withheld from him on grounds manifestly wrong. Indeed, it seems sufficient to sustain * if the duties exacted were not legal and were demanded and we e

the action

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paid under protest.

A close study of the Maxwell case seems conclusive of all the points in this case. There is nothing in that case which indicates that there was a personal communication to the importer from the collector or any officer of the customs as to adding upon entry, which he did, and claimed was done under duress. The recited things which impelled this action upon his part are, first, the usage in the customhouse at the port of New York, and, second, a circular of the Secretary of the Treasury previously issued covering the same. The court recites in

this connection:

The importer knowing that this would subject him to a severe penalty, in order to avoid it felt compelled to add to his invoice.

The remonstrance which he filed was his protest.

The court said:

The collector virtually insisted upon having them appraised at the increased value— and styles this "moral duress." This virtual insistence seems to have been expressed by the usage of the port and circular of the Secretary of the Treasury.

The court goes much further in the concluding sentence of the opinion, wherein it is stated:

Indeed, it seems sufficient to sustain the action, *

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were not legal and were demanded and were paid under protest.

if the duties exacted

Regardless, therefore, of the presence or absence of duress in the case, the Supreme Court in that case seems to have concluded that it is only necessary that the duties exacted be illegal, that they were demanded by the collector, and that legal protest was made. That they were demanded here seems sufficiently proven by the fact that they were paid and accepted.

It may be noted in passing that the character of the entries before us, with the additions noted, put it beyond the power of the appraiser to make any effective appraisement which would give relief to the importer, for regardless of whether the appraisement was above or below the entered value under the law the collector could not take duty at less than the entered value (customs administrative act, sec. 7). This being the case, it can not be assumed that the appraiser was further concerned in the ascertainment of a market value less than the entered value, and that this entered value, though involuntary, being before him was probably controlling in his appraisal.

What constitutes an involuntary payment made to a public official and the slight circumstances necessary in such cases to constitute involuntary payment received consideration in the case of Swift & Co. v. United States (111 U. S., 22). That was an internal-revenue

case.

The complainants were manufacturers of matches, and the question affected an internal-revenue collection from them running over a long period of years. It was shown that the leading manufacturers of matches had made protest to the Bureau of Internal Revenue particularly against this method of computing commissions for proprietary stamps. It did not appear that anyone in behalf of the claimant corporation, even after its organization, made any such protest, or before, until years later. Later the claimant caused letter to be written to the commissioner asserting its claim for the amount afterwards sued for. The commissioner, replying, denied the claim, asserting that the previous ruling would be followed. The court said:

From this statement it clearly appears that the Internal Revenue Bureau had at the beginning deliberately adopted the construction of the law upon which it acted through it successive commissioners * * *; that it refused on application prior to 1866 and subsequently to modify its decision; that all who dealt with it in purchasing these stamps were informed of its adherence to this ruling; and, finally, that conformity to it on their part was made a condition without which they would not be permitted to purchase stamps at all.

During this period of years the appellants continued doing business in pursuance of the prescribed methods of the bureau, and signed receipts, agreements, and settlements as prescribed by the bureau without further or other protest. The court further says:

* The question is whether the receipts, agreements, accounts, and settlements made in pursuance of that demand and necessity were voluntary in such sense as to preclude the appellant from subsequently insisting on its statutory right. We can not hesitate to answer that question in the negative. The parties were not on equal terms. The appellant had no choice. The only alternative was to submit to an illegal exaction or discontinue its business. It was in the power of the officers of the law and could only do as they required. Money paid or other value parted with under such pressure has never been regarded as a voluntary act within the meaning of the maxim volenti non fit injuria.

The court then quotes many others with approval; among these is Ogden v. Maxwell (3 Blatchford, 319), wherein the approval noted is as follows:

* It was held that illegal fees exacted by a collector, though sanctioned by a longcontinued usage and practice in the office, under a mistaken construction of the statute, even when paid without protest, might be recovered back, on the ground that the payment was compulsory and not voluntary.

And, further, the court says:

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No formal protest made at the time is by statute a condition to the present right of action, as in cases of action against the collector to recover back taxes illegally exacted; and the protests spoken of as having been made prior to 1866 by manufacturers of matches and others requiring such stamps are of no significance, except as a circumstance to show that the course of dealing prescribed by the commissioner had been deliberately adopted, had been made known to those interested, and would

not be changed on further application, and that consequently the business was transacted upon that footing because it was well known and perfectly understood that it could not be transacted upon any other. A rule of that character, deliberately adopted and made known and continuously acted upon, dispenses with the necessity of proving in each instance of conformity that the compliance was coerced.

Robertson v. Frank Brothers Co. (132 U. S., 17) was quite similar to these in many particulars. On entry the importers noted: Shipping charges added as required by the appraiser.

The same notation was made upon the invoice. The appraiser's notation was:

Value correct, with importer's additions.

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The court instructed the jury as follows:

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If he was required to do it, or given to understand by some officer in the collector's department that it would be the worse for him, seriously, if he didn't-as, for instance, if the appraiser told him if he didn't put those on there the collector's office would, that the appraiser would, and that he would be exposed to a penalty that would be assessed against him; if he was given to understand by the collector's department, or some officer of it, that if he didn't put these figures on there they should and make it the worse for him because he didn't and he would thereby be exposed to a penalty of a larger duty which he would have to pay for not doing it, and he was in that way for the sake of saving himself from the penalty which they . would put upon him beyond what would otherwise be chargeable induced to put them on, then he is not bound by it.

The jury found in favor of the importer.

The court further stated:

We do not see how the verdict can be set aside for error in the charge on this point, unless the law be that virtual or moral duress is insufficient to prevent a payment made under its influence from being voluntary.

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In our judgment the payment of money to an official, as in the present case, to avoid an onerous penalty, though the imposition of that penalty might have been illegal, was sufficient to make the payment an involuntary one. It is true that the thing done under compulsion in this case was the insertion of the additional charges upon the entries and invoices; but that necessarily involved the payment of the increased duties caused thereby, and in effect amounts to the same thing as an involuntary payment.

In the particular cases it seems that it was the practice of the customs from 1883 to 1902 not to add this 24 per cent to make market value on these so-called Bradford goods. About that time the Board of General Appraisers rendered a decision that these commissions were dutiable. As is well known in customs circles, the decisions of the board are promulgated throughout the trade generally and read and followed by customs brokers and importers as authority for their actions; that they are the guides as to market value and followed as authority by all collectors and appraising officers. It expressly appears in the record that this action of the board was so published and that information thereof was brought home thereby to the brokers

1

of these importers, and that immediately and continuously thereafter the collector and appraiser at New York followed this decision.

While the record is not clear whether or not this appellant firm was a party to the cases before the board, it is clear and undisputed that its customhouse brokers knew of these decisions, and a member of the appellant firm testified that these additions were made to prevent being assessed with penalties by virtue of said decisions.

The record contains plenary evidence that this ruling was brought home to this appellant and constrained his action with reference to these entries. They were made in November, 1903. The customhouse broker who made the entries testified:

That from October 3, 1883, to the fall of 1902 this item of commissions was not included in the dutiable value in such entries; that it was first included about July or August, 1902, at or about which time there was a decision of the Board of General Appraisers so holding, whereupon the practice was changed.

He further stated:

We first tried to add to it "Under duress," and the same was rejected by the collector. * * * We put the words on the slip attached to the invoice; then we had to strike off the words "Added under duress." * * * We then tried to attach a slip "Add 24 per cent commission."

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*

This was also refused. We then had

a stamp made "Add 24 per cent commission to make market value," which we use to the present day. These entries are invariably thrown out and we have to put a pen through the word "commission," and after that word is stricken out the entry is accepted.

Another member of the appellant's broker's firm testified:

Question. State what has been the practice of the customhouse with regard to entries of this class of goods since these decisions where the 24 per cent commission has not been added.

Answer. To my own knowledge and from my own experience I know that the 24 per cent commission when omitted from the entry would have been added by the United States appraisers.

Question. And what would result in liquidation of duties from such an addition by the appraiser?

Answer. There would be a penalty equal to the advance.

Other brokers testified to the same usage at the customhouse.

The entry clerk at the customhouse in New York substantially corroborated the testimony quoted, and justified his actions by the statement that it was held at the customhouse that the importer had no right to put words upon his entry other than those approved by law, to wit, "add to make market value," and then testified as follows:

Question. The action taken by you or your office upon the last invoice called to your attention, in which an entry had been thrown out because the importer said "add 24 commission under duress," the action taken by you in that case is the ordinary action that was taken and had been taken during all the time covered by these various entries in case such an en try was presented to the customhouse; is that right?

Answer. That is correct. When an entry was presented where it is stated that the addition is made under duress (it) was rejected and the importer's representative informed that it was optional with him whether he should make such addition or not.

All of the above testimony quoted, as well as that recited in this opinion concerning the usage of the New York custom house, and the publication of the opinions of the Board of General Appraisers, and the efforts exerted by the importer's brokers to place upon their entries such a memorandum in protest of such payment as would support future action upon their part, or make proof of payment under duress by them, was presented for the first time under the old practice in the Circuit Court for the Southern District of New York, and was not before the Board of General Appraisers at the time of rendition of decision herein. This presents a vastly different record.

It is true that the collector did not insist that the 24 per cent be added on entry, but it is equally true and fairly well established by this record that these importers knew, and there was brought home to them the knowledge, that if 23 per cent was not added upon entry it would be upon appraisement and penalties accrue. Without quibbling upon the finer points of evidence, and coming straight to what must have been the facts of the case, as shown by the testimony, there could be no sound reason why the various classes of entries were tendered the collector except to register the importer's protest against the inclusion of this 23 per cent as dutiable, and it was known to the importer, and his agents, that if they were not added the appraiser would add them. If this were not true, the broker and the importer were changing a policy of 20 years and performing idle acts without reason. Subsequently, and several years thereafter, to ascertain if the same practice was being observed by the collector, the importers again presented an entry to which was added their protest against adding the 2 per cent, reciting that it was added under duress, and it was again rejected by the collector, showing that the practice was still being pursued at the customhouse. To say that the importers in these cases, in the presence of these conditions, were not constrained in their actions by the fear that unless they added on entry this 24 per cent commission that they might be assessed in penalties, to say that they made this addition of their own free will and accord, would be to say that business men in the course of business were idly profligate of their money. We believe that it is fairly shown by the facts disclosed in this record, which differs from that before the board, that the addition put on the entries in this case, "24 per cent commission," was induced by the fear in the minds of the importers that if they did not add upon entry it would be added by the appraiser, and that in event that decision went against them they would be assessed not only in additional duties, but in penalties. Under the decisions quoted that condition of mind inducing such plainly constitutes an involuntary act.