Adolphe Hurst & Co. v. United States

DISSENTING OPINION

Bland, Judge:

The majority, I think erroneously, conclude that our holding in the General Dyestuff Corporation case that the importation there involved was more than a wax and was a manufactured article (cited with approval by the entire court in United States v. Nippon Co. et al., 32 C. C. P. A. (Customs) 164, 172, C. A. D. 303) was unsound for what I regard as insufficient reasons.

Before considering the questions of law involved, it is highly important to more carefully consider the nature of the imported article at bar, the manner in which it is manufactured, and the uses to which it is applied. If it is a wax to be classified under the free list provision it should be either as an animal, a vegetable, dr a mineral wax. It is not sufficient to merely hold that it is a wax.

While some of the stipulated testimony of the chemists states that it is a wax by reason of the fact that it is sold as such and has some of the characteristics and uses of known waxes, the record is certainly not conclusive that the chemists concluded that it was a wax at all, and particularly they, did not conclude it was any one of the three kinds of free list waxes. An analysis of the statements of the witnesses conclusively shows, in my opinion, that it is something that has been manufactured from a wax and which is neither animal, vegetable, or mineral.

A chemist, Dwight A. Bartlett, stated that:

I found that Exhibit 1 is a mixture of approximately 35% of calcium salts of fatty acids, commonly called lime soap, with 65% double bleached montan wax whose fatty acids have been esterified with beta butylene glycol. * * *
Exhibit 2 contains approximately 15% of the calcium salts of fatty acids or lime soap, and the balance is bleached montan wax whose acids have been ester-ified with beta butylene glycol. * * *
Calcium is not a natural constituent of montan w;ax. I believe it has been added and that the calcium has combined with the free fatty acids in the montan wax to form a fatty acid salt of calcium, which is a chemical reaction, and I believe it has been brought about by an act of man and not a natural phenomenon.

*105Herbert W. Eckweiler testified in part as follows:

Montanie acid is bought and sold as a wax, but I would not otherwise consider it to be a wax. Montan wax itself consists of something other than montanie acid, and in producing montanie acid, montan wax is subjected to chemical treatment and chemical reactions take place. * * *
I consider Exhibit 1 a manufactured wax. If I had never seen the material before, and made no analysis of it, I would say it was a wax. There are a lot of things which are waxlike, for example, stearic acid, has many of the properties' of a wax, but I couldn’t say it was a wax. My definition of a wax is a product which is found in nature with very divergent chemical and physical characteristics, all used as the first waxes were used.

Frank A. Bowles testified in part as follows:

Exhibits 1 and 2 might be used for extreme pressure lubrications, journal compounds, driving journal compounds, floor polishes, boot blackening, in various types of wiring, to produce a waterproofness. The formation of soaps with lime and esterification with beta butylene glycol is a chemical process. * * *
I should define a wax as an organic ester of high molecular weight obtained from nature, the chemical properties and constants of which are not altered in the commonly known and accepted refining methods. * * *
I know of no natural waxes that have approximately the properties of Exhibits 1 and 2. There are some that have melting points within that range, and there are natural waxes which have the appearance of Exhibits 1 and 2, but appearance is not always the property that is desired or sought in compounding various materials for which the waxes are used. There are natural waxes which have the same feeling as Exhibits 1 and 2 approximately, and there are natural waxes which are used as polishing compounds in the same manner as Exhibits 1 and 2. The consistency of the material and the use to which it is put are not the real tests of whether the material is or is not a wax. A wax is distinguished by its analysis, by its physical constants and chemical constants, as distinguished from manufacturing products which we make to contain those constants that we wish it to have. Various waxes have various compositions. You would not compare beeswax with Carnauba wax in most of its chemical and physical properties. They are both natural waxes. We can make a beeswax having pioperties entirely different from beeswax by taking the ceryl alcohol or ceric acid contained therein, and manufacturing other products from them to have different properties. It would be substantially a product derived from beeswax, but manufactured. There are a good many substances that we commonly call waxes that are not, chemically, waxes. [Italics added.]

Ernest B. Stein, Tice president of the importing company, said that the importation was sold “as Adurco wax — a trade name.” He further stated that:

It is sold to manufacturers of rubber repair goods, manufacturers of lipsticks and cosmetics, manufacturers of shoe polishes and furniture polishes, and to manufacturers of insulated wires and cables. It is sold for use as a wax, and based on my experience it is a wax because it is bought and sold as a wax.

Dwight A. Bartlett also stated that lime had been added since the material was taken from its original source and that:

This importation would be of mineral origin exclusive of the lime soap. Lime is not a mineral, but a chemical obtained from limestone. [Italics mine.]

*106The foregoing partial statement of the record relating to the nature and characteristics of the importation illustrates how far from wax a commercial manufactured article sold as a wax may be processed from a wax. Particularly it shows that the montan wax, whether bleached or purified or not, is a mineral wax and that the instant importation, if a wax at all (which it is not) is a mixed wax for which there is no provision under the free list. Suppose a substantial quantity of beeswax (an animal wax) or japan wax (a vegetable wax) had been added to obtain certain results, could it be said to be a mineral wax?

The only reasons that I can find from the majority opinion as to why they conclude that the instant material is a wax are:

First, because it has some of the uses of natural wax and is sold as a wax; and,

Second, because they found nothing in the legislative history or elsewhere that indicated that Congress intended to limit the free list paragraph to crude waxes.

There need be no controversy about the second conclusion because the legislative history shows that Congress did not intend that the free list paragraph be limited only to a wax in its crudest form. The provision without the word “crude” was inserted in a tariff act for the first time in 1922. When the bill was introduced into, reported, and passed by the House of Representatives, the paragraph contained the word “crude.” On the floor of the Senate the word “crude” was stricken from the paragraph. The reason for this was obvious. Montan wax in its original brown crude state had been going through a bleaching and purifying process abroad. These processes did not involve adding anything to the wax but took something out of it. Congress sought to prevent the word “crude” from barring from free entry such waxes as montan wax which had been bleached and to some extent purified. In its purified and bleached state it contained all of its original desirable characteristics and uses in a more compact form.

The instant importation is not a bleached or purified montan wax but an article which by manufacturing efforts has been advanced to a manufactured article. The testimony of the chemists and everything connected with the case, in my judgment, point to the fact that the meagre reasons assigned by the majority, which are not very definitely expressed, why the instant material must be regarded as a mineral wax are insufficient.

It must be remembered that it is not disputed that a chemical reaction has taken place, that materials foreign from those which are found in montan wax or any other animal, vegetable or mineral wax have been added in large quantities for the purpose of making a new article for uses for which a bleached or purified montan wax was unsuit*107able. While it is in part of wax the addition of substances and the chemical changes brought about gave it a new texture and fitted it for new uses not theretofore common to the waxes of commerce.

Flour may be manufactured into dough. It is no longer flour. The dough may be made into bread, but certainly neither the bread nor the dough should be regarded as flour. When you take a known wax and chemically mix it with substances foreign to its nature for the purpose of making it fit into new uses foreign from the uses it originally possessed and submit it to chemical processes other than those of bleaching and purifying it, it would seem clear that a manufactured article had emanated.

A wax may be produced synthetically and come within the free list paragraph but a synthetically produced wax which has subsequently been manufactured by the steps which were applied in the instant case ceases to be a synthetic wax but a manufactured article made in part from wax. Where would the majority draw the limit on the kind of waxes entitled to free entry? How far could a foreign manufacturer go in adding new materials giving new characteristics and uses to natural waxes? Can it be said that as long as it is waxy in appearance and that it had some of the uses of wax or some of the chemical elements of natural wax left in it it would still be a wax? It would still be waxy as putty is waxy if its inherent characteristics were far more changed than they are in the present instance and it could be sold as a wax and it might have some of the uses of a wax, but if an abrasive was put in it fitting it for a wholly new use than we now have in mind, or if some other material was added that we do not think of now but may be thought of later which gives it a new characteristic and new use, are we still going to say that it is still a free list wax? For instance, montan wax is in this country mixed with tar and used in making roofing waterproof (Summary of Tariff Information, 1929, p. 2638). Quaere: Is a wax-tar mixture for reasons stated by the majority to be held free of duty? We are big tar producers. The wax question, in view of its many new uses and increasing importations — tens of millions of pounds per annum — is not an unimportant one.

Sealing wax is waxy and has a wax use, but it is not a wax. In T. D. 25595, sealing wax composed of resins and chemicals was held not to be a wax under the tariff act of 1897 which provided for vegetable and mineral waxes. That case illustrates that everything that is waxy and which is sold and used as a wax is not a wax, and further supports the contention herein that a mixture of a mineral wax with something that is not a mineral is not a mineral wax.

If it were not for the fact that the word “crude” was stricken out of the bill in the Senate as hereinbefore mentioned it would be difficult *108for me to believe that Congress intended for a bleached or purified wax to be admitted free of duty. One reason which brings me to this conclusion is the legislative history with reference to beeswax. When they wanted bleached beeswax made dutiable they made a special provision for it although "beeswax” was on the free list. The majority state that whenever Congress intended for a thing to be regarded in its crude or natural state they used some such term as "crude,” etc., to indicate that fact. This was not true in the case of crude beeswax because, as I understand it, bleaching is the first step away from crudeness and adds nothing to the wax. After putting a duty of 25 per centum on “bleached beeswax” crude beeswax became free under the provisions for "Wax: Animal, vegetable, or mineral,” and Congress was informed that in the Act of 1922 bleached beeswax was free under paragraph 1458. See Supplement to Summary of Tariff Information, 1929, p. 551.

The majority quote the following as a part of the information furnished by the Summary of Tariff Information, 1929:

Mineral wax to which stearic acid had been added Was held dutiable at 20 per cent as a nonenumerated manufactured article under paragraph 1459 rather than free as a wax under paragraph 1693. (T. D. 41814.) [Decided 1926.]

This fact is a strong indication that the majority have arrived at the wrong result in the instant proceeding. Congress was told that if the foreign manufacturer added stearic acid to his montan wax he would have manufactured it away from montan wax into a non-enumerated manufactured article. Congress was told this in 1929. They did nothing about it, apparently contented with the manner in which the wax problem was being handled, so that if something was added to the wax, as in the instant case, it would be declared something more than a wax.

The interesting thing about it is that in T. D. 41814 the particular substance there involved was a mineral wax, such as montan wax, mixed with a small percentage of stearic acid. The stearic acid was added for the purpose of giving it “artificial hardness,” the wax extracted from the mineral, ozocerite, being too soft for use in making wax figures. The court’s holding that it was a nonenumerated manufactured article was based upon the fact that stearic acid added a new use and character to the merchandise.

The best example of stearic acid is beef tallow. Commercial stearic acid (stearin) is commonly a mixture of stearic [animal] and palmitic [vegetable] acid. (Webster’s New International Dictionary, 2nd Edition, 1939.) In T. D. 41814 an animal or an animal and vegetable wax was added to a mineral wax, giving the so-called wax new uses and new characteristics, and Congress was informed that it had been held to be a nonenumerated manufactured article. Those *109are substantially the'facts in the instant case. Probably the majority had not observed that stearic acid was used for a purpose other than to bleach or purify the wax or it would not have cited this circumstance as an indication that wax such as that involved here was to be included in the free list paragraph.

The majority seein to think that the issue here is whether or not montan wax for free list purposes is limited to its crudest form. There is no issue on that question. The majority did not need to belabor this issue. The question is whether or not montan wax which had been processed by such revolutionary methods as was the article at bar would still be entitled to the same tariff treatment as montan wax either in its natural state or if bleached or refined.

The Beiersdorf case is cited by the majority only for the purpose of shedding light upon the question as to whether or not the free list provision should be limited to a natural wax. No one contends that it should be limited to a natural wax. It includes a synthetic wax if of the kind enumerated. It must be conceded by all that Congress intended that a wax might be bleached or purified without removing it from the free list status. But the case is no authority for holding that the instant merchandise is a free list wax. The issue in the Beiersdorf case was whether or not a wax made from wool grease, not being a natural wax, was included in the provision. We held that it was the intent of Congress that if the wax had the physical properties resembling beeswax and was a mixture of compounds containing carbon, hydrogen, and oxygen it was a wax, if waxlike in appearance and use. What has the Beiersdorf case to do with the holding that a material which has gone through numerous processes, catalytic and others, involving the addition of a calcium soap and beta butylene glycol, materials wholly foreign to wax, should still be regarded as a free list wax?

Last but not least, the majority have concluded (for insufficient reasons, I submit) that our holding in the General Dyestuff Corporation case was erroneous and that “the error should not be perpetuated by following it here.”

For nearly six years, since the handing down of the General Dyestuff case, the trade has been informed as to what the law on this question is, and no doubt there has grown up a settled practice.

Settled practices should not be disturbed except for most compelling reasons. Such reasons do not maintain in the instant appeal. In United States v. Basket Importing Co., 13 Ct. Cust. Appls. 98, T. D. 40941, cited with approval in United States v. Bernard, Judae & Co., 13 Ct. Cust. Appls. 444, T. D. 41346, and elsewhere, this court reiterated in strong terms a correct procedure to follow in customs jurisprudence to the. effect that the importance of uniformity of *110decisions and of settled and well-understood administrative practice bad always been stressed and that in a case involving such practice it should not be disturbed even though a “position, technically more correct, might be arrived at” upon new consideration.

The holding by the majority that the alleged error in our former holding should not now be perpetuated by following that holding here contradicts, and sets aside the effect of, our holding in the Basket Importing case and others. This is particularly unfortunate in the instant case since the trial court followed this decision and must now be reversed for so doing and for reasons which, to say the least, are not convincing.

For reasons above stated, I think the judgment should have been affirmed.