In the 1913 Supreme Court case, United States v. Twenty-Five Packages of Panama Hats, the issue at hand was whether or not a shipment of hats from Ecuador could be considered as originating from Panama and thus subject to import duties under U.S. law. The importer argued that although the hats were made in Ecuador, they were finished in Panama and should therefore be classified as Panamanian goods for customs purposes. However, the court ruled against this argument stating that it is where an article reaches its completed form ready for market determines its origin rather than any subsequent finishing process performed on it elsewhere before being exported to another country. Therefore, since these hats reached their final form in Ecuador before being sent to Panama for further processing and then shipped to America; they are deemed Ecuadorean products according to American tariff laws which meant higher duty rates applied compared with those levied on similar items imported directly from Panama.

In the dissenting opinion for the case of United States v. Twenty-Five Packages of Panama Hats, it was argued that the seizure and forfeiture of goods under tariff laws should not be allowed unless there is clear evidence that a fraud has been committed against customs revenue. The justice disagreed with the majority's interpretation of "intent to defraud" in relation to undervaluation on import documents, arguing that an honest mistake or negligence does not constitute fraudulent intent. He also expressed concern over potential abuse by government officials who might seize imported goods without sufficient cause, thereby infracring upon property rights and due process protections guaranteed by law. The justice maintained that such seizures could have serious economic implications for businesses involved in international trade and potentially discourage foreign commerce.