The plaintiffs in error imported into the port of New York in
November, 1888, a quantity of wool which had been scoured, which
was then put upon a comb from which it came in long lengths known
as slivers or stubbing; which was then put through a process called
gilling, which formed the slivers into a less number of slivers of
greater thickness, and which was then taken into the drawing room
and finished, from whence it tame out in the form of round balls
called tops. The collector first classed the goods as waste, and
fixed the duty at ten cents a pound under the Act of March 3, 1883,
c. 121, 22 Stat. 488, which duty was paid, but subsequently the
collector imposed on the whole importation, under the same act, a
duty of ten cents a pound as wool of the first class costing under
thirty cents per pound in the unwashed condition, then trebled that
duty because imported scoured, and then doubled the result upon the
ground that the tops had been changed in their character or
condition for the purpose of evading the duty. The importer
declined to pay the excess of duty so imposed, and the United
States commenced this action to recover it.
Held that the
duty of sixty cents a pound was properly imposed, and that there
was no error in the rulings of the trial court which are set forth
in the opinion of this Court.
This was an action by the United States in the district court
against the importing firm of George W. Patton & Co. to recover
certain duties claimed to be due on thirty-three bales of
merchandise entered by the importers as "wool waste," and claimed
by them to be dutiable at ten cents per pound under the following
clause of Schedule K of the Tariff Act of 1883: "Woolen rags,
shoddy, mungo, waste, and flocks, ten cents per pound." At the time
of the importation (November, 1888) the duties were accordingly
assessed and paid at this rate.
The appraiser subsequently returned the goods as "scoured wool,
broken tops, class 1, costing under thirty cents per pound in the
unwashed condition, sixty cents per pound." The collector
accordingly fixed the duty at sixty cents per
Page 159 U. S. 501
pound under the following paragraphs of the Act of March 3,
1883, c. 121, 22 Stat. 488, 508:
"All wools . . . shall be divided for the purpose of fixing the
duties to be charged thereon, into the three following
classes:"
"Class one, clothing wools -- that is to say, merino . . .
wools,"
etc.
"The duty on wools of the first class which shall be imported
washed shall be twice the amount of the duty to which they would be
subjected if imported unwashed, and the duty on wools of all
classes which shall be imported scoured shall be three times the
duty to which they would be subjected if imported unwashed."
"The duty upon wool . . . which shall be imported in any other
than ordinary condition, as now and heretofore practiced, or which
shall be changed in its character or condition for the purpose of
evading the duty . . . shall be twice the duty to which it would be
otherwise subject."
The collector first imposed a duty of ten cents a pound upon
this as wool of the first class, costing under thirty cents per
pound in the unwashed condition, then trebled this duty, because
they were imported scoured, and again doubled the result upon the
ground that they had been changed in their character or condition
for the purpose of evading the duty. This made the aggregate duty
sixty cents per pound, which appears to have been greater than the
whole value of the goods. To recover the difference paid upon the
entry and the duty imposed by the collector, the United States
brought this suit.
Upon trial before a jury, the court charged that the importation
in question could not be considered as wool waste, as it did not
consist of refuse or broken particles thrown off in the process of
manufacture, and was made intentionally by tearing up what are
called "wool tops," which consist of wool which has been subjected
to several processes, and prepared for spinning, and that it could
not be considered as a manufacture of wool, and hence the court
left it to the jury to say whether the wool was imported scoured,
and in a condition other than that in which such wool was
customarily imported in March,
Page 159 U. S. 502
1883, and previously. The court expressed the opinion that the
plaintiff was entitled to recover the amount of the duties
assessed, but submitted the case to the jury upon the evidence.
The jury found a general verdict for the plaintiff in the sum of
$10,887.26, and further found, in answer to a special question
submitted to them by agreement,
"that the tops which were broken into fragments constituting
this importation were so broken for the purpose of changing the
condition of the wool from tops into the fragments resembling
waste, for the purpose of evading the duty to which the wool in the
form of tops would be subjected on importation into this country or
evading duty to which the importers believed the tops would be
liable."
Judgment having been entered upon this verdict, defendant sued
out a writ of error from the circuit court of the United States,
which affirmed the judgment of the court below. Defendants
thereupon sued out a writ of error from this Court.
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
1. The first assignment of error is that which is taken to the
instruction to the jury that the importation in question, though
called "wool waste," seems to be so called only because of its
resemblance to what was formerly known by this designation; that it
does not consist of refuse or broken particles thrown off in the
process of manufacture, but is made intentionally by tearing up
what are called "wool tops," which consist of wool which has been
put through several processes and prepared for spinning, and that
the term "waste" did not embrace this commodity.
The correctness of this instruction turns upon the meaning
Page 159 U. S. 503
of the words "woolen waste," as used in the act of 1883. As
bearing upon this, we are at liberty to consider its ordinary
definition, which will be controlling, except so far as it may be
varied by a commercial designation obtaining at that time.
Saltonstall v. Wiebusch, 156 U. S. 601.
"Waste" is defined by Webster as:
"That which is of no value; worthless remnants; refuse.
Specifically: remnants of cops, or other refuse resulting from the
working of cotton, wool, hemp, and the like, used for wiping
machinery, absorbing oil in the axle boxes of railroad cars,
etc."
In this connection, and in the same clause of the statute, other
words are included, undoubtedly referring to articles of the same
or of a similar nature. These are: "Rags: shoddy," defined as "a
fibrous material, obtained by "deviling" or tearing into fibers
refuse woolen goods, old stockings, rags, druggets, etc.;" "mungo,"
which properly signifies the disintegrated rags of woolen cloth, as
distinguished from those of worsted, which form shoddy, and
"flocks," defined as "woolen or cotton refuse, old rags, etc.,
reduced to a degree of fineness by machinery, and used for stuffing
upholstered furniture," and also as
"very fine sifted woolen refuse, especially that from shearing
the nap of cloths, used as a coating for wallpaper to give it a
velvety or cloth-like appearance."
The prominent characteristic running through all these
definitions is that of refuse, or material that is not susceptible
of being used for the ordinary purposes of manufacture. It does not
presuppose that the article is absolutely worthless, but that it is
unmerchantable, and used for purposes for which merchantable
material of the same class is unsuitable.
The importation in question consisted of wool which had been
scoured, then carded and prepared, then put upon a comb, from which
it comes in long lengths, known as "slivers" or "slubbing." It is
then put through a process called "gilling," which forms the
slivers into a less number of slivers of greater thickness. These
slivers are then taken into the drawing room and finished, from
whence they come out in the form of round balls, called "tops."
These tops become new articles of merchandise, which are sold to
the spinners, who spin them into worsted yarn.
Page 159 U. S. 504
In the process of making the tops, short ends of wool are
produced, which are called and sold in the trade as "Botany laps"
or "Botany waste," the two terms being synonymous in the English
market. After the top is produced, it sometimes happens that it is
shorter in staple than was anticipated, or not of the proper color,
or that it has to be recarded to get out the burrs, or for some
other reason it becomes unmerchantable. In such cases, it has
always been the practice in England to break up the tops as unfit
for ordinary use, and in that condition they are sold for the same
purpose as wool waste, and are known and sold commercially as
"Botany laps" or "Botany waste." It was not claimed, however, that
they formed a recognized article of commerce in this country, or to
any great extent in England. At and prior to 1883, there was no
quotable market price for waste, for the reason that the
manufacture was not large, though it was bought and sold to a
certain extent on its merits upon the market.
In 1887 or 1888, owing to the depression of the wool trade in
England, and the demand for waste in this country, the price of
tops became so low and the price of waste so high that the
deliberate breaking up of tops began for the purpose of exporting
them to America as waste, though there is no evidence of any
importation of this character prior to 1887. The discovery that the
tops thus broken up might be entered at the American customhouses
as "waste" produced such a sudden demand for exportation that,
while the amount declared at the American consulate at Bradford,
the center of this trade, for the last two months of 1887 and the
first two months of 1888 was only 190,088 pounds, for the
corresponding months of 1888 and 1889 it rose to 1,803,558
pounds.
It appeared from the evidence that the waste, whether
intentionally or unintentionally produced, was an article having
different qualities from the merchantable wool, and was used as an
adulterant. It is, however, used like other scoured wool, being
mixed with it in the carding machine, and is worth only ten or
fifteen cents less per pound than
Page 159 U. S. 505
scoured wool of the same character, and hence, in view of the
difference in tariff rates, is an article of much more value than
scoured wool for the purposes of importation. While these broken
tops became a large import under the designation of waste, they
never seem to have been prepared in this country for the purposes
of sale, the tops being much more valuable in their unbroken
condition, while in England, in 1888, the broken tops were more
valuable than the unbroken ones. The testimony upon both sides
indicates that this artificial kind of waste is, for obvious
reasons, more uniform and clean, and therefore more valuable, than
genuine waste. It was not disputed that the importations in
question consisted of tops deliberately broken up for the purposes
of sale. The main question is whether the action of the collector
was correct in refusing to allow them to be entered under the
denomination of "waste."
If the ordinary definition of waste as refuse matter thrown off
in the process of manufacture is to control, it is quite clear that
the importations in question are not susceptible of this meaning.
The common definition of "waste" lends no support to the theory of
the defendants.
With regard to its commercial designation, there was undoubtedly
some testimony tending to show that in England, merchantable tops,
broken up for the purpose of exportation, had acquired the
commercial designation of waste, or, more properly, "broken top
waste;" that the importations in question were ordered by the
defendants under the latter designation, and that such waste was
preferred to the ordinary waste or refuse because the latter had
too much slubbing. This designation, however, was confined to such
waste as had been purchased since 1887, and threw no light upon the
commercial designation of the article in question at or prior to
March, 1883. There is little or nothing to indicate that the
practice of breaking up merchantable tops for export prevailed in
England prior to 1887, when the attention of wool dealers there
seems to have been called to the profits that could be made by
exporting broken tops to America. There were, however, several
witnesses produced by the defense who were
Page 159 U. S. 506
residents of the United States and who swore that the article in
question had been known in this country as "top waste" since 1866,
and that there was no difference in the commercial designation of
the article, whether it was intentionally or unintentionally
produced.
This must, however, be taken in connection with the undisputed
testimony that merchantable tops had never been broken up in
England to form waste prior to 1887 or 1888, when the attention of
dealers was first directed to the profits which could be made by
importing them into this country under that denomination. The
witnesses, upon cross-examination, admitted that they had never
known of merchantable tops being broken up and imported here as
waste prior to 1887, and their testimony, so far as it bears upon
preceding years, indicates that the top waste referred to was that
produced by the breaking up of discolored or otherwise
unmerchantable tops, the product of which was known commercially
and properly as "waste" or "top waste." In short, the testimony
upon this subject falls far short of establishing a commercial
designation applicable to these articles with the certainty,
uniformity, and generality required by the decisions of this Court.
Maddock v. Magone, 152 U. S. 368,
152 U. S. 371;
Berbecker v. Robertson, 152 U. S. 373,
152 U. S. 377;
Sonn v. Magone, 159 U. S. 417. In
default of such evidence, the term will be presumed to have been
used in the tariff act in its ordinary sense of "refuse."
Swan
v. Arthur, 103 U. S. 597;
Schmieder v. Barney, 113 U. S. 645.
Taking the testimony altogether, we think there was no such
evidence of a commercial designation of the articles in question as
made it incumbent upon the court to submit the question to the
jury.
But had the evidence upon this point been much stronger than it
was, it is difficult to see how it could avail the defendants in
view of the clause that
"the duty upon wool . . . which shall be imported in any other
than ordinary condition, as now or heretofore practiced, or which
shall be changed in its character or condition for the purpose of
evading the duty . . . shall pay twice the duty to which it would
otherwise be subject."
Although it was submitted as a separate question
Page 159 U. S. 507
to the jury, the testimony was practically undisputed that the
articles in question were merchantable tops, broken up for the
purpose of changing their character or condition from that of tops
to that of waste, and that it was done for the purpose of evading
the duty to which the wool in the form of tops would be subject on
importation, or, at least, to which the importer believed it would
be liable. If such change were made, and made for this purpose, it
would make no difference whether the article thus produced was
known commercially as waste or not. Assuming that the product would
be waste, it would be waste produced by a process which Congress
had refused to recognize, and the fact that the classification of
the article was thereby changed would not relieve it from the
double duty which Congress had imposed upon wool whose character or
condition had been changed.
In this connection, we are referred by counsel for defendants to
two cases which are supposed to justify the inference that imported
merchandise may be treated in such manner as to change its
classification, even though such change were made for the purpose
of securing its importation at a lower rate of duty. In the first
of these cases,
Merritt v. Welsh, 104 U.
S. 694, certain sugars were given an artificial color in
the process of manufacture. The sole test of their dutiable quality
was their actual color, as graded by the Dutch standard. It had
been decided that this meant the color of the sugar obtained by the
ordinary process of manufacture, and that any means used to degrade
the color after such process was a fraud upon the revenue. As no
proof was offered to show that they were artificially colored after
the manufacture was completed, the court instructed the jury to
find a verdict for the plaintiffs. The real question was whether
(supposing that sugars were not artificially colored for the
purpose of avoiding duties after being manufactured) their dutiable
quality was to be decided by their actual color or by their
saccharine strength. It was decided that, as the Dutch standard was
a color standard only, even if the sugars had been manufactured in
dark colors on purpose to evade our duties, the entry at a reduced
value was nevertheless lawful, and that the remedy lay with
Congress alone.
Page 159 U. S. 508
In the second case,
Seeberger v. Farwell, 139 U.
S. 608, this Court held that certain manufactures of
wool, into which a few threads of cotton had been introduced for
the purpose of securing the classification of the goods at a lower
rate of duty, were properly subject to classification at that rate,
although the quantity of cotton was so small as not to materially
change the character of the goods as merchandise, the Court
observing that:
"Congress having made special provision for a lower rate of duty
upon goods when composed in part of wool, without naming how much
of other material should enter into their composition in order to
secure such lower rate of duty, the court was of opinion that
manufacturers and importers had a right to adjust themselves to the
foregoing clause of the tariff, and to manufacture the goods with
only a small percentage of cotton for the purpose of making them
dutiable at the lower rate."
In those cases, however, there no such provision applicable to
sugars or to woolen cloths as exists in this case, providing that
where wool unmanufactured shall be changed in its character or
condition for the purpose of evading duty a double duty shall be
imposed. The object of this legislation seems to have been to make
that unlawful with respect to raw wools which had been held to be
legitimate with respect to other articles.
2. We are also of opinion that the importations in question
cannot be considered as manufactures of wool. Assuming that the
tops, before being broken up, represented a stage in the process of
converting the wool into cloth which would entitle them to be
considered as manufactures, if the tops be reconverted into wool,
so that the process has to be gone through with again, the wool
loses its character as a manufacture and resumes its character as
wool, even though it acquires the new commercial designation of
"waste." Waste, in its ordinary sense, being merely refuse thrown
off in the process of converting raw wool into a manufacture of
wool, cannot be considered a manufacture simply because it acquires
a new designation, and if it be artificially produced by the
breaking up of tops, it is with even less reason entitled to be so
considered. Unless natural waste can be treated as a manufacture,
artificial waste should not.
Page 159 U. S. 509
The clause in the tariff act covering these manufactures imposed
both a specific and an
ad valorem duty upon "woolen
cloths, woolen shawls, and all manufactures of wool of every
description." Applying the rule
noscitur a sociis, it can
hardly be supposed that wool used for the purpose of waste, and as
an adulterant in the manufacture of cloths, was to be included in
the same designation as woolen cloths and shawls, which evidently
refer to articles made of wool and having a separate designation of
their own. But, however this may be, the article in question does
not fall within the definition of "manufactures" as laid down by
this Court in numerous cases. Thus, in
United
States v. Potts, 5 Cranch 284, round copper bottoms
turned up at the edge, not imported for use in the form in which
they were imported, but designed to be worked up into vessels, were
held not to be manufactured copper within the intention of the
legislature. So, in
Hartranft v. Wiegmann, 121 U.
S. 609, shells cleaned by acid and then ground on an
emery wheel, and some of them afterwards etched by acid, and
intended to be sold for ornaments, as shells, were held to be
"shells," and not "manufactures of shell." The question is fully
discussed in
Lawrence v.
Allen, 7 How. 785, in which, however, it was held
that India rubber shoes made in Brazil by simply allowing the sap
of the India rubber trees to harden upon a form were manufactured
articles, because they were capable of use in that shape as shoes.
Indeed, this was the form in which such shoes were at first made.
Finally, in
Seeberger v. Castro, 153 U. S.
32, tobacco scrap, consisting of clippings from the ends
of cigars and pieces broken from tobacco, of which cigars are made
in the process of such manufacture, not being fit for use in the
condition in which they are imported, were held to be subject to
duty as unmanufactured tobacco. This scrap is in the nature of
waste, and the case is directly in point.
3. The remaining assignment is as to the charge of the court
that if this wool was imported scoured, and in condition other than
that in which such wool was customarily imported in March, 1883,
and previously, it fell within the provision of wool imported
scoured. There is abundance of testimony to
Page 159 U. S. 510
the effect that the article imported was not known commercially
as "scoured wool," but, in the view taken by the court below, which
we think was correct, this was immaterial. The act does not impose
a duty upon scoured wool as such by its commercial designation, but
provides that
"the duty on wools . . . which shall be imported washed shall be
twice the amount of duty to which they would be subject if imported
unwashed, and the duty on wools of all classes which shall be
imported scoured shall be three times the duty to which they would
be subjected if imported unwashed."
In short, the act refers not to the commercial designation, but
to the fact whether the wool has been actually scoured or washed or
is imported unwashed. If the wools have in fact undergone the
process of scouring, they are properly classified as imported
scoured, although they may not be known commercially as scoured
wools.
There was no error in the rulings of the court below of which
the defendants were entitled to complain, and the judgment of the
court below is therefore
Affirmed.