Reporter's Statement of the Case XV. On December 28, 1922, Smith, Bell & Co. Ltd., by O. W. Darch, agents for the Asiatic Petroleum Co. (P. I.) Ltd., wrote to the supply officer at the United States naval station, Cavite, concerning the deliveries of fuel oil under contract No. 56924, as follows: SIR: Further to our letter of December 14th and to your reply of December 19th regarding the shortage of 38 tons on the occasion of the loading of the above vessel at Tarakan in July, we have pleasure in forwarding you herewith copy of a further letter we have received from Belikpapan, and we shall be glad to receive your comments in due course. As regards deliveries against the contract recently concluded in New York for 200,000 barrels, and with reference to our telephone conversation with your department yesterday afternoon, we beg to advise you that we are in receipt of the following information regarding conditions of delivery: Delivery to be effected between 1st January and 30th June, 1923, and the oil to be paid for at the rate of gold $10.25 per ton, payment to be made on bill of lading quantity. The oil will be shipped to Cavite in our own tankers and both the tanker and the cargo will be consigned to you in order to obviate the possibility that we may be called upon to pay duty. The period of free discharge is laid down as 96 hours, and thereafter demurrage will be at the rate of gold $19 per hour. We understand that you wish the cargo of the Hermione, which is due to arrive with the first shipment against the contract early next month, to be delivered partly into the Pecos and partly into Navy tank at Cavite. We understand that you are not certain as to manner in which the cargo can be checked, but in view of the stipulation that payment be on bill of lading quantity this point would appear to be of minor importance. Your representatives will, however, be at liberty to check the tanker's measurements prior to discharge. Respectfully yours, (Sgd.) GM/1 p For THE ASIATIC PETROLEUM Co. (P. I.) LTD., Encl. as above. Reporter's Statement of the Case XVI. On March 19, 1924, Smith, Bell & Co. Ltd., agents for the Asiatic Petroleum Co. (P. I.) Ltd., wrote to the supply officer United States naval station, Cavite, concerning the deliveries of fuel oil under contract No. 57684 as follows: THE ASIATIC PETROLEUM CO. (P. I.), LIMITED, In reply please quote: G-46-X-SC. SUPPLY OFFICER, U. S. Naval Station, Cavite. Attention of Com. Gudger. DEAR SIR: We are in receipt of a telegram from our Hongkong office in which they ask us to make clear the following points re duty on liquid fuel delivered to the U. S. Navy: 1. The cargo which you received per S. S. Anstina toward the end of January, 1924, and which was discharged into the Pecos-was this cargo reexported? If so, we presume it will be free of duty. 2. The Eburna cargo of November, 1923. This was delivered to the Pecos. Could you kindly inform us what actually happened to this oil, so that we can understand whether it is dutiable or not? 3. The Cowrie November shipment. We understand that this cargo was first delivered to the Pecos but later transferred to the shore tanks, but we have some idea that you think it possible that we may not have to pay duty on this cargo. Will you kindly advise us regarding this point? 4. The Gold Shell December cargo. As this was delivered into the shore tanks, we presume this cargo is definitely dutiable. We should be very much obliged if you would kindly give us a reply as soon as possible, as our Hongkong office are asking us to telegraph them promptly regarding this matter. Thanking you in anticipation, we are, dear sir, SC/EC Yours faithfully, For THE ASIATIC PETROLEUM Co. (P. I.), LTD., XVII. Contract No. 56924 terminated on June 30, 1923, and contract No. 57684 terminated on June 30, 1924. XVIII. The plaintiff did not pay any customs duties to the Philippine Government on fuel oil delivered under con Reporter's Statement of the Case tracts numbers 56924 and 57684, and the plaintiff at all times refused to permit any such customs duties to be paid by the defendant for the plaintiff's account. XIX. No claim was made by the Philippine customs authorities for customs duties on fuel oil delivered, under the contracts against the plaintiff at any time and no claim by the Philippine customs authorities for such duties was made against the Navy until complete deliveries under contract 56924 had been made and paid for, and two cargoes had been delivered under contract 57684. XX. The plaintiff was not advised that any claim had been made against the Navy by the Philippine customs authorities for customs duties on fuel oil delivered under contract 56924 until July 29, 1924. XXI. The amount of duty assessed against the Navy in respect of the various cargoes of fuel oil delivered under the two contracts was as follows: XXII. In May, 1924, the collector of insular customs of the Philippine Islands refused to issue permits to the Navy to receive future cargoes of freight until customs duties on past deliveries had been paid, and also refused to issue permits on outgoing shipments for the Navy. XXIII. After negotiations by officers of the Navy with the collector of insular customs of the Philippine Islands he agreed to issue permits for incoming and outgoing cargoes for sixty days from June 2, 1924, with the understanding all bills would be settled within sixty days from that day. Opinion of the Court XXIV. In making payments for the fuel oil delivered under contract No. 57684 certain amounts were withheld by the Navy to cover the estimated customs duties on fuel oil delivered under that contract and contract No. 56924, as XXV. All fuel oil delivered under contracts numbers 56924 and 57684 was either reexported from the Philippine Islands by the Navy or used in the propulsion of naval vessels. XXVI. Under date of January 5, 1925, the Navy purchasing officer at San Francisco was authorized to make payment to the plaintiff of the $18,477.49 withheld from payments to it in excess of the customs duties levied, and this amount was paid to plaintiff on January 14, 1925. XXVII. No payment has been made by the defendant to the government of the Philippine Islands of the sum of $121,876.16, or any other sum on account of customs duties on cargoes of fuel oil delivered by the plaintiff under contracts 56924 and 57684 and assessed against the Navy as set forth in Finding XXI. The court dismissed the counterclaim, and gave judgment for plaintiff in the sum of $121,876.16. Moss, Judge, delivered the opinion of the court: Plaintiff, Asiatic Petroleum Co., is suing for the recovery of a balance of $121,876.16 due on purchase price of fuel oil sold by plaintiff for the use of the Navy under a certain contract dated May 7, 1923. The amount claimed is admitted, but defendant has interposed a counterclaim for the same amount alleged to be due and owing to the Philippine government as customs duties on oil delivered under this con Opinion of the Court tract and also under a prior contract dated December 18, 1922. No duties have been paid by either the Government or plaintiff, the Government contending, however, that it will be required to pay same to the Philippine customs officials. It is stipulated that the oil under both contracts was consigned to the United States. Section 15 of the Philippine tariff act, 36 Stat. 174, provides that all property imported into the Islands shall for the purpose of that act be deemed to be "the property of the person to whom the same may be consigned." The United States would therefore, as between the parties, be liable for customs duties, if any should be collectable, unless expressly assumed by plaintiff under the contract. It is contended by defendant that under the terms of the contract plaintiff obligated itself to pay such duties, and in support of that contention cites paragraph 3 of said contract, which reads as follows: "The customs duties on imported articles used in the fulfillment of this contract are included in the price herein set opposite each item, and therefore the contractor will not be entitled to free entry or remission of any customs duties." Each contract in this case consisted of a standard printed form of Navy contract, used in connection with the purchase of all manner of supplies, within which was inserted a mimeographed schedule relating to the proposed purchase of fuel oil. The mimeographed portion of the printed form invited proposals for fuel oil to be delivered at a number of places, including Cavite, Philippine Islands. Plaintiff bid only on the oil to be delivered at Cavite, and there was inserted in appropriate places, in typewriting, plaintiff's proposal, which in part is as follows: 66* * * but maximum annual quantity not to exceed 750,000 bbls. to be delivered c. i. f. Cavite, in cargo lots By this provision plaintiff limited its obligation to a quantity not to exceed 750,000 barrels "to be delivered c. i. f. Cavite," at $11.48 per ton. Plaintiff's proposal was accepted and became the contract between the parties. The term "c. i. f." has a well-understood legal meaning in commercial transactions. In simple terms it means that the price quoted included cost of goods at point of shipment, insurance, and freight to point of delivery. All other charges, if any, including import duties being assumed by the buyer. * * |