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Federal Reserve Bank of St. Louis
700.011 - Schmoll Armand Inc vs FRBank New
York
Suits Against FRBanks -FRI3ANICS
19'D IN FILES sEcTioN
JAN 18 1953
January 3, 1950
Xr. Rufus J. Trimble,
Assistant General Counsel,
Federal Reserve, flank of New York,
,
Mel York 45, New York.
Devi- ic,ufus:
.
have yolir .letter . oC_Decembr. .,9,_l949jwith whicn you
of the Uhlted Stiates Court of Cu,Aoms
encicmed a copy of thF: opinion
and Patent Appeals in the secoac Scholl case, which you argued on
behalf of' the Federal lieserve Dank. I note your statement thFt the
opinion is completely satisfactory to you and that it indirectly affirms the action of' the Customs Court- In quashing the subpoena duces
tecum served upon the Federal Reserve Eank. 1 hbve read ti-le opinion
with much Interest and I conEvItulate you on the sacce6.3ful outcome
of the case.
Sincerely yours,
Geo/so R. Vest,
General Counsel.
PAC
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Federal Reserve Bank of St. Louis
GBV:lim
•
1
lUIt FL
L. INIcCclic.ch
•
FEDERAL RESERVE BANK
41,
e
OF NEW YORK
-?5-re, B+,
NEW YORK 45,N.Y.
December 291 1949.
George B. Vest, Esq.,
General Counsel,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
Dear George:
For your information I enclose herewith a copy of
the opinion of the United States Court of Customs and Patent
Appeals in the case of Armand Schmoll, Inc. v. The United
States - the second Schmoll case - which I argued for the
bank on October 5, 1949, together with copy of my memorandum
to Mr. Logan of December 2 1 1949 thereon.
Yours sincerely,
f
Rufus J. Trimble,
Assistant General Counsel.
Enclosures.
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Federal Reserve Bank of St. Louis
L. 1,7
"
LeC0110C11
,...,
MISC.
30.2-100M-3-49
to Messrs. KPRIce,
rozi11
OFFICE CORRESPONDENCE
_oy
'D ENT FILES SECTION
AL RESERVE RANK
gQii4-44
opdN10Q30
r
DATE December 28, 1949.
To
Mr. Logan
Rufus -j. Trimble
FRONL
.
SUBJECT Certification
of rates - Second
Schmoll ease - Opinion of the U. S.
Court of Customs and Patent Appeals,
Attached hereto is a copy of the opinion rendered by the
above court apparently under date of December 12, 1949. It affirms
the Customs Court in overruling the protest of the importer and thereby
indirectly affirms the action of the Customs Court in quashing the
subpoena duces tecum served upon this bank. The opinion is completely
satisfactory to me. I have some doubt that an appeal to the Supreme
Court will be sought by the importer and have considerable confidence
that, if it Is, the Supreme Court will not grant the appeal.
There is one Point of incidental interest. The Assistant
Attorney General, representing the Government was inclined to question
the inclusion in our brief of a point asserting that the appellate
court did not have jurisdiction of an appeal, on the ground that it
might prejudice us with the court. However, it seems to me that there
may have been enough merit in our contention so that it may have
strengthened our case in that if the court did not affirm the Customs
Court it might have opened up the question to the Supreme Court whether
a substantial portion of the cases decided by the appellate court were
not outside its jurisdiction.
The attorney for the importer indicated
upon the argument that four-fifths of the customs cases decided by the
court in the past might fall within this category.
PST:GRG
Att.
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Federal Reserve Bank of St. Louis
rot PIT,E3
•
1122.1.
1149_11_1 4
19
REC'D iN FILES SECTi 17 I
trpirT STIATi
n
eQ71 qPITMT
PA.Trtier
ATA
JAN 18 1950
APMAND SCHMOLL, INC.,
October Term
v.
1949.
Cultome Appeal ro.
Appellant*
4611.
2
OUStatia
Calendar Vo,
2.
THE uvrrn STATF8,
•Appellee.
GARRETT, Chief Zudge*
This is an appeal from the judgmert of the United 51uktes CUSe
toms Court (Third Divielon), rendered in conformity Trith its decision,
C.
D. 1097 (21 Curt. Ct, 117), overrulirg the protest of the importer
(500 974$9900,41422) againr!t the duty Asnesenent made by the Collector
Of Cult(ms at the port of rev York upon hides innorted from nrasil*
it srearn thlt the hides were irInorted in 1935, the date of
exportation from nraeil being October 7, 19,5*
The entry van liqui-
dated by the eollector June 2. 193$, and protest under Fection 514
of the 1930 Tariff Act was filed by the importer within' the statlitory
period. The decision of the trial court was rendered March 24, 19414.*
The following statement of the ease it quoted from the brief
filed before us on behalf of the Ooverntent:
The consular invoice and other entry papers in
this ease show that on October 7, 19,5, n shipment
of hides was exported from Brazil consigned to
appellant. rrtry was made at the nort of We 'fork
on October 22, 1935* The entry was liquidated on
4
* The long delay between the filing of the protest and the hear.
ing and decision by the trial court as due to legitimate causes unneeessnry to be recited in detail.
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Federal Reserve Bank of St. Louis
•
S
Sure
1938, when the collector of customs core
verted the currency of the invoice from milreis to
dollars at the rate of '183740. This rate and others
for the aurreney of other countries had bear eublished it the Treasury Decisions An e directive to collectors eteting that they vere the rates which had
been certified by the rederal neserve Par of Now
York under authority of Section 522 (c), for the
period of October 4 to 100 1935 (68 Trees" Dec' 144.345), A photostatic copy of the original certification for October 70 19350 ws received in evidence es
'Exhibit 1 (71, 38a), Opposite the rate certtfied for
Brazilian teilreis (a, well as the currencies of several other countries) was an asterisk referring to a
note on the certificate stating wroeinal rate, rirm
rates not available."
Prior to the trials plaintiff?, counsel serve on
the redeTel Reserve Bank of New York a subpoena dcs
term requiring the bark to produce its records relating to the rates or exchange of the Ilrasilien
milreis or the date or exnortation of the instant
Inerchandise (P., 16), The bank appearee through its
attornOr ard moved to quash the subpoena (Ti. 10),,
The motion was granted (R" 22) are a review of that
action issaught in this appeal
' In the course of the
hearing there was extended argument between appellanets
counsel and counsel for the bank with respect to the
losure
right of the bark to claim immunity fro
of its records because It functioned as a governrental
agenay when it certified rates of exchatee for foreign
currencies under Section 522s vxmo,• This aspect of
the case Nall not be considered by appellee because
here0 as in the court below, the Federal Reserve Bank
has appeared and obtained permission to rile e brier
addressed to this aspect of the case"
2,
The etatement of the case in the brief on behalf or Repellents
although expressed in different phraseology, does rot differ in any
material respect from the foregoing'
ThemeigalpAriee brief alluded to in the etateeent quoted from
the Gemormout brief was received by the collet end oral argument by
counsel representing the 'Federal Peserve Bark vas heard.
We quote from that briefs eR an appropriate part of the statenent
or
the enses the following (reference to record pages being omittee as
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Federal Reserve Bank of St. Louis
4.1.4,4110.
•
indicated by asterisks):
In the present proceeding, the appelUnt sought
to.have the United Mates Custons Court find independently A new and different rate of exchange for
the !rasilian milreis for Use by the Collector in
reliquidating the entry of 7rlder .t'si* in lieu of the
rate certified. by the Pederal Reserve Bank of Vew
York to the recretary of the Treasury :..rtd 7roclained
,
by the latter *4
*, Appellant's prayer on the present
appeal is that this Court instruct the Customs Court
so to find a different rate***,
We here quote flectior 522 of the TIriff
ct of 1910, vhich de-
finer the -gethod of deterrilrine the rate of eTchtinge to be enDloiTed
In convert119 the currency raned in an Invoice of imported .rierchandlse
,
for the purpose of duty tssetvaent:
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Federal Reserve Bank of St. Louis
522, corvrnrturz
CUIMEr‘CY,
(a) varr or ronTor COL PROCIJIMIT
SF.C.
or
TRFASURY,
reetion 25 of the
lt94, entitled An Act to reduce
vide revenue for the Goverment,
poses,” cs amended, is reenacted
follows:
BY rECRFTABY
Act of Allgust 77,
taxation, to proend for other wrvithovt chr.nge as
0Sre, 25, That the value of foreign coin as ex.
prevned in the money of iccourt of the United rtates
shall be that of the pure metal of such coin of
standard value; trd the values of the tandard coins
In circulation of the various rations of the world
shall he estimated quarterly by the Director of the
Mint and be proclaimed by the Secretary of the
Treasury quarterly on the lrt day of jamery„ April,
July, and October in each year.
(b) MCLAIMED WITT BASIS Or cormsTox„ • ?or
the purpose of the assessment and collection of duties
upon merchandise imported into the United Elates on
or after the day of the enactment of this Act, wherever
It is necessary to convert foreign currency into cur.
rency of the United rtates, such conversion, eyeept as
provided in subdivision (O p shall be made at the
values Proclaimed by the !lecretary of the Treasury
under the provisions of section 25 of such Act of
August 27, 1P94, as amended, for the querter in vtich
the merchandise vas exported,
•
(c) MARKET PATE wnEn YO MOCLIVATION, - If ro
such value lIp,s beer. proclaimed, or if the value so
proclaimed varies by 5 per centum or nore frem a
value teasured by the buying rate in the New York
market at noon or the day of exportation, eonverelon
be made at a value measured by such buying
rate, If the date or exportation falls upon a Sun
day or holiday, then the buying rate at noon on the
or the
last preeeding businese day shall he teed,
purl'oees of this subdivision such buying rate sall
be the buying rate for cable transfers payable in
the foreign currency so to be converted and shl
be determined by the rederal Reserve Bank of Rev
York and eartified daily to the Secretary of the
Treasury, who shall rukke it putlic at such times and
to such extent as he deems necessary. In escertain.
irg such buying rate euchrederal reserve bank may
In its discretion. (1) take into corsideration the
last ascertainable transzetions and quotations.,
whether direct or through el:ehnnge of other eurreneies, and (2) if there is no nArket buying rate for
such cable transfers, calculate such rate from actual
transactions and quotations In dernd or tiro bills
of exchange,
The brief on behalf of appellant, unlor the 'needing of "The
Issue," submits the following in nuestion 4
*ormt
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Federal Reserve Bank of St. Louis
10 Ts it incumbent upon the rederal Reserve Bank
and the Secretary of the Treasury to certil'y and
publish the "buying rate" for foreign currencies at
noon or each day under the T)rovisions of reetion
522 (c) of the Tariff Act of 191n, that rate varying
nore than 5/0 from the proclained rate?
1
20 Upon failure of the Pederal reserve Bank and
the Seeretary of the Treasury to certify and publish
the "buying rate" for Brazilian nilreis on a date
material to the issue in this case, has the Customs
Court turisdietion to review the decision of the collector applying a different rate and correct the
same?
'3* In response to a AlammulAtimutaslap, is it
incumbent upon the court to comnel the nroduction
of th evidence sought before deciding a motion to
quash or the ground of privileged or confidential
conrlurications?
4. Ts the Federal Reserve Bank bound to produce
the records subpoenae ttne the enurt bonne to receive
them as cobapetent evidence?
•
S
Tie argumentative sectio- of the brief for appellant seems first
to emphosize the third and fourth eueztioes so stated,
There is no controversy with respect to the first nuestion stated
in the brief.
The trial court held:
No question Is involved here concerning the value
of the Brazilian rilreis as estimated by the Direconder subsection (a) above, ror is
tor of the Tart .
-e
It disnuted by the plaintiff thnt t1 proclatied
value varied "by 5 per centum or pore from a value
measured by the buying r3te in the New York ,
tarket
at noon on the day of exportation," i,e,„ October 7,
1935. Plaintiffts contention as set forth in its
brief it that the collector failed to comply with
the terns of the statute in that he used as the basis
of conversion a rate vtlich had been certified to the
Secretary of the Treasury by the rederal Niserve Bank
of 'flew York zts a "nominal rate" (TX, 47910, supra),
and that by so doing he disregarded the buying rate
for cable trPrsfert.
The ansver to appellantfs first questior p.s stated in the brier,
obviously, is "yes," but that answer does not tettTe any question
here vital.
The second staltement is peculiarly phrased, it is in question
form, but the portion. rtich actually constitutes a question is based
upon an affirmative assertion to the effect that the ?ederal Tteserve
Bark and the secretary of the Treasury failed to certify Plnd ruhlish
the "buying rate" for Brazilianmilreis on a date material to the
issue in this cases
it seems to us that before the question which relates to_ the
jurisdiction of the Customs Court ree,uires any consideration it must
be determined whether the assertior of failure is correct.
In other 'words,
at5
we view the controversy, the furdarftents1 Issue
here is whether the rederal Reserve Bank of !lel/York complied with the
.
toerdate of Section 522 (o), sum' specifically whether, within the
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Federal Reserve Bank of St. Louis
rneaning of that statute, it determired and certified the buyirg rate
for Brasilian milreis in the ICe-4. York ,,,arket at roor on the 7th day
of October 1935,
As has been indicated, counsel for appellant at the trial canned
to be introduced in evidence a photostatic copy
or
a certification by
the revisal Reserve Bark of New York addressed to the recretary or the
Treasury, dated October
7,
1915, which read, in part, as follovst
In pursuance or the provisiors of section 522 or
the Tariff Act of 19,0, dealing vith the conversion
of foreign currency for the purpose of the assessnent nnd collection of duties upon flerchendive ii
ported irto the United States, we have ascertained
arid hereby certify to you that the buying rates in
the rev York Market at noon today for cable transfers pnyable in the foreign currencies are as shown
below.
The foregoing is follol4ed by a table headed *Valuer of 7oreign
Currencies,*
The table te divided into four eolumnas
The first column gives
the ranee cr countries; the second, the mmos of the ronotary units
of thore countries.
The third is headed *Noon Puying rate for Cable
Transfers in Y. Y.
Value in U. S. dollars,*
In several instaneer,
the value stated in the third column is followed by an asterisk, and
in the fourth column, under headirg *remerks,* there appears **Nomiral
rate. Pim rater rot available,*
One of the U.P. values stated (vita
an asterisk) is 083740* for Tnilreis of nraril, which, as ve understand it, nrescriben the value of the Brazilian milreis to be used in
the assesiment of duties upon merchandise exported from Prail on
October 7# 1935, expreseetl in terms of United Ptates dollars.
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Federal Reserve Bank of St. Louis
That was the value which the Secretary of the Treasury oansed to
.6.
S
•
be rinds public as the buying rate contenplated by section 522 (c),
VIM, and the collector assessed ard collected duties or the
ides
accordingly,
it is rated that the only duty imposed upon the tecretary of the
Treasury by the statute is that of making public the buyingT rate eel,tified to him 'at such times tole to such extert as he deems necessary,'
The ascertaiment of the rate ir .T..nde the exclusive furction or the
Federal reserve Bank of Nev York,
The pertinent phraseology of appellartf5 protest addressed to the
collectors as originally filed* reads:
*** The reasons for objection to your action are
that an erroneous and an im7roper rat* or value
was used by you, at the time of liquidation, in
converting the mi/reis value of the hides into
United Stitt** dollars, You have colleoted duty
In amounts greater than that contemplated by lav
and you have erroneously interpreted tectior 522
of the Tariff Act of 1930* resulting in t greater
exaction than contemplated by law,
To the foregoing there vas subsequently added by amendmentt
Moreover, 70n should have converted at the buying
rate in the New York market at noon on the date of
exportation of the merchandise, under section 522
(c), such buying rate varying by -lore than 5 per
centum from the rate proclaimed by the Secretary
of the Treasury under the provisions of rection
522 (a),
It will be observed that the protest neither specifies nor
clains any rate as being a "buying rate,* it merely attacks the rate
litich the colleetor applied,
Appellants contention* as developed before the trial court nnd
before us, grows out of the use of the rotation "Nominal rate,* appearing in the fourth column of the table hereinbefore described,
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Federal Reserve Bank of St. Louis
•
In itn decision in the case of atE v, pnited, Statce, 124 U.S.
81,i, 19, the Supreme Court recites the hirtory of the vsearch
which has been made for a measure of the true dollar values of imported rler&landise for customs purposes which was accurate (see rtraner v.
Arthur, 102 U.
r. 612, 617) and nt the same time administratively
Otasible and efficiento w whieh we here c!uote:
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Federal Reserve Bank of St. Louis
*** In the beginning Congress prescribed specific
dollnr values of specified coins. Act of July 11,
1709, 1 18, 1 Stat. 29* 41. rot cmx after, the
President VAS given authority to presoribe regulations for computing duties on imports mtere the
original cost as exhibited in * depreciated currency of & foreign goverrment, Act of Mrch 2,
1799, § 61, 1 Stat, 627, 673. In 1873 Congress
provided for an annual estimate by the Director of
the ! int or the full metal value of standard coins
,
l
of the various nations ard a proclamation of the
value by the recretary of the Treasury. Act or
March 3, 1873, 17 'tat, 602* That estimate was
remired to be nade marterly rather than annually
by the Act of October 1, 1900 i 52, 26 Stat. 567,
624. Then came the Act of August 27, 1094„ S 250
28 Stat, 509, 552, which retained the provision
for the estimate and proclamatior of metallic
values ard cve the Secretary of the Treasury power
to order a reliouidation at a different value on a
showing thAt the value ofthe invoice currency in
United States currency was 10 per cent more or less
than the proclaim0 value. Mnited tete, v.
* The procedure under the letter
Whit Adtp,
pro .sion dgao4 on a consular certificate to
establish the percentage of depreciation of the
currency. T. D. No, 23725, 5 Treas, Dec* 396.
There van thus no siva* source (and none at all
in the United States) to which custons ofricials
could look to determine the extent to which foreign
currency had. depreciated. Mmieover, violent
fluctuations in foreign exchame rates had occurred
after the first Icirld 7,!ar. It was for those reasons
that 1 411 (c) was added to the Emergency Tariff Act
of 1921, 42 Stat, 9, 17. reo S, rep. Vb. 16, 67th
Cong., 1st Sess., pip 16; H. Rep. ro. 79, 67th Comp,
1st Sess., p. 12; !Pry tiTriedwa v. vrito nt4tspl
12 rust. App, 486, 489, And 1 40? (0) of the 1921
Act now appears as ; 522 (c) of the. 1911 Act on
whose rteaning the present decision turns.
•
/t may bo said that in the parr case, alma, the Supreme Court
reversed the dectston of this court (12 C, C. P, A. (Customs) 16,
C. A. f$4 279), thereby upholding that of the United__ States Custons
,
court (C. D. A01), In that ease, vhieh involved rection 522( ),
0
mora, the Federal Peserve Ntrik of rev York (because of certain coral.
tions in England growing out or the liar in which Tuglad wat then engaged) certified two rates for the English pourd sterlirg
designated as the *free rate ard the other as the noffieisl" re7.e.
The Setretary of the Treasury notified Collectors of Customs that he
would publish only the “official" rate, which vas higher thar the
*frees rate, and directed them to use that rate on merchandise) imported
from 1711g1an(!.
The eollector applied the roffIcial" rate in the assess.
nort of Nty on woolens, the merchandise thpre Involved, and the tm.
porter protested,
In rustatning the ludglent of the Crstons Court, the Snprene
Court held, in erfect„ that under the facts there appearing the ,
free'
'
rate Ilch had been certified was riore truly representative of the
actual donor value than the'
offl' rate, and declined to hold that
,
,
"only or
buyirg rpte must be determined and certified,'
We think it obvious that there is nothing ir the decision in the
=mange, lunra, whieh Is of aid to appellant in the trstart case.
Manifestly, the 71eserve Bank did not find two buying rtes feir _
Alier milrets.
Pra,
Trileo it referred to 0nomiral rate' and stated
'trim rates not availableo n brt there is nothiTT to Indicate that there
Tmn pry Intention of treating the nominal rate es sonething different
from the buying rote,
Had it intended to find two buyinrT rates, it
doubtless would have done so with the same clarity which narked its
finding in the Mu, eases spra.
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Federal Reserve Bank of St. Louis
The trial court directed particuler attertior to that provision
n Section 522 (c) readitv:
*** In ascertairinq rueb bming rate such Federa/
reserve bank ,
lay in its diserotion (1) take into
consideration the last aseertainable transactions
Ard quotations, whether direct or through 07:chAnge
of other currencies, and (2) if the
is no market
buying rkte for such cable transfers, calculate
such rate from actual trensactionr ond rmotations
in demand or time bills of exchange.
and thereafter said:
is plain to the court that in derominutIng
the rate certified as unominal” said Federal reserve
bark indicated that such rate hae beer tetervtined
by calculation ilndor the circumstances surraurdiny!
Brazilian currency transactions on the day of
exportation of this lierehandise•
144
* It
Yith that holdinr we agree,
think the following from the Supreme Court's deelsion in the
BeT * ease jpprq, is of particular interest heret
,
*** The exercise of the Bankts discretionary power
under
522 (c) is in the category of admiristra.
tive or executive action which this Cour,1 held non.
rev ewable in : v, Arthur,
n
L102 U,S.
6
and in a r
v. Nitrritt, 11. tl.. 25, 27-2g.
A
see
4te v. t2.sli & Co., 310 U.S. 171, 380.
t
But the function of the Secretary in this regard is
purely ninisterial ***0
The holding In crwler v, Arthqr, suprfi, is summarized in the
first heimdnote of the opinion as follollst
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Federal Reserve Bank of St. Louis
1, The vexation of foTeign stnderd coins, which
the act of March 3, 10'730 e. 268 (17 Ptat. 602; rev.
Stat., sect. 3564), requires the director of the mint
to enttmxte annually, and the Secretary r.f the
Treasury to proclain on the first day of January, is
as binding on collectors of customs and importers,
as if decl,zred by statute; ,and_ eviderv, la !19t reqeivablet tcz flhou that it j* 1pAcgurat's fftalics ouril
agflolle toy v, R;Itchards (23 Wall. 24) cited ard
reaffirme •
-10...
•
•
It is obvious that the principle announced by the Supreme Court
ir its opinion stvtl.rg the reasons for its doeston is directly in
point here. The Supreme Court folloved it in its Occislor of the
Ilaglz v. lie:mitt ease, sra, and
in the ense of rplted Stately% V.
197 U.S. 115. The United States Custons Court and this
court have followed it in numerous cases. Illlistrative we cite the
qt 7c,„ Cr
following decisiors of this court
V.
Vrotvi Statel
(1911), 17 C. C. P. A. (Customs) 4200 422„ T. D. ,0866: k710.Ramted
aaattl jat.
i
IWIA4 SIAII (1916), 24 C, C. P. A. (Custons) 74,
rat AJIAWIgt"Ita. v. United Statvs (1937), 25
79, T. DO 0378; j j
C. C. P. A. (Customs) 136,
141) T.
D. 49255.
V. fird nothing In the opinion in the .7.3ry. case, sunTA, which
Indicates any disposition on the part of the Supre7i. Court to depart
from the rule so lorr nollowed.
Urtil the Conrress changes the rule
.
by legislation, or the Supreme Court itselr overrules '.0 we feel
bound to follow It. • In view of this holding, other cuestiors here
raised reed not be discussed.
The ludgment of the Customs Court is affirmed.
min=
By reason of illness, Hatfield, J.,
WO not
preqert at the argu,
mert of thin case and did not participate in the decision.
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Federal Reserve Bank of St. Louis
4013dii,
RZE
IN FILES SEMI
sEr 4 1949'
„
•
'de
7
CV it3
4
Lf
11
July 22, 1949.
Mr. Pufus J. Trimble,
Assistant Generrl Counsel,
Federal Feserve Pank O. New York,
New York 45, Nes: York.
Deer Rufus:
Thank you for sending me with your letter.of July 7
copies of the brief of the Federal Reserve ',lank of New York amicus
curiae in thecase of Armand Schmoll, Inc. v. United States, in the
United Stntes Court of Customs erd Patent Appeals. I nm glad to
hnve these copies rat:d wIll likevise be glad to know of further developments in the matter.
Sincerely yours,
George B. Vest,
GenerA. Counsel.
,86(i
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Federal Reserve Bank of St. Louis
a
-
_
,REC'D IN FILES SECTION
c,-tV
.
1
SE? 14 1949
-5 00 0
July 22,
19149
-
Board of Governors
Suit by Armand Schmoll, Inc.
;herry
Mr. (
v. The United States
LLLi
i.t
\
Counsel for the Federal Reserve Bank of rew York has sent us
, copies of a brief filed by the New York Reserve Bank as anicus curiae
in an appeal to the United States Court of Customs and Patent Appeals
from a suit brought in the Customs Court by 3chnoll against the United
States. The Reserve Bank is not a party to the suit.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Ochmoll sued the United f;tates in tn- Customs Court seeking
to have that Court find a new and different rate of exchange for
Brazilian nilreis in lieu of the rate certified to the Jecretary of the
Treasury by the l'ederal Reserve Bank of New York in accordance with the
Tariff Act of 1930. During this proceedina, the deserve Bank was served
with a subpoena requiring it to produce in court certain of its files
and records. The Court quashed this subpoena. Since almost the entire
argument in the appellant's brief on appeal is directed at the action of
the Customs Court in quashing the subpoena, the itoserve Bank obtained
permission from the Court to file the brief as anicus curiae.
The brief covers three points, namely: (1) that the Court
should not exorcise appell:to jurisdiction to review action of the lower
court in quashini; its own subpoena served upon the Reserve Bank; (2)
that the foreign exchange rates determined and certified to the Secretary
of the Treasury by the Federal Reserve Bank of G.71 York pursuant to
,
Section 522(c) of the Tariff Act, are final and conclusive and not subject
to judicial review; and (3) that the Customs Court does not have laaful
authority to compel the Reserve Bank to produce in court its confidential
records and other information.
This natter is brought to the Board's attention for its infora—
tion and there appears to be no action required by the :oard concernilv,
this matter.
_
\•
AKC:elh
7/224.49
/
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9/115
t
FEDERAL RESERVE BANK
OF NEW YORK
NEW YORK 45,N.Y.
July 7, 1949.
George B. Vest, Esq.,
General Counsel,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
Re: Axmand Schmoll, Inc. v. The United States
Dear George:
I enclose herewith for your files two copies of the
brief we are serving tomorrow on the parties to the above proceeding (the second Schmoll case).
Yours sincerely,
Rufu J. Trimble,
Assistant General Counsel.
Enclosures.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
6- -
REC'D TN F11E Sr;Crif3:71;.
P 0 - 1948
1
-tf i, A
April 5, 1948.
Kt,
/
/
Mr. I-ufus J. Trimble,
A35istant General Counsel,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Rufus:
Thank you ver:i much for your letter of April 2nd, enclosing
United States Customs Court in the case
a copy of the opinion o o Schmoll v. United States. I congratulate you on securing an opinion
upholdin6 you on all points. /..-Air batting average on cases involving
tbe certLfication of rates seems to be a full 100 per cent.
If the case should e taken to the higher court on appeal,
I will apprecitte it if you will let me know.
Sincerely yours,
George R. :Vest,
General Counsel.
GBV:lim
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1
1
FC-7.
:
L. Loiaiii
•
Mr. Entriken has the enclosures referred
to and will send them to Files in a few days.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
L.I.M.
10
•
FORM F. R. 326
r)
FILE,; S1TTQ1
APR 9 - 1948
(i
NOT RECEIVED BY FILES
DATE
KIND OF MATERIAL:
April 2, 1948
Letter, Trible to Vest
NAME OR SUBJECT:
Re
REMARKS:
opinion of the U.S. Customs Court in the case of
Schmoll v. United States
Letter in circulation in Leal Department
*L21/4.vvir-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
CHECKED BY
DATE
-
"
c.
I 9 /8
1945.
Mr. hifus I. Trimble,
Assistart General Counsel,
Federal hcservo sank or New -York,
Nilw York 7, Ne,
,
,
tear 1,ufus:
Thank you fcr yurjetter of ,:4ky .291 _19*5 advis1
77
thnt the motion for reargument in t.
.ae case of Schmoll v. YVerl
-,eserve iridik of Ne York was denied by the No.
, ori Court of
:
kTeals on gay 24, 190.•
arii sure that the very effective brief, which,
inderstand, you had a najor hand in drafting, had
Luch to do
with the decision of tc.1 court.
Sincerely yours,
George D. Vest,
General Attorney.
GBV:lim
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
May 30, 19145.
Mr. Rufus J. Trimble,
Assistant amoral Counsel,
Federal Reserve bank of tiew York,
Now York 7, Now York.
Dear Ni. Trimble:
I have received your letter of May 2?, 1945 and I
am delighted to know that the New York Court of Appeals oanourred in your view and mine that there was a conclusive
case
aLainst the granting of the motion for reargument in the
case
of Armand Salmon, [no. v. Federal 1-Zoserve Bank of Um
York.
Please accept my hearty oongratulations.
Cora.*
7
‘
Welter 'Iyatt
General Counsel.
':actd
e
N.:. . . . . . . . . . .
1
y
Ur. A. LITer
•
:/
FEDERAL RESERVE BANK
OF NEWYORK
May 291 1945.
George B. Vest, Esq.,
General Attorney,
Board of Governors of the
Federal Reserve System,
Washington 251 D. C.
Dear George:
It will please you to know that the New York
Court of Appeals was apparently, like you, unable to see
the legal basis on which it would grant the motion for
reargument in the case of Armand Schmoll, Inc. against
this bank.
On Thursday, May 24, 1945, it denied the
motion.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Yours sincerely,
Rufus' J. Trimble,
Assistant General Counsel.
MAY 3 1 1946-„A
FEDERAL RESERVE BANK
OF NEWYORK
May 29, 1945.
Walter Wyatt, Esq.,
General Counsel,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
Dear Mr. Wyatt:
It will please you to know that the New York
Court of Appeals apparently concurred with you that there
was a conclusive case against the granting of the motion
for reargument in the case of Armand Schmoll, Inc. against
this bank.
On Thursday, May 24, 1945, it denied the
motion.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Yours sincerely,
Rufus J. Trimble,
Assistant General Counsel.
alba
tl'At
DY
‘11
I
4
7
FEDERAL RESERVE BANK
OF NEW YORK
May 25, 1945. ('
Dear Governor Szymczak:
Vvith reference to the brief sent you last week
which we filed in the Schmoll case, you will be
interested to Know that according to today's New
York Law Journal, in the matter of application of
Armand Schmoll, Inc., v. Federal Reserve Bank the
motions for reargument were denied, with $10 costs
and necessary printing disbursements.
Very truly yours,
L. W. Knoke,
Vice President.
tz,t VICTORY
; BUY
,
UNITED
STATES
WAR
SAVINGS
/BONDS
AN ri
ps
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The Honorable M. S. Szymczak,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
•-• •
a
'wig
':,!; •
, MAY 2 1
q/.1._
..
MOTION FOR riliAILZIE1411 IN SC.!- , i0LL CASE
,
:
:
c_
•
A
;
In 1941 the Court of Appeals of the State of i,ew York
held, in :;climoll V. Federal eserve hank of New - ork, thee the
New York State courts eere without jurisdiction to order the Fed('re? Reserve Lank to certife a rate of exchanee for cable transfe
rs
different from the :Ai(' ArciC.1 it Itid certified. Schmoll is now
asking
ror a rearEelment of this decision, contending that the recent
opinion
of tne uprere Court of the United 2tatos in Parr V. Jnited
States
affords a proper basis for a. different decision.
=
Attorneys for Schmoll argue that -1. In the Derr case, the Supreme Court in effect held
that the Federal Eeserve Bank must certife a 'free rate",
although
in determining what the ectual rate shall be it may
Exercise some
discretien;
2. The New York Court in the chmoll case had held that
the State court has no jurisdiction te compel the "manner
" of the Federal reserve Eankt e performance ef its statutory duty;
Since, under the Darr decision, the rederel i..eserve
an nnst certife the free rate, the State ceurt would Lot
be underLing to control the manner of the exercise ef the Federal
Reserve
Oeties;
4. The Stete court hat jurisdiction because there ie
no
otaer reuede evailable to compel action by the Federel 1.eserve
Ii its brief in ofl?osition to *he motion for reargument
the Fedeeal reserve Lank contends -1. The "eArr case had no thin.?, to do with the question of
juriediction of a State court te iesue directions to an instrumentalit
y
of teee 7edera1 C.overnment in the performance of its duty; it
decided
only that where the Federal 1;eeerve -Eank had certified both
as official
rate end e free rata, the free rate ehould have been used in
assessing
the duty involved in the particular case.
2. The ,eirr cane 'lei not hold that the Federal heserve
Bane: nust crtif:, two rates, but only that wnere tee Federal heserve
Bank heel in fact certified two rates, it wae ,:roper fer it to
do to.
.11,40.11.1.•••••••
3. Yven if the Tarr case bad held tIlat the Federal heserve
ank ust certife both rates, te:,e facts in the ':_chrricll cese ",'re
,
entirely different frem those presented in the Barr case.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
fr
,FT
"
OR FILE '
Viceolloch
4. Cu thr contrary, the Barr celie held that the action
ruired cf the Federal Leserveyerk by the statute t of an administrative or executive character an') thereforti corroborates a
c ntertton tedch hd been made by the Federal Eeserve '.an's in the
rct reviewable by
3chmol1 case that the Eesurve Bank's action
.
ma2
5,
if any relief io justified, it may be found in the
customs courts specifically ectnblished be tns Tariff Act of 1930
-toms, but
2ctors of cus
for the ,urpooe of reviewinp, actions of co11,
not in the State ccurt where the Sehmoll )1-Jceeding is pending.
It does not appear likely tat t.e court will crent the
reargamnt for which Se.!imoll iks petitioning.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1-)
L
"'"-"• 1:!.
'7)
--c?
kay 15, 1945.
ufu:. Trimble,
Assistant General Counsel,
Foderal penerve sank of New York,
irk ?, !ow ,ork.
tear ilufust
Thanks very much for sending me a copy of your brief
in opposition t the motion for reargament in the Schmol
l case.
I am unable to see the legal basis on which the court w'uld
be
likely to ,irent the motion, and I think your brief very
effectually disposes of the contentions of Schmoll's attorn
eys.
SincereL. yours,
C;eQ,rgefi, Vet,
General Attorney.
IN*
GBV:lim
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
y
n,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Ire et t
IP"
Vd igoipien
‘
t,
wiswoomem
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May 15, 1945
R;Ifuu J.. Trimble,
AssistAnt fleneral Counsel,
Federal Reserve Bank of New York,
w York.
New York,
Dear 7!r. Trimblet
!any thanks for your letter
ray__14... 191451 enolosing
a copy of your brief in opposition to the mltion for rearcument
1
before the row York Court of Appeals .1.n the ease of Arnand
Irv,. v. The Fedral neserve Bank of "ew York.
I have read your brief with much interest and bolieve that
it makes a concluslve case a_ainst the grantinr, of the r%otion for
roarrument. Please accept my hearty eoncratulations on the excellenme of :our brief.
I nJlte that you are inclined to think that the bank has
authority to certify qdditional rate for I71,razilian milreis exchange
in 1935 and 1936, if it Should determine that such n rate should be
Loan, I did not
In. w_lettor of sty 7, 191.4r to
certified.
intend to smgcest that such a rate should be ctIrtified but was merely expressin6 ry curiosity as to the legal 81 4-uation. I do not know
enonh about the prac7Acal aspects of this ::-atter to justify me in
formulating any opinion upon that point.
With kindest personal ro,Ards, Iam,
Cordially yours,
Walter Wyatt,
General Counsel.
1171/mg
1
FEDERAL RESERVE BANK
OF NEWYORK
l!iay 14, 1945.
Walter Wyatt, Esq.,
General Counsel,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
Re: Armand Schmoll, Inc. v. The Federal
Reserve Bank of New York.
0.••••,...1••••••
Dear Mr. Wyatt:
For your information I am enclosing a copy of our
brief in opposition to the motion for reargument before the
New York Court of Appeals in the above case.
We are disposed to agree with the view you expressed
in your letter of May 7, 1945 to Er. Logan (who is not in
today). We feel that there is no real ground for the court
to grant a reargument.
We have not thoroughly considered the question of
the authority of this bank to now certify the free rate for
Brazilian milreis exchange in 1935 and 1936, or what the effect
of such certification would be. However, we have a fairly
general practice of certifying rates of exchange at the request of the Treasury for past dates on which no rate had been
certified. I am inclined to think that the bank has authority
to certify an additional rate for dates in 1935 and 1936 if
it should determine that such a rate should be certified.
Yours very truly,
Rufus J. Trimble,
Assistant General Counsel.
FOR FILLS
Sam A. Dyer
Enclosure.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
FEDERAL RESERVE BANK
OF NEWYORK
May 14/ 1945.
George B. Vest, Esq.,
General Attorney,
Board of Governors of the
Federal Reserve System,
Washington 251 D. C.
Re: Armand Schmoll, Inc. v. The Federal
Reserve Bank of New York.
Dear George:
For your information I am enclosing a copy of
our brief in opposition to the motion for reargument before
the New York Court of Appeals in the above case.
Yours sincerely,
Rufus J. Trimble/
Assistant General Counsel.
Enclosure.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I I I,
M AY
' 49,
nt-41*
t.*-4-_,L
/
•
May 81 1945.
alter S. Loolin,
Vieb Pre6ident and General Counsel,
Federal Rest,rve an of Now \ork,
Z;eti. (;ork 7, Ned; ork
7::enr
Lo. ;an:
:
eckno4ed,.ie receipt of your letter or.htai_p,
enclosinc a copy of the "Notice of Motion for Reargument, AffiGavit and -rief in '
,
7,u,.ort Thereof" in the case of Schmoll vs.
Iederal :,eserve
As you indicate, it does rot appear that tbe petitioner
has Luch basis for his motion for reargument, in view of tile fact
that t.(2 :3chmoll case turned on a jurisdictional point which was
not involved in the fiarr case.
am 0.ad to have. a copy of the papers filed in this
matter and hope that you will keep me advised of any important
developments from time to time.
Sincerely yours,
George B. Vest,
General Attorney.
Dy
1
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
i
... .,
Lai 7, 19145.
LTr. Walter
Vice -2resideet and
General Counsel,
Federal `Aeserve Bank of New York,
Itew York 7, 'New York.
Dear Mr. Lor,an:
I wish to thut:k you for your kind letter .ot, May 5, 1945
and for your courtesy in sending lue a taimeogiii-p hed-aopy of the "Notice
—
h
of /,!otion for Reargument, Affidavit and Brief in Support 'thereof" in
the case of An:a.nd 3ohmoll, Inc. v. The federal eserve bank of new
York, vfhich was served on attorneys of record for the i''ederal Reserve
Bank of New York on May 3, 1945.
have read all of this with muoh interest. For the
reasons indicated in the second paragraph of your letter, I would
be
greatly surprised if the court should r,rant this notion. However,
am curious as to whether or not the l ederal Reserve Bank would have
'
the authority to certify at this time the free rate for cable transfers on the dates of the transactions involved in the Sehmoll
litivation
and what the legal and practical effects of such a certification
would
be if the iederal Reserve Bank should issue one at this time.
I am
With kindest personal recards and b•lzt wishes for V-P. Day,
Sincere
alter "yatt,
General Counsel.
i.:sad
J
- --.,. ., •
go
_
FEDERAL RESERVE BANK
OF NEW YORK
May 5, 1945.
George B. Vest, Esq., General Attorney,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
Dear Mr. Vest:
I enclose a mimeographed copy of the "Notice of Motion
for Reargument, Affidavit and Brief in Support Thereof" in the
case of Schmoll against this bank, served on May 3 on Winthrop,
Stimson, Putnam & Roberts, the attorneys of record for this bank
in the case. These are, of course, the papers referred to in my
telephone conversation with you and in my telegram t4the Board
yesterday. You will note that the motion is for reargument of
the case in the Court of Appeals of the State of New York, which
rendered its decision in October, 1941. The Supreme Court of
the United States denied petition for writ of certiorari in
March, 1942.
I do not think the rules of court prescribe any definite limitation on the time within which such a motion for reargument may be made, and I do not know whether there are any
cases indicating the attitude of the court as to what it considers
timely. We will, of course, explore this point. In any event,
it does not seem to me that there is any valid ground for reargument, since the Schmoll case merely decided that the State
courts have no jurisdiction to entertain this kind of a proceeding and the decision in the Barr case has no relation to this
jurisdictional point.
I am also sending a copy of these papers to Mr. Wyatt.
If you would like any more copies, please let me know
and I will be glad to furnish them.
Yours faithfully,
VICTORY Enclosure
BUY
WAR
BONDS
UNITED
STATES
STAMPS
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Walter S. Logan;
Vice President and General Counsel.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
COURT OF APPEALS
Of the State of New York
In the Matter of the Application of
Armand Schmoll, Inc.,
Petitione2—Appellant
against
The Federal Reserve Bank of New York,
Respondent.
NOTICE OF MOTION MR REARGUIENT, AFFIDAVIT
AND BRIEF IN SUPPORT THEI-IEOF
Rathbono, Perry, Kelley & Drye,
Attorneys for Petitioner—Appellant,
70 Broadway,
New York, New York.
Hersey Eggintony
of Counsel.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
Notice of Motion for Reargumnt.
1
COURT OF APPEALS
OF THE STATE OF NEV YORK
In the Matter of the Application of
ARMAND SCHMOLL, INC.,
Petitioner-Appelant,
2
against
THE FEDERAL RESERVE BANK OF NEW YCRK,
Respondent.
PLEASE TAKE NOTICE that, upon the Record on
Appeal and the briefs and the affidavit of Hersey Egginton verified April 25, 1945, hereto annexed, and herein filed, and upon the opinions of
the Court of Appeals handed down with its decision on October 16, 1941 (see 286 N. Y. 503), 3
and upon the brief herewith attached and served
upon you, a motion will be made to the Court of
Appeals, at the Court of Appeals Hall, in the
City of Albany, on the 14th day of May, 1945,
at two o'clock in the afternoon on said day for
an order, directed to the Clerk of the Supreme
Court of the County of New York, requesting
him to return to this Court the remittitur, dated
October 17, 1941, in the above-entitled matter,
filed with that Clerk on or about October 18,
1941, -which order on remittitur was, on October 21, 1941, by an order of Hon. Louis A. Va-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
2
4
Notice of Motion.
Gal
lente, Justice of the Supreme Court of the
County of New York, Special Term Part II,
made the order of the Supreme Court; and, upon
the return of said remittitur, for a reargument
of said appeal; and for such other or further
relief as may be just.
That the grounds upon which the reargument
is asked are as follows:
That this Court had no opportunity to and
did not consider the recent, overruling case of
5 Barr v. United States, decided by the United
States Supreme Court on February 5, 1945, and
reported in Law. ed. Advance Opinions, Volume
89, Number 8, at page 515, and with which the
decision in the case at bar is in complete conflict; that by the Barr decision the certification
by the Federal Reserve Bank of the "free" or
market rate for cable transfers, under the facts
of the instant case, is not discretionary but
mandatory, and only a limited discretion is
granted to the Bank by Section 522(c) of the
Tariff Act of 1930 (Title 31, U. S. C. A., Section
6 372) to determine the actual amount of the
"free" or market rate.
Dated, New York, Now York, May 3, 1945.
RATHBONE, PERRY, KELLEY & DRYE,
Attorneys for Armand Schmoll,
Inc., Petitioner-Appellant,
Office & P. O. Address,
70 Broadway,
New York 4, N. Y.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
3
Notice of Motion.
7
To:
Winthrop, Stimson, Putnam & Roberts, Esqs.,
Attorneys for Respondent,
32 Liberty Street,
Borough of Manhattan,
New York, N. Y.
John F. X. McGohey, Esq.,
United States Attorney for the Southern
District of New York, Attorney for the
United States of America as Anicus
8
Curiae,
Office & P. 0. Address,
Federal Court House,
Foley Square,
New York.
9
4
10
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
AFFIDAVIT OF HERSEY EGGINTON.
COURT OF APPEALS,
State of New York.
In the Matter of the Application of
ARMAND SCHIDLL, INC.,
Petitioner-Appellant,
11
against
THE FEDERAL RESERVE BANK OF NEW YORK,
Respondent.
State of New York )
County of New York) "
S :
Hersey Egginton, being duly sworn, deposes
and says:
12
I am an attorney-at-law, residing at 85 Tenth
Street, Garden City, Long Island, New York, and
a member of the law firm of Rathbone, Perry,
Kelley & Drye (formerly Larkin, Rathbono &
Perry) the attorneys for the Petitionor-Appel)ant. As counsel in the above matter, I am familiar with the proceedings taken in the above
matter in connection with the appeal to the
Court of Appeals.
On October 16, 1941, the Court of Appeals
handed down in the above matter its decision
and order affirming the order of the Appellate
Division in and for the First Department dated
November 8, 1940, which affirmed the resettled
order of the Supreme Court, New York County,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
5
Affidavit of Hersey Egginton
13
dated August 8, 1939 granting the motion of the
Respondent to dismiss the petition herein, with
oosts.
John Ludden, Clerk of the Court of Appeals,
on October 17, 1941 issued its remittitur into the
Supreme Court of the State of New York, ordering that the order so appealed from be affirmed with costs. On October 21, 1941, Hon.
Louis A. Valente, Justice of the Supreme Court
of the State of New York for New York County,
at a Special Term, Part II, thereof, entered an 14
order on remittitur making the said order of the
Court of Appeals the order of said Supreme
Court, and ordering that the Respondent, The
Federal Reserve Bank of New York, recover of
the Petitioner herein the sum of $236.00 costs
to he taxed and that it have execution therefor.
That no previous application for the relief
, prayed for by this motion has been made.
HERSEY EGGINTON.
Sworn to before me this
25th day of April, 1945.
OLIVER A. ILES,
Notary Public,
Westchester County
Now York Co. Clk's No. 47, Reg. No. 53-1-7
Commission Expires March 30, 1947
15
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
•
COURT OF APPEALS
OF THE STATE OF NEW YORK
In the Matter of the Application of
ARNAND SCHMOLL, INC.,
Petitioner-Appellant,
against
THE FEDERAL RESERVE BANK OF NEW YORK,
Respondent.
APPELLANT'S BRIEF ON MOTION FOR
REARGUMENT
POINT FIRST
THE UNITED STATES SUPREME COURT HAVING
RECENTLY DECIDED THAT THE BUYING OR "FREE"
RATE IN THE NEW YORK MARKET FOR CABLE TRANSFERS MUST BE CERTIFIED BY THE RESERVE BANK
AND USED BY THE CUSTOIS AUTHORITIES, THIS
COURT SHOULD REQUEST THE SUPR:VE COURT, NEV
YORK COUNTY, TO RETURN ITS RENITTITUR AND
ORDER REARGUMENT IN THE ABOVE-ENTITLED CAUSE.
The United States Supreme Court, on February 5, 1945, decided the case of Barr v. The
United States of America. (See Law. cd. Advance Opinions, Vol. 89--No. 8, pp. 515-524.)
6
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
7
Essentially the decision is to the effect that,
under Section 522(c) of the Tariff Act of 1930,
the Secretary of the Treasury must publish the
"free" or actual market "buying rate for cable
transfers payable in the foreign currency so to
be converted" as well as the so-called "official"
rate, also certified by the Reserve Bank.
In the Barr case the official rate was fixed by
the British Treasury, It seems that: "At all
times prior to March 25, 1940, the Federal Reserve Bank of New York pursuant to its authority under §522(c) certified daily to the Secretary of the Treasury one buying rate for the
pound sterling" (id., p. 517). As a war result,
the British Government inaugurated a system
for control of foreign exchange, by requiring
United Kingdom residents to sell all their foreign currency to the British Treasury at prices
fixed by it. The British Government also prohibited the exportation of certain classes of merchand4sel unless payment therefor would be
made to persons resident in the United Kingdom
in specified currencies,
In March,1940, the Federal Reserve Bank, because of the British order and called for by the
British Act, there being two or more classes of
different products involved, certified two rates
for the pound sterling, one the "free" rate for
cable transfers in the New York market, and
the other, the "official" rate as fixed by the
British Treasury. The Secretary notified collectors of Customs that he would publish only
the "official" rate, which they must use for assessing and collecting when there was a variance
of more than 5 per cent, from the value of the
pound proclaimed by him under §522(a) of the
Tariff Act of 1930 (31 U. S. C. A. §372).
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Federal Reserve Bank of St. Louis
8
The result was the assessment and collection
of much higher duties than if the "free" rate
had been published and applied.
The Supreme Court decisively declared the
trunpurpose of Congress, in enacting §522(c),
to be:
"This history makes clear the search
which has been made for a measure of the
trundollar values of imported merchandise
for customs purposes which was accurate (see
Cramer v. Arthur, 102 U.S 612, 617, 26 L
ed 259, 261) and at the same time administratively feasible and efficient. The formula
finally selected is dependent on the actual
value of the foreign currency in our own
money. * * *
"We would depart from that scheme if we
read §522(c) as saying that on a given date
only one buying rate for a specified foreign
currency could be certified by the Federal
Reserve Bank of New York or proclaimed
by the Secretary of the Treasury. Dual or
multiple exchange rates have resulted in recent years from measures for the control
and restriction of foreign exchange and export transactions. In the present case the
British Government fixed the 'official' rate
for the purchase of specified commodities
for export. One who purchased woolens for
export need not acquire pounds at that rate.
A lover rate was avai?able and was indeed
taken advantage of by petitioner when he
purchased pounds to pay for the woolens.
If the higher 'official' rate is used in the
valuation of the woolens, the cost of the goods
will be distorted and an inflated value for
customs purposes will be placed upon them.
Such a result would be quite out of harmony
with the history of these statutes and
should be avoided unless the result is plainly
required by the language of 6522(c). Vie
do not think it is. * *" (Law. ed. Vol. 89,
No. 8, pp. 518-519).
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Federal Reserve Bank of St. Louis
9
"Nor is there substance in the argument
that the SecretaryTs action in publishi
ng
only one of the rates certified by the Bank
is non-reviewable. Section 522(c) plai
nly
gives discretion to the Bank to determin
e
the buying rate. And for the reasons
stated
vie cannot say that only one buying rate
must be determined and certified. The exer
cise of the Bankls discretionary mwer
under §522 (c) is in the category of administrative or executive action which this Cour
t
held non-reviewable in Cramer v. Arthur,
102 US M
-7771777 259, supra, and in
Haddon v. Merritt, 115 US 25, 27, 28, 29 L
ed 333, 334, 5 S Ct 1169. And sec Unit
ed
States v. Bush & Co., 310 US 371, 380,
84 L ed 1259, 1262, 60 S Ct 944. But
the
function of the Secretary in this regard
is
purely ministerial and is to be cont
rasted to
othcr situations in which the Secr
etary is
exercising discretionary authority. Cf.
Boske v. Comingore, 177 US 459/
44 L ed
846, 20 S Ct 701. The power to publ
ish
the certified rate may not be exer
cised in
such a way as to defeat the meth
od of assessment which Congress has provided
. Cf.
Campbell v. United States, 107
US 407, 27
L od 592, 2 S Ct 759. Congress
has
granted judicial review of the deci
sions of
the collector including the lega
lity of the
orders and findings entering
into the
protested decision. g§514-517, 19 USCA
RP-514-1517, 6A FCA title 19, OR15141517o If the decision of the coll
ector contravenes the statutory scheme and
disregards rights which Congress has
bestowed,
the fact that he acts pursuant
to the directions of the Secretary does not save
his decision from review. Campbell v. Unit
ed
States, supra. We think that the use
of the
tofficialt rate of exchange in assessing
and
collecting duties upon these imports tran
scended the authority of the collecto
r and
of the Secretary and that the 'fre
e' rate of
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••.•.•••r•
,
..
•••
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Federal Reserve Bank of St. Louis
10
• exchange certified by the Federal Reserve
Bank of New York should have been used.
* * *" (Law. ed. Advance Opinions, Vol.
89
--No. 8, pp. 520-521). (Emphasis added.)
Thus, under the law as declared by the United
States Supreme Court, while the Federal Re—
serve Bank has a measure of discretion in de—
termining and certifying what is the "free" or
actual buying rate in the market for cable ex—
changes, it has no power and no right and no
discretion to certify exclusively and only the
fixed or "official" rate and may not refuse to
certify the "free" rate. It must certify the
actual or market buying rate and the Secretary
of the Treasury must publish that "free" rate
.
Said Er. Justice Douglas (89 Law. ed., p.
519):
"Section 522(c) contains no language indicat—
ing that the Secretary of the Treasury has
any
function to perform except the publication of
any buying rate which is certified. The
deter—
mination of the rate is left exclusively
to the
Federal Reserve Bank of New York. It alon
e
is given discretion in computing it. The
duty
of the Secretary to publish the certified rate
is
as clear as the duty of the Federal Rese
rve
Bank of New York to determine and certify it."
So far as the duty is concerned, there is no
discretion in the Federal Reserve Bank. It must
certify the market rate, as to which ther
e is no
discretion, although in determining what is the
actual rate it may exercise some discretion.
In
the Schmoll case -what was actually decided,
and
long before the Barr decision, is that the
Bank
had a discretion whether to certify the actu
al
market rate or not and so the petition to
compel
it to certify the "free" or actual market rate
was in fact and legal effect an attempt
to compel
the "manner" of its performance of a duty by
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Federal Reserve Bank of St. Louis
•
•
a federal agency. Navy, since under the Barr
.
decision, the actual market rate, there cert
ified
by the Bank, must be published by the Secretar
y
of the Treasury and used by the collector, ther
e
is no discretion involved, and not the manner
of
performance of a federal statutory duty but
only
the decided and exclusive duty of performance
is sought. The Record in Schnell (This. 33.-41;
64 -66) shows that the Bank certified only the
,
"official" rates and did not even purport to
return the actual market rates.
The Record on Appeal filed in this Court
in
Schmoll v. Federal Reserve Bank, 286 N. Y.
503
wawa October 1677rviir shows that the decision of the Special Term, by Er. Justice
Rosenman, turned on the point that there was
no jurisdiction in the State courts to direct the
manner
of performance of the duties of a federal
agency
under a federal statute. Said Er. Just
ice Rosen
man: "The question involved here is not
whether
rights created by a federal statute may
be the
subject of controversy in a state court.
It is
whether the manner of performance of a spec
ific
federal government statutory function by a
federal statutory agency can be the subject
of a decree of a state court. * * *" (Record,
fol. 124).
That point of actual decision is confirme
d by
Chief Judge Lehmants opinion (286 N. Y.
503,
508-9) quoting the language of Rosenman
, J.,
and adding that: "No case has been
cited which
holds that a State court may go outside that
field and control the manneE in which a fede
,
ral
agency performs or attempts to perform
its
functions and duties under the Tariff Act
of
other federal statute where the Federal
government has exclusive jurisdiction." (Emp
hasis
added')
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Federal Reserve Bank of St. Louis
12
The decision of the majority is necessarily
based upon the proposition that Respondent Bank
had the lawful discretion to certify either the offi—
cial rate or the "free" rate, and that to grant
appellantts motion would be to have the Court
exercise this discretion by commanding the
"manner" of performance of its duty by a federal
agent, which would not be within the jurisdiction
of the State courts. That this was the decision
of the majority is necessarily shown by Respond—
ent Bank in certifying only the official rate and is
also confirmed by this Courts former decision in
affirming the order of dismissal.
With the Barr case determining the Schnell
question on the merits, reargument should nov
be permitted. Under Rule XX of this Court,
reargument is authorized where points have been
overlooked or misapprehended. This Court,
upon the argument of the Schmoll case (see Arspcllantts Points I, II, III; Reply Brief, Points
III), was presented with the point that the
clear statutory duty of the Federal Reserve
Bank was to certify the actual or "free" mar—
ket buying rate for cable transfers. That point
was then rejected by this Court, holding that
the manner (whether to certify the "free" or
the "official" rate) was involved and could ndb
be commanded by a state court. With the "man—
ner" of performance no longer involved, reargu—
ment and reversal should be had. The effect
of the Barr decision is to relate that holding of
the United States Supreme Court to the time of
the decision by this Court in the Schmoll case,
and also to determine that the rule now laid
down in the Barr case, then existed and was
then properly applicable to the Schmoll case.
To put it in another way, Er. Justice Rosen—
man and this Court refused to assume jurisdic—
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Federal Reserve Bank of St. Louis
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13
tion on the theory apparently that, if juri
sdiction
were undertaken, then they must construe a federal statute, involving discretion and dive
rse
duties, to constitute a mandate to the Fede
ral
Reserve Bank to certify only the market or
"free" rate and so our state courts would
dictate
the manner of performance by a federal agen
cy
of its federal statutory duty. Such a refu
sal
of jurisdiction is no longer sound in view
of the fact
that the Supreme Court of the United Stat
es has
decided that there is a mandatory duty rest
ing
upon Repondent Bank to certify that "free"
rate.
LACK OF POWER AND OF REMEDY IN THE
CUSTOMS AUTHORITIES AND ODURTS.
The arguments presented in the Schmoll
brief (Appellant's Reply Brief, II;
Appellant's
Points, IV) to show that there was no adeq
uate
remedy and no power in the customs offi
cials to
find and to apply the market or "free"
rate, and
no power to bring in the Federal Rese
rve Bank
or to enforce their finding against the
latter, are
still good and effective. It happened
that, in the
Barr case, both the "free" and the "off
icial"
rates were certified by the Bank but only
the
official rate was published by the Secretar
y of
the Treasury (Law. ed. Vol. EN, p.
517). Accordingly, unlike the Schmoll case, the
customs
officials in the Barr case had by the
facts and by
the Federal Reserve Bank certificate
the power
of making a choice and the cust
oms courts had
a record permitting a review of the
original
finding. Certification there by the Rese
rve Bank
of two rates was due altogether
to the fact of
the British Government currency
control, a fact
not present in the Schmoll case.
A proper record for the future decision in this
Schmoll case
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Federal Reserve Bank of St. Louis
14
by our courts, in response to the Supreme Court's
Barr decision, and for the customs officials, can
now be had only by commanding the Reserve
Bank to certify the "free" or actual market rate,
which is the mandatory statutory duty now resting upon it.
No jurisdiction can be had over that Bank,
except here in New York. It would be futile to
attempt suit in Washington against the Secretary of the Treasury or the United States, unless the Reserve Bank first certified the actual
market rate, for the Secretary may publish only
such rate as is certified to him. Mr. Justice
Douglas said: "Section 522(c) contains no language indicating that the Secretary of the Treasury has any function to perform except the
publication of any buying rate which is certified.
The determination of the rate is left exclusively
to the Federal Reserve Bank of New York. It
alone is given discretion in computing it" (89 L.
ed. 519). The effect of Barr V. United States,
89 L. ed. Advance Opinion,Flo. 8, pr. 515, 518,
519, 520, 521, may be stated as follows:
The statute authorizes the Federal Reserve
Bank to determine more than one rate but only
buying rates are to be certified and thus the
buying or "free" rate must be certified (supra,
519-520).
The statutory purpose would be thwarted if
)
in the circumstances of this case only one buying
rate could be used in making the valuation of
English merchandise, since by the British Control Act, some merchandise could be purchased
at the "free" rate while other merchandise could
not (supra, 518, 520).
The Secretary's action is reviewable as an
order or finding entering into the collector's de-
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Federal Reserve Bank of St. Louis
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•
15
cision (Law, ed. Vol. 89, at 521). His action,
further, is purely ministerial (supra, 521).
"Congress has granted judicial review of
the decisions of the collector including the
legality of the orders and findings entering
into the protested decision. p§ 514-517, 19
USCA 0§ 1514-1517, * **. If the decision of the collector contravones.tlie AatuTory schema and disregards rights which
Congress has bestowed, the fact that he acts
Eyrsuant to the direct= of the See7etary
does not save as decision from review,
'Campbell v. United States, supra (107
S.
407)" (supra, 521). (Emphasis added.)
Since the collectorls action is reviewable, it
is clear that the customs court9 as in the Barr
case, has jurisdiction in a cas where the Federal Reserve Bank has certified the two rates.
But where, as in the Schmoll case, the Bank has
certified only the "official" rate and the Secretary has published it, his duty being simply to
publish the certified rate, a judgment by the
customs court that the Bank should have certified the "free rate" would give petitioner no
adequate remedy at law, as the customs court
has no jurisdiction over the Reserve Bank, to
order it to certify the "free" rates, since the
Bank's determination of the "official" rate is
discretionary and not subject to review (Law. ed.
Vol. 89, at 519). There is, therefore, no power in
the customs courts either to bring in the Federal
Reserve Bank as a party or to render an enforceable judgment against it.
The Congress has not granted exclusive jurisdiction over market rates to any federal authority.
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Federal Reserve Bank of St. Louis
16
The Congress has not expretsly vested exclu—
sive jurisdiction over matters arising under Sec—
tion 522(c) of the Tariff Act in the collectors
of customs, in the customs courts having power
to review their decisions or in any other federal
court or authority. It cannot in reason be
deemed that the Congress has established such
exclusive jurisdiction by implication, inasmuch
as neither the collectors nor the customs courts,
nor any other federal court having jurisdiction
over Respondent Bank has authority to bring
it in as a party to the proceedings, or to compel
it by any order är judgment, much loss man—
damus, to comply with 522(c).
The United States, in its brief as amicus in
this Court (p. 15; Point III, pp. 32:37)7—Con—
tended that Congress
by implication, has limited a review of
the action of the bank to the United States
Customs Court. This limitation is found,
not in the words of any statute, but in the
fact that Congress has established a com—
prehensive system for the appraisal of im—
portations, for the liquidation or the fixing
of the duty thereon, for the collection of
that duty, and for the judicial review of
such appraisal and liquidation,--the liqui—
dation of the duties being conclusive and
final unless the importer files a protest
which can be reviewed only in the Customs
Court." (Amicus brief, p. 15.)
"* * *,
The claim is that this authority may be inferred
from Sections 514 and 515 of the Tariff Act
of 1930 (19 U. S. C. A., Sections 1514, 1515).
Any inference of exclusive jurisdiction from
those provisions is wholly unwarranted. The
jurisdiction of federal courts, other than the
customs courts, to enforce by mandamus or in—
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Federal Reserve Bank of St. Louis
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•
17
junction mandatory statutes involving the Tariff has frequentiy been upheld and so negates
any claim of exclusive jurisdiction under Section
514 in the Customs courts. Mite v. Macy, 246
U. S. 606, 608-610, affirming Macy v. 1717177ne,
224 Fed, 359; United States v, United RTEJE
Tariff Commission, 6 F. (2d) 491, reversed in
274 U. S. 106 because case had become moot;
Calf Leather Tanners' Assin v. Morgenthau, 80
1'. (2d) 536, 541-2, cert. denied 297 U.'S. 718;
compare: Blair v. United States, 6 F. (2d) 484.)
No remedy ig Trovided in terms by the Tariff
- Act for any failure on the part of the Respondent Bank correctly to certify to the Secretary
of the Treasury, or of the customs authorities
independently to apply, the actual buying rate.
That rate is actually determined daily by the
market itself and not by the customs authorities. These rates automatically registered in
the New York market and directed to be certified
daily by the Respondent Bank, while their certification by the bank is a condition precedent
to any use of them by the collector in liquidating duties, are not any part of the ordinary
customs process regulated by Section 514 (§ 514,
19 U. S. C. A.). Section 522(c) was a new section, creating new rights and, by implication, remedies, in addition to the older Section 514.
This legislation, in the absence of specific exclusion, does not deprive the state courts of jurisdiction, unless the remedy provided is adequate.
(Dudley v. Mayhew, 3 N. Y.- 9., 15; Oneida Corn.
Ltd. v. Oneida Game Trap Co., 168 App. Div.
767; 7717774:87)
-In the Barr case Mr. Justice Douglas, writing
for the Supreme Court, said:
"The determination of the (buying) rate is
lert exclusively to the
—Federal Reserve Bank
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Federal Reserve Bank of St. Louis
18
of New York. It alone is given discretion
L compUrrig it, —TR—duty of the Secretary
n
7 publish the certified rate is as clear as
the duty of the Federal Reserve Bank of
New York to determine and certify it. * * *
But §522(c) means to us that that buying
rate is to be used which is in fact applicable
to the part3Fura7—transacTion."--TEMphasis
addeaT (9 L. ed. 519) "* * * Section 522(c)
plainly gives discretion to the Bank to determine the buying rate. And for the reasons stated we cannot say that only one
buying rate must be determined and certified. The exercise of the Bank's discretionary power under §522(c) is in the category of administrative or executive action
which this Court held non-reviewable in
Cramer v. Arthur, 102 US 612, * ** and
in Hadden v. Merritt, 115 US 25, 27, 28,
* * *. And see United States v. Bush & Co.,
310 US 371, 380, 84 L ed 1259, 1262, 69 S Ct
944" (lb. 520,521).
Of course, if the Bank's determination of the
buying rate is not subject to review, the customs
courts are without jurisdiction to pass upon it.
United States v. Bush, supra. Certainly these
customs bodies are not vested with any general
judicial powers and Respondent Bank could
neither be brought in as a party to their proceedings nor could these customs authorities enforce any adequate remedy such as mandamus
would be.
It is Clear that collectors of customs and federal courts having power to review their decisions do not have exclusive jurisdiction over
issues arising under the Tariff Act where they
have no power to give adequate relief (Blair v.
U. S., 6 Fed. (2d) 484, 486). The mere factthat
the collector might hold that Respondent Bank
had not complied with the law, is not enough,
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Federal Reserve Bank of St. Louis
•
19
for then the duties would not be liquidated and
Petitioner's deposits collected at unlawful rates
would be unrecoverable. There still would be no
way to compel Respondent Bank to comply with
Section 522(c) by certifying the actual market
rate, unless the State courts have jurisdiction
to command Respondent Bank, as the customs
authorities and courts are without any such
power.
Any remedy, other than mandamus, is inadequate and no bar to the relief sought by Petitioner in the Schmoll case (Kendall v. U. S., 12
Pet. 524; Fremont v. Crippen, 10 Cal. 211, 215;
American Railway Frog Co. V. Haven, 101 Mass.
398; Eureka Pipe Line Co. v. Riggs, 75 W. Va.
353, 83 S. E. 1020, Ann. Ca's% 1918A, 995; 93
A. L. R. 590, 591, note). Judge Conway, in his
dissenting opinion, definitely stated it as follows
(286 N. Y. at 524, 525, R. 51): "There is no other
adequate remedy than mandamus. Recoverable
damages are inadequate (Kendall V. United
States, supra (12 Pet.) pp. 614, 615). Thereis no
jurisdiction in the customs authorities or courts
to consider the question, and, if there were, the
power could not be effectively or adequately exercised by customs authorities or courts, for respondent would not or could not be a proper party
to those proceedings, and, if it were, there exists
no power in those customs authorities or courts to
command compliance by respondent with the
Tariff Act by certifying the actual market
rates."
IN CONCLUSION
Under the Barr decision, the certification by
the Federal Reserve Bank of the "free" rate is
not discretionary but mandatory, and the use
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Federal Reserve Bank of St. Louis
20
by the collector and the Secretary of that rate
is also mandatory. When the "free" rate is
certified but not used, a petitioner may have
correction and relief by appealing from and to
the customs authorities and courts. When, how.'
ever, there is a failure by the Reserve Bank
to certify the "free" rate, then there is no possible relief to be had by the present appellant,
except by mandamus to compel the performance
of a non-discretionary and mandatory statutory
duty.
POINT SECOND
THIS COURT SHOULD REQUEST THE RETURN OF ITS
RELaTTITUR AND THEREUPON ORDER A REARGUMENT
OF THIS CAUSE.
Respectfully submitted,
RATHBONE, PERRY, KELLEY & DRYE,
Attorneys for Petitioner-Appellant,
Office & P. O. Address,
70 Broadway,
New York 4, N. Y.
HERSEY EGGINTON,
of Counsel.
FEDERAL RESERVE BANK
OF NEW YORK
May 5, 1945.
Walter Wyatt, Esq., General Counsel,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
Dear Mr. Wyatt:
I enclose a mimeographed copy of the "Notice of Motion
for Reargument, AffiCavit and Brief in Support Thereof" in the
case of Schmoll against this bank, served on May 3 on Winthrop,
Stimson, Putnam & Roberts, the attorneys of record for this bank
in the case. These are, of course, the papers referred to in
my telegram to the Board yesterday. You will note that it is a
motion for reargument of the case in the Court of ALpeals of the
State of New York, which rendered its decision in October, 1941.
The Supreme Court of the United States denied petition for writ
of certiorari in March, 1942.
I do not think the rules of court prescribe any definite limitation on the time within which such a motion for reargument may be made, and I do not know whether there are any
cases indicating the attitude of the court as to what it considers
timely. We will, of course, explore this point. In any event,
it does not seem to me that there is any valid ground for reargument, since the Schmoll case merely decided that the State
courts have no jurisdiction to entertain this kind of a proceeding and the decision in the Barr case has no relation to this
jurisdictional point.
I am also sending a copy of these papers to Mr. Vest.
Yours faithfully,
Walter S. Logan,
Vice President and General Counsel.
Enclosure
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
lilay 5, 1945.
_
f.
eoard of Governors
:3chmo11 v. rederal 'e.eeerv
of Kew York -- Employment of Special
Counsel by Federal Reserve 'etnk.
'Mr. Vest
According to advice contained in the attac.hed toleeram
from Lr. Loan, General Counsel of the Federal Reserve Bank of New
'York, a motion has been made in the Court of Appeals of New ork
for reargument of the case of Schmoll v. rederel heserve I3ank of
New .lork. In 1941 that court rendered an opinion in this case holdin e that it is beyond the power of a. State ceurt to compel the Federal Reeerve Bank to detereine certain buyinie rates for cable transfers
under the Tariff Act of 1930. In l'earch 1942, the Supreme Court of the
United States refused to grant a writ of certiorari.
It appears that the motion for reareument is based leiJon the
recent :iecision of the United States Supreme Court in the case of
Barr v. Jelted tates. In that cese it was held that the Federal
heserve Telnk of New eork may properly certify both the "free" rate
end the "official" rate of exchange.
The law firm of einthrop, Stimson, Putnam and Roberts represented the Federal eserve hank throughout the Schmoll case, and
the Eoard approved payment of compensation to that firm in the amount
of :10,000 for services in connection with the handling of the case
in the Ctete court and in the amount of :j2500 for services connected
with the appeal to the Supreme Court.
Under eeneral instructions of tT.e Hoard dated '.arch 4, 1940,
reeardine payment of fees to special counsel, it is not necessery for
tee Federal Reserve Bank to submit the matter to the Board for approval
where the fee is not expected to exceed 4'1000; but where the fee appears likele to exceed that amount, the employment of special counsel
should be first subm.itted to the hoard for approval. The attached
teleran does not state whether tne fee is likele to exceed 1,000,
but e,r. Logmn states that it is understood that an fee in excess of
that amount will be eubject to the Board's approval.
In tne circumstances, it is not believed that it is necessar- foe the Board to take any action in this matter at tee preeent
time.
•
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retieraiRe...s.k.n.nre Systv)
)eeived at
Wasithigton, 1).1L
WA85WASH B199 NY 4-142P
BOARD OF GOVERNORS
MOTION PAPERS WERE SERVED YESTERDAY FOR REARGUMENT IN
NEW YORK COURT OF APPEALSHOF CASE OF SCHMOLL AGAINST THIS BANK
:
REFERRED TO IN MY LETTER OF MAY 4 1943. MOTION RETURNABLE MAY 14.
MOTION IS BASED UPON RECENT DECISION OF UNITED STATES SUPREME COURT
IN CASE OF BARR AGAINST UNITED STATES. THROUGHOUT SCHMOLL CASE
THIS BANK WAS REPRESENTED BY WINTHROP) STIMSON, PUTNAM AND ROBERTS
AS TRIAL AND APPEAL COUNSEL. KLOTS OF THAT FIRM HANDLED CASE IN
COLLABORATION WITH COUNSEL FOR THIS BANK AND MADE ALL COURT
ARGUMENTS. WE HAVE REQUESTED WINTHROP,. STIMSON: PUTNAM AND ROBERTS
TO REPRESENT THIS BAN ON THIS MOTION AND IN FURTHER PROCEEDINGS IF
MOTION SHOULD BE GRANTED. IN ACCORDANCE WITH BOARD'S RULE REGARDING
EMPLOYMENT OF OUTSIDE COUNSEL) IT IS UNDERSTOOD THAT ANY FEE IN
i)1:UCC WILL BE SUBJECT TO BOARD'S APPROVAL
EXCESS OF ,
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Federal Reserve Bank of St. Louis
LOGAN.
'REVD TN FILES SECTION
I
MAY 1 0 1943
)
May 7, 1943.
Mr. Dreibelbis
Schmoll v. Federal Reserve
Bank of New York
Ur. Hooff
Under the United States Tariff Act of 1930, the Federal
Reserve Bank of New York is required to determine and certify daily
to the Sacretary of the Treasury the buying rate for cable transfers.
The plaintiff contends that the Reserve Bank failed to determine such
rate in the manner directed by the .)t.atute. The question to be
decided was whether the State courts have jurisdiction to direct or
ccntrol by mandamus the performance by the Reserve lank, acting as a
Federal agency, of its specific Governmental functions.
The case was briefed and argued for the Federal Reserve Bank
in the State Supremo Court and in the Appellate Division of such court
by the firm of iiinthrop, Stimson, PuLter4on and Roberts. Both courts
rendered decisions favorable to the Federal Reserve Bank and in December
1940, a bill of $10,000 for attorney fees was approved by the Board.
It was expected at that time that the case 'would be carried to the
highest courts.
The plaintiff appealed to the Court of Appeals of New York
and on October 16, 1941, was again denied relief. Petition was then
made to the Supreme Court of the United States for a writ of certiorari
but this WAS denied on March 16, 1942. Therefore, the case has been
finally disposed of and the decision affirmed that the state court has
no jurisdiotion to direct or control by mandamus, performance by the
Reserve Bank of its specific Governmental function.
The same livor firv presented the case before the New York Court
of Appeals and prepared the brief to the Supreme Court of the United
States. For these services they are aakig a fee of 42,500.
5-7-43
GENERAL CO
.
Dictated by.
4oproved
by
qwwweig
•
y
•1101111111
4
-
//
„4
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Federal Reserve Bank of St. Louis
ilk1 /
7
Wilt FILES 1
J.P. Dreibe/bie
REC'D IN FILE3 SECTION
MAY 1 0 1943
FEDERAL RESERVE BANK
OF NEWYORK
(-}
hay 4, 1943.
J. P. Dreibelbis, Esq., General Attorney,
Bou'rd of Governors of the
Federal Reserve System,
'Washington, D. C.
Dear Mr. Dreibelbis:
In writing the Board of Governors to request its approval of the final bill of Winthrop, Stimson, Putnam & Roberts
for their services in connection with the case of Armand SchmolA,
Inc., v. The Federal Reserve Bank of New York, I discovered that
I had not sent to you copies of the briefs in this case upon the
application for a writ of certiorari to the Supreme Court of the
United States. Accordingly, in order to complete the file which
your office has of the briefs in:this case, I am now enclosing /
three copies of the briefFin behalf of this bank and one copy of
the brief in behalf of the petitioner, Armand Schmoil, Inc. The
application for writ of certiorari was denied by the Supreme
Court of the United States on March 161 1942.
I also enclose u. copy of the above-mentioned lettprito
the Board of Governors requesting approval of the final bill of
Winthrop, Stimson, Putnam & Roberts.
Faithfully yours,
Walter S. Logan,
Vice President and General Counsel.
Enclosures
I
Alf/L.4Ck
seNll
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Federal Reserve Bank of St. Louis
nr4-4-47'
-
• .00
(
t
IPOR FILES I
J.P. Dreibelbia
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Federal Reserve Bank of St. Louis
:.i.
m Itr.t..-; %%Taco
3O6 0
;I
Mobe, 29, 1941.
-.r. Walter S. Lo -an,
Vice President and General Counsel,
Federal Reserve Bank of New York,
New York, New York.
Dear !
,r. Logan:
Pleaae accept my thanks for your letter of October 21,
1941, anl for your kindness for sending me malii
-separate cover
threa copies of the opinion of the New. York Court of Appeals,
three copies of the brief filed on behalf of the Federal
Resnik._
Bank, and one copy each of the main and reply briefs-in-behalf
of appellant, all in the case of Armond Schmoll Inc. vs. Federal
)
Reserve Bank of New York.
note th-t you expect that the Supreme Court of the
United States will grant a vrit of certiorari in this ease,
especially in view of the fact that one of the seven judges of the
New York Court of Appeals dissented from the opinion of the *wart.
Walter Wyatt,
General Counsel.
WW:ii
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)
AP
40
61
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OCI::;, 194 i2%
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41P OH
FEDERAL RESERVE BANK
OF
A., , ...6_,,, (- .) /14
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NEWYORK
Al
October 21, 1941.
Taller Wyatt, Esq., General Counsel,
Board of Governors of the
Federal Reserve System,
Washington, D. C.
Dear gr. Wyatt:
I have your letter of October 20, 1941, referring to
the decision of the New York Court of Appeals affirming the
decisions of the lower courts in favor of this bank in the
case brought against it by Armand Schmoll, Inc.
I was intending to send you copies of the opinions
and also of the briefs in the Court of Appeals, and I am now
doing so.
You will receive under separate cover three copies
of the opinion, three copies of the brief in behalf of this
bank, and one copy of the main and reply briefs in behalf of
Armand Schmoll, Inc.
I have always rather assumed that the United States
Supreme Court would grant certiorari in this case, and I
suppose that the dissent by one of the seven judges of the
New York Court of Appeals increases the likelihood of this.
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Federal Reserve Bank of St. Louis
Yours faithfully,
iZ/a_.6
61E-:
ALI 6
Walter S. Logan,
Vice President and General Counsel.
•
•
UNREVISED AND UNCORRECTED
NOT FOR PUBLICATION
1;33C'D
3a4 Fulls suirlos
3C7
194i
Majority opinion of Lehman, Ch.J., and
dissenting opinion of Conway, J., of
New York Court of Appeals.
l
In the Matter of A.P.I.1A1TD SCHMOLL, INC., Appellant against THE FEDERAL RESE:V2 BANK OF
NEW YORK, Respondent.
(Decided October 16, 1941.)
APPEAL by petitioner pursuant to leave granted by the Appellate Division,
first department, from the unanimous order of said Appellate Division affirming the
order of the Special Term (ROSENITAN, J.) dismissing the petition.
Hersey Egginton for appellant.
Allen T. Klots for respondent.
Mathias F. Correa United States Attorney for Southern District of
New York (George B. Schoonmaker of counsel), amicus curiae.
LEMAN, Ch. J. Under the United States Tariff Act of 1930 (Chap. 497,
Stat. 739; 31 U. S. C. A. §372), the Federal Reserve Bank of New York is authorized
and required, under specified conditions, to determine and certify daily to the
Secretary of the Treasury "the buying rate for cable transfers." The statute directs
that such determination shall be made in manner defined in the statute. Claiming
that the Federal Reserve Bank has failed to determine the buying rate in manner
directed by the Federal statute, the a-nellant has brought proceedings under article
78 of the Civil Practice Act to compel the Federal Reserve Bank to make its
determination in manner provided by 1ai. The proceedings have been dismissed on
the ground that the State courts have no jurisdiction to issue orders or directions
to the Federal Reserve Board in the performance of its statutory duty.
The Federal Reserve Bank is a Federal agency exercising powers conferred
by Federal statute and performing duties imposed upon it by Federal statute in a
field which, under the Constitution of the United States, is within the sole and
exclusive jurisdiction of the Federal government. In the case of McClun v.
Silliman (6 Wheat. 598) the Supreme Court of the United States declared In
unambiguous and emphatic language that the State court is without power to give
such directions to a Federal officer acting under a Federal statute within a field
from which the State government is excluded. No case has been cited to us where a
State court has since that time assumed to give such directions. Narhas the Supreme
Court of the United States in any opinion or decision cast doubt upon the scope of
its decision in that case.
Vie are now told, however, that, though language is found in Justice
JOHNSON'S opinion in that case which "seemingly supports the rule that the State
courts have no jurisdiction or power to give directions to a Federal agent or to
control the agent's acts in the performance of a specific function entrusted to the
agent by a Federal statute, at least within a field from which the State is excluded
by the constitution of the United States," yet the mandate of the Supreme Court of
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Federal Reserve Bank of St. Louis
•..
2
the United States, in the cited case, contrary to what is said in th, opinion,
.
affirms "on the merits" a decision of the State court holding that the State court
has such power.
Examination of the mandate of the court shows clearly that it is dictated
by what was said in the opinion and constitutes emphatic warning to the courts,
State and Federal, to remain within the field of jurisdiction allotted to each. In
that case, a party aggrieved by a determination of a Federal agent acting under a
Federal statute, applied to the State court for an order directing the Federal
officer to perform his duties in manner provided by the Federal statute. The State
court overruled a challenge to its jurisdiction by the United States government,
but after consideration of the merits of the claim dismissed the application made
to it for relief. The applicant for relief, disappointed by that decision against
him, brought the case to the United States Supreme Court for review. The government
of the United States did not, of course, appeal from the order of the Supreme Court
of Ohio, which had determined the case in favor of the government, The Supreme
Court of the United States affirmed that determination in favor of the government
on the ground that the State court had no power to grant the application. In its
opinion the court pointed out that "The question before an anpellate court is, was
the judgment correct, not the ground on which the judgment professes to proceed,"
and the mandate or judgment of the Supreme Court of the United States, like the
opinion, supplies the ground for the adjudication, for after affirming the judgment of the Supreme Court of Ohio, the mandate of the United States continues,
"it being the opinion of this court that the said Supreme Court of the State of Ohio
had no authority to issue a mandamus in this case."
The opinion of the court in the case of Kendall v. United States (12 Pet.
528), to which Judge CONWAY refers in his dissenting opinion, far from suggesting
that the case of LicClung v. Silliman (supra) was decided on any other ground, again
states the ground of the decision and recognizes its authority: "The only question
directly before the court was, whether a state court had authority to issue a
mandamus to an officer of the United States and this power was denied." What the
court said on naje 619 in reference to the decision of the court in Wheelri7,ht v.
Columbia Insurance Co. (7 Wheat. 534) can have no possible application to the
McClung case.
The right of a State Supreme Court, in many cases, to vindicate and protect
rights granted by a Federal statute or to give redress for wrongs committed by a
Federal officer under color of authorit:r granted by Federal statute, cannot be doubted.
It has been firmly established in the cases cited by Judge CONWAY, and especially in
Clafman v. Houseman (93 U. S. 130.) It is to be noted, however, that in that case
the court was careful to point out that there are fields from which the State courts
are excluded. The question here presented is narrow. In the opinion of lir. Justice
ROSEMAN at Special Term, he said: "The question involved here is not whether rights
created by a federal statute nay be the subject of controversy in a state court.
It is whether the manner of performance of a specific federal government statutory
function by a federal statutory agency can be the subject of a decree of a state
court. This case does not involve any encroachment upon the state's authority by a
federal agency; or any power given by the Congress to a state court to interpret a
state law; or a suit against individual federal officers who are allegedly infringing
upon the rights of an individual in violation of their duties.
Consequently the
cases relied upon by the petitioner are not in point. Not one of them is, in the
opinion of this court, authority for the proposition that a state court has the
jurisdiction here urged."
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Federal Reserve Bank of St. Louis
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3
The cases cited in Judge CONWAY'S opinion sustain the power of a State
court acting within the field of its allotted jurisdiction, to enforce rights
created by Federal statute and to remedy wrongs committed by Federal officers under
color of authority granted by Federal statutes. No case has been cited which holds
that a State court may go outside that field and control the manner in which a
Federal aency performs or attempts to perform its functions and duties under the
Tariff Act or other Federal statute where the Federal government has exclusive
jurisdiction. Assumption of such power would hamper orderly government and ignore
the division of the fields of government of State and nation created by the
Constitution. No case has been cited which might justify the invocation of the
powers of a State court in this proceeding.
The order should be affirmed, with costs.
CONWAY, J. (dissenting). This is a proceeding under section 1289 of the
Civil Practice Act brought by petitioner to obtain an order directing the Federal
Reserve Bank to perform a mandatory, ministerial duty enjoined upon it by section
522 (c) of the Tariff Act of 1930 (31 U. S. C. A. § 372). No answer was filed but
respondent moved under section 1293 of the Civil Practice Act for an order dismissing
the petition on objections in point of law. Special Term granted the motion as a
matter of law only, viz., upon the ground that the Sunreme Court had no jurisdiction
of the subject of the proceeding, specifically excluding any exercise of discretion.
The appeal to this court is from an order of the Appellate Division unanimously
affirming the order of Special Term.
In January and February, 1936, the petitioner imported three lots of cattle
hides from Brazil. Those hides were subject to an ad valorem duty of ten per cent
and they were a2oraised in Brazilian milreis as of the date of exportation from
Brazil. Under the Tariff Act it was the duty of the Collector of Customs of the Port
of New York, prior to liquidating the duties on the hides, to convert their appraised values into United States currenc:: and in so doing to use the rates of exchange determined in accordance with section 522 of the Tariff Act of 1930.
Subdivision (c) of section 522 is the material portion of the section
here. It reads as follows:
"(c) Market Rate When No Proclamation. - If no such value has been proclaimed, or if the value so proclaimed varies by 5 per centum or more from a value
measured by the buying rate in tthe New York market at noon on the day of exportation,
conversion shall be made at a value measured by such buying rate. If the date of
exportation falls upon a Sunday or holiday, then the buying rate at noon on the last
Preceding business day shall be used. For the purposes of this subdivision such
buying rate shall be the buying rate for cable transfers payable in the foreign
currency so to be converted; and shall be determined by the Federal Reserve Bank of
New York and certified daily to the Secretary of the Treasury, who shall make it
public at such times and te such extent as he deems necessary. In ascertaining such
buying rate such Federal reserve bank may in its discretion (1) take into consideration the last ascertainable transactions and quotations, whether direct or through
exchange of other currencies and (2) if there is no market buying rate for such
cable transfers, calculate such rate from actual transactions and quotations in
demand or time bills of exchange."
Congress specifically provided that the "value" of the foreign currency
for customs purposes "shall be the buying rate for cable transfers payable in the
foreign currency * * * and shall be determined by the Federal Reserve Bank of New
York * * *4" "Value" and "buying rate" were not used synonymously. The latter was
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Federal Reserve Bank of St. Louis
4
the measuring
factors. All
stricting the
"positive and
rod for the former and Congress precluded the consideration of other
functions involving judgment and discretion were eliminated by reinquiry to the New York market buying rate for cable transfers. A
peremptory rule of valuation" was prescribed.
On the dates in question the Collector converted the appraised milreis
value of the hides into United States currency at the rates certified by the respon
dent. The res-)ondent had certified as the buying rates for cable transfers in
Brazilian milreis, amounts more than forty per cent in excess of the actual rates,
at the sane time admitting that they were not the actual rates but asserting that
there were no market rates by characterizing each rate certified as "Nominal rate.
Firm rate not available."
During all of the period in question, as established by the affidavit of
an officer of one of the largest New York trust companies, there were actual transactions in cable transfers payable in Brazilian milreis and in which firm quotations
of the buyinz rates for such cable transfers were at all tines obtainable. The
actual rates on the three days in question were $0.0555, $0.0560 and W.0585 per
milreis, respectively. The maximum range over the whole three months' period was
only two-fifths of a cent. The respondent received daily reports of those rates
from its member banks and every person having a principal place of business in its
district who engaged in such transactions and transfers, with minor exceptions, was
required by law to report complete information relative thereto to respondent.
Notwithstanding these actual market rates, the respondent certified for
the same three days in question the following rates per milreis respectively:
$0.083916, 00.084200 and )0.084700. These rates were over fifty per cent higher
than the actual market rates.
The petitioner alleges that there is no way in which the respondent can
to certify the correct rates other than by this proceeding.
be forced
No answer was filed so the facts are admitted for the purpose of this
proceeding. A motion was made under section 1293 of the Civil Practice Act for an
order dismissing the petition on objections in point of law:
"(1) this court has no jurisdiction of the subject of the proceeding;
"(2) the petition does not state facts sufficient to entitle the petitioner
to the relief prayed for or for any relief;
"(3) the nroceeding was not instituted within the time limited by law for
the commencement thereof; and
"(4) the determination sought to be reviewed can be adequately reviewed by
an appeal to a court or to some other body or officer."
The learned Special Term justice dismissed the petition as a matter of law
on the ground that the court did not have jurisdiction of the subject of the proceeding and specifically excluded any question of discretion. Respondent's remaining
objections were not passed upon. We shall, therefore, devote ourselves to the
question of jurisdiction solely except for a passing reference to objection numbered
(4) above.
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Federal Reserve Bank of St. Louis
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5
Curiously, the resnondent advances two arguments which are opposed one
to the other. It argues first, and in this the United States, as amicus curiae
joins, that, on the basis of court decisions, the rates determined and certified by
respondent for use in connection with the collection of customs are conclusive and
binding and not subject to review in any court. It is a somewhat startling, if not
sinister, argument to advance in a democracy that a citizen engaged in commerce is
subject to uncontrolled power. We shall revert to this hereafter. The other argument is that Congress has granted exclusive jurisdiction over matters arising under
section 522 (c) of the Tariff Act upon the Collectors of Customs and the courts having power to review their decisions. In cther words, that the ordinary rule that
the courts of this State have concurrent jurisdiction to enforce section 522 (c) does
not apply because by the Tariff Act of 1930 Congress granted exclusive jurisdiction
of all matters relating to the collection of customs to the Collector and to the
Customs Courts. Respondent concedes, however, that this must be implied from sections 514 and 515. It is elementary, however, that because Congress has legislated,
State courts are not deprived of their jurisdiction. (People v. Welch, 141 N. Y.
266, 273, 275.) There it was said:
ll* * * There can be no presumption that state authority is excluded from
the mere fact that Congress has legislated. There must be express words of exclusion, or a manifest repugnancy in the exercise of state authority over the subject.
"* * * The jurisdiction of
less there is found elsewhere in the
and unmistakable import, taking away
**
(See, also, to same effect,
659, 660.)
the United States courts is not exclusive unlegIslation of Congress, provisions of clear
the jurisdiction of the courts of the State.
First N9tiona1 Bank v. Eissouri, 263 U. S. 640,
In point of fact the jurisdiction of the Customs Court is limited to
matters which the Collector has power to decide. (Hatter of Fassett, 142 U. S. 479,
487; De Lima v. Bidwell, 182 U. S. 1, 175-177.) If the Collector has any authority
at all in connection with the resnondentis duty, at nost it would be the power to
determine whether or not the respondent has complied with the law. Neither the
Collector nor any Federal court having jurisdiction over the resnondent has power to
compel it to comply with section 522(c37
To sustain this contention of respondent would be to say that a Congressional statute by implication excluded State courts from exerc2.sing jurisdiction beyond
the powers of the Collectors and the Customs Courts although such jurisdiction had
been conferred upon them by our laws. It is a sufficient answer to quote the following from Dudley v. nayhew (3 N. Y. 9, 15): "It is very clear that when a party
is confined to a statutory remedy, he must take it as it is conferred; and that
where the enforcing tribunal is specified, the designation forms a part of the
remedy, and all others are excluded. The rule is inapplicable, of course, where
property or a right is conferred and no remedy for its invasion is specified. Then
the party may sustain his right, or protect his property in the usual manner. That
is in such cases reasonably supposed to be the intention of the Legislature, as it
could not be the design to confer a barren proper
or a fruitless right which could
not be protected or enforced anywhere."
Italics supplied.
We return now to the question whether the Supreme Court is without
jurisdiction to grant the relief sought and thus compel the respondent to perform
the duties imposed by section 522 (c) in the manner directed.
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Federal Reserve Bank of St. Louis
0.. •
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6
•
Whether and to what extent section 522 (c) confers discretion upon
respondent is plainly irrelevant on this motion. Its duties under the statute are
mandatory and ministerial. It is a jurisdictional limitation upon the respondent's
power that the rates it certifies must be the buying rates for cable transfers payable
in foreign currency in the New York market at noon on each day. By its motion to
dismiss the res-)ondent admitted not only that the rates it certified were not those
rates and, accordingly, that it exceeded its powers under the statute, but that the
actual rates were as claimed by petitioner.
State courts have jurisdiction concurrently with the Federal courts to defend and enforce private rights created by Federal laws, except (1) where Congress
has deprived State courts of that jurisdiction by conferring exclusive jurisdiction
over the subject-matter upon the Federal courts, and (2) where to do so mould
"interfere" with, that is, impair or destroy, the efficiency of the Federal agent to
perform its official duties. (Claflin V. Houseman, 93 U. S. 130, 133-143; Second
Employers' Liability Cases, 223 U. S.'1, 55-59; Galveston, H. e: S. A. Ry. Co. v.
Wallace, 223 U. S. 4gi,490; Minn. e: St. Louis R. R. v. Bombolis, 241 U. S. 211, 2113,
017772; People v. Welch, 141 g. Y. 266, 272, - 73.) We have indicated, sum,
that Congress has not deprived the State courts of their ordinary concurrent jurisMoreover, Congress has, specifically provided that respondent can
diction.
"* * * sue and be sued, complain and defend in any court of law or equity." (12
U. S. C. A. R 341.) That includes State courts. (12 U. S. C. A. § 632.)
;
The learned Special Term justice - ranted resoondent's motion on the exthat there was no
;
clusive autherit- of McClung v. Silliman (6 Wheat. 598
jurisdiction in the State courts to direct or control the conduct of a Federal
agent acting under a Federal act, for the reson that such agent is subject only to
the power creating it. Obviously that inference is not correct, for in the McClung
case the application was first made to the local Federal court and there denied because that court had no original power to issue mandamus, such jurisdiction having
On then
been generally withheld from Federal courts by the Judiciary Act of 1789.
renewed in the Ohio Supreme Court, the government objected that a State court
being
had no power to issue mandamus to a Federal agent acting under a Federal statute.
This preliminary objection to jurisdiction was overruled and the court, after trial,
dismissed the application on the merits.
7,L82g )
While languac:e is found in Judge JOHNSON'S opinion, which seemingly
respondent's contention, the mandate, by which the holding must be detersupports
mined, directs an affirmance on the merits of the ouclgtent of the Ohio Supreme Court.
The McClung case came to the United States Supreme Court on writ of error to the Ohio
Supreme Court for Muskingum County. McClung, claiming a preemptive interest in
several tracts of alleged "public land" of the United States,brought a mandamus
proceeding in that Ohio court to compel Silliman, the Register of the United States
Land Office at Zanesville, Ohio, to "enter" his application in the Register's
"Book of Entries" - the "initiatory step" entitling him, upon full payment of the
purchase price, to a "final certificate" which in turn would entitle him to a patent.
Silliman had refused to make the entry on the ground that he had no power to act in
the premises, because the lands had been previously sold to others. The Ohio court
sustained its own jurisdicticn over Silliman on a preliminary plea to its jurisdiction.
in which Silliman argued that n* * * for his official acts as an officer of the
United States, he is not subject to the order, direction or control of the courts of
law for the State of Ohio, * * *." A year later the case was tried on a sti ulation
of facts which is a part of the record in the Lpreme Court. On the stipulated facts
the Ohio court dismissed the plaintiff's motion for a mandamus on the merits. The--
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Federal Reserve Bank of St. Louis
7
Supreme Court of the United States affirmed the dismissal. Its mandate reads:
"Judgment. * * * it is adjudged and ordered that the judgment of the said Supreme
Court of the State of Ohio be and the same hereby is affirmed with costs; it being
the opinion of this court that the said Supreme Court of the State of Ohio had no
authority to issue a mandamus in this case." Since the Supreme Court affirmed the
Ohio court's dismissal of McClung's petition on the merits, there was by necessary
implication a holding that the State court had jurisdiction to issue mandamus in a
proper case to compel compliance with a Federal statute by a Federal agent (Northern
Pacific Ry. Co. and Yialker D. Hines, Director General of Railroads v. North
Dakota, 250 U. S. 135), since the United States Supreme Court, if it inEFrird to
hold State courts without power to exercise their usual and conceded jurisdiction
as against Federal agents acting under Federal laws, would then by its mandate to
the Ohio court have directed instead a dismissal for lack of jurisdiction - snecifying that ground. As was aptly said in Kendall v. United States (12 Pet, at p. 619,
referring to Columbian Ins. Co. v. Wheelwright, 7 Wheat. 534): "If the want of
jurisdiction in the circuit court had been the ground on which the writ of error was
quashed, the same course would have been pursued as was done in the case of Custiss
v. Georgetown & Alexandria Turnpike Co., 6 Cranch 233, where the writ of error was
quashed, on the ground that the court below had not cognisance of the matter."
Assuming, however, that the McClung case held that, on the stipulated
facts in that case, the Ohio court did not have jurisdiction to grant the relief
sought, it still is not authority that our Supreme Court was without jurisdiction
here. The facts are in no way comparable. Here the petitioner is seeking to compel
the respondent to perform a duty specl_fically imposed by Federal statute. McClung
sought to compel the Register of the Land Office to perform an act which was wholly
beyond his authority. As awears from the stipulation of facts, prior to McClung's
attempt to have the Register enter his application, a part of the land in question
had been duly sold by a former Register of an earlier land office in another district
and a United States patent had been i.ssued; another part had also been sold by the
same register and the purchaser had made full payment, although he had not received
his patent; and the remainder of the land had been sold at private sale in accordance
with the law. Accordingly, no part of the land McClung was seeking to pre-empt was
a part of the public domain at the time he made his application. It had ceased to
be within the jurisdiction of the land office and was no longer subject to entry or
to disposition by the land officers. The Register had no power or duty to do the
act which McClung sought to force him to perform. (Simmons v. Wagner, 101 U. S. 260,
For that reason no
261, 262; Borax, Ltd., v. Los Angeles, 29- U. S. 10, 17,
6
State or Federal, had power to grant the relief sought in the McClung case.
court,
As stated by Mr. Justice JOHNSON, after pointing out that, were the case decided for
the plaintiff, the Supreme Court would either be required to order the State court
to issue the writ demanded or do so itself, at page 603 (6 Wheat.): "* * * Or, in
other words, to issue the writ of mandamusOn a case to which it is obvious that
neither the jurisdiction of that Lthe state' court nor this extends."
is.)
McClung sought to have the court "interfere" with the Register's "official
duties" by forcing him to do an act wholly beyond his authority. Whether Justice
JOHNSON, in holding that the State court lacked such power, used the word
"jurisdiction" in its technical sense, or merely as meaning "authority," as the
Supreme Court's mandate reads, under the Constitution no court, State or Federal,
could have granted the relief McClung desired.
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The McClung case was decided in 1821 but in 1820 (Houston v. Moore, 5
'neat. 1, 32) the same Supreme Court held that a State court had the power to enforce the Federal military laws, saying by Justice WASHINGTON: "Upon the whole, I
am of opinion, after the most laborious examination of this delicate question,
that the state court-martial had a concurrent jurisdiction with the tribunal pointed
out by the acts of congress, to try a militia man who had disobeyed the call of the
president, and to enforce the laws of congress against such delinquent; and that this
authority will remain to be so exercised, until it shall please congress to vest it
exclusively elsewhere, or until the state of Pennsylvania shall withdraw from their
court-martial the authority to take such jurisdiction." Mr. Justice JOHNSON, the
author of the opinion in the McClung case, wrote a lengthy dissenting opinion and
no doubt his views therein expressed affected and colored his McClung opinion.
That, however, did not control the majority in that latter case for the mandate
affirmed the dismissal on the merits by the Ohio Supreme Court, which latter had
definitely asserted its jurisdiction, in a proper case, to issue mandamus to a
Federal agent. The enforcement of the Federal military laws involves as much of a
governmental function of an independent sovereignty as does the enforcement of the
tariff laws.
It seems entirely clear that, in the absence of Federal exclusory laws,
all doubts as to the jurisdiction of State courts over Federal matters and agents
was set at rest by the complete adoption by the United States Supreme Court in
Claflin v. Houseman (93 U. S. 130) of the views of Alexander Hamilton, respecting
State courts, as set out in the eighty-second number of "The Federalist."
There it was argued by the defendants that "The state courts can neither
interfere with, or interrupt, the exercise of the authority with which he fan
officer appointed under the laws of the United StateSj is clothed, nor aid in enforcing it," and McClung v. Silliman was cited (p. 132). In overruling that
argument the Supreme Court said (pp. 136, 137): "The laws of the United States are
laws in the several States, and just as much binding upon the citizens and courts
thereof as the State laws are. The United States is not a foreign sovereignty as
regards the several States, hut is a concurrent, and, within its jurisdiction,
paramount sovereignty, * * *. Legal or equitable rights, acquired under either
system of laws, may be enforced in any court of either sovereignty competent to hear
and determine such kind of rights and not restrained by its constitution in the
exercise of such jurisdiction. * ** So rights, whether legal or equitable, acquired under the laws of the United States may be prosecuted in the United States
courts, or in the State courts competent to decide rights of the like character and
class; subject, however, to this qualification, that where a right arises under a law
of the United States, Congress may, if it sees fit, give to the Federal courts
exclusive jurisdiction. * * * This jurisdiction is sometimes exclusive by express
enactment and sometimes by implication. If an Act of Congress gives a penalty
tmeaning civil and remediallj to a party aggrieved, without specifying a remedy for
its enforcement, there is no reason why it should not be enforced, if not provided
otherwise, by some Act of Congress, by a proper action in a State court. The fact
that a State court derives its existence and functions from the State laws is no
reason why it should not afford relief; because it is subject also to the laws of
the United States, and is just as much bound to recognize these as operative within
the State as it is to recognize the State laws. The two together form one system
of jurisprudence which constitutes the lag of the land for the State; and the courts
of the two jurisdictions are not foreign to each other, nor to be treated by each
other as such, but as courts of the same country, having jurisdiction partly
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different and partly concurrent. The disposition to regard the laws of the United
States as emanating from a foreign jurisdiction is founded on erroneous views of
the nature and relations of the State and Federal governments. It is often the
cause or the consequence of an unjustifiable jealousy of the United States government, which has been the occasion of disastrous evils to the country.
"It is true, the sovereignties are distinct, and neither can interfere
with the proper jurisdiction of the other, as was so clearly shown by Chief Justice
TANEY, in the case of Ableman v. Booth, 21 Haw. 506; and hence the State courts
have no power to revise the action of the Federal courts, nor the Federal the State,
except where the Federal Constitution or laws are involved. But this is no reason
why the State courts should not be open for the prosecution of rights growing out
of the laws of the United States, to which their jurisdiction is competent, and not
denied." (Emphasis and insertion supplied.)
So also in Minneano2is & St. Louis R. R. v. Bombolis ([192S1 241 U. S.
211, 221, 222) Chief Justice MITE on the authority of Claflin v. Houseman (supra)
a
wrote that the 11* * * lawfill rights of the citizen, whether arising fromlegitimate exercise of state or national power, unless excepted by express constitutional limitation or by valid legislation to that effect, are concurrently subject
to be enforced in the courts of the State or nation when such rights come within the
general scope of the jurisdiction conferred upon such courts by the authority, State
or nation, creating then. This principle was made the basis of the first Federal
Judiciary Act and has prevailed in theory and practice ever since as to rights of
every character, whether derived from constitutional grant or legislative enactment,
state or national. In fact this theory and practice is but an expression of the
principles underlying the Constitution and which cause the governments and courts of
both the Nation and the several States not to be strange or foreign to each other in
the broad sense of that word, but to be all courts of a common country, all -within
the orbit of their lawful authority being charged with the duty to safeguard and enforce the right of every citizen without reference to the particular exercise of
governmental power from which the right may have arisen, if only the authority to
enforce such right comes generally within the scope of the jurisdiction conferred by
the government creating them."
Similarly this court in Teal V. Felton (1 N. Y. 537, 545-549; affd., 12
Haw. 284, 291, 292), in holding a local postmaster liable for damages for neglect of
duty in withholding mail, said (at pp. 545, 547): " * * * I think that it is
strictly true that in all civil cases where the common law affords a redress, the
party injured may seek it in a state tribunal, proceeding according to the course of
the common law, and having jurisdiction of the person of the defendant, though he
may be an officer of the Federal government and affect to act under a law of the
Union.
"* * * it is an incorrect conclusion that because a law of Congress
prescribes the duties of a federal officer, and in a proper case he may thereunder
defend his acts, for such reason the state courts are ousted of jurisdiction."
The Claflin case is decisive of three points:
1. It reaffirms the doctrine of this court in Teal v. Felton (supra),
making Federal agents purporting to act under Federal laws liable in a great variety
of actions for their wrongs, by saying (at p. 142): wVie do not see why this case
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peal v. Feltonj is not decisive of the very question under consideration."
2. It declared and reaffirmed the effect of Houston v. Moore (5 Wheat.
1) on jurisdiction of State courts, by saying in part: "Houston, a delinquent
under the United States law, was tried by a state court-martial; and it was decided
that the court had jurisdiction of the offense, having been constituted, in fact,
to enforce the laws of the United States which the state legislature had re-enacted.
But the decision (which was delivered by Mr. Justice WASHINGTON) was based upon the
general principle that the State court, had jurisdiction of the offense, irrespective of the authority, State or Federal, which created it. Not that Congress could
confer jurisdiction upon the State courts, but that these courts mught exercise
jurisdiction on cases authorized by the laws of the State, and not prohibited by the
exclusive jurisdiction of the Federal courts. Justices STORY and JOHNSON dissented;
and, perhaps, the court went further, in that case, than it would now, * * * Be
this as it may, it was only a question of construction; and the court conceded that
Congress had the power to make the jurisdiction of its own courts exclusive" (pp.
141-142).
3. It overruled the contention of the plaintiff in error, for which he
cited the McClung case, and which his counsel worded as follows (see p. 132): "The
fact that an assignee in bankruptcy is dependent upon the national tribunals, and
independent of those of the States, is conclusive against the jurisdiction of the
latter, over statutory actions brought by him as an officer appointed under the laws
of the United States. The State courts can neither interfere with, or interrupt,
the exercise of the authority with which he is clothed, nor aid in enforcing it."
(Emphasis supplied.)
Thus the Claflin case destroys, as authority in any respect for respondent,
the McClung case and expounds the law of jurisdiction of the State courts to be that
as expressed by Alexander Hamilton. This Court of Appeals, however, anticipated the
United States Supreme Court in the expression of those views in holding that Federal
agents purporting to act under Federal laws were amenable to State courts for their
conduct. (Teal V. Felton, supra.)
The United States Supreme Court in the McClung case has necessarily affirmed the jurisdiction of the State court to issue mandamus to a Federal agent, although its issuance was reversed because of an interpretation of the Federal statute
which left the petitioner there without merit. Had the interpretation of the statute
been otherwise, undoubtedly the State court mandamus against the Federal agent would
have been affirmed. (Northern Pacific Ry. Co. v. North Dakota, 250 U. S. 135, 142,
152.) This power is again confirmed by the case of Riggs v. Johnson County Wall,
166). In that case the Federal Circuit Court, within its proper ancillary jurisdiction, where the State court had first enjoined the county officers from levying a
tax, mandamused those county officials to levy the enjoined tax, for the purpose of
paying on the bonds, held to be obligatory on the county by the Federal court judgment.
The exclusive theory of respondent is that the Federal government is an
independent sovereignty, with the State courts having no power to affect in anywise
the administration of the Federal tariffs and customs. The Claflin case demonstrates
that that theory is incorrect, and the Riggs case destroys it by its holding that
the Federal courts - of one independent sovereignty - may command county officials of another independent sovereignty - to comply with a State statute by levying a tax.
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Thus the power of one sovereignty by its courts to enforce the performance by
officers of another sovereignty of a statutory governmental function, such as
raising taxes, is demonstrated. This power or jurisdiction must, in the absence
of congressional exclusion, operate in favor of State as well as Federal courts.
The cases cited by respondent are inapplicable here. When it is sought
to have courts "interfere" by preventing or impairing performance by Federal agents
the court be Federal or State.
of their statutory duties, relief is denied whether
sought is to compel a compliance with the statute unde771=717=
Here the relief
with but to aid in enforcing
spondent is purporting to act - it is not to interfere
The only interference is with admittedly unlawful acts
duties imposed by statute.
which are not "official" acts but nullities.
Moreover, where jurisdiction is conferred, the Federal courts mandamus
Federal agents. (Kendall v. United States, 12 Pet. 524, 608, 619-621.) In that
of Columbia issued peremptory
case the Federal Circuit Courtfor the District
-General of the United States commanding his performance
mandamus to the Postmaster
to be no longer a high prerogaof a Federal statutory duty. It declared the writ
or withheld in absolute discretion, but to be "considered
tive one, to be granted
a writ of right; * **." The power to issue mandamus, not vested generally in the
Federal courts, was held properly exercisable by the Federal courts of the District
of the courts of
of Columbia because Congress had vested them with the powers
section ref the act of Congresqj declares that the laws of the
Maryland. "The first
State of Maryland, as they now exist, shall be, and continue in force in that part
of the district which was ceded by that State to the United States; which is the
part lying on this side the Potomac, where the court was sitting when the mandamus
was issued. It was admitted on the argument, that at the date of this act, the
common law of England was in force in Maryland and, of course, it remained and
continued in force in this part of the district; and that the power to issue a
cannot be doubted, and
mandamus in a proper case, is a branch of the common law,
(pp.
operation in that State, * *
has been fully recognized as in practical
power must reside equally in our
619-62(4 (Insertion supplied.) That recognized
Supreme Court.
The argument of the respondent and the government comes to this: However
and however
intentional the violation of the mandatory and non-discretionary statute
suffered by one of our citizens and
grave and destructive the injury and damages
and
with damages inadequate (Kendall v. United States, 12 Pet. 524, 614, 615),
may deliberately refuse to perform
mandamus the only adequate remedy, the respondent
compel performance,
its statutory duties, because the State court has no power to
Federal agent in every way save
although it may correct or punish the misbehaving
statute.
by ordering compliance with the plain terms of the Federal
traditionally and
That argument is a direct challenge to our courts which
if possible, for
fundamentally exist to furnish a remedy and an effective one,
v. United States
every invasion of a right. The words of the court in Kendall
prosecution of a suit to
(supra, at p. 624) are indeed apt and cogent: "It is the
of the postmasterenforce a right secured by a special act of Congress, requiring
plainly enjoined
general the performance of a precise, definite and specific act,
the power to command that
by the law. It cannot be denied but that congress had
to enforce the performance of the act must rest someact to be done; and the power
involve a monstrous
where, or it will present a case which has often beeniiid to
governrent, that there should be no remedy, although
absurdity in a well-organized
a clear and undeniable right should be shown to exist."
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There is no other adequate remedy than mandamus. Recoverable damages
are inadequate. (Kendall v. United States, supra, pp. 614, 615.) There is no
jurisdiction in the customs authorities or courts to consider the question and,
if there were, the power could not be effectively or adequately exercised by
customs authorities or courts, for respondent would not or could not be a proper
party to those proceedings and, if it were, there exists no power in those customs
authorities or courts to command compliance by respondent with the Tariff Act by
cerbifying the actual market rates.
The facts are conceded; the violation is clear; the injury and damages
grave. Our State courts in thase circumstances should not abdicate nor minimize
their constitutional and statutory powers, traditionally exercised, by failing to
direct the issuance of the necessary mandamus order petitioned for and which
constitutes the only adequate remedy against the continuance of a conceded wrong.
Gelber in his Oxford Pamphlet, entitled "War for Power and Power for Peace," says
(at p. 8.): "All power corrupts, said Lord ACTON, and absolute power corrupts
absolutely."
Respondent's argument that there is no power, Federal or State, to correct
or prevent this conceded wrong, arising out of uncontrolled power, is one to which
this court cannot subscribe; That is government by men and not by law.
The order should be reversed, with costs.
LOUGHRAN, FINCH, RIPPEY, LEWIS and DESMOND, JJ., concur with LEHTIAN, Ch.J.;
CONWAY, J., dissents in opinion.
Order affirmed.
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Or
REM
I
To be argued by
ALLEN T. KLOTS.
COURT OF APPEALS
OF THE STATE OF NEW YORK.
N THE MATTER
of
ARMAND SCHMOLL, INC.,
Petitioner-Appellant,
against
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respondent.
POINTS OF RESPONDENT
FEDERAL RESERVE BANK OF NEW YORK.
Statement.
This is a proceeding in the nature of mandamus
instituted under Article 78 of the Civil Practice
Act. The petition sought to obtain an order directing respondent, Federal Reserve Bank of New
York, to certify nunc pro tune certain rates of
exchange in dollars for Brazilian milreis in place
of certain rates theretofore certified by respondent
under the provisions of Section 522(c) of the
Tariff Act of 1930 (Chapter 497, 46 Stat. 739; 31
U. S: C. A., Section 372.) Respondent made application to dismiss the petition as a matter of law
and the application was granted by the Supreme
Court at Special Term. This is an appeal by permission from an order of the Appellate Division,
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Fuss sthimil
OCT 3 f,$ 1941
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First Judicial Department, unanimously affirming
without opinion (fols. 145-147) the order of the
Special Term (as resettled) which dismissed the
petition (fols. 7-18).
The opinion of the Special Term is printed at
folios 120-126 of the Record on Appeal.
Respondent's application (fols. 82-86), pursuant to Section 1293 of the Civil Practice Act,for
an order dismissing the petition as a matter of
law specified objections to the petition in point of
law as follows:
1. That the Court has not jurisdiction of
the subject of this proceeding;
2. That the petition does not state facts
sufficient to entitle petitioner to the relief
prayed for or to any relief;
3. That this proceeding was not instituted
within the time limited by law for the commencement thereof; and
4. That the determination sought to be
reviewed can be adequately reviewed by an
appeal to a court or to some other body or
officer.
Respondent's application was granted at Special
Term upon the ground that the Supreme Court of
the State of New York has not jurisdiction of the
subject of this proceeding. Having determined
that it was without jurisdiction in the premises,
the Court below found it unnecessary to consider
the other objections presented by respondent.
The Nature of This Proceeding.
In this proceeding under Article 78 of the.Civil
Practice Act, petitioner sought to have the Court
below review certain determinations made by
respondent Federal Reserve Bank of New York
on certain days in 1935 and 1936 of the rate of
exchange in dollars for Brazilian milreis. The
rates sought to be reviewed were determined by
the Federal Reserve Bank, and certified by it
to the Secretary of the Treasury of the United
States on the dates in question under specific
provisions of the Tariff Act of the United States.
The rates were to be used and were used pursuant
to the terms of that Act as the measure of the
value of Brazilian milreis in terms of the United
States dollar for the purpose of computing customs duties levied upon goods exported from
Brazil to the United States on the respective
dates. The petition prayed that an order be
granted by the Court below directing the Federal
Reserve Bank to determine and certify to the
Secretary of the Treasury nunc pro tune as of
these same dates in 1935 and 1936 rates of exchange for Brazilian milreis different from those
already certified by the Federal Reserve Bank to
the Secretary of the Treasury on the dates in
question. The petition was served on March 23,
1939, more than three years after the certifications
complained of.
The United States of America submitted to the
Court at Special Term a petition with an affidavit
executed by Henry Morgenthau, Jr., Secretary of
the Treasury of the United States (fols. 87-99)
showing the special interests of the United States
in this proceeding and pointing out that it is predicated upon a Federal statute of fundamental importance in the collection of customs duties, and
upon such petition and affidavit the Court granted
leave to the United States to file a brief as amicus
curiae. Upon similar applications, the United
States has been permitted to file briefs as amicus
curiae in the Appellate Division and in this Court.
Respondent's application for an order dismissing the petition as a matter of law, pursuant
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to section 1293, Article 78 of the Civil Practice
Act, was based on the facts alleged in the petition,
assuming them for the purposes of the application
to be true. Respondent submitted no affidavit in
support of its application.
The Facts as Alleged in the Petition.
The petitioner is an importer. In December
1935 and in January and February 1936 he bought
in Brazil certain cattle hides. These hides were
imported by him into the United States in January
and February 1936 (fols. 23-24).
The hides were subject to an ad valorem duty
of 10%. The Collector of Customs caused the
hides to be appraised at a certain number of milreis and then converted the appraised value into
dollars as required by law, and liquidated the duty
at 10% of the converted value (fols. 24-26). The
liquidations of the duties upon petitioner's hides
so made by the Collector have been set aside upon
grounds not involved in this case (fols. 52-53).
The petition alleges, however, as a conclusion of
law, that the Collector will be required by law,
when the custom duties on these hides are finally
liquidated, to use the rates which were certified
by the Federal Reserve Bank on the respective
dates of the exportation of the hides from Brazil
and published by the Secretary of the Treasury of
the United States (fol. 53). It alleges that the
rates used by the Collector in liquidating the
duties previously assessed which have been set
aside on other grounds were in fact these same
rates (fols. 33-37).
The acts of determination and of certification
of these rates were done by the Federal Reserve
Bank pursuant to the Tariff Act of the United
States. The Tariff Act requires that the Federal
Reserve Bank of New York shall determine the
5
buying rates in the New York market for cable
transfers' payable in foreign currencies and, in
any case where there is no market buying rate for
such cable transfers, shall calculate such rate, and
shall certify such buying rates daily to the Secretary of the Treasury who shall make them public
at such times and to such extent as he deems
necessary. Section 522 of the Tariff Act of 1930
(Chap. 497, 46 Stat. 739; 31 U. S. C. A., Sec. 372)
(fols. 27-32).
The petition then alleges that the rates of exchange certified by the Federal Reserve Bank to
the Secretary of the Treasury on the dates in question, to wit, December 19, 1935, January 15, 1936
and February 8, 1936, were not the lawful rates
which should have been determined to be the
buying rates in the New York market for cable
transfers payable in the foreign currency at noon
on the days of exportation, respectively; and that
in certifying the rates in question to the Secretary of the Treasury, the Federal Reserve Bank
acted in complete disregard of the provisions of
the statute and in an unreasonable, arbitrary and
capricious manner, in violation of its duties under
and in flagrant abuse of any discretion conferred
upon it by the statute (fols. 47-50).
Petitioner sought in the Court below an order
directing the respondent in effect to redetermine
and recertify to the Secretary of the Treasury
nunc pro tunc as of the dates in 1935 and 1936 in
question the foreign exchange rates for Brazilian
milreis (fols. 61-62). The conclusions of law, and
characterizations of respondent's acts referred to
above (as distinguished from any properly pleaded
1 A "cable transfer" may be defined as an order transmitted by
cable to pay a certain sum of money to a designated payee. Djorup,
"Foreign Exchange Accounting" 1926, ed., p. 44; Oshinsky
Taylor, 172 N. Y. Supp. 231, 232 (App. Term 1st Dept. 1918); and
see Strohmeyer & Arpe Co. v. Guaranty Trust Co., 172 App. Div.
16, 19 (1st Dept. 1916).
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statements of fact) are not, of course, taken as true
for the purposes of respondent's application to
dismiss the petition. They are referred to at this
point merely to indicate the theory on which the
petition is based.
The Statute of the United States Under Which the
Federal Reserve Bank Functioned in Determining the Foreign Exchange Rates.
The statute which authorized and directed the
Federal Reserve Bank of New York to determine
the foreign exchange rates in question and certify
them to the Secretary of the Treasury of the
United Slates is Section 522, Chapter 497, Title
IV of the Tariff Act of 1930 (31 U. S. C. A., Sec.
372). This statute reads as follows:
"(a) Value of Foreign Coin Proclaimed by
Secretary of Treasury.—Section 25 of the
Act of August 27, 1894, entitled 'An Act to
reduce taxation, to provide revenue for the
Government, and for other purposes,' as
amended, is reenacted without change as follows:
'Sec. 25. That the value of foreign coin
"
as expressed in the money of account of the
United States shall be that of the pure metal
of such coin of standard value; and the values
of the standard coins in circulation of the
various nations of the world shall be estimated
quarterly by the Director of the Mint and be
proclaimed by the Secretary of the Treasury
quarterly on the 1st day of January, April,
July, and October in each year.'
"(b) Proclaimed Value Basis of Conversion.—For the purpose of the assessment
and collection of duties upon merchandise imported into the United States on or after the
day of the enactment of this Act, wherever it
is necessary to convert foreign currency into
currency of the United States, such con-
1
7
version, except as provided in subdivision (c),
shall be made at the values proclaimed by the
Secretary of the Treasury under the provisions of Section 25 of such Act of August 27,
1894, as amended,for the quarter in which the
merchandise was exported.
"(c) Market Rate When No Proclamation.
—If no such value has been proclaimed, or
if the value so proclaimed varies by 5 per
centum or more from a value measured by
the buying rate in the New York market at
noon on the day of exportation, conversion
shall be made at a value measured by such
buying rate. If the date of exportation falls
upon a Sunday or holiday, then the buying
rate at noon on the last preceding business day
shall be used. For the purpose of this subdivision such buying rate shall be the buying
rate for cable transfers payable in the foreign
currency so to be converted; and shall be
determined by the Federal Reserve Bank of
New York and certified daily to the Secretary
of the Treasury, who shall make it public at
such times and to such extent as he deems
necessary. in ascertaining such buying rate
such Federal Reserve .Bank may in its discretion (1) take into consideration the last
ascertainable transactions and quotations,
whether direct or through exchange of other
currencies, and (2) if there is no market buying rate for such cable transfers, calculate
such rate from actual transactions, and quotations in demand or time bills of exchange."
It will be noted that this statute directs the
Director of the Mint to estimate the value of
foreign coin and the Secretary of the Treasury to
proclaim the value thus estimated. It then provides that the value thus estimated and proclaimed
shall be used in connection with the assessment and
collection of duties but that if the value so proclaimed varies by 5% or more from the value
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measured by the buying rate for cable transfers
in the New York market at noon on the day of exportation, the conversion shall be made at the
value measured by such buying rate. The petitioner alleges that in this case the value did vary.
by more than 5% and that, therefore, the rate to
be used was the buying rate certified by the Federal Reserve Bank (fols. 36-37, 51).
The Nature of Respondent Federal Reserve
Bank.
The Federal Reserve Bank was created by act
of Congress known as the Federal Reserve Act approved December 23, 1913 (38 Stat. 251, ch. 6)
and from time to time thereafter amended. It
has only such powers as have been granted to it
by the laws of the United States. It acts under the
supervision and regulations of the Board of
Governors of the Federal Reserve System (known
prior to the Banking Act of 1935 as the Federal
Reserve Board) and this Board is composed exclusively of officers of the United States appointed
by the President of the United States of America
by and with the advice and consent of the Senate
(Federal Reserve Act, Sec. 10; 12 U. S. C. A., Sec.
241).
The Federal Reserve Bank by law performs
numerous functions of the United States Government. Thus, it issues currency of the United
States, including Federal Reserve Notes, which are
obligations both of the Bank and of the United
States (Federal Reserve Act, Sec. 16 12 U. S.
C. A., Sec. 411). Again, as required by Section
15 of the Federal Reserve Act (12 U. S. C. A., Sec.
391), it acts as depositary and Fiscal Agent of the
United States, performing various duties and engaging in various operations and transactions
a
9
under the direct authority of the Secretary of the
Treasury of the United States.
See
Federal Reserve Bank of Richmond v.
Kahn, 77 F. (2d) 50, 51 (C. C. A. 4th
1935).
The function prescribed for the Federal Reserve Bank of New York by law in this case is
another instance where the Federal Reserve Bank
of New York is acting in performance of a governmental duty in aid of the administration by the
United States Government of one of its primary
executive functions, namely, the collection of
customs revenue. We shall discuss this more fully
hereafter.
ARGUMENT.
Respondent respectfully submits that the order
of the Appellate Division, which unanimously affirmed without opinion the order of the Court at
Special Term dismissing the petition in this proceeding, must be affirmed for the following reasons,
each of which is sufficient of itself to require such
affirmance:
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1. Under Section 522(c) of the Tariff Act
of 1930 respondent Federal Reserve Bank of
New York functions as an agency and instrumentality of the United States Government in
the administration and execution of the customs laws and it is not within the power or
jurisdiction of the courts of the State of New
York to direct or control the acts performed
by respondent in that capacity.
2. On the basis of repeated decisions of
the United States Supreme Court and other
courts, the rates determined and certified by
respondent for use in connection with the col-
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•
10
lection of customs are conclusive and binding
and not subject to review in any court.
3. If the action of the Federal Reserve Bank
is reviewable at all, it is reviewable in the
United States Customs Courts following propel. protest by petitioner against the decision of
the Collector yet to be made, and petitioner
is not entitled to the extraordinary relief provided by Article 78 of the Civil Practice Act.
4. The determinations of respondent sought
to be reviewed herein became final and binding on petitioner on December 19, 1935,
January 15,1936 and February 8,1936, respectively, and accordingly this proceeding was
not instituted within the four months' period
limited by law for the commencement thereof.
POINT
I.
The Courts of the State of New York do not
have jurisdiction of the subject of this proceeding.
The petition herein was dismissed by order of
the Court at Special Term on the ground that a
court of this State does not possess jurisdiction
"to issue directions to the Federal Reserve Bank
of New York in connection with the latter's performance of its functions as an agency and instrumentality of the United States Government in
the administration and execution of the customs
laws" (fol. 122). The order of the Special Term
was unanimously affirmed by the Appellate Division, without opinion. This disposition of the
proceeding is clearly right, and should be affirmed.
The memorandum opinion of Mr. Justice Rosenman at Special Term (fols. 120-126) presents a
concise summary of the reasons why the courts of
this State do not have jurisdiction of the subject of
this proceeding.
11
A.
The Supreme Court of the United States holds
that a State court has no jurisdiction to issue mandamus to direct performance of a Federal function
by a Federal agency.
The assessment and collection of customs duties
is a power delegated exclusively to the Federal
Government by Article I, Section 8, clause 1 of
the Constitution of the United States, which provides:
"The Congress shall have Power To lay
and collect Taxes, Duties, Imposts and Excises, m."
Congress is also expressly empowered by Article
I, Section 8, clause 5 of the Constitution:
To coin Money, regulate the Value
"
thereof, and of foreign Coin,
"
In the course of exercising its power to impose
customs duties, it becomes necessary for the Congress of the United States to regulate and fix the
values of foreign coins and currencies in order
that the value of merchandise purchased in foreign
countries may be translated into dollars for the
purpose of assessing ad valorem duties. In the
exercise of these powers, Congress has set up in
the Tariff Act the administrative machinery under
which this process of converting into dollars the
value of imports, initially expressed in foreign
currency, and of levying duties on the basis
thereof, is carried out (Section 522 above quoted).
By this statute Congress has made the Federal
Reserve Bank of New York an essential cog in
this machinery. Under subdivision (c) of this
section of the statute the Federal Reserve Bank
of New York is made the agency of the Federal
Government to determine on each business day
the buying rates at noon in the New York market
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12
for cable transfers payable in the respective currencies of the various foreign countries and to
certify the same to the Secretary of the Treasury
so that such rates may be made available through
him to Collectors of Customs as the values at
which the respective foreign currencies shall be
converted into currency of the United States for
the purpose of the assessment and collection of
ad valorem duties on imports.
Thus the action of the Federal Reserve Bank
of New York which is challenged in this proceeding was undertaken by it as an agency and
instrumentality of the United States. It was performing a duty expressly imposed upon it by a
statute enacted by Congress in the exercise of
both of the constitutional powers and functions
mentioned above. The petitioner in this proceeding seeks an order of the Supreme Court of this
State (1) determining that respondent's previous
action as such agency and instrumentality in certifying rates for Brazilian milreis for the dates
in question did not comply with the terms of the
Federal statute, and (2) directing respondent to
certify different rates for such dates nunc pro
tune.
The decisions of the Courts below dismissing
such petition follow the established rule that
a State court has no power thus to direct or
control the functioning of the Federal Government through its agents.
M'Clung v. Silliman,6 Wheat.598(1821);
Tarble's Case, 13 Wallace, 397 (1872)
Ex Parte Shockley, 17 F.(2d) 133 (D. C.
N. D. Ohio 1926)
State ex rel. Wilcox v. Curtis, 35 Conn.
374 (1868);
Hinkle v. Town of Franklin, 118 W. Va.
586, 191 S. E. 291 (1937);
Goldstein v. S'omervell, 170 Misc. 602, 10
N. Y. S. 2d 747 (1939);
13
See Kendall v. United States, 12 Peters
524, 617 (1838);
Territory v. Lockwood, 3 Wall. 236, 239
(1866);
In re Blake, 175 U. S. 114, 119 (1899);
United States v. Owlett, 15 F. Supp. 736
(1936).
1
The case of M'Clung v. Silliman, supra, heads
the unbroken line of decisions establishing this
principle beyond question. In that case the relator
sought by mandamus in a State court in Ohio to
compel the Register of the United States Land
Office in Ohio to enter relator's application for a
patent covering certain lands to which relator
claimed he was entitled. The Supreme Court held
that the State court had no power to issue a mandamus to an officer of the United States. The Court
said (6 Wheat., at p. 603):
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Federal Reserve Bank of St. Louis
"Whether a state court generally possesses
a power to issue writs of mandamus, or what
modifications of its powers may be imposed
on it, by the laws which constitute it, it is
correctly argued that this court cannot be
called upon to decide. But when the exercise
of that power is extended to officers commissioned by the United States, it is immaterial
under what law that authority be asserted,
the controlling power of this court may be
asserted on the subject, under the description
of an exemption claimed by the officer over
whoni it is exercised.
"It is not easy to conceive on what legal
ground a State tribunal can, in any instance,
exercise the power of issuing a mandamus to
the register of a land-office. The United
States have not thought proper to delegate
that power to their own. Courts. But when in
the eases of Alarbury v. Madison, and that of
/It'Intire v. Wood, this Court decided against
the exercise of that power, the idea never presented itself to any one, that it was not within
the scope of the judicial powers of the United
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14
States, although not vested by law, in the
Courts of the general Government. And no
one will seriously contend, it is presumed,
that it is among the reserved powers of the
States, because not communicated by law to
the Courts of the United States?
"There is but one shadow of a ground on
which such a power can be contended for,
which is, the general rights of legislation
which the States possess over the soil within
their respective territories 0 It is not now
!
necessary to consider that power, as to the
soil reserved to the United States, in the
States respectively. The question in this
case is, as to the power of the State Courts,
over the officers of the general Government,
employed in disposing of that land, under the
laws passed for that purpose. And here it is
obvious, that he is to be regarded either as an
officer of that Government, or as its private
agent. In the one capacity or the other, his
conduct can only be controlled by the power
that created him; since, whatever doubts have
from time to time been suggested, as to the
supremacy of the United States, in its legislative, judicial, or executive powers, no one
has ever contested its supreme right to dispose of its own property in its own way.
'
"
The reasoning which underlies the principle
that it is not within the jurisdiction of a State
court to direct or control the acts of officers or
agents of the Federal government in the performance of duties imposed upon them by the
laws of the United States is clearly presented in
the opinion of Mr. Justice FIELD in Tarble's Case,
13 Wall. 397. This case involved the jurisdiction
of the State court to inquire into the validity of
the enlistment of a soldier in the military service
of the United States and to direct an officer of
the United States Army to discharge the soldier
from arrest on the ground that he had not been
II! `MILL
pin
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Federal Reserve Bank of St. Louis
'pOAIOATII 0.10M SOCUl SilOpUA JO S11.102m
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paltua 1TT jo smut aqi. HTM Sltuuojuoa Tit paisllua
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•
16
M'Clung v. Silliman, supra, as already indicated,
the relator sought in a State court a writ of mandamus to compel the Register of a Federal Land
Office, whose duties were prescribed by Federal
law, to enter an application for a patent to certain lands to which relator claimed he was entitled.
In Tarble's Case, supra, an attempt was made,
by writ of habeas corpus issued by a State court,
to compel an officer of the United States Army to
release a person held for violation of the military
laws of the United States. In Ex Parte Shockley,
supra, it was held that a State court had no jurisdiction to issue a writ of mandamus ordering a
Director of Naturalization to furnish a certificate
of arrival to an alien. The Director, who had been
committed by the State court for failure to obey
the mandamus, was released on a writ of habeas
corpus issued by the Federal court. Parenthetically, it may be observed that this principle applies
whether the duty, the performance of which is
sought, may be classified as ministerial or discretionary. In the M'Clung case, for instance, the
Court clearly indicated that it regarded the duties
of the Register as ministerial by its references at
three points in its opinion to "ministerial officers"
(6 Wheat. at pp. 599,600,605).
We have found no case in which any court of the
State of New York, or of any other State, has
undertaken in any way to direct the action of a
Federal officer or agent in the performance of his
official duties for the United States. On the other
hand, the Supreme Court, Special Term, in New
York County, has recently held that a Federal
agency is immune from interference by injunction in the State court.
Goldstein v. Somervell, Administrator of
Works Progress Administration for the
City of New York, 170 Misc. 602, 10
N. Y. Supp. 2d 747 (1939).
17
The decisions of the highest courts of other States
are in complete harmony.
Hinkle v. Town of Franklin, et al., 118
W.Va. 586, 191 S. E. 291 (1937);
State ex rel. Wilcox v. Curtis, 35 Conn.
374 (1868).
The authority of M'Clung v. Silliman, supra, is
recognized as unquestioned by writers of authoritative legal texts. Willoughby on The Constitutional Law of the United States, 1929 Edition,
Volume I, page 201, says:
"That a State court has no power to issue
a mandamus or writ of certiorari to a Federal
officer is not questioned."
See also
Rottschaefer on Constitutional Law,
(1939) pp. 111-115;
Merrill on Mandamus, p. 271;
High on Extraordinary Legal Remedies,
(3d ed. 1896) p. 107;
Spelling on Injunctions and Other Extraordinary Remedies,(2d ed. 1901) p.
1268.
The principle that State governments shall not
interfere with the functioning of the Federal Government finds application not only in preventing
interference by the State judiciary with performance of Federal functions, but it also extends
to preventing interference by State legislative and
executive authorities with Federal functions.
Johnson v. Maryland,254 U. S. 51;
Ohio v. Thomas, 173 U. S. 276.
In the Johnson case, supra, the Supreme Court
held that an employee of the Post Office Department in driving a Government motor truck need
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18
not qualify for a State operator's license. Mr.
Justice Holmes said at page 57:
"It seems to us that the immunity of the
instruments of the United States from state
control in the performance of their duties
extends to a requirement that they desist
from performance until they satisfy a state
officer upon examination that they are competent for a necessary part of them and pay
a fee for permission to go on. Such a requirement does not merely touch the Government's
servants remotely by a general rule of conduct; it lays hold of them in their specific attempt to obey orders and requires qualifications in addition to those that the Government has pronounced sufficient."
In Ohio v. Thomas, supra, it was held that the
superintendent of a Federal soldiers' home could
not be required to comply with the State law prohibiting the use of oleomargarine.
The authorities, as well as the constitutional
principle involved, imperatively indicate that no
State court has jurisdiction of the subject of this
proceeding, and, accordingly, the decisions of the
Courts below should be affirmed.
From the foregoing it is apparent
(a) that the subject matter of this action is an
attempt by petitioner to impose by mandatory
decree of a State court, directions upon a Federal
agent pertaining to the performance of its functions as an agency and instrumentality of the
United States Government, and
(b) that the State court has not jurisdiction of
such subject matter.
This rule is based on reason and on authority and
the line of authorities in support of it is unbroken
and unshaken. In the following sections of this
19
Point I of our brief we will show that the authorities cited and the arguments made by appellant in Points I, II and III of its brief do not meet
the issue here presented.
B.
The cases cited by appellant with respect to
concurrent jurisdiction are not in point.
1. We do not dispute that State and Federal
courts have concurrent jurisdiction in many
matters. We do not dispute that rights created by
Federal statutes may in many instances be asserted in State courts or that Federal statutes are
the law of the land, including the land comprised
within the boundaries of a State. We do not dispute that the Federal Reserve Bank of New York
may be sued in a proper case in the State court,
although by statute it is permitted to remove any
such suit to the Federal court if it so desires.
Consequently the matter in Point II-A of appellant's brief is irrelevant to the point at issue.
What we do contend and what the courts below
held is that the performance by a Federal governmental agency of a Federal governmental function
prescribed by an act of Congress in a matter in
which the Federal Government has exclusive jurisdiction cannot be directed by a State court and that
this principle was laid down by the Supreme Court
of the United States in 111'Clung v. Silliman,supra,
and has been followed and approved by that court
and other Federal and State courts down to the
present time and is today established beyond question. None of the cases cited by appellant even
challenges the principle. On the contrary, in
Claftin v. Houseman, 93 U. S. 130 (1876), cited
several times in appellant's brief as one of
the leading cases with respect to concurrent jurisdiction of State and Federal courts to enforce
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20
rights created by Federal statutes, the Supreme
Court stated that the jurisdiction of the Federal
courts in such matters "is sometimes exclusive by
express enactment and sometimes by implication"
(p. 137), and held that State courts have concurrent jurisdiction with the Federal courts
"where it is not excluded by express provision,
or by incompatibility in its exercise arising from
the nature of the particular case" (p. 136) (Italics
supplied.)
In referring to numerous cases holding that
State and Federal courts have concurrent jurisdiction to enforce rights created by Federal
statute, appellant has failed to recognize the distinction between an agency of the Federal government which performs a governmental function
by direction of Congress, and a person or corporation which performs no governmental function but
is merely under a general legal duty imposed by
Federal statute. For example, the cases cited by
appellant (Brief, pp. 13, 15) in which State courts
have been held to have jurisdiction to mandamus
national banks to permit inspection of lists of
stockholders as provided in Section 5210 of the
United States Revised Statutes (12 U. S. C. A.
§ 62), represent an instance of the concurrent jurisdiction of State and Federal courts to enforce
private rights created by Federal statute. The
relief sought in such cases in no manner interfered with or affected the functions of the national
banks as agencies or instrumentalities of the
United States. The case at bar, on the other hand,
involves an entirely separate and distinct rule
based upon an altogether different principle—
namely, that the enforcement of the performance
of Federal duties by Federal agents is not a subject matter within the province of the State courts.
2. Appellant asserts at page 12 of its brief that
respondent has not pointed to any provision of law
21
either directly or impliedly depriving State courts
of "their ordinary concurrent jurisdiction to enforce rights created by Section 522(c) of the Tariff
Act of 1930." As we have shown above, the State
courts, because of the nature of this proceeding
and the constitutional principle involved, never
had concurrent jurisdiction to grant the relief
sought in this case. But even if this were not the
fact, the Congress by setting up in the Tariff Act
itself complete judicial machinery for the correction of errors arising in the administration of the
customs law, has clearly indicated that it has intended to exclude any concurrent jurisdiction in
the State courts.
The Constitution of the United States specifically provides that the Federal Congress is supreme in the field of tariff legislation. Not only
is Congress given power by Article I, Section 8 to
lay and collect duties and imposts, but by Section
10 of the same Article, States are forbidden to lay
any imposts or duties on imports. The field of
customs legislation is thus by the Constitution exclusively delegated to the Federal Government.
Congress has sought to legislate comprehensively
in that field. It has not only prescribed the rate
of duty and the machinery for its collection, but
it has set up in the Tariff Act a system of special
courts having special knowledge for the review
of questions arising in the administration of the
customs laws—first by the Collector himself, then
by the United States Customs Court and then by
the United States Court of Customs and Patent
Appeals. We shall discuss the jurisdiction of these
Courts more fully in Point III of this brief.
It is apparent that Congress, in setting up by
the Tariff Act this complete system of administrative and judicial machinery in this field in which
it has exclusive power to legislate, intended to
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confine the consideration of customs questions to
the special tribunals which it thus established for
this exclusive purpose, to the exclusion of any
other courts, State or Federal.
3. Appellant argues that a mere claim that a
defendant was acting as a Federal statutory agent
does not make him immune from suit in the State
court if in fact he was exceeding his authority.
We concede that in some cases where a defendant
has committed a private *wrong and attempts to
justify it on the ground that he was acting with
Federal authority, he may be held for damages
or enjoined or ejected if in fact the act was unlawful and unauthorized. We do not dispute that as
a necessary incident to the determination whether
such a suit will lie, the State court may pass on
the question as to whether the act complained of
was within the scope of the defendant's authority
as a Federal officer or agent, or whether it was
to be regarded purely as the act of a private individual. This is the principle for which many
of the cases cited on page 13 of appellant's brief
stand:
Teal v. Felton,1N. Y. 537, aff'd. 12 How.
284;
United States v. Lee, 106 U. S. 196;
Bates v. Clark, 95 U. S. 204;
Wilson v. Mackenzie, 7 Hill 95;
Hoyt v. Gelston & Schenck, 13 Johns. R.
141, aff'd. 3 Wheat 246;
Ripley v. Gelston, 9 Johns. R. 201.
These cases are all essentially the same in principle, and the facts and the reasoning in Teal v.
Felton are typical of those in the other decisions.
Teal v. Felton was an action of trover brought in
a New York State court against a postmaster for
his unlawful refusal to deliver a newspaper without payment of additional postage. Thus the suit
•
23
was against the postmaster in his individual capacity for wrongfully detaining the plaintiff's
property. It was held that the tortious act complained of was not within the scope of defendant's
authority as postmaster and that therefore he was
liable in damages for his tort as any other private
individual. So, in United States v. Lee, supra,
plaintiff brought an action of ejectment against
certain officers and agents of the United States
who claimed to hold certain real estate for the
United States. The court held that the mere assertion of authority from the Federal Government
did not make the defendants immune from suit
by a private citizen seeking to enforce his private
property rights and did not make it a suit against
the United States Government if in fact defendants were exceeding their authority. The court
held that it could inquire whether in fact the defendants were exceeding their authority.
In other words, in each of the cases cited by
appellant the action of the court was directed
solely at the defendant's acts as an individual outside the scope of his Federal authority, and in no
case did the court purport to assume jurisdiction
to direct or control the acts of the defendant as a
Federal officer.
But this case is entirely different. Here a State
court is requested to direct a Federal instrumentality in the performance of acts within the scope of
its Federal authority. Indeed, the very hypothesis
upon which the court's power is invoked is that
the act sought to be required is an act which respondent should perform within its authority as
a Federal instrumentality. This Court made this
distinction when it stated in Teal v. Felton, supra
(at p. 546)
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"The plaintiff is not seeking redress under
the Post Office laws, or attempting to enforce
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a penalty specifically imposed by them on the
postmaster for a fraudulent act pertaining to
his official duty. She simply seeks to recover
in an appropriate common law tribunal, competent to afford a remedy, and in a form of
action more ancient than the Federal Constitution or laws, the value of her property."
Thus the cases cited by appellant in which State
courts have assumed jurisdiction over acts done
by Federal officers outside the scope of their
authority, have no bearing on the question of a
State court's jurisdiction to direct performance
of an act by respondent conceded by appellant to
be within the scope of its statutory authority as
agent of the Federal Government. Such action
by the State court would operate directly upon
respondent in its Federal function and upon the
function itself. The individual may not be immune from State process, but the Federal function is immune under all of the authorities which
we have heretofore discussed. The subject matter of such a proceeding is not within the province
of a State court. The appellant has cited no case
in its entire brief which indicates that any State
court has ever been upheld in exercising such control over Federal agents.
A large group of the cases cited by appellant
on pages 13-15 and 18-19 of its brief are cases
where Congress has given the State court jurisdiction over the agency and subject matter in question.
First National Bank v. Union Trust Co.,
244 U. S. 416;
First National Bank v. Missouri,263 U. S.
640;
First National Bank v. Commonwealth,
143 Ky. 816, 137 S. W.518; 34 L. B. A.
(N. S.) 54;
Matter of Tuttle v. Iron National Bank,
170 N.Y. 9;
•
25
Guthrie v. Harkness, 199 U. S. 148;
Federal Land Bank v. Priddy, 295 U. S.
229;
State ex rel. Whitmore v. Barboglio, 63
Utah 432;
Robinson v. National Bank of Newberne,
81 N. Y. 385;
Matter of Carlton,7 Cow. 471.
For example, First National Bank v. Union
Trust Co., supra, involved the question of the jurisdiction of the State court to test the right of the
national bank to exercise fiduciary powers in accordance with the provisions of Section 11(k) of
the Federal Reserve Act (12 U. S. C. A., Sec. 248).
The decision of the Supreme Court rested upon
the express ground that
"As the particular functions in question by
express terms of the act of Congress were
given only when not in contravention of state
or local law' the State court was, if not expressly, at least impliedly, authorized by
Congress to consider and pass upon the question of whether the particular power was or
was not in contravention of the State law."
(p. 428).
The opinion of the court shows clearly that in the
absence of any question of interpretation of substantive State law and the consent by Congress,
the State court would not have had jurisdiction.
The proceeding at bar involves no interpretation of
substantive State law and there has been no consent by Congress, either express or implied, that
the performance of respondent's duty under the
Tariff Act shall be directed by a State court.
Northern Pacific Railway Co. and Walker D.
Hines, Director General of Railroads v. North
Dakota, 250 U. S. 135, cited on page 14 of appellant's brief, was a suit by the State Utilities Com-
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26
mission of North Dakota to restrain the Director
General of Railroads, appointed under the Act of
Congress of August, 1916, from charging intrastate rates prescribed by him which were different
from those prescribed by the State Utilities Commission. The Supreme Court of the United States,
reversing the Supreme Court of the State of
North Dakota, held that the Director General had
authority to charge the rates complained of. This
was the only question litigated. The opinion indicates that the jurisdiction of the State court was
not questioned by the parties. The Supreme Court
stated at page 142:
"In the opinion of the court below it was
stated that all the parties admitted that there
was no question as to the jurisdiction to consider the controversy.
'
."
Even if the question of the right of the State
court to consider the controversy had been litigated, the Northern Pacific case would be no authority for appellant. It was a case where the
Federal officer was claimed to have encroached
upon and to have interfered with the State's sovereignty by illegally imposing Federal rates on
intra-state commerce. The claim was that the
Federal officer acting outside the authority conferred upon him was usurping the State's functions to the injury of both the State and the
shipper. The Supreme Court held that the Federal officer had not exceeded his powers. This was
all it held. The court said by way of dictum that
if the Federal officer had been exceeding his powers
as such the court could have restrained his unlawful acts "to the detriment of the rights and
duties of the state authority." In doing so the
court would have been defending a State function
against the unauthorized and unlawful acts of the
individual who was not acting under the protec-
27
tion of any Federal authority. The court did not
say or in any way suggest, however, that a State
court could ever direct a Federal officer to perform
his duties as such. The Supreme Court, at pages
151-152, said:
"The relief afforded against an officer of
the United States proceeded upon the basis
that he was exerting a power not conferred by
the statute, to the detriment of the rights and
duties of the state authority and was subject,
therefore, to be restrained by state power
within the limits of the statute."
The Supreme Court clearly indicated, moreover,
that if its decision on the merits had not disposed
of the case it would have held that the suit must be
dismissed because it was in effect a suit against the
United States.
4. In Point II B of its brief appellant argues
that the order sought in this case would not be directed to respondent in its "official", but in its
"individual", capacity and that therefore it is
wholly immaterial that in certifying the rates in
question respondent acted as the agency or instrumentality of the Federal government. This
argument finds no support in the cases cited
by appellant which hold merely that, in the absence of a statutory provision to the contrary,
when a writ of mandamus is sought against the
holder of a public office, the proceeding abates
upon the death or resignation of such office holder
and does not continue against his successor in
office. The courts explain this 'result by saying
that the writ runs to the "person" and not to the
"office". These cases, however, do not justify
appellant's conclusion that the proceeding is directed against the officer in his "individual" rather
than his "official" capacity. On the contrary, the
very purpose of the writ of mandamus is to require
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an office holder to perform his duty as such. The
order which appellant seeks in this proceeding is
an order requiring respondent to perform its
statutory duty as agent of the Federal government; such an order would necessarily be directed
to respondent in its capacity as such agent, and
not in its "individual" capacity, because it would
require official performance.
5. Finally, at pages 23 and 24 of its brief, appellant asserts that performance of a statutory governmental function by a Federal agent may be directed by a State court by mandamus because, as it
claims, performance of a State governmental function by a State agent has been directed by a Federal court. In support of its premise it cites Riggs
v. Johnson County, 6 Wall. 166 (1867) and other
similar cases, wherein a Federal court by mandamus compelled municipal authorities to levy a tax
in accordance with State statutes in order to satisfy a judgment against the municipality previously entered in the Federal court. Appellant's
argument that it must follow from these cases
that a State court possesses jurisdiction to require Federal agents to perform generally their
Federal functions, is without foundation. As
stated in Merrill on Mandamus:
"§219. Federal courts can issue a mandamus to all state officers, except judicial
officers, but state courts cannot to federal
officers.—Owing to the peculiar relations between the United States government and the
states, questions have often arisen concerning
the right of the federal courts to issue the
writ of mandamus to state courts and state
officers, and of state courts to issue the writ
to federal courts and federal officers. The
laws of the United States are the supreme
law of the land, and the states have no cm!trol over the federal officers, who can only be
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controlled by the power that created then,;
consequently a state court cannot issue a
mandamus to a federal officer. Nor can the
states restrain either the process or the proceedings of the national courts. The United
States courts are invested with authority to
decide causes in the same manner as the state
courts are, and involving the rights and
remedies of parties under state laws, and are
allowed to use the same remedies as the state
courts. They can therefore issue the writ of
mandamus to state officers, so far as the federal congress has given them authority. They
can issue the writ of mandamus to all state
officers except judicial officers."
Riggs v. Johnson County and the other cases
cited by appellant are clearly distinguishable from
the case at bar. In each case judgment had been
rendered in the Federal court against the municipality over which it admittedly had jurisdiction,
and execution on such judgment had been returned
unsatisfied. In each case the recognized practice
in the State Supreme Court for enforcing a judg ment against a municipality under such circumstances was to issue a writ of mandamus compelling a municipal officer to levy a tax to pay such
judgment. The Federal court in issuing the writ
in each case was acting strictly in accordance with
the authorization of Congress which had provided
(1 Stat. 93, 276; 4 Stat. 274; 5 Stat. 499, 789) that
the forms of writs and executions and the modes
of process in suits at common law in the Federal
courts should be the same as those used in the
Supreme Courts of the respective States in which
such courts sat. The cases cited, therefore, stand
for no such broad principle as appellant contends;
they hold merely that where under State practice
the recognized method of enforcing a judgment obtained in a State court against a municipality is by
mandamus directing an officer to levy a tax to pay
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the judgment, a non-resident who obtains judgment against a municipality in a Federal court
sitting in that State is entitled under the Acts of
Congress to the same means of execution. Amy v.
The Supervisors,11 Wall.136 (1870);In re Copenhaver, 54 Fed. 660 (D. C. W. D. Mo. 1893).
Thus, in each of the cases cited by appellant
the order issued by the Federal court was not
in the nature of an original writ of mandamus
(such as appellant seeks in this proceeding) but
was merely an order in the nature of the usual
Writ of execution ancillary to the judgment previously rendered by the Federal court and therefore
expressly authorized by the Federal Statute (1
Stat. 93, 276; 4 Stat. 274; 5 Stat. 499, 789). Riggs
v. Johnson County,6 Wall. 166, at 197-198 (1867);
Mayor, etc., of The City of Helena v. United States
ex rel. Helena TVaterworks Co.,104 Fed. 113,at 117
(C. C. A. 9th 1900).
C.
An order of mandamus in this case would necessarily direct the performance of a Federal function
by a Federal agency.
Appellant claims that it is seeking a direction
merely that respondent should perform its duty
and not a direction as to the manner in which it
should perform. Its argument is that because respondent has certified what appellant claims are
incorrect rates it has not acted at all. This is
mere quibbling. Respondent has, of course, already acted and appellant is really asking the
State court to direct it to act differently. The
petition itself alleges that respondent certified to
the Secretary of the Treasury that the buying
rates in question were as set forth in Schedule A
annexed to the petition and it then proceeds to set
forth as Schedule A a copy of the rates so certified (fols. 33-35, 64-66). The petition thus shows
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31
that the respondent certified on December 19, 1935
the rate of $0.083916; on January 15, 1936 the rate
of $0.0842 and on February 8, 1936 the rate of
$0.0847. The actual certifications will be found
published in Treasury Decisions TD48064;
TD48100; and TD48155. A copy of Treasury Decision TD48064 is attached to this brief as Appendix A.
Respondent has thus admittedly already acted
and appellant is in substance and effect asking the
State court to direct respondent to act differently.
If the court were merely to direct the respondent
to perform its statutory duty in the manner prescribed by Congress in the statute (Appellant's
Brief p. 19) it would only be repeating what the
statute had already prescribed. The court's order
to perform, therefore, would have no meaning
whatsoever except in so far as it might expressly
or impliedly direct the respondent to perform in a
different manner than it has already performed.
Appellant's argument that because respondent
has acted wrongly (according to appellant's contention) it has not acted at all, could be made and
used as a basis to justify the State court taking
jurisdiction in any case where a Federal agent
is claimed to have performed improperly. It
would in fact nullify the principle laid down by
M'Clung v. Silliman and the other cases heretofore cited.
These cases make no such distinction, however.
Under the rule established by them it is immaterial whether respondent has or has not acted
under the statute. In neither instance has the
State court power to direct performance of a Federal function. In M'Clung v. Sillinian, supra, the
Register of a Federal land office, whose duties were
prescribed by Federal law, had refused to enter
an application for a patent to certain lands to
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which the relator claimed he was entitled. In
Tarble's Case,supra, a United States Army officer
had refused to release a person held for violation
of the military laws of the United States. In Ex
Parte Shockley, supra, a Director of Naturalization had refused to comply with a writ of mandamus issued by a State court directing him to
furnish a certificte of arrival to an alien. Each
of these cases is, therefore, authority for the
proposition that the State court has no jurisdiction
to compel a Federal officer or agent to perform
an alleged duty which he has refused to perform
at all.
Certainly any order of the Supreme Court of
this State which would direct respondent nunc
pro tunc to certify new or different rates for
Brazilian milreis on the dates in question and
which would, therefore, necessarily disregard or
annul the action already taken by respondent in
the discharge of its statutory duty, would clearly
constitute a direction of the manner of performance of that duty.
Appellant's contention would also nullify the
distinction made in Article 78 of the Civil Practice Act itself, the very statute under which petitioner has brought this proceeding. That statute
expressly recognizes the difference between a proceeding "to review a determination" and a proceeding "to compel performance of a duty specifically enjoined by law"(C.P. A.§ 1284). If every
time an officer had performed wrongly it could
be claimed that he had not performed at all, there
would be no room for a proceeding "to review a
determination" in the nature of certiorari, and all
proceedings could be brought in the nature of a
proceeding "to compel performance". Obviously
this was not contemplated by the New York Civil
Practice Act.
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D.
Appellant's attempts to discredit or distinguish
M'Clung v. Silliman are ineffectual.
Appellant's final assault on the decision below
is an attempt to discredit the holding of the Supreme Court of the United States in M'Clung v.
Silliman,6 Wheat. 598. This is the first time that
the authority of M'Clung v. Silliman has been
challenged by anyone so far as we are aware. Not
only has no case been found by either appellant
or ourselves which questions its authority on this
point and not only has it been followed in the
numerous cases herein previously cited, but it has
uniformly been accepted by text writers as standing for the very proposition for which it is cited
by Mr. Justice Rosenman, i. e., that a State court
has no jurisdiction to issue mandamus to a Federal officer.
See
Merrill on Mandamus, p. 271;
Willoughby, Constitutional Law of the
United States (1929 Ed.), Vol. 1, p.
201;
High on Extraordinary Legal Remedies
(3d ed. 1896), p. 107;
Spelling on Injunctions and Other
Extraordinary Remedies (2d. 1901), p.
1268;
Rottschaefer, Constitutional Law, 1939,
pp. 111-115.
Appellant contends that the Supreme Court in
the M'Clung case passed on the merits of the question as to whether the register had properly refused to make the entry demanded and dismissed
the case on the ground that the register had acted
in conformity with his statutory authority. It is
only necessary to read the M'Clung case to see
that this contention is completely erroneous. The
Supreme Court did not itself pass on the merits
but it held that the Ohio State court had no juris-
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diction to go into the merits and dismissed the case
for want of jurisdiction of the Ohio court.
The plaintiff M'Clung first moved for a mandamus in the Circuit Court of the United States
and that court decided that it was without jurisdiction to issue such a writ. Plaintiff then moved
for the mandamus in the Supreme Court of the
State of Ohio and that court sustained its own
jurisdiction but dismissed the motion on the
merits. The case was before the Supreme Court
of the United States on appeals from both of these
decisions.
In considering the appeal from the decision of
the Circuit Court of the United States,the Supreme
Court held, citing Marbury v. Madison, 1 Cr. 137,
and M'Intire v. Wood, 7 Cr. 504, that, while the
power to issue writs of mandamus was within the
scope of the judicial powers of the United States,
the Congress had never vested in the Federal
courts the power to issue such writs except where
necessary to the exercise of their jurisdiction.
The Supreme Court therefore affirmed the decision of the Circuit Court of the United States
that it had no jurisdiction.
After thus dealing with the appeal from the decision of the Circuit Court of the United States,
and disposing of it on the ground of that court's
lack of jurisdiction, the Svpreme Court turned to
the appeal from the decision of the State Court of
Ohio and prefaced its discussion of this aspect of
. the case by saying:
"The remaining questions bear a striking
analogy to that already disposed of."(p. 602)
In subsequent paragraphs discussing the appeal
from the decision of the State court, the Supreme
Court referred "to the defect in the jurisdiction
of the Court below"(p. 602); and said that to give
judgment for the plaintiff would be "to issue the
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writ of mandamus,in a case to which it is obvious
that neither the jurisdiction of that Court (i. e. the
State court) nor this, extends" (p. 603) and
reached the conclusion that:
notwithstanding express evidence of
"
'
the contrary, this Court feels itself sanctioned,
in referring the decision of the State Court,
in this case, to the ground on which it ought
to have been made, instead of that on which it
appears to have been made. The question before an appellate Court is, was the judgment
correct, not the ground on which the judgment professes to proceed."
Thus the Supreme Court explained why it felt
bound to consider and dispose of the appeal from
the decision of the State court on jurisdictional
grounds, notwithstanding that the State court itself had purported to decide the case on the merits.
The Supreme Court then proceeds to dispose of
the appeal on the ground indicated in the headnote, that "A State Court cannot issue a mandamus to an officer of the United States". The language of the court in so disposing of the case has
already been quoted on pages 13 and 14 of this brief.
It is thus apparent that in the Supreme Court's
mandate, quoted on page 27 of appellant's brief, to
the effect that the Supreme Court of Ohio had "no
authority to issue a mandamus in this case", the
court used the words "no authority" in the sense
of "no jurisdiction".
There is no basis whatever for appellant's contention that the Supreme Court of the United
States decided the Ill'Clung case on the ground
that the plaintiff was seeking to compel the Register to perform an act beyond his statutory authority. This point was never decided. Moreover there is nothing in the Supreme Court's opinion to indicate what its views might have been as
to this.
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Nothing could be clearer than that the Supreme
Court of the United States held in the M'Clung
case that a State court has no jurisdiction to issue
a mandamus to an officer of the United States, and
Mr. Justice Rosenman was entirely correct in taking the case as decisive authority for this rule—as
all other courts have done in which the point has
been raised.
Appellant also attempts to distinguish Tarble's
Case, 13 Wall. 397 (1872), on the ground that it
represented "a direct attempt by the state court to
force the federal agent to violate his federal
duties", whereas in the case at bar the State court
is asked to compel a Federal agent to perform its
federal statutory duty (Appellant's Brief, p. 30).
Tarble's Case does not so hold. The question
whether the statutory duties of the Federal
officer required him to release or to continue holding the prisoner was not decided; all that was decided was that the State court had not had jurisdiction of the proceeding.
For the reasons above stated, we respectfully
submit that neither the courts of this State, nor
of any other State, have jurisdiction to direct or
control the acts performed by respondent Federal
Reserve Bank of New York, pursuant to Section
522(c) of the Tariff Act of 1930, in its capacity
as an agency and instrumentality of the United
States Government in the administration and execution of the customs laws; and that the order appealed from should be affirmed. If the Court
agrees with us in this contention, it will, of course,
be unnecessary for it to consider the remaining
points of this brief. Even if this Court should decide, however, that the courts of this State have
jurisdiction of the subject of this proceeding, we
submit that the order dismissing the petition as a
matter of law should be affirmed for the reasons
hereinafter urged.
‘,7
POINT II
On the basis of repeated decisions of the
United States Supreme Court and other courts
the rates determined and certified by respondent for use in connection with the collection of
customs are conclusive and binding and not
subject to review in any court.
This point goes to the second of the objections
set forth in respondent's notice of objections, to
wit,
That the petition does not state facts sufficient
to entitle petitioner to the relief prayed for
or to any relief.
A.
The Supreme Court of the United States has held
that the determination by executive agencies of
rates for the conversion of foreign money into dollars for customs purposes is not subject to judicial
review.
The particular field of law in which this case
arises is by no means a new one.
It has been long since decided by the highest
court of the land in several decisions that the
determination by executive officers and agencies
of the United States Government of the rates for
the conversion of foreign money into dollars in
the assessment and collection of customs duties
is conclusive upon importers and that no error
alleged to exist in such determination is open to
judicial inquiry.
The leading and early case on this subject not
only has been consistently followed but is strikingly analogous in its facts to the case at bar.
Cramer v. Arthur, 102 U. S. 612 (1880).
This was a suit in a Federal Court against the
Collector of the Port of New York to recover duties
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alleged to have been illegally exacted by reason of
the Collector's refusal to liquidate the duties on
the basis of the depreciated value claimed by the
plaintiff for the Austrian paper florin, the currency in which the imported merchandise had been
purchased. The law in force at that time provided that the President of the United States
should establish regulations for estimating the
duties on goods which had been purchased in depreciated currencies (Rev. Stat. § 2903). Pursuant to this provision, the President through the
Secretary of the Treasury had made a regulation
to the effect that depreciation in the value of a
foreign currency should be shown by a consular
certificate attached to the invoice. In that case
the consular certificate attached -to the invoice
showed that the Austrian paper florin was depreciated and stated the depreciated value in
terms of United States currency. The Collector
assessed the duties on the basis of this value and
the plaintiff brought suit against the Collector to
recover back the duties alleged to have been overcharged. He sought to prove by extrinsic evidence
that the actual depreciated value of the Austrian
paper florin was less than that certified by the
consul. The Circuit Court of the United States
refused to go behind the certificate of the consul
and plaintiff appealed to the Supreme Court which
affirmed the judgment of the Circuit Court. In its
opinion, the Supreme Court, by Mr. Justice
Bradley, said at page 619:
"In this certificate the consul assumes the
value of the silver florin to be as it was proclaimed to be at the beginning of the year by
the Secretary of the Treasury, namely, 47
60/100 cents; and, on this basis, he certifies
that the value of the florin in the currency in
which the invoice was made out was 45 77/100
cents; and this, as we understand the statement of the case, is the valuation adopted by
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39
the collector in assessing the duties in question. The plaintiff seeks to go behind this
valuation, and to show that, at the time of
the purchase of the goods, the value of the
silver florin in Vienna,as quoted in the papers,
and as exhibited by the actual rate of exchange, was less than 47 60/100 cents, namely,
45 46/100 cents, and that the value of the
paper florin was 43 71/100 cents.
"This we think the plantiff cannot be allowed to do. The proclamation of the Secretary and the certificate of the consul must be
regarded as conclusive. In the estimation of
the value of foreign moneys for the purpose
of assessing duties, there must be an end to
controversy somewhere. When Congress fixes
the value by a general statute, parties must
abide by that. When it fixes the value through
the agency of official instrumentalities, devised for the purpose of making a nearer
approximation to the actual state of things,
they must abide by the values so ascertained.
If the currency is a standard one, based on
coin, the Secretary's proclamation fixes it; if
it. is a depreciated currency, the parties may
have the benefit of a consular certificate. To
go behind these and allow an examination by
affidavits in every case would put the assessment of duties at sea. It would create utter
confusion and uncertainty. If existing regulations are found to be insufficient, if they
lead to inaccurate results, the only remedy is
to apply to the President, through the Treasury Department, to change the regulations.
From the letter of the Secretary exhibited in
this case, we infer that this was afterwards
done, and that he made the desired change.
But this change in the regulations does not
affect prior transactions which took place before they went into effect. These transactions
must be governed by the regulations in force
at the time. It is of the utmost consequence
to the government, and it is, on the whole,
most beneficial to importers, that the value of
foreign moneys should be officially ascertained,
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40
and that they should be fixed by a uniform
method or rule."
Similarly it has been consistently held that the
value of foreign coin estimated by the Director of
the Mint and proclaimed by the Secretary of the
Treasury as provided in the tariff acts was conclusive and binding and that evidence was not
admissible to impeach the rate so determined and
certified.
Cramer v. Arthur, 102 U. S. 612, 616-617
(1880);
Hadden v. Merritt,115 U. S. 25 (1885);
United States v. Klingenberg, 153 U. S.
93 (1894);
Amalgamated Textiles v. United States,
84 F.(2d) 210 (Oust.& Pat. App.1936);
J. S. Staedtler, Inc. v. United States,
T. D. 49255, 25 C. C. P. A. 136 (1937).
In the case of Hadden v. Merritt, supra, at page
27, the Supreme Court said:
"The value of foreign coins, as ascertained
by the estimate of the director of the mint and
proclaimed by the Secretary of the Treasury,
is conclusive upon custom-house officers and
importers. No errors alleged to exist in the
estimate resulting from any cause, can be
shown in a judicial proceeding, to affect the
rights of the government or individuals. There
is no value, and can be none, in such coins,
except as thus ascertained; and the duty of
ascertaining and declaring their value, cast
upon the Treasury Department, is the performance of an executive function, requiring
skill and the exercise of judgment and discretion, which precludes judicial inquiry into the
correctness of the decision. If any error, in
adopting a wrong standard, rule, or mode of
computation, or in any other. way, is alleged
to have been committed, there is but one
method of correction. That is to appeal to
the department itself. To permit judicial in-
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question the rate certified by the United States
consul it follows conclusively that the Court must
similarly refuse to review the rate certified by the
Federal Reserve Bank in performance of precisely
the same function for precisely the same purpose,
namely, the collection and assessment of customs
duties.
It thus appears that historically under a succession of statutes the determinations of rates for
conversion of foreign currencies for customs purposes made by the executive agencies of the United
States Government, whether such agency be the
Director of the Mint, the Secretary of the Treasury, or Consul, have been consistently held to be
outside the province of judicial inquiry. All the
reasons for the application of the principle to these
agencies equally compel its application to the
Federal Reserve Bank of New York performing
the same function for precisely the same purpose.
B.
It is immaterial whether the action of the executive agency is discretionary or ministerial.
Appellant apparently does not dispute the authority of these cases as applied to the determinations of the Secretary of the Treasury, the Director of the Mint and the United States Consuls.
It attempted in the courts below, however, to distinguish these cases from the case at bar by asserting that in them the act of the Federal officer
was discretionary and that the officer had not
exceeded his discretion. It argued that in the case
at bar respondent's duties were ministerial and
that even if they were discretionary there was an
abuse of discretion. While we deny that respondent's function under the statute is ministerial,
we submit that the cases cited by us under this
point do not turn upon any distinction between
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43
ministerial and discretionary functions, and that
the facts in those cases clearly indicated just as
great a departure from the authority granted by
the statute as appellant claims here.
Thus, in Hadden v. Merritt, supra, the value of
the Mexican dollar as estimated by the Director of
the Mint and proclaimed by the Secretary of the
Treasury was required by law to be based on the
United States gold dollar. (Collector v. Richards,
23 Wall. 246, 259-260). It was claimed that the
rate which had been proclaimed was based on the
silver dollar and evidence was offered to prove
this. The court excluded the evidence on the
ground that the action of the Federal officers was
conclusive.
Amalgamated Textiles v. United States, supra,
decided in 1936, involved a protest by an importer
of certain merchandise from England against the
action of the Collector of Customs who had converted the invoice value expressed in pounds sterling into terms of United States currency at the
rate which had been estimated by the Director of
the Mint and proclaimed by the Secretary of the
Treasury pursuant to Section 522(a) of the Tariff
Act of 1930. It will be recalled that that section
requires the Director of the Mint to estimate, and
the Secretary of the Treasury to proclaim, periodically "the values of the standard coins in circulation of the various nations of the world". The
plaintiff's protest was based on the ground that
the Secretary had proclaimed a rate for a standard coin which was not in circulation, since the
evidence showed that Great Britain had suspended
all gold payments in 1931 and that the gold
sovereign (conceded to be the gold coin equivalent
of the pound sterling) was not in circulation in
England in 1934 when the merchandise in question
was exported.
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The Customs Court overruled the protest (T. D.
47931) and, referring to the Cramer and Hadden
cases, held:
we have no power to go behind the
Secretary's proclamation with a view to weighing its relative accuracy, and this applies to
his finding as to the existence of a foreign
standard coin no less than his finding as to
the value thereof in United States currency."
On appeal the Court of Customs and Patent
Appeals affirmed the judgment, stating (84 F.(2d)
210, at pp. 215-216):
"
Appellant's contention is based upon
the claim that the equivalent of the pound
sterling in gold is no longer a standard coin
in Great Britain, and is, in fact, no longer in
circulation in that country.
We think that said contention is an effort,
in effect to impeach the accuracy of the proclamation of the Secretary of the Treasury.
By that proclamation the secretary found the
existence of a foreign standard coin and the
value thereof in United States money. Upon
that finding the amount of duties assessable
in the case at bar were computed.
It is our opinion that, under the authority
of the cases of Cramer v. Arthur, supra, and
Hadden v. Merritt, supra, the correctness of
the findings set forth in said proclamation
may not be inquired into by either the collector or the courts, and that the collector was
bound to accept such findings in computing
'
the duties here involved.
"
In both the Hadden and Amalgamated Textiles
cases, therefore, it appears that the importers
were in effect asserting that the Director of the
Mint and the Secretary of the Treasury had
abused their discretion in that they had, respectively, estimated and proclaimed values for
foreign currencies in disregard of the require-
45
ments of the statute. In both cases it was held
that notwithstanding such claim, the courts will
not examine the value proclaimed to ascertain
whether it was arrived at in conformity with the
statute. By the same token, we submit that the
rule of the Cramer, Hadden and Amalgamated
Textiles cases applies in respect of the rates
certified by respondent in discharge of its duty
under Section 522(c) and that the question of
whether respondent's function is ministerial or
whether it involves the exercise of judgment and
discretion is immaterial.
C.
The acts of the respondent in this case in fact
involved discretion.
It is clear, however, that the performance of the
duty imposed upon respondent by Section 522(c)
necessitates the exercise of judgment, discretion
and special knowledge and the facts alleged in the
petition (assuming them to be true) are insufficient
to constitute a case of abuse of such discretion.
As between the present function of respondent in
determining buying rates in the New York market
for cable transfers payable in foreign currencies,
and the former functions of the United States
Consuls in determining and certifying values of
foreign currencies, it is difficult to see any difference of substance. It would seem clear, however, that this function of respondent involves
the exercise of a greater, rather than a lesser,
measure of judgment and discretion than the
function of the Director of the Mint in estimating
the values of foreign coins which are arrived at
by arithmetical computations based on definite
ratios of the gold Parity values of such coins in
relation to the dollar.
In the performance of its duty under Section
522(c) respondent is required to determine cer-
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46
tam n facts. This is manifest, not only from the
statute itself, but also from the allegations of
the petition and the facts of which this Court
has judicial knowledge. The statute provides that
the rates "shall be determined" by respondent
and that respondent
"may in its discretion (1) take into consideration the last ascertainable transactions
and quotations, whether direct or through exchange of other currencies, and (2) if there
is no market buying rate for such cable transfers, calculate such rate from actual transactions, and quotations in demand or time
bills of exchange."
The terms of Section 522(c) quoted above, expressly permitting respondent "in its discretion"
to "take into consideration" other factors in determining the rates, show that Congress knew
that determination and certification of the market
buying rate was not merely ascertaining and
certifying a clearly established figure or one derived from a simple mathematical calculation, and
recognized thdt it was a task requiring the consideration of numerous facts and the exercise of
skill, judgment and discretion in determining from
them the market buying rate at a given time.
As appears from the petition (fols. 44-45 and
76) it is the custom of banks in New York City to
notify the Federal Reserve Bank daily of their
buying rates for cable transfers payable in Brazilian milreis for that day. The ascertainment of
the price in New York City of a particular
foreign currency at a given moment is not the
simple matter of ascertaining a single fixed price
quoted by a central exchange, but it involves the
consideration of numerous different quotations
upon the basis of which it is necessary to determine a single rate. The determination of the
single rate from the numerous different quota-
47
tions in the market is not simply a matter of
arithmetical computation; on the contrary, one
is required to use discretion and judgment, as
well as special knowledge of the intricate factors
affecting the exchange rate of the currency of the
particular country involved, in order to determine which quotations most accurately represent the New York market buying rate for cable
transfers payable in such currency.
It is highly significant that Congress designated
the Federal Reserve Bank of New York as the
agency to determine the buying rate in the New
York market for cable transfers payable in the
various foreign currencies of the world. If, as
appellant suggests, the matter of determining the
buying rate in New York for cable transfers payable in foreign currencies were a simple ministerial function which virtually anyone could perform, Congress would have committed the function
to the office of the Collector of the Port of New
York or to some other agency of the Bureau of
Customs which is more closely connected with
the assessment and collection of customs duties
than is the Federal Reserve Bank of New York.
Congress, however, delegated the function to the
Federal Reserve Bank of New York realizing that
it was one of the few institutions possessing the
necessary technical knowledge, experience and
sources of information, including its member
banks and other dealers in foreign exchange, to
discharge the duty imposed by the statute.
It is the established rule of this State and elsewhere that where a body is vested with the power
to determine a much simpler question of fact than
that involved in the case at bar, the duty is discretionary or judicial, and not purely ministerial.
In Matter of Petition of Howland v. Eldredge,
43 N. Y. 457 (1871), a state statute authorized a
town to issue certain bonds upon the written con-
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48
sent of a majority of the taxpayers owning more
than half of the taxable property, and provided
that proof of such consent should be made by affidavit of the town assessors, and made it the duty
of the assessors to make such affidavit when the
requisite consent was obtained. This Court reversed an order awarding a peremptory mandamus to the assessors commanding them to execute such an affidavit on the ground that the court
will not direct how a discretionary act shall be
performed.
Similarly, in People ex rel. Francis v. Common
Council of the City of Troy, 78 N. Y. 33 (1879),
this Court said (at p. 39):
"Where a subordinate body is vested with
power to determine a question of fact, the duty
is judicial, and though it can be compelled by
mandamus to determine the fact, it cannot be
directed to decide in a particular way, however clearly it may be made to appear what
the decision ought to be."
Other cases to the same effect are:
People ex rel. Harris v. Commissioners
of the Land Office, 149 N. Y. 26, 31;
People ex rel. Elmira Advertiser Ass'n.
v. Gorman, 169 App. Div. 891;
United States, ex rel. Tucker v. Seaman,
58 U. S. 225, 230.
Moreover, mandamus will not lie to compel an
officer to undo an act not performed in accordance
with law, unless he is authorized by statute to
reconsider his act.
New York State Society of Professional
Engineers v. Department of State, 174
Misc. 173.
We do not dispute that respondent's duty under
Section 522(c) is mandatory in the sense that respondent is required to act; the performance of its
49
duty when it does act, however, is not a ministerial function but involves the exercise of discretion, judgment and special knowledge.
The facts pleaded in the petition are insufficient
to sustain a claim of abuse of discretion. Characterizations, of course, are not facts. The Court
will readily see from the very nature of the
duty imposed upon respondent by the statute
that many factors necessarily had to be considered
in determining the rates in question. For instance,
the Court will take judicial notice of the fact
that since the statute in question was enacted in
1930 chaotic conditions have affected the currencies and foreign exchanges of the world. Foreign
laws, decrees, and regulations of one kind or another have imposed controls or restrictions on
foreign exchange and export transactions, in the
light of which the duties of respondent under the
statute must be construed. It is a matter of common knowledge and continuous public comment
and discussion, that most of the countries of the
world are not now, and were not in 1935 and 1936,
on the gold standard, and that many countries (including South American countries) now have and
then had in effect measures for the control and restriction of foreign exchange and export transactions in an effort to conserve and make the
most effective use of their gold supplies and
national resources and otherwise to protect their
national economy, and that these measures resulted in different rates of exchange for the same
currency, varying with the sources and use of the
particular exchange.
It was in the exigency of these conditions that
respondent was forced to act in making the determinations here involved. There were, in fact,
Brazilian laws and decrees of this character affecting the rate of exchange for Brazilian milreis.
While respondent does not contend that the Court
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50
will take judicial notice of the terms of such laws
and decrees, it submits that the Court does know
judicially of the existence of such restrictive exchange control measures in Brazil and many other
countries. Reference to the public documents of
the Government will disclose that exchange control measures were in effect in Brazil in 1935 and
1936.
House Document No. 15, 76th Congress,
1st Session, Twenty-second Annual Report
of the United States Tariff Commission
(1938), pursuant to section 332 of the Act of
Congress approved June 17, 1930 (46 Stat.
698), p. 1.
"Regulation of Tariffs in Foreign Countries by Administrative Action", United
States Tariff Commission, Report to Committee on Ways and Means, House of Representatives (1934), pp. 1-2, 5-6.
For the convenience of the Court we have set
forth in Appendix B attached to this brief excerpts
from the public documents described above containing references to exchange control measures
in Brazil.
That the Courts will take judicial notice of the
contents of public documents and reports of Commissions made to Congress is well settled.
Greeson v. Imperial Irr. Dist., 59 F.(2d)
529, 531 (C. C. A. 9th, 1932)•
Muller v. Oregon, 208 U. S. 412, 419-420
'
(1908);
The Appollon, 9 Wheat. 362, 374 (1824).
As we have heretofore pointed out, however,
under the ratio decidendi of the Cramer and Hadden cases it is immaterial whether respondent's
determinations involved discretion. We submit
that the rule adopted by the United States Supreme Court in those cases and followed in the
Klingenberg and Amalgamated Textiles cases,
51
supra, is applicable to the facts presented in this
proceeding, and that the rates certified by respondent are not subject to judicial review.
D.
Independent of all other grounds, the granting
of the extraordinary remedy of mandamus in this
case would be inappropriate because it would be
against public interest.
It is well established that the petition in a
proceeding to obtain any of the extraordinary
remedies afforded by Article 78 of the Civil Practice Act "must present an issue for the enforcement of a clear legal right".
Coombs v. Edwards, 280 N. Y. 361, 364,
21 N. E. 2d 353 (1939);
Economy Holding Corporation v. Berry,
234 App. Div. 214, 255 N. Y. S. 20
(1st Dept. 1932).
The burden of showing the clear legal right to
such order and the necessity and propriety of its
use rests upon the petitioner.
Coombs v. Edwards, supra.
Even though the petition in a proceeding under
Article 78 of the Civil Practice Act may present
an issue for the enforcement of a clear legal right,
the Court will not issue an order as provided in
said Article where the effect would be to cause
disorder and confusion in public affairs. In the
recent decision in Andresen v. Rice, 277 N. Y. 271,
14 N. E. 2d 65 (1938), Chief Judge Crane stated
(at p. 282):
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"Mandamus is an extraordinary remedy, and
its issuance is to a great extent discretionary.
The courts will be chary to issue it so as to
cause disorder and confusion in public affairs,
even though there may be a strict legal right.
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52
Duncan Townsite Co. v. Lane, 245 U. S. 308,
311, 38 S. Ct. 99, 62 L. Ed. 309; Matter of
Warehousemen's Association v. Cosgrove,
241 N. Y. 580, 150 N. E. 563; Matter of Smidt
v. McKee,262 N. Y. 373,378, 186 N.E.869."
It requires no extended discussion to demonstrate
the "disorder and confusion in pubic affairs"
that would result from the granting of the order
sought in this proceeding, even assuming that appellant could show a clear legal right to be
enforced. The rates which are questioned in this
proceeding were certified by respondent to the
Secretary of the Treasury more than three years
before the institution of this proceeding and were
immediately published by the Secretary for use in
the assessment and collection of customs duties
on imports (fols. 33-36). Any order in this proceeding which would now determine that the
rates so certified were erroneous would bring
into question the legality of ad valorem customs
duties heretofore levied upon goods imported from
countries having currencies with respect to which
multiple rates of exchange have prevailed. The
resulting "disorder and confusion in public affairs" is manifest. In fact the rule which denies
recourse in these circumstances to extraordinary
remedies, such as those provided by Article 78 of
the Civil Practice Act, is based on the same principle upon which the courts have refused to review
the values of foreign currencies ascertained by
officers of the Federal Government for use in the
assessment and collection of ad valorem customs
duties. In Cramer v. Arthur,102 U. S. 612,(1880)
to which we have referred above, the Supreme
Cour,t stated (at p. 617):
"The government gets at the truth, as near
as it can, and proclaims it. Importers and
collectors must abide by the rule as pro-
•
53
claimed. It would be a constant source of
confusion and uncertainty if every importer
could, on every invoice, raise the question of
the value of foreign moneys and coins."
And, similarly (at p. 619):
"If the currency is a standard one, based on
coin, the Secretary's proclamation fixes it; if
it is a depreciated currency, the parties may
have the benefit of a consular certificate. To
go behind these and allow an examination by
affidavits in every case would put the assessment of duties at sea. It would create utter
confusion and uncertainty."
POINT
III.
If the action of the Federal Reserve Bank is
reviewable at all, it is reviewable by the United
States Customs Court and the Court of Customs and Patent Appeals under the procedure
set up by Congress in the Tariff Act itself, and
the petitioner is not entitled to the extraordinary relief provided by Article 78 of the
Civil Practice Act.
We have discussed under Point II the authorities which show that the particular act of the Federal Reserve Bank complained of in this case is
not subject to judicial inquiry in any court. If,
however, for any reason this act should be held
subject to judicial inquiry, the petitioner has full
opportunity to review it in the United States Customs Court under the regular procedure expressly
provided by Congress in the Tariff Act itself for
the protection of importers.
With such a remedy in the Customs Court available to him, petitioner is precluded from invoking
the extraordinary remedies of Article 78 of the
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Civil Practice Act. This Article specifically provides in Section 1285:
"Except as otherwise expressly prescribed
by statute, the procedure under this article
shall not be available to review a determination in any of the following cases:
*
*
*
4. Where it can be adequately reviewed by
an appeal to a court or to some other body
or officer."
A.
Congress has provided a complete system for
judicial review of any error in the assessment of
customs by which the petitioner may be injured.
H any act is to injure the petitioner it will be
the customs levy itself. Congress itself has set
up a comprehensive system for review of that act.
The Tariff Act of 1930 is a legislative enactment
complete in its field. Section 522 is not to be read
in vacuo—it is a part of a complete statute. That
statute contains also Sections 514 and 515 which
set up a complete system for review—first by the
Collector himself, then by the United States Customs Court and then by the United. States Court
of Customs and Patent Appeals. Section 514
specifically provides that the subjects for review
shall be
"all decisions of the Collector, including the
legality of all orders and findings entering
into the same, as to the rate and amount of
duties chargeable, * * *" (Section 514 of the
Tariff Act of 1930; 19 U. S. C. A. §1514).
As we have shown above in Point I, the field of
customs legislation is by the Constitution exclusively delegated to the Federal Government.
Congress has sought to legislate comprehensively
in that field. It has not only prescribed the rate
•
55
of duty and the machinery for its collection, but it
has set up a system of special courts having special
knowledge to correct errors in the administration
of the customs laws. This system, set up by the
Tariff Act and administered by the United States
Customs Court and the United States Court of
Customs and Patent Appeals,is so complete that it
would seem apparent that Congress, in a field in
which it has exclusive power to legislate, intended
to confine the consideration of customs questions
to tribunals which it itself had established.
The broad and exclusivq power of the Customs
Court to inquire into all findings entering into
decisions of the Collector is well illustrated by
David L. Moss, Inc. v. United States, 103 F. (2d)
395 (Cust. & Pat. App. 1939). The question was
whether the Customs Court had jurisdiction to go
behind findings of the Tariff Commission and of
the President resulting in an increase of duties
on certain commodities pursuant to the Flexible
Tariff Act, in order to determine whether such
findings were supported by the evidence before
the Commission. A majority of the Court of Customs and Patent Appeals held that the Customs
Court did have such jurisdiction, and concurred in
the following statement (p. 397):
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"It is true, as pointed out by counsel for
the Government, that the Customs Court is
given no direct right of review over action of
the Tariff Commission. This does not mean,
however, that it is without power to consider
the legality of increase of duties resulting
from the Commission's action. The court is
a court of law, and it is granted full power to
relieve against illegality in the assessment or
collection of duties. 19 U. S. C. A. §§ 1515,
1518. If relief may not be had before it
against illegal action under the flexible tariff
provisions, relief may not be had anywhere;
for its jurisdiction in such matters is exclusive. It is the tribunal established by Con-
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56
gress in the provision of a complete system of
corrective justice for the administration of
the customs laws, and questions involving the
validity of official action in the imposition and
collection of duties are properly cognizable
before it to the exclusion of other courts.
Cottman Co. v. Dailey,4 Cir., 94 F. 2d 85, 88;
Riccomini v. United States, 9 Cir., 69 F. 2d
480, 484; Gulbenkian v. United States, 2 Cir.,
186 F. 133, 135; Nicholl v. United States, 7
Wall. 122, 130, 19 L. Ed. 125. There can be
no question but that courts must exercise the
judicial power vested in them to determine
the legal validity of administrative action,
where the validity of such action is involved
in questions properly before them, whether
they have been granted the right of review
over action of time administrative agency or
not. The duty necessarily arises because of
their obligation to decide cases before them
according to law." (Italics supplied.)
Certainly the determination of the rate to be
used in the conversion of foreign currency into
dollars is,in the language of Section 514,"a finding
entering into" the decision of the Collector who
effects a liquidation of duties based thereon. In
numerous cases where the Collector has used a
rate of conversion other than the rate prescribed
by statute, it has been held that such error may be
corrected upon protest by the importer by appeal
to the Board of General Appraisers (now known
as the United States Customs Court).
Macksoud Importing Co. v. United States,
T. D. 48442 (1936);
A. S. Rosenthal Co. v. United States, 24
F.(2d) 351 (C. C. A. 2d 1928);
Louis Contencin & Son v. United States,
T. D. 13511 (G. A. 1892);
M.J. Brandenstein v. United States, T. D.
25596 (G. A. 1904);
Illinois Watch Company v. United States,
T. D. 38718 (G. A. 1921);
57
M. M. Schwartz & Co. v. United States,
T. D. 37517 (G. A. 1918);
Decorative Plant Co., T. D. 37602 (G. A.
1918).
("T.D." denotes United States Treasury
Decision.)
Other decisions which show that the Customs
Court has jurisdiction to review any determination which enters into the decision of the Collector
in the liquidation of duties, and which is a proper
subject of judicial inquiry are as follows:
William A. Foster & Co. (Inc.) v. United
States, 20 C. C. P. A. (Customs) 15
(1932);
Norwegian Nitrogen Products Co. v.
United States, 20 C. C. P. A. (Cust.)
27, aff'd. 288 U. S. 294;
United States v. Fox River Butter Co.,
20 C. C. P. A. (Cust.) 38 (Certiorari
denied, 287 U. S. 628);
United States v. Harry Blandamer, 20
C. C. P. A. (Cust.) 45 (Certiorari denied, 287 U. S. 628);
United States v. S. Leon & Co., 20 C. C.
P. A.(Cust.) 49 (Certiorari denied, 287
IT. S. 628).
13.
Petitioner may not resort to the extraordinary
remedy of mandamus since it has not exhausted
the opportunity for relief thus specifically afforded
by Congress.
Appellant in effect is asking this Court to declare that the review, set up by Congress which
has the exclusive power in the field of customs
collection and which has assumed to provide a
comprehensive procedure for their collection and
for the review of the acts of its agents engaged in
their collection, is inadequate.
Article 78 of the Civil Practice Act (Section
1285, Subdivision 4), in providing that it cannot
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58
be invoked when the determination sought to be
reviewed can be adequately reviewed by an appeal
to a court or to some other body or officer, is
codifying a rule that has always been fundamental
in certiorari and mandamus proceedings. This
rule is based on the fundamental principle that
these extraordinary remedies may be resorted to
only if imperatively necessary and as a last resort.
People ex rel. McMackin v. Board of
Police, 107 N. Y. 235;
People ex rel. Uvalde Asphalt Paving Co.
v. Seaman, 217 N. Y. 70, 76;
Matter of International Railway Company v. Schwab, 103 App. Div. 68.
It is for this reason that it has always been a
requirement that every other recourse for review
must be exhausted before a court will presume to
take jurisdiction and assert its power over the act
of a coordinate branch of the Government. Prior
to the present Article 78 of the Civil Practice Act
the same provision as that contained in Section
1285, Subdivision 4, existed both in the former
Civil Practice Act and the Code of Civil Procedure,
Section 2122, in the case of certiorari proceedings.
In the case of mandamus proceedings the courts
themselves without express statutory direction applied the same rule and held that mandamus would
not issue where another remedy or appeal was
available.
Towers Management Corporation v.
Thatcher, 271 N. Y. 94;
Calf Leather Tanners Ass'n v. Morgenthau, 80 F.(2d) 536 (App. D. C. 1935),
certiorari denied 297 U. S. 718 (1936).
In the Calf Leather Tanners Association case
last cited the court declined to issue a writ of
mandamus against the Secretary of the Treasury
to make a certain finding as required by the Tariff
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Federal Reserve Bank of St. Louis
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•
60
States ex rel. Carroll Electric Co. v. McCarl,
56 App. D. C. 49, 8 F.(2d) 910."
Appellant's contention that an appeal to the
United States Customs Court from any action of
the collector in liquidating duties on the basis of
the rates certified by respondent, would not be
such an "appeal" as is contemplated by the Civil
Practice Act because respondent would not be
before the Customs Court as a party, is without
force. The fact is that review by the Customs
Court will give petitioner the same protection
against an unlawful levy based upon wrongful
certification by respondent, whether respondent
is a party or not. On such a review any improper
levy may be nullified, and any wrongful certification by respondent may be set aside, without respondent being a party. The Customs Court has
exclusive jurisdiction over such matters and must
exercise its jurisdiction in a proper case.
David L. Moss Co., Inc. v. United States,
103 F.(2d) 395, 397-398 (1939). quoted
above at pages 55-56 of this brief;
Coltman Co. v. Dailey, 94 F. (2d) 85
(C. C. A. 4th 1938);
Riccomini v. United States,69 F.(2d) 480,
483-484 (C. C. A. 9th, 1934).
If it should be determined by the United States
Customs Court that the liquidation of the duties
at the rates already certified was erroneous and
if respondent's cooperation should be necessary
to the ultimate liquidation at proper rates, there
can be no question but that the judgment of
the United States Customs Court would be effective in accomplishing that result. This Court
will not indulge in the presumption that if it
were determined by a court of competent jurisdiction that respondent had failed to discharge
properly the duty imposed upon it by statute, re-
•
61
spondent would thereafter disregard its duty and
fail to perform it in conformity with the court's
decision.
In Miguel v. McCarl, 291 U. S. 442 at 456, the
Supreme Court said, in a case where it refused
a mandamus against the Comptroller General,
after having decided that he had acted improperly,
in withholding a voucher, and preventing its
payment:
"But it is not to be supposed that, upon having his attention called to our decision, the
Comptroller General will care to retain possession of the voucher or that he will interfere
in any way with its payment."
When alleged erroneous findings affecting the
rate or amount of customs duties were made by
the President, by the Director of the Mint, or by
the Secretary of the Treasury the importers have
proceeded in the Customs Court directly against
the United States without it ever having been
doubted that the judgments rendered therein
would be conclusive and binding upon the officials
who made the findings in question even though
such officials were not actual parties to the proceedings.
William A. Foster & Co. (Inc.) v. United
States, 20 C. C. P. A. (Customs) 15
(1932), supra;
David L. Moss Co., Inc. v. United States,
103 F. (2d) 395, supra;
Amalgamated Textiles v. United States,
84 F.(2d) 210 (Cust.& Pat. App.1936),
supra.
As we have shown under Point II, we contend
that on the authorities, the determinations and
certifications of the Federal Reserve Bank and
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62
the publications of value by the Secretary of the
Treasury under Section 522 of the Tariff Act
of 1930 are not susceptible of review by any
court. If, however, it should be held that they
are open to judicial examination, they "can be
adequately reviewed by an appeal" (within the
meaning of Section 1285 of the Civil Practice Act)
to the United States Customs Court upon proper
protest filed after the final liquidation of duties
on the hides in question. Accordingly, it is clear
that the procedure under Article 78 of the Civil
Practice Act is not available to review the determinations in question.
POINT IV.
The determinations of respondent sought to
be reviewed herein became final and binding
on petitioner on December 19, 1935, January
15, 1936 and February 8, 1936, respectively,
and accordingly this proceeding was not instituted within the four months' period limited
by law for the commencement thereof.
Certainly this is a proceeding to review a determination. Respondent concededly did determine and certify rates for the dates in question.
Even though this proceeding be regarded as a
mandamus proceeding to compel respondent to
make a different determination, it is one to review
a determination already made and not a proceeding to compel performance where there has never
been any performance at all. Article 78 of the
Civil Practice Act by its terms recognizes that
where there has been an act of the body or officer in
question, even though the proceeding take the
111
63
form of a mandamus proceeding, it is a proceeding "to review a determination". Section 1284
of this Article provides:
"2. The expression to review a determination' refers to the relief heretofore available
in a certiorari or a mandamus proceeding for
the review of any act or refusal to act of a
body or officer exercising judicial, quasijudicial, administrative or corporate functions, which involves an exercise of judgment
or discretion."
A.
Where a proceeding under Article 78 of the
Civil Practice Act is to review a determination
already made the act provides that the proceeding must be instituted by service of the petition
within four months after the determination to be
reviewed becomes final and binding. Section 1286
of the Civil Practice Act provides as follows:
"§ 1286. Limitations of Time. A proceeding under this article to review a determination or to compel performance of a duty
specifically enjoined by law, must be instituted
by service of the petition and accompanying
papers, as prescribed in section twelve hundred eighty-nine of this article, within four
months after the determination to be reviewed
becomes final and binding, upon the petitioner
or the person whom he represents, either in
law or in fact, or after the respondent's
refusal, upon demand of the petitioner or the
person whom he represents, to perform his
duty, as the case may be; m."
.
Petitioner instituted this proceeding by serving
a petition on the respondent on March 23, 1939.
This was more than three years after the certifications were made by respondent in December 1935
and in January and February 1936.
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•
64
B.
Appellant contends, however, that the determination in question has not yet become final and
binding upon it. It contends that it will not become final and binding upon it until sixty days
after the date of the decision of the Collector
which shall finally liquidate the duties—at some
unknown date in the future.
Assuming, arguendo, that this reasoning is
sound, the contention is fatal to appellant. On
elementary principles of jurisprudence a court
cannot be asked to apply a remedy of the extraordinary nature of mandamus while the question
is moot and not yet final and binding upon petitioner. The statute so expressly provides (C.P. A.
§ 1285). It provides that the procedure under
Article 78 of the Civil Practice Act shall not be
available to review a determination—
"3. Where it does not finally determine
the rights of the parties with respect to the
matter to be reviewed."
Petitioner is thus definitely faced with this
dilemma:
A. If the determinations made by respondent
became final and binding in 1935 and 1936, this
proceeding is definitely barred, the period of
limitation imposed by the statute having long since
expired.
B. If the determinations are not yet final and
binding, he has no standing in Court because he is
seeking to review determinations which have not
finally determined his rights with respect to the
matter to be reviewed.
We submit, however, that this determination did
become final and binding upon appellant when the
•
65
certifications were made by respondent to the
Secretary of the Treasury and published by the latter and that the four months' period began to run
on the dates of those determinations in December
1935 and January and February 1936. It is to be
noted that the Civil Practice Act uses the language
"within four months after the determination
to be reviewed becomes final and binding, upon
the petitioner or the person whom he represents, either in law or in fact w."
The allegation of the petition that
"the collector will be required to use the rates
so certified by the defendant to the Secretary
of the Treasury" (fol. 51)
recognizes that the rates so certified must now be
final and binding "in law" and "in fact", for
how else could the petition assume that the Collector would be required to use such rates.
Surely the only test as to the finality of an
administrative act is whether anything more needs
to be done to complete the act or whether there is
provided a rehearing and reconsideration by the
officer himself. Thus in Matter of Weinstock v.
Hammond, 270 N. Y. 64, this Court held that the
action was barred because it had not been brought
within four months after the determination of the
officer in question since he had no unconditional
power to re-hear the question. In the case cited
by appellant, on the other hand, Matter of N. Y. C.
R. R. Co. v. Public Service Commission, 238 N. Y.
132, a rehearing before the Commission was
specifically provided.
Of course there is no provision for a re-consideration by the respondent after its determination and certification has been made.
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66
C.
Appellant's argument that no period of limitation began to run until it should make a demand
amounts to a contention that there is no limit
whatsoever to the time within which it may seek
a review of the determinations by the Federal
Reserve Bank. Even where it has been held that
a demand was necessary, the court will in mandamus or certiorari proceedings bar recovery unless demand is made promptly.
DeLack v. Greene, 170 Misc. 309, 11
N. Y. S. (2d) 149;
Insley v. Shanahan, 173 Misc. 33, 17
N. Y. S. (2d) 25.
As the court said in the DeLack case, supra, at
pages 311-312:
"Read literally, the time limitation of the
statute in a proceeding to compel the performance of a duty does not begin to run until
there has been a demand and a refusal. If
relief must always follow in a case having
merit in substance instituted within four
months after demand and refusal to perform
a duty, the power of indefinite suspension of
the limitations of time would reside in the
petitioner by a refusal, failure or neglect to
make expeditious demand that the duty affecting his rights be performed. This right
to suspend indefinitely the time in which a
proceeding may be instituted, by not making
a demand, runs counter to the general purpose of the Legislature to simplify and coordinate the remedies now afforded by
Article 78."
It is apparent that this determination by the
Federal Reserve Bank was a matter of public
concern. By its act it determined a rate which
was used by the Collector of Customs in the ap-
I
67
plication of duties on all merchandise exported on
the day's in question and it was important to all
importers alike. It has long been recognized that
review of determinations made by public officers
of public importance must be expeditiously sought
whether by certiorari or by mandamus.
Under the provisions of the Civil Practice Act
before the passage of Article 78 the same four
months' limitation was the rule of general application. Under these former provisions of the
Civil Practice Act authorizing certiorari to review,
a specific limitation of four months was prescribed.
(See Civil Practice Act in effect in 1935 and 1936,
Section 1288.) The courts regarded this limitation as so important that they applied the same
four months' limitation in mandamus proceedings, although not specifically prescribed by
statute, unless some excuse for delay was affirmatively shown by the petition.
People ex rel. Collins v. Ahearn,120 App.
Div. 95 (1st Dept. 1907);
Matter of Williams v. Pyrke, 233 App.
Div. 345 (4th Dept. 1931);
Matter of Upholf v. Roberts, 244 App.
Div. 596 (4th Dept. 1935);
See, Insley v. Shanahan, 173 Misc. 33, 17
N. Y. S. 2d 25.
We submit that to ask any court to review at
this late date a determination of public importance
thus made by the Federal Reserve Bank, on the
basis of which countless importations have been
made, public duties assessed and collected, a determination which concerns not only this petitioner but is of a general public character, would
not only be violating the specific limitations imposed by statute but would in addition contravene
the principle of prompt action demanded in all
cases where extraordinary remedies are invoked.
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68
CONCLUSION.
The order appealed from should be affirmed.
Respectfully submitted,
WINTHROP, STIMSON, PUTNAM & ROBERTS,
Attorneys for Respondent.
ALLEN T. KLOTS,
WALTER S. LOGAN,
RUFUS J. TRIMBLE,
G. SCHUYLER TARBELL, JR.,
JOHN H. WURTS,
Of Counsel.
Dated: May 21, 1941.
69
APPENDIX A
(T. D. 48064)
Foreign currencies-Rates of exchange
Rates of exchange certified to the Secretary of the Treasury by the Federal
Reserve Bank of New York under the provisions of section 522 (c), Tariff
Act of 1930
TREASURY DEPARTMENT,
OFFICE OF THE COMMISSIONER OF CUSTOMS,
Washington, D. C., December 21, 1935.
To Collectors of Customs and Others Concerned:
The appended table of the values of certain foreign currencies as certified
to the Secretary of the Treasury by the Federal Reserve Bank of New York under
the provisions of section 522 (c),, Tariff Act of 1930, during the period from
December 13 to 19, 1935, inclusive, is published for the information of collectors
of customs and others concerned.
(103512.)
JAMES H. MOYLE,
Commissioner of Customs.
Values of foreign currencies as certified to the Secretary of the Treasury by the Federal Reserve Bank of
New York under the provisions of section 522 (c), Tariff Act of 1930
PERIOD DECEMBER 13 TO 19, 1935, INCLUSIVE
Country
Europe:
Austria
Belgium
Bulgaria
Czchoslovakia
Denmark
England
Finland
France
Germany
Greece
Holland
Hungary
Italy
Norway
Poland
Portugal
Rumania
Spain
Sweden
Switzerland
Yugoslavia
Asia:
China
Do
Do
Do
Do
India
Japan
Singapore (S. S.)..
Australasia:
Australia
New Zealand
Africa: South Africa.
North America:
Canada
Cuba
Mexico
Newfoundland
South America:
Argentina
Brazil
Chile
Colombia
Uruguay
Name of Currency
Schilling
Belga
Lev
Krone
.do
Pound sterling
Markka
Franc
Reichsmark
Drachma •
Guilder
Pengo
Lira
Krone
Zloty
Escudo
Len
Peseta
Krona
Franc
Dinar
Chefoo dollar (Yuan)....
Hankow dollar (Yuan)..
Shanghai dollar (Yuan)..
Tientsin dollar (Yuan)
..
Hong Kong dollar
Rupee
Yen
Dollar
Dec. 14
Dec. 16
Dec. 117
Dec. 18
Dec. 19
1$0.187966 1$0.187966 1$0.187933 1$0.188016 '$0.188133 1$0.188083
.168600
.168588
.168679
.168615
.168866
.168480
1
.013375
1
.
1
.013375
1.013375
1.013375
1.013375
.041482
.041489
.041496
.041560
.041432
.041464
.219925
.219866
.219991
.219925
.219975
.219975
4.926500
4.927500
4.927833
4.927416
4.927500
4.927500
.021730
.021745
.021730
.021740
.021750
.021740
.066083
.066120
.066140
.065963
.066262
.066108
.402161
, .402130
.402228
.402407
.402178
.402292
.009385
.009380
.009382
.009390
.009365
.009385
.677114
.677192
.677028
.678050
.678585
.677307
1.296125
'.296125
.296250
1
.296125
1
1.296125
'.296125
1
.080762
1.080771
1.080692
1.080700
1.080780
1.080791
.247512
.247441
.247554
.247570
.247554
.247518
188660
.188760
.188900
.188600
.188780
.188580
.044840
.044783
.044816
.044820
.044820
.044857
.007875
.007875
.007900
.007875
.007875
.007868
.136692
.137214
.136896
.137014
.136928
.136988
.254054
.254029
.254045
.253958
.254016
.253979
.324092
.325285
.324614
.324328
.324453
.324435
.022962
.022900
.022925
.022950
.022950
.022887
.293333
.293750
.293333
.293750
.318125
.371900
.287190
.575625
.293750
.294166
.293750
.294166
.317343
.371940
.287275
.575625
.294166
.294583
.294166
.294583
.317500
.371965
.287110
.575625
.294375
.294791
.294375
.294791
.320937
.371840
.287335
.575625
.294166
.294583
.293958
.294583
.324062
.372025
.287335
.575625
.293333
.293750
.293333
.293750
.320312
.372085
.287460
.576250
'3.912812
13.943125
14.873250
13.916875
13.944687
14.876500
13.911250
13.941875
14.871000
'3,912812
13.943125
'4.872750
13.912812
'3.943125
'4.873250
'3.912812
13.943125
14.873000
Dollar
Peso
Peso (silver)
Dollar
.991761
.999200
.277675
.989375
.991536
.999200
.277675
.989125
.991484
.999200
.277675
.989125
.990026
.999200
.277675
.987625
.990312
.999200
.277675
.987875
.990703
.999200
.277675
.988250
Peso
Milreis
Peso
do
.do
.328325
1
.084170
1
.050950
1
1
.566600
.802750
1
.328300
1
.083836
1
.050625
1
1
.566600
1
.802125
.328500
1
1.083950
.050950
1
1.570600
'.802750
1
.328550
1.084161
1
.050950
1
.570600
.802750
1
1
.328550
.083916
1
1
.050950
1
.570600
.802750
1
1.328550
.083916
1
1.050950
1
.570600
,
.802750
Pound
do
....do
Nominal rates. Firm rates not available.
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Federal Reserve Bank of St. Louis
Dec. 13
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70
APPENDIX B.
Excerpt from House Document No. 15, 76th Congress, 1st Session, Twenty-second Annual Report of
the United States Tariff Commission (1938), Pursuant to Section 332 of the Act of Congress Approved
June 17, 1930 (46 Stat. 698).
On page 1 of the "Introduction and Summary",
after mentioning the British Protective Tariff of
1932, the report states:
"In Germany and other central European
countries, in southern and eastern Europe,
and in Latin America, licensing systems, exchange controls, clearing and compensation
agreements followed in rapid succession.
'
All of these developments have affected the
foreign trade of the United States."
Excerpts from "Regulation of Tariffs in Foreign
Countries by Administrative Action", United States
Tariff Commission Report to Committee on Ways
and Means, House of Representatives (1934).
• On pages 1 and 2 of the "Introduction" the
report states:
"Restrictive measures other than tariffs
In addition to tariff duties import trade has
been restricted or controlled by other measures, such as import quotas or prohibitions;
import restrictions with or without a system
of licenses; import monopolies; foreign exchange control; milling or mixing regulations;
and increased fees and restrictive regulations
of various kinds. Import quotas and exchange control measures may be even more
restrictive trade barriers than tariff rates.
* * *
Restrictions on foreign exchange transactions are applied in many countries, almost
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iiRIC'D IN PTLES
watacr1
-
F../ 2. 1941
-
October 20, 3941.
Zi,r. Walter S. 1ot7,an,
Vice President and General Counsel,
Federal Reserve Beni. of New York,
,
New York, New York.
Lear Mr. Logan:
Through Saturday's American Banker, I notice that the
New York Curt of Apeals has affirmed the favorable decision of
the lower court in the Armand Schmoll case and I wish to extend
my
hearty - congratulations.
When convenient, I hope that you will send us a copy of
the opinion.
With all best wishes, I
aCQrdially
Walter Wyatt,
General Counsel.
H COPY
_
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sEariii9
DEC 20 1940 .1• f,
00
D IN FILES
../v0,41A
'
December 20, 1940.
.alter :J. Logan,
Vice President and General Counsel,
Federal Aeserve Bank of New York,
New York, New York.
Dear Er. Logan:
Pressure of urgent official business has prevented
an earlier acknovaedgment of your letter of December 12, 1940,
regarding the case of Armand 6chmoll, LW. 114 The Federal Reserve Bank of liew York.
Please accept my hearty congratulations on the favorable decision obtained in this case and my thanks for your
courtesy in sending me copies of your briefs.
Lith all best wishes for a Eerry Christmas and a
Happy and Prosperous New Year, I an,
Walter Wyatt,
General Counsel.
:sad
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1
! FOR FILES ,
1
A. !'.1 A 1 ::\
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REC'D IN FILES SECTION
IL_
DEC 20 1940
FEDERAL RESERVE BANK
OF NEWYORK
December 12, 1940.
/ 416
Walter Wyatt, Esq., General Counsel,
Board of Governors of the Federal
Reserve System,
VJashington, D. C.
Dear niir. Wyatt:
I find that I have not sent you copies of our brief
in the Appellate Division, First Judicial Department, of the
Supreme Court of the State of New York, on the appeal from the
decision in our favor dismissing the petition of Armand Schmoll,
Inc. in the proceeding entitled Armand Schmoll, Inc. v. The Feueral Reserve Bank of New York. I therefore am sending you three
copies under separate cover.
The Appellate Division handed domn its decision t-n
November 8, 1940, unanimously affirming the decision of the court
without opinion.
On December 6, 1940, a motion in behalf of Armand Schmoll,
Inc. was presented to the Appellate Division for leave to reargue
or, in the alternative, to appeal to the Court of Appeals of New
York. I am also sending under the separate cover three copies of
our brief in opposition to that motion. In view of the importance
of the case, and the unusual questions involved, I think probably
the appeal will be allowed.
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Faithfully yours,
14
Walter S. Logan,
Vice President and General Counsel.
_
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L_._MALIA
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REC D IN FILES SECTION
DEC 20 1940
1
SUPREME COURT
APPELLATE DIVISION-FIRST JUDICIAL DEPARTMENT.
In the Matter of the Application
of
ARMAND SCHMOLL,
Petitioner-Appellant,
against
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respondent
File No.
6886-1939
AFFIDAVIT
AND
BRIEF
2
AFFIDAVIT IN OPPOSITION TO MOTION OF
PETITIONER-APPELLANT FOR A REARGUMENT
OR, IN THE ALTERNATIVE, FOR LEAVE TO
APPEAL TO THE COURT OF APPEALS.
STATE OF NEW YORK
COUNTY OF NEW YORK SS.
3
ALLEN T. IcLoTs, being duly sworn, deposes and
says:
That he is an attorney and counsellor-at-law and
a member of the firm of Winthrop, Stimson, Putnam & Roberts, the attorneys for the respondent,
and that this affidavit is submitted in opposition
to petitioner-appellant's motion for permission to
reargue the appeal herein, or in the alternative,
for leave to appeal to the Court of Appeals.
The petitioner-appellant's moving papers set
forth four grounds upon which it seeks reargu-
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4
Affidavit of Allen T. Klots.
ment and alleges the points which it claims were
overlooked or misapprehended by the Court in an
annexed brief, which is made a part of the affidavit
of Hersey Egginton.
Deponent believes that all of these alleged points
were fully and adequately briefed and argued
before this Court on October 25, 1940 and that
further argument would be a mere repetition of
the points already covered.
Deponent further urges for the reasons stated in
the annexed brief that the issues in this case do not
5 justify leave to appeal to the Court of Appeals.
Deponent respectfully requests that the motion
of the petitioner-appellant be denied in all respects.
ALLEN T. KLOTS.
Sworn to before me this
5th day of December, 1940.S
WALTER J. HOLZKA
Notary Public
County Certificates filed in
Richmond
New York County
N. Y. Co. Clk's No. 941, Reg. No. 111571
6 Commission expires March 30, 1941
SUPREME COURT
APPELLATE DIVISION—FIRST DEPARTMENT.
IN THE MATTER
of
f
the Application of
ARMAND SCHMOLL,INC.,
Petitioner-Appellant,
4-
against
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respoodent.
BRIEF OF RESPONDENT FEDERAL RESERVE
BANK OF NEW YORK IN OPPOSITION TO MOTION OF PETITIONER-APPELLANT FOR A REARGUMENT OR IN THE ALTERNATIVE FOR
LEAVE TO APPEAL TO THE COURT OF
APPEALS.
In this case petitioner
(a) waited more than three years after the act
complained of to bring mandamus, although the
statute prescribes a four months' period of limitation;
(b) ignored the whole system of Customs
Courts established by the Congress of the United
States, which has exclusive jurisdiction of customs matters under the Constitution of the
United States, for the express purpose of correcting any errors or improprieties in the administration of the customs law; and
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(c) chose instead to ask the courts of the State
of New York to mandamus a Federal agency to
perform a Federal statutory function in spite of
the principle established over one hundred years
ago by the highest court of the land to the effect
that the State courts were without power to issue
mandamus in such a case.
We respectfully submit that such a case merits
neither a reargument nor leave to appeal to the
Court of Appeals.
For a more detailed answer to petitioner's brief
on this application, we submit the following:
A.
Each of the points which petitioner-appellant
asserts was "mistakenly overlooked and misapprehended" by this Court has already been exhaustively briefed and argued on both sides.
(1) Appellant asserts that performance of a
specific government statutory function by a Federal agent may be directed by a State court by
mandamus because, as it claims, performance of
a State government function by a State agent has
been directed by a Federal court. In support of
its premise it cites Riggs v. Johnson County, 6
Wall. 166, wherein a Federal court by mandamus
compelled municipal authorities to lay a tax in
accordance with State statutes in order to satisfy
a judgment of the Federal court. Appellant then
argues that it must follow that a State court possesses jurisdiction to require Federal agents to
perform generally their Federal functions. This
argument has already been set forth in Appellant's Points, pages 41-42 and in Appellant's
Reply Brief, pages 15-16.
5
In the first place, we recognize no rule of
reciprocity such as that for which appellant contends. Secondly, the case of. Riggs v. Johnson
County is no authority for such a broad contention
and belongs to a very special category, namely,
where the power of the Federal court is being invoked solely in aid of execution of its own judgment. In that case the judgment had been rendered in the Federal court against the municipality
over which it admittedly had jurisdiction; the writ
of mandamus was the recognized means under
State practice of enforcing judgments against
municipalities; and the writ was issued by the Federal court as the only means of preventing its
judgment from being annulled by hostile action of
the State and of protecting the successful litigant
from State action which would impair the obligation of the litigant's contract in violation of the
rights guaranteed to him by the Federal Constitution. Thus Riggs v. Johnson County falls within
the principle that 'whenever any conflict arises between the State and the Federal governments the
authority of the United States is supreme. (See
excerpt from opinion in Tarble's case, 13 Wall.
397, quoted at pages 14-16 of Respondent's
Points.)
The decisions of the United States Supreme
Court in Northern Pacific Ry. Co. etc. v. North
Dakota, 250 U. S. 135, and M'Clung v. Silliman, 6
Wheat. 598, have been treated so exhaustively in
the briefs and the argument on both sides (Appellant's Points, pp. 17-23, 31-42; Respondent's
Points, pp. 12-18, 23-25, 29-32; Appellant's Reply
Brief, pp. 8-9, 16-17) that we cannot conceive of
their having been "mistakenly overlooked or
misapprehended" by this Court in reaching its
decision unanimously affirming the order below.
Any reargument with respect to the effect of these
decisions would be superfluous.
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(2) The question whether respondent's action
is reviewable by the United States Customs Court
and the Court of Customs and Patent Appeals so
that appellant is therefore not entitled to the
extraordinary relief provided by Article 78 of
the Civil Practice Act, has been thoroughly briefed
by both sides (Appellant's Points, pp. 52-54;
Respondent's Points, pp. 51-59; Appellant's Reply
Brief, pp. 18-24, 46-48). Appellant has raised no
point that has not already been covered completely, and reargument would add nothing to
what has already been said. The case cited by
appellant (Macy v. Browne, 224 Fed. 359, 362,
aff'd sub nom. Waite v. Macy, 246 U. S. 606) involved an injunction issued by a Federal court to
a Federal officer and obviously has no bearing on
the question of the power of a State court to control the performance of the Federal statutory
duties of a Federal officer or agent.
(3) The matter of whether appellant has instituted this proceeding within the time limited by
law has also been the subject of complete treatment in the briefs and on the argument (Appellant's Points, pp. 49-52; Respondent's Points,
pp. 59-65; Appellant's Reply Brief, pp. 49-54). In
its brief in support of this motion appellant asserts the novel proposition that no limitation commences to run until there has been compliance with
the statute. If this were true, it would completely
nullify the statute of limitations.
B.
Appellant's motion for leave to appeal to the
Court of Appeals should equally be denied. Leave
to appeal is sought on the grounds (1) that there
is a conflict between the decision of this Court
in this case and a decision of the Appellate
Division, Second Department, and (2) that this
7
case presents a matter of great public importance
which should be settled by the highest court of this
State.
(1) The decision of the Appellate Division, Second Department, in Matter of Hurley v. National
Bank of Middletown, 252 App. Div. 272 is not in
conflict with the decision in this case. In Matter
of Hurley the court granted a peremptory order
of mandamus permitting a stockholder of a
national bank to inspect the list of stockholders
required by statute to be kept by the bank. The
proceeding did not affect the bank in its capacity
as an instrumentality of the federal government,
and was in all respects the same as Matter of
Tuttle v. Iron National Bank, 170 N. Y. 9, Guthrie
v. Harkness, 199 U. S. 148, and other cases distinguished at pages 22 and 23 of Respondent's
Points. Matter of Hurley falls into an altogether
different category from the case at bar and
presents no conflict with the decision in this case.
(2) In urging the public importance of the issues
involved in this case Appellant argues that in
view of the great increase of Federal administrative agencies, boards and commissions which
is already taking place and the fact that "many
more agencies will be created in the future," the
State courts should undertake to assume jurisdiction over the functions of such Federal agencies by mandamus. The mere statement of this
argument emphasizes the incongruous and Gargantuan nature of the task which Appellant is
asking the State courts now to assume
Finally we again urge that the principal question presented in this case was decided over 100
years ago by the United States Supreme Court
and its decision has been followed and approved
by that court and other Federal and State courts
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down to the present time. We respectfully submit
that since the question in issue has been finally and
authoritatively determined by the United States
Supreme Court, there is no occasion at this time
for having it passed upon by the Court of Appeals
of this State.
Respectfully submitted,
WIN1HROP, STIMSON, PUTNAM & ROBERTS
Attorneys for Respondent
ALLEN T. KLOTS,
WALTER S. LOGAN,
RUFUS J. TRIMBLE,
G. SCHUYLER TARBELL, JR.,
JOHN H. WURTS,
Of Counsel.
Dated: December 5, 1940.
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FtEC'D IN FILES
SECTION
{Tr 20 1940
To be argued by
ALLEN T. KLOTS.
Supreme Court of the State of New York
APPELLATE DIVISION—FIRST JUDICIAL DEPARTMENT.
ARMAND SCHMOLL, INC.,
Petitioner-Appellant,
against
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respondent.
POINTS
OF
RESPONDENT
FEDERAL RESERVE BANK OF NEW YORK.
Statement.
This is a proceeding in the nature of mandamus
instituted under Article 78 of the Civil Practice
Act. The petition sought to obtain an order directing respondent, Federal Reserve Bank of New
York, to certify nunc pro tune certain rates of
exchange in dollars for Brazilian milreis in place
of certain rates theretofore certified by respondent
pursuant to the provisions of Section 522(c) of
the Tariff Act of 1930 (Chapter 497, 46 Stat. 739;
31 U. S. C. A., Section 372). Respondent made
application to dismiss the petition as a matter of
law and the application was granted. This is an
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appeal from the order of the Special Term (as
resettled) which dismissed the petition (fols. 7-18).
The opinion of the Special Term is printed at
folios 120-126 of the Papers on Appeal.
Respondent's application (fols. 82-86), pursuant to Section 1293 of the Civil Practice Act, for
an order dismissing said petition as a matter of
law specified objections to the petition in point
of law as follows:
1. That the Court has not jurisdiction of
the subject of this proceeding;
2. That the petition does not state facts
sufficient to entitle petitioner to the relief
prayed for or to any relief;
3. That this proceeding was not instituted
within the time limited by law for the commencement thereof; and
4. That the determination sought to be reviewed can be adequately reviewed by an appeal to a court or to some other body or officer.
Respondent's application was granted at Special
Term upon the ground that the Supreme Court
of the State of New York has not jurisdiction
of the subject of this proceeding. Having determined that it was without jurisdiction in the
premises, the Court below found it unnecessary
to consider the other objections presented by respondent.
Facts.
In this proceeding under Article 78 of the Civil
Practice Act, petitioner sought to have the Court
below review certain determinations made by respondent Federal Reserve Bank of New York on
certain days in 1935 and 1936 of the rate of exchange in dollars for Brazilian milreis. The rates
3
sought to be reviewed were determined by the Federal Reserve Bank, and certified by it to the Secretary of the Treasury of the United States on the
dates in question pursuant to certain express provisions of the Tariff Act of the United States.
The rates were to be used and were used pursuant to the terms of that Act as the measure of
the value of Brazilian milreis in terms of the
United States dollar for the purpose of computing
customs duties levied upon goods exported from
Brazil to the United States on the respective dates.
The petition prayed that an order be granted by
the Court below directing the Federal Reserve
Bank to determine and certify to the Secretary of
the Treasury nunc pro tunc as of these same dates
in 1935 and 1936 rates of exchange for Brazilian
milreis different from those already certified by
the Federal Reserve Bank to the Secretary of the
Treasury on the dates in question. The petition
was served on March 23, 1939, more than three
years after the certifications complained of.
The United States of America submitted to the
Court below a petition with an affidavit executed
by Henry Morgenthau, Jr., Secretary of the Treasury of the United States (fols. 87-99) showing the
special interests of the United States in this proceeding and pointing out that it is predicated upon
a Federal statute of fundamental importance in
the collection of customs duties, and upon such
petition and affidavit the Court below granted leave
to the United States to file a brief as amicus curiae.
A similar application has been made to this Court.
Respondent's application for an order dismissing the petition as a matter of law, pursuant to section 1293, Article 78 of the Civil Practice Act, was
based on the facts alleged in the petition, assuming
them for the purposes of the application to be
true. Respondent submitted no affidavit in support of its application.
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The Facts as Alleged in the Petition.
The petitioner is an importer. In December
1935 and in January and February 1936 he bought
in Brazil certain cattle hides. These hides were
imported by him into the United States in January
and February 1936 (fols. 23-24).
The hides were subject to an ad valorem .duty
of 10%. The Collector of Customs caused the
hides to be appraised at a certain number of
niilreis and then converted the appraised value
into dollars as required by law, and liquidated the
duty at 10% of the converted value .(fols. 24-26).
The liquidations of the duties upon petitioner's
hides so made by the Collector have been set aside
upon grounds not involved in this case (fols. 52-53).
The petition alleges, however, as a conclusion of
law, that the Collector will be required by law,
when the custom duties on these hides are finally
liquidated, to use the rates which were certified by the Federal Reserve Bank and published
by the Secretary of the Treasury of the United
States on the respective dates of the exportation
of the hides from Brazil (fol. 53). It alleges that
the rates used by the Collector in liquidating the
duties previously assessed which have been set
aside on other grounds were in fact these same
rates (fols. 33-37).
The acts of determination and of certification
of these rates were done by the Federal Reserve
Bank pursuant to the Tariff Act of the United
States. The Tariff Act requires that the Federal
Reserve Bank of New York shall determine the
buying rates in the New York market for cable
transfers payable in foreign currencies and shall
certify such buying rates daily to the Secretary of
the Treasury who shall make them public at such
times and to such extent as he deems necessary.
Section 522 of the Tariff Act of 1930 (Chap. 497,
1
46 Stat. 739; 31 U. S. C. A., Sec. 372) (fols. 2732). A "cable transfer" may be defined as an
order transmitted by cable to pay a certain sum of
money to a designated payee. Djorup, "Foreign
Exchange Accounting", 1926, ed., p. 44; Oshinsky
v. Taylor,172 N. Y. Supp. 231, 232 (App. Term 1st
Dept. 1918); and see Strohmeyer & Arpe Co. v.
Guaranty Trust Co., 172 App. Div. 16, 19 (1st
Dept. 1916).
The petition then alleges as further con'clusions
of law that the rates of exchange certified by the
Federal Reserve Bank to the Secretary of the
Treasury on the dates in question, to wit, December 19, 1935, January 15, 1936 and February 8,
1936, were not the proper rates which should have
been determined to be the buying rates in the New
York market for cable transfers payable in the foreign currency at noon on the days of exportation,
respectively; and that in certifying the rates in
question to the Secretary of the Treasury, the Federal Reserve Bank acted in complete disregard of
the provisions of the statute and in an unreasonable, arbitrary and capricious manner,in violation
of its duties and in flagrant abuse of any discretion
conferred upon it by the statute (fols. 47-50).
Petitioner sought in the Court below an order directing the respondent in effect to redetermine and
recertify to the Secretary of the Treasury Ittline
pro tune as of the dates in 1935 and 1936 in question the foreign exchange rates for Brazilian milreis (fols. 61-62). The conclusions of law, and
characterization of respondent's acts referred
to above (as distinguished from any statements of
fact which are well pleaded) are not, of course,
taken as true for the purposes of respondent's
application to dismiss the petition. They are referred to at this point merely to indicate the theory
on which the petition is based.
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The Statute of the United States under Which the Federal Reserve Bank functioned in determining
the Foreign Exchange Rate
The statute which authorized and directed the
Federal Reserve Bank of New York to determine
the foreign exchange rates in question and certify
them to the Secretary of the Treasury of the
United States is Section 522, Chapter 497, Title IV
of the Tariff Act of 1930 (31 U. S. C. A., Sec. 372).
This statute reads as follows:
"(a) Value of Foreign Coin Proclaimed by
Secretary of Treasury.—Section 25 of the Act
of August 27, 1894, entitled 'An Act to reduce
taxation, to provide revenue for the Government, and for other purposes,' as amended, is
reenacted without change as follows:
" SEc. 25. That the value of foreign coin
as expressed in the money of account of the
United States shall be that of the ,pure metal
of such coin of standard value; and the values
of the standard coins in circulation of the various nations of the world shall be estimated
quarterly by the Director of the Mint and be
proclaimed by the Secretary of the Treasury
quarterly on the 1st day of January, April,
July, and October in each year.'
"(b) Proclaimed Value Basis of Conversion.—For the purpose of the assessment and
collection of duties upon merchandise imported into the United States on or after the
day of the enactment of this Act, wherever it
is necessary to convert foreign currency into
currency of the United States, such conversion, except as provided in subdivision (c),
shall be made at the values proclaimed by the
Secretary of the Treasury under the provisions of Section 25 of such Act of August 27,
1894, as amended,for the quarter in which the
merchandise was exported.
7
"(c) Market Rate When No Proclamation.
—If no such value has been proclaimed, or if
the value so proclaimed varies by 5 per centum
or more from a value measured by the buying
rate in the New York market at noon on the
day of exportation, conversion shall be made
at a value measured by such buying rate. If
the date of exportation falls upon a Sunday
or holiday, then the buying rate at noon on
the last preceding business day shall be used.
For the purpose of this subdivision such buying rate shall be the buying rate for cable
transfers payable in the foreign currency so
to be converted; and shall be determined by
the Federal Reserve Bank of New York and
certified daily to the Secretary of the Treasury, who shall make it public at such times
and to such extent as he deems necessary. In
ascertaining such buying rate such Federal
Reserve Bank may in its discretion (1) take
into consideration the last ascertainable transactions and quotations, whether direct or
through exchange of other currencies, and (2)
if there is no market buying rate for such
cable transfers, calculate such rate from actual transactions, and quotations in demand
or time bills of exchange."
It will be noted that this statute directs the
Director of the Mint to estimate the value of
foreign coin and the Secretary of the Treasury to
proclaim the value thus estimated. It then provides that the value thus estimated and proclaimed
shall be used in connection with the assessment
and collection of duties but that if the value so
proclaimed varies by 5% or more from the value
measured by the buying rate for cable transfers
in the New York market at noon on the day of
exportation, the conversion shall be made at the
value measured by such buying rate. The petitioner alleges that in this case the value did vary
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by more than 5% and that, therefore, the rate to
be used was the buying rate certified by the Federal Reserve Bank (fols. 36-37, 51).
The Nature of Respondent Federal Reserve Bank
The Federal Reserve Bank was created by act
of Congress known as the Federal Reserve Act
approved December 23, 1913 and from time to
time thereafter amended. It has only such powers
as it has been granted by the laws of the United
States. It acts under the supervision and regulations of the Board of Governors of the Federal
Reserve System (known prior to the Banking Act
of 1935 as the Federal Reserve Board) and this
Board is composed exclusively of officers of the
United States appointed by the President of the
United States of America by and with the advice
and consent of the Senate (Federal Reserve Act,
Sec. 10; 12 U. S. C. A., Sec. 241).
The Federal Reserve Bank by law performs
numerous functions of the United States Government as its agent. Thus, it issues currency of the
United States, including Federal Reserve Notes,
which are obligations both of the Bank and of the
United States (Federal Reserve Act, Sec. 16;
12 U. S. C. A., Sec. 411). Again, as required by
Section 15 of the Federal Reserve Act (12 U. S.
C. A., Sec. 391), it acts as depositary and Fiscal
Agent of the United States, performing various
duties as Fiscal Agent and engaging in various
operations and transactions, acting under the direct authority of the Secretary of the Treasury
of the United States.
See
Federal Reserve Bank of Richmond v.
Kahn, 77 F. (2d) 50, 51 (C. C. A. 4th
1935).
9
The function prescribed for the Federal Reserve
Bank of New York by law in this case is another
instance where the Federal Reserve Bank of New
York is acting in performance of a governmental
duty in aid of the administration by the United
States Government of one of its primary executive
functions, namely, the collection of customs
revenue. We shall discuss this more fully hereafter.
ARGUMENT.
Respondent respectfully submits that the order
of the Court at Special Term dismissing the petition in this proceeding must be affirmed for the
following reasons, any of which is sufficient of
itself to require such affirmance:
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1. Under Section 522(c) of the Tariff Act
of 1930 respondent Federal Reserve Bank of
New York functions as an agency and instrumentality of the United States Government
in the administration and execution of the
customs laws and it is not within the power
or jurisdiction of the courts of the State of
New York either to direct or control the acts
performed by respondent in that capacity.
2. On the basis of repeated decisions of
the United States Supreme Court and other
courts, the rates determined and certified by
respondent for use in connection with the collection of customs are conclusive and binding
and not subject to review in any court.
3. If the action of the Federal Reserve
Bank is reviewable at all it is reviewable in
the United States Customs Court following
proper protest by petitioner against the deci-
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sion of the Collector yet to be made, and petitioner is not entitled to the extraordinary
relief provided by Article 78 of the Civil Practice Act.
4. The determinations of respondent
sought to be reviewed herein became final and
binding on petitioner on December 19, 1935,
January 15,1936 and February 8,1936, respectively, and accordingly this proceeding was
not instituted within the four months' period
limited by law for the commencement thereof.
POINT
I
The courts of the State of New York do not
have jurisdiction of the subject of this proceeding.
The petition herein was dismissed by order of
the Court at Special Term on the ground that a
court of this State does not possess jurisdiction
to issue directions to the Federal Reserve Bank
of New YOrk in connection with the latter's performance of its functions as an agency and instrumentality of the United States Government in the
administration and execution of the customs laws.
This disposition of the proceeding is clearly right,
and should be affirmed. The memorandum opinion
of Mr. Justice Rosenman below (fols. 120-126)
presents a concise summary of the reasons why
the courts of this State do not have jurisdiction
of the subject of this proceeding.
A.
The assessment and collection of customs duties
is a power delegated exclusively to the Federal
Government by Article I, Section 8, clause 1 of
11
the Constitution of the United States, which provides:
"The Congress shall have Power To lay and
collect Taxes, Duties, Imposts and Excises,
Congress is also expressly empowered by Article
I, Section 8, clause 5 of the Constitution:
To coin
"
' Money, regulate the Value
thereof, and of foreign Coin, * *
In the course of exercising its power to impose
customs duties, it becomes necessary for the Congress of the United States to regulate and fix the
values of foreign coins and currencies in order that
the value of merchandise purchased in foreign
countries may be translated into dollars for the
purpose of assessing ad valorem duties. In the
exercise of these powers, Congress has set up in
the Tariff Act the administrative machinery under
which this process of converting into dollars the
value of imports, initially expressed in foreign
currency, and of levying duties on the basis
thereof, is carried out (Section 522 above quoted).
By this statute Congress has made the Federal
Reserve Bank of New York an essential cog in
this machinery. Under subdivision (c) of this
section of the statute the Federal Reserve Bank
of New York is made the agency of the Federal
Government to determine on each business day the
buying rates at noon in the New York market
for cable transfers payable in the respective
currencies of the various foreign countries and to
certify the same to the Secretary of the Treasury
so that such rates may be made available through
him to Collectors of Customs as the values at
which the respective foreign currencies shall be
converted into currency of the United States for
the purpose of the assessment and collection of
ad valorem duties on imports.
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Thus the action of the Federal Reserve Bank
of New York which is challenged in this proceeding
was undertaken by it as an agency and instrumentality of the United States in performance of
the duty expressly imposed upon it by a statute
enacted by Congress in the exercise of both of the
constitutional powers and functions mentioned
above. The petitioner in this proceeding seeks an
order of the Supreme Court of this State (1)
determining that respondent's previous action as
such agency and instrumentality in certifying
rates for Brazilian milreis for the dates in question did not comply with the terms of the Federal
statute, and (2) directing respondent to certify
• different rates for such dates nunc pro tunc. The
decision of the Court at Special Term dismissing
such petition follows the established rule that a
State court has no power thus to direct or control
the functioning of the Federal Government
through its agents.
Ill'Clung v. Silliman,6 Wheat.598 (1821);
Tarble's Case,13 Wallace, 397 (1872);
Ex Parte Shockley, 17 F.(2d) 133 (D. C.
N. D. Ohio 1926);
State ex rel. Wilcox v. Curtis, 35 Conn.
374 (1868);
Hinkle v. Town of Franklin, 118 W. Va.
586, 191 S. E. 291 (1937);
Goldstein v. Somervell, 170 Misc. 602, 10
N. Y. S. 2d 747 (1939);
See Kendall v. United States, 12 Peters
524,617 (1838);
Territory v. Lockwood, 3 Wall. 236,
239 (1866);
In re Blake,175 U. S. 114,119 (1899);
United States v. Owlett, 15 F. Supp.
736 (1936).
The case of M'Clung v. SilliMan, supra, heads
the unbroken line of decisions establishing this
principle beyond question. In that case the re-
13
lator sought by mandamus in a State court in Ohio
to compel the Register of the United States Land
Office in Ohio to issue certain legal documents to
which relator claimed he was entitled. The Supreme Court held that the State court had no
power to issue a mandamus to an officer of the
United States. The Court, at page 603, said:
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"Whether a state court generally possesses
a power to issue writs of mandamus, or what
modifications of its powers may be imposed
on it, by the laws which constitute it, it is correctly argued that this court cannot be called
upon to decide. But when the exercise of that
power is extended to officers commissioned by
the United States, it is immaterial under what
law that authority be asserted, the controlling
power of this court may be asserted on the
subject, under the description of an exemption
claimed by the officer over whom it is exercised.
"It is not easy to conceive on what legal
ground a State tribunal can, in ally instance,
exercise the power of issuing a mandamus to
the register of a land-office. The United States
have not thought proper to delegate that
power to their own Courts. But when in the
cases of Marbury v. Madison, and that of
M'Intire v. TVood, this Court decided against
the exercise of that power, the idea never presented itself to any one, that it was not within
the scope of the judicial powers of the United
States, although not vested by law, in the
Courts of the general Government. And no
one will seriously contend, it is presumed, that
it is among the reserved powers of the States,
because not communicated by law to the Courts
of the United States
"There is but one shadow of a ground on
which such a power can be contended for,
which is, the general rights of legislation
which the States possess over the soil within
their respective territories? It is not now
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necessary to consider that power, as to the
soil reserved to the United States,in the States
respectively. The question in this case is, as
to the power of the State Courts, over the
officers of the general Government, employed
in disposing of that land, under the laws passed
for that purpose. And here it is obvious, that
he is to be regarded either as an officer of that
Government, or as its private agent. In the
one capacity or the other, his conduct can
only be ,controlled by the power that created
him; since, whatever doubts have from time
to time been suggested, as to the supremacy
of the United States, in its legislative, judicial,
or executive powers, no one has ever contested
its supreme right to dispose of its own property in its own way. * * *"
The reasoning which underlies the principle that
it is not within the jurisdiction of a State court
to direct or control the acts of officers or agents
of the Federal government in the performance of
duties imposed upon them by the laws of the
United States is even more clearly presented in
the opinion of Mr. Justice Field in Tarble's case,
13 Wall. 397. This case involved the jurisdiction
of the State court to inquire into the validity of
the enlistment of a soldier in the military service
of the United States and to direct an officer of the
United States Army to discharge the soldier from
arrest on the ground that he had not been enlisted
in conformity with the laws of the United States.
Mr. Justice Field said at page 406:
"It is in the consideration of this distinct
and independent character of the government
of the United States, from that of the government of the several States, that the solution
of the question presented in this case, and in
similar cases, must be found. There are
within the territorial limits of each State two
governments, restricted in their spheres of
action, but independent of each other, and su-
15
preme within their respective spheres. Each
has its separate departments; each has its distinct laws, and each has its own tribunals for
their enforcement. Neither government can
intrude within the jurisdiction, or authorize
any interference therein by its judicial officers
with the action of the other. The two governments in each State stand in their respective
spheres of action in the same independent relation to each other except in one particular,
'
that they would if their authority embraced
distinct territories. That particular consists
in the supremacy of the authority of the United
States when any conflict arises between the
two governments. The constitution and the
laws passed in pursuance of it, are declared by
the Constitution itself to be the supreme law
of the land, and the judges of every State
are bound thereby, anything in the constitution or laws of any State to the contrary notwithstanding.' Whenever,therefore any conflict arises between the enactments of the two
sovereignties, or in the enforcement of their
asserted authorities, those of the National
government must have supremacy until the
validity of the different enactments and authorities can be finally determined by the
tribunals of the United States. This temporary supremacy until judicial decision by the
National tribunals and the ultimate determination of the conflict by such decision, are essential to the preservation of order and peace,
and the avoidance of forcible collision between
"
'
the two governments.
And the Court concludes its review of the principles applicable in cases of this kind with the following forceful statement:
"Such being the distinct and independent
character of the two governments, within their
respective spheres of action, it follows that
neither can intrude with its judicial process
into the domain of the other, except so far as
such intrusion may be necessary on the part
of the National government to preserve its
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rightful supremacy in cases of conflict of authority. In their laws, and mode of enforcement, neither is responsible to the other. How
their respective laws shall be enacted; how
they shall be carried into execution; and in
what tribunals, or by what officers; and how
much discretion, or whether any at all shall be
vested in their officers, are matters subject to
their own control, and in the regulation of
which neither can interfere with the other."
The cases above cited represent attempts to invoke the aid of State Courts to compel action by
Federal officers and agents of various types. Thus,
iii ill'Clung v. Silliman,supra,as already indicated,
the relator sought in a State court a writ of mandamus to compel the Register of a Federal Land Office
to issue certain documents to which relator claimed
he was entitled under the Federal laws prescribing
the Register's duties. In Tarble's case, supra, an
attempt was made, by writ of habeas corpus issued
by a State court, to compel an officer of the United
States Army to release a person held for violation
of the military laws of the United States. In Ex
Parte Shockley, supra, a Director of Naturalization, who had been committed to jail by a State
court for contempt in failing to obey a writ of
mandamus issued by such court directing him to
furnish a certificate of arrival to an alien, was released on a writ of habeas corpus issued by the Federal court on the ground that the State court had
no jurisdiction to direct the performance of his
duties under the laws of the Federal Government.
We have found no case in which any court of the
State of New York, or of any other State, has
undertaken in any way to direct the action of a
Federal officer or agent in the performance of his
official duties for the United States. On the other
hand, the Supreme Court, Special Term, in New
York County, has recently held that a Federal
17
agency is immune from interference by injunction
in the State court.
Goldstein v. Somervell, Administrator of
Works Progress Administration for the
City of New York, 170 Misc. 602, 10
N. Y. Supp. 2d, 747 (1939).
The decisions of the highest courts of other States
are in complete harmony.
Hinkle v. Town of Franklin, et al., 118 W.
Va. 586, 191 S. E. 291 (1937);
State ex rel. Wilcox v. Curtis, 35 Conn.
374 (1868).
The authority of M'Clung v. Silliman, supra, is
recognized as unquestioned by writers of constitutional law. Willoughby on The Constitutional
Law of the United States, 1929 Edition, Volume I,
page 201, says:
"That a State court has no power to issue
a mandamus or writ of certiorari to a Federal
officer is not questioned."
See also
Rottschaefer on Constitutional Law,
(1939) pp. 111-115;
Merrill on Mandamus, p. 271.
The principle that State governments shall not
interfere with the functioning of the Federal Government finds application not only in preventing
interference by the State judiciary in performance of Federal functions, but it extends to interference by legislative and executive power of State
authorities with Federal functions.
Johnson v. Maryland,254 U. S. 51;
Ohio v. Thomas, 173 U. S. 276.
In the Johnson case, supra, the Supreme Court
held that an employee of the Post Office Depart-
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ment in driving a Government motor truck need
not qualify for a State license. Mr. Justice Holmes
said at page 57:
"It seems to us that the immunity of the
instruments of the United States from state
control in the performance of their duties extends to a requirement that they desist from
performance until they satisfy a state officer
upon examination that they are competent for
a necessary part of them and pay a fee for
permission to go on. Such a requirement does
not merely touch the Government's servants
remotely by a general rule of conduct it lays
hold of them in their specific attempt to obey
orders and requires qualifications in addition
to those that the Government has pronounced
sufficient."
In Ohio v. Thomas supra, it was held that the
superintendent of a Federal soldiers' home could
not be required to comply with the State law prohibiting the use of oleomargarine.
The authorities, as well as the constitutional
principle involved, imperatively indicate that no
State court has jurisdiction of the subject of this
proceeding, and, accordingly, the decision of the
Court at Special Term should be affirmed.
B.
From the foregoing it will be seen
(a) that the subject matter of this action is an
attempt by petitioner to impose by mandatory
decree of a state court directions upon a Federal
agent pertaining to the performance of its functions as an agency and instrumentality of the
United States Government, and
(b) that the State court has not jurisdiction of
such subject matter.
19
It will be seen that this rule is based on reason
and on authority and that the line of authorities
in support of it is unbroken and unshaken. The
arguments and authorities cited by appellant in
Point I of its brief are irrelevant and quite beside
the point.
1. Thus we do not dispute that Slate and Federal courts have concurrent jurisdiction in many
matters. We do not dispute that rights created
by Federal statutes may in many instances be
asserted in State courts or that Federal statutes
are the law of the land, including the land comprised within the boundaries of a state. Consequently the matter in Point I-A of appellant's brief is irrelevant to the point at issue.
What we do contend and what the court below
held is that the performance by a Federal governmental agency of a Federal governmental function prescribed by an act of Congress in a matter
in which the Federal Government has exclusive
jurisdiction cannot be directed by a state court
and that this principle was laid down by the
Supreme Court of the United States in M'Clung
v. Silliman, supra, and has been followed and approved by that court and other Federal and State
courts down to the present time and is today established beyond question. None of the cases cited by
appellant even challenges the principle. The rule
which is applicable in this case and which is the
basis of the decision of the court below is not as
petitioner implies—merely an exception to the general rule with respect to concurrent jurisdiction
of the State and Federal courts. On the contrary, it is an entirely separate and distinct rule
based upon an altogether different principle—
namely, that the enforcement of the performance
of Federal duties by Federal agents is not a sub-
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ject matter within the province of the State
courts.
2. Appellant argues that a mere claim that a
defendant was acting as a Federal statutory agent
does not make him immune from suit in the State
court if in fact he was exceeding his authority.
We concede that where a defendant has committed a private wrong and attempts to justify it
on the ground that he was acting with Federal
authority, he may be held for damages or enjoined or ejected if in fact the act was unlawful and
unauthorized. We do not dispute that as a necessary incident to the determination of whether such
a suit will lie against the defendant, the State
court may pass on the question as to whether the
act complained of was within the scope of the
defendant's authority as a Federal officer or
agent. This is the principle for which many of
the cases cited on pages 17 and 18 of appellant's
brief stand:
Teal v. Felton,1 N. Y. 537, aff'd. 12 How.
284;
United States v. Lee, 106 U. S. 196;
Bates v. Clark, 95 U. S. 204;
Wilson v. Mackenzie, 7 Hill 95;
Hoyt v. Gelston & Schenck, 13 Johns. R.
141, aff'd 3 Wheat 246;
Ripley v. Gelston, 9 Johns. R. 201.
These cases are all essentially the same in
principle, and the facts and the reasoning of the
Court of Appeals in Teal v. Felton are typical of
those in the other decisions. Teal v. Felton was
an action of trover brought in a New York State
court against a postmaster for his unlawful refusal to deliver a newspaper without payment of
additional postage. Thus the suit was against
the postmaster in his individual capacity for
wrongfully detaining the plaintiff's property. It
was held that the tortious act complained of was
21
not within the scope of defendant's authority as
postmaster and that therefore he was liable in
damages for his tort as any other private individual. So,in United States v. Lee,supra,plaintiff brought an action of ejectment against certain
officers and agents of the United States who
claimed to hold certain real estate for the United
States. The court held that the mere assertion of
authority from the Federal Government did not
make the defendants immune from suit by a private citizen seeking to enforce his private property rights and did not make it a suit against the
United States Government if in fact defendants
were exceeding their authority. The court held
that it could inquire whether in fact the defendants were exceeding their authority.
In other words, in each of the cases cited by
appellant the action of the court was directed
solely at the defendant's acts as an individual
outside the scope of his Federal authority, and
in no case did the court purport to assume jurisdiction over the acts of the defendant as a Federal
officer.
But that is not this case. Here a state court is
requested to direct a Federal instrumentality in
the performance of acts within the scope of its
Federal authority. Indeed, the very hypothesis
upon which the court's power is invoked is that
the act sought to be required is an act which respondent should perform within its authority as
a Federal instrumentality. The Court of Appealswas cognizant of this distinction when it stated in
Teal v. Felton, supra (at p. 546)—
"The plaintiff is not seeking redress under
the Post Office laws, or attempting to enforce
a penalty specifically imposed by them on the
postmaster for a fraudulent act pertaining to
his official duty. She simply seeks to recover
in an appropriate common law tribunal, corn-
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petent to afford a remedy, and in a form of
action more ancient than the Federal Constitution or laws, the value of her property."
Thus the cases cited by appellant in which state
courts have assumed jurisdiction over acts done
by Federal officers outside the scope of their authority, have no bearing on the question of a state
court's jurisdiction to direct performance of an
act by respondent conceded by appellant to be
within the scope of its statutory authority as agent
of the Federal Government. Such action by the
State court would operate directly upon respondent in its Federal function and upon the
function itself. The individual may not be immune from State process, but the Federal function
is immune under all of the authorities which we
have heretofore discussed. Petitioner in such a
case is not seeking a remedy , for a "personal
transitory tort" as appellant contends (p. 24). He
is seeking affirmative direction by a State court of
a Federal executive function. The subject matter
of such a proceeding is not within the province
of a State court. The appellant has cited no case
in his entire brief which indicates that any State
court has ever been upheld in exercising such
control over Federal agents.
A large group of the cases cited by appellant
on pages 17 and 18 of its brief are cases where
Congress has given the State court jurisdiction
over the agency and subject matter in question.
First National Bank v. Union Trust Co.,
244 U. S. 416;
First National Bank v. Missouri,263 U. S.
640;
First National Bank v. Commonwealth,
143 Ky. 816, 137 S. W.518; 34 L. R. A.
(N. S.) 54;
Matter of Tuttle v. Iron National Bank,
170 N. Y. 9;
23
Guthrie v. Harkness, 199 U. S..148;
Federal Land Bank v. Priddy, 295 U. S.
229;
State ex rel. Whittemore v. Barboglio, 63
Utah 432;
Robinson v. National Bank of Newberne,
81N. Y. 385;
Matter of Carlton, 7 Cow. 471.
For example, First National Bank v. Union Trust
Co.,supra,involved the question of the jurisdiction
of the State court to test the right of the national
bank to exercise fiduciary powers in accordance
with the provisions of Section 11(k) of the Federal
Reserve Act (12 U. S. C. A., Sec. 248). The decision of the Supreme Court rested upon the express ground that
"As the particular functions in question by
express terms of the act of Congress were
given only 'when not in contravention of state
or local law' the State court was, if not expressly, at least impliedly, authorized by Congress to consider and pass upon the question
of whether the particular power was or was
not in contravention of the State law." (p.
428).
The opinion of the court shows clearly that in the
absence of the question of the interpretation of
state law and the consent by Congress, the State
court would not have had jurisdiction. The proceeding at bar involves no interpretation of state
law and there has been no consent by Congress,
either express or implied, that the performance
of respondent's duty under the Tariff Act shall
be directed by a state court.
Northern Pacific Railway Co. and Walker D.
Hines, Director General of Railroads v. North
Dakota, 250 U. S. 135, cited on page 17 of appellant's brief, was a suit by the State Utilities Commission of North Dakota to prevent the Director
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General of Railroads, appointed under the Act of
Congress of August, 1916, from charging intrastate rates prescribed by him which were different
from those prescribed by the State Utilities Commission. The Supreme Court of the United States,
reversing the Supreme Court of the State of
North Dakota, held that the Director General had
authority to charge the rates complained of. This
was the only question litigated. The opinion indicates that the jurisdiction of the State court was
not questioned by the parties. The Supreme Court
stated at page 142:
"In the opinion of the court below it was
stated that all the parties admitted that there
was no question as to the jurisdiction to con."
'
sider the controversy
Even if the question of the right of the State
court to consider the controversy had been litigated, the Northern Pacific case would be no authority for appellant. It was a case where the
Federal officer was claimed to have encroached
upon and to have interfered with the State's
sovereignty by illegally imposing Federal rates on
intra-state commerce. The claim was that the
Federal officer acting outside the authority conferred upon him was usurping the State's functions to the injury of both the State and the
shipper. The Supreme Court held that the Federal officer had not exceeded his powers. This was
all it held. The court said by way of dictum that
if the Federal officer had been exceeding his powers as such the court could have restrained him.
In doing so the court would have been defending
a State function against the unauthorized and unlawful acts of the individual who was not acting
under the protection of any Federal authority.
The court did not say or in any way suggest, however, that a State court could ever direct a Fed-
25
eral officer to perform his duties as such. The
Supreme Court, at pages 151-152, said:
"The relief afforded against an officer of
the United States proceeded upon the basis
that he was exerting a power not conferred
by the statute, to the detriment of rights and
duties of the state authority and was subject,
therefore, to be restrained by state power
within the limits of the statute."
The Supreme Court clearly indicated, moreover, that if its decision on the merits had not disposed of the case it would have held that the suit
must be dismissed because it was in effect a suit
against the United States.
American Express Company v. Michigan, 177
U. S. 404, cited by appellant at page 17 of his brief,
has not even a remote bearing on the case at bar.
The Express Company, which was the respondent
in that case, was obviously not an agent of the
United States Government in any way. The statute simply imposed a tax by requiring that a
stamp should be affixed to the receipt for every
parcel shipped. The sole question was whether
the Express Company could pass along that tax to
the shipper and the court held that it could. There
is nothing in the opinion to indicate that the Express Company was regarded as the agent of the
United States to collect the tax or was regarded
other than as a taxpayer.
The cases which hold that Federal courts in
the District of Columbia have power to issue writs
of mandamus compelling officers and agents of
the United States to perform duties imposed
upon them by Federal law are obviously not in
point. The leading case on this subject cited by
petitioner is Kendall v. United States, 12 Peters
524. Its opinion expressly approves the prior decision of the court in M'Clung v. Silliman, supra,
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to the effect that it is beyond the power of a
state court to issue a mandamus to control a
Federal officer in the performance of his official
duties (pp. 617-618). The point in the Kendall
case was this: The Supreme Court had previously
held that the Federal Circuit Courts sitting in the
several states had no authority to issue writs of
mandamus because it had not been given them
by Congress. The question was whether Congress had given the Circuit Court for the District
of Columbia such power. It was held that this
court had been given such power. The Supreme
Court held that since Congress had vested in the
Circuit Court of the United States for the District
of Columbia jurisdiction "of all cases in law and
equity" such court was thereby authorized to
exercise the whole judicial power of the United
States, including the power to issue a writ of
mandamus to a Federal officer, although this
power had not been conferred upon the Circuit
Courts of the United States sitting in the several
states. The power of the court to issue this writ
against the Postmaster General of the United
States did not depend on any power which the
Circuit Court had acquired from the State of
Maryland, but to the Congress of the United
States, a sovereign authority, which had itself
created and defined the duties of the office of
Postmaster General. The Supreme Court, repeating what it had said in M'Clung v. Silliman
with reference to the question of jurisdiction to
control by mandamus the acts of agents of the
Federal Government, stated at page 618:
" idea never presented itself to anythe
one, that it was not within the scope of the
judicial power of the United States, although
not vested by law in the courts of the general
government. And no one will contend that it
27
was among the reserved powers of the states
because not communicated by law to the
courts of the United States."
There is nothing in the Kendall case suggesting
that the Maryland courts can issue mandamus to
Federal officers. The Maryland courts issue
mandamus to executive officers of that state;
therefore, by analogy the United States Court
for the District of Columbia can issue mandamus
to a Federal officer. That is all that case bolds
so far as the Maryland courts were concerned.
C.
Appellant claims that it is seeking a direction
merely that respondent should perform its duty
and not a direction as to the manner in which
it should perform. Its argument is that because
respondent has certified what appellant claims
are incorrect rates it has not acted at all. This
is mere quibbling. Respondent has, of course,
already acted and appellant is really asking the
state court to direct it to act differently. The
petition itself alleges that respondent certified to
the Secretary of the Treasury that the buying
rates in question were as set forth in Schedule A
annexed to the petition and it then proceeds to
set forth as Schedule A a copy of the rates so
certified (fols. 33-35, 64-66). The petition thus
shows that the respondent certified on December
19, 1935 the rate of $0.083916; on January 15,
1936 the rate of $0.0842 and on February 8, 1936
the rate of $0.0847. The actual certifications will
be found published in Treasury Decisions
TD48064; TD48100; and TD48155. Appellant's
argument that because respondent has acted
wrongly (according to appellant's contention) it
has not acted at all, could be made in any case
wherever a Federal agent is claimed to have per-
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formed improperly and used as a basis to justify
the state court taking jurisdiction and would in
fact nullify the principle laid down by 11I'Clung v.
Silliman and the other cases heretofore cited.
These cases make no such distinction, however. Under the rule established by them it is
immaterial whether respondent has or has not
acted under the statute. In neither instance has
the state court power to direct performance of
a Federal function. In 111'Clung v. Silliman,supra,
the Register of a Federal land office had refused
to issue documents to which the relator claimed
he was entitled under the Federal laws prescribing
the Register's duties. In Table's Case, supra,
a United States Army officer had refused to
release a person held for violation of the military
laws of the United States. In Ex Parte Shockley,
supra, a Director of Naturalization had refused
to comply with a writ of mandamus issued by a
state court directing him to furnish a certificate
of arrival to an alien. Each of these cases is,
therefore, authority for the proposition that the
state court has no jurisdiction to compel a
Federal officer or agent to perform an alleged
duty which he has refused to perform at all.
We submit, therefore, that the question of whether
respondent has or has not acted under the statute
is immaterial because even if respondent had not
so acted the state court has no jurisdiction to
compel it to act.
Certainly any order of the Supreme Court of
this State which would direct respondent nunc
pro tune to certify new or different rates for
Brazilian milreis on the dates in question and
which would, therefore, necessarily disregard or
annul the action already taken by respondent in
the discharge of its statutory duty, would clearly
constitute a direction of the manner of performance of that duty.
29
Appellant's contention would also nullify the
distinction made in Article 78 of the Civil Practice Act itself, the very statute under which petitioner has brought this proceeding. That statute
expressly recognizes the difference between a
proceeding "to review a determination" and a
proceeding "to compel performance of a duty
specifically enjoined by law"(C. P. A. § 1284). If
every time an officer had performed wrongly it
could be claimed that he had not performed at
all there would be no room for a proceeding "to
review a determination" in the nature of certiorari, but all proceedings could be brought in the
nature of a proceeding "to compel performance".
Obviously this was not contemplated by the New
York Civil Practice Act.
D.
Appellant's final assault on the decision of the
Special Term is an attempt to discredit the holding of the Supreme Court of the United States in
M'Clung v. Silliman, 6 Wheat. 598. This is the
first time that the authority of M'Clung v. MINman has been challenged by anyone so far as we
are aware. Not only has no case been found by
either appellant or ourselves which questions its
authority on this point and not only has it been
followed in the numerous cases herein pieviously
cited, but it has uniformly been interpreted by
text writers as standing for the very proposition
for which it is cited by Mr. Justice Rosenman, i. e.,
that a state court has no jurisdiction to issue
mandamus to a Federal officer.
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Merrill on Mandamus, p. 271;
Willoughby, Constitutional Law of thr
United States, 1929 Ed., Vol. 1, p. 201;
Rottschaefer, Constitutional Law, 1939,
See
pp. 111-115.
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1. Appellant first attempts to give the impression that the Supreme Court in the M'Clung case
passed on the merits of the question as to whether
the Register had properly refused the documents
demanded and that it dismissed the case on the
merits, holding that the Register had acted in
complete conformance with his statutory authority. Appellant then argues that this distinguishes it from the case at bar because the Federal Reserve Bank in our case, as appellant claims,
was not acting within its authority. Of course,
the Supreme Court made no such bolding as
appellant claims. The Supreme Court not only
failed to pass on the merits itself but it held that
the Ohio State court had no jurisdiction to go into
the merits and dismissed the case for want of
jurisdiction of the Ohio court. The Supreme
Court, therefore, did not hold that the Register
had authority to withhold the documents in question and did not sustain the Register on the merits.
The distinction which appellant attempts to draw
between that case and this case is, therefore,
groundless because we do not know whether the
Register was right or wrong. This point was
never decided.
2. Appellant then makes the equally amazing
contention that the Supreme Court of the United
States did not have jurisdiction to decide the case
of M'Clung v. Silliman. He makes this contention
in spite of the fact that the Court itself carefully
considered this very question, deciding that it
did have jurisdiction. Surely the Supreme Court
of the United States is the final and highest authority on the question of its own jurisdiction.
The Supreme Court affirmed the judgment of the
Ohio State Court solely on the ground that the
state court was without jurisdiction to issue
mandamus to a Federal officer, and this is the
proposition for which the case stands and has
been cited and relied upon ever since.
31
3. Appellant then contends that the M'Clung
case did not hold that the state court as such
was without jurisdiction to mandamus a Federal
officer but held rather that no court, state or Federal, had authority to control the Register because Congress was the only power that could do
so. In answer to this we only ask this Court to
read the opinion of the Supreme Court. It is
true that Mr. Justice Johnson held that neither
the Federal court nor the state court could
mandamus the Register but he held this as to the
state court expressly on the ground that the
power to mandamus an officer commissioned by
the United States was not one of the powers reserved to the states under the Constitution. At
page 604 he says:
"And no one will seriously contend, it is presumed, that it is among the reserved powers
of the states, because not communicated by
law to the courts of the United States."
Nothing could be clearer from the decision than
the holding that the state court had not the power
because that power was vested in the Federal
Government and had not been reserved to the
states. The Federal courts had not the power because it had not been conferred by Congress upon
them. This being the ratio decidendi of the Supreme Court, surely the Special Term was entitled
to take it as authority for this principle—the principle for which it has been regarded as authority
by all the courts in which the matter has heretofore
been raised.
Appellant's attempts to show that it might have
been decided on some other grounds are, therefore,
far beside the point. It is obvious, moreover, that
these grounds urged by appellant (at pages 35-39
of its brief) were not available. For example,
appellant's argument that the duties of the Register discussed in the M'Clung case were discre-
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tionary rather than ministerial is nowhere borne
out by the record or the opinion. On the contrary,
the court clearly indicated that it regarded the
duties of the Register as ministerial by its references hi three points of the opinion to "ministerial
officers" (pp. 599, 600 and 605).
For the reasons above stated, we respectfully
submit that neither the courts of this State nor of
any other State have jurisdiction to direct or control the acts performed by respondent, Federal
Reserve Bank of New York, pursuant to Section
522(c) of the Tariff Act of 1930, in its capacity as
the agency and instrumentality of the United
States Government in the administration and
execution of the customs laws; and that the order
of the Court at Special Term should be affirmed.
If the Court agrees with us in this contention, it
will, of course, be unnecessary for it to consider the
remaining points of this brief. We believe, however, that even if this Court should decide that the
courts of this State have jurisdiction of the subject of this proceeding, the order dismissing the
petition as a matter of law must be affirmed for
the reasons hereinafter urged.
POINT
II
On the basis of repeated decisions of the
United States Supreme Court and other courts
the rates determined and certified by respondent for use in connection with the collection of
customs are conclusive and binding and not
subject to review in any court.
This point goes to the second of the objections
set forth in respondent's notice of objections, to
wit,
33
That the petition does not state facts sufficient
for
to entitle petitioner to the relief prayed
or to any relief.
A.
The particular field of law in which this case
arises is by no means a new one.
est
It has been long since decided by the high
that the
court of the land in numerous decisions
agencies
determination by executive officers and
nt of the rates for
of the United States Governme
rs in
the conversion of foreign money into dolla
duties
the assessment and collection of customs
error
is conclusive upon importers and that no
n is open to
alleged to exist in such determinatio
judicial inquiry.
The leading and early case on this subject not
only has been consistently followed but is strik
ingly analogous in its facts to the case at bar.
Cramer v. Arthur,102 U. S. 612 (1880).
the
This was a suit in a Federal Court against
s
Collector of the Port of New York to recover dutie
by reason of
alleged to have been illegally exacted
s on
the Collector's refusal to liquidate the dutie
rian
the basis of a depreciated value for the Aust
h the imported
paper florin, the currency in whic
in
merchandise had been purchased. The law
force at that time provided that the President of
the United States should establish regulations for
estimating the duties on goods which had been
purchased in depreciated currencies (Rev. Stat.
§ 2903). Pursuant to this provision, the President
through the Secretary of the Treasury had made
a regulation to the effect that depreciation in the
value of a foreign currency should be shown by a
consular certificate attached to the invoice. In
that case the consular certificate attached to the
invoice showed that the Austrian paper florin was
depreciated and stated the depreciated value in
terms of United States currency. The Collector
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34
assessed the duties on the basis of this value and
the plaintiff brought suit against the Collector to
recover back the duties alleged to have been overcharged. He sought to prove by extrinsic evidence
that the actual depreciated value of the Austrian
paper florin was less than that certified by the
consul. The Circuit Court of the United States
refused to go behind the certificate of the consul
and plaintiff appealed to the Supreme Court which
affirmed the judgment of the Circuit Court. In its
opinion, the Supreme Court, by Mr. Justice
Bradley, said at page 619:
"In this certificate the consul assumes the
value of the silver florin to be as it was proclaimed to be at the beginning of the year by
the Secretary of the Treasury, namely, 47
60/100 cents; and, on this basis, he certifies
that the value of the florin in the currency in
which the invoice was made out was 45 77/100
cents; and this, as we understand the statement of the case, is the valuation adopted by
the collector in assessing the duties in question. The plaintiff seeks to go behind this
valuation, and to show that, at the time of
the purchase of the goods, the value of the
silver florin in Vienna, as quoted in the papers,
and as exhibited by the actual rate of exchange, was less than 47 60/100 cents, namely,
45 46/100 cents, and that the value of the
paper florin was 43 71/100 cents.
"This we think the plaintiff cannot be allowed to do. The proclamation of the Secretary and the certificate of the consul must be
regarded as conclusive. In the estimation of
the value of foreign moneys for the purpose
of assessing duties, there must be an end to
controversy somewhere. When Congress fixes
the value by a general statute, parties must
abide by that. When it fixes the value through
the agency of official instrumentalities, devised for the purpose of making a nearer
35
approximation to the actual state of things,
they must abide by the values so ascertained.
If the currency is a standard one, based on
coin, the Secretary's proclamation fixes it; if
it is a depreciated currency, the parties may
have the benefit of a consular certificate. To
go behind these and allow an examination by
affidavits in every case would put the assessment of duties at sea. It would create utter
confusion and uncertainty. If existing regulations are found to be insufficient, if they
lead to inaccurate results, the only remedy is
to apply to the President, through the Treasury Department, to change the regulations.
From the letter of the Secretary exhibited in
this case, we infer that this was afterwards
done, and that he made the desired change.
But this change in the regulations does not
affect prior transactions which took place before they went into effect. These transactions
must be governed by the regulations in force
at the time. It is of the utmost consequence
to the government, and it is, on the whole,
most beneficial to importers, that the value of
foreign moneys should be officially ascertained,
and that they should be fixed by a uniform
method or rule."
Similarly it has been consistently held that the
value of foreign coin estimated by the Director of
the Mint and proclaimed by the Secretary of the
Treasury as provided in succeeding tariff acts was
conclusive and binding and that evidence was not
admissible to impeach the rate so determined and
certified.
Cramer v. Arthur, 102 U. S. 612, 616-617
(1880);
Hadden v. Merritt, 115 U. S. 25 (1885);
United States v. Klingenberg, 153 U. S.
93 (1894);
Amalgamated Textiles V. United States,
84 F.(2d) 210 (Oust.& Pat. App. 1936).
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36
In the case of Hadden v. Merritt, supra, at page
27, the Supreme Court said:
"The value of foreign coins, as ascertained
by the estimate of the director of the mint and
proclaimed by the Secretary of the Treasury,
is conclusive upon custom-house officers and
importers. No errors alleged to exist in the
estimate resulting from any cause, can be
shown in a judicial proceeding, to affect the
rights of the government or individuals. There
is no value, and can be none, in such coins,
except as thus ascertained; and the duty of
ascertaining and declaring their value, cast
upon the Treasury Department, is the performance of an executive function, requiring
skill and the exercise of judgment and discretion, which precludes judicial inquiry into the
correctness of the decision. If any error, in
adopting a wrong standard, rule, or mode of
computation, or in any other way, is alleged
to have been committed, there is but one
method of correction. That is to appeal to
the department itself. To permit judicial inquiry in any case is to open a matter for repeated decision, which the statute evidently
intended should be annually settled by public
authority; and there is not, as is assumed in
the argument of the plaintiff in error, any
such positive and peremptory rule of valuation prescribed in the statute, as serves to
limit the discretion of the Treasury Department in making its published estimate, or
would enable a court to correct an alleged
mistake or miscalculation. The whole subject
is confided by the law exclusively to the jurisdiction of the executive officers charged with
the duty; and their action cannot be otherwise
questioned."
It is submitted that these cases establish conclusively that the determination of rates for the
conversion of foreign money into dollars in the
assessment and collection of customs duties has
37
and
become a function solely of executive officers
be
agencies and is of such a nature as not to
subject to judicial review.
It is to be noted that the Federal Reserve Bank
the
became by statute the immediate successor to
and certifyUnited States Consul in determining
ign
ing the rate for conversion of depreciated fore
by the President
currency. The regulation made
the
through the Secretary of the Treasury under
h 2,
earlier acts, beginning with the act of Marc
that the rate for
1799 (1 Stat. 627), providing
conversion of depreciated currency should be cerwas
tified by the consul in the country in question,
of 1921 (Act of May
superseded by the Tariff Act
h
27, 1921, C. 14, Sec. 403 (a), 42 Stat. 17) whic
substituted the Federal Reserve Bank of New
York for the consul as the agent-to determine and
s
certify to the Secretary of the Treasury the rate
ction
for depreciated currencies for use in the colle
t
and assessment of customs duties. Since the cour
a, refused to
in the case of Cramer v. Arthur,supr
es
question the rate certified by the United Stat
consul it follows conclusively that the Court must
similarly refuse to review the rate certified by the
Federal Reserve Bank in performance of precisely
the same function for precisely the same purpose,
namely, the collection and assessment of customs
duties.
It thus appears that historically under a succession of statutes the determinations of rates for
conversion of foreign currencies for customs purposes made by the executive agencies of the United
States Government, whether such agency be the
Director of the Mint, the Secretary of the Treasury, or Consul, have been consistently held to be
outside the province of judicial inquiry. All the
reasons for the application of the principle to these
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38
agencies equally compel its application to the
Federal Reserve Bank of New York performing
the same function for precisely the same purpose.
B.
Appellad apparently did not dispute in the
court below the authority of these cases as applied to the determinations of the Secretary of
the Treasury, the Director of the Mint and the
United States Consuls. It attempted to distinguish
these cases from the case at bar, however, by asserting that in them the act of the Federal officer
was discretionary and that the officer had not
exceeded his discretion. It argues that in the case
at bar respondent's duties were ministerial and
that even if they were discretionary there was an
abuse of discretion. While we dispute that respondent's function under the statute is ministerial, as we shall hereafter show, we submit that
the cases cited by us under this point turn upon
no such distinction and that the facts in those
cases clearly indicated just as great a departure
from the authority granted by the statute as appellant claims here.
Thus, in Hadden v. Merritt, supra, the value of
the Mexican dollar as estimated by the Director of
the Mint and proclaimed by the Secretary of the
Treasury was required by law to be based on the
United States gold dollar. It was claimed that
the
rate which had been proclaimed was based on the
silver dollar and evidence was offered to prove
.
this. The court excluded the evidence on
the
ground that the action of the Federal officers
was
conclusive.
Amalgamated Textiles v. United States, supra
,
decided in 1936, involved a protest by an impor
ter
of certain merchandise from England against
the
action of the Collector of Customs who had
con-
39
verted the invoice value expressed in pounds sterling into terms of United States currency at the
rate estimated by the Director of the Mint and proclaimed by the Secretary of the Treasury pursuant
to Section 522(a). The Secretary's proclamation
stated that gold was the legal standard in Great
Britain and that the monetary unit, the pound sterling, was valued at $4.8665, with the note "Obligation to sell gold at legal monetary par suspended,
effective Sept. 21, 1931". Evidence introduced in
the Customs Court showed that Great Britain had
suspended all gold payments in 1931, and that the
gold sovereign (conceded to be the gold coin equivalent of the pound sterling) was not in circulation
in England in 1934 when the merchandise in question was exported. On the basis of this evidence,
the importer contended that gold coins were not
"
standard coins in circulation" in England within
the meaning of Section 522(a) and that therefore
the proclamation of the Secretary, which purported
to give a value to the pound sterling as estimated
by the Director of the Mint, was null and void pro
tanto. The protest was based on the ground that
that Secretary had proclaimed a rate for a standard gold coin that did not exist and that since,
therefore, there was in legal effect no proclaimed
rate for the pound sterling the collector should
have converted the invoice value at the rate certified by the Federal Reserve Bank of New York
on the date of exportation, $4.77875, as required
by Section 522(c) in a case where no value has
been proclaimed by the Secretary.
The Customs Court overruled the protest (T. D.
47931) and, referring to the Cramer and Hadden
cases, held:
"* * * we have no power to go behind the
Secretary's proclamation with a view to weighing its relative accuracy, and this applies to
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40
his finding as to the existence of a foreign
standard coin no less than his finding as to
the value thereof in United States currency."
On appeal the Court of Customs and Patent
Appeals affirmed the judgment, stating (84 F.(2d)
210, at pp. 215-216):
* * Appellant's contention is based upon
the claim that the equivalent of the pound
sterling in gold is no longer a standard coin
in Great Britain, and is, in fact, no longer in
circulation in that country.
We think that said contention is an effort,
in effect to impeach the accuracy of the proclamation of the Secretary of the Treasury.
By that proclamation the secretary found the
existence of a foreign standard coin and the
value thereof in United States money. Upon
that finding the amount of duties assessable
in the case at bar were computed.
It is our opinion that, under the authority
of the cases of Cramer v. Arthur, supra, and
Hadden v. Merritt, supra, the correctness of
the findings set forth in said proclamation
may not be inquired into by either the collector or the courts, and that the collector was
bound to accept such findings in computing
the duties here'
involved.
"
In both the Hadden and Amalgamated Textiles
cases, therefore, it appears that the importers
were in effect asserting that the Director of the
Mint and the Secretary of the Treasury had
abused their discretion in that they had,
respectively, estimated and proclaimed values
for foreign currencies in disregard of the requirements of the statute. In both cases it was held
that notwithstanding such claim, the Courts will
not examine the value proclaimed to ascertain
whether it was arrived at in conformity with the
statute. By the same token, we submit that the
rule of the Cramer, Hadden and Amalgamate
d
41
Textiles cases applies in respect of the rates
certified by respondent in discharge of its duty
under Section 522(c) and that the question of
whether respondent's function is ministerial or
whether it involves the exercise of judgment and
discretion is immaterial.
C.
It is clear, however, that the performance of the
duty imposed upon respondent by Section 522(c)
necessitates the exercise of judgment, discretion
and special knowledge and the facts alleged in the
petition (assuming them to be true) are insufficient
to constitute a case of abuse of such discretion.
As between the present function of respondent in
determining buying rates in the New York market,
for cable transfers payable in foreign currencies,
and the former functions of the United States
Consuls in determining and certifying values of
foreign currencies, it is difficult to see any difference of substance. It would seem clear, however, that this function of respondent involves
the exercise of a greater, rather than a lesser,
measure of judgment and discretion than the
'function of the Director of the Mint in estimating
the values of foreign coins which are arrived at
by arithmetical computations based on definite
ratios of the gold parity values of such coins in
relation to the dollar.
In the performance of its duty under Section
522(c) respondent is required to determine certain facts. This is manifest, not only from the
statute itself, but also from the allegations of
the petition and the facts of which this Court
has judicial knowledge. The statute provides that
the rates "shall be determined" by respondent
and that respondent
"may in its discretion (1) take into consideration the last ascertainable transactions
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42
and quotations, whether direct or through
exchange of other currencies, and (2) if there
is no market buying rate for such cable transfers, calculate such rate from actual transactions, and quotations in demand or time
bills of exchange."
The terms of Section 522(c) quoted above, expressly permitting respondent "in its discretion"
to "take into consideration" other factors in determining the rates, show .that Congress knew
that determination and certification of the market
buying rate was not merely ascertaining and
certifying a clearly established figure or one derived from a single simple mathematical calculation, and recognized that it was a task requiring
the consideration of numerous facts and the exercise of skill, judgment and discretion in determining from them the market buying rate at a
given time.
As appears from the petition (fols. 44-45 and 76)
it is the custom of banks in New York City to
notify the Federal Reserve Bank daily of their
buying rates for cable transfers payable in Brazilian milreis for that day.
Thus, the ascertainment of the price in New
York City of a particular foreign currency at a
given moment is not the simple matter of ascertaining a single fixed price quoted by a central
exchange, but it involves the consideration of
numerous different quotations upon the basis of
which it is necessary to determine a single rate.
The determination of the .
single rate from the
numerous different quotations in the market
is not simply a matter of arithmetical computation on the contrary, one is required to use
discretion and judgment, as well as special knowledge of the intricate factors affecting the exchange rate of the currency of the particular
country involved, in order to determine which
43
quotations most nearly represent the actual buying rates in the New York market for cable transfers payable in such currency.
It is highly significant that Congress designated
the Federal Reserve Bank of New York as the
agency to determine the buying rate in the New
York market for cable transfers payable in the
various foreign currencies of the world. If, as
appellant suggests, the matter of determining the
buying rate in New York for cable transfers payable in foreign currencies were a simple ministerial function which virtually anyone could perform, Congress would have committed the function
to the office of the Collector of the Port of New
York or to some other agency of the Bureau of
Customs which is more closely connected with
the assessment and collection of customs duties
than is the Federal Reserve Bank of New York.
Congress, however, delegated the function to the
Federal Reserve Bank of New York realizing that
it was one of the few institutions possessing the
necessary technical knowledge, experience and
sources of information, including its member
banks and other dealers in foreign exchange, to
discharge the duty imposed by the statute.
It is the established rule of this State and elsewhere that where a body is vested with the power
to determine a much simpler question of fact than
that involved in the case at bar, the duty is discretionary or judicial, and not purely ministerial.
In Matter of Petition of Howland v. Eldredge,
43 N. Y. 457 (1871), a state statute authorized a
town to issue certain bonds upon the written consent of a majority of the taxpayers owning more
than half of the taxable property, and provided
that proof of such consent should be made by affidavit of the ton assessors, and made it the duty
of the assessors to make such affidavit when the
requisite consent was obtained. The Court of Ap-
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44
peals reversed an order awarding a peremptory
'mandamus to the assessors commanding them to
execute such an affidavit on the ground that the
court will not direct how a discretionary act shall
be performed.
Similarly, in People ex rel. Francis v. Common
Council of the City of Troy, 78 N. Y. 33 (1879),
the Court of Appeals said (at p. 39):
"Where a subordinate body is vested with
power to determine a question of fact, the duty
is judicial, and though it can be compelled by
mandamus to determine the fact, it cannot be
directed to decide in a particular way, however clearly it may be made to appear what
the decision ought to be."
Other cases to the same effect are:
People ex rel. Harris v. Commissioners
of the Land Office, 149 N. Y. 26, 31;
People ex rel. Elmira Advertiser Ass'n.
v. Gorman, 169 App. Div. 891;
United States ex rel. Tucker v. Seaman,
58 U. S. 225, 230.
Moreover, mandamus will not lie to compel an
officer to undo an act not performed in accordance
with law, unless he is authorized by statute to
reconsider his act. Cases cited by appellant at
pages 46-47 of his brief are, therefore, not in
point.
New York State Society of Professional
Engineers v. Department of State, 174
Misc. 173.
We do not dispute that respondent's duty under
Section 522(c) is mandatory in the sense that respondent is required to act; the performance of its
duty when it does act, however, is not a ministerial function but involves the exercise of discretion, judgment and special knowledge.
The facts pleaded in the petition are insufficient
to sustain a claim of abuse of discretion. Characterizations, of course, are not facts. The Court
45
will readily see from the very nature of the
duty imposed upon respondent by the statute
that many factors necessarily had to be considered
in determining the rates in question. For instance,
the Court will take judicial notice of the fact
that since the statute in question was enacted in
1930 chaotic conditions have affected the currencies and foreign exchanges of the world. Foreign
laws, decrees, and regulations of one kind or another have imposed controls or restrictions on
foreign exchange and export transactions, in the
light of which the duties of respondent under the
statute must be construed. It is a matter of common knowledge and continuous public comment
and discussion, that most of the countries of the
world are not now, and were not in 1935 and 1936,
on the gold standard, and that many countries
(in particular Germany and South American
countries) now have and then had in effect measures for the control and restriction of foreign exchange and export transactions in an effort to conserve and make the most effective use of their gold
supplies and national resources and otherwise to
protect their national economy, and that these
measures resulted in different rates of exchange
for the same currency, varying with the source and
use of the particular exchange.
It was in the exigency of these cohditions that
respondent was forced to act in making the determinations here involved. There were, in fact,
Brazilian laws and decrees of this character affecting the rate of exchange for Brazilian milreis.
While respondent does not contend that the Court
will take judicial notice of the terms of such laws
and decrees, it submits that the Court does know
judicially of the existence of such restrictive exchange control measures in Brazil and many other
countries. Reference to the public documents of
the Government will disclose that exchange control measures were in effect in Brazil in 1935 and
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46
1936. That the Courts will take judicial notice of
the contents of public documents and reports of
Commissions made to Congress is well settled.
Greeson v. Imperial Irr. Dist., 59 F.(2d)
529, 531 (C. C. A. 9th, 1932);
Muller v. Oregon, 208 U. S. 412, 419-420
(1908);
The Appollon, 9 Wheat. 362, 374 (1824).
House Document No. 15, 76th Congress, 1st Session, Twenty-second Annual Report of the United
States Tariff Commission (1938), pursuant to section 332 of the Act of Congress approved June
17, 1930 (46 Stat. 698), on page 1 of the "Introduction and Summary", after mentioning the
British Protective Tariff of 1932, states:
"In Germany and other central European
countries,in southern and eastern Europe,and
in Latin America, licensing systems, exchange
controls, clearing and compensation agreements followed in rapid '
succession.
All of
these developments have affected the foreign
trade of the United States."
"Regulation of Tariffs in Foreign Countries by
Administrative Action", United States Tariff
Commission, Report to Committee on Ways and
Means, House of Representatives (1934), on pages
1 and 2 of the "Introduction" states:
"Restrictive measures other than tariffs
In addition to tariff duties import trade
has been restricted or controlled by other
measures, such as import quotas or prohibitions; import restrictions with or without a
system of licenses; import monopolies;foreign
exchange control; milling or mixing regulations; and increased fees and restrictive regulations of various kinds. Import quotas and
exchange control measures may be even more
restrictive trade barriers than tariff rates.
* * *
47
Restrictions on foreign exchange transactions are applied in many countries, almost
necessarily by the Executive. In several
European and Latin American countries control of foreign-exchange transactions is officially exercised through the central banking;
system. Among the countries applying restrictions for control of foreign exchange are:
Argentina
Austria
Bolivia
Brazil
Bulgaria
Chile
Colombia
Costa Rica
Czechoslovakia
Denmark
Ecuador
Estonia
Greece
Germany
Hungary
Italy
Latvia
Norway
Paraguay
Spain
Turkey
Uruguay
Yugoslavia
The section under heading "Brazil", on pages 5
and 6 of the report, reads as follows:
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"BRAZIL
"The Executive of the post-revolutionary
government specifically assumed power over
the tariff under decree no. 20,280 of September
8, 1931. Since then the Executive of this government by decree has exercised the following
functions with respect to the tariff: (1) Establishment of 'minimum' and general rates;
(2) changes in the method of applying the
existing tariff in such a way as to affect rates;
(3) changes in individual classiflcations and
rates; (4) negotiation, conclusion, and enforcement of a limited number of commercial
agreements so as to affect a few individual
rates; (5) prohibitions and licensing affecting;
the importation of a limited number of articles; (6) preparation of a complete -tariff
revision (promulgated June 11, to be put into
effect September 1, 1934).
Foreign exchange restrictions affecting imports have been in effect in Brazil since September 1931.
Quota restrictions have not been imposed on
imports into Brazil up to the present."
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48
As we have heretofore pointed out, however,
under the ratio decidendi of the Cramer and Hadden cases it is immaterial whether respondent's
determinations involved discretion. We submit
that the rule adopted by the United States Supreme Court in those cases and followed in the
Klingenb erg and Amalgamated Textiles cases,
supra, is applicable to the facts presented in this
proceeding, and that the rates certified by respondent are not subject to judicial review.
None of the cases cited in Point JIB of appellant's brief are in point none of them involve
the functions which are involved in the case at
bar and which have been held in the Cramer,
Hadden, Klingenberg, Amalgamated Textile
cases to be not subject to judicial review.
D.
The Court of Appeals has established that the
petition in a proceeding to obtain any of the extraordinary remedies afforded by Article 78 of the
Civil Practice Act "must present an issue for the
enforcement of a clear legal right".
Coombs v. Edwards, 280 N. Y. 361, 364,
21 N. E. 2d 353 (1939)
Economy Holding Corporation v. Berry,
234 App. Div. 214, 255 N. Y. S. 20
(1st Dept. 1932).
The burden of showing the clear legal right to
such order and the necessity and propriety of its
use rests upon the petitioner.
Coombs v. Edwards, supra.
Even though the petition in a proceeding under
Article 78 of the Civil Practice Act may present
an issue for the enforcement of a clear legal right,
the Court will not issue an order as provided in
49
said Article where the effect would be to cause
disorder and confusion in public affairs. In the
recent decision in Andresen v. Rice, 277 N. Y. 271,
14 N. E. 2d 65 (1938), Chief Judge Crane stated
(at p. 282):
"Mandamus is an extraordinary remedy, and
its issuance is to a great extent discretionary.
The courts will be chary to issue it so as to
cause disorder and confusion in public affairs,
even though there may be a strict legal right.
Duncan Townsite Co. v. Lane, 245 Ti. S. 308,
311, 38 S. Ct. 99, 62 L. Ed. 309; Matter of
Warehousemen's Association v. Cosgrove,
241 N. Y. 580, 150 N. E. 563; Matter of Smidt
v. McKee,262 N. Y. 373,378, 186 N. E.869."
It requires no extended discussion to demonstrate
the "disorder and confusion in public affairs"
that would result from the granting of the order
sought in this proceeding, even assuming that appellant could show a clear legal right to be
enforced. The rates which are questioned in this
proceeding were certified by respondent to the
Secretary of the Treasury more than three years
before the institution of this proceeding and were
immediately published by the Secretary for use in
the assessment and collection of customs duties
on imports (fols. 33-36). Any order in. this proceeding which would now determine that the
rates so certified were erroneous would bring
into question the legality of all ad valorem
customs duties levied over a span of years upon
goods imported from countries having currencies
with respect to which multiple rates of exchange
have prevailed. The resulting "disorder and confusion in public affairs" is manifest. In fact the
rule which denies recourse in these circumstances
to extraordinary remedies, such as those provided
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50
by Article 78 of the Civil Practice Act, is based on
the same principle upon which the courts have
refused to review the values of foreign currencies
ascertained by officers of the Federal Government
for use in the assessment and collection of ad
valorem customs duties. In Cramer v. Arthur,
102 U. S. 612, (1880) to which we have referred
above, the Supreme Court stated (at p. 617):
"The government gets at the truth, as near
as it can, and proclaims it. Importers and
collectors must abide by the rule as proclaimed. It would be a constant source of
confusion and uncertainty if every importer
could, on every invoice, raise the question of
the value of foreign moneys and coins."
And, similarly at (p. 619):
"If the currency is a standard one, based on
coin, the Secretary's proclamation fixes it; if
it is a depreciated currency, the parties may
have the benefit of a consular certificate. To
go behind these and allow an examination by
affidavits in every case would put the assessment of duties at sea. It would create utter
confusion and uncertainty."
We submit, therefore, that the petition in this
proceeding fails to allege facts which in any case
would entitle petitioner to the extraordinary
remedies afforded by Article 78 of the Civil Practice Act.
51
POINT III.
If the action of the Federal Reserve Bank is
reviewable at all, it is reviewable by the United
States Customs Court and the Court of Customs and Patent Appeals under the procedure
set up by Congress in the Tariff Act itself, and
the petitioner is not entitled to the extraordinary relief provided by Article 78 of the
Civil Practice Act.
We have discussed under Point II the authorities which show that the particular act of the Federal Reserve Bank complained of in this case is
not subject to judicial inquiry in any court. If,
however, for any reason this act should be held
subject to judicial inquiry, the petitioner has full
opportunity to review it in the United States Customs Court under the regular procedure expressly
provided by Congress in the Tariff Act itself for
the protection of importers.
With such a remedy in the Customs Court available to him, petitioner is precluded from invoking
the extraordinary remedies of Article 78 of the
Civil Practice Act. This Article specifically provides in Section 1285:
"Except as otherwise expressly prescribed
by statute, the procedure under this article
shall not be available to review a determination in any of the following cases:
*
4. Where it can be adequately reviewed by
an appeal to a court or to some other body
or officer."
A.
If any act is to injure the petitioner it will be
the customs levy itself. Congress itself has set
up a comprehensive review for that act. The
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52
Tariff Act of 1930 is a legislative enactment complete in its field. Section 522 is not to be read
in vacuo—it is only a part of a complete statute.
That complete statute contains also Sections 514
and 515 which set up a complete system for review
—first by the Collector himself, then by the United
States Customs Court and then by the United
States Court of Customs and Patent Appeals.
Section 514 specifically provides that the subjects
for review shall be
"all decisions of the Collector, including the
legality of all orders and findings entering
into the same, as to the rate and amount of
duties chargeable,
"(Section 514 of the
Tariff Act of 1930; 19 U. S. C. A. §1514).
By the Constitution of the United States the
Federal Government and the Federal Congress
are supreme in the field of tariff legislation. Not
only is Congress given power by Article I, Section 8 to lay and collect duties and imposts, but
by Section 10 of the same Article, states are forbidden to lay any imposts or duties on imports.
The field of customs legislation is thus by the
Constitution exclusively delegated to the Federal
Government. Congress has sought to legislate
comprehensively in that field. It has not only prescribed the rate of duty and the machinery for
its collection, but it has set up a system of special
courts having special knowledge to correct errors
in the administration of the customs laws. This
system, set up by the Tariff Act and administered
by the United States Customs Court and the
United States Court of Customs and Patent Appeals, is so complete that it would seem apparent
that Congress, in a field in which it has exclusive
power to legislate, intended to confine the consid-
53
eration of customs questions to tribunals which
it itself had established.
Cottman Co. v. Dailey, 94 F. (2d) 85 (C.
C. A.4th, 1938),..o.o14,41014,4410-W44.466e.
In this case an importer sought by injunction
in the United States District Court to restrain
the Collector from liquidating duties improperly.
The Circuit Court of Appeals held that the procedure provided by Congress for review of the
Collector's determination by the Customs Court,
was adequate and conclusive. The Court said:
"This system of corrective justice being
complete in itself, it must be concluded that
Congress did not intend to allow ally other
method to redress supposed wrongs occurring
in the operation of the laws in relation to
the collection of (customs) revenues."
The broad power of the Customs Court to
inquire into all findings entering into decisions
of the Collector is well illustrated by David L.
Moss,Inc. v. United States, 103 F.(2d) 395 (Cust.
& Pat. App. 1939). The question was whether the
Customs Court had jurisdiction to go behind findings of the Tariff Commission and of the President resulting in an increase of duties on certain
commodities pursuant to the Flexible Tariff Act,
in order to determine whether such findings were
supported by the evidence before the Commission. A majority of the Court of Customs and
Patent Appeals held that the Customs Court did
have such jurisdiction, and concurred in the following statement (p. 397):
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"It is true, as pointed out by counsel for
the Government, that the Customs Court is
given no direct right of review over action
of the Tariff Commission. This does not
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mean, however, that it is without power to
consider the legality of increase of duties resulting from the Commission's action. The
court is a court of law, and it is granted full
power to relieve against illegality in the assessment or collection of duties. 19 U. S.
C. A. §§ 1515, 1518. If relief may not be had
before it against illegal action under the flexible tariff provisions, relief may not be had
anywhere; for its jurisdiction in such matters
is exclusive. It is the tribunal established by
Congress in the provision of a complete system of corrective justice for the administration of the customs laws, and questions involving the validity of official action in the imposition and collection of duties are properly cognizable before it to the exclusion of other
courts. Cottman Co. v. Dailey, 4 Cir., 94 F.
2d 85, 88; Riccomini v. United States, 9 Cir.,
69 F.2d 480,484; Gulbenkian v. United States,
2 Cir., 186 F. 133, 135: Nicholl v. United
States,7 Wall. 122, 130, 19 L. Ed. 125. There
can be no question but that courts must exercise the judicial power vested in them to determine the legal validity of administrative action, where the validity of such action is involved in questions properly before them,
whether they have been granted the right of
review over action of the administrative
agency or not. The duty necessarily arises
because of their obligation to decide cases
before them according to law (citing cases)."
Certainly the determination of the proper rate
of exchange to be used in the conversion of foreign
currency into dollars is, in the language of Section 514 "a finding entering into" the decision of
the Collector who effects a liquidation of duties
based thereon. In numerous cases where the Collector has used a rate of conversion other than the
rate prescribed by statute, it has been held that
such error may be corrected upon protest by the
importer by appeal to the Board of General Ap-
55
praisers (now known as the United States Customs
Court).
A. S. Rosenthal Co. v. United States, 24
F. (2d) 351 (C. C. A. 2d 1928);
Louis Contencin & Son v. United States,
T. D. 13511 (G. A. 1892);
M.J. Brandenstein v. United States, T.D.
25596 (G. A.1904);
Illinois Watch Company v. United States,
T. D. 38718 (G. A. 1921);
M. M. Schwartz & Co. v. United States,
T. D. 37517 (G. A. 1918);
Decorative Plant Co., T. D. 37602 (G. A.
1918).
("T.D." denotes United States Treasury
Decision.)
Other decisions which show clearly that the
Customs Court has jurisdiction to review any determination which enters into the decision of the
Collector in the liquidation of duties, and which is
a proper subject of judicial inquiry are as follows:
William A. Foster & Co.(Inc.) v. United
States, 20 C. C. P. A. (Customs) 15
(1932);
Norwegian Nitrogen Products Co. v.
United States. 20 C. C. P. A.(Cust.) 27,
aff'd. 288 U. S. 294;
United States v. Fox River Butter Co.,
20 C. C. P. A. (Cust.) 38 (Certiorari
denied, 287 U. S. 628);
United States v. Harry Blandamer, 20
C. C. P. A. (Cust.) 45 (Certiorari denied, 287 U. S. 628);
United States v. S. Leon & Co., 20 C. C.
P. A. (Cust.) 49 (Certiorari denied, 287
U. S. 628).
B.
Appellant •in Point IV of his brief in effect
concedes that the validity of respondent's acts
may be determined in a proceeding before the
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56
Collector or, on an appeal from his decision, in
the United States Customs Court and that such
relief is available to appellant. He is, however,
asking this Court to declare that the review, set
up by Congress which has the exclusive power in
the field of customs collection and which has assumed to provide a comprehensive procedure for
their collection and for the review of the acts of
its agents engaged in their collection, is inadequate.
Article 78 of the Civil Practice Act (Section
1285, Subdivision 4), in providing that it cannot
be invoked when the determination sought to be
reviewed can be adequately reviewed by an appeal
to a court or to some other body or officer, is
codifying a rule that has always been fundamental
in certiorari and mandamus proceedings. This
rule is based on the fundamental principle that
these extraordinary remedies may be resorted to
only if imperatively necessary and as a last resort.
People ex rel. McMackin v. Board of
Police, 107 N. Y. 235;
People ex rel. Uvalde Asphalt Paving Co.
v. Seaman, 217 N. Y. 70, 76;
Matter of International Railway Company v. Schwab, 103 App. Div. 68.
It is for this reason that it has always been a
requirement that every other recourse for review
must be exhausted before a court will presume
to take jurisdiction and assert its power over
the act of a coordinate branch of the Government.
Prior to the present Article 78 of the Civil Practice Act the same provision as that contained in
Section 1285, Subdivision 4, existed both in the
former Civil Practice Act and the Code of Civil
Procedure, Section 2122, in the case of certiorari
proceedings. In the case of mandamus proceed-
57
ings the courts themselves without express statutory direction applied the same rule and held that
mandamus would not issue where another remedy
or appeal was available.
Towers Management Corporation V.
Thatcher, 271 N. Y. 94;
Calf Leather Tanners Ass'n v. Morgenthau, 80 F.(2d) 536 (App. D. C. 1935),
certiorari denied 297 U. S. 718 (1936).
In the Calf Leather Tanners Association case
last cited the court declined to issue a writ of
mandamus against the Secretary of the Treasury
to make a certain finding as required by the Tariff
Act on the very ground that an adequate remedy
existed in a proceeding in the United States Customs Court.
Appellant's contention that an appeal to the
United States Customs Court from any action of
the collector in liquidating duties on the basis
of the rates certified by respondent, would not
be such an "appeal" as is contemplated by the
Civil Practice Act because respondent would
not be before the Customs Court as a party, is
without force. The fact is that review by the
Customs Court will give petitioner complete protection against an unlawful levy based upon
wrongful certification by respondent, whether respondent is a party or not. On such a review any
improper levy may be nullified, and any wrongful
certification by respondent may be set aside, without respondent being a party. The Customs Court
has exclusive jurisdiction over such matters and
must exercise its jurisdiction in a proper case.
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David L. Moss Co., Inc. v. United States,
103 F.(2d) 395, 397-398 (1939), quoted
above at pages 53-54 of this brief;
Cottman Co. v. Dailey, 94 F. (2d) 85 (C.
C. A. 4th 1938).
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If it should be determined by the United States
Customs Court that the liquidation or the duties
at the rates already certified was erroneous and
if respondent's cooperation should be necessary
to the ultimate liquidation at the proper rates,
there can be no question but that the judgment
of the United States Customs Court would be
effective in accomplishing the proper result. This
Court will not indulge in the presumption that if
it were determined by a court of competent jurisdiction that respondent had failed to discharge
properly the duty imposed upon it by statute,
respondent would thereafter disregard its duty
and fail to perform it in conformity with the
court's decision.
In Miguel v. McCarl, 291 U. S. 442 at 456, the
Supreme Court said, in a case where it refused
a mandamus against the Comptroller General:
"But it is not to be supposed that, upon having his attention called to our decision, the
Comptroller General will care to retain possession of the voucher or that be will interfere in any way with its payment."
When alleged erroneous findings affecting the
rate or amount of customs duties were made by
the President, by the Director of the Mint, or by
the Secretary of the Treasury the importers have
proceeded in the Customs Court directly against
the United States without it ever having been
doubted that the judgments rendered therein
would be conclusive and binding upon the officials
who made the findings in question even though
such officials were not actual parties to the proceedings.
William A. Foster & Co. (Inc.) v. United
States, 20 C. C. P. A. (Customs) 15
(1932), supra;
59
David L. Moss Co., Inc. v. United States,
103 F. (2d) 395, supra;
Amalgamated Textiles v. United States,
84 F.(2d) 210(Gust.& Pat. App.1936),
• supra.
As we have shown under Point II, we contend
that on the authorities the determinations and
certifications of the Federal Reserve Bank and
the publications of value by the Secretary of the
Treasury under Section 522 of the Tariff Act
of 1930 are not susceptible of review by any
court. If, however, it should be held that they
are open to judicial examination, they "can be
adequately reviewed by an appeal", (within the
meaning of Section 1285 of the Civil Practice Act),
to the United States Customs Court upon proper
protest filed after the final liquidation of duties
on the hides in question. Accordingly, it is clear
that the procedure under Article 78 of the Civil
Practice Act is not available to review the determinations in question.
POINT
IV.
The determinations of respondent sought to
be reviewed herein became final and binding
on petitioner on December 19, 1935, January
15, 1936 and February 8, 1936, respectively,
and accordingly this proceeding was not instituted within the four months' period limited
by law for the commencement thereof.
Certainly this is a proceeding to review a determination. Respondent concededly did determine and certify rates for the dates in question.
Even though this proceeding be regarded as a
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60
mandamus proceeding to compel respondent to
make a different determination, it is one to review
a determination already made and not a proceeding to compel performance where there has never
been any performance at all. Article 78 of the
Civil Practice Act by its terms recognizes that
where there has been an act of the body or officer in
question, even though the proceeding take the
form of a mandamus proceeding, it is a proceeding "to review a determination". Section 1284
of this Article provides:
"2. The expression 'to review a determination' refers to the relief heretofore available
in a certiorari or a mandamus proceeding for
the review of any act or refusal to act of a
body or officer exercising judicial, quasijudicial, administrative or corporate functions, which involves an exercise of judgment
or discretion."
A.
Where a proceeding under Article 78 of the
Civil Practice Act is to review a determination
already made the act provides that the proceeding must be instituted by service of the petition
within four months after the determination to be
reviewed becomes final and binding. Section 1286
of the Civil Practice Act provides as follows:
"§ 1286. Limitations of Time. A proceeding under this article to review a determination or to compel performance of a duty
specifically enjoined by law, must be instituted
by service of the petition and accompanying
papers, as prescribed in section twelve hundred eighty-nine of this article, within four
months after the determination to be reviewed
becomes final and binding, upon the petitioner
or the person whom he represents, either in
law or in fact, or after the respondent's
61
refusal, upon demand of the petitioner or the
person whom he represents, to perform his
duty, as the case may be; w."
Petitioner instituted this proceeding by serving
a petition on the respondent on March 23, 1939.
This was more than three years after the certifications were made by respondent in December 1935
and in January and February 1936.
B.
Appellant contends, however,• that the determination in question has not yet become final
and binding upon it. It contends that it will
not become final and binding upon it until sixty
days after the date of the decision of the Collector which shall finally liquidate his duties—at
some unknown date in the future.
Assuming, arguevdo, that this reasoning is
sound, the contention is fatal to appellant. On
elementary principles of jurisprudence a court
cannot be asked to apply a remedy of the extraordinary nature of Inandamus while the question
is moot and not yet final and binding upon petitioner. The statute so expressly provides (C.P. A.
§ 1285). It provides that the procedure under
Article 78 of the Civil Practice Act shall not be
available to review a determination— •
"3. Where it does not finally determine the
rights of the parties with respect to the matter to be reviewed."
Petitioner is thus definitely faced with this
dilemma:
A. If the determinations made by respondent
became final and binding in 1935 and 1936, this
proceeding is definitely barred for the period of
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62
limitation imposed by the statute has long since
expired.
B. If the determinations are not yet final and
binding, be has no standing in Court because he is
seeking to review determinations which have not
finally determined his rights with respect to the
matter to be reviewed.
We submit, however,that this determination did
become final and binding upon appellant when the
certifications were made by respondent to the
Secretary of the Treasury and published by the
latter and the four months' period began to run
on the dates of those determinations in December
1935 and January and February 1936. It is to
be noted that the Civil Practice Act uses the
language
"within four months after the determination
to be reviewed becomes final and binding, upon
the petitioner or the person whom he represents, either in law or in fact""."
The allegation of the petition that
"the collector will be required to use the rates
so certified by the defendant to the Secretary
of the Treasury" (fol. 51).
recognizes that the rates so certified must now be
final and binding "in law" and "in fact", for
how else could the petition assume that the Collector would be required to use such rates.
Surely the only test as to the finality of an
administrative act is whether anything more needs
to be done to complete the act or whether there is
provided a rehearing and reconsideration by the
officer himself. Thus in Matter of Weinstock v.
Hammond, 270 N. Y. 64, the court held that the
action was barred because it had not been brought
within four months after the determination of the
officer in question since he had no unconditional
63
power to re-hear the question. In the case cited
by appellant, on the other hand, Matter of N. Y. C.
R. R. Co. v. Public Service Commission, 238 N. Y.
132, a rehearing before the Commission was
specifically provided.
Of course there is no provision for a re-consideration by the respondent after its determination and certification has been made.
C.
Appellant's argument that no period of limitation began to run until it should make a demand
amounts to a contention that there is no limit
whatsoever to the time within which it may seek
a review of the determinations by the Federal
Reserve Bank. Even where it has,been held that
a demand was necesary, the court will in mandamus or certiorari proceedings bar recovery
unless demand is made promptly.
DeLack v. Greene, 170 Misc. 309, 11
N.Y. S. (2d) 149 •
Insley v. Shanahan, 173 Misc. 33, 17
N. Y. S. (2d) 25.
As the court said in the DeLack case, supra, at
pages 311-312:
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"Read literally, the time limitation of the
statute in a proceeding to compel the performance of a duty does not begin to run until
there has been a demand and a refusal. If
relief must always follow in a case having
merit in substance instituted within four
months after demand and refusal to perform
a duty, the power of indefinite suspension of
the limitations of time would reside in the
petitioner by a refusal, failure or neglect to
make expeditious demand that the duty affecting his rights be performed. This right
to suspend indefinitely the time in which a
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64
proceeding may be instituted, by not making:
a demand, runs counter to the general purpose of the Legislature to simplify and
coordinate the remedies now afforded by
Article 78."
It is apparent that this determination by the
Federal Reserve Bank was a matter of public
concern. By its act it determined a rate which
was used by the Collector of Customs in the application of duties on all merchandise exported on
the days in question and it was important to all
importers alike. It has long been recognized that
review of determinations made by public officers
of public importance must be expeditiously sought
whether by certiorari or by mandamus.
Under the provisions of the Civil Practice Act
before the passage of Article 78 the same four
months' limitation was the rule of general application. Under these former provisions of the
Civil Practice Act authorizing certiorari to review,
a specific limitation of four months was prescribed.
(See Civil Practice Act in effect in 1935 and 1936,
Section 1288.) The courts regarded this limitation as so important that they applied the same
four months' limitation in mandamus proceedings, although not specifically prescribed by
statute, unless some execuse for delay was affirmatively shown by the petition.
People ex rel. Collins v. Ahearn,120 App.
Div. 95 (1st Dept. 1907);
Matter of Williams v. Pyrke, 233 App.
Div. 345 (4th Dept. 1931);
Matter of Uphoff V. Roberts, 244 App.
Div. 596 (4th Dept. 1935);
See, Insley v. Shanahan, 173 Misc. 33, 17
N. Y. S. 2d 25.
We submit that to ask any court to review at
this late date a determination of public importance
65
thus made by the Federal Reserve Bank, on the
basis of which countless importations have been
made, public duties assessed and collected, a determination which concerns not only this petitioner but is of a general public character, would
not only be violating the specific limitations imposed by statute but would in addition contravene
the principle of prompt action demanded in all
cases where extraordinary remedies are invoked.
POINT V.
The order of the Court at Special Term dismissing the petition as a matter of law should
be affirmed.
Respectfully submitted,
WINTHROP, STIMSON, PUTNAM & ROBERTS,
Attorneys for Respondent.
ALLEN T. KLOTS,
WALTER S. LOGAN,
RUFUS J. TRIMBLE,
G. SCHUYLER TAIMELL, JR.,
JOHN H. Wuwrs,
Of Counsel.
Dated: September 23, 1940.
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o
REC'D IN FILES SECTION
( SEP 25 1940
u
• o //
44 ,)()
,
FEDERAL RESERVE BANK
'
Yi
/
p
OF NEWYORK
September 23, 1940.
Jerome W. Shay, Esq.,
Office of General Counsel,
Board of Goversnors of the
Federal Reserve System,
Washington, D. C.
Dear Mr. Shay:
I received your letter of September 16/ and the
copy of the record in the case of M'Clung v. Silliman enclosed therewith.
I appreciate very much all the trouble
that you and Mr. Dreibelbis took in obtaining this copy for
us, and wish to take this occasion to thank you.
It has
been helpful to me to have a copy of the record available
to refer to in connection with the preparation of our brief.
I am planning to send copies of our brief to Mr.
Wyatt when they are available.
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Federal Reserve Bank of St. Louis
Sincerely yours,
Walter S. Logan,
Vice President and General Counsel.
For Fie
S. E. Entrikell
744,6
September 16, 1940.
Mr. W(lter S. Logan, General Counsel,
4Federe1 Reeerve Bank of New 'York,
A New York, New York.
Deer Yr. Logan:
Pursuant to your telephonic conversation with Mr. Dreibelbis
on September 16, 1940, there is submitted herewith a typewritten copy
of the record (Locket C, No. 1071) contained in the Office of the
g v.
Clerk of the United States Supreme Court in the case of, ,McClun
The documents comprising the record in the McClune case
the
F,re available only in the original lonchand which will explain
a word on page 14. You will also note
omission in the attechment of
d were
that certified copies of plets cind surveys of the land involve
d to. In all other respects the -,tnot copied, being merely referre
preserved in the
tachment is intended as a true copy of all documents
aforementioned docket number.
Clerk's office under the
Respectfully,
Jerome W. Shay,
Law Clerk.
Enclosure
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Federal Reserve Bank of St. Louis
RECORD IN
McCLUNG v. SILLIMAN
6 Whegt. 504
Decided
KS
16, 1821
contained in Office of Clerk of the
United St.tes Supreme Court
C
For Files
O. NI. Crcg1,
DOCKIT C, NO. 1071, U. S. SUPREUE COURT
FkBRUAR( TERI 1821
Doddridge
Harper. -
William McClung
vs.
Wyllys Silliman
U S.
.
Error from
Circuit Court
of Ohio
1820 Dec. 4th
Fecord received and filed
1821 Mar. 2
Argument heard -
1821 Mar. 3
Further argument herd and concluded -
1821 Mar. 8
Iudgment of Circuit Court affirmed
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with costs.
I ))
-2
-
TRANSCRIPT OF RLCORD
William McClung
Vs.
Wyll7s Silliman
Register of Land Office
Zanesville, Ohio.
Filed July 10, 1818
Decided 1821
The Ftf.lte of Ohio, :
Be
Muskingum County
:
In obedience to the within writ, I Df;:vid Ch mbers, Clerk of the
Supreme Court of Ohio for Muskingum County, have hereunto annexed a certified copy of the record in said court of the
co
wherein William McClung
is applicant and lAyllys Silliman Register of the Lend Office at Zanesville
is respondent; And have also attached the citation and A*Tidavit thereon
endorsed ns served on the respondent and certified by ThomLs Flood, Esq.,
a justice of the pence for Muskingum County.
In testimony whereof I have hereto set ry hand and affixed my
°Meinl seal at Zanesville the 23d day of June A. D. 1816.
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Federal Reserve Bank of St. Louis
David Ch,
mbers, Clk. S. C.
CO
United St-tes ....ss:
TEE PRESIDENT 01 TFL UNITED STATES
To the Judges of the Supreme Court of the State of Ohio for
Muskingum County being the highest court of law or equity having jurisdiction in the last resort of the subject matter of the case hereafter mentioned within wild State of Ohio.
Greeting:
BECLUF.E in the record and proceedings as also in the rendition
of the judgment of a plea which is in the said Supreme Court of Ohio before
you or some of you, between William McClung applicant and Wyllys Sillinan
Register of the Land Office at Zanesville respondent, a manifest error hat))
happened, to the great damage of the said William McClung, ,s by his complaint appears.
We being willing that error, if any h:Yth been, should be
duly corrected, and full and speedy justice done to the parties aforesaid
in this behalf:
Do command you, if judgment be therein given, that then
under your seal distinctly and openly, you send the record and proceedings
TRY
aforesaid, with all things concerning the seine, to the YUPPEME COURT OF
,
UNITED STATES, together with this writ, so that you hive the same at Washington
then
on the first Monday of August next, in the said Supreme Court, to be
inspected,
And there held, that the record and proceedings aforesaid being
the said Supreme Court may cause further to be done therein
o correct that
the United States
error, what of right and according to the law and custom of
should be done.
said
WITNESS, the honorable, John Marshall - chief justice of the
of our Lord one
Supreme Court, this first Monday of February in the year
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Federal Reserve Bank of St. Louis
-4-
thousand eight hundred and eighteen and of the Independence of the United
States the forty second.
E. B. Caldwell
Clk. Sup. Ct. U. S.
Allowed by
Thomas Todd an Associnte
Justice of the Supreme Court of
the United Ststes.
Wrch 12th, 1618.
United States
se
District of Columbia :
To Wyllys Stillman Pegister of the Lend Office at Zanesville greeting:
You are hereby cited end admonished to be and appear 'et a Supreme
Court of the United States to be holden at Washington, on the first MendE7
in August next, pursuant to a writ of error filed in the clerk's office of
the Supreme Court of the State of Ohio for Muskingum County, in a case where
McClung was applicant and you wore Despondent, to show ceuse if any
there be, why the judgment given against the said William McClung as in the
said writ of error mentioned should not be corrected and why speedy justice
should not be done to the perties in that behalf.
Witness the Honorable Thomas Todd one of the AssociAe Justices of
of karch A. D.
the Supreme Court of the United States, this thirtieth (?) day
1616.
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Federal Reserve Bank of St. Louis
Thomas Todd
C
y\c3
..5
State of Ohio
: ss
Muskingum County :
Be it remembered thet on this tenth day of Tune in the year 1818
properly before me the publisher, a justice of the law of the said Stete in
and for the said county, appeared James Roland of said county being by me
duly sworn did on his oath say that on the 10th day of the said month of
June he did show the above citation to Wyllys Silliman therein named, and
did deliver him a copy thereof.
Thomas F. Card (?) J. P.
William McClung
vs.
Wyllys Silliman
Register of the Land:
Office at Zanesville:
SEAL
State of Ohio Muskingum county. Supreme
Court, October Term A.D. 1814, for said
county - October 8th, 1814.
Said court being the highest court of law or equity, having jurisdiction in the last resort of the subject matter of this ease within said
State of Ohio. On this day care William McClunc the applicant by his attorney and produced
in court a certificate signed
by Wyllyo Sillieean register of the United States
Land Office at Zanesville in the words and figures, following
Office, Zanesville August 2nd 1810.
to wit, "Land
I certify that William McClung of Brook
county Virginia heth this day produced two receipts from the receiver of Publick Monies Number three thousand two hundred and fifty five and three thousand
to hundred and fifty six and dated this day for nineteen dollers eighty nine
cents and made application for the following tract of land, entire -,ection
ve, 13-
six, Township
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Federal Reserve Bank of St. Louis
umbe
i t
and fra tion number five,
ED)
F
93
84
game Township and same range containing 977 160 acres, and for entire Section
number twelve and frection number one, Township number sixteen, Pane number
17
fourteen, containing 931 In acres but which applicetion I have refused to
enter in the Books of entries - first because said tracts of land heve been
sold at Merietta prior to the time of the esteblishment of the lend office
at Zanesville, Second, because if not sold at Marietta those trects were
never offered for Publick sale in this district egreeable to the act of congres
of March 26th, 1604.
Wyllys Stillman, Register of Land Office.
And thereupon moved the court for a rule to be given to the said Wyllys
Sillimen to show cause on the first day of the next term why a writ of Mandamus should net be awarded agninst him commanding him to enter the application aforesaid in the said certificate mentioned as made by the said William
SicClung in the Book of entries .ccording to the provisions of the seventh
section of the Act of Congress passed the tenth day of May eighteen hundred,
entitled en act providing for the sale of lends of the United States in the
Territory northwest of the Ohio, and above the mouth of the Kentucky River.
And the said Wyllys Stillman appearing in court in his proper person claies
thet he is an officer of the United States acting under the authority and
direction of the United States and that he for his official nets as an officer
of the United States he is not subject to the order direction or controul of
the courts of law of the State of Ohio, and thet therefore this court in the
matter of the motion bath no jurisdiction to make any rule upon him to call
him before them to answer upon which exception argument being heard and consideretien had
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Federal Reserve Bank of St. Louis
pint
thc
tter" i
aforesaid
9A5
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is not sufficient to exempt the said Wyllys Stillman in the matter aforeseid
from the jurisdiction of this court.
Whereupon a rule is given to the seid
411ys Sillimen that he eppear here upon the first dey of the next Term to
show cause why a mandamus shall not be awarded -eainst hie commanding him
to
enter the application aforesaid, according to the provisions of the act of
Congress aforesaid.
William McClung
:
•
vs.
.
Wyllys Silliman
:
Register of Land Office:
Supreme Court October Term 1815 Monday 16th
inst. Upon a rule to show cause why a mandamus
should not be issued.
By consent of the parties this rule is enlarged till tomorrow morning.
Supreme Court October Term 1815 nineteenth Inst.
On motion for a rule to
show cause why e mandamus should not issue against him to compel hi •
to admit
the entries of the application in the order of the last term made in this
cuse.
It is agreed between the parties thet on the second of August one
thousand eight hundred and ten the applicant regulerly applied to the defeneent to make entry of his application for entire section number six Tomnship
twelve, Pane thirteen with the fraction number five same Township and range,
lying north of said section, also for entire section number twelve, with the
'motion number one north thereof in the township number sixteen PRnge fourteen, and produced the receiver's receipts for the 1/20 part of the purchase
of each.
That the defendant refuses to enter the said applications first,
because the said lande had been before sold at Marietta except tlet pert of
section number six lying east of the river, prior to the tire
the estb-
lishment of the land office of Zanesville end prior to the erection of the
2,enesvi11e district - second
- •
been offered el
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Federal Reserve Bank of St. Louis
AL Tale
because if not sold the said tract had never
the part of number six lying east of the river had before the time of the
le
blaintiffts application been offered for sale at Publick auction at Zanesvie
and aftsrmirds and before such application had been sold at private sale according to law and was sold singly as fraction, and was one of the sales of fractions
made according to the secretary's order, pursuant to the act of eighteen hendred
and four.
The parties agree as part of this case the Platt hereto annexed with
all the notes letters and figures thereon.
They further agree that section twelve
juskingum, also the part of
and the part of section six lying west of the river ,
fraction number five lying west of the said river and the fraction number one, all
appearing on the said Platt were sold together to Increase Mathews and Levi Whieple
at the Publiek sales at larietta in the year eighteen hundred and one, for which
a patent issued to Increase 'Aathews Levi Whipple and liufus Putnam, dated the
twenty first day of February one thousand eight hundred and three which Patent
hereto annexed is agreed as part of this ease.
They further agree that the
fraction number five aeeearing on ale said Platt was sold as a fraction united
with another tract lying due east of it, and contained by the lines of the
south Military boundary lines the north of said fraction, each produced
east three hundred and four Poles and a line from those points parallel
with the eastern lloundary of the said fraction number five was sold at
Marietta to John McIntire together with that part of fraction. number one
fraction
which lies east of the Muskingum river by the description of east
his
number one, who has made full payment therefor but has not received
thousand
patent - the last purchase above mentioned was made in January one
on said
eight hundred and three. The Parties further agree, the colours
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Federal Reserve Bank of St. Louis
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Platt to be true representations of the river Muskingum Licking and Zenes'
Grant which wets made in May one thousand seven hundred and ninety six by a
lrw of that dete.
The parties agree that the river -foreseid is a navigeble
stream the sales above stated to hive been mede at Marietta were returned by
the eurveyor General to the Zenesville office in one thousend eight hundred
and four, before they proceeded to do business as having been sold at Marietta
and therefore were never offered at Publick sale in the Zanesville District they further agree that the surveyor General in executing the surveys of
the publick lands northwest of the river Ohio and above the nouth of the Kentucky river, returned the same from the south boundary of the Military lands
appearing on the said Platts down to the Ohio companys purchase on the official platts all along the river in the manner appearing on the platts annexed
in entire townships nuMbered as such intersected by the river and has divided
the townships intersected into entire sections, crossing the river, showing
the distance of eech from its east and from its west boundary to the river,
and distance, across the river and in the return of the quantity of each section intersected deducting the area of the river bed and describing the
quantity of each tract on the different aides of the river in the manner appearing on the said Platt annexed which so far as the same goes is a true
copy from the surveyor General's record.
The perties further agree that the'
sale of the property contained in the said patent made part of this case was
7eade in Marietta in one entire sale under the direction of the Surveyor General and the Governor of the Territory - they further agree tatt the section
four being the tract before described lying east of the said fraction number
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Federal Reserve Bank of St. Louis
C
"10...
five lies on the north side of the Township
containing it and
is
bounded on
the north by the south bounds of the United
Seetes Military tract.
They
agree that this agreed case shall not be
considered on the defendants p-rt
as a waiver of the question of jurisdiction
, and thet the c as be now considered es on a motion for a. preemptory
mandamus waiving preliminry proceedings.
The parties further agree that altho the law
eat: bushing the Zanes-
ville district paseed in March one thousand
eight hundred and three, an office IT,s not opened there until the twenty
first day of Mey one thousand eight
hundred and four. - And they lastly agree that
all the official Pletts end
notes thereon or accompenying the platts now filed
in the office of the
Treasury Deprtment of the seventh Panges and
of the lands northwest of the
river Ohio and above the mouth of Kentucky river
be considered as parts of
this case and to be referred to, by either party, in
the Supreme Court of the
United States if this case shell be taken to thvt court
without being copied
into the record of this court.
William McClung
vs.
Wyllys Silliman
Pegr. of Land Office:
Supreme court of Muskingum County
October Term 1815
On the twenty first instant on a rule to show cause
why a mandamus should not issue.
Court took tire to consider thereon.
On the
following day of said term to wit, the tventy first, in this ease
a rule was
erlde at the lest term to show cause why a mandamus should not is:
usagainst
the defendant to compel him to admit and enter the Plaintiff's applic
ation in
the rule mentioned Came on to a finel hearing on the statement of fact; agreed
between the parties 8nd documents in the said Statment mentioned and was agreed
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Federal Reserve Bank of St. Louis
1""
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by the counsel on consideretion whereof the court are of
opinion that the law
is with the defendant and that the said rule be dismisse
d end thet the defendant recover of the Plaintiff his costs by him
nbout his defense in this
behalf expended.
The following is the patent referred to within. Patent
Thomas Jefferson, President
of the United States of America, to all to whom these
presents Shell come
Greeting: Know ye that Increase Mathews, Levi Whipple and flufus
Putnam having
deposited in the Treasury a certificate of the Register of
the Lend Office
at Marietta whereby it appears that they
emade full payment for the lot
or section number tINelve and fraction number one in townshi
p number sixteen
end range fourteen end the west fraction of number six and
number five in
township number twelve in Eange number thirteen of the land directed
to be
sold at Marietta by the act of Congress entitled an act to amend the
act entitled an act providing for the sale of the lends of the United States
in
the Territory northwest of the Ohio end above the mouth of Kentucky river
there is granted by the United States in pursuance of the acts aforesaid unto
the said Increase Methews, Levi Whipple and Rufus Putnam the lot or section
and parts of lots or sections of lend above de, cribed, to have and to hold
the said lot or section and parts of lots or sections of land with the appurtenences unto the said Increase Mathews, Levi Whipple and Fufue Putnam
their heirs and. essigns forever
RS
tenants in common and not as Joint Tenants.
In testieony whereof I have caused these letters to be mAe patent and the
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Federal Reserve Bank of St. Louis
CoU
cr3
4.12-
seal of the United States to be hereunto Affixed.
Given under my hand at
the city of Washington the twenty first day of i'ebruery in tl!() year of our
Lord one thousand eight hundred and three, end of the Independence of the
United States of America the twenty seventh.
Washington City se
By the President
(signed) Thome Jefferson,
received and recorded Book eighth
Jemes
:
fadison
ecry. of State
Pege 17'2.
Attest Dudley Voodbri(!e,e, recorder.
CThe next document in the transcript is a certified reproduction of an
oriented map of range seven, military lands, taken from the records of the
Surveyor General on December 27, 1813. The next document in the transcript
purports to be e certified copy of a survey of parts of ranges 13 and 14
likewise taken from the records of the Surveyor General, September 2, 1814.]
State of Ohio
I David Ch mbers, clerk of the Supreme court of
Muskingum County ss :
Ohio for the county of Muskingum, do hereby certify
that the foregoing is e true transcript of the record and proceedings in the
foregoing cause, as recorded in my office.
In testimony whereof I have
hereunto ret my hand, and affixed my official seal at Zanesville, the twelfth
day of Yebruery 181P.
David Chezbers, Clk.
Clks. Fees
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Federal Reserve Bank of St. Louis
4.00
C.
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Federal Reserve Bank of St. Louis
(Under this docket number (1071) there also appears,
as a separate doculaen.t, a certified copy of Range 8
and parts of Ranges 9 and 7, Military Lands, certified to by Sosiah I4eigs, Corimissioner, dated February 25, 1819.
Another separate document comprises
a similarly certified copy of what appears to be all
of Range 7, Military Land.]
1
C
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Supreme Court of the United States
Filed February 23, 1821
William McClung
vs.
Wyllys Siliiman
Register of the Land
Office at Zanesville :
The Same
vs.
The Same :
Error from the Circuit Court of
Ohio, on a moti.)n for b mand
amus.
The Same
It is agreed by the parties in this
case that the transcript or record now in this cour
t, between the same parties, in. a
writ of error to the Supreme Cour
t of the State of Ohio, for
Muskingum County, shall be tbken and
considered as :art of these
cases and each of them; and shall
be used and referred to in the
ai.Lreement and ,(?)
of them. and each of the:a iK the sagie
mfInner as
if written and set out In the transcri
pts in these cases respectively.
Robt. G. Harper
for Plaintiff in Error
Foby. 23, 1821
W. Silliman
It is also agreed that the pro-.erty
to be affected by each
of the entries in question in these cases,
is respectively 1!,
orth
more than two thousand dollars.
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Federal Reserve Bank of St. Louis
Robt. G. Harper
for Plaintiff in Error
W. Silliman
F1
-15
[Also conteined under Docket No. 1071 is document No. 104, pet forth
next
below]
United States Circuit Court Ohio Diet.
William MeClune,
v t Transcript
Wyllys Silliman
Filed Dec. 4th, 1820
Ohio
Decided 1821
William VeeClung
eget.
Vyllys Silliman
Plff. t
t
Deft. t
Upon a motion for a mandamus.
Pleas held at the court house in the Town
of Chillicothe before the Honorable Thomas Todd and Charles Dilling Byrd,
Jedses of the seventh circuit court of the United States in and for the
District of Ohio, on Tuesday the fourth day of Zanuary in the year of
our Lord one thousand eight hundred and twenty End in the forty fourth year
of the American Independence.
Be it remembered that at a circuit court of the United States of
America, in and for the seventh circuit and District of Ohio, holden at the
court houae in the Torn of Chillicothe, on Saturday the sixth day of September in the year of our Lord one thousand eight hundred and seventeen.
On
motion of William LeClung a citizen of the State of Virginia by Mr. Doddridge
his attorney, and it appearing to the satisfection of the court that notice
or making this eotion has been given to the adverse party.
It is ordered
that a rule be and the same is hereby entered against the said Wyllys
Register of the Lend Office ut Zanesville, a citizen of the State of Ohio, to
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Federal Reserve Bank of St. Louis
1
HCo
17
/
1
show cause if any he can at the next Term of this court why a nandaleus
should not be awarded against him.
Comnanding hie to enter for the said
William. McClung of Brook County in the State of Virginia his application
according to law for the following tracts of lends viz, entire section
number twelve and fraction number one of Township number sixteen and
Range number fourteen containing nine hundred and thirty one acres
and
seventeen hundredths of an acre, lying and being in the District of lands
offered for sale at Zanesville.
And afterwards to wit, on the nineteenth
day of September in the year aforesaid the following sumeons issued to wit,
"The United States of America District of Ohio - To Wyllys Silliman
Esquire
Register of the Land Office at rLanesville, Ohio, a citizen of the State of
Ohio Greeting, (SEL) You are hereby commanded to appeer before the
Judges of the Circuit Court of the United States for the seventh circuit
and District of Ohio, at Chillicothe, on a day of their next January Term
to •show cause if any you can why a mandamus shall not be awarded against
you commanding you to enter for William McClung a citizen of the State of
Virginia his application according to law for the following tracts of lands,
viz, entire section number twelve and fraction number one of Township number sixteen and Range number fourteen containing nine hundred and thirty
one acres and seventeen hundredths of an acre lying and being in the District of land offered for sale at Zanesville cra this you are in nowise to
omit under the penalty of the law.
Witness tee Hoeorable John Marshall,
Chief Justice of the United States of America the 19th day of September in
the year of our Lord 1817 and of our Independence the 42nd.
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Federal Reserve Bank of St. Louis
Attest
C
E. T. Laudaam, Clerk.
-17
-
Marshal's return, to wit, October 6th, 1817 then served this
writ by copy.
I. Vickers. Dept. Marshal. O. D.
And afterwards to wit, at January Term
in the year of our Lord one thousand eight hundred and eighteen
on motion
of Mr. Hammond and by consent of Mr. Silliman it is ordered
that the rules
entered in this cause at our last Term be and they are hereby
extended to
our next Term and afterwards, to wit, at September Term in the
year last
aforesaid.
On motions of Mr. Doddridge of counsel for the Plaintiff in
the above cause.
It is ordered that the some be placed on the issue
docket and that the rules extend in this cause at our September Term
1617
be and they are hereby extended to our next Term.
And afterwards, to wit,
at January Term in the year of our Lord ono thousand eight hundred
and
nineteen this cause was continued, and afterwards, to wit, at September
Term in the year last aforesaid, came the plaintiff aforesaid by his attorney, and on his motionthis cause is dismissed for the want of jurisdiction.
And now at this day to wit, on the day in the year and at the place first
herein aforesaid mentioned came the parties aforesaid and the motion of P.
Doddridge Esq., of Counsel for the Plaintiff and wIth the defendant assent
the dismission extended in this cause at the last Term is set aside.
And
now on the -motion of the defendant, and the court being of opinion that
they have no /urisdictior over the subject of the plaintiff's suit.
It is
considered that the same be dismissed for the want of jurisdictiorl..
WRIT 02 ERR°
"United States as
The President of the United States.
To the
judges of the circuit court of the United States for the District of Ohio
Greeting:
Because in the record and proceeding as also in the rendition of
the Tudgment
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Federal Reserve Bank of St. Louis
rich
the
117
1
I
you or some
-18
of you between William McClung plaintiff' and Wyllys Sillian defendant a
manifest error bath happened, to the greet damege of the said plaintiff
We being willing V...at error, if any bath
as by his complaint appears.
been should be duly corrected and full and speedy justice done to the
parties aforesaid in this behalf.
Do coeand you, if judgment be therein
given, that then under your seal distinctly and openly, you send the
record and proceedings aforesaid, with all things concerning the same to
the Supreme Court 3f the United States together with this writ, so that
you have the
381110
at Vashington, on the first Monday of February next in
the said Supreme Court, to be then and there held that the record and
proceedings aforesaid being inspected the said Supreme Court may cause
further to be done therein to correct that error, what of right and ace
eording to the law and custom of the United States should be done.
Wit-
ness, the Honorable Xohn Marshall Chief Justice of the said Supreme Court
this first Monday of August 1i the year of our Lord one thousand eight
the
hundred and nineteen and of the Independence of the United States
forty fourth.
Allowed by
Thomas Todd
E. B. Caldwell
Associate Justice of the
Clk. Sup. Ct. U. S."
Supreme Court United States."
Citation
"The United States
to Wyllys Silliman
District of Columbia
as
Greetings
and a
You are hereby cited and admonished to be and appear
Supreme Court of the United
Monday in Feb
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Federal Reserve Bank of St. Louis
A
states to
be holden at Washington on the first
in the
Clerk's Office of the circuit court of the United States for the District
of Ohio in, a cause wherein William. ivieClunL is plaintiff in error, and you
are defendant, to show cause if any there be, why the judEment rendered acair:st
the said Mlliam McClung as in the said writ
be corrected,
that behalf.
of error mentioned,
hodd not
why speedy justice should not be done to the parties ir
Witneos the Honorable Thsyaas Todd one of the Associate Jus-
tices of the Suprene Court of the United States this first day of March
A. D. 1820.
Thomas Todd."
Nov. 3rd 1820.
Then served this notice on Wyllys Sillimam by copy.
I. Vickers
THE UlUTED STATE;::: OF AMEt.dCA,
District of Ohio Set.
I, Harvey D. Evans, Clerk of the seventh circuit court of the United States
within and for the District of Ohio aforesaid, do hereby certify that the
foregoing is a true cony fro
the reoords in my office.
In Testimony whereof
have hereunto subscribed my name and affixed the seal of said court at
Columbus this seventh day of -November i. the year
of our Lord one thousand eijht hundred and twenty
(SEAL)
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Federal Reserve Bank of St. Louis
and in the forty fifth year of the American
Independence.
Att.
Harvey D. Evans, Clk.
ce
I:There is also contained under this docket nunber doculeent No.
105 set forth
next below.j
U. States
C. C. Ohio
ist.
William McClung
V.
Transcript
yilye Sillinan
Filed Dec. 4, 1520
Ohio
Decided 1821
William McClung Pitt.
agst.
Reopen a motion for illandamus
Tyllys Silliman Deft.
Pleas held at the court house in the Town of
Chillicothe before the Bonorable Thomas Towd and Charles Willing
Byrd Judges
of the seventh circuit court of the United States, in end for
the District of
Ohio, on Tuesday the fourth day of J-anuary in the year of our Lord
one thousand
eight hundred and twenty, and in the forty fourth year of the
American Inde—
pendence.
Be it remambored that heretofore to :it, at a circuit court of the
United States of America for the seventh circuit and District of Ohio,
holden
at the court house in the Town of
iiillicothe on Saturday the sixth day of
September in the year of our Lord one thousand eight hundred and seventeen,
on motion of William McClung a citizen of the State of Virginia by Mr.
Doddridge his attorney and it appearing to the satisfaction of the court that
notice of aaking this motion has boon given to the adverse party.
that a rule be and
Register of th
Ohio, to show
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Federal Reserve Bank of St. Louis
It is ordered
same is hereby entered against the said Wyllys Silliman
I f the State of
V
use
a mani us should not be
,
73
-21aarded against him ccemanding him to enter for th- said William McClung of Brooke
County in the State of Virginia aforesaid his aplication according to law for
the following tracts c:f land Viz, entire section aLAMber six Townships number
twelve Range number thirteen and fraction number five of the same Township and
Range containing nine hundred anq seTent.r seven acres and eighty four hundredths
of an aore lying and being in the District of lands offered for sale at Zanesville,
and afterwards to wit, on the nineteenth day of September in the year last aforesaid the folioiAng
Ohio Set.
SU 21033.8
issued to wit, The United States of America District of
To Wylly-s Silliman Esquire Regj.ster of the Land at Zanesville, a citizen
of the State of Ohio, a citizen of the said state Greeting: (SEAL)
You are hereby
commanded to appear before the Judges of the circuit court of the United States
for the seventh circuit and District of Ohio at Chillicothe on a day of their
next Term of January to show CEAlse if any you can why a mandamus should not be
awarded agLiinst you comn.anding you to enter for William McClung a citien of the
State of Virginia his ap:ilication according to law for the following tracts of
land, viz, entire section number six and fraction number five of Towriship number
twelve and Range number thirteen, containing nine hundred and seventy seven
acres and eighty four hundredths of an acre lying and being in the :A.strict of
lands offered for sale at Zanesville, And this you are in nowise to omit, under
the penalty of the law, 'iitness the Honorable John Marshall Chief Justice of the
United
tateS of America this 19th day of September 1817 and in the 42nd year of
our Independence.
Attest
Marshall: return to wit, Oct. 6th, 1817,
writ by copy.
I. Vickers.
E. T. Longhorn
Clerk
then served the within
Dept. M. O. D.
And afterwards, to wit, at January Term in the year of our Lord one thousand eight
Hiekred and
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Federal Reserve Bank of St. Louis
f Mr
of Mr. Silliman
it is ordered that the rules entered
in this cause at own last Term be
and they
are hereby extended to our next Term
. And afterwards, to wit, at Sept
ember
Term iu th6 year last aforesaid, on
motion of Me. Doddridge of coun
sel for the
Plaintiff in the above cause, it
is ordered that it be placed on
the issue
docket, and that the rules entered
in tide ceene at our September Term
eighteen
hundred and seventeen be and they
are hereby extended to our next
Term. And
afterwards, to wit, at January Term
in the year of our Lord one thou
sand eight
hundred and nineteen this caus
e was continued. And afterwar
ds, to wit, at
September Term in the year last
eforesaid cause the Plaintiff
aforesaid by
his Attorney and on his ee)tieu
this cause is diemiseed for the
want of jurisdiotion. And now at this day to wit,
on the day in the year and at the
pleoe
first herein aforesaid mentione
d, owaritt the parties aforesaid,
and on motion of
P. Doddridgo Use., of counsel for
tte Plaintiff, and with the defe
ndant's assent
the dismission ent red in this
ceeee it th! last term is set asid
,
e. And now on
motion of the defendant, and the
eourt being of opinion that they have
no jurisdiction over the subject of the
Pleiutifr's rule, it is considered
that the
same be dismissed for the want of
juriodievion*
WRIT OF ERROR
"United States ss
The President of the United States
To the Judges of the
circuit court of the United States
for the District of Ohio, Greoting
L
Because
in the record and proceedings as also
in the renditien ol the judgment of
a plea
whioh is in the said circuit cour
t before you or some of you between
William
ec'eClung Plaintiff and Jyllys Silliman
a manifest error hath happened, to the
great damage of the said Plaintiff as
by his complaint appears. We bein
g willing
that error, if any bath been, should
be duly corrected and full and spee
dy justice
done to the parties aforesaid in this beha
lf:
comand ou if judgeent be
i
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Federal Reserve Bank of St. Louis
kil
r
therein given, that then under your seal distinctly and openly, you send the
record and proceedings aforesaid with all things concerning the same to the
Supreme Court of the united States, together with this writ, so that you have
the same at Washington on the first Monday of February next, in the said
Supreme Court, to be then and there held, that the record and eroseedings aforesaid being inspected, the said Supreme Court may cause further to be done therein
to correot that error, what of right and according to the law and custom of the
United States should be dons*
Witness, the honorable John Marshall Chief Justice
of the said Supreme Court, this first Monday of August in the year of our Lord
one thousand eight hundred and nineteen, and of the Independence of the United
States the forty fourth.
Allowed by
Thomas Todd
an Associate Justice
E. B. Caldwell
Clk. Sup. Ct. U. S. "
of tho Sup. Ct. U. S."
Citation
"The United States, District of Coluiabia es
Greeting:
To Wyllys Siiliman,
You are hereby cited and admonished to be and appear at a supreme
court of the United States, to be holden at Washington on the first :.onday in
February A. D. 1U0 pursuant to a writ of error filed in the clerk's Office
of the circuit court of the United States for the District of Ohio in a cause
wherein William icOlung is Plaintiff in eri.or, and you are defendant to show
cause if any there be, why the judgment rendered against the said William
AcClung as in the said writ of error mentioned, should not be corrected, and
why speedy justice should not be done to the parties in that behalf.
Witness
the Honorable Thomas Tod,d one of the Associate Justices of the Supreme Court
a.
of the United S
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Federal Reserve Bank of St. Louis
Thomas Todd*
Nov. 3rd, 1820.
Then served this notice on Wyll:rs Silliman by copy.
I. Vickers
THE UNITA) STATES OF AnRICA
District of Ohio Set.
Harvey D. Evans, Clerk of the seventh Circuit Court of the United States
within and for the District of Ohio aforesaid do hereby certify that the
foregoing is a true copy from the records in my office In Testimony thereof I have hereunto subscribed
my name and affixed my seal of Office at
Colubus this seventh day of November in the
year of our Lord one thousand eight hundred and
(SEAL)
twenty, and in the forty fifth year of the
Aaerican independence.
Att.
.
Harvey D. Evans
Sao
atIERM.COIStiSa'S Of
.De
.......... 0
.
Inctt..tad
.
..............
APPtosied
.6•4.00,00...••••dia
.
17(11 •
Raised
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Federal Reserve Bank of St. Louis
C
1
REC'D IN 11- ES SECTION
sEiji 111940 K
C
n /
0
t
September 14, 1.)40
Recores in 'LcIntire v. ,00d„
Mr. Dreibelbis
Mr. Shay
-
and ecClunz v. Si1ll.z.
4
Pursuant to your request I visited the office of the
Clerk of the United States Supreme Court and exenlined the documents constitutinc the records of McIntire v. rood, 7 Cranch (11
777Silliman, 6
U.S.) 504, decided iiarch 15, 1813 and hic0214E7
1821, to deteroine if
Wheat. (19 U.S.) 598, decided March 16,
such records revealed. any material ehich riiht bear upon the use
of such decisions as authorities in the case of ArmandOchmoll,
s_
. 1ederel Reserve Beek of tg.-. York, now pendieg
Incorporated v. 2p
in the courts of Ne'York.
Only since l8 ::? have the records of litigation before
the United States Supreme Court been bound and placed in a readily
accessible form; and briefs have been nreserved only since 1854.
However, a reference to the docket ledgers lead to the discovery
of the folloeing material:
MeINTIRE v, i0OD,. DOCLET
534,
The record in this case is compoaed of a single document,
to wit, the certification of the question from the United States
Circuit Court for the District of Ohio, filed *the United States
Supreme Gourt on February 3, 1812. The oely naftet apeearing in
such certification and not appearing in the reported decision relates to the reasons why the Register of the Land Office refused to
grant the—plaintiff a final certificate of eurchase, namely, that
the Secretary of the Treasury had directed that the final certificate of purchase should not issue, that the land in question had
not been sold in a manner "'agreeable° with the laws of the United
States, that such land remained the property of the United States
and was claieed by a third party.
McCLUNG v, SILLIMAL, LOCKET NO. 1071.
In edeitien to teo certified plats of the land in eles-:
tion and a certificate indicatiuc. the disposal of the piaintiffts
claims in the United States Circuit Court for the District of Ohio
(as iadicated on page 599 of 6 Wheat.), the material preserved under
the above docket number includes what appears to be a transcript of
the record of the case in the Supreme Court of Ohio filed with the
United States Supreme Court on July 10, 1818. This transcript reveals, in rather general language, the plaintiff's claim to the
woo.. ..„
loos04,••
CoTOFirr
:
;:
(70
fie e
( ,
e2 ce
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Federal Reserve Bank of St. Louis
Me
0
4
To: Mr.Dreibelbis
land in question and the refusal by the defendant to issue a
final certificate of title; a rule addressed to the defendant
to show cause why the certificate should not issue; and the
reasons for such refusal by the defendant, Register of the Lend
Office. The decision in this case, at page 599 of G Wheat.,
shows that such officer refused the demand of the Plaintiff on
the ground that "the right is already legally vested in another".
The record merely elaborates this point, to hit, that the land
was sold prior to the establishment of the Land Office, that the
land was never offered for public sale under the laws of the
United States, and that title to part of the land in questin
was vested in another. The record, of course, also contains the
”lea of the defendant based upon his alleged immunity from jurisdiction as an officer of the United States acting pursuant to
statutory authorization.
Respectfully,
Jerome W. Shay.
UrrIcAt
Dictated
APIroved bY
41,114444.00044
&wised ts7
.:Ate644$Z4EAR.
TWS:am
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Federal Reserve Bank of St. Louis
••••1
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Federal Reserve Bank of St. Louis
\N-(
()
PR 4 '
w4e#
Mr. Walter S. Logan,
nos President and General Counsel,
Fedaral Reserve Bank of New York,
New York, New York.
Dear Mr. Logan:
In response to your letter of March 30, 1939,
you are advised that the Board approves the employmant
of the firm of Winthrop, Stimeon, Putnam and Roberts as
trial counsel to assist your legal department in the
mandamus proceeding brought against the Federal Reserve
Bank of New York by Armand Sehmell, Ins.
The Board's approval is given subjeet to the
conditions set forth in its letters of February 15, 1926
(X-4531) and April 15, 1936 (1.4546), under the terms of
which the Federal Reserve Bank *rill obtain an agreement
from this fire of special counsel that any fee in *moss
of $1.000 will be subject to final review and approval by
the Board of Governors and that, before paying any fee
which mould exceed $1.000, the Federal Reserve Bank will
submit the same to and obtain the approval of, the Board
of Governors.
Very truly yours,
iOR APPROVAL
first of
L. P. Bethel',
Assistant Seereftryo
Mr. Rarrom
Mr.
to.setnt
_
Mr.
WLH/rag
Mr. Prow: please
itlitia mid return to
Mrs. Fitzgerald
Co
-
FEDERAL RESERVE BANK
OF NEWYORK
March 30, 1939.
Board of Governors of the
Federal Reserve System,
Washington, D. C.
S i r s :
A proceeding in the nature of mandamus has been
brought against us in the Statt_uurI.by_an importer, Armand
Schmoll, Inc., to require us to certify io the Secretary of
the Treasury under Section 522 of the Tariff Act of 1930 (Section 372, Title 31, U. S. C.) the rates for Brazilian milreis
on three specified dates in December, 1935, and January and
February, 1936, on which it exported hides from Brazil that
were later imported into the United States. We certified on
these and other dates the so-called official rate for Brazilian
milreis, i.e., the rate (approximately 8 1 2 per milreis) at
/0
which the central bank of Brazil sold milreis and bought dollars,
this being the only rate at which Brazilian milreis could be
bought under such circumstances that the milreis became available,
without limitation or restriction under the Brazilian foreign exchange control regulation, for the purchase of goods for export
from Brazil to the United States. The importer alleges that
such certification did not constitute compliance with the law
and seeks to compel us to recertify the rate for those rates at
the so-called free rate (approximately 5 1 4 per milreis). Mil/(
reis purchased at the free rate were subject to foreign exchange
control restrictions during the period in question in that in
order to obtain an export license it was necessary for the exporter to show that milreis had been purchased from (or in other
words that dollars had been sold to) the central bank of Brazil,
, at the official rate, to the extent of a specified percentage of
the cost of the goods which percentage varied for different
classes of goods. If the petitioner succeeds in this proceeding
3i 0; /
) 40
it will, of course, attempt to compel the customs authorities to
assess the duty on the imported hides on the basis of the free
rate rather than the official rate.
The question of the certification of rates under Sec522 of the Tariff Act when there are in existence more than
tion
one rate for a given foreign currency has been the subject of
discussion in correspondence with Treasury officials and importers
(including representatives of Armand Schmoll, Inc.) from time to
V/v/f,
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Federal Reserve Bank of St. Louis
FEDERAL RESERVE BANK OF NE X
PRK
2
Board of G, !rnors of the
Feder.I. Reserve System.
tome in the past, and is a very complex and difficult subject.
We regard this proceeding as a very important one from
our standpoint as well as from the standpoint of the Treasury
because if it should be established, as the petitioner in this
proceeding claims, that it was our duty under the law to certify
only the free rate, we believe we would have other suits brought
against us by this and other importers on the ground that our
failure to certify the free rate had caused damages to the importers to the extent that they had thereby been required to
pay excessive duties.
Upon my recommendation our directors at their meeting
today authorized the employment of Winthrop, Stimson, Putnam and
Roberts as trial counsel to assist the legal department in the
matter, and in accordance with the Board's rules with respect to
the employment of outside counsel I am now writing to the Board
to request its approval.
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Federal Reserve Bank of St. Louis
Very truly yours,
Walter S. Logan,
Vice President and General Counsel.
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Federal Reserve Bank of St. Louis
@FedFRASER