Submitted November 10, 1902. Decided Description had passed from the control of the

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rupt's estate; and, thereafter, on February | modify this rule, but with unusual careful23, 1900, that court rendered a decree by ness guards it in all of its details, provided which, among other things, it was ordered the suit pending in the state court was inthat the deed of trust referred to in the bill stituted more than four months before the be set aside as fraudulent, and that a spe- district court of the United States had adcial commissioner and receiver therein judicated the bankruptcy of the party enti named should rent the land described until a tled to or interested in the subject-matter certain day and then sell the same, the pro- of such controversy." ceeds thereof to be applied to the payment of the debts due by Pickens. November 20, 1899, complainant Dent, “without waiving her preference," tendered her proof of debt before the referee in bankruptcy, it being the judgment in question, which was allowed as a preferred claim against the bank-risdiction by the district court as invoked. rupt's estate.

The court also ruled that the mere fact that complainant Dent proved up her judgment as a preferred debt in bankruptcy, when and as she did, did not operate to deprive the state court of jurisdiction, nor amount to a consent to the exercise of ju

We are of opinion that the circuit court of appeals was right in its rulings. The case in the one aspect came within Bardes v. First Nat. Bank, and in the other within the rule applied. Metcalf v. Barker, 187 U. S. 165, ante, 67, 23 Sup. Ct. Rep. 67. Decree affirmed.

The receiver and commissioner appointed in the chancery court was proceeding to execute the decree therein when Pickens filed his bill in the district court March 31, 1900, against Dent and others, rehearsing the facts relating to the suit and to the proceedings in bankruptcy, charging that the trustee was not authorized to intervene in the chancery cause, and asserting that the state court on the filing of Pickens's answer | MILTENBERGER LAWDER et al, Peti setting up his adjudication should have taken no further action, and that, therefore, the decree appointing the commissioner and receiver to rent and sell the real estate was without authority of law and void.

The prayer was that defendants be restrained from all further proceedings in the suit so pending in the circuit court of Barbour county until the termination of the bankruptcy proceedings; that the receiver and commissioner be enjoined from executing the decree during their pendency; and that the possession and control of the property be turned over to the trustee to be administered under the direction of the court in bankruptcy.

A preliminary injunction was granted by the district judge, which was dissolved July 26, 1900, and Pickens's bill dismissed with costs. From that decree this appeal was taken.

tioners,

v.

(187 U. S. 281)

WILLIAM F. STONE, Collector.

Duties worthless articles-decayed fruit.

That portion of a cargo of pineapples which on arrival within the limits of a port of entry of the United States was found to be so decayed as to be utterly worthless is not dutiable, though the loss was less than 10 per cent of the total invoice, as entirely worthless articles are not within the provision of the customs administrative act of June 10, 1890, § 23, that no allowance shall be made for damage to "goods, wares, and merchandise" imported into the United States, unless the importer shall abandon to the United States a portion of such articles amounting at least to 10 per cent of the total invoice.

[No. 82.]

Such being the state of facts, the circuit court of appeals held that the district court Submitted November 11, 1902. Decided had no jurisdiction of the suit, even if it had been brought in the name of the trustee, who could not have sued defendants be

December 1, 1902.

States Circuit Court of Appeals for the Fourth Circuit to review a decree which reversed a judgment of the Circuit Court for the District of Maryland affirming the decision of the board of general appraisers which sustained a protest of importers against the assessment of duties on decayed fruit. Reversed.

See same case below, 41 C. C. A. 621, 101 Fed. 710.

low in that court in respect of the bank-ON WRIT of Certiorari to the United rupt's property, unless by consent, while the bankrupt himself had no standing in that court after adjudication (Bardes v. First Nat. Bank, 178 U. S. 524, 44 L. ed. 1175, 20 Sup. Ct. Rep. 1000); and further, that as the circuit court of Barbour county had at the time of the adjudication, and had had for years, complete jurisdiction and control over the bankrupt and his property, that jurisdiction was not devested by the proceedings in bankruptcy, and it was the right and duty of that court to proceed to final decree notwithstanding adjudication, the rule being applicable that the court which first obtains rightful jurisdiction over the subject-matter should not be interfered with. Frazier v. Southern Loan & T. Co. 40 C. C. A. 76, 99 Fed. 707. And Goff, J., speaking for the court, said: "The bankrupt act of 1898 does not in the least

Statement by Mr. Justice White: In the months of May, June, and July, 1897, the petitioners, copartners trading as S. M. Lawder & Sons, Imported into the port of Baltimore from the British West Indies several cargoes of pineapples, invoiced as a specified number of dozens.

Upon the discharge of the cargo at Baltimore, after the pineapples had been taken out of the vessels and their number esti 1 U. 8. Comp. St. 1901, p. 1930.

2

00

⚫283

Do pineapples, which, on the voyage to this country, become so decayed as to be utterly worthless, constitute, upon arrival within the limits of a port of entry of the United States, goods, wares, and merchandise imported into the United States, within the meaning of this expression as employed in the section above quoted? is the question for decision.

mated by the inspectors, there remained invided, That the portion so abandoned shall the holds a quantity of what was described amount to 10 per centum or over of the as "slush," consisting of decomposed veg total value or quantity of the invoice; and etable matter, mixed with bilge water and the property so abandoned shall be sold by other débris of the cargo, some of it in a public auction, or otherwise disposed of for semi-liquid condition. This slush was the account and credit of the United States brought up from the holds in baskets and under such regulations as the Secretary of included by the inspectors in their appraise the Treasury may prescribe." [26 Stat. at ment of the cargoes. The pineapples al-L. 140, chap. 407, U. S. Comp. Stat. 1901, leged to be contained in the slush were un- p. 1930.] countable, and their number was roughly estimated by the inspectors by counting the pineapple tops and butts contained in a number of baskets of the slush, striking an average of those baskets, and then calculating the number contained in the whole quantity of slush according to that average. The material thus removed from the vessels was commercially valueless, and under the sanitary regulations of the city of Balti- In Marriott v. Brune (1850) 9 How. 619, more was taken down the river on a scow 13 L. ed. 282, it was held that, under the and dumped overboard. The number of 11th section of the tariff act of July 30, pineapples so estimated by the inspectors to 1846, where a portion of a cargo of sugar be contained in the slush was less than 10 and molasses was lost by leakage on the per cent of the total invoice, and the col- voyage to this country, duty should be exlector treated the loss as a case of damage acted only upon the quantity of sugar and to the cargo within the meaning of § 23 of molasses which arrived here, and not upon the customs administrative act of June 10, the quantity which appeared to have been 1890, and assessed duty on the whole num-shipped. In the course of the opinion the ber of pineapples estimated by the inspect- court said (p. 632, L. ed. p. 288): ors to be contained in the cargoes, including "The general principle applicable to such this quantity of slush. a case would seem to be, that revenue should The board of general appraisers sustained be collected only from the quantity or a protest of the importere against the as-weight which arrives here. That is, what sessment of duties on the worthless and in- is imported, for nothing is imported till it distinguishable mass referred to, and this comes within the limits of a port. See decision was affirmed, ou appeal of the col-cases cited in Harrison v. Vose, 9 How. 372. lector, by the circuit court of the United 13 L. ed. 179. And by express provision in States for the district of Maryland. On a further appeal by the collector the circuit court of appeals for the fourth circuit reversed the decisions which had been made in favor of the importers and sustained the action of the collector. 41 C. C. A. 621, 101 Fed. 710. The case was then brought to this court by writ of certiorari.

Mr Edward S. Hatch for petitioners. Assistant Attorney General Hoyt and Messrs. James A. Finch, John C. Rose, and Solicitor General Richards for respondent.

"Mr. Justice White, after making the foregoing statement, delivered the opinion of the court:

As mentioned in the preceding statement, the collector of customs for the district of Baltimore treated the loss arising from the worthless condition of the portion of the cargo in question as a case of damage to the entire cargoes, within the meaning of $23 of the customs administrative act of June 10, 1890. That section reads as follows:

"That no allowance for damage to goods, wares, and merchandise imported into the United States shall hereafter be made in the estimation and liquidation of duties there on; but the importer thereof may, within ten days after entry, abandon to the United States all or any portion of goods, wares, and merchandise included in any invoice, and be relieved from the payment of the duties on the portion so abandoned: Pro

all our revenue laws, duties are imposed only on imports from foreign countries; or the importation from them, or what is imported. 5 Stat. at L. 548, 558, chap. 270. The very act of 1846 under consideration imposes the duty on what is 'imported from foreign countries.' [9 Stat. at L. chap. 74] p. 68 [48]. The Constitution uses like language on this subject. Art. 1, §§ 8, 9. Indeed, the general definition of customs confirms this view; for says McCulloch (vol. 1, p. 548): 'Customs are duties charged upon commodities on their being imported into or exported from a country.'

"As to imports, they therefore can cover nothing which is not actually brought into our limits. That is the whole amount which is entered at the custom house; that is all which goes into the consumption of the country; that, and that alone, is what comes in competition with our domestic manufactures, and we are unable to see any principle of public policy which requires the words of the act of Congress to be extended so as to embrace more.

"When the duty was specific on this article, being a certain rate, per pound, before the act of 1846, it could, of course, extend to no larger number of pounds than was actually entered. The change in the law has been merely in the rate and form of the duty, and not in the quantity on which it should be assessed.

| "On looking a little further into the prin ciples of the case, it will be seen that a de

*"Sec. 2927. In respect to articles that have been damaged during the voyage, whether subject to a duty ad valorem, or chargeable with a specific duty either by number, weight, or measure, the appraisers shall ascertain and certify to what rate or percentage the merchandise is damaged, and the rate of percentage of damage, so ascertained and certified, shall be deducted from "To add to such unfortunate losses, the the original amount subject to a duty ad burden of a duty on them, imposed after- valorem, or from the actual or original wards, would be an uncalled-for aggrava- number, weight, or measure, on which speition, would be adding cruelty to misfor-cific duties would have been computed. No tune, and would not be justified by any allowance, however, for the damage on any 23 S. C.-6.

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merchandise that has been entered, and on which the duties have been paid or secured to be paid, and for which a permit has been granted to the owner or consignee thereof, and which may on examining the same prove to be damaged, shall be made, unless proof to ascertain such damage shall be lodged in the custom house of the port where such merchandise has been landed within ten days after the landing of such merchandise."

So, also, by § 2921 of the Revised Statutes [U. S. Comp. Stat. 1901, p. 1929], it was provided as follows:

"Sec. 2921. If, on the opening of any package, a deficiency of any article shall be found, on examination by the appraisers, the same shall be certified to the collector on the invoice, and an allowance for the same be made in estimating the duties."

made in consequence of rust of iron or steel, etc. Again, in treasury decision No. 1,167, of date July 8, 1872, fruit which had become worthless on the voyage of importa tion was held not dutiable, and the provision of the act of July 14, 1870, limiting the damage allowance on fruit, was held not to apply, and it was ordered that the case should be treated as if no importation had been made. In the course of the decision, known as treasury decision No. 3,236, of date May 14, 1877, after ruling that the "quantity" specified in the act of July 14, 1870 [16 Stat. at L. 265, chap. 255, § 21], limiting allowances for damage to green fruit, referred to the quantity specified in the damage application and landed in the United States, it was observed (italics not in the original):

"In many instances a portion of a cargo of green fruit becomes wholly worthless by decay, and such portion is to be excluded in considering the quantity upon which damage is to be estimated, unless it is included in the damage warrant."

By the act of July 14, 1870 (16 Stat. at L. 265, chap. 255), however, an exception was ingrafted upon the general provision as to allowances for damage which might have resulted to goods, wares, and merchandise on the voyage, by the enactment that no al- In treasury decision No. 3,272, dated @ lowance should be made with respect to cer- July 21, 1877, passing upon a case where an tain fruits, for loss by decay on a voyage, importer, in his application for damage al-* unless the same should exceed 25 per cen-lowance upon 41 barrels of oranges, intum of the whole quantity, and the allow- cluded as part of the 41 barrels, 20 bar. ance then made should be only for the rels of entirely worthless oranges, it was de amount of loss in excess of 25 per centum clared that, if the goods had been landed in of the whole quantity. As said in Scatter- the United States as any other merchandise, good v. Tutton, 2 Fed. 28, the limitation and no damage application had been filed, was applied "manifestly to avoid allowance duty would have accrued thereon; whereas for trifling losses." While, however, cer- if they had been thrown overboard at sea, tain fruits were made dutiable by the tariff no duty would accrue, as there would have act of March 3, 1883 (22 Stat. at L. 504, been no importation of that quantity. In chap. 121), and certain other fruits (in- treasury decision No. 4,126, of date August cluding pineapples) were placed on the free 1, 1879, upon application being made for list (ld. 519, chap. 121), the discrimination a damage allowance upon an invoice of cerreferred to against damage allowances upon tain oranges and lemons, the goods were reimportations of fruit was not continued, ported damaged "to the extent of 100 per and in § 23 of the customs administrative cent,-in other words, entirely worthless." act of 1890 fruits are not discriminated The ruling in treasury decision No. 1,167 against. was applied, and it was held that, where fruit was so damaged on the voyage of importation as to be entirely worthless, the clause in the statute limiting the damage allowance to the excess over 25 per cent did not apply, and that the case should be treated the same as if no importation had been made. Treasury Decision No. 9,719, dated November 19, 1889, reads as follows:

In its decisions upon applications of importers to be exempted from payment of duties because of the practical destruction of an article while in transit to this country, or for an allowance because of damage occasioned to imported goods before arrival here, the Treasury Department has fre quently applied the doctrine enunciated by this court in Marriott v. Brune, viz., that "Sir: The Department is in receipt of the purpose of Congress in enacting tariff your letter of the 13th instant, reporting laws was to exact the payment of duty only further on the appeal (537x) of Messrs. upon imported articles which were in truth Riley & Grey from your assessment of duty and in fact, entitled to the appellation of on certain card clothing, imported by them goods, wares, and merchandise, articles per Bulgarian' February 16, 1889, and which were not absolutely worthless, but found, upon examination, to have been demay possess some value for use or consump-stroyed by water during the voyage of imtion. Thus, in treasury decision No. 424, portation.

of date July 15, 1869, duties were ordered "The appraiser reports that the clothing to be remitted on four cases of needles in question was wound in coils, and has which had become worthless by reason of been subjected to a complete soaking with being submerged in salt water on the voy-salt water, which has permeated the entire age of importation. It was held that the coil, oxidizing the wire and completely rotcase did not come within the prohibition of the 33d paragraph of the 3d section of the act of July 14, 1862 [12 Stat. at L. 546, chap. 153], which prescribed that no allowance for partial loss or decay should be

ting the cotton backing, so that it is absolutely worthless, and cannot be used for any purpose whatever, even as old junk.

"In view of this report, the Department is of opinion that the card clothing is not