MEREDITH v. United States

delivered the opinion of the Court.

This is a writ of error to the Circuit Court for the district of Maryland; The original action was assumpsit brought by the United States against the plaintiffs in error, who were the original defendants, to recover from them,as assignees' under a general assignment of the property of the firm of Smith and Buchanan, the .amount of certain duties alleged, to be due from the said firm upon certain importations in the. brig Unicorn and. the ship Brazilian, out of the funds in the hands of the assignees, upon, the ground of an asserted .right of priority of the United States to payment out of the same funds.

At. the trial,.upon the general issue, the material’facts'appeared as follows. ■ In the-. y,ears 181,8. and 1819' Smith and Buchanan, and Hollins and M^áir,’.two separate commercial firms, in Baltimore,imported, orpthéir’own account as owners, a quantity of goods from Calcutta irf Jhe brig Unicorn and ship Brazilian above mentioned, *492 on which, the .present duties were claimed. Smith and Buchanan were the importers and owners of two-thirds of the cargo of the ship, and five-ninths of that'of the Brig; and that proportion went to their possession and use, The remainder of both cargoes belotaged to Hollins. and. M£Blair. The entries of both cargoes were, made at the customhouse at Baltimore by John S. Hollins, óne of the firm, of Hollins and M£Blair, as imported in the vessels, respectively, by Hollins and M£Blair, and Smith and Buchanan; and Hollins gaye bonds for- the duties in .the common form im.his. own name'; .and James A. Buchanan, of . the firm of Smith and-Buchanan, and Lemuel Taylor, who is admitted to be a mere-surety, also executed the same bonds. The condition . of the bonds .was for the payment of the dutieis on the goods “entered by the above bounded John S. Hollins, for Smith and Buchanan, and Hollins and M£Blair, as imported” in the ship and brig respectively. Upon these bonds the United-States afterwards instituted actions against each , of the obligors, and recovered judgments in the Circuit Court for the. District of Maryland. These judgments have, been revived, and are now in full force and unreversed. Smith and Buchanan became insolvent; and after the rendition Of the -judgments, Taylor; lalso became insolvent under the insolvent laws of Maryland. One Rose well L. Colt- became the trustee of Taylor; and afterwards, under the treaty of. indemnity with "France, a large sum of money was awarded to him by the commissioners; and a largé sum of money Was. also awarded ' to Smith and Buchanan, which has béen received by the Original defendants as their assignees,, and is more than sufficient to pay.the sums now claimed by the United States,.but not enough to pay the partnership debts of the firm of Smith arid Buchanan. Taylor applied'to the treasury department for the, usual certificates granted to claimants by the awards underdhe treaty,; but they were refused by the department upon the ground of Taylor’s indebtment to the United State? upon the aforesaid bonds and judgments. Since that period an arrangernerit has been made between the government and C.olt, the trustee, by, which a sufficient, sum of .the moneys so due by Taylor - is reserved in the treasury to secure the amount of the judgments. on' the bonds against -Taylor,.-and the residue has been paid over to the trustee. And the present action has been brought by the United States for the benefit of Taylor’s trustee, in order to give to-the latter the-full.-rights and remedies of the ■•'United States to a priority of payment out of the moneys.of Smith and' Buchanan, in the hands of the defendants as their assignees. To repel the supposed equity in Taylor, as .a surety, the defendants offered-to prove that at the period of the application of. Taylor for the benefit of . the insolvent laws, he .was largely indebted-to Smith g.nd Buchanan, and in a sum' more than sufficient ■ to coyer,- the whole amount due úpon the duty bonds aforesaid, and still remained s'O indebted. The Court rejected.the evidence, and to this rejection the defendants excepted.. And this" constitutes the first bill of ex *493 .ceptions. Upon this We have no more to. say than that we think the ruling of the Court was clearly right. Whatever might- be the merits of-such an equitable claim in any suit brought by .Taylor or his assignee against Smith and Buchanan, or their .assignees;' if could have no proper place in a suit brought by the United States-to recover demands justly due to them for duties.. It was, as .to them, res inter alios- acta; and ..the United States were'not'called upon to engage in or to' unravel any of the accounts and set-offs ex-' isting between those parties,, in a.suit at law like the present. "

Afterwards-the United States asked an instruction to ..the jury, which was given to the jury, to which the defendants excepted. The defendants then prayed certain instructions to the jury, which the Court refused to give ;' -to which refusal the defendants also excepted. These exceptions are spread at large upon the record, and. constitute the second bill of. exceptions.. It is unnecessary to recite, them at large, as they are all resolvable into the leading points which have been so dully argued at the bar; and we shall, therefore, proceed at once 'to the consideration of these points.

The first question is¿ whether. Smith and Búcharián'were ever personally indebted for- these duties; . or,, in other words, whether the- importers of goods do, in virtue of the importation thereof, become personally indebted to the United .States for the duties due thereon;' or the remedy of the United States is exclusively confined to the lien on the goods, and the. security 6f the bond1 given for the duties. It appears to us clear upon principle, an well, as upon the obvious import of the provisions of the various aets of Congress on this .subject, that.the duties due upon all goods imported constitute a-personal debt due-to the United States from the importer, (and-the consignee fi this purpose is-treated as. the owner and importer,) independently of any lien on the goods, and. any bond given for the duties,' The language of .-the. duty act.of the 27th óf April, 1816,. ch. 107, tinder. Which -the present importations, were .made, declares that “ there shall be levied, collected, and paid,” the several duties prescribed by the act on goods imported into, the'United States. And this is a common fpfmulary in.other. acts laying duties. Now, 'in the exposition of statutes laying duties, it has been a commoti ride of interpretation derived from the principles of the, common law, that where the duty is charged., on the goods, the. meaning is that it is a personal , charge1 óñ thq owner by reason of. the goods. So it was held' in Attorney-general vs. ___, 2 Anst. R. 558, wheré: a duty was laid on wash in. a still.; and it was said by the' Court that where -duties are charged ón any articles in a revenue act, the word “ charged’.’ means that the owner shall be .debited with-the sum; and that, this rule prevailed even when the article was actually, lost or destroyed before -it became available to the owner.. Nor is there any thing new in. this doctrine; for it has ,Iotw*been held that, in all such cases an action of debt lies in favour bf. the government against the importer, for the duties, whenever by *494 áccident, mistake,- or fraud, no duties, or short duties have been paid.

The question has also been asked, at what time the right of the government to ■ the duties accrues in the fiscal sense • of the terms. The answer is,, at the time when the goods have arrived at the proper port of entry. This is the established rule adopted by the government in all cases where there has been a new-act passed, increasing or diminishing the duties to be paid on goods imported after a specified period. The same doctrine was affirmed by this Court in the cases of The United States vs. Vowell, 5 Cranch, 368; and of Arnold vs. The United States, 9 Cranch, 104. But although the duties thus accrue to the government as a personal debt of the importer, upon the arrival of the goods in the proper port of entry j yet it is but a debitum in presenti solvendum in futuro, according to' the requisitions of the revenue collection act of the 2d of March, 1-799, ch. 128; and, therefore, if a deposit of.the-goods is made by the.importer,-or a bond is given'by him for the duties, pursuant to the provisions of that act, the importer is entitled to the_full credit allowed by that act. But it is a mistake to suppose that.if a deposit is made of the goods, either with or without á bond given for the duties, the rights of the’government for the duties are limited to the lien upon- the goods; and cannot, if they‘are lost or destroyed, be made a personal charge against the importer. On the contrary, the .revenue collection act of 1799,^ ch. 128, s. 62 ¡ expressly declares • that' the goods deposited shall be kept by the collector with due and reasonable care, at the expense and' risk of the party on whose ac-. count they have been deposited. Our opinion, therefore, on this point is¿ that the duties due upon goods imported, constitute a personal debt, and charge upon the importer, as well ás a lien on the goods themselves..

. In the next place, was the debt due for the duties on the . goods imported, in the - present case extinguished by giving the bond by Hollins, in the manner before stated ?, ’ We have no doubt that these bonds, being voluntary bonds, are valid ;, and'that Hollins and his sureties are estopped to deny their validity. But the-question is no.t whether they are valid; but whether they are the proper statute bonds contemplated by the'.revenue act of 1799, ch. 128. It is- to be observed that the present, case is not’one, where the bond's were given.by the sole importer of the goods; so that the.sole'question would then be, whether the bond of-the same party, who was personally liable for the duties, supposing the bond to -cover all the. duties due and payable on the goods, was an extinguishment of the •simple contract debt for those duties.' But' the present is a case where one of several partners, and one of several joint importers, has given his separate bonds- for the duties due by law by all the importers, either'as partners or as part owners; and therefore, where the true question is whether such bonds under such circumstances amount to an extinguishment of the debt due by all the *495 other importers, as partners or as part owners. It is certainly encjim* bent upon those who assert the affirmative, to show by some clear and determinate language of the revenue collection act of '179.9, ch. .128, that the collector ,was thus authorized to take the separate bonds of one óf the importers for the debt of all; and tjhat it was the legislative intention that such separate bonds,' when taken, should operate as an extinguishment of the liability of all the other importers. Now, it is plain, that where the goods áre received on deposit, the whole goods, and not merely the share of the partner .giving the bonds, are liable for the.duties.'

Upon a careful review of the other provisions of the act, we are equally well satisfied that in every case within the act, the bond for the duties is required to be given by all the persons who are the importers, whether they be partners or part owners; and that the collector is not by law authorised to take the separate bond of one of the' importers in extinguishment of .the joint liability of all. The language' of the £>2d section of the. act is, “that all duties on goods,, wares, or merchandise imported shall, be paid,: pr secured to be paid, before a permit, shall be granted for landing the same ;and where the amount of such duty on goods- imported in any ship or vessel, on account of ' one person only, or of ¡several persons jointly interested, shall hot exceedffifty dollars, the same shall be immediately paid; and if it exceed that sum, shall, at the option of the Importer or importers, be paid) or secured to be paid, by bond.” Now, construing this language distributively, as in our judgment it ought to be construed, to mean by the importer when there is one only, and by all the importers when there is more than one, there is not the slightest difficulty in' giving full effect to every word of the act. Construe it the other way, and the word “ importers” has no appropriate use, which Ts not included in the. other language. The. very form of the bond given in th ,■ same section, also, shows that it was the intent of the act that all the importers should be parties to the bond; for it, prescribes, “ Know all men. by these presents that wé (here insert the name of the importer or consignee; or if by an agent the name of such agent, and of the importers or consignees, -and the sureties,, their place of abode, and occupation,) &c.” It is not unimportant, also, to consider what would be the consequence of a different con--' struction of the act; for if it would lead to great insecurity in the collection of. the public revenue, and enable importers to substitute almost at their own" discretion the liability of one of.the firm, or one part owner for the liabilities of all, it would open the way not only to many intentional evasions and frauds upon the just right of the government, but also,'ih cases of the death or insolvency of the act-' ing partner, or part owner, leave the government without redress against those who had almost exclusively énjoyed all the benefits Of .the importation. On the other hand, the construction which we put upon the act imposes the burden upon those who have enjoyed the benefits; and creates a common interest in.a vigilánt and prompt *496 discharge of that burden. - Nor' is there-any inconvenience in it ; for ' if-all the importers aré not present, a letter of attorney may readily be executed, which will meet every exigency of commercial business. And we éannot but think that the 25th section of theact.of1823, ch. 149, which provides that any bond to the United States entered into for the payment of duties by a merchant belonging to a firm, in. the name , of such firm, shall equally bind the . partner or partners in trade of the person Or persons by whom such bond shalL have, been _executed, was intended to meet cases off this sort;- and' that it demonstrates the understanding of Congress,- that by the existing. law then in force, all the partners Were required to join in the bond for .the duties.. . ' ,

. The remaining point is, whether under the circumstances of the-present, case, the government has actually received payment of the duties iri cbntroversy. We think, it has not. By the -payment of the moneys due'under the French treaty,-and the awards of the commissioners, there was originally iri the jhahds of the govémrnent the sum of sixty thousand dollars awarded to Smith and Buchanan, which' was .properly;and primarily applicable tq. the- discharge of these very duties. But by mere mistake, arising from the circumstance that Hollins alone appeared, the principal in the bonds, and Smjth and Buchanan'being unknown to have-been the original importers, that sum was paid over by the government to the present defendants,-.as assignees. Had .the facts been known, the present controversy would have stopped at .the threshold, by recouping or retaining the amount from the awards. :.The government has now in its possession the funds, under the awards due to Taylor, the surety on these bonds; and it'certainly-had the power, if it pleased, to appropriate the same in payment of the debt. The question is, whether it has so done. Looking to the-whole transactions;.we are .satisfied that it has not. It retains the funds of Taylor in its hands as security-for payment, if the present suit should not be successful; and,it has allowed .the suit to be .brought in the name of thé Unitéd States, for the benefit of Taylor.. It has ,'thus' carried put. the intent and spirit of the. act of 1799, ch. 128, sec. 65, which declares "that the surety paying a- bond for -duties shall have and eiijoy the like advantage, priority, or preference .for the recéipí of the said moneys out of. the effects of the insolvent, as are reserved and. secured to the United States. We think, then, that no payment has been made; but that Taylor’s.funds have been held as a mere, special deposit for the. indemnity of the government, and to abide, the event of the suit; and that to give a different construction to the .acts of the officers of the government would defeat their true- objects, as well, as the purposes -of substantial justice.

Upon the whole, we, are of opinion that the judgment of the' Circuit Court ought to. be affirmed.

Thé case of Nathaniel Williams, and another, vs. The United States, which was submitted to the Court upon the argument in *497 the present case, is far less- stringent in' its circumstances in favour of the defendants; and involves far less difficulty.' The judgment' in that case is also affirmed. '

This cause came on to be heard on the transcript of the récord from the Circuit Court of the United States for the district of Maryland, and was argued by counsel;' On consideration whéreof, it is ordered and adjudged by this Court, that the judgment of the said Circuit Court'in this cause be, and the same is hereby,'affirmed.