The importer was not constrained by duress to enter its merchandise at the values stated in the respective entries; it was at liberty to state the values later ascertained in reappraisement proceedings to be the proper values, or other values may have been stated, as in the opinion of the importer were proper.

We think that this case is distinguishable from the cases cited by the importer as authority for its contention.

In the case of Stein v. United States (1 Ct. Cust. Appls. 36; T. D. 31007) this court held that, when an importer is constrained to include in his entry a nondutiable item, in this case a 21 per cent commission, by the knowledge gained from the Customs Regulations, that the omission of the item would be followed by the exaction of a penalty, the inclusion thereof is made by duress.

In the case of Stein v. United States (1 Ct. Cust. Appls. 478; T. D. 31525) the doctrine announced in the case of Stein v. United States, supra, was reaffirmed. In this case the question of an involuntary inclusion in the entry of a commission paid by the importer was under consideration by the court.

In the case of Batten & Co. v. United States (5 Ct. Cust. Appls. 447; T. D. 34975) the question involved was whether the collector's action amounted to duress in refusing an entry unless the importer used language substantially as follows: "Add 2 per cent to make market value," in the place of the following declaration contained in the entry: "Add 24 per cent commission." This court held that an entry made and filed in accordance with such official interference was not the voluntary act of the importer in a matter in which he was entitled to exercise discretion and judgment.

The 2 per cent commission, however, having been determined to be a dutiable item, relief was denied the importers for the reason that they had not been deprived of substantial rights and privileges.

In the case of Vandiver v. United States (6 Ct. Cust. Appls. 80; T. D. 35329) substantially the same questions were involved as in the "Stein" and "Batten" cases, supra, and we think that those cases are clearly distinguishable from the case under consideration.

No substantial right or lawful privilege has been denied the importer. It has merely been prevented by proper official action from exercising a privilege not extended to it by law, which, if not denied, would have nullified other provisions of the law of great importance to the Government of the United States.

The action of the collector in liquidating the entries on the basis. of the entered values was in accordance with the provisions of paragraph I, supra; he had no other course than to obey the plain mandate of the law.

We think that the merchandise was properly classified and assessed by the collector under paragraph 288, supra, at 35 per cent ad valorem.

The samples were manufactured for a definite purpose, and were fully dedicated to the use, at the time of importation, of aiding in the sale of merchandise of which they were representative.

The record in the case clearly establishes that the merchandise is not "waste," and that it is not used as "rags" and not dutiable as such.

The judgment of the Board of General Appraisers is affirmed.

MECKE & CO. ET AL. v. UNITED STATES (No. 2173).1

RES ADJUDICATA-ADDITIONAL DUTY ON RELIQUIDATION UNDER Board's Order. 'Goods were assessed as specific-duty and claimed in the protest to be ad valorem. The protest was sustained and the judgment affirmed in this court (11 Ct. Cust. Appls. 46; T. D. 38689). Upon reliquidation the collector assessed additional duty for undervaluation under paragraph I, Section III, tariff act of 1913. The assessment of additional duty was not barred under the rule of res adjudicata, since that issue was not presented by the record on appeal, and could have formed, and did form, no part of the judgment order. The assessment was in accordance with law.

United States Court of Customs Appeals, June 9, 1924.

APPEAL from Board of United States General Appraisers, G. A. 8536 (T. D. 39124). [Affirmed.]

Comstock & Washburn (Geo. J. Puckhafer of counsel) for appellants. William W. Hoppin, Assistant Attorney General (Samuel M. Richardson and Oscar Igstaedter, special attorneys, of counsel), for the United States.

[Oral argument October 17, 1923, by Mr. Puckhafer and Mr. Richardson.]

Before MARTIN, Presiding Judge, and SMITH, BARBER, BLAND, and HATfield, Associate Judges.

MARTIN Presiding Judge, delivered the opinion of the court: This appeal relates to an assessment of "additional duties" under paragraph I, Section III, tariff act of 1913, the pertinent part of which reads as follows:

* and if the appraised value of any article of imported merchandise subject to an ad valorem duty or to a duty based upon or regulated in any manner by the value thereof shall exceed the value declared in the entry, there shall be levied, collected, and paid, in addition to the duties imposed by law on such merchandise, an additional duty of 1 per centum of the total appraised value thereof for each 1 per centum that such appraised value exceeds the value declared in the entry * *

1 T. D. 40263.

The importers do not deny that the appraised value of the imported merchandise did in fact exceed the entered value, nor that the merchandise was subject to an ad valorem rate of duty, but they claim that the assessment of additional duties in this case was barred under the rule of res adjudicata by a former decision of the board relating to the same merchandise. This raises the only question in the case, and requires an explanation of the proceedings relating to the importation.

When the importers entered the merchandise they regularly declared its foreign-market value in the entry, but the local appraiser appraised it at a value which exceeded that declared in the entry. Due notice of the advance was sent to the importers, but no appeal was taken to reappraisement; hence the appraiser's advance became final. The collector assessed the merchandise with duty at the rate of 15 cents per pound under paragraph 36 of the tariff act of 1913. He did not then assess any additional duties under paragraph I, supra, because its provisions related only to ad valorem merchandise, whereas the collector held this to be specific-duty merchandise. The importers protested against the assessment of 15 cents per pound, claiming free entry for the merchandise under paragraph 477, or alternatively an assessment of 10 per cent ad valorem under paragraph 385. The protest was tried before the Board of General Appraisers, who held that the merchandise was not dutiable at the specific rate of 15 cents per pound as assessed, but at the rate of 10 per cent ad valorem as alternatively claimed in the protest.

The operative terms of the board's judgment read as follows:

It is hereby ordered, adjudged, and decreed this 14th day of April, 1920, that the protests in this case, claiming 10 per cent under paragraph 385 of the tariff act of 1913, are sustained

* *

*

The collector of customs at the port of New York will reliquidate the entries accordingly.

The judgment was affirmed by this court (11 Ct. Cust. Appls. 46; T. D. 38689).

It is important to note that up to this point in the proceedings no question relating to "additional duties" under paragraph I, supra, had arisen in the case, notwithstanding that the appraised value of the merchandise exceeded its entered value. As already explained, this was because the collector had assessed duty at a specific rate, whereas the statutory provisions for additional duties applied only to ad valorem merchandise. Consequently the subject of additional duties did not enter in any manner into the first liquidation, nor was the subject mentioned in the protest, nor did the board refer to it in its judgment or order. But after the board had vacated the specific-duty assessment, and held that the merchandise was dutiable at an ad valorem rate of duty, the subject of additional duties under paragraph I necessarily arose in the case.

Accordingly, when the collector came to reliquidate the entry he assessed duty at the rate of 10 per cent ad valorem, and also assessed appropriate additional duties under paragraph I. The importers protested against the additional duties, claiming that the board had ordered an assessment of 10 per cent ad valorem, no more and no less, and that the assessment of additional duties was an unwarranted variance from the order. The protest was overruled by the board, and the importers appealed to this court upon the subject of the additional duties alone.

It may be repeated that the present importation responded exactly to the provisions of paragraph I imposing additional duties in cases of undervaluation. The imported merchandise was "subject to an ad valorem duty," and its appraised value did "exceed the value declared in the entry." It thus became the mandatory duty of the collector under the act to impose additional duties thereon, unless prevented by the operation of the board's former judgment. The importers in fact concede that if the collector in the first liquidation had assessed ad valorem duty, he would have been bound also to assess additional duties because of the undervaluation. But they contend that the subject of additional duties was foreclosed by the board's judgment at the first trial, and that inasmuch as that judgment contained no provision for such duties, the collector was not entitled to assess them in his reliquidation. The question therefore practically becomes one of res adjudicata alone. The general rule as to the doctrine of res adjudicata is stated with citations in 23 Cyc. p. 1215, "Judgments," as follows:

A fact or question which was actually and directly in issue in a former suit, and was there judicially passed upon and determined by a domestic court of competent jurisdiction, is conclusively settled by the judgment therein, so far as concerns the parties to that action and persons in privity with them, and can not be again litigated in any future action between such parties or privies, in the same court or in any other court of concurrent jurisdiction, upon the same or a different cause of action.

It has also been held in Henderson v. Henderson (3 Hare 100, 115) that

The plea of res adjudicata applies, except in special cases, not only to the points upon which the court was required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties exercising reasonable diligence, might have brought forward at the time.

Under these authorities we think that the subject of additional duties was not involved in the former trial nor adjudicated by the board at that time. The issue which then came before the board was made up by the collector's liquidation and the importers' protest, which virtually served as pleadings in the case. The only

issue thereby raised was whether the merchandise was dutiable at the specific rate of 15 cents per pound, as assessed by the collector, or was free of duty, or dutiable at 10 per cent ad valorem, as claimed by the importers. Accordingly, since no additional duties were included in the liquidation nor mentioned in the protest, the subject did not enter into the issue. The board's judgment responded to the issue as made, and did no more than sustain the alternative claim of the protest for an assessment of 10 per cent ad valorem. It is, therefore, manifest that the subject of additional duties was not presented to the board, nor considered by them, nor did it enter into their judgment in any manner.

It may be asked whether the collector by the exercise of reasonable diligence could not have brought the subject of additional duties before the board at that trial, so as to conform to the requirements of the rule quoted from Henderson v. Henderson, supra. The peculiar circumstances of the present case at once answer this question in the negative. It was not until after the publication of the board's decision upon the first protest that additional duties became applicable to the merchandise, consequently the subject could not have been brought before the board prior to that time. It is proper also to note that the importers have actually lost nothing by reason of the procedure followed in the case. In fact their contention resolves itself into a complaint because the collector failed in the first place to assess duty at 10 per cent ad valorem together with the same additional duties which are now in question. For after all, the present assessment including the additional duties, is precisely the one which, according to the importers' contention, should have been made by the collector in the first liquidation.

The fact that the board's order to the collector contained no direction with reference to the assessment of additional duties is of no consequence. Such a direction was unnecessary, for the order as it stood implied that the reliquidation should follow the decision of the board in respect to the issues decided by it, and otherwise should proceed according to law. And since the board had decided that the merchandise was subject to an ad valorem rate of duty the collector was bound to assess such additional duties as the statute itself imposed in cases of undervaluation of merchandise. The assessment therefore was not. inconsistent with the terms of the order, but was a lawful compliance therewith.

This view is analogous to that expressed by Judge Barber, speaking for this court, in the case of Lord & Taylor v. United States (8 Ct. Cust. Appls. 345, 348; T. D. 37610), as follows:

But we think fairly interpreted the decision of the board in directing the reliquidation of these entries was designed to direct the collector to reliquidate comformably to the statute and to the regulations of the Treasury Department