US SUPREME COURT DECISIONS

The remedy of an importer on a question of valuation is to call for a reappraisement, though, if his contention be that a jurisdictional question exists, he may make his protest, pointing out the defect, and stand upon it as the ground of refusal to pay the increased duty.

What an importer's agent says to an assistant appraiser, or conversations had subsequently to the appraisement, are not competent evidence in an action like this.

The court below properly excluded a question propounded to the merchant appraiser as to whether or not he and the general appraiser did not agree to apply the valuation of one case in each invoice to the entire importation of which it was a part, and also the question whether or not those goods in the several cases were all of the same character as to value.

Reappraisers may avail themselves of clerical assistance to average appraisements given by different experts when it appears that it was for their guidance only. chanrobles.com-red

Page 155 U. S. 229

Under the plaintiff's protest, the question is not open that Rev.Stat. § 2900 is unconstitutional in its provisions for fixing or authorizing 20 percent additional duty, but that question has been disposed of on its merits in Passavant v. United States, 148 U. S. 214.

If an importer is afforded such notice of a reappraisement and hearing as enables him to give his views and make his contention in respect of the value of his goods, he cannot complain, even though he be not allowed to be present throughout the proceedings on the reappraisement, or to hear and examine all the testimony, or to cross-examine the witnesses.

It appeared in this case that the merchant appraiser examined the goods sufficiently to satisfy him that they were the same order of goods that his firm imported. Held that this established the familiarity required by the statute and placed his qualifications as an expert beyond reasonable doubt.

An importer whose goods, in several packages, are sent by the collector to the public store and are there examined cannot take advantage of the fact that the appraisers, in making up their opinion, did not examine every case, unless it also appears that they were directed by the collector to make such examination of all, and failed to do so.

This was an action seasonably brought by Arthur Origet against Edward L. Hedden, then collector of the port of New York, in the Circuit Court of the United States for the Southern District of New York, to recover an alleged excess of duty exacted by the collector upon goods imported by plaintiff on February 8, 9, 17, and 23, 1886 (the last two importations being by steamships Oregon and Chicago, respectively), and paid under protest.

The invoice and entered value of each of the four importations were raised by the appraisers to an amount exceeding ten percent thereof, and the collector liquidated and exacted duty upon the value so increased, and the additional duty of twenty percent thereon, mentioned in section 2900 of the Revised Statutes.

Upon the two entries of the 8th and 9th of February, plaintiff did not call for any reappraisement, but protested against the assessment of duty upon any values higher than those declared on the entry, the protest stating that

"said valuations are correct, and that said goods are liable to no more duty than would accrue upon said valuations, and that the additional values were not legally ascertained; that the appraiser made no proper or legal examination or appraisement

Page 155 U. S. 230

of said goods; that he arbitrarily added to the values upon an arbitrary and assumed basis of the cost thereof; that in so doing he acted under instructions from special agents of the Treasury, and not upon his own knowledge or judgment, and we specially protest against the additional duty of 20%, claiming, for the reasons aforesaid, that it did not accrue, and said goods are not dutiable as charged."

On the trial, plaintiff's New York manager testified that he saw Brown, the assistant appraiser, regarding the appraisal of these importations, and was then asked, "state whether or not you said anything to Mr. Brown (and, if so, what) as to the production of evidence as to the value of these goods." The question was objected to on the ground that the importer's remedy was to call for a reappraisement. The court thereupon excluded the question, and plaintiff excepted. The witness then testified that he had conversed with the collector as to a reappraisal, or a call for a reappraisal, of these first two entries, and was asked what the conversation was. To this the defendant objected because it was not claimed in the protest that any reappraisal was called for and refused. The question was excluded, and plaintiff excepted.

The record thus proceeded:

"Upon the two later importations, of February 17th and 23d per the Oregon and the City of Chicago, reappraisements were called for and had. The Oregon importation consisted of four cases, and the other of three cases, all of which (both importations) were by the collector ordered to the public store, and were there at the time of the reappraisements."

The merchant appraiser was then called as a witness by plaintiff, and testified: "I did not examine one case. I merely looked over the goods. Q. You did not examine any case? A. Not specially; not to appraise it." But he explained on cross-examination that he examined the goods in one case out of each importation sufficiently to satisfy himself that the goods were of the same order as those imported by the firm of which he was a member; that the average of the different valuations of the witnesses was made up in his office by another person at his direction; that the report of the chanrobles.com-red

Page 155 U. S. 231

appraisal was based upon that computation and the witnesses' reports, and that the general appraiser sat with the witness "in the reappraisal -- in the writing up of the reappraisal."

The following question was then propounded by plaintiff's counsel:

"What I ask you is, Mr. Brower being the general appraiser, and sitting with you on the reappraisal, was there or not any agreement (and, if any, what) as to the application of the valuation of one case on each invoice to the entire importation?"

This was objected to, the question excluded, and plaintiff excepted.

The witness also testified that the general appraiser, in examining the goods

"simply passed and looked at them to see that they were woolens -- he was not competent to judge of their value -- to see that they corresponded with the invoices."

He further said that the general appraiser generally went with him in examining the goods, but what he did when witness was not present he did not know; that after the computations were made, the general appraiser and himself had a joint session in which they made up their reports.

Plaintiff's manager was asked in reference to the goods reappraised, "state whether or not those goods in the several cases were all of the same character as to value." The witness testified to the presence of a Treasury agent at the reappraisement, and was asked, "Did you hear any of the questions put to the witness?" The witness was also asked if the Treasury agent did not himself put questions to him on that examination. These questions were severally objected to as immaterial, and were excluded by the court, and plaintiff excepted, but only the exception to the first was argued.

When the reappraisement was about to take place, plaintiff's counsel, Mr. Clarke, was present, and made application to the appraisers

"to be present to examine the schedules of the different witnesses -- to ask them questions, or to suggest questions to you to be asked them, and hear and know the testimony which you have or may receive,"

and that, if this request be denied, plaintiff and his associate in business "be present when the witnesses are examined in the case of Origet, and that one of them be allowed to see the schedules of the witnesses." chanrobles.com-red

Page 155 U. S. 232

To which the general and merchant appraisers responded that they denied the application of the attorney to be present, but desired to hear the importers in regard to their reappraisements, and that they would be glad to have any suggestions that they might have to make as to asking questions of witnesses.

The record then gives the following statement by the general appraiser:

"Mr. Clarke further asks that they may be permitted to examine the various affidavits made by the experts, importers, merchants, and others, and also to be present at the taking of any testimony herein, and to cross-examine all such witnesses as may be produced here on this reappraisement, or to suggest questions to the general appraiser."

"The general appraiser and the merchant appraiser say, in regard to that, they cannot permit the importers to be present during the taking of the testimony or the examination of the affidavits, but they will be glad to receive suggestions from the importers in asking any questions of any and all who may be called."

The request was then renewed so that plaintiff might "be enabled to suggest question," and disposed of by the same ruling.

Plaintiff protested against the assessment and exaction of duties upon the values ascertained by the reappraisements upon the grounds that the goods were "liable to no greater amount of duty than that accruing upon the invoice or entered value thereof;" that the appraiser's return "was made contrary to law, and without legal or proper examination of the goods;" that plaintiff "was entitled to a reappraisement of said goods, according to law, by a general and merchant appraiser, and made due demand therefor;" that, "notwithstanding said demand for reappraisement, no legal reappraisement of said merchandise was ever had;" that the so-called reappraisement

"was illegally conducted, and was not a valid reappraisement, according to which duties might be assessed, in this, that the general appraiser, George V. Brower, did not act upon his knowledge or judgment of the goods, but permitted his judgment and return of value to be controlled and

Page 155 U. S. 233

dictated by special agents of the Treasury; that he did not personally examine and appraise the merchandise,"

nor did the merchant appraiser; that the general appraiser refused to allow plaintiff to be represented by counsel, or allow counsel to be present to examine the schedules of the different witnesses, to ask them questions, or to suggest questions to be asked, or to hear or know the testimony received; that the appraiser refused to allow plaintiff and his associate to be present at the examination of witnesses, or to see the schedules; that the general appraiser permitted special agents of the Treasury and business rivals to attend; that after the proceedings on the first day, the general appraiser called other witnesses and parties to estimate the value of the goods, without giving plaintiff notice; that in arriving at the valuation returned, the appraisers took the average of the valuations of the witnesses without regard to their competency or knowledge of the goods; that "witnesses were permitted to return schedules of the value of all the goods without an examination thereof by them;" that such schedules were considered by the merchant and general appraiser -- and some other particulars.

Testimony was given as to the difference between the duties upon the goods as entered and the duties exacted.

The foregoing was all the evidence adduced in the case, the defendant offering no testimony.

The case was tried before Lacombe, J., and a jury. A verdict was directed in favor of the collector, and plaintiff brought error to the judgment rendered thereon.

The following are sections of the Revised Statutes particularly referred to:

"SEC. 2901. The collector shall designate on the invoice at least one package of every invoice, and one package at least of every ten packages of merchandise, and a greater number should he or either of the appraisers deem it necessary, imported into such port, to be opened, examined, and appraised, and shall order the package so designated to the public stores for examination, and if any package be found by the appraisers to contain any article not specified in the invoice, and

Page 155 U. S. 234

they or a majority of them shall be of opinion that such article was omitted in the invoice with fraudulent intent on the part of the shipper, owner, or agent, the contents of the entire package in which the article may be, shall be liable to seizure and forfeiture on conviction thereof before any court of competent jurisdiction; but if the appraisers shall be of opinion that no such fraudulent intent existed, then the value of such article shall be added to the entry, and the duties thereon paid accordingly, and the same shall be delivered to the importer, agent, or consignee. Such forfeiture may, however, be remitted by the Secretary of the Treasury on the production of evidence satisfactory to him that no fraud was intended."

"SEC. 2939. The collector of the port of New York shall not under any circumstances direct to be sent for examination and appraisement less than one package of every invoice, and one package at least out of every ten packages of merchandise, and a greater number should he, or the appraiser, or any assistant appraiser, deem it necessary. When the Secretary of the Treasury, however, from the character and description of the merchandise, may be of the opinion that the examination of a less proportion of packages will amply protect the revenue, he may, by special regulation, direct a less number of packages to be examined."