United States v. Accurate Millinery Co.

Jackson, Judge,

delivered the opinion of the court:

The issue before us concerns the proper classification of imported fur felt hoods which are shapes intended for ultimate use in the manufacture of hats.

The hoods are produced by placing a weighted amount of fur sufficient to make one article in the chamber of an apparatus, from which it is blown into a box-like closed space containing a perforated metal cone, under which there is a suction arrangement in order that air may be drawn through the perforations. As the fur is projected into the box containing the metal cone, which is kept revolving, it settles thereon. During that process hot water is sprayed on the cone. The *230thickness of the layer of fur and its size are governed by controls. The natural scales of the fur fibers interlock by reason of the settling, suction and hot water and, when all of the fur has been deposited, the cone of fur fibers which is very loosely held together and may be easily picked apart, is gently removed from the cone. Subsequently, there is a process of shrinking and compacting the fur so that the fibers may be more closely interlocked. First, the tender fur cone is subjected to a hand-rolling operation, after which it is slightly more compacted than before the rolling. After it has been so rolled, a similar operation is performed in what is known as a “starting” machine. Then it is “crozed” and afterward put into a “multi-roller,” which is known as a “fulling” machine.

Exhibits were introduced in evidence to illustrate the condition of the hood at its various stages of manufacture.

It may be noted that, during all of the manufacturing operations subsequent to the original deposit of the fur upon the cone, there is a successive compacting of the material, and at the end of the fulling operation the hoods are of the same structure as those of the importation, but not necessarily possessing the color,- lustre, or hardness of the exhibits. Those qualities may be subsequently added to the hood by finishing operations, which include blocking and, if so desired, dyeing.

The Collector of Customs at the Port of New York classified the importation pursuant to the provisions of paragraph 1526 (a) of the Tariff Act of 1930, as modified by the Presidential Proclamation No. 2761 A to be found in T. D. 51802, 82 Treas,. Dec., 305, which put into effect the General Agreement on Tariffs and Trade, and the Presidential Proclamation No. 2912 found in T. D. 52600, 85 Treas. Dec. 318, which later proclamation terminated in part the earlier proclamation.

Paragraph 1526 (a), as far as pertinent, provides for:

* * * hoods, for * * * women’s * * * wear, trimmed or untrimmed, including bodies, hoods, plateaux, forms, or shapes, for hats * * * composed wholly or in chief value of fur of the rabbit, beaver, or other animals, * * *

The dutiable rates of that paragraph were on a graduated rising scale, depending upon the value of the hoods per dozen.

The first Presidential Proclamation, hereinbefore mentioned, proclaimed certain modifications of existing duties that had to do, among other things, with hoods, such as set out in the quoted paragraph. That proclamation modified the rates of duty applicable to most of the articles covered by the said paragraph without change in the descriptive language.

As a result of a Tariff Commission investigation, and in accordance with provisions of the said General Agreement, the second proclamation hereinbefore noted was issued by the President terminating, in part, the prior proclamation and withdrawing, in effect, the tariff concessions with respect, among other things, to:

*231* * * hoods, for women’s wear, including bodies, hoods, plateaux, forms or shapes, for women’s hats or bonnets, composed wholly or in chief value of fur felt, and valued at more than $9 and not more than $24 per dozen * * *.

The Collector of Customs, in classifying the goods, held that they were “composed wholly or in chief value of fur felt” and accordingly assessed duty thereon at the appropriate rate of the value of the hoods per dozen.

The appellees protested the classification and claimed the merchandise to be “composed wholly or in chief value of fur of the rabbit, beaver or other animals” and not composed in chief value of fur felt. It was further claimed that fur felt had no preexistence at any time before the completed hoods came into being as articles of commerce.

The case was tried before the United States Customs Court, First Division, and judgment entered, pursuant to the court’s decision C. D. 1652, 23 Cust. Ct. 191, sustaining the claim made in both the protests, which were filed herein at the appropriate rates under paragraph 1526 (a), as modified by the said General Agreement on Tariffs and Trade, for hoods composed wholly or in chief value of animal fur. From that judgment this appeal was taken.

It will be seen that appellees relied on what is known in customs law as the “preexisting material” doctrine and contended that the clause in the latter of the Presidential Proclamations, “composed wholly or in chief value of fur felt,” necessarily presupposes the existence of fur felt before the hoods came into existence. It was argued below by counsel for appellees that the fur felt of the imported goods never had independent existence of the hoods and that, therefore, the goods cannot properly be considered as “composed wholly or in chief value of fur felt” within the meaning of that term, as used in the statute as modified by the latter proclamation.

Counsel for the Government contended below that the Report of the Tariff Commission and the Presidential Proclamation No. 2912 indicate that the Tariff Commission and the President meant “composed wholly or in chief value of fur,” when the term “composed wholly or in chief value of fur felt” was used, and that the expression “composed wholly or in chief value of fur felt” did not contemplate a preexistence of fur felt. Government counsel further contended that, if the theory of counsel for appellees were to be held sound, then the weight of the evidence would establish that fur felt was preexistent to the manufacturing of the imported merchandise.

We are in agreement with the reasoning of the trial court, in which it was stated that the contention of counsel for appellant that the term “composed wholly or in chief value of fur felt,” as set out in Proclamation No. 2912, should be interpreted as meaning “composed wholly or in chief value of fur” finds no support in the record. The expression contained in the paragraph, as enacted, and also in the *232first Presidential Proclamation which modified the same, is “composed wholly or in chief value of fur of the rabbit, beaver, or other animals.” In our opinion, it is quite true, as expressed by the lower court, that all hoods composed of fur felt would also be composed of fur, but that not all hoods composed of fur would necessarily be hoods composed of fur felt.

The investigation of the Tariff Commission with respect to hats, etc., including hoods “composed wholly or in chief value of fur felt” was ordered by the Tariff Commission and notice duly given. We think it may be fairly presumed that both the Tariff Commission and the President knew full well that the tariff term appearing in the paragraph and, as modified by the first Proclamation, was “composed wholly or in chief value of fur.”

Thus it can be noted that effect must be given to the deliberate choice of the more limited description of hoods composed in chief value of fur felt and those wholly or in chief value of fur.

Furthermore, the notice by the Tariff Commission and its report, together with the Proclamation of the President, clearly limited its investigation to hats, etc., “composed wholly or in chief value of fur felt.” Those articles, it appears to us, were properly covered among other products by the language of paragraph 1526 (a). The issue for determination here is the question as to whether or not the hoods are composed wholly or in chief value of fur felt or whether or not in chief value of fur.

It may be noted that, in the forming of the imported goods, the felt had no existence as such until the hoods were completely formed. We do not think tenable the argument made by counsel for appellant that the felt had an existence prior to the process, which terminated in the fulling of the material and brought the hoods into existence.

With respect to the preexistence doctrine, counsel for both litigants cited the case of Alfred Kohlberg, Inc. v. United States, 27 C. C. P. A. (Customs) 354, C. A. D. 111. In that case, the term “laces * * * and articles wholly or in part thereof” in paragraph 1530 of the Tariff Act of 1930, as applied to certain cotton gloves having lace cuffs, all of which were crocheted in a single process, was up for decision. The trial court there pointed out that the predecessor provision of the involved paragraph was paragraph 1429 of the Tariff Act of 1922 and in that paragraph, the provision was for “articles composed in any part, however small, of lace.” The court there was of the opinion that, under the then prevailing decisions, the last quoted provision required the preexistence of lace before the creation of the article of which it was composed in part. Alfred Kohlberg, Inc. v. United States, 2 Cust. Ct. 84, C. D. 93. The trial court, then noting the change of language, concluded that Congress had intended by the omission of the words “composed * * * of” from the later act to diverge from the line of *233decisions relating to the preexisting material doctrine. Consequently, the trial court held that the preexistence of lace was not a requirement under the Act of 1930.

The judgment of the trial court, on appeal, was here affirmed by a divided court and in the decision of the majority, it was stated “At this point it may be noted that we have found no decision of this court in which a provision involving the word ‘composed’ was held to require the application of the principle of the independent preexistence of a component material.” Consequently, this court found it unnecessary to determine the intent of Congress in omitting the words, “composed * * * of,” and found that the language used by Congress in the 1930 Act meant that something way be part of the article, even though produced in connection with the making of the article itself.

The minority of the court in that case cited the cases of United States v. Guy B. Barham Co., 26 C. C. P. A. (Customs) 83, T. D. 49614, and Cohn & Lewis v. United States, 25 C. C. P. A. (Customs) 220, T. D. 49335, as authority for their conclusion that any of such terms which included the word, “composed,” necessarily implied that the material of which an article is manufactured, made, or composed of should have a prior, separate, and independent existence.

While that case is the latest from this court with respect to the preexisting material doctrine, it should be stated that the tariff term in that case did not contain “composed of,” and it was found by the majority not to be implicit in the involved tariff expression.

We agree with the reasoning of the trial court in its holding that the Kohlberg case, supra, is not a pertinent authority on the question of the preexisting material doctrine.

It appears to us that the doctrine of preexistence discussed in the Cohn c& Lewis case, supra, is rather parallel to what our holding should be here, if not controlling. In that case, the involved merchandise was wool felt hoods classified by the Collector of Customs as manufactured wholly or in part of wool felt. That classification was opposed by the appellants, who claimed that the wool felt had no prior existence as a separate entity and, therefore, the merchandise could not have been manufactured wholly or in part therefrom.

The manufacturing process in that case substantially followed the process through which the involved merchandise was made. There the material consisted of mixed wool and noils. The mixture was first put into a carding machine for combing and cleaning, from which it issued in the form of a wool mattress. Then the material was put into a second carding machine, from which was thrown off a thin veil of wool, which was wound around wooden blocks, and was termed “the carded form of wool.” When the web came from the second carding machine, it was evenly laid over a double cone-shaped form, from which, when completed the hat forms were taken by cutting the double cone form in the middle. Subsequent to the second process, *234tbe form went through successive processes. First there was a hardening process, then a shrinking operation, which tightened the fibers. After that, the material was shrunk and tightened bj a bumping operation prior to the dyeing process.

This court held in that case that there was no existence of wool felt as an entity prior to the completion of the hat forms and, therefore, such forms were not “wholly or in part of wool felt.”

Of course, the statutory language which was in issue in the Cohn & Lewis case, supra, is different from that of the instant case. Here we have the language “composed wholly or in chief value of fur felt.” In the Cohn & Lewis case, the language reviewed by us was “manufactured wholly or in part of wool felt.”

It seems to us that the language in the two cases must be considered as being interchangeable and, since that is the case, it follows that there must be a preexistence of fur felt here just as preexistence of wool felt was required in the Cohn & Lewis case, supra.

In that view we believe we are amply sustained by precedents in the Barham case, supra, where we stated that:

It is well settled that the general rule is that when a tariff statute provides for “an article of specified material, without declaring to what extent it must be composed of that material, it is at least confined to merchandise of which the specified material is that of chief value or is the predominant one therein,” and the words “composed of,” “made of,” and “kindred expressions” in tariff statutes may, according to the context, mean wholly or substantially wholly of a specified material, or wholly or in chief value of such material. Vantine & Co. v. United States, 3 Ct. Cust. Appls. 488, T. D. 33124; Kenyon Co. v. United States, 4 Ct. Cust. Appls. 344, T. D. 33529; Blumenthal & Co. et al. v. United States, 5 Ct. Cust. Appls. 327, T. D. 34529; Steinhardt & Bro. v. United States, 8 Ct. Cust. Appls. 372, T. D. 37629; Simiansky & Co. v. United States, 9 Ct. Cust. Appls. 288, T. D. 38224; United States v. Kalter Mercantile Co. et al., 11 Ct. Cust. Appls. 540, T. D. 39680; United States v. Linen Thread Co., 13 Ct. Cust. Appls. 359, T. D. 41257.

See also Curtis & Von Bernuth Mfg. Co. v. United States, 22 C. C. P. A. (Customs) 651, T. D. 47633; American Shipping Co., Husney & Co. v. United States, 22 C. C. P. A. (Customs) 72, T. D. 47064; United States v. Ascher & Co., 11 Ct. Cust Appls. 453, T. D. 39532.

We find no sound reason to discuss the contention of counsel for appellant that the term, “composed of,” is a flexible concept. To our way of thinking, it has a clear meaning and quite interchangeable with “made of,” “manufactured of,” and “manufactured from.”

Of course, the imported articles here are fur felt hoods. However, those hoods are articles manufactured of and composed of fur. Since they are manufactured of fur, there can be no question that they cannot be properly considered in any light except that of the preexisting material doctrine. Therefore, we hold that the merchandise herein are fur felt hoods composed wholly or in chief value of fur. The judgment appealed from is affirmed.

*235Jackson, J., retired, sat in place of Garrett, C. J.