IN THE MATTER OF THE UNITED STATES V. EIGHTY-FOUR BOXES OF SUGAR, TUFTS AND CLARKE CLAIMANTS.

The claimants of eighty-four boxes of sugar, seized in the port of New Orleans, for an alleged breach of the revenue laws, and condemned as forfeited to the United States for having been entered as brown instead of white sugar, claimed an appeal from the district court of the United States to the supreme court. The sugars, while under seizure, were appraised at two thousand six hundred and two dollars and fifty-one cents; and after. condemnation they were sold for two thousand three hundred and thirtyeight dollars and forty-eight cents; leaving, after deducting the expenses and costs of sale, the sum of two thousand one hundred and fifty dollars and six cents. The duties on the sugars, considering them as white or brown, being deducted from the amount, reduced the net proceeds below two thousand dollars, the amount upon which an appeal could be taken. Held, that the value in controversy was the value of the property at the time of the seizure, exclusive of the duties, and that the claimant had a right to appeal to this court.

The statute under which these sugars were seized and condemned, is a highly penal law, and should, in conformity with the rule on the subject, be construed strictly. If either through accident or mistake the sugars were entered by a different denomination from what their quality required, a forfeiture is not incurred.

•FROM the district court of the district of East Louisiana.

In the port of New Orleans, eighty-four boxes of sugar, imported from Matanzas, were entered as brown sugar, and were seized by the officers of the customs for having been so entered, the same being alleged to be white sugar, and therefore forfeited to the United States; a libel was filed against the whole importation, but afterwards a part of the cargo was released, and the proceedings in the libel were against the remaining eighty-four boxes. The whole parcel had consisted of one hundred and fifty-five boxes, of which seventy-one were marked B, and eighty-four marked C. The seventy-one boxes released were marked C, and of the eighty-four remaining, seventy were marked B, and fourteen were marked C.

In the answer of the claimants, all fraudulent intention is denied, and the character of the sugar, as entered, is asserted;

(United States v. Eighty-four Boxes of Sugar.]

and the claimants also allege, that if the contrary shall be adjudged by the court, the just conclusion should be that a mistake has been committed, and not that a fraud was meditated.

The sugars while under seizure were appraised by two officers of the customs at two thousand six hundred and two dollars fifty-one cents. After their condemnation they were sold by the marshal of the United States at a public sale for two thousand three hundred and thirty-eight dollars forty-eight cents, leaving two thousand one hundred and fifty dollars six cents after deducting the costs and the charges attending the suit and sale. Upon the sugars whether white or brown, the duties amounted to a sum sufficient to reduce the net proceeds below two thousand dollars; considering the sugars as white sugars these proceeds would be one thousand three hundred and eighty-eight dollars thirty-six cents.

Testimony was taken as to the real nature and description of the sugars, all of which was set forth in the record of the proceedings in the district court, and which is particularly referred to in the opinion of this court. The district court conderined the sugars as forfeited to the United States, for having been entered under a false denomination; the entry stating them to have been brown sugars, and the court having adjudged them to have been white sugars.

The claimants prayed an appeal, which the district court refused to allow, taking the ground that the value of the property in dispute was not above two thousand dollars: and insisting, that to ascertain the value, the duties must be deducted from the amount of sales, which deduction would leave a sum much below two thousand dollars.

Upon this refusal, notice was given to the district judge and district attorney, of an application to this court for a mandamus, for the allowance of the appeal. And the case came before the court upon a motion for such a mandamus. The record in court being full, it was, to avoid delay, agreed that if this court shall consider that the case admits of an appeal, it may, ca the present transcript, proceed to decide the merits of the cause.

[United States v. Eighty-four Boxes of Sugar.]

The case was argued by Mr Mayer, for the appellants; and by Mr Taney, attorney-general, for the United States.

For the appellants, Mr Mayer contended.

1. That, the value of the property in suit, in reference to the right of appeal, is the amount of money into which it is convertible; and that the sales made in this case, are the best test of the value of the sugar, and decide the value of property in dispute to be above two thousand dollars; that in such a case, to learn the value, the court ought not to make any deduction for the amount of duties a subject, as regards value, entirely collateral to the goods; the productive capacity of the goods to yield the amount for paying the duties, being, in itself, a part of their essential value.

On the merits, he contended:

1. That the testimony shows that the sugars ought to be considered brown.

2. That whether adjudged brown or white, there is no ground for forfeiture of the sugars; the testimony exhibiting justification for a belief that the sugars should be, or might be, denominated brown; and the court's opinion, if to the contrary, only settling a doubt, and at most establishing an error of judgment, and not a wilful deception.

That no presumption of fraudulent representation necessarily arises from showing a specification of an entry to be incorrect in regard to the commercial character or designation of an article, when that incident of the article is speculative, or may be variously interpreted, or when, at all events, as in this case, it is variously defined by the opinions and experience of commercial witnesses.

3. That the testimony of the custom house officers is incompetent; that it is inadmissible, at least as to declarations of Mr Tufts; and that, under any view, it is entitled to but little weight, since it must have been governed by the prepossessions which led them to seize the sugar, and comes in aid of their act of seizure

On the point of jurisdiction, Mr Mayer argued, that the value of the property in question, in reference to the right of

[United States v. Eighty-four Boxes of Sugar.]

appeal, is commensurate with the party's interest, and is the amount of money into which the subject matter is convertible; that the sales made in this case, are the best test of the value of the sugar, and decide the value of property in dispute to be above two thousand dollars; that, to learn the value, the court ought not to make any deduction for the amount of duties, a subject, as regards value, entirely collateral to the goods; the productive capacity of the goods to yield the amount for paying the duties themselves being in itself a part of their essential value. The lien of the United States on imported goods for the duties gives the government no property in them, and does not impair in any degree the proprietary interest of the individual throughout the whole property. No lien would have such an effect in regard to the owner's interest; but the lien for duties is not one of as proprietary a character as the lien of mortgage, or a sailor's lien, or a judicial lien of any kind. The existence of the lien in no case extinguishes the personal liability. It does not in case of duties; because, no matter what may be the fate of the goods held for the duties, the personal liability continues.

2

A mortgagor may insure the vessel mortgaged, without specifying his interest as incumbered, and recover as owner. Caines's Rep. 19; Caines's Ca. Er. 124; 1 Johns. Rep. 385. Even a mortgage of land is not in effect regarded as giving an interest in the land, even at law; but is looked on as a mere chattel interest. 11 Johns. Rep. 534; 15 Johns. Rep. 319. The utmost, in respect of the duty claim, to be pretended by the United States, is an interest in the proceeds of the goods liable to duty; but such an interest is not an interest in the property. In case of an insurance, an averment of interest in the property would not be sustained by proof of right to the proceeds. 11 Johns. Rep. 302.

Under the poor laws in England, property, though mortgaged, will support a claim of settlement at its full value, as if not mortgaged. 6 Term Rep. 755; 1 W. Bl. 598. A mortgagor of a ship cannot commit barratry, because deemed the owner. Marsh. Ins. 528. A mortgage of a ship is regarded as only a right by means of the ship to enforce payment of the mortgage debt. The mortgagor is liable for the ship's repairs, as if no mortgage were made. 1 II. Blac. 117; Abbott, 117.

[United States v. Eighty-four Boxes of Sugar.]

The question of duties was not involved in this case in the court below. The claim for the duties was not therefore to be recognized by the court. The pretensions of the United States in the case, were paramount to all ownership or claims of duties, as the government demanded the whole property, under the charge of unlawful importation. The obligation and the claim for duties are incidental only to lawful importation. It is therefore contradictory to the very nature of such a case as the present, to assume that the claim for amount of duties can be judicially known or regarded in it. But in the very question of duties the owner of the goods has an interest, and it may be a subject of judicial controversy; and what is the value of that interest but the amount of the duties? It is no answer to say that the property has been here condemned and sold; and that the claimant can be restored only to the amount of sales remaining after deducting for the duties. For the purposes of the appeal only, the judgment complained of, and not the acts done in pursuance of the erroneous judgment, is to be regarded. The appellate court can take notice of the execution of the erroneous judgment only after reversing the judgment, and to determine the mode of doing justice to the appellant on the reversal. The consequences of the judgment constitute the ground of the complaint against it, and cannot come in to sustain it. As regards the present question, the sugars are to be treated as in their original specific condition. It is a cause of complaint that they were not allowed to remain so; but were converted into money, by adverse proceedings. Suppose the importer had wished to use the merchandize himself, would it not be deemed to be of the value to him of the cost and the amount of duties? Or, suppose that he intended to export the property and receive the drawback; where in such case is the proprietary interest to the amount of duties of government in the merchandize? Are not these to be considered by the court as rights, and rights of property in the importer, respected by our revenue system? But the theory of the district court in this case would contravene all this privilege, on every fair inference to be drawn from its existence. It may also be said too, that in reference to sales of merchandize even for home consumption, the amount of the duties is VOL. VII.-3 H