
    SAMUEL C. BOEHM ET AL. v. THE UNITED STATES.
    [No. 12980.
    Decided April 20, 1885.]
    
      On the Proofs.
    
    The claimants pledge 408 barrels of tax-paid alcohol and whisky as security for the return of another distiller’s alcohol to a bonded warehouse in the thirty-second district. The government permits the latter to return it to a bonded warehouse in the eighth district, but refuses to release the claimants. They give a warehouse bond, and pay, under protest, the tax a second time on their own alcohol. On the trial questions of evidence arise.
    I.Though the condition of a pledge be that certain alcohol belonging to a third person be returned to a designated bonded warehouse, yet if the pledgee allow it to be returned to another, the condition will be satisfied and the pledge discharged.
    II.The government, as pledgee, is not authorized to impose conditions inconsistent with or additional to the terms of a pledge.
    III. An internal-revenue bond conditioned for the payment of a tax on alcohol, if extorted without color of right and given under protest, is void, and money paid pursuant to it may be recovered back.
    IV. An affidavit made and filed by one of several obligors on a warehouse bond would be evidence against him in a suit in which he was sole defendant, but eannotJbe admitted if it will affect his co-obligors.
    V.An uncanceled bond given to secure the return of certain alcohol to a bonded warehouse, and the official records of the collector’s office showing its removal, but silent as to its return, are evidence, prima facie, of a breach.
    
      The Bejportet s’ statement of the case:
    It was found by the court that one O. A. Sanborn, in the city of New York, withdrew from a warehouse in the thirty-second district 500 barrels of whisky for redistillation, after giving the usual bond, and the court then further found as follows:
    II. Two of said Sanborn’s sureties became insolvent, and the collector of the thirty-second district demanded .further security. Thereupon C. A. Sanborn induced the claimants to deposit with said collector 358 barrels of whisky and 50 barrels of alcohol belonging to them, upon which the taxes had already been paid, as collateral security for the fulfillment of the bond.
    
      III. The collector of the eighth district was requested to enter into the bonded warehouse in said district the said Sanborn whisky, as appears by the following letter :
    
      “ Internal Revenue
    “ 32d Collection District, .
    “State of New Yore,
    “ New York, July 8th, 1867.
    “ Thomas E. Smith, .
    “ Collector 8th District, New York:
    
    “Dear Sir': You will please allow Mr, H. D. Chaffee to enter into the bonded warehouse of R. H. Cunningham all goods withdrawn from the thirty-second district for redistillation, to cancel the bonds held against him. The same privilege is requested for Mr. O. A. Sanborn for all goods withdrawn by him for the same purpose from the same district.
    “ Yours, respectfully,
    “J. E. Messmore,
    “ Deputy Commissioner.”
    Thereafter said Sanborn deposited 302 barrels of alcohol (being the amount obtained by the redistillation of the 500 barrels of whisky) in said Cunningham warehouse in said eighth district, under the control of the collector of that district.
    Said bonds were thereupon each marked by E. B. Shafer “ Canceled on annexed certificate, E. B. Shafer, deputy collector, August 30, ’67,” said Shafer being a deputy collector of internal revenue for the thirty-second district of New York.
    July 17,1867, the Cunningham warehouse and the claimants’ rectifying-house, which adjoined it, with all their contents, were destroyed by fire. The fire originated in the claimants’ rectifying-house.
    IV. After the Sanborn whisky had been deposited as alleged in the Cunningham warehouse the claimants demanded the return of the whisky and alcohol deposited as aforesaid as collateral security, and the local officers referred the matter to the Bureau of Internal Revenue, and received the following instructions:
    “-Treasury Department,
    “Oefice or Internal Revenue,
    “ Washington, June 20th, 1868.
    “ Sir: I return you herewith two bonds, signed by C. A. San-born as principal, for the withdrawal on each of two hundred and fifty barrels of spirits for rectification, together with the certificate of ex-Collector Smith, of the 8th district, as to the deposit of 302 barrels of alcohol in a warehouse in his district in cancellation of the bonds first referred to. This certificate has been carefully considered, together with such other evidence as has been furnished to show that the alcohol was actually deposited in warehouse in the 8th district. The proof of that fact is not considered satisfactory, and they are therefore returned to you in order that you may distrain forthwith upon the spirits left with you as security unless the claimant shall choose immediately to execute a satisfactory warehousing bond for the same. If the warehousing bond is executed, you will take the amount up in your bonded account in the same manner as if the spirits had been produced in your district.
    “ Please advise me as soon as possible of the course taken by the claimant of the spirits.
    “Yery respectfully,
    “Thomas Harland,
    
      "Aoting Commissioner.
    
    “Sheridan Shook,
    “ Collector 32d District, New York.”
    
    In consequence of this order the spirits were not released, and one of the claimants, acting for all, executed the following bond:
    “ Know all men by these presents that Isaac Boehm, as principal, and S. Frank and Henry Cohen, as sureties, are held and firmly bound unto the United States of America in the sum of thirty-six thousand dollars, to be paid to the United States; for the payment whereof we bind ourselves, our heirs, executors, administrators, and assigns, jointly and severally, firmly by these presents, as witness our hands and seal, at New York, this 22d of June, 1868.
    “The condition of this obligation is such that if the above bounden principals, or either of them, or either of their heirs, executors, administrators, assigns, shall well and truly pay, or cause to be paid, unto the collector of internal revenue for the 32d district of New York the amount of taxes due and owing on the following-described goods :
    Marks. Serial numbers. No. bbls. or packages. Articles. Proof galls. Pate of or pounds, tax. Amountof tax.
    K. B. Co. 358 50 Whiskey . Alcohol... 14,264.45 3,399. 66 $2 00 $28,528 90 6,709 32
    which were deposited in the bonded warehouse, class B, of Stewart & Co., at Whitehall street, in the 32d district of New York, on the 20th day of June, 1868, or shall, in the mode prescribed by law, withdraw the said goods from bonded ware-bouse, then this obligation is to be void; otherwise to remain in full force and virtue.
    “Isaac Boehm. L. S.
    “S. Frank. L. S.
    “ Henry Cohen. L. S.' n
    
    The spirits described in the foregoing bond were subsequently, from time to time, withdrawn, and the tax paid thereon, as provided in the bond, amounting to $10,234.08.
    The claimants orally protested against giving the bond and the payment of the tax.
    Y. Claimants made application to the Commissioner of Internal Bevenue for refund of this tax, but the claim was rejected April 2, 1872.
    Thereafter claimants applied to Congress for relief, and the claim was referred to this court by the following resolution of the House of Bepresentatives, adopted August 5, 1882:
    
      11 Resolved, That the claim of Boehm & Bros., of New York, for $10,234.08, being the amount of a duplicate tax alleged to have been paid by said Boehm Brothers upon 358 barrels of whisky and 50 barrels of alcohol, be referred to the Court of Claims to be heard and determined.”
    YI. Counter-claim, No. 1. — July 11, 1867, the claimants executed the following bond:
    “ Bond for withdrawal from warehouse for redistillation (or canning) for export. Internal revenue.
    
    “ Know all men by these presents that we, Isaac Boehm, as principal, Sam. C. Boehm and Nathan Boehm, as sureties, are held and firmly bound unto the United States of America in the full and just sum of one hundred and fifteen thousand seven hundred and seventy-nine -f0-0- dollars; to which payment, well and truly to be made, we bind ourselves, jointly and severally, our joint and several heirs, executors, and administrators, firmly by these present, sealed with our seals and dated at New York, this eleventh day of July, A. D. 1867.
    “ The condition of the foregoing obligation is such that whereas the said Isaac Boehm has received a permit to remove, for the purpose of change of package for export, the following-described merchandize:
    Marts. No. of barrels or packages. Proof, if liquids. No. of gallons or pounds. 1 Article. Pate of Amount of tax.
    A. Yarious. 98 188 793, 592 Alcoliol. $15, 871 84
    H. D. 0. & Co . 135 188 1, 034,478 26, 689 56
    H. D. C. & Oo . 140 188 1,058,450 21,168
    
      from the bonded warehouse known as R. A. Cunningham, situated in the city, of New York, county of New York, State of New York:
    “Now, therefore, if the said Isaac Boehm shall return the said merchandise to the said warehouse to be again inspected, and shall pay the duty to the collector on any deficiency or reduction beyond the allowance for loss by change of p’k’ge established by the Commissioner of Internal Revenue in the number of proof gallons received at the warehouse, within five days from the time of execution of this bond, then the above obligation to be void and of no effect; otherwise to be and remain in full force and virtue.”
    In pursuance of this bond the spirits therein described were withdrawn from the said warehouse by the claimants and never returned. The taxes thereon were never paid.
    VII. Counter-claim No. 2. — April 13,1869, in a certain proceeding in rem lawfully pending in the United States district court for the district of New Jersey, a judgment was duly entered against Samuel 0. Boehm and Nathan Boehm for the sum of $13,186, with interest from March 11,1869, and costs. The said court had jurisdiction of the parties and the subject-matter of the proceeding, and the judgment has not been paid. The partnership of Samuel C. Boehm, Nathan Boehm, and Isaac Boehm has been dissolved, and all the affairs of said partnership have been fully settled up except the collection of the claim now sued upon and any debts due the partnership which may be hereafter discovered; the mutual accounts of all the said parties have been fully adjusted, so that neither of the said parties is indebted to either of the others; and the amount of said claim is owned by, and, if collected, will be divided among the said parties in the following proportion, to wit: One-half to Samuel C. Boehm, one-third to Nathan Boehm, and one-sixth to Isaac Boehm.
    During the progress of the trial the following motions were made and ruled upon:
    The defendants, having read in evidence, in support of their counter-claim No. 1, the uncanceled bond given by the claimants, conditioned for the return to the bonded warehouse within five days of the 373 barrels of alcohol, and also a duly certified copy of the official record of the collector of internal revenue in the eighth district of New York, containing the accounts of entries and removals in the Cunningham bonded warehouse during’ the month of July, 1867, showing that the alcohol had been removed, with no entry showing its return, now offered in evidence, in further support of said counter-claim, the affidavit of Isaac Boehm, dated July 31, 1867, and the affidavits of Israel Boehm, Charles A. McLachlan, and Thomas Gately, dated September 5, 1867. Objected to by the claimants.
    
      Per curiam: The objection is sustained.
    These four affidavits were filed in the Treasury Department in September, 1867, but by whom or for what purpose does not appear. Had it been shown that they were procured and filed by the claimants to excuse their failure to return the alcohol, as intimated in the argument, they might become evidence against them, but in the absence of such proof they must be excluded. While the affidavit of Isaac Boehm would be evidence in a separate suit against himself, it cannot be admitted to affect his co-obligors. (1 Greenleaf’s Evidence, sec. 187.)
    The defendants offering no other evidence to show a breach of the condition of the bond, the claimants moved the court to dismiss the counter-claim.
    
      Per curiam: The uncanceled bond and the official records of the collector’s office are sufficient to put the claimants on proof of the return of the alcohol. It was the duty of the collector to cancel the bond and record the fact of return on the boots of his office. It was also the right of the claimants to demand that the cancellation and the record should be made, and also a receipt should be given to be retained by themselves. It is to be presumed, nothing appearing to the contrary, that the officer performed his duty.
    The claimants offer in evidence thedeposition of IsaacBoehm, one of the claimants, not in support of the claim set forth in the petition, but to defeat the defendants’ counter-claim. The defendants object to the deposition, on the ground that a claimant is not a competent witness in his own case.
    
      Per curiam : The objection is overruled.
    The propriety of excluding interested witnesses, according to the rule of the common law, has of late years been very much questioned. Many of the States, under this progressive sentiment, have abrogated that rule altogether. The United States, in section 858, Rev. Stat., has provided that “ in the courts of the United States no witness shall be excluded * # * in any civil action because he is a party to or interested in the issue tried”; but section 1079 provides that “no claimant * * * shall be a competent witness in the Court of Claims in supporting the same [the claim], and no testimony given by such claimant # * * shall be used except as provided in the next section.”
    The last clause of this section, as we understand it, relates to testimony given in support of the claim.
    In the light of section 858 the court does not feel called upon to carry the exclusion of claimants as witnesses beyond the letter of the statute.
    The deposition of the claimant is not offered to support the claim, directly or indirectly, but to defeat a counter-claim, and is therefore not within the letter of section 1079.
    The United States circuit court has jurisdiction of the counter-claim, and, in fact, a suit upon it was pending in that court at the time this suit was commenced. Had the counterclaim been prosecuted in that court, the claimants would have been competent witnesses to defeat it. They should not be placed in a worse position because the defendants have chosen to present it here.
    
      Mr. W. B. and Mr. G. A. King for the claimants.
    Mr.' George L. Douglass (with whom was the Assistant Attorney-General) for the defendants.
   Scofield, J., delivered the opinion of the court:

delivered the opinion of the court:

The claimants bring suit to recover taxes alleged to have been assessed illegally and paid under compulsion, amounting to $10,234.08.

It appears that in June, 1867, one C. A. Sanborn had in the United States bonded warehouse of A. H. Mills, in the thirty-second district of New York, 500 barrels of whisky, which he desired to remove for reilistillation. Having given a bond, with sureties, conditioned for its return after redistillation, he was-allowed to remove it. It was developed soon afterwards that some of the sureties were insolvent, and he was required to give additional security. Instead of giving anewbondhe borrowed from the claimants 358 barrels of whisky and 50 barrels of alcohol and offered them as collateral to the bond. The offer was accepted and the whisky and alcohol given into the possession of the proper officer of the government.

Thereafter Sanborn obtained permission from the deputy commissioner, J. E. Messmore, to return his whisky, when redis-tilled, into the Cunningham bonded warehouse, located in the eighth district, instead of the warehouse in the thirty-second district from which it was taken. In due time it was so returned.

Very soon thereafter the Cunningham warehouse, and Boehm’s rectifying-house, adjoining it, were destroyed by fire.

After the Sanborn whisky, converted into alcohol, had been returned to the Cunningham warehouse, the claimants demanded the surrender of the 358 barrels of whisky and 50 barrels of alcohol put up as collateral to the Sanborn bond.

Some question arose as to whether the Sanborn whisky had been returned to the Cunningham warehouse, in the eighth district, and, if so, whether that fact satisfied the bond conditioned for its return to the thirty-second district. The matter was referred to the Internal Beveuue Bureau, at Washington, by which the collector was finally instructed to require from the claimants a warehouse bond conditioned for the payment of the regular tax upon the whisky and alcohol, as if such tax had not already been paid, and upon failure to comply to dis-train and sell the same. Tb e claimants, orally protesting against the requirement, gave the bond and, still protesting, subsequently paid the tax, amounting to $10,234.08.

The claimants made application to the Commissioner of Internal Revenue for a refund of this tax, but the application was rejected. They then applied to Congress, and thence, by a resolution of the House, their claim was sent to this court.

The court has found that the Sanborn whisky, after conversion into alcohol, was deposited in the Cunningham warehouse, and also that claimants’ whisky and alcohol had paid the regular tax before it was put up as collateral security to the San-born bond.

Upon this state of facts the court holds that the claimants were entitled to demand a return of their property. The defendants could not justly receive and retain the Sanborn spirits in the Cunningham warehouse and still demand its return to the Mills warehouse. By receiving it in one place they waived their right to claim it in another.

In this view of the ease, we are not required to pass upon the legality of the acts of the collector in accepting property as collateral security, nor of the deputy commissioner in consenting that the spirits might be deposited in a warehouse other than the one called for by the bond.

In the judgment of the court the defendants were not authorized by law to impose conditions upon the return of claimants’ whisky and alcohol inconsistent with or additional to the original pledge.

But it is said that even if the defendants could not legally exact the bond, the claimants, having given it, must abide by its terms. That might be so if the bond had been voluntarily given in settlement or compromise of a doubtful claim. In' this case, however, the bond was demanded without color of right, and given under protest and by compulsion. The claimants were told that they must execute the bond or suffer their property to be distrained and sold. The alternative was as unlawful as the demand. They had no right to distrain the property, because the Sanborn bond for which it had been pledged was fulfilled and canceled. They had' no right to assess taxes upon it, because it had already been assessed for all legal taxes, and the same had been paid.

A bond thus secured should not be enforced, and taxes thus collected should not be retained. (United States v. Tingey, 5 Pet., 115; Swift Company v. United States, 111 U. S. R., 22.)

The defendants present a counter-claim, based upon the following facts:

July 11, 1867, Isaac Boehm, one of the claimants, was-the owner of 373 barrels of alcohol which were deposited, under bond, in the Cunningham bonded warehouse, in New York. Desiring to remove the alcohol temporarily in order to change it into better barrels, he gave a bond, signed by all the claimants, conditioned for its return within five days. Under this bond the alcohol was removed from the warehouse, but never returned.

At the time of its removal there was a tax lawfully assessed against it amounting to $63,629.40. This tax has never been paid.

Upon these facts the court holds that the claimants became liable for the amount of the tax, and thatit constitutes aproper counter-claim in this case.

In the pleadings the defendants presented as an additional counter-claim a judgment in their favor against Samuel C. Boehm and Nathan Boehm, two of the claimants, obtained in the United States district court, amounting to $13,186. In connection with this counter-claim it was shown that the defendants in the judgment were entitled to receive five-sixths of any sum that might be recovered in this suit. To this counter-claim the claimant entered a demurrer, which was sustained by the court in an opinion elsewhere reported.

Deducting the amount of the claim from the counter-claim allowed by the court leaves a balance in favor of the defendants amounting to $53,395.32, for which sum judgment will be entered in their favor.

Davis, J., took part in this and all the decisions subsequently reported unless otherwise noted.  