This was a proceeding to forfeit, for fraud of foreign consignors, goods not technically entered at the New York customs house, but unloaded from the ship and stored in general order. The libel charges that Castillo & Company were engaged in buying and selling Panama hats shipped to them by merchants from foreign ports. These consignors, as required by law (26 Stat. at L. 131, chap. 407, U.S.C.omp. Stat. 1901, p. 1886), delivered to the American consular agent, at the point of shipment, three sets of invoices showing the value of the property intended for importation into the United States. One of these invoices was retained by that officer, one was sent to the collector of the port at New York, and the third was delivered to the consignor, and by him forwarded to the consignee, Castillo & Company. All the provisions of the law were complied with, except that the consignors falsely and fraudulently undervalued the merchandise. The goods arrived in New York during April, May, and June, 1910, but were not called for by the consignee. They were accordingly put in general order by virtue of customs regulations (§§ 1087, 1088, 1902; Rev. Stat. §§ 2954, 2989, U.S.C.omp. Stat. 1901, pp. 1943, 1960), whereby the collector takes possession of goods unloaded, but unclaimed. They are then stored in a general order warehouse, the consignee having the right at any time within twelve months to withdraw them and make due entry therefor. If not so entered within the year, the merchandise must be sold at public auction.
The libeled goods not having been called for, the collector, in May, 1911, caused proceedings to be instituted to have them forfeited under the provisions of § 9 of the tariff act [of 1890, 26 Stat. at L. 135, chap. 407, U.S.C.omp. Stat. 1901, p. 1895, as amended by § 28] of 1909 (36 Stat. at L. 97, chap. 6, U.S.C.omp. Stat. Supp. 1911, p. 904), which declares 'that if any consignor, seller, owner, importer, consignee, agent, or other person or persons, shall enter or introduce, or attempt to enter or introduce, into the commerce of the United States, any imported merchandise by means of any fraudulent or false invoice . . . or shall be guilty of any wilful act or omission by means whereof the United States may be deprived of the lawful duties . . . such merchandise or the value thereof, to be recovered from such person or persons, shall be forfeited . . . and such person or persons shall, upon conviction, be fined . . . or be imprisoned . . . or both, in the discretion of the court.'
Maximo Castillo, as claimant, filed exceptions to the libel on the ground that the merchandise was not subject to forfeiture because there had been no entry of the goods; contending that placing them in general order was not even an attempt to introduce them into the commerce of the United States, inasmuch as the owner might, during the year, direct them to be forwarded to a foreign country without payment of a duty here. This contention was sustained by the district judge. That judgment was affirmed by the circuit court of appeals (115 C. C. A. 340, 195 Fed. 438), and the case is here on writ of certiorari.
The prior tariff act (26 Stat. at L. 131, chap. 407, U.S.C.omp. Stat. 1901, p. 1886), provided for the forfeiture of the goods 'if any owner, importer, consignee, agent, or other person, shall make or attempt to make any entry of imported merchandise by means of any fraudulent or false invoice.' In several cases arising under that act it was held that the language used did not cover the case of fraud by the consignor, nor could the goods be forfeited for the wrongful conduct of any person if the act preceded the making of the documents or taking any of the steps necessary to enter the goods. United States v. 646 Half Boxes of Figs, 164 Fed. 778 (1908); United States v. One Trunk, 171 Fed. 772 (July, 1909). Under the statute, as thus construed, there was no penalty for the grossest fraud on the part of the consignor, notwithstanding the fact that his invoice valuation was of great importance in determining true value, as a basis for collecting the duty. And even if the consignor was also consignee, it had been held that there was a locus poenitentioe so that he might, before entry, substitute a true for a false invoice, and thus escape a forfeiture.