Case Name: Pacific Overseas Co. W. J. Byrnes & Co. v. United States
Court: United States Customs Court
Jurisdiction: United States
Decision Date: 1953-02-05
Citations: 30 Cust. Ct. 43
Docket Number: C. D. 1496
Parties: Pacific Overseas Co. W. J. Byrnes & Co. v. United States
Judges: Before Rao, Fobd, and Ekwall, Judges; Rao, J., dissenting
Reporter: United States Customs Court Reports
Volume: 30
Pages: 43–58

Head Matter:
(C. D. 1496)
Pacific Overseas Co. W. J. Byrnes & Co. v. United States
United States Customs Court, Second Division
(Decided February 5, 1953)
Lawrence, Tuttle & Harper {George R. Tuttle of counsel) for the plaintiffs.
Charles J. Wagner, Acting Assistant Attorney General (Richard H. Welsh, Dorothy C. Bennett, and Daniel I. Auster, special attorneys), for the defendant.
Before Rao, Fobd, and Ekwall, Judges; Rao, J., dissenting

Opinion:
Foed, Judge:
This case was originally assigned to Judge Rao who prepared a proposed majority opinion. Judge Lawrence havmg disqualified himself from participating in this decision, Judge Rao's opinion was submitted to the writer for approval or disapproval. The writer being in disagreement with the final conclusion reached by Judge Rao, Judge Ekwall was assigned to participate in the decision, and he having agreed with the writer's views, the case was assigned to the writer to prepare the majority opinion.
The reasoning advanced by Judge Rao in support of his conclusion that the involved merchandise is not inlaid linoleum within the common meaning of that term is logical and sound, and the authorities cited in support thereof are apt and to the point. On this phase of the case, therefore, and with Judge Rao's permission, we hereby adopt as our opinion the decision originally prepared by Judge Rao, as follows:
"This is an action to recover excess duties alleged to have been erroneously assessed by the collector of customs at the port of Los Angeles against an importation of linoleum. Two grades or patterns of this material comprise the importation in question. One is denominated in the invoice as "3rd Gauge Super Parquet." The other carries the invoice description of "3rd Gauge Sheet Marble." Both types of linoleum were classified as "inlaid linoleum" and assessed with duty at the rate of 25 per centum ad valorem; as provided for in paragraph 1020 of the Tariff Act of 1930, as modified by the General Agreement on Tariffs and Trade, 82 Treas. Dec. 305, T. D. 51802. In their protest, plaintiffs alleged that neither grade of linoleum involved in the importation at bar was inlaid linoleum, and that, therefore, the merchandise was within the provision for all other linoleum in said paragraph 1020, as modified, swpra, and is dutiable at only 15 per centum ad valorem.
"The trial proceeded upon the basis of the claim as stated in the protest, and evidence concerning both super parquet and sheet marble linoleum was adduced. Subsequent to the trial, however, and in the brief filed in behalf of plaintiffs, counsel waived the importer's claim with reference to the "3rd Gauge Super Parquet" and expressly limited its protest to tbe "3rd Gauge Sheet Marble." Accordingly, therefore, the protest claim that the items invoiced as "3rd Gauge Super Parquet" are not inlaid linoleum is overruled.
"A sample of the linoleum which remains the subject of dispute is in evidence as plaintiffs' exhibit 2. It is a segment taken from the importation which is approximately 10 by 12 inches in size, and has an over-all marbleized effect, with color tones of tan, brown, green, gray, and white. Exhibit 2-A is a smaller piece of linoleum, approximately 3K by 7 inches, which was cut from exhibit 2, with the court's permission, for use in connection with the deposition of one Edward Nicholson Barran, director in charge of sales of the English manufacturer, Linoleum Manufacturing Co., Ltd.
"This witness testified by deposition concerning the method of manufacture of different kinds of linoleum, including the involved merchandise. In the course of his testimony, he referred to various exhibits by numbers which he apparently arbitrarily assigned to them. In an effort to coordinate the exhibit numbers mentioned in the deposition with those introduced at the trial, and to avoid confusion, the same were each designated plaintiffs' exhibit 3, plus the number used by the witness in testifying.
"The manufacturing processes described by the witness Barran accord substantially with those in use in various American linoleum companies as related by defendant's witnesses O'Hara and Newman of Congoleum-Nairn, Inc., and the Sloane-Blabon Corp., respectively.
"It therefore may be said that the instant merchandise is produced in the following manner: Linoleum cement, a product formed by the combination, under heat, of oxidized linseed oil with resins, is mixed with powdered cork, or wood flour, and pigments to create what is known as a plasticized mass. This is then reduced to granules, of a fairly coarse consistency (plaintiffs' exhibit 3-20), which are passed through heavy rollers, called calenders, to form a sheet of the required thickness. The pressure of the rollers gives the granules a directional streak, known as a jaspe pattern, and a coarse-grained jaspe effect is obtained, as shown in plaintiffs' exhibit 3-21. This roughly jasped sheet is cut into suitable lengths and passed through another calender, at right angles to its original direction. The "streaks are, by the pressure of the rollers and the presence of several thicknesses of sheeting being introduced at the same time, drawn out and dispersed. Its effect is called in the trade sheet marble," and is illustrated by plaintiffs' exhibit 3-21-A. The second calendering is usually keyed on to a hessian or burlap backing, although it may equally well be keyed on to an impregnated felt paper. A sample of the second calendering on a burlap backing is in evidence as plaintiffs' exhibit 3-21-B, which, except for coloring and size, substantially simulates plaintiffs' exhibits 2 and 2-A.
"It further appears tbat as the result of this processing the pattern penetrates the linoleum through to the backing, although not necessarily in a vertical direction.
"There is also in evidence as plaintiffs' exhibit 3-17, a 9-inch square of linoleum which plaintiffs concede is inlaid. It is made in the following manner:
" Inlaid linoleum is produced by reducing the plasticised mass to fine granules which can then be run through a stencil on to the burlap back. The granules take the form of the stencil and, although two colours are usually mixed to go through one stencil plate, it is by no means necessary. After being deposited on the burlap back, the sheet passes through a heavy calender which consolidates the granules without distorting them. There is, therefore, no directional bias in inlaid patterns, as shown by Sample 17 of Exhibit 1. [Plaintiffs' exhibit 3-17.] The formation of the granules goes right through to the burlap backing.
"Other methods of producing inlaid linoleum will hereinafter- be adverted to.
"Samples of jaspe and granite linoleum are also in evidence as plaintiffs' exhibits 3-19 and 3-27. No useful purpose is served by describing these or detailing the methods by which they are produced. It is sufficient to observe that the manufacturing steps undertaken to produce them resemble fairly closely those adopted in connection with the merchandise at bar.
"This, in essence, is plaintiffs' case. It is urged that linoleum which is formed by the calendering and cross-calendering of a granulated plasticized mass does not fall within the common meaning of the tariff term "inlaid linoleum" and, hence, that the merchandise in controversy is within the provision of paragraph 1020, supra, as modified, for all other linoleum. Plaintiffs contend that the essential characteristic of inlaid linoleum, as commonly understood, as in the case of other inlaid articles, refers to the fitting into a background-material of other materials of different shapes and appearance, the whole having a decorative effect. It is further urged that the fact that the pattern penetrates from the surface to the backing is merely an incidental result of the nature of linoleum and the impracticability of cutting only a part of the way beneath the surface for the purpose of introducing the inlay, as in the case of furniture, but that this latter characteristic is not a determinant of inlaid linoleum.
"It is the position of the Government that the sole criterion for testing whether linoleum is inlaid linoleum within the common understanding of that term is whether the color scheme or pattern penetrates the fabric from the surface to the backing; that, therefore, the processes employed to produce the linoleum are immaterial considerations; and that the merchandise at bar being possessed of the vital characteristic of having the pattern perpetuated throughout is inlaid linoleum, within the common meaning.
"For an authoritative discussion of linoleum, we turn to the 1947 edition of the Encyclopaedia Britannica. It is there stated:
"Linoleum can be divided into two broad classes: (a) Plains and (b) inlaids. These can again be further sub-divided, from the manufacturing point of view, into — (1) Plains, Printed, Jaspes, Granites and Moires. (2) Inlaids — -Moulded, Straight-line, Granites, Parquetries and Marbles.
"Plain and Printed Linoleums. — The granulated material is calendered on to the canvas backing by heavy steam-heated rolls. The same type of material is used for plain and printed goods, but the latter are usually thinner, and' have the pattern printed on in oil colours afterwards. Granites, Jaspes and Moires are, with modifications, made in the same way, the variously coloured scratched materials being blended before calendering.
"Inlaid Linoleum. — When produced by the moulding process, the granulated material of different colours is sifted through stencils on to canvas lying on a table. A separate stencil, having perforations corresponding to the desired position in the pattern, is used for each colour, the scratched material being thrown on and the perforations filled. The completed pattern is afterwards put through a flat hydraulic "making press," to consolidate it, and the face is perfected by passing through a "finishing press." This method gives very fine carpet and floral effects.
"Straight-line Inlaids. — For these two processes are used, (a) Hand-made: the stencils in the moulding process are in this case replaced by pieces of previously sheeted material, cut to the desired shape, and laid on to form the pattern required. The rest of the operations are as in the moulding process. Parquetries, Marbles and Tile patterns are made in this way. (b) Machine-made: in this process the scratched material is rolled into a continuous sheet, and led, together with the backing, under a revolving "cutting cylinder." In the periphery of the cylinder steel knives are embedded, forming a complete pattern. Between the knives plungers operate selectively from the inside and place on the canvas the tesserae of the particular part of the pattern required. The pieces not required are carried round between the knives and are ejected.
"See also Summary of Tariff Information, 1920, Summary of Tariff Information, 1929, and United States Tariff Commission. Tariff Information Surveys on Articles in Paragraphs 1020 and 1022 of the Tariff Act of 1922, published in 1929.
"In the case of Hunter & Witcombe v. United States, 7 Treas. Dec. 322, T. D. 25063, the Board of General Appraisers (now the United States Customs Court), was called upon to determine whether certain merchandise invoiced as "granite linoleum" or "granite" was inlaid linoleum, within the meaning of paragraph 337 of the Tariff Act of 1897. It appears that the merchandise there involved consisted of linoleum "in the manufacture of which different colors are so introduced and laid as to penetrate the body of the plastic material from the surface to the burlap foundation, the colored materials taking such form as the pressure of the rollers and resistance of the materials give them, and which, because it is in imitation of granite, is called 'granite linoleum'." The board, in holding that such merchandise was not inlaid linoleum, relied upon the definition of the word "inlaid" adopted by the Circuit Court for the Southern District of New York in the case of Hunter v. United States, 121 Fed. 207 (affirmed without opinion, in 127 Fed. 1022), wherein it was stated: " 'Inlaid' means laid into a definite space, as a separate part of the material of the structure."
"Linoleum was again the subject of judicial consideration in the case of Keveney v. United States and Germania Importing Co. v. United States, 1 Ct. Cust. Appls. 101, T. D. 31111, the question being whether linoleum made by the stencil process, hereinabove described, was inlaid linoleum within the meaning of said paragraph 337 of the Tariff Act of 1897. The court, after quoting- definitions of "inlay" and "inlaid" from several lexicons, stated:
"In Hunter v. United States (121 Fed. Rep., 207), relied upon by the importer» Judge Wheeler, in dealing with so-called granite linoleum, said:
" "Inlaid" means laid into a definite space, as a separate part of the material of the structure; and the product is of a higher grade of manufacture, on which the higher duty appears to be laid.
"This statement of Judge Wheeler does not relate to the manner in which the laying in should occur, as that question was not before the court. Nor do we conceive that that method should be controlling. It is the finished article which is made the subject of duty, and the method by which the result is obtained is immaterial. The process by which the material in question is made results in a substantial separation of the different colors and figures, and the actual laying in of the substance in different figures so that the inlaid substance extends through the whole thickness of the linoleum and can be worn down to the base without effacing or affecting the figure. We hold this to be, in the sense in which the term was employed in the tariff act, inlaid linoleum.
"We do not agree with the contention of defendant that the decision in the Keveney case, supra, has so broadened the common meaning of the term "inlaid linoleum" as to include all linoleum in which the pattern extends through the whole thickness of the fabric. It is true that the court's primary concern was the finished article, with its accompanying effect, and not the method by which it was manufactured. Nevertheless, it is also true that the court saw in that finished article a "substantial separation of the different colors and figures, and the actual laying in of the substance in different figures ." Moreover, there can be no justification for the court's recital of dictionary definitions of the word "inlay" and "inlaid" which plainly suggest a setting-in of one material into the body of another, if its holding be construed as a rejection or repudiation of such definitions. It is to be assumed, instead, that the court relied upon those meanings to support its holding in the case, especially since specific mention was made of the appearance of the fabric.
"We have examined the lexicographical authorities published since those cited in the Keveney case, supra, and find no appreciable variation in the language used in defining these terms. For purposes of comparison, we quote from Webster's New International Dictionary, Second Edition:
"inlay 1. To set into the body of a surface or ground material; as, to inlay arabesques; also, to pattern or adorn (a surface or ground) by the insertion of other material; as, to inlay a panel with lilies; to adorn by inlaying (with); as, to inlay wood with mother-of-peárl.
"Accordingly, we find that the common meaning of the tariff term "inlaid" as applied to linoleum refers to that only in which the inlay mix has been set or laid into definite spaces in the structure, and this irrespective of the process by which such result has been obtained. The fact of the penetration of the various patterns from the surface to the backing of the fabric is an incidental, not a decisive, characteristic of inlaid linoleum as that term is commonly understood, which results from the manner in which the inlay mix is applied in the manufacturing process.
"The description of the method of production of the linoleum in issue, as well as the samples thereof which have been received in evidence, clearly establishes that it is not inlaid linoleum within the common meaning of that term.
"The rule is, however, that unless a contrary intention of the legislature be shown, tariff statutes are written in the language of commerce rather than in that in common acceptation, it being presumed, in the absence of proof of commercial designation, that the common and commercial meanings are the same. The burden is upon him who claims a commercial meaning different from the common meaning, to establish that, at and prior to the enactment of the pertinent tariff statute, the relevant language had a meaning in the trade and commerce of the United States which differed from its common meaning, and that such meaning was uniform, definite, and general. Straus & Co. et al. v. United States and United States v. Straus & Co. et al., 7 Ct. Cust. Appls. 414, T. D. 36982; American Express Co. v. United States, 10 Ct. Cust. Appls. 275, T. D. 38680; United States v. Briggs Manufacturing Co., 14 Ct. Cust. Appls. 1, T. D. 41526; Walter Johnson v. United States, 21 C. C. P. A. (Customs) 129, T. D. 46464; United States v. Armand Schwab & Co., Inc., et al., 30 C. C. P. A. (Customs) 72, C. A. D. 218.
"Plaintiffs' argument that there is evidence of a congressional intention that the rule of commercial designation shall not be applicable to the provision for inlaid linoleum is not impressive. A careful review of the history of this paragraph fails to disclose any legislative purpose to restrict the meaning of the term to that in common parlance. There is, on the other hand, implicit support for the receipt of evidence of commercial designation to be found in the Keveney case, supra, as the court there stated:
"There is no clear proof in the record as to whether there was an established commercial designation of goods answering the description of those involved in this case at the time of the enactment of the tariff act of 1897, so that the question presented is whether the linoleum in question is shown to have been, as a matter of fact, inlaid linoleum.
"It has here been held that as commonly understood the term "inlaid linoleum" refers to that substance in which the inlaid mix or pattern has been set or laid into definite spaces in the structure of the fabric, and that the linoleum in issue does not respond to that description. Proof'as to a different commercial meaning within the rules laid down for such proof will, therefore, be considered."
In dealing with the question of commercial designation in Jas. Akeroyd & Co. v. United States, 15 Ct. Cust. Appls. 440, T. D. 42641, the Court of Customs Appeals held as follows:
Commercial designation is a thing often claimed in customs litigation and rarely established. The rule of commercial designation was nevér intended, as has been often said, to apply to cases where some portion of the trade use a certain trade practice or nomenclature, but was intended to apply to cases where the trade designation is so universal and well understood that the Congress, and all the trade, are supposed to have been fully acquainted with the practice at the time the law was enacted. There was never any other reason for the rule.
Only three witnesses gave testimony on the question of commercial designation. The first of these, William J. O'Hara, testified that he started with Congoleum-Nairn, Inc., in 1922, in a sales capacity and continued as a salesman for 16 years, covering only the six New England States. This witness did not testify to any other sales experience prior to 1930 and was, therefore, not qualified to give testimony as to the commercial meaning of the term "inland linoleum," at or immediately prior to 1930, in any portion of the United States, except the six New England States.
The second witness, Wilbur Newman, testified that in 1928, he was with W. & J. Sloane and remained with them until 1931, when we went with Sloane-Blabon Corp.; that in 1928, he covered the territory of "Chicago, Wisconsin, Minnesota, Missouri, Kansas, Iowa, Nebraska, North Dakota, and Illinois." "I've always been on the west coast in later years and also in the south." Just what the witness meant by "in later years" we are left without any clarification or explanation. Under the circumstances, we cannot" assume or presume that he was.engaged in selling linoleum to the wholesale trade in all of the West Coast States and in all of the states in the South at and prior to June 17, 1930. His testimony, therefore, as to the commercial meaning of the term "inlaid linoleum," at and prior to June 17, 1930, must be confined to the eight states set out above.
The third witness on the question of commercial designation, Samuel O. Sixsmith, testified that for more than 30 years he had been connected with Congoleum-Nairn, Inc., the first 20 years of which time he was a salesman, covering the 16 states in the northern part of the United States, plus the District of Columbia. The witness was not asked, nor did he offer to name the 16 states "in the northern part of the United States," which he had covered as a salesman. These 16 states may or may not have covered and included the 6 New England States concerning which witness O'Hara testified, or the 8 states testified to by witness Newman.
Totaling the territory in which the three witnesses who testified had sold linoleum on and prior to June 17, 1930, we have not more than 30 states at most, plus, the District of Columbia.
During the trial of this case, counsel for the defendant offered in evidence a catalog published by Congoleum-Nairn, Inc., and distributed to its 30 to 40 thousand retail dealers in January 1930. Witness O'Hara testified with respect to said exhibit 6 for identification that merchandise similar to plaintiffs' exhibit 2 was therein designated as inlaid linoleum. The court sustained the objection of plain-' tiffs' counsel to the receipt in evidence of this exhibit. After reviewing several authorities on the matter, we are constrained to reverse this ruling. Trade catalogs which have been thoroughly circulated throughout the United States, while not alone satisfactory proof of commercial designation, are, nevertheless, competent as indicative to some extent of the trade understanding. United States v. Sheep Shearers Mdse. & Comm. Co., 23 C. C. P. A. (Customs) 146, T. D. 48009; United States v. Nordlinger, 121 Fed. 690; and Great Western Mercantile Co. et al. v. United States, 25 Cust. Ct. 126, C. D. 1275. The exhibit in question will be received in evidence as defendant's exhibit 6. The general idea running through all the decisions on the question of commercial designation is that the term sought to be established must be definite, uniform, and general, and not local, partial, or personal. In United States v. Brandenstein & Co., 17 C. C. P. A (Customs) 480, T. D. 43941, this thought was expressed as follows:
It is incumbent upon a party who asserts that a tariff term has a commercial meaning different from its common meaning to establish that fact by a preponderance of the evidence. Furthermore, if it is to control the classification of imported merchandise, such commercial meaning must be definite, uniform, and general, and not local, partial, or personal. These principles have been stated and restated by this court on many occasions, and we deem it unnecessary to cite authorities in support of them.
In United States v. Kwong Yuen Shing, 1 Ct. Cust. Appls. 14, T. D. 30773, the Court of Customs Appeals observed:
It is pertinent, then, to inquire what is a commercial designation in a legal sense.
This is aptly defined by the Supreme Court of the United States to be "the result of established commercial usage in commerce and trade" and that the commercial usage "must be definite, uniform, and general and not partial, local, or personal." Maddock v. Magone (152 U. S. 368); Berbecker v. Robertson (152 U. S. 373).
In Acker v. United States, 1 Ct. Cust. Appls. 328, T. D. 31431, the Court of Customs Appeals again expressed its views on this subject in the following language:
The further requisite, however, is necessary in assigning to a phrase a commercial limitation or application that it must be proven not alone that the imported merchandise is not classed therewithin, but there must be assigned by proof to that phrase a scope and meaning which is clearly, definitely, and uniformly understood throughout the United States which includes some other merchandise and excludes the imported merchandise. Claffin v. Robertson (38 Fed. Rep. 92); Sidenberg v. Robertson (41 Fed. Rep. 763). It likewise must be shown in such cases that such meaning of the phrase in trade and commerce should differ from the ordinary dictionary meaning or that of common speech. Maddock v. Magone (152 U. S. 368).
One of the latest expressions by the Court of Customs and Patent Appeals upon this subject is tbe following from Nylos Trading Company v. United States, 37 C. C. P. A. (Customs) 71, C. A. D. 422: •
Where the Government contends that an eo nomine designation in the tariff law is a commercial or trade term excluding merchandise the subject of a protest, it must prove that as used in commerce the term has a meaning which is general, extending over the entire country; definite, certain of understanding; and uniform, the same everywhere in the country. [Italics quoted.]
There is no proof in this case that the territories covered by the three commercial witnesses were the principal territories or markets in the United States where linoleum was bought and sold, nor is there any evidence to show that the portions of the United States not covered by the testimony of the three commercial witnesses were not the principal territories in the United States where such merchandise was bought and sold. This lack of proof clearly distinguishes the facts in this 'case from the facts in the case of United States v. S. S. Perry, 25 C. C. P. A. (Customs) 282, T. D. 49395. In the Perry case, a witness testified without contradiction that the States of California, Oregon, and Washington were "the principal poultry, center of the United States." In the absence of proof that the territories covered by the three commercial witnesses were the principal linoleum center of the United States, the Perry case is no authority for holding that commercial designation has been established in this case, even if it should be considered that proof of chief use is in any way analogous to proof of commercial designation.
Another case applicable to the facts in this case is that of Lee & Co. v. United States, 15 Ct. Cust. Appls. 202, T. D. 42236, where the Court of Customs Appeals- observed' as follows:
There is no showing in the record that throughout the United States in trade and commerce the commodity was known as peas. Therefore, the importers have failed to meet one important requirement of commercial proof, in that they have failed to show that their proposed commercial classification was uniform, either throughout the United States or throughout the whole portion of the United States where this commodity was bought and sold.
Measured by tbe rule laid down in tbe authorities heretofore referred to and quoted from, it is our opinion that tbe testimony of tbe three witnesses who testified that they bad sold linoleum in not more than 30 states and tbe District of Columbia at and prior to June 17, 1930, falls far short of establishing a commercial designation for tbe involved merchandise which would include it within the nomenclature of inlaid linoleum. Particularly is this true in the absence of any evidence to show that this territory is the principal territory in the United States where this merchandise is bought, sold, and used.
The three commercial witnesses herein were in a position to testify only as to facts within their knowledge, and since they had not sold the merchandise in more than 30 states and the District of Columbia at and prior to June 17, 1930, they did not possess the knowledge necessary to enable them to testify as to how the merchandise was bought and sold and designated throughout the remaining portion of the United States on and immediately prior to June 17, 1930. The mere fact that some years after June 17, 1930, and prior to the trial of this case in 1951, the three commercial witnesses gained a broader experience in the field of linoleum which enabled them to testify how the merchandise was bought, sold, and designated throughout the United States in 1951, cannot serve to enlarge the scope of their testimony beyond more than 30 states and the District of Columbia, in which territory they had been engaged in selling linoleum at and prior to June 17, 1930. Particularly is this true when the witnesses admitted that they could not state how the merchandise was invoiced in 1930.
For the reasons stated, and following the cited authorities, we hold the merchandise described on the invoice as "3rd Gauge Sheet Marble" to be properly dutiable at the rate of 15 per centum ad valorem under paragraph 1020 of the Tariff Act of 1930, as modified by the General Agreement on Tariffs and Trade, 82 Treas. Dec. 305, T. D. 51802, as alleged by the plaintiffs.
To the extent indicated the specified claim in this suit is sustained; in all other respects and as to all other merchandise all the claims are overruled. Judgment will be rendered accordingly.