B-142874, JUL. 7, 1960

B-142874: Jul 7, 1960

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TO BRODSKY AND ETTINGER: REFERENCE IS MADE TO YOUR LETTERS OF MAY 3 AND JUNE 15. RODE'S CLAIM IS AN ATTORNEY'S LIEN ARISING UNDER SECTION 475. UNDER WHICH HE IS TO BE PAID FIFTY PERCENT OF ALL REFUNDS OF CUSTOMS DUTIES SECURED FOR HIS CLIENT. THE RECORD SHOWS THAT THESE REFUNDS ACCRUED AS A RESULT OF THEIR RELIQUIDATION IN ACCORDANCE WITH COURT DECISION AND TIMELY PROTESTS WHICH WERE PROSECUTED BY MR. THAT ALL THE ENTRIES WERE MADE IN THE NAME OF THE CANDOUR SHIPPING COMPANY AS IMPORTER OF RECORD WITH MARTIN M. - "/1) ALL MERCHANDISE IMPORTED INTO THE UNITED STATES SHALL BE HELD TO BE THE PROPERTY OF THE PERSON TO WHOM THE SAME IS CONSIGNED. SHALL BE DEEMED THE CONSIGNEE THEREOF. * * *" SECTION 1485 (D) OF THE SAME TITLE PROVIDES: "A CONSIGNEE SHALL NOT BE LIABLE FOR ANY ADDITIONAL OR INCREASED DUTIES IF (1) HE DECLARES AT THE TIME OF ENTRY THAT HE IS NOT THE ACTUAL OWNER OF THE MERCHANDISE.

B-142874, JUL. 7, 1960

TO BRODSKY AND ETTINGER:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 3 AND JUNE 15, 1960, REQUESTING RECONSIDERATION OF OUR SETTLEMENT OF APRIL 25, 1960, WHICH DISALLOWED THE CLAIM OF YOUR CLIENT, JOHN D. RODE, ATTORNEY FOR MARTIN M. JORDAN CORPORATION, FOR FIFTY PERCENT OF CERTAIN CUSTOMS DUTY REFUNDS AWARDED TO THE CANDOUR SHIPPING COMPANY, A BUSINESS CONDUCTED BY GEORGE CANTLEY, JR., NOW DECEASED.

THE BASIS OF MR. RODE'S CLAIM IS AN ATTORNEY'S LIEN ARISING UNDER SECTION 475, JUDICIARY LAW OF THE STATE OF NEW YORK, PURSUANT TO A RETAINER AGREEMENT EXECUTED BY MARTIN M. JORDAN CORPORATION, HIS CLIENT, UNDER WHICH HE IS TO BE PAID FIFTY PERCENT OF ALL REFUNDS OF CUSTOMS DUTIES SECURED FOR HIS CLIENT.

THE RECORD SHOWS THAT THESE REFUNDS ACCRUED AS A RESULT OF THEIR RELIQUIDATION IN ACCORDANCE WITH COURT DECISION AND TIMELY PROTESTS WHICH WERE PROSECUTED BY MR. JOHN D. RODE; THAT ALL THE ENTRIES WERE MADE IN THE NAME OF THE CANDOUR SHIPPING COMPANY AS IMPORTER OF RECORD WITH MARTIN M. JORDAN CORPORATION INDICATED AS THE ULTIMATE CONSIGNEE; AND THAT THE COLLECTOR OF CUSTOMS AT NEW YORK DREW THE CHECKS TO THE ORDER OF THE CANDOUR SHIPPING COMPANY IN THE ABSENCE OF A TIMELY OWNER'S DECLARATION. IT APPEARS THAT THE ADMINISTRATOR OF THE ESTATE OF GEORGE CANTLEY, JR., HAS REFUSED TO AUTHORIZE MR. RODE OR YOU TO COLLECT THE PROCEEDS OF SUCH CHECKS.

IN CONNECTION WITH THE MATTER WE INVITE YOUR ATTENTION TO SECTION 1483, TITLE 19, UNITED STATES CODE WHICH PROVIDES, IN PART, AS FOLLOWS:

"FOR THE PURPOSE OF THIS SUBTITLE---

"/1) ALL MERCHANDISE IMPORTED INTO THE UNITED STATES SHALL BE HELD TO BE THE PROPERTY OF THE PERSON TO WHOM THE SAME IS CONSIGNED; AND THE HOLDER OF A BILL OF LADING DULY INDORSED BY THE CONSIGNEE THEREIN NAMED, OR, IF CONSIGNED TO ORDER, BY THE CONSIGNOR, SHALL BE DEEMED THE CONSIGNEE THEREOF. * * *"

SECTION 1485 (D) OF THE SAME TITLE PROVIDES:

"A CONSIGNEE SHALL NOT BE LIABLE FOR ANY ADDITIONAL OR INCREASED DUTIES IF (1) HE DECLARES AT THE TIME OF ENTRY THAT HE IS NOT THE ACTUAL OWNER OF THE MERCHANDISE, (2) HE FURNISHED THE NAME AND ADDRESS OF SUCH OWNER, AND (3) WITHIN NINETY DAYS FROM THE DATE OF ENTRY HE PRODUCES A DECLARATION OF SUCH OWNER CONDITIONED THAT HE WILL PAY ALL ADDITIONAL AND INCREASED DUTIES, UNDER SUCH REGULATIONS AS THE SECRETARY OF THE TREASURY MAY PRESCRIBE. SUCH OWNER SHALL POSSESS ALL THE RIGHTS OF A CONSIGNEE.'

UNDER THE ABOVE-QUOTED PROVISIONS OF LAW IT HAS BEEN HELD THAT WHERE MERCHANDISE IS IMPORTED IN THE NAME OF A NOMINAL CONSIGNEE AND NO OWNER'S DECLARATION IS FILED THE NOMINAL CONSIGNEE IS TO BE REGARDED AS THE OWNER BOTH FOR THE PURPOSE OF ADDITIONAL ASSESSMENTS AND FOR REFUND OF EXCESSIVE DUTIES PAID, EVEN THOUGH THE NOMINAL CONSIGNEE DECLARES IN THE ENTRY THAT ANOTHER IS THE ULTIMATE CONSIGNEE AND ACTUAL OWNER. SEE MAGINNIS ET AL. EXRS. V. UNITED STATES, 74 C.CLS. 668; AMERICAN SHIPPING CO. V. UNITED STATES, 10 CUST.CT.REPTS. 300 (C.D. 771); AND 19 COMP. GEN. 309, AS TO REFUNDS; AND BALDWIN ET AL. V. UNITED STATES, 113 F. 217; UNITED STATES V. BISHOP, 125 F. 181; AND UNITED STATES V. VANDIVER, 133 F. 252, AS TO PAYMENT OF DUTIES. IN MAGINNIS ET AL., EXRS. V. UNITED STATES, THE COURT SAID:

"THE PETITION SHOWS THAT THE MERCHANDISE WAS IMPORTED IN THE NAME OF A. C. MERKLE, WHO PAID THE DUTIES ASSESSED THEREON. THE PLAINTIFF'S DECEDENT WAS AN ENTIRE STRANGER TO THE RECORD SO FAR AS THE IMPORTATION OF THE GOODS AND THE PAYMENT OF THE CUSTOMS DUTIES WERE CONCERNED. UNDER THE PROVISIONS OF SECTION 483 OF THE TARIFF ACT OF 1922 (42 STAT. 858) (19 U.S.C. 1483), MERKEL, AS THE CONSIGNEE, BECAME AND WAS THE OWNER OF THE GOODS FOR CUSTOMS PURPOSES.

"THE PETITION SHOWS THE CONSIGNEE'S DECLARATION REFERRED TO IN THIS SECTION (19 U.S.C. 1485 (D) ( WAS NEVER FILED AS TO PART OF THE MERCHANDISE IN QUESTION, AND AS TO THE REMAINDER WAS NOT FILED WITHIN THE NINETY DAYS REQUIRED. MERKLE, THEREFORE, AT ALL TIMES REMAINED THE OWNER OF THE MERCHANDISE FALLING WITHIN THESE TWO CLASSES AND WAS LIABLE FOR ANY ADDITIONAL DUTIES THAT MIGHT HAVE BEEN ASSESSED AGAINST IT.

"PLAINTIFFS CONTEND, HOWEVER, THAT SECTIONS 483 AND 485 (D) OF THE 1922 ACT (19 U.S.C. 1485 AND 1485 (E) ( ARE LIMITED BY THE TERMS OF THE TITLE TO PART 3 OF THE ACT, IN WHICH THEY APPEAR, TO THE "ASCERTAINMENT, COLLECTION, AND RECOVERY OF DUTIES," AND DO NOT FIX TITLE IN THE GOODS FOR THE PURPOSE OF THE REFUND OF EXCESSIVE DUTIES. THIS CONTENTION IS NEGATIVED BY THE FACT THAT FOLLOWING SECTIONS OF THE SAME TITLE DEAL WITH THE DETERMINATION AND REFUND OF EXCESSIVE DUTIES, AND MAKE THE ADJUDICATION OF THE BOARD OF GENERAL APPRAISERS (NOW THE UNITED STATES CUSTOMS COURT) FINAL AND CONCLUSIVE ON SUCH MATTERS AS ARE APPEALED TO AND DETERMINED BY IT.

"* * * WE THINK SECTIONS 483 AND 485 (D) DEFINITELY FIXED THE OWNERSHIP OF THE MERCHANDISE IN THESE TWO CLASSES IN MERKLE FOR ALL CUSTOMS PURPOSES --- THE REFUNDING OF EXCESS DUTIES AS WELL AS THE PAYMENT OF ANY ADDITIONAL DUTIES THAT MIGHT HAVE BEEN ASSESSED.'

WHAT WAS SAID THEREIN WOULD APPEAR TO BE FOR APPLICATION IN THE INSTANT CASE.

IN VIEW OF THE ABOVE-QUOTED STATUTORY PROVISIONS AND THE CONSTRUCTION THEREOF BY THE COURTS AND THIS OFFICE, IT APPEARS THAT NEITHER THE BUREAU OF CUSTOMS NOR THIS OFFICE MAY LEGALLY REFUND THE CUSTOMS DUTIES INVOLVED HERE TO MARTIN M. JORDAN CORPORATION, MR. RODE'S CLIENT, IN THE ABSENCE OF A JUDICIAL DETERMINATION OR DECLARATION THAT IT IS ENTITLED TO SUCH REFUNDS, SINCE IT DOES NOT APPEAR THAT THE MARTIN M. JORDAN CORPORATION ON THE PRESENT RECORD IS QUALIFIED TO GIVE A GOOD ACQUITTANCE TO THE UNITED STATES.

AN ATTORNEY'S LIEN UNDER SECTION 475, JUDICIARY LAW OF THE STATE OF NEW YORK, ARISES BY OPERATION OF LAW RATHER THAN BY PURCHASE. BROOKS V. MANDEL-WITTE COMPANY, 54 F. 2D 992; IN RE LEVINE'S ESTATE, 278 N.Y.S. 36, 286 N.Y.S. 513. CONSEQUENTLY, ITS RECOGNITION HERE WOULD NOT BE PRECLUDED BY SECTION 3477, REVISED STATUTES. HOWEVER, ALTHOUGH SECTION 475, ABOVE, GIVES AN ATTORNEY A LIEN ON PROPERTY RECOVERED, HE IS NOT ENTITLED TO POSSESSION OF HIS AGREED SHARE OF THE PROCEEDS OF A RECOVERY WHERE THE FUNDS ARE STILL THE SUBJECT OF LITIGATION AND THE CLIENT'S RIGHT THERETO HAS NOT BEEN ESTABLISHED, BUT RATHER, THE ATTORNEY MUST WAIT UNTIL THE EXTENT OF THE CLIENT'S INTEREST HAS BEEN DETERMINED. SMITH V. FIRST NATIONAL BANK, 172 N.Y.S. 595. INASMUCH AS ON THE PRESENT RECORD, THE RIGHT OF MR. RODE'S CLIENT, MARTIN M. JORDAN CORPORATION, TO THE PROCEEDS OF THE CUSTOMS DUTY REFUND CHECKS HAS NOT BEEN ESTABLISHED, HE IS NOT PRESENTLY ENTITLED TO POSSESSION OF HIS AGREED SHARE THEREOF.

ACCORDINGLY, THE SETTLEMENT OF APRIL 25, 1960, IS SUSTAINED.

WE SHOULD LIKE TO POINT OUT, HOWEVER, THAT UPON RECEIPT OF PROOF THAT A COURT ORDER OR DECREE HAS BEEN ENTERED TO THE EFFECT THAT THE MARTIN M. JORDAN CORPORATION RATHER THAN THE ESTATE OF GEORGE CANTLEY, JR., IS ENTITLED TO THE REFUNDS OF THE EXCESS CUSTOMS DUTIES OR THE PROCEEDS OF THE CHECKS INVOLVED, WE SHALL BE PLEASED TO RECONSIDER THE MATTER. ANY FURTHER REQUEST FOR RECONSIDERATION OF THIS MATTER BY YOU ON BEHALF OF MR. RODE SHOULD BE ACCOMPANIED BY A PROPER POWER OF ATTORNEY.