Case: William P. Kellogg v. The United States
Abbreviation: Kellogg v. United States
Decision Date: 1879-12
Docket Number: 
Citation: 15 Ct. Cl. 372
Volume: 15
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: William P. Kellogg v. The United States.
Judges: 
Pages: 372–381

Head Matter:
KELLOGG’S CASE.
William P. Kellogg v. The United States.
On the Proofs.
The claimant is collector of the port of Nexo Orleans. Proceedings are instituted in the district court for the forfeiture of wines imported in fraud of the revenue laxos. While the suits are pending, compromises are made l>\j the Secretary axxit the owners, pursuant to which a large sum of money is paid, into coux't for costs, duties, and forfeiture. Less costs axxd expenses, it is received by the collector and by him paid into the Treasury. Se goes before the Secretary, is heard in relation to the distribution, submits to the Secretary’s proceedings to determine the claims of all parties upon the fraud, axid then receives the amount awarded as his share. After the entire fund has been paid away he brings this suit. Evidence is offered as to the details of the methods by lohich the Secretary reached his conclusions.
1.The three methods by which informers and seizing officers claiming shares of penalties and forfeiture’s in 1871 could have their rights determined stated and explained.
II.Where the Secretary of the Treasury has made destribution of fines and penalties before suit brought by a claimant to recover a share therein, his action is final and cannot be reviewed in this court.
III.When it appears by the evidence that the Secretary of the Treasury has made a finaL distribution which cannot be reviewed, the court is not required to find as facts the details of the methods whereby the Secretary reached his conclusions.
The Reporters1 statement of the case:
This case was argued at considerable length, to show that the Secretary of the Treasury had awarded the portion of the fines and forfeitures that formed the foundation of the suit to certain persons who were legally incompetent to receive them, and Fence, that the claimant as collector of the port of New Orleans should have received a much larger proportion of the fund distributed than the Secretary awarded to him. A mass of evidence was also read on the trial, to show the details of the methods employed by the Secretary to reach his conclusions, and the claimant requested the court to find a number of facts from that evidence. Such a finding the court declined to make, on the ground of its immateriality. The following are the facts found by the court:
I. The claimant was collector of the port of New Orleans from June 26, 1865, to July 16, 1868. During said time Thomas M. Wells was naval officer and Andrew T. Stone was surveyor of customs at said port.
II. In and before the year 1866, L. W. Viollier was consul of the United States at Lyons, France, and Montgomery Gibbs was a special agent of the Treasury, detailed for duty abroad, and discharging such duty in France, with his headquarters in Paris, under instructions from the Secretary of the Treasury.
Viollier first learned from private sources of information facts tending to show that certain invoices of red wine imported into the United States from Bordeaux were undervalued. He communicated the information to Gibbs, and went to Bordeaux and made a thorough investigation of the subject and reported the results, which confirmed his information to Gibbs.
On February 1,1866, Gibbs wrote to the claimant, Kellogg, reporting the existence of frauds in, and recommending the seizure of, certain importations of red wine, part of which are the subject of controversy herein, and claiming to be entitled as informer. A similiar communication, with copies of the reports of Viollier to Gibbs, was at the same time sent by him to the Solicitor of the Treasury, .who at once sent them to said Kellogg, who thereupon, and in pursuance of instructions from the Secretary of the Treasury, seized the property in qtiestion and caused the same to be prosecuted for fraudulent undervaluation.
III. Proceedings were instituted in the district court of the district of Louisiana for the condemnation and forfeiture of said wine, and by compromises with the parties judgments were rendered, and certain sums of money were paid into the registry of the court for duties and costs and for forfeitures. Subsequently the. sum of $41,737.01 was paid to the collector of said port, ajid by him paid over to the Treasury of the United States, in the year 1871, as the proceeds of fines and penalties arising in said proceedings.
IY. On the 29th of September, 1871, the Secretary of the Treasury distributed one-quarter part of said sum to Montgomery Gibbs and L. W. Viollier, whom he found to have been the first informers, and whom he decided to be as such entitled to share therein. On the 16th of November, 1871, the Secretary made his final distribution of the balance of the fund then remaining in the Treasury. In so doing he first made certain deductions (to which the claimant objects in this action!, neither the nature nor the amount of which have been inquired into by the court, and the balance then remaining after such deductions he awarded one-third to the collector, naval officer, and surveyor, as their one-quarter of the whole amount of the fines and penalties received, as set forth in the preceding finding. The balance, including’ such deductions, the Secretary retained in the Treasury.
Y. The claimant and all the x>arties making claim to share in the money were heard before the Secretary of the Treasury, and objected to the allowance of any sum to said Gibbs and Yiollier as informers, on the ground that they were not such either in law or in fact. Evidence was taken on the question, and after hearing the parties the Secretary overruled the objections.
VI. The money thus ordered to be distributed was paid to said informers, collector, naval officer, and surveyor before this action was commenced.
Upon the foregoing findings of fact, the court decided as conclusions of law:
1. That when the Secretary of the Treasury has made a distribution of fines and penalties before suit brought by a claimant to a share thereof, his action is finad and conclusive and cannot be reviewed in this court.
2. That the court cannot in such ease go back of the distribution to impeach its correctness, and is not required to find the facts as to an alleged informer to whom a share was paid, or as to deductions made by the Secretary in determining the amount to be distributed, or as to whether such deductions remain in the Treasury and should not have been deducted from the amount to be distributed.
Messrs. Lander &Merriman for tbe claimant:
The act of March 2, 1867, passed after the seizures in these cases, provides that in addition to the payment of legal charges and expenses, that before distribution there shall be also “ distributed an amount equivalent to the duties in coin upon such merchandise.” And it was claimed by the Secretary, by virtue of this act, he was authorized to apply so much of the proceeds of such forfeited goods as would have paid the duties thereon.
In this we insist the Secretary was in error, for here was a right vested in the claimant prior to the passage of the act of 2d March, 1867, which is not affected by that act. It is a universal principle of legislation, and of the construction of legislative acts, that such acts shall operate in futuro only so far as the rights of parties are concerned. (Gilmore v. Blatter, 2 Mod., 310; Lash v. Tan Kleek, 7 Johns., 477; Lewis v. Breelt-enbridge, 1 Blatchf., 222.)
A forfeiture attaches at the time of seizure. (United States v. 1060 Bags Coffee, 8 Oran., 398; United States v. The Mars, 8 Oran., 417; Gelston v. Hoyt, 3 Wheat., 146; Caldwell v. The United States, 8 How., 366.)
The right of the government, having attached at the time of the seizure, includes with it the rights of the officers making the seizure, for the reason that they are jointly interested with the government in the proceeds of such seizure, which rights are to be consummated by condemnation. (Jones v. Shore, 1 Wheat., 462; Tan Less v. Buell, 4 Wheat., 74; United States v. Morris, 10 Wheat., 246-292; Hoyt v. The United States, 10 How., 321.)
And although the power exists in the Secretary of the Treasury to remit penalties or forfeitures in Avhole or in part, yet such remission must apply equally to all parties interested in such proceeds. (Marguretta, 2 Gall., 515; MeLcme v. The United States, 6 Pet., 404-426.)
Mr. Assistant Attorney-General Simons for the defendants :
The Supreme Court has repeatedly held that such officers as these claimants acquire no vested right in a fine, penalty, or forfeiture, before the proceeds are received for distribution, which can be maintained against the lawful authority to remit or otherwise dispose of a claim vested in the Secretary of the Treasury or other officer controlling the suit, and this notably in some of the cases cited in the claimant’s’ brief. (McLa/ne v. United States, 6 Pet., 404; United States v. Morris, 10 Wh.,. 246; Hoyt v. United States, 10 How., 109; Confiscation Cases7 7 Wall., 454.)
In the case last cited, the court refer with disapproval to-some obiter dicta to be found in the opinions in Jones v. Shore (1 Wh., 462) and YanNess v. Buell (4 Wh., 74), cited by claimants-apparently in reliance thereon.
These authorities are so decisive that the only thing that can be said to avoid their effect is that they do not relate directly to a case of compromise of a forfeiture under the Act March 3,1863, § 10 (12 Stat.L., 740), as they were mostly decided before that power was conferred on the Secretary of the Treasury. It seeips a conclusive answer to this that the same reasoning-by which the right of the Secretary to deprive the revenue officers or informers of part or of all of their interest in the forfeiture by remission is established applies a fortiori to establish his authority to do likewise by compromise. The power-granted by the statute is without limitation, and being given after the courts had settled that such officers had no vested right in the subject-matter prior to receipt of the money, it must be construed as in pari materia with the legislation in connection with which the law was so settled,‘and this has been judicially determined in connection with a like provision in the internal-revenue laws. (Dorsheimer v. United States, 2 O. Cls. R., 103; 7 ib., 43.)
It is ■ contended that the Secretary had no authority, after the proceeds came into his hands for distribution, to hear and determine the claims of alleged informers, citing Bradley’s Case-(12 O. Cls., 578).
Reference to that case shows that this court purposely expressed no final opinion on the question, and left it open for further argument, recognizing it as not free from difficulty.
Before the organization of this court, however, there was none. The collector was the distributing officer, but he could not distribute until he had a fund in possession. Ordinarily, such a fund would reach him by payment out of the registry of a Federal court, but it was early decided that while those courts have possession of the fund, they have an ancillary jurisdiction to • tliat of the principal cause to determine tire rights of informers and others claiming’ a distributive share therein. (Me-Lcme's JExecutor v. The United States, 6 Pet., 404; Westcot v„ Bradford, 4 Wash. O. C., 498; United States v. George, 6 Blatch,,. 37.)
In some of the decisions the collector and Secretary are referred to as acting in a ministerial capacity in the distribution, but this we submit is to be understood only as to the distribution of a fund transmitted by a court with. instructions concerning the distribution, which would not occur except when, in case of a controversy between different parties as to their right to the informer’s share, or of a dispute between the customs officers and claimants of such share, the matter is brought before a court, as in the matter of George ( 6 Bl. C. 0., 38, 406).
In the vast majority of cases the collector, before the act of 1867, acted without intervention of a court and decided fob himself who were entitled to the distributive shares, and it cannot be denied that in every case in which the fund came to him without a trial in court, or without instructions after a trial, he had the same powers and duties in the premises as the court.
If, then, it must be conceded that in the absence of judicial instructions transmitted with the fund affecting its distribution, the collector had complete authority and discretion under the law, and had always exercised it down to the organization of this court in 1863, the question arises how that jurisdiction is affected by the general grant to this of court jurisdiction over-claims arising under a law of Congress.
It seems reasonable to suppose. that Congress did not intend by that grant to divest the district and circuit courts of the jurisdiction they have always exercised over such controversies; as the present, and it is certain that those courts have not regarded themselves as in any respect shorn of authority in that regard, as they have continued as theretofore to exercise it.
Some delicate questions are presented by this condition of things. Has this court authority to entertain am informer’s-claim while the fund is in the registry of another court subject to its decree; and if such decree should be made would it not be binding on this courts Under the rulings which have been made in cases where current jurisdiction of a given subject-matter exists in different tribunals, it would be held that the tribunal which first got control of the subject-matter would ■have exclusive right to it until disposed of, and its decrees, so ■far as they went, would be binding. (Taylor v. Garryl, 20 How., 583; Freeman v. Howe, 24 How., 450.)
If the grant to this court is necessarily limited by the existing jurisdiction vested in other Federal courts, it is difficult to see why it is not also limited by the existing conditional juris■diction vested in the collector, which lasted until March 2,18G7, •and was then transferred to the Secretary of the Treasury.
Under the authority of NioolVs Case (7 Wall., 122) it might be contended that, as a special tribunal created by law for determination of such claims, subject only to instructions from the ■ courts controlling the principal cause, the authority of the Secretary is exclusive of any in this court; but it is not necessary for the purposes of this case to go so far. It is enough to show that where, as here, the Secretary has exercised the jurisdiction with full knowledge of these claimants, and decided the matter against their contention and without objection to the exex’cise ■of jurisdiction or protest against the decision, but with acceptance by them of the award, and where no suit is brought here until after such submission and determination of their claims, the claimants will be estopped from contesting the jurisdiction. If jurisdiction is concurrent in this court it cannot vest under such circumstances. Whether after suit brought here the Secretary can proceed to distribute a fund affected thereby, it is not necessary to decide. The question arose in Bradley’s Case, but there the Secretary in proceeding took the precaution to exact bonds of indemnity.
If, however, that point is considered to be involved here, there are some reasons why the jurisdiction of the Secretary should be exclusive.of this court in the matter which should be considered. In this court the action of an informer or other interested party may be brought at any time within six years from the time when the action accrued. That this would give rise to serious practical difficulties is manifest. The Secretary, as a ministerial officer, could not act until instructed by some court, and the order might not come, as in the present case, for more than ten years, whereas such distribution ought and was required to be promptly made. Every person claiming a share would have to bring suit in this court, and if there were conflicting interests, one party might bring suit and obtain a decision without the knowledge of another, who, though the law gives Mm six years in wMcb to sue, would, be thus deprived of bis right.
If the Secretary bad jurisdiction, it is decisive of this controversy ; but if be bad not, tlie further question arises whether the claimants have made out that there was no informer in the ■cases, as that has been shown to be a condition precedent to their right.

Opinion:
Richardson, J.,
delivered the opinion of the court:
This is an action brought to recover a share of the proceeds of certain forfeitures incurred by parties for violation of the revenue laws at the port of New Orleans, while the claimant was collector there, during the year I860. Proceedings were instituted in the district court of the district of Louisiana for the condemnation and forfeiture of wines which had been seized as imported in fraud of the laws. Compromises were entered into between the owners of the property and the Secretary of the Treasury, by which a large sum of money was paid into court for cost, duties, and forfeiture. After deducting costs and expenses the balance was received by the collector and by him paid into the Treasury of the United States, in accordance with the provisions of the Act March 2, 1799 (1 Stat. L., 697), ch. 22, § 91, and the Act March 2, 1867 (14 Stat. L., 546), ch. 188, now Revised Statutes, § 3090.
At that time the statute gave the residue of the proceeds of fines, penalties, and forfeitures, after making certain deductions, one-half to the United States, one-fourth to tlie person giving the information which led to the seizure or to the recovery of the fine or penalty, and if' there were no informer other than the collector, naval officer, or surveyor, then to the officer making the seizure. The remaining one-fourth was to be equally divided between the collector, naval officer, and surveyor, or such of them as were appointed for the district in which the seizure had been made or the fine or j>enalty incurred, or if there were only a collector then to such collector, &c. (Rev. Stat., § 3090, and acts there revised.) By a subsequent act all provisions of law under which officers of the United States and informers were to share in the proceeds of fines, penalties, and forfeitures were repealed, but as that act only applied to future cases, it is not material in this case. (Act June 22, 1874, 18 Stat. L., 186, ch. 391, § 2.)
There were three methods by which informers and officers who claimed shares of penalties and forfeitures could have their rights determined:
I. While the money remained in the registry of the court they might apply to the court which had jurisdiction of the case and had control of the money, and obtain an adjudication upon their conflicting claims. It was decided in many cases that such court had authority, as incident to its jurisdiction of the original' cause, to decree a distribution in accordance with the statute. (6 Pet., 404; 4 Wash. C. C., 492; 2 Mas., 85, 409; 2 Ware, 371; 1 Low., 22; 10 Wheat., 290, 402; 6 Blatch., 45.)
II. After the money had been paid into the Treasury of the United States, and before it was distributed by the Secretary of the Treasury, they might bring their action in this court, as founded upon a law of Congress or contract, and have their respective claims judicially determined. Such was the unanimous opinion of the court in Shelton's Case (8 C. Cls. R., 487), decided in 1873.
In Bradley's Case (12 C. Cls. R., 578) we examined with much care the several statutes and decisions of the courts in relation to the distribution of penalties, and pointed out how this court acquired jurisdiction. By the Act March 2, 1869 (14 Stat. L., 546), ch. 188, the Secretary of the Treasury was substituted for the collector in making the distributions, and had no authority beyond that which the collector had under the Act March 2, 1799 (1 Stat. L., 695-697), ch. 22.
While the duty of distributing the money was by law imposed upon the collector, an action might have been maintained against him to determine the rights of different claimants (1 Paine, 426; 3 Wash., 464), and that, too, even in the State courts. (Latham v. Almey, 13 Allen, 301.) When the duty of distribution was transferred to the Secretary of the Treasury, and the money was paid into the Treasury of the United States, jurisdiction was vested in this court because the claim then became one against the United States, arising upon statute or by contract.
III. Parties might submit to the jurisdiction of the Secretary of the Treasury and allow the money to be distributed under his direction, according to the terms of the statute.
Whichever of these three methods claimants voluntarily submitted to, they became concluded by the result. After the money bad passed from the control of the court in which the original proceedings had been instituted, they could no longer apply to that tribunal5 and after the money had been distributed by the Secretary of the Treasury this court was no longer open to them. No appeal is given to the Court of Claims from the determination of the Secretary of the Treasury in such eases, and it has no authority to review his proceedings. When •he has acted, without objection from the claimants and before they have instituted a suit, his action becomes final and conclusive.
In Shelton's Case and in Bradley's Case, above cited, the suit was commenced before the Secretary of the Treasury had taken any action whatever in the matter. In Bradley's Case the Secretary recognized the jurisdiction of this court, and although he afterwards distributed the money in controversy, he took a bond from each of the distributees to refund it in case the judgment here should be .against the United States.
In the present case the claimant appeared before the Secretary of the Treasury, was heard in relation to the distribution, submitted to his. proceeding to determine the conflicting claims of all parties, and received the amount which was found to be Ms due. He now comes into court asking for more, on the ground that the Secretary erred in making the distribution or .award. We are of opinion that the claimant is concluded by what has already been done, and is estopped from calling Iiu question the determination of the Secretary of the Treasury, to whom he voluntarily submitted his claims. That being the •case, the court is not required to find the facts as to the details and particulars of the methods by which the Secretary reached Ms conclusions, nor as to the original claims, which have been determined, settled, and paid.
The claimant's petition must be dismissed.