[Court of customs appeals, Philippine Islands. Case No. 18.]

In the matter of the appeal of Warner, Barnes & Co., Limited.

IDE, Judge:

DECISION.

On the 15th day of February, 1902, the appellants paid to the collector of customs for the port of Manila the sum of $107.43, in United States currency, for duties imposed upon certain merchandise imported during that month from Hongkong, China, but the origin of the merchandise was San Francisco, in the United States. The payment was accompanied by a protest, based upon the following grounds:

"That duties on goods coming into the Philippine Islands from the United States have been abolished, such duties being in conflict with the Constitution of the United States, which provides that duties shall be uniform throughout the United States, and, further, that no preference in the matter of duties, etc., shall be given the ports of one State over those of another, and as the Philippine Islands have become a part of the United States legislation establishing such duties is null and void."

That portion of the protest which states "That duties on goods coming into the Philippine Islands from the United States have been abolished" is incorrect in point of fact; such duties have not been abolished at any time since they were first imposed after American occupancy, and have been collected during that whole period, and are still being collected, in all the ports of the Philippine Islands. Doubtless the appellants in the statement referred to had in mind the case of 'Fourteen diamond rings," Emil J. Pepke, claimant. v. United States (183 U. S., 176), and from the decision in that case, and from the action of the United States authorities thereon, inferred that duty on the class of goods here in question had been abolished; but no such inference is to be drawn. In that case Pepke went from the Island of Luzon, P. I., to the United States, arriving at the port of San Francisco, carrying with him fourteen diamond rings which he had purchased in the Philippine Islands, or acquired through a loan, subsequent to the ratification of the treaty of peace between the United States and Spain and the proclamation thereof by the President of the United States. The rings were imported into the United States without entry or declaration, or payment of duties, and were seized by the customs officials as having been imported contrary to law, and the single determinative question was, Were the rings subject to duty by virtue of what has been called the Dingley tariff act of July 24, 1897, imposing customs duties upon " all articles imported from foreign countries?" Pepke claimed that after the ratification and promulgation of the treaty of peace, by virtue of which the Philippine Islands were ceded to the United States, those islands ceased to be a foreign country; they were no longer Spanish territory, they were American territory; consequently, the Dingley tariff did not apply to them. This contention was sustained by the Supreme Court, and in consequence thereof the Federal authorities directed that duties should no longer be collected upon goods that otherwise would have been dutiable, arriving in the United States from the Philippine Islands, and such continued to be the status of articles of that class until the enactment by Congress on the 8th day of March, 1902, of an act entitled "An act temporarily to provide revenues for the Philippine Islands, and for other purposes, whereby other provisions were made in regard to articles so imported into the United States.

That decision. therefore, only determined that goods passing from the Philippine Islands to the United States were not dutiable under the Dingley tariff law, but did not in any wise determine the question as to whether goods coming from the United States to the Philippine Islands were or were not dutiable under the laws prevailing in the islands.

At the time the goods now in controversy were imported the act of Congress last referred to had not been passed; the duties were assessed and collected by virtue of an act passed by the United States Philippine Commission on the 17th day of September, 1901, entitled "An act to revise and amend the tariff laws of the Philippine Archipelago," which act by its terms took effect on November 15, 1901. The duties were such as that act imposes, and the determination of the issue raised in this case involves the question of the validity of the tariff-revision law of 1901, and the solution of that question depends upon whether it was within the power of the Commission to enact the law referred to. The appellants contend that, while duties might have been imposed in the Philippine Islands by military order, after military occupancy and before the ratification and promulgation of the treaty of cession, yet that after that time, when the islands ceased

to be foreign territory, no power other than Congress could impose such duties, even if Congress had such power in the face of the constitutional provisions relied upon prohibiting the imposition of export duties from any State by Congress and requiring that duties shall be uniform throughout the United States.

In support of this contention reliance is placed upon one of the most recent utterances of the Supreme Court of the United States in its decision in the case of Dooley v. United States (182 U. S., 222). The action in that case was begun in the circuit court for the .southern district of New York, sitting as a court of claims, to recover back certain duties paid under protest at the port of San Juan, P. R., upon several consignments of merchandise imported from New York between July 26, 1898, and May 1, 1900.

The court held that the duties imposed after July 26, 1898, and before April 11, 1899, the date of the ratification and promulgation of the treaty and the cession of the islands to the United States, which were imposed in the exercise of the war power, were valid; but that the duties imposed after the ratification and promulgation of the treaty and before the taking effect of the Foraker Act, by which Congress enacted a tariff to be imposed upon all importations to enter the island of Porto Rico, were unlawfully collected, although imposed by virtue of an amended customs tariff, promulgated by order of the President of the United States, a majority of the court saying:

“In our opinion, the authority of the President, as Commander in Chief, to exact duties upon imports from the United States ceased with the ratification of the treaty of peace, and the right to the free entry of goods from the ports of the United States continued until Congress should constitutionally legislate upon the subject.

That case being the most recent declaration of the Supreme Court upon the subject, although embracing the views of a majority only of the court, would be controlling in favor of the appellants in this case if there is no legal distinction such as to involve other principles of law between the situation in these islands, at the time of the collection of the duties in question, and the situation of the island of Porto Rico, at the time of the collection of the duties in Dooley v. United States, supra.

In certain respects the cases are analogous; the Philippine Islands, as well as Porto Rico, ceased to be foreign country upon the ratification and promulgation of the treaty and cession, and in each case Congress had not acted when the duties were imposed. The duties which were held to be unlawful in Porto Rico were imposed by military authority, and so, as it will appear hereafter in this opinion, were the duties imposed in the Philippine Islands.

In the majority opinion in Dooley v. United States, also it is said by the court: The spirit as well as the letter of the tariff laws admit of duties being levied by a military commander only upon importations from foreign countries; and while his power is necessarily despotic, this must be understood rather in an administrative than in a legislative sense. While in legislating for a conquered country he may disregard the laws of that country, he is not wholly above the laws of his own. For instance, it is clear that while a military commander during the civil war, when in the occupation of a Southern port, could impose duties upon merchandise arriving from abroad, it would hardly be contended that he could also impose duties upon merchandise arriving from ports of his own country. His power to administer would be absolute, but his power to legislate would not be without certain restrictions-in other words, they would not be beyond the necessities of the case.

This language is be construed with reference to the state of facts to which it applies, not to a totally different state of facts.

Porto Rico, at the time referred to, was governed under military authority from necessity, because it had been seized as foreign territory by a military force, and had remained in the possession of the military authorities after the ratification of the treaty of peace between the United States and Spain. Yet that possession was during a time of absolute peace, and after peace had been officially declared by the two parties to the war, Spain and the United States. A military governinent may exist in times of peace, and it is then a government by law, and not one regardless of law. The decision above quoted in the Dooley case relates purely to what a military government may do in time of peace, and, however broad its language, can only apply to such a situation. What may be done in a military emergency for military purposes in time of war is a fundamentally different question. It therefore becomes material to determine the condition of the Philippine Islands at the time of the enactment of the tariff-revision act of 1901, and to ascertain the character and source of the power at that time exercised by the Philippine Commission.

Upon the destruction of the Spanish fleet in Manila Bay in May, 1898, and the

capture of the city of Manila by the American forces on the 13th day of August following, the military authorities came into possession of the city and port of Manila and of certain territory adjacent thereto. That possession was gradually extended, but such extension met eventually with opposition on the part of the Filipino leaders and resulted in open hostilities in February, 1899. The beginning of hostilities was followed by war extending over nearly every portion of the islands to which the army of the United States went. The war was not a theoretical or paper one, but was an actual war. Military operations were conducted upon a large scale, the United States having equipped and transported to the archipelago two armies, and in December, 1900, more than 60,000 men and officers of the United States Army were here.

On the date of the enactment of the tariff-revision act, the 17th day of September, 1901, nearly 50,000 officers and men of the Army of the United States were in the archipelago, aside from several thousand Filipino scouts who had been enlisted to serve with the Army. A powerful fleet of the United States Navy was cooperating with the Army. The event most disastrous to the United States Army during the progress of the whole war-the "Belangia massacre "-occurred during the last days of September, 1901. The whole of General Smith's famous campaign in Samar occurred after the enactment of the tariff-revision law. General Bell's reconcentration campaigns in Luzon, in the provinces of Tayabas, Laguna, and Batangas, near Manila, all took place after that date. Both of the campaigns last referred to were in active progress at the time the customs dues in the present case were exacted. The consummation of peace between Spain and the United States on April 11, 1899, had no relation whatever to the existence or the termination of the war waged in the Philippine Islands between the American forces and the insurgents. Whether that war consisted in actual battles between organized armies, or was conducted on one side largely as a cruel, guerrilla warfare, it was war nevertheless, and all those measures were justifiable that a condition of actual war required. It is true that portions of the islands became pacified to a large degree prior to February, 1902, and that in portions of the archipelago civil government had been established, in pursuance of orders issued by the President of the United States as Commander in Chief of the Army and Navy; but at that time garrisons were stationed all over the islands for the purpose of enforcing and maintaining order and for subduing the remnants of the insurrection.

As late as June 30, 1901, there were detachments of the army stationed at nearly 500 towns in the islands, and during all the time in question a large fleet of the United States Navy was in Philippine waters cooperating in the suppression of the insurrection. Congress had been constantly informed of the existence of the insurrection and of the measures taken to suppress it, and had repeatedly voted men and means for conducting military operations. At as late a day as July 1, 1902, Congress directly recognized the existence of war here by the passing of an act entitled 'An act temporarily to provide for the administration of the affairs of civil government in the Philippine Islands, and for other purposes," by declaring in section 6: That whenever the existing insurrection in the Philippine Islands shall have ceased and a condition of general and complete peace shall have been established therein and the fact shall be certified to the President by the Philippine Commission, the President, upon being satisfied thereof, shall order a census of the Philippine Islands to be taken by said Philippine Commission.”’

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On the 4th day of July, 1902, the President issued an official proclamation declaring that peace existed throughout the archipelago except in the Moro country and granting an amnesty to many political offenders. The political department of the Government had never until that day declared that peace existed. The determination of the question as to whether the Philippine Islands were or were not hostile territory and whether war did or did not exist there rests with the Executive in the absence of Congressional action. It is a political and not a judicial question. As was said upon this subject by the Supreme Court of the United States in Williams v. Suffolk Insurance Company (13 Peters, 415):

It is not the province of the court to determine whether the Executive is right or wrong. It is enough to know that, in the exercise of his constitutional functions, he has decided the question. Having done this under the responsibilities which belong to him, it is obligatory on the people and Government of the Union. So, also, the same court said in the prize cases (2 Black, 635, 670):

Whether the President, in fulfilling his duties as Commander in Chief in suppressing an insurrection, has met with such armed hostile resistance and a civil war of such alarming proportions as will compel him to accord to them the character of belligerents is a question to be decided by him, and this court must be governed by the decisions and acts of the political department of the Government to which this power was entrusted. He must determine what degree of

force the crisis demands. The proclamation of blockade is itself official and conclusive evidence to the court that a state of war existed which demanded and authorized a recourse to such a measure under the circumstances peculiar to the

case.

A state of war having existed in the islands at the time the tariff-revision act was passed, and at the time customs duties in question were paid, it becomes material to determine what action might properly have been taken by the military authorities for the suppression of the insurrection, including in the term "military authorities" all the agencies which the President, by virtue of his office as Commander in Chief of the Army and Navy, might lawfully employ. There has been much dicussion as to what may be done by military authority in territory which is the field of military operations and in which a state of war actually exists. Probably no better brief statement of the powers that may be exercised in such cases can be found than as stated in New Orleans v. Steamship Company (20 Wall., 387):

*

"It may do anything to strengthen itself and weaken the enemy. There is no limit to the powers that may be exercised in such cases save those which are found in the laws and usages of war. * * In such cases the laws of war take the place of the Constitution and laws of the United States as applied in time of peace. * * * These principles have the sanction of all publicists who have considered the subject.'

As stated in Lieber's Instructions for the Government of Armies of the United States in the Field (General Orders, No. 100, Adjutant-General's Office, 1863):

Military necessity, as understood by modern civilized nations, consists in the necessity of those measures which are indispensable for securing the ends of the war, and which are lawful according to the modern law and usages of war."

To the same effect see Daniel v. Hutcheson (86 Texas, 61); Sargeant on the Constitution (330, 1 Kent's Com., 306); Flanders' Exposition of the Constitution (169, 184); Little v. Barreme (2 Cranch, 170); State v. Fairfield (13 Ohio Stats., 377), and all writers upon military law.

To strengthen itself and weaken the enemy military authorities may prohibit all trade with the country which is the seat of war, and may close or open all ports thereof as military necessity requires from time to time. If it may, as a military necessity, prohibit all trade in certain localities, it may permit commerce in the same localities upon such terms and conditions as to the payment of license fees or customs duties or the obtaining of permits, or as to any other conditions as seem best adapted to promote the end in view-the successful termination of the war.

Among the agencies necessary for subduing the enemy in a hostile country, not only are armies deemed essential, but the organization of governments as well for promoting the military operations of the occupying army as for preserving the safety of society. To both these ends revenue is necessary, and such means may be adopted to secure it as the exigencies require within the rules and usages of civilized warfare: Ex parte Milligan (4 Wall., 127, 141); Lieber's Instructions for the Government of Armies of the United States in the Field; Cross v. Harrison (16 How., 164, 193); Leitensdorfer v. Webb (20 How., 176, 177).

One of the most efficient methods of weakening the enemy in the Philippine Islands was the establishment, under the authority of the President, as Commander in Chief of the Army and Navy, of law and order, and the protection of individual rights, so far as was compatible with the situation, thereby affording the Filipinos who were in arms an example of what the Government of the United States proposed to do for them, and a direct object lesson, such that they might know that their rights were not to be destroyed, but that they were to have all the individual liberties that citizens of the United States have. The establishment of such governmental institutions, under whatever name, whether called military or civil, but under the military authority, was essential not only for the maintaining of order and for the collection of revenue, but also for weakening the enemy by withdrawing from its support the largest number of adherents possible who would be attracted by the beneficent system of laws provided for them.

On the 12th day of July, 1898, the President directed that, "Upon the occupation and possession of any ports and places in the Philippine Islands by the forces of the United States, the following tariff of duties and taxes, to be levied and collected as a military contribution, and regulations for the administration thereof, shall take effect and be in force in the ports and places so occupied * * * Necessary and authorized expenses for the administration of said tariff and regulations shall be paid from the collections thereunder."

On the 26th day of October, 1898, Major-General Otis, in command of the United States forces in the Philippine Islands, issued an order containing a revision of the customs tariff and the regulations for such portions of the Philip

pine Islands as might be under United States control. From time to time, while General Otis was in command, modifications of the customs tariff were made and additional regulations adopted for the collection thereof, all by virtue of general orders issued from the office of the military governor. All the powers of the President, as Commander in Chief of the Army and Navy, in the Philippine Islands, whether of a purely military character or of an executive, administrative, or legislative character, were exercised through the military governor, and continued to be so exercised purely as military measures until the appointment of the present Philippine Commission, in March, 1900. The Commission was appointed by the President in the exercise of his power as Commander in Chief of the Army and Navy, and by his instructions to the Commission, under date of April 7, 1900, he entrusted to that body the performance of a certain portion of the duties which had before that time been performed by General Otis and his saccessor, MajorGeneral MacArthur, as military governors. The source of authority remained as before-the military power of the Commander in Chief-but the instrumentalities of executing the commands of the President were in part new. The Commission was authorized and directed "to continue and perfect the work of organizing and establishing civil government already commenced by the military authorities, and to establish municipal governments, to organize governments in the larger administrative divisions, and to report the conclusions to the Secretary of War, and recommendations as to the central government. They were directed also to exercise those functions that were of a legislative character by making rules and orders having the effect of law, for the raising of revenue by taxes, customs dues, and imposts; for the appropriation and expenditure of public funds of the islands; the establishment of an educational system to secure an efficient civil service; the organization and establishment of courts, and all other matters of a civil nature for which the military governor had been competent theretofore to provide by rules or orders of a legislative character; and certain executive powers were also conferred upon them. The military governor remained the executive head of the government.

On June 21, 1901, the President appointed Hon. William H. Taft civil governor, and directed that on and after the 4th day of July, 1901, the executive power before that time vested in the Commission should be exercised by the civil governor, with the advice and consent of the Commission; that as to the portions of the islands wherein public order was restored and provincial civil governments were established, the executive powers theretofore exercised therein by the military governor should be transferred to the civil governor, and the subordinate governments should report to him.

The principal difference between a "military" government and "civil” government in the Philippines, after the appointment of the Commission and the civil governor, was that in the one case the civil affairs were administered by military officials or their subordinates, while in the other case the same affairs were administered by men not in the military service, but subject to the direct orders of the President, through the Secretary of War. It is also true that under the administration of civilians the individual rights of personal liberty were safeguarded by definite rules of law, instead of by the more harsh and arbitrary procedure that military exigency at times requires. But the purpose of the President in all that was done by him as Commander in Chief, either through the agency of military or civilian government, was to crush the insurection, weaken the power of the insurgents, organize the elements of society from the conditions of chaos to those of good order, and build up a structure that should eventually be relieved, when peace came, from the orders of the Commander in Chief, and be enabled, under the direction of Congress, to administer an orderly and permanent government in the islands.

After many months of careful consideration by the Commission and by the Secretary of War, and after many public hearings, the tariff-revision act was passed on the 17th day of September, 1901. It was not enacted in the ordinary manner of legislation by the Commission, but by special and direct authority of the President, and with his approval transmitted to the Commission in advance, through the Secretary of War. The enacting clause reads: "By the authority of the President of the United States, and with the approval of the Secretary of War, first had, be it enacted by the United States Philippine Commission." Under the law thus enacted the duties in question were imposed and collected. During the early portion of the military occupancy of the islands, millions of dollars of the customs revenues collected were devoted to purposes purely military and naval. Long after the enactment of the tariff-revision act the Philippine scouts were paid wholly from insular funds, mainly collected from customs duties. The whole administration, whatever name may be given to the government controlling the