Max Sandherr, Inc. v. United States , 4 Cust. Ct. 334 ( 1940 )

Kincheloe, Judge:

All of these protests were originally filed in the year 1934, and raised the sole claim that the assessment of so-called processing taxes on certain cotton commodities or articles under the Agricultural Adjustment Act of May 12, 1933, was illegal and invalid, on the ground of unconstitutionality. On January 31, 1935, motions were filed in all of these cases to amend the protests by adding the claim that the collector had “erroneously converted the currency of the invoice,” etc., under section 518 of the Tariff Act of 1930, reading as follows:

Sec. 518. * * * Under such rules as the United States Customs Court may prescribe, and in its discretion, the court may permit the amendment of a protest, appeal, or application for review. * * *

and Kule 9 (2) of the United States Customs Court, made pursuant thereto, reading:

Rule 9 (2) Amendment of Pleadings and Motions on Circuits. If the plaintiff desires to amend his protest, appeal or application for reveiw, as provided in section 518 of the Tariff Act of 1930, he may do so by filing with the judge presiding a motion in writing setting forth the proposed amendment at any time before the case is called for trial.

Such motions to amend protests pending on the calendar at the port of New York, if no objection is made thereto, may be approved by the division of the court having jurisdiction of the subject matter involved, but motions made to amend protests on calendars at ports other than New York, if objection is made thereto, may be passed upon by the judge presiding subject to the approval of the majority of the division having jurisdiction of the subject matter.

At tbe time of the hearing on the motions of February 14, 1935, the protests were suspended under a suit then pending (No. 4040) from our decision in Macksoud Importing Co. v. United States, T. D. 48442, on the question of the amendment of a protest. In that case protests had been filed against the action of the collector in assessing duty on certain imported merchandise at 90 per centum ad valorem under paragraph 1529 of the Tariff Act of 1930, and claimed the mer-cbandise properly dutiable alternatively under various other paragraphs of that act. ’ Subsequently plaintiff sought to amend said protests by adding the claim that the collector had improperly converted the currency of the invoices. It was contended by counsel for the Government, however, that such amendment was a new cause of action filed more than 60 days after liquidation of the duty on the merchandise, under section 514 of said act, and was therefore invalid. In a majority opinion by Division Two of this court it was held that as the new claim pertained to the same merchandise as that covered by the original protests this court had the power and authority to grant such amendment, and did so grant same. Citing Sweeney & Johnson v. United States, T. D. 45772 (61 Treas. Dec. 1331); Agfa Ansco Corp. v. United States, T. D. 47217 (66 id. 169). The court then proceeded to decide the protests on the merits, overruling the claim of plaintiff in the original protests, but sustaining the new claim raised by the amendment.

Our appellate court, in deciding said appeal in United States v. Macksoud Importing Co. et al., 25 C. C. P. A. 44, T. D. 49041, after reviewing all the cases on the amendment of protests before and under the acts of 1922 and 1930, affirmed the decision of this court, and, in so doing, used the following language:

Why, then, should the Congress provide for amendments to protests after the United States Customs Court had obtained jurisdiction, unless it was its purpose to give that court the power, in its discretion and under such rules as it might prescribe, to permit, by such amendments, the presentation of new and additional claims, which might have been made in the original protest as to the merchandise covered by that ‘protest? We think that that was the purpose of the Congress, and that any other construction of the provisions in question would make them practically inoperable.

This was really confirming the attitude always taken by the majority of Division Two of this court in regard to an amendment of a protest. It happens, however, that in all of the instances in which an amendment was granted the original protest contained at least one claim over which this court had jurisdiction.

In the present case, as already stated, the original protests make the sole claim that the so-called processing (or compensating) tax levied on certain cotton articles under the Agricultural Adjustment Act is unconstitutional, no objection whatever being made to the classification of the merchandise and the assessment of duty thereon under the Tariff Act of 1930.

The Agricultural Adjustment Act was passed May 12, 1933, and under date of September 18, 1935, this court, in the case of Marshall Field & Co. v. United States, T. D. 47877 (68 Treas. Dec. 272), held that it properly had jurisdiction over the question of so-called compensating taxes on imported cotton articles under said Agricultural Adjustment Act, on authority of Faber, Coe & Gregg v. United States, 19 C. C. P. A. 8, T. D. 44851, and other cases therein cited. Subsequently, by section 905 of title VII of the Revenue Act of 1936, this court was expressly divested of any jurisdiction under the Agricultural Adjustment Act, which section reads as follows:

SEC. 905. JURISDICTION OP COURTS.

Concurrent with the Court of Claims, the District Courts of the United States (except as provided in section 906 of this title) shall have jurisdiction of cases to which this title applies, regardless of the amount in controversy, if such district courts would have had jurisdiction of such cases but for limitations under the Judicial Code, as amended, on jurisdiction of such courts based upon the amount in controversy. The United States Customs Court shall not have jurisdiction of any such cases. [Italics ours.]

The lack of jurisdiction by this court as a result of the foregoing provision was further established by our appellate court in United States v. Marshall Field & Co., 25 C. C. P. A. 308, T. D. 49422. Note also Lamborn & Co. v. United States, C. A. D. 60. It therefore now is the contention of the Government that as this court no longer has jurisdiction of the sole claim raised in the original protests, it no longer has any right or authority to grant an amendment of said protests at this time.

In this connection it should be borne in mind, however, that the motions to amend the protests herein were made and filed during the year 1935, at which time this court unquestionably had jurisdiction of the subject matter and claim raised by the original protests, as held by us in said T. D. 47877, supra. The situation with reference to the amendment of the present protests is therefore really no different from that in the Macksoud case, supra, so that it still remains a matter within the discretion of this court to grant such amendment, so long as the new protest claim is confined to merchandise covered by the original protests.

This being so, we need then only consider whether there is any good or logical reason why the amendments should not be granted. We can think of no reasonable objection thereto ourselves, and none has been advanced, apart from the fact that since 1936 this, court has been without jurisdiction in any matter relating to the Agricultural Adjustment Act. We do not, however, consider that the Revenue .Act of 1936 in any way deprived this court of the right, within its discretion, to amend a protest containing a cause of action which was within its jurisdiction at the time the protest was filed, under section 518 of the Tariff Act of 1930, and where the motion to amend was also made before the repealing statute of 1936.

In view of all of which the motions of counsel for the plaintiff to amend the protests herein in the manner hereinbefore mentioned are hereby granted, with an exception to this ruling given to defendant.