Court Opinion

ID: 9653852
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:57:03.774135+00
Date Added: 2024-06-11T18:13:02.670569
License: Public Domain

Upon Petition, for Rehearing.
PER CURIAM.
We affirmed the decision of the District Court dismissing the bill of complaint and holding that complainant’s Hispano-Suiza automobile could not be imported for the reason that it bore a foreign trade-mark owned by Clarke D. Pease, Inc., a citizen of the United States, and the written consent of the latter to importation had not been obtained as required by section 526 (a) of title 4 of the Tariff Act of September 21, 1922 (19 USCA § 141). .
After our decision, the complainant applied to the collector of the port for permission to remove or obliterate the trade-marks on the merchandise in order thus to obviate the objections to the -importation. In making this application, she relied upon section 526 (e), 19 USCA § 143, which provides that the importer may be enjoined from dealing in the merchandise “within the United States or may be required to export or destroy such merchandise or to remove or obliterate such trade-mark. * * * ” The collector took the position that the Secretary of the Treasury had ruled that the provisions of section 526 (c) are to be enforced only by a court and are not administrative provisions to be applied by the Secretary of the Treasury, and that the request for permission to remove or obliterate the trade-marks “should have been made to the court.” After this 'ruling the complainant moved for a rehearing of this appeal so that a mandate might issue directing that upon the removal of the trade-marks and the payment of all proper duties and charges, entry of the automobile might be permitted.
On the argument of the appeal, and in complainant’s brief, it was not suggested that she desired to have the trade-marks removed or obliterated so that she might be allowed to retain her car. Nor does the bill of complaint ask to have the trade-marks removed or obliterated. The only cause of action of any moment, which is the first, is based upon the claim that the provisions of section 526 of the Tariff Act (19 USCA §§ 141-143), are inapplicable to an automobile which is being imported for the personal use of the owner and not for sale. Complainant does, however, pray in her bill that the collector be ordered to admit the-car to entry and to deliver it to her upon payment of customs duties and other lawful charges, and also asks for “such other and further relief as the court may deem proper.” This we think is enough as a matter of pleading to justify us in allowing the bill to stand and the cause to go to trial if, under section 526 (c), supra, the complainant has any right to require the car to be admitted to entry on removal or obliteration of the trade-marks.
In answer to complainant’s petition for a rehearing, Clarke D. Pease, Inc., says that under section 526 (b), 19 USCA § 142, the ear is “subject to seizure and forfeiture for violation of the customs laws,” and that it has already been seized by the collector. Clarke D. Pease, Inc., likewise says that the provisions of section 526 (e), 19 USCA § 143, only afford supplementary remedies for the benefit of the trade-mark owner and not of the importer, that the trade-mark is impressed upon so many parts of the automobile that it is impracticable to obliterate it, and that when, as is the case here, the collector has expressed “a willingness to permit the exportation of the car back to the port it came *1039from the importer is being granted every consideration.”
We have no doubt that the car must be regarded as “merchandise imported into the United States” within the meaning of section 526 (b) of the Tariff Act (19 USCA § 142), and that it was such when it arrived within the limits of the port of New York. American Sugar Ref. Co., v. United States, 181 U. S. 619, 21 S. Ct. 830, 45 L. Ed. 1024; Marriott v. Brune, 9 How. 619, 13 L. Ed. 282; United States v. Southmayd, 9 How. page 637, 13 L. Ed. 290. By such importation it became, under section 526 (b), “subject to seizure and forfeiture.” But the statute affords certain alternative remedies when no forfeiture is decreed. While the collector may file a libel for forfeiture, yet, where he does not take this drastic step which nothing that has been suggested to us would seem to justify, either an injunction or an order to export or to destroy the car, or to remove the trade-marks therefrom may be granted under section 526 (c), 19 USCA § 143. Both the ruling of the Treasury Department and the fact that the last three remedies follow the' clause of section 526 (e) providing for injunctive relief would indicate that the remedies are not administrative, but are intended to be enforced by a court, and that the selection of the appropriate remedy will depend upon the exercise of judicial discretion.
Though the merchandise which has been unlawfully imported is subject to seizure and forfeiture under section 526 (b), 19 USCA § 142, and has been actually seized by the customs authorities, we think that the collector may be required to assert his right to file a libel for forfeiture with promptitude. Any other mode of procedure would render the remedies afforded by section 526 (c), 19 USCA § 143 futile and incapable of efficient enforcement. The situation is analogous to those where claims for taxes have existed against bankrupt estates but no steps have been taken to assert them. In such cases we have required the government to file its claim within á specified period, and, in the event of failure to do this, have ordered the estate administered free from such claim. In re Anderson (C. C. A.) 279 F. 525.
It cannot be said that the complainant has no right to have her ear admitted to entry upon removal or obliteration of the trademarks, because this remedy can only be invoked by the owner of the trade-mark. While we do not say that the latter may not invoke it, we do not think this remedy is solely or even primarily for the benefit of such owner. The owner of the trade-mark is amply protected by the clauses of section 526 (c) permitting an injunction against dealing in the prohibited merchandise and providing for exportation and destruction. The clause permitting the merchandise to remain after removal of the trade-mark really benefits the* importer alone, and evidently was inserted in the act to ameliorate the situation of the latter when the facts justified its application. It is quite superfluous and useless if the importer can never be heard to say that it ought to be applied. We think complainant should be allowed to invoke the remedy sought, provided that the collector does not insist upon a forfeiture.
The collector makes substantially the same contentions as Clarke D. Pease, Ine., but adds that he objects to the burden of seeing that the trade-marks are removed or obliterated. Perhaps he ought not to be under such a burden, but that will depend on the extent of the burden in this particular case and whether removal or obliteration is shown to be reasonable and practicable in the circumstances. Whether the remedy sought should he applied or not is a matter for a court to determine upon proofs, and the trial court is the proper tribunal to conduct the inquiry.
Although this appeal was not argued upon the theory that the appellant was seeking the remedy she now invokes, we think under the prayer for general relief contained in her bill that she should be given the opportunity to pursue the remedy in the District Court.
A mandate will issue reversing the decree, remanding the ease, and providing (1) that the collector shall have thirty days within which to file a libel of forfeiture, and that, if he files such libel, the cause shall stand over to await the outcome; and (2) likewise providing that, in case no libel is filed within the foregoing period, the court shall hear proof and determine whether complainant’s ear shall be exported or destroyed, or, after removal or obliteration of the trade-marks thereon and the payments of customs duties and other proper charges, shall be admitted to entry.