and the preference given on that day, September 26th, of course, for it was on that day the accounts were assigned. All these were agreements to make transfers. But a real estate mortgage is the present transfer of an estate in the land and declared by subdivision 25 of section 1 of the act itself to be a transfer.

Attention is called to Tatman v. Humphrey, 184 Mass. 361, 68 N. E. 844, 63 L. R. A. 738, 100 Am. St. Rep. 562, 12 Am. Bankr. Rep. 62. That case has been reversed by the Supreme Court of the United States (Humphrey v. Tatman, 14 Am. Bankr. Rep. 74), the court holding the mortgage was good as against the trustee.

The trustee insists that the facts of this case bring it within the principles declared in Blennerhassett v. Sherman, 105 U. S. 100, 26 L. Ed. 1080. It was there held:

"A mortgage of his entire estate, executed by an insolvent mortgagor to a creditor, who knows of his insolvency, and who, for the purpose of giving him a fictitious credit, actively conceals the mortgage, withholds it from record, and represents him as having a large estate and unlimited credit, by which means he is enabled to contract other debts which he cannot pay, is void at common law. A mortgage executed by an insolvent with intent to give a preference to a creditor who has reasonable cause to believe him to be insolvent, and knows that it is made in fraud of the provisions of the bankrupt act, and who, for the purpose of evading them, actively conceals it and withholds it from record for two months, is void, although executed more than two months before the filing of a petition in bankruptcy by or against the mortgagor."

There can be no doubt that there was an agreement between Hunt, the mortgagor, and Honeywell, the president of the bank, at the time the mortgage was given, and as a part of the transaction, that the bank would not put the mortgage on record at that time, and that Hunt would not put a mortgage on the premises to some other person ahead of the one given the bank. Honeywell also concedes that Hunt was given to understand by him that, if the mortgage was not given, the notes held by the bank would not be renewed. There is no doubt that there was also an understanding between Hunt and Honeywell at some time that the mortgage must have been executed and delivered over four months prior to bankruptcy proceedings in order to be good as against general creditors. But the evidence would tend strongly to show that this understanding was arrived at about May, 1904, not in June, 1903. The evidence does not show that there was any agreement to keep the mortgage from record for any definite period of time, or for at least four months. The evidence also shows that about April or May, 1904, Mr. Honeywell, when asked as to the financial responsibility of Mr. Hunt, said, in substance, they (meaning the bank) regarded him (Hunt) as solvent; that he had his real estate with nothing against it more than the amount of the bank's indebtedness, and his stock of goods and accounts would more than offset his other indebtedness. It does not appear that Honeywell knew, even approximately, the indebtedness of Hunt. It also appears that shortly before filing his petition in bankruptcy Hunt made incorrect and untruthful statements regarding his indebtedness to some of his numerous creditors. It is undoubtedly true

that Honeywell, along in the spring of 1904, but more than six months after the execution and delivery of the mortgage, failed to disclose that the bank held the mortgage when inquiry was made as to the standing and financial responsibility of Hunt; but it is not shown that Honeywell had authority to make such concealment of the fact, or that he actively concealed the existence of the mortgage, or that Honeywell's acts and declarations, whatever they were, influenced any person to give or extend credit to Hunt. In short, it is not made to appear that the nonfiling of the mortgage either induced any person to give credit to Hunt or forbear suit or bankruptcy proceedings. If the evidence established that Honeywell, president of the bank, mortgagee, kept secret and withheld the mortgage from record for the purpose of allowing the four months to run so as to defeat the provisions of the bankruptcy act relating to preferences, and intended so to do when he took it, this court would hold that such acts were in fraud of the act, and rendered the mortgage void. Blennerhassett v. Sherman, 105 U. S. 100, 26 L. Ed. 1080; Clayton v. Exchange Bank of Macon, 121 Fed. 630, 57 C. C. A. 656; Curtis, Receiver, v. Lewis et al., 74 Conn. 367, 50 Atl. 878; Hildreth v. Sands, 2 Johns. Ch. 35. But while the court may have its suspicions that such was the fact, it is not therefore at liberty to so find or hold, even if those suspicions are justified by and grow out of the evidence. Fraud must be proved. It may be inferred from facts established by competent proof, but the inference of fraud cannot legally be drawn and is not justifiable when the inference of innocence is just as consistent with the facts. I cannot find from this evidence that the failure to record the mortgage was accompanied by such acts on the part of the mortgagee or of its agents that a fictitious credit was given to Hunt, now the bankrupt, or that the acts of the defendant induced any creditor to forego any right. The defendant is not estopped from asserting the mortgage.

The order of the referee is affirmed.

UNITED STATES v. FIFTY WALTHAM WATCH MOVEMENTS. (District Court, N. D. New York. June 6, 1905.)

1. CUSTOMS DUTIES-ILLEGAL IMPORTATION-FORFEITURE-FRAUD-ABSENCE OF INTENT.

Proceedings for forfeiture of merchandise illegally imported may be sustained under section 3082, Rev. St. [U. S. Comp. St. 1901, p. 2014], though the United States has not been defrauded of any sum, and there has been no intent to defraud.

[Ed. Note.-For cases in point, see vol. 15, Cent. Dig. Customs Duties, § 297.]

2. SAME-FREE GOODS-INTENTIONAL EVASION OF LAW.

An importer, for the purpose of serving his own pecuniary interests, intentionally omitted to meet the requirements of the customs laws of the United States, in that he failed to enter certain imported articles at any customhouse, and to comply otherwise with the law. If duly imported, the articles would have been free of duty. Held, that this was an offense which rendered the merchandise liable to forfeiture, under section 3082,

Rev. St. [U. S. Comp. St. 1901, p. 2014], as imported "knowingly

contrary to law."

[Ed. Note.-For cases in point, see vol. 15, Cent. Dig. Customs Duties, § 297.]

3. SAME-NECESSITY OF COMPLYING WITH LAW.

The requirements of the customs laws regarding the importation of goods are just as positive in respect to goods exempt from duty as in respect to dutiable goods. It is the duty of importers to comply with such laws, irrespective of whether the merchandise they import is dutiable. 4. SAME TREASURY REGULATIONS CONTINUATION UNDer New Tariff.

The rules and regulations prescribed by the Secretary of the Treasury under one tariff act may legally be kept in force under a succeeding act by adopting and continuing to enforce them.

5. SAME-FAILURE TO PROmulgate REGULATIONS.

On proceedings under section, 3082, Rev. St. [U. S. Comp. St. 1901, p. 2014], for the forfeiture of merchandise imported contrary to law, which would have been admissible free of duty on compliance with regulations which the Secretary of the Treasury is authorized by law to prescribe, it may not be maintained in defense that the regulations have not been promulgated, and that therefore the importer was justified in importing the merchandise according to his own convenience, independently of the requirements of law. Such an importation would be “contrary to law," under said section.

6. SAME-ILLEGAL IMPORTATION-COMMON-LAW OFFENSE.

Where an importer brought merchandise into the United States without complying with the customs laws, but there was no intent to defraud the United States, held, that this would not constitute an offense at common law.

Action for Forfeiture of Merchandise Seized as Illegally Imported.

Note Six Parcels of Placer Gold v. U. S. (Ariz.) 76 Pac. 473.

This is an action or proceeding under the provisions of section 3082 of the Revised Statutes of the United States [U. S. Comp. St. 1901, p. 2014] to condemn 50 Waltham watch movements, manufactured at Waltham, Mass., exported to the Dominion of Canada, there purchased by one J. H. Racicott, the claimant herein, and by him sent by team across the border into the United States for sale and use in the United States without passing through the customhouse, or complying with the rules and regulations of the Secretary of the Treasury of the United States alleged to be applicable in such cases. The main defense relied upon is utter absence of intent to defraud the United States, the claim of Racicott being that unless such intent is shown the action for condemnation cannot be maintained.

Geo. B. Curtiss, U. S. Atty.
S. L. Wheeler, for defendant.

RAY, District Judge. Section 3082 of the Revised Statutes of the United States reads as follows:

"If any person shall fraudulently or knowingly import or bring into the United States, or assist in so doing, any merchandise, contrary to law, or shall receive, conceal, buy, sell or in any manner facilitate the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported contrary to law, such merchandise shall be forfeited and the offender shall be fined in any sum not exceeding five thousand dollars nor less than fifty dollars, or be imprisoned for any time not exceeding two years, or both. Whenever, on trial for a violation of this section, the defendant is shown to have or to have had possession of such goods, such possession shall be deemed evidence sufficient to authorize conviction, unless the defendant shall explain the possession to the satisfaction of the jury."

Paragraph 493 of the act of October 1, 1890 (chapter 1244, 26 Stat. 603), entitled "An act to reduce the revenue and equalize duties on imports and for other purposes," reads as follows:

"Articles the growth, produce, and manufacture of the United States, when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means; casks, barrels, carboys, bags, and other vessels of American manufacture exported filled with American products, or exported empty and returned filled with foreign products, including shooks when returned as barrels or boxes; also quicksilver flasks or bottles, of either domestic or foreign manufacture, which shall have been actually exported from the United States; but proof of the identity of such articles shall be made under general regulations to be prescribed by the Secretary of the Treasury; and if any such articles are subject to internal tax at the time of exportation such tax shall be proved to have been paid before exportation and not refunded."

Under this provision the Secretary of the Treasury made the following rules and regulations:

"(483) Exportations under this provision of law must be bona fide and not for the purpose of evading any revenue law. Merchandise, the growth, produce, or manufacture of the United States, ostensibly exported to ports in Canada in foreign vessels, but really shipped from one place in the United States to another by routes part water and part rail, and passing through foreign territory, are not bona fide exportations, and the merchandise is not entitled to free entry on importation.

"(484) If returned to the port of original exportation, the fact of regular clearance for a foreign destination must be shown by the records of the customs, except in regard to exports to Canada by ferryboat, and by the declaration of the person making the entry. But when the reimportation is made into a port other than that of original exportation, there shall be required, in addition to the declaration, a certificate from the collector and the naval officer (Cat. No. 773), if any, of the port where the exportation was made showing the fact of exportation from that port (and such certificate shall be furnished on application by the collector of customs at the port of exportation). If the importation be made within one year after the date of exportation, the collector shall require the importer to produce the affidavit (Cat. No. 594) of the exporter to the fact that such exportation was made in good faith and without any purpose or intention to reimport the merchandise. If such certificate of exportation cannot at once be procured, and the proof otherwise required be produced, free entry will be permitted on bond (Cat. No. 596) being given for the production of the certificate in a sum equal to what the duties would be if it were foreign merchandise. The issuance of such certificate shall be noted on the export manifest.

"(485) To guard against fraud, and to insure identity, the collector shall require, in addition to proof of clearance, the production of a declaration made by the foreign exporter of the goods before the United States consul of the fact that the merchandise was imported from the United States, and that it has not been advanced in value nor improved in condition by any process of manufacture or other means. But if it be impracticable to produce such declaration at the time of making entry, bond may be given for the production thereof. Collectors, with concurrence of naval officers, if any, may waive the record evidence of clearance and above declaration in the case of domestic goods on which no drawback has been allowed, valued at not over $100. In default of observance of the foregoing requirements imported merchandise will be treated as foreign."

Article 384 of the customs regulations of 1899, at page 123, provides as follows:

"All imported merchandise must be entered at the customhouse of the port of arrival."

Chapter 11 of the customs administrative act, as amended by the act of July 24, 1897, in sections 3095 to 3101 [U. S. Comp. St. 1901, pp. 2025, 2027], regulates the bringing of merchandise into the United States on the northern border from contiguous countries. The sections referred to admit the bringing of merchandise into the United States from Canada by means of vehicles or other means of transportation, but provide that such merchandise must first be reported to and entered at the customhouse nearest to the point at which they cross the border. Section 3100 provides:

"All merchandise and all baggage and effects of passengers and all other articles imported into the United States from any contiguous foreign country, except as hereafter provided, as well as the vessels, cars and other vehicles, and envelopes in which the same shall be imported shall be unladen in the presence of and be inspected by any inspector or other officer of the customs at the first port of entry or customhouse in the United States where the same shall arrive and to enable the proper officer thoroughly to discharge this duty he may require the owner or his agent or other person having charge or possession of any trunk, traveling bag or sack, valise, or other envelope or of any closed vessel, car or other vehicle to open the same or to deliver to him the proper key."

Section 2766 [U. S. Comp. St. 1901, p. 1861] provides as follows: "The word 'merchandise' as used in this title may include goods, wares and chattels of every description capable of being imported."

And section 2767 defines the word "port" as follows:

"The word 'port' as used in this title may include any place from which merchandise can be shipped for importation or at which merchandise can be imported."

Paragraph 483 of the act approved July 24, 1897, c. 11, § 2, Free List, 30 Stat. 195 [U. S. Comp. St. 1901, p. 1680], entitled "An act to provide revenue for the government and to encourage the industries of the United States" reads as follows, leaving off the provisos which are entirely immaterial:

"Articles the growth, produce, and manufacture of the United States, when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means; casks, barrels, carboys, bags, and other vessels of American manufacture exported filled with American products, or exported empty and returned filled with foreign products, including shooks and staves when returned as barrels or boxes; also quicksilver flasks or bottles, of either domestic or foreign manufacture, which shall have been actually exported from the United States; but proof of the identity of such articles shall be made, under general regulations to be prescribed by the Secretary of the Treasury, but the exemption of bags from duty shall apply only to such domestic bags as may be imported by the exporter thereof, and if any such articles are subject to internal tax at the time of exportation, such tax shall be proved to have been paid before exportation and not refunded."

The facts upon which this proceeding is based are as follows:

(1) At some time prior to June 13, 1904, the Waltham Watch Company, of Waltham, state of Massachusetts, U. S. A., a corporation of said state engaged in the manufacture of watches and watch movements, manufactured at its place of business in Waltham aforesaid the 50 watch movements in question here, of the value of $230, and then exported them to the province of Quebec, Dominion of Canada, where they were held for sale or sold. Thereafter the