. FEDERAL REPORTER.
At Law. Action to recover damages for breach of contract. tion to strike out counter-claims. J. K. Ha1fWard, for plaintiff. Seligman &0 Seligman, for defendant.
LACOMBE, J. Plaintiff and defendant heretofore formed a copartnership for the purpose of carrying on the dry goods commission business in the city of New York. By the terms of their articles of copartnership, defendants were to furnish $120,000 capital, and plaintiff was to bring to the firni what is known as business," amounting to about $1,000,000 per annum. The complaint avers that the plaintiff fulfilled his obligations under the articles, but that the defendants, "in violation of their duties to plaintiff and to said firm," wrote to certain manufacturers, whose business plaintiff had secured, repudiating existing contracts with them, and making false representations as to the inability of the . firm tq make advances on goods consigned to them, to the great damage of the firm and of the plaintiff. The amended answer of the defendants sets up, inter alia, two counter-claims, which plaintiff now moves to strike out. The complaint indicates that this is a common-law action on contract. As such, the sufficiency of the pleading is to be tested by the rules of the state courts. Rev. St. § 914. The first counter-claim is for a breach of the contract of partnership by the plaintiff, in that, as alleged, he failed to brIng to the firm the amount and kind of commission business which he had agreed to. The cause of action set forth in the complaint arising on contract, the counter-claim, which also arises on contract, rnl1y be set up. Code, § 501. The second 6ounter-claim is for an accounting and adjustment of the affairs of the partnership. This is an equitable cause of action, and section 914 of the Revised Statutes has been construed as not allowing the interposition of equitable defenses in a legal action. Montejo v. Owen, 14 Blatchf. 324; Parsons v. Denis, 7 Fed. Rep. 317. The motion to strike out the second counter-claim is therefore granted, that to strike out the first counter-claim is denied.
McLEAN .". HAGER,
«(JirC1tit Oourt, N. D. Oalifornia. July 26,1887.
CuSTOMS DUTIES-OPIUM IN TRANSIT.
Opium shipped on board a steam-ship at Honolulu. for Panama. by way of San Francisco, intended to be transferred, without landing, to another steamer at San Francisco, running to Panama, in connection with the steam-ship from Honolulu, and entered on the manifest and bills of lading, and reported ta the collector, as being In transit for Panama, the owner having applied to thl collector for a permit to make the transhipment, and offered to give the se·
M'LEAN ". HAGER.
cnrity prescribed by the statute, and a permit having been refused, was held not to be liable to duties,-and a seizure for non-payment of duties adjudged to be illegal. Sections 2502, 2931, and 2979, Rev. St., construed.
Demurrer to Complaint. T. D. Riordan, for p1aintiff. J. T. furey, ·U. S. Atty., for defendant. Before SAWYER, circuit judge, and HOFFMAN, district judge. SAWYER, J. The complaint alleges that plaintiff, on November 14, 1885, at Honolulu, shipped a quantity of opium prepared for smoking, on the steam-ship Mariposa, then lying in the port, en route for San Francisco; that said opium was shipped to Panama by way of San Francisco, that being the only route by which freight destined for Panama could be shipped at Honolulu for that port; that said freight was marked "In transit for Panama;" "and was entered on the steam-ship's manifest, and indorsed on the bill oflading, 'In transit for Panama; '" that said steam-ship arrived at San Francisco on November 22, 1885, and, thereafter, on November 25, 1885, said plaintiff tendered to said defendant, as collector of said port, an entry of said opium as required by law, for immediate transhipment by the steam-ship Colima, then in port, to Panama; that said collector refused to allow such entry, and refused to permit such opium to be transferred from said steam-ship Mariposa to said steam-ship Colima, for transportation to Panama, unless plaintiff would first pay the duties required by the laws of the United States to be paid on prepared smoking opium imported into the United States; that plaintiff declined to pay said duties, whereupon said defendant seized said opium while still upon said steam-ship Mariposa, and, afterwards, sold the same to pay said duties so claimed; that plaintiff did not intend to import said opium into the United States, but, on the contrary, it was his intention, and '<lesire, to ship said opium to Panama; and at the time of the said arrival of said steam-ship Mariposa, at San Francisco, aud of said seizure, said opium was in transit for Panama, and was not subject to the payment of any duty. It is, also, alleged, that said opium was domestic opium, prepared in San Francisco, and exported to Honolulu; that it was seized by the Hawaiian government as having been imported into Honolulu, in violation of the laws of that kingdom, and forfeited and sold to plaintiff upon condition, that it should be, immediately, sent out of the country. Plaintiff claims $4,000 damages. The question is, whether this opium was liable to pay duties under the circumstances stated, and, whether it was lawfully seized, and sold for non-payment thereof. Section 2502, Rev. St., as amended in 1883', provides, that "there shall be levied, collected, and paid upon all articles importedfromJoteign countries, and mentioned in the schedules herein contained, the rateil of duties, which are by the schedule respectively prescribed, namely: * * * opium, prepared for smoking, and all preparations of opium, not speciallyenumerated or provided for in this act, ten dollars per pound; but
.opium prepared for smoking, and other preparations of opium depo,nted in bonded shall not be therefrom, for exportation, without payment of duties, and such duties shall not be refunded." 22 Rev. St. 491, 495. If the opium in question was fairly within the meaning of this statute, then, it was liable to duty, and the seizure, for refusal to pay, and salE;l for non-payment, were lawful. But this opium was never, in fact, "deposited in any bonded warehouse," and there was no occasion to so deposit it. We do not find any statute that requires opium, or other goods situated as this was, to be so deposited, or any express provision requiring it to pay duties. It was never intended to be brought into the United States for consumption, or sale, there. It was never intended to enter into the commerce of the country. It was not imported into the United States in any proper sense of the term. It was shipped from one foreign port to another, by way of San Francisco, simply, because there was no other convenient nieans of forwarding it to its destination. It purported on the ship's manifest, and in the bill of lading, to be shipped from Honolulu to Panama, and to be only in transit, and it was so reported to the collector. The owner applied to the collector, not for permission to land it, and put it in a bonded warehouse, but for permission to transfer it from the steam-ship Mariposa to another ship, then in the harbor, bound for Panama, and running in connection with the Mariposa, thereby making the whole transit from Honolulu to Panama without landing at all. To land and bond the goods, and .. then, take them out of the bonded warehouse, and reship, would be a useless double labor, and expense, which no statute called to our attention, appearsto us to require. It would be casting an unnecessary burden upon commerce, expressly destined to be between two foreign ports, and performing an unneighborly act by our goverpment towards adjacent friendly nations. The secretary of the treasury has prescribed rules for such cases under which he seems to consider the importing vessel, a bonded warehouse, for the occasion, his language being, "the importing vessel being considered the warehouse." Gen. Reg. 1884, art. 783, p. 331. Upon that idea he holds that duties should be exacted as if the opium had been deposited. in a bonded warehouse, and the collector acted in accordance with that ruling. But we are unable to find any statutory authority for such proceedings. The statute prescribes what shall constitute a bonded warehouse, and how it is to be established and qualified for the service. No such proceedings were had to make the Mariposa a bonded warehouse, or to qualify her to serve in that capacity. Section 2776, Rev. St., provides that "any vessel may proceed with any merchandise brought in her, and, in the manifest delivered to the collector of customs, reported as destined for any foreign port, from the district within which such vessel shall first arrive to such foreign port, without paying or securing the payment of any duties upon such merchandise as shall be actually re-exported in the ve88el." Then, it provides, what shall be done to secure the carrying away of the goods. Had the Mariposa been on a voyage from Honolulu to Panama, touching at the port ()f
M'LEAN V. HAGER.
San Francisco,having this opium on board, in transit, from the former to the latter port, in precisely the same manner, as in this case, can there be a shadow of doubt, that upon complying with the statutory condidons, she would have beert entitled under this section to proceed with the opium to Panama, without either paying or securing the payment of the duties imposed upon such merchandise, when imported into the country, in the ordinary way, for the purposes of the commerce of the country? We think not. So it appears to us, that section 2979 provides, with little less explicitness, for the case in hand, where merchandise is brought into port in transit from one foreign port to another, upon a vessel which is to proceed no further, and intencied not to be landed, but transferred to another vessel, ready to receive it, to be transported to and landed at another foreign port. Says the statute: "If the owner, importer, consignee, or agent of any merchandise, on which duties have not been paid, shall give the collector satisfactory security, that the merchandise shall be landed out of the.iurisdiction of the United States, in the manner required by the laws relating to exportations for the benefit of drawback. the collector, and naval officer, if any, on the entry to re-export of the appropriate expenses, permit the merthe same, shall, upon chandise, Under the tnspection of the proper officers, to be shipped WITHOUT THE PAYMENT OF ANY DUTIES THEREON." Rev. St. § 2979. This section appears to exactly cover this precise case. Here were goods in transit from one foreign port to anothet, not intended to be landed in San Francisco. It was so expressed on the manifest, and on the bill oflading, and so reported to the collector of customs. The owner offered to give the security required, that the "merchandise should be landed out of the jurisdiction of the United States," and asked a permit to transfer it to a ship, in port, ready to sail, and bOund to the port of destination. But the collector, acting upon the ruling of the secretary, refused to grant a permit, without payment of the ordinary duties imposed upon goods imported into, and landed in, the United States, although this section of the statute expressly says, that the collector shall, "upon payment of the appropriate expenses, permit the merchandise, under the inspection of the proper officers, to be shi pped withou' the payment of any duties." It must be remembered, that these goods were never, in fact, landed and placed in a bonded wareho'use, and no statute has been called to our attention, that appears to us to require that goods so situated, should warehouse. And unless this be landed, or should be placed in a opium was "deposited in a bonded warehouse," within the meaning of the statute, the provisions of section 2502, Rev. St., as amended in 1883, do not apply. We cannot attribute to congress an intention to place so important an obstruction upon the commerce of friendly neighbors,-a partial confiscation of the property of their citizens, under the circumstances SUfrounding this case,-without a more explicit expression of such intent than is found in any provision of the statutes brought to our notice.
The rule:is, undoubtedly, established, that when goods arrive within the destined port of entry with intent that they shall be uoladen, and become a part of the commerce of the country, the liability to pay duties attaches. U. S. v. Twelve Tho'U8and Three Hundred and Fcrrty-Seven Bags of Sugar, 2 Abb. (U. S.) 423, note. Says, the Court in U.8. v. Ten Thou,.. sand OigarB, 2 Curt. 437: "An importation is complete when goods are brought within the limits of a port of entry, with the intention of unloading them there." In The Gertrude, 3 Story, 71, the court says the revenue laws "refer, also, to goods intended to be introduced into the country for sale and consumption, or for the general purposes of commerce. * * * To constitute an importation, within the meaning and intent of the laws, the arrival must be voluntary, with the intent to import them." -The qualifications mentioned in the foregoing cases are not mentioned in U. S. v. Vowell, 5 Cranch, 372; Arnold v. U. S., 9 Cranch, 119; and .Meredith v. U. S., 13 Pet. 494. In the latter it is said that the right of the government to the duties accrues "at the time when the goods .have arrived at the proper port of entry.". That is to say, when liable to duties at all, the right attaches at the time indicated. In the cases cited from the supreme court, there was no occasion to mention the qualification stated in the cases cited from, the circuit courts. But, in this case, the goods were not intended to be landed. or imported for the purpose of the commerce of this country. This opium was professedly shipped at Honolulu, for Panama, by way of San Francisco, and purported on the manifest and bills of lading, and so reported to the collector, to be in transit,-to be transhipped without landing. There was no intention to import it into the United States, for any purposes of the country, in any just commercial sense, and, consequently, the right to duties never attached. The proper port of entry, for the purposes of commerce, was Panama, and the only burdens imposed and provided in such cases, by the statutes referred to, were for the purposes of securing the landing 'of the goods beyond the borders of the United States, so that they should not enter clandestinely into the commerce of·the countr)' of which it had not yet become a part. If wrong in the position taken by him as to the liability of the opium to duties, the United States attorney insists that plaintiff cannot recover because he did not first appeal to the secretary of the treasury, and take the proceedings required by section 2931,Rev. St., before instituting his suit. This is not a suit to recover duties improperly exacted. It is a suit for damages resulting from a trespass alleged to have been illegally committed,-a trespass by unlawfully seizing goods not liable to seizure. The goods never were entered, and not desired to be entered, for the ordinary purposes of the commerce of the country. They were, merely, in transit, and not liable to duties upon the conditions under which they were seized and sold. We do not think the section of the statute relied on applies. It follows that the demurrer must be overruled, with leave to answer, and it is so ordered.
'CRtAVER V. WEYHRICH.
and others v.
COif-cuit Oowrt, B. D. NmJJ York. July 28,1887.)
·CUSTOH DUTIEs-TREATmS-ExEHPTIONB-Do¥DhOAN REPUBLIC-HAWAIIAN IsLANDS.
The treaty with the king of the Hawaiian Islands. and the act of congress it effect, (19 U. S. St. at Large, 200,) by which molasses from those Islands was admitted into the United States free of duty, did not operate upon the previous treaty with the Dominican Republic,so as to establish a like exemption as to molasses imported from the latter country; followinjt Bartram v. RobertlJon,15 Fed. Rep. 212, affirmed 7 Bup. Ct. Rep. 1115; Whitney v. Rob· ertlJon, 21 Fed. Rep. 566;· Netherclift v. RobertlJon, 27 Fed. Rep. 787.
OF CONGMSS OF .1888.
The eleventh section of the tariff act of 1888, referring to the sanctity of treaty notwithstandinf that act, was not intended to revive and let inxnotlon the iner.tfeatures 0 the Dominican treaty; following Nethttr· elifl v. Robert8on, 8U1J'1'a.
On Demurrer to Complaint. OharlaStewart Davison, for plaintiffs. Stephen A. Walker, U. S. Atty., and Thomas Greenwood, Asst. U. S. Atty., for defendant.
LACOMBE, J. The questions raised by the demurrer are the same consideredinthe cases of Bartramv.Robe:rtmn, 15 Fed. Rep. 212, (recently affirmed in the supreme court, 7 Sup. Ct. Rep. 1115;) Whitney v. Robe:rtmn; 21 Fed. Rep. 566, and Netherclift v. Robertson, 27 Fed. Rep. 737; and, for the reasons stated in the opinions there delivered, the demurrer issustaibed. Judgnient is ordered for the defendant.
(Oi'l'cuit Oourt, 8. D. Illinf1tB. 188'l.)
PATENTS FOR INVENTIONS-ABANDONMENT.
A delay of 10 years in applying for a patent, when the inventor had sum· cientmeans, coupled with the sale of machines with the improvement by the patentee, that time, held to be an abandonment by him of hisinven· tion to the publIc. Letters patent No. 155.256, dated September 22, 1874, for an improvement in harvester or header, h6ld·'Void; the invention having been abandoned to the public·before application for the patent was made.
SAME-IMPROVEMENT IN HARVESTERS.