Court Opinion

ID: 5329752
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:08:47.879447+00
Date Added: 2024-06-11T08:29:26.289985
License: Public Domain

Untermyer, J.
(dissenting). The defendants appeal from an order granting the plaintiff’s motion for judgment on the pleadings.
On October 11, 1926, the plaintiff purchased from the defendants constituting the firm of Henry W. Peabody & Co. 500 dozen hats to be shipped from Japan to the United States during the *730month of January, 1927. The written contract of sale contained the following provisions: “ Price: (N. Y. funds) $5.60 per dozen duty paid f. o. b. New York. The selling price in this order is based on Henry W. Peabody & Company paying present rate duty on present valuation at port of shipment. Any change in rate or advance or decline in value necessitating a change in the amount of U. S. Duty is for the account of the Buyer.”
The complaint alleges that upon arrival at the port of New York a duty of thirty-five' per cent ad valorem was imposed upon the merchandise by the Collector of the Port and was paid by the defendants under protest. From that ruling the defendants appealed to the United States Customs Court, which held that the merchandise was dutiable at the rate of twenty-five per cent and not at the rate of thirty five per cent ad valorem. In consequence of this decision the defendants have received or will receive a refund of the ten per cent excess duty so paid. The present action is for judgment declaring that any refund of duty is to be held by the defendants in trust for the plaintiff to be accounted for in accordance with the provisions of the contract. The answer does not deny the material allegations of the complaint so that the question which is determinative of this appeal is whether a cause of action is stated in the complaint.
Upon the uncontroverted facts alleged in the complaint I think the plaintiff is not entitled to recover. The parties contracted, and the stipulated price of five dollars and sixty cents per dozen was determined, upon the assumption that the defendants should pay the “ present rate duty on present valuation ” at the time the contract was made, and this is precisely what the defendants have paid. The parties likewise agreed that “ any change in rate or advance or decline in value necessitating a change in the amount of U. S. Duty ” should be for the account of the plaintiff,.the buyer of the merchandise, and there has been no change in duty or in valuation. If any change of rate had occurred between the date of the contract and the imposition of the duty, the plaintiff would, of course, have been liable for any increase and entitled to any reduction. (Wayne County Produce Co. v. Duffy-Mott Co., 244 N. Y. 351; Solomon Tobacco Co. v. Cohen, 184 id. 308.) But here the legal rate, as the decision of the Customs Court attests, was twenty-five per cent and there is no suggestion in the complaint that the correct rate, or even the rate commonly imposed on merchandise of this character at the port of New York, was more than this. The rate of duty, therefore, was the same when the contract was made as when the duty was imposed. The decision of the Customs Court did not constitute “ any change in rate.” It was merely a determination that the existing rate of duty, with reference to which the parties *731must have intended to contract, was twenty-five per cent instead of thirty-five per cent erroneously or inadvertently imposed. The complaint does not justify any inference that the parties acted under a mistake concerning the correct rate of duty on merchandise of this character, or that the defendants paid less duty than it was contemplated they should pay. The provisions of the contract on which the plaintiff relies could, only have been intended to apply if the rate of duty or the valuation of the merchandise was changed by act of law between the date of the contract and the imposition of the duty.
The order should be reversed, with twenty dollars costs and disbursements, and the motion denied, with ten dollars costs,
Townley, J., concurs.
Order affirmed, with twenty dollars costs and disbursements.