to the provisions of section 319 for the reason that appellants’ goods were illegally in the bonded warehouse. After previously having referred to the appellants’ contention, the majority opinion says:
We would further observe that, even though appellants’ contention that the goods in question were illegally in warehouse at the time of the enactment of the Tariff Act of 1922 was correct, nevertheless the judgment of the lower court must be affirmed for the reason that if the goods were not, by reason of being free, entitled to the warehouse privilege, it must follow that the warehouse entries made by appellants were void for that reason.
We find no contention made by appellants in this case to the effect that the goods were illegally in the bonded warehouse in the sense that they had no right to be there. Appellants do contend that their goods were “illegally held” by the collector. By reason of this contention of appellants the above quoted statement on the part of the majority does not seem to us to be a fair statement of the case, because it amounts to saying that the appellants’ entry was void. We do not think it is the intention of the majority to hold that the appellants did not have the right to enter their goods for warehousing even if they were in fact free goods, if the collector refused to let them have them until duty was paid or the issue was adjudicated. The warehouse entry certainly would not be invalidated because appellants claimed the goods were free. As we understand the position of appellants, it is that the goods were legally entered and placed in bonded warehouse, but being free goods (and this court said they were free), the collector illegally withheld them from the appellants for payment of duty, and that, therefore, they were not to be regarded as dutiable goods which were the only kind of goods that are subject to the provisions of section S19.
We think the contention of appellants above referred to was correct and that their goods were legally entered and legally in the warehouse for the purposes for which they were placed in the warehouse. They were not in the warehouse when the new act came into existence because appellants wished them to remain there but because the collector forcibly held them unless the duty was paid, which duty, as we have said heretofore, appellants did not have to pay until the matter was adjudicated.
The authorities cited by the majority have reference to dutiable goods remaining in warehouse under conditions totally dissimilar to those at bar. Furthermore, none of the decisions cited in the majority opinion involved cases wherein it was necessary to consider the legal effect of a judgment of a court.
*272It seems to us that the decisions in Bidwell v. Levi, 147 Fed. 225, and DePass v. Bidwell, 124 Fed. 615, are much more in point. While the last two above-cited cases may be in other respects distinguishable, the reasoning on the exact question at bar would seem to be very persuasive. In the latter case, speaking of free goods imported from Porto Rico and held in bonded warehouse by the collector, the court said:
If, however, these sugars were voluntarily placed in bond by the importer, and a duty was imposed thereon under the Dingley Tariff Act, and they were held for the payment of such duties until the Toraker act took effect, such holding and detention were illegal * * *.
Now, it seems to us that the first thing to do is to determine whether the goods were free or dutiable at the time they were in warehouse after the passage of the Tariff Act of 1922. If they were free when they were entered, they were free all the time they were in the warehouse, since section 319, supra,,- could not affect their status. The court below has held that they never were free goods because the Supreme Court of the United States in a similar later case hold the goods in the similar case to be dutiable. (The majority properly holds that this was erroneous.) This court held the exact goods in this case to be free of duty at the time of importation. These were not the same goods as the goods which were before the Supreme Court, and its judgment in the latter case has no bearing whatever on the free or dutiable status of the merchandise at bar.
The Supreme Court has pointed out where this court was in error in its later decision. The reasoning and effect of the Supreme Court decision, although upon a different record with some different facts, we think points to the fact that this court erred in its conclusions in the first decision and that the goods in the first case should have been held dutiable.. Notwithstanding the fact that our first judgment, in the light of the Supreme Court’s decision, was unquestionably wrong, it was not void. It remained a judgment in full force and effect and was a complete and final adjudication of the dutiable status of the merchandise therein involved.
The Supreme Court said that our adjudication of the status of the wool in the first case was not res adjudicatd of the dutiable status of the wool in the second case. United States v. Stone & Downer Co., 274 U. S. 225, 230. The grounds of such holdings were based upon the proposition that irrespective of the similarity of the goods, they were different shipments on different dates and were ,different entries and therefore, were different goods. The doctrine of estoppel by res adjudicata was limited to “the identical importation.”
The collector, on October 6, 1924, felt called upon by the mandate of this court and the lower court to reliquidate the entries of the wool involved and classify the same as free of duty (except in entry 1660). *273If the wool was free then, two years after the 1922 act had gone into effect, it was free immediately thereafter, on the same date, when he re-reliquidated by reason of section 319. Its tariff status had been definitely fixed by the final judgment of a court of competent jurisdiction, which judgment was in full force and effect. Its status was that of duty-free merchandise, and the collector was given no authority, in section 319, to change such status by a re-reliquidation. In United States v. Kurtz, Stuboeck & Co., 5 Ct. Cust. Appls. 144, T. D. 34192, where the collector declined to comply fully with the mandate of the Board of General Appraisers, this court said:
* * * The board may have mistaken the law or misjudged the facts, but its adjudication once made was binding upon all the parties until set aside either on rehearing or by the proper appellate tribunal. Gray v. Brignardello (1 Wall., 627, 634); Voorhees v. United States Bank (10 Pet., 449, 473).
In Harvey v. Tyler, 69 U. S. 328, 342, the Supreme Court of the United States said:
* * * There is, however, one principle underlying all these various classes of cases, which may be relied on to carry us through them all when we can be sure of its application. It is, that whenever it appears that a court possessing judicial powers has rightfully obtained jurisdiction of a cause, all its subsequent proceedings are valid, however erroneous they may be, until they are reversed on error, or set aside by some direct proceeding for that purpose. The only difficulty in applying the rule is to ascertain the question of jurisdiction.
To now hold that the particular goods involved in this suit and which were before us in the first Stone & Downer Co. case, supra, were not free at the time of entry (contrary to our definite and final adjudication), would be, in our judgment, in disregard of the decision of the Supreme Court on the question of res adjudicata hereinbefore referred to. If a judgment affecting one entry is not res adjudicata of the status of another entry, it follows that the Supreme Court’s adjudication in the second case in no wise affects our unmodified valid judgment that the goods were free in the first case.
It is argued by the Government that in certain cases the importer might contend that his goods were free and enter them for warehousing and then protest the classification and enter into litigation which would be in progress at the time a new act was passed and then contend that his goods came under the new act, if in the new act the duty was lower than in the old one. We think this argument is without merit as affecting the issue at bar. If the importer entered his goods in warehouse, and claimed in his protest that they were free, and they were not in fact free, then, by virtue of section 319, the customs authorities should charge the same'with the duty provided for in the new act. It would depend upon whether the goods were in fact free or dutiable at the time of entry. The court below in its *274decision correctly, makes this the test, but, we think, under the circumstances, it erroneously concluded that the particular goods at bar were dutiable goods at the time of entry, and the majority of this court has, in part, fallen into the same error by holding that the goods, having been entered for warehousing, were to be regarded as dutiable goods and as such subject to the application of section 319, sufra.
The protest should have been sustained, and the judgment of the United States Customs Court reversed.