Court Opinion

ID: 8774459
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:56:27.450869+00
Date Added: 2024-06-11T17:02:26.735474
License: Public Domain

COXE, Circuit Judge
(after stating the facts as above). The questions in controversy have been discussed in four opinions, in which the opposing arguments have been fully and ably presented. In three of these opinions- — those written by General Appraiser Waite, b,y Board 3, and by Judge Martin — the contention of the importers has been sustained. The facts have been so fully presented that it will not be necessary to restate them in detail.
*177The question here to he considered is whether Board 2, in overruling General Appraiser Waite and advancing the value of the merchandise 26.o per cent, above invoice value, transcended the powers conferred by the statute or proceeded upon a wrong principle contrary to law. If Board 2 acted outside of or contrary to law or proceeded upon a wrong principle or without any evidence to sustain their finding, they exceeded their power, and the decisions of Board 3 and the Circuit Court should be sustained. As both parties are apparently agreed upon this proposition, it is unnecessary to elaborate it.
Board 2 bases its conclusion upon a letter written by Charles Edward Haviland, the head of Haviland & Co., to Ralph W. Clayton, a special agent of the Treasury, in 1906, in which he gives a frank and compendious statement of the expenses and profits of the Paris branch of the business, in order that a comparison might be instituted between the prices at which the Rimoges branch sells in Europe and the prices at which they sell to the New York branch.
It must be conceded that there is no direct proof in this letter establishing the actual market value of the merchandise as bought and sold in usual wholesale quantities in Paris. By reading portions of the letter apart from the context, by deductions scarcely warranted by the writer’s language, by assumptions unsupported by the proof and by arbitrary reductions to equalize the expenses between the wholesale and retail prices at Paris, the result is reached that 16.5 per cent, should be added to make market value. There is no proof such as is contemplated by the statute, many of the propositions urged in support of the conclusions of Board 2 being based upon conjecture and guesswork. The letter shows that the Paris house is a comparatively unimportant branch of the entire business, 80 per cent, of the output being exported to the United States. In 1905 the expenses of the Paris house were $33,000 and the sales about $127,000; the percentage of expense for total sales was 25.5 per cent. It dealt in Plaviland & Co.’s goods, hut also handled the goods of other manufacturers of china. The character of the decorations and the number of pieces in the sets sold at Paris differed materially from the china sent to this country.
Mr. Haviland says:
All tho richer decorations sold by H. & Co., Paris, are in every respect so entirely different from those ordered by H. & Co., New York, that no comparison between them can be made.
Thirty-five invoices of actual sales at wholesale by the Paris house in 1905-6 were submitted, which show that, after deducting expenses:
The net amount received by IT. & Co., Paris, from its buyers after deduction of its Paris expenses is frs. 13,872.94e„ while the net amount received by H. <fe Co., Limoges, from H. & Co. New York for the same would be frs. 15,-764.33c. — and this although II. & Co., New York, buy two millions of francs annually and pay cash, while most of the customers of H. & Co. Paris order but a few hundred francs annually.
Commenting upon this statement, Board 3 says:
The 35 invoices in question and the statement in the letter relative thereto furnish the only evidence which the letter contains of the price at which *178Ilaviland's china is sold at wholesale in the city of Paris. This evidence of sales in wholesale quantities shows that the Paris wholesale price was 15.5 per cent, above the Limoges prices. The aggregate price of the merchandise stated in the various invoices under reappraisement by Board 2 averaged 16.5 per cent, above the Limoges price. The merchandise in question was therefore entered at 1 per cent, more than the Paris value of like merchandise as shown by the invoices in question.
If Haviland & Co., of Paris, had been a wholesale house simply, if it had dealt in the same goods assembled in the same sets and decorated in same manner as the exported goods, and if it had appeared that the entered value was less than the price thus established, the letter might have justified the conclusion drawn therefrom; but as none of these propositions is true, the letter is valueless as proof.
The part of the letter relied on by Board 2, which is quoted in both opinions, when read in connection with the other statements does not warrant the construction placed upon it. Even if their construction be adopted it is still incomplete and indeterminate. This is clearly recognized by Board 2 in making the arbitrary reduction of 10 per cent, based upon the fact that the Paris house sold both at retail and wholesale. The other attempts to establish a wholesale market value in Paris resulted in failure so complete that comment is unnecessary.
The opinion of Judge Martin contains a concise statement of the facts and concurs in the opinion of Board 3 in their view of the insufficiency of the Haviland letter as a basis for the conclusions of Board 2. He goes further, however, and concurs with. General Appraiser Waite in finding that Limoges is the principal market in France from which china is imported to this country. His argument to establish this proposition is able and seems unanswerable. The testimony shows that if Limoges had been adopted Haviland & Co. would have been treated substantially as the other importers of china from France have been treated. It is, however, sufficient for us to say that we concur with the protest board and the Circuit Court in holding that there was no evidence before Board 2 which warranted ■the conclusion reached by them and that their action proceeded upon a wrong principle and was contrary to law.
The decision of the Circuit Court is affirmed.