Court Opinion

ID: 8112940
Source: CourtListenerOpinion
Date Created: 2022-09-09 14:42:00.856059+00
Date Added: 2024-06-11T16:38:46.801662
License: Public Domain

*47DISSENTING OPINION
Richardson, Judge:
I would sustain tbe protest. Tbe evidence indicates that, at tbe time tbe subject merchandise was landed, the 490 cases of beer in question, or some quantity contained therein, were damaged externally to an extent which rendered them unfit for commercial channels. In its landed condition, the subject merchandise has been variously described at divers times. The cargo surveyor’s report described the merchandise as “480 cdbd ctns wet, quantity of bottles with labels stained, slipping metal caps corroded slight.” In a report to the collector, the appraiser described the merchandise as “25% of bottles are damaged due to rusty caps or lables [sic] which are loose or soiled due to moisture.” And the Regional Commissioner of Internal Revenue described the merchandise as “not in a marketable condition,” although he felt hampered by some procedural impasse concerning the consignee’s remedy for relief, due to the fact that the merchandise had been released from customs custody.
In such condition, the merchandise never left the docks. It was rejected outright by the consignee upon inspection, and an application was filed with the collector at the port of entry for exportation or destruction under customs supervision. And until the merchandise was actually exported and destroyed, it remained in the custody of the steamship agent in a shed on the docks.
This state of facts brought the merchandise within the class of prohibited articles referred to in 19 U.S.C.A., section 1558(a) (2) (section 558 (a) (2), Tariff Act of 1980) and entitled the consignee to an abatement or refund of duties. There is sufficient evidence of record of the deterioration of the containers in which the subject beer was imported to bring the affected merchandise within the condemnation of at least two laws of the United States. As an alcoholic beverage, the importation at bar was subject to the requirements of the Federal Alcohol Administration Act, which prohibits the mutilation, destruction, obliteration, or removal of any mark, brand, or label upon malt beverages held for sale in interstate or foreign commerce or after shipment therein, except under certain conditions not here applicable.1 The mishap to which the involved beer was subjected at sea brings the affected articles clearly within the purview of this statute. As used in laws prohibiting adulteration, food is generally held to mean any article used as food or drink. Consequently, the damaged condition of the containers holding the subject beer is deemed to be adulterated under the Food, Drug & Cosmetic Act, since it was held under insanitary conditions whereby it may have been contaminated with filth, and where its container is composed in part of any deleterious substance *48which may render the contents injurious to health.2 Food so adulterated is not entitled to admission into the commerce of the United States. The subject merchandise falls within the condemnation of this statute also.
The majority would deny relief to the consignee under section 1558 (a) (2), supra, following the case of Wm. J. Jones and Co. v. United States, 38 CCPA 158, C.A.D. 453, because the beer in question had never been denied admission by any Government agency, nor had any prohibitory order been made against such merchandise. In my opinion, there are considerable differences between the instant case and the Jones case. In the Jones case, there was no evidence as to actual damage on board ship; and the ship’s officer conjectured about a possible oil leak and no further evidence was adduced relative to the condition at the time of unlading. Moreover, in the Jones case, the merchandise had moved inland for some distance before the claimed damage was ascertained. In the instant case, the ship’s officer definitely reported damage to 480 cases of beer on board ship; and the merchandise remained at the docks. In the Jones case, no agency of the Government expressed an opinion as to the unfitness of the merchandise for commercial channels, while in the case before us, the internal revenue inspector reported that the 490 cases in question were not in a marketable condition at the time of unlading. In the Jones case, the importer’s application for destruction of the merchandise was at least acted upon by the collector. However, in the instant case, and contrary to the assumption made by the majority, the consignee’s application for destruction of the merchandise under customs supervision was not acted upon by the collector.
There is nothing in section 1558(a) (2), supra, which delegates exclusive responsibility for ascertaining whether or not imported merchandise is “prohibited” to any administrative agency of the Government. And, in the absence of such express statutory reservation, the courts are privileged to and should interpret a statute and define its application to the facts developed in the evidence. Kirschbaum Co. v. Walling, 316 U.S. 517; Skidmore v. Swift & Co., 323 U.S. 134. Under section 1558(a) (2), supra, the court must make its own findings as to whether or not merchandise is “prohibited” independent of administrative action. Kreutz & Co. v. United States, 20 CCPA 109, T.D. 45752. The principal inquiry to be made under this statute is whether the subject merchandise is “prohibited” wider the law, and not whether such merchandise has been “prohibited” by an administrative agency of the Government. Kreutz da Co. v. United States, supra.
The inherent danger of relying solely on administrative action as a basis for interpreting and applying section 1558(a) (2), supra, is
*49illustrated in an observation made by our court of appeals in United States v. W. F. Machay, 34 CCPA 127, 133, C.A.D. 355, concerning the functions of a typical administrative agency concerned with imported merchandise, namely, the Food and Drug Administration. In that case, the court pointed out that the Food and Drug Administration does not furnish inspectors at each port of entry and relies upon customs personnel to furnish samples of imported merchandise for examination. Hence, where, as in the instant case, customs personnel have declined or failed to supply such samples to the Food and Drug Administration, either before or after releasing the merchandise to the consignee, there could be no basis for such administrative action. Thus, the mandate of section 1558(a)(2), supra, is emasculated through Government inaction. Such a result does not comport with congressional intent, as expressed in the language of this statute. The language of section 1558(a) (2), supra, does not foreclose the situation where “prohibited” merchandise escapes customs surveillance and is detected only after the merchandise has been released to the importer. Such is the posture of the instant case.
It is incumbent upon collectors, as well as the courts, to apply the provisions of section 1558(a) (2), supra, in appropriate cases. The collector at bar recognized his responsibility under this statute to make inquiry subsequent to the release of the merchandise to the consignee. He received the consignee’s application for destruction of the merchandise on forms modified to meet the exigencies of the occasion, engaged the time and effort of the appraiser to ascertain the extent of damage, received a report of the occurrence which occasioned the damage from the shipper and referred it promptly to the appraiser, and received the appraiser’s report of the estimated damage to the merchandise in question.
At this point, the collector’s efforts went awry. In transmitting the application from the subport at Houston to the headquarters port at Galveston, a clerk in the entry division erroneously characterized the application in a memorandum note, dated October 2,1957, as follows:
Attached please find complete file on the above mentioned entry in which the importer wishes to abandon 490 cases beer for destruction. Entry mailed to your office for liquidation on Sept. 12,1957. Please advise of your decision.
The collector at Galveston, apparently of the opinion that the consignee sought relief under the abandonment statute,3 declined to abate the duties and taxes paid on the beer in question because, as he stated in his letter to the broker, under date of October 8,1957, “. . . none of the regulation requirements, whereby an importer may abandon *50merchandise and thereby secure abatement of duty and taxes, were met . . . .” Thus, it clearly appears in the record that the consignee’s application for destruction of the imported merchandise under customs supervision went begging for disposition by the collector, because the consignee fell victim to the mistaken belief entertained by the collector concerning the nature of the relief sought. At the time the consignee sought relief, abandonment of the subject merchandise was no longer available to it, but the exportation or destruction of such merchandise in customs custody or under customs supervision was still available to the consignee. As such, it is no answer to the claim here made for the majority to conclude that the collector’s refusal to resume custody of the subject merchandise must be regarded as a finding that the collector found the merchandise not to be “prohibited” merchandise under section 1558(a) (2), supra, when, in fact, he did not pass upon that issue at all, as the record reveals.
The majority have seemingly invoked the doctrine of “laches” against the plaintiff, noting that its application was made more than 3 months after the subject merchandise was released from customs custody. I find nothing in the record which impugns the good faith of the plaintiff consignee in the filing of its application, or which indicates its awareness of facts bearing upon the condition of the beer prior to its release. The steamship agent to whom the knowledge of the damaged condition of the beer upon arrivel was first imparted, and in whose custody the beer was kept on the docks, was the agent of the ocean carrier and appears to have responded only to instructions from its principal abroad. It should be borne in mind that this beer was sold to the plaintiff consignee while in transit under a bill of lading made out to the importer, Van Munching & Co., Inc., of New York City. Consequently, arrangements for the transportation, handling, and destination of this merchandise had been set even before the plaintiff came into the picture. Under such circumstances, it is unlikely that the plaintiff could have figured more prominently than it did in the disposition and settlement of the damaged beer problem. In the filing of the instant 'application, the plaintiff acted seasonably in its own best interests after its initial inspection and rejection of the subject merchandise on the docks.
Beer enjoys an inseverable relationship to its container, by reason of the oxidation spoilage to which it is subject, so that injury or damage to the container is tantamount to injury or damage to the beverage itself. It is this quality which sets beer apart from other alcoholic beverages not so affected by oxidation spoilage. On such basis, the instant case and the Hulse case are distinguishable from Columbia Co. v. United States, 9 Cust. Ct. 179, C.D. 688, cited by the majority opinion, *51wherein, importations of Chinese wine were not regarded by the court as being “prohibited articles” solely because of defective containers.
Even if internal examination of the beer is necessary or desirable under section 1558(a) (2), supra, the critical time for the marshaling of such evidence was not at trial time, but at the time when the merchandise was in the carrier’s custody on the docks and the Government’s inspection was invited. Nothing testified to at trial time could improve upon the quantum of evidence available at the time of dock storage.
There were extraordinary circumstances attendant upon the landing of the involved merchandise which warranted a more thorough examination of such merchandise than it received. Even the breakage noted by the discharging inspector upon the release of the beer from customs custody forebode more, under the circumstances, than the customary hazards of an ocean voyage and handling of merchandise in transit. Cf. Italerica Corporation v. United States, 28 Cust. Ct. 259, C.D. 1419. It is not unlikely that a thermal processing of the beer in a bath of steam during the voyage of importation would have left its mark upon the beer — causing a secondary fermentation of the beer in the bottles, a resultant increase in carbon dioxide pressure, and consequent breakage of bottles from such added pressure.4 In any event, the collector was not obliged to speculate about the condition of the beer, as we must of necessity, do now. He twice had opportunity to procure appropriate examinations and analyses of samples of the affected beer and declined or failed to do so.
Under the circumstances of this record, it is deemed sufficient that the merchandise was, in fact, exported and destroyed. In no uncertain terms, the plaintiff had requested in its application to the collector the destruction of this beer under customs supervision and had been turned down albeit for mistaken reasons. Beyond making such a request, there remained nothing further that it could do to effectuate the customs supervised disposal of the merchandise. The fact that exportation and destruction of such merchandise took place outside of customs supervision cannot be attributed to any dereliction on the part of the plaintiff-consignee. The default lies with the collector, however much it appears that he misunderstood the claim made. Nevertheless, the failure of the collector to discharge antecedent obligations accruing under section 1558(a)(2), supra, should not operate to deprive the plaintiff of rights obtainable thereunder. Bacardi Corporation v. United States, 11 Ct. Cust. Appls. 252, T.D. 39078; Armour and Company v. United States, 29 Cust. Ct. 296, C.D. 1482.
For the reasons stated, I would, therefore, sustain the instant protest.

 27 U.S.C.A., § 205.

 21 U.S.C.A., §342.

 19 U.S.C.A., § 1506(1).

 Parker, Harvey & Stateler, Elements of Pood Engineering, ibid.