In order to produce uniformity in the Imposition of duties, the
dutiable classification of articles imported must be ascertained by
an examination of the imported article itself in the condition in
which it is imported.
A prescribed rate of duty cannot be escaped by disguise or
artifice, but if the article imported is not the article described
as dutiable at a specified rate, it does not become dutiable under
the description because it has been manufactured for the purpose of
being imported at a lower rate.
The court is not concerned with reasons for a distinction in the
tariff act -- it is enough that Congress made it.
Pearls, unset and unstrung, are dutiable under par. 436 of the
tariff Act of 1897 at ten percentum, and not under par. 434 at
sixty percentum, because capable of, or intended for, being strung
as a necklace.
Page 223 U. S. 408
The fact that a pearl has been drilled -- as is the case with
more than seventy-five percent of all large pearl when they come
from the wholesale dealer -- does not take it out of par. 436 and
make it dutiable under par. 434 at sixty percentum.
Congress will not be presumed, in framing a tariff, act to have
contemplated a radical departure from the policy of former tariff
legislation when it will also be necessary to presume that
Congress, in doing so, also disregarded facts of the trade.
After reviewing provisions of former tariff acts and prior
decisions in regard to pearls and the duties to be levied upon
them,
held that pearls, not strung or set, although
suitable for being strung as a necklace, are not to be classed by
similitude under par. 434 and subjected to the higher duty of sixty
percentum.
Where a tariff act, as that of 1897, provides for pearls set or
strung and for pearls not strung or set, it will not be presumed
that Congress intended to leave an unenumerated class of pearls to
be classed by similitude.
166 F. 693 affirmed.
The facts, which involve the construction of paragraphs 434 and
436 of the Tariff Act of 1897 as applied to pearls, are stated in
the opinion.
Page 223 U. S. 413
MR. JUSTICE HUGHES delivered the opinion of the Court.
Bernard Citroen, on June 11, 1906, imported into the United
States thirty-seven drilled pearls -- unset and unstrung -- divided
into five lots, separately enclosed. The collector classified them
by similitude "as pearls set or strung, or jewelry," dutiable at
sixty percent
ad valorem under paragraph 434 of the Tariff
Act of 1897. 30 Stat. 151, p. 192, c. 11. The Board of General
Appraisers sustained the importer's protest, holding the pearls to
be dutiable by similitude at ten percent under paragraph 436. The
circuit court, on additional testimony, reversed this ruling and
affirmed that of the collector, and this decision was, in turn,
reversed by the circuit court of appeals, which held that the Board
was right. 166 F. 693. The case comes here on certiorari.
The paragraphs of the Act of 1897 (30 Stat. p. 192, c. 11) which
are in question read as follows:
"434. Articles commonly known as jewelry, and parts thereof,
finished or unfinished, not specially provided for in this act,
including precious stones set, pearls set or strung, and cameos in
frames, sixty percentum
ad valorem."
"436. Pearls in their natural state, not strung or set, ten
percentum
ad valorem."
The pearls had been purchased by the importer's brother, and had
been offered for sale, collectively and in lots, in Paris, London,
and Berlin, and to show that the collection was a desirable one for
a necklace, they had been strung from time to time on a silk cord.
It appeared that Mrs. Leeds, the present owner, had seen the pearls
in Paris, both loose and on a string. As she testified, they were
brought to her hotel
"both on the string and off the string; it was strung up at odd
times, then it was taken apart and other pearls were put in and
others taken out, so it
Page 223 U. S. 414
was strung several times."
She was permitted to wear the pearls as a necklace, and finally
bought them, it being agreed that they should be delivered to her
in this country. They were so delivered in the condition in which
they were imported, without string or clasp, and to these the
purchaser subsequently added six pearls and formed the necklace she
desired.
With respect to the character of the imported collection, the
Board of General Appraisers found:
"Pearls of greater dimensions than the average are comparatively
rare; hence it frequently requires several years' search in order
to secure a sufficient number to form a necklace, all accurately
matched in the essential features of size, color, and luster. Such
a collection thus assembled would, no doubt, command a higher price
than the aggregate value of the separate pearls. On the other hand,
a sufficient number of pearls, although of large size, required to
form a necklace, matched as to size but not otherwise, except a
mere regard for comparative color, could be assembled within a
short time and at a price based upon the cost of each separate
pearl. In order to dispose of thirty or more pearls to one
purchaser, such a collection would usually be sold at a less price
than the aggregate would amount to were each pearl sold separately.
The evidence shows, and we find, that the pearls in question belong
to the latter, and not to the first, class."
T.D. 28,246; G. A. 6617. And, as to these facts, there is
nothing in the evidence introduced in the circuit court which
requires a different conclusion.
The questions presented are (1) whether the pearls fall directly
within the description of the paragraph (434) relating to jewelry,
and (2), if not, whether they are brought within this paragraph,
through similitude, by virtue of § 7. 30 Stat. 205, c. 11.
First. The rule is well established that,
"in order to produce uniformity in the imposition of duties, the
dutiable
Page 223 U. S. 415
classification of articles imported must be ascertained by an
examination of the imported article itself, in the condition in
which it is imported."
Worthington v. Robbins, 139 U.
S. 337,
139 U. S. 341;
Dwight v. Merritt, 140 U. S. 213,
140 U. S. 219;
United States v. Schoverling, 146 U. S.
76,
146 U. S. 82;
United States v. Irwin, 78 F. 799, 802. This, of course,
does not mean that a prescribed rate of duty can be escaped by
resort to disguise or artifice. When it is found that the article
imported is in fact the article described in a particular paragraph
of the tariff act, an effort to make it appear otherwise is simply
a fraud on the revenue, and cannot be permitted to succeed.
Falk v. Robertson, 137 U. S. 225,
137 U. S. 232.
But when the article imported is not the article described as
dutiable at a specified rate, it does not become dutiable under the
description because it has been manufactured or prepared for the
express purpose of being imported at a lower rate.
Merritt v.
Welsh, 104 U. S. 694,
104 U. S. 704;
Seeberger v. Farwell, 139 U. S. 608,
139 U. S.
611.
"So long as no deception is practiced, so long as the goods are
truly invoiced and freely and honestly exposed to the officers of
customs for their examination, no fraud is committed, no penalty is
incurred."
Merritt v. Welsh, supra. The inquiry must be -- does
the article, as imported, fall within the description sought to be
applied?
In the paragraph as to jewelry (434), Congress expressly defined
what pearls were to be included. The paragraph reads, "including .
. . pearls set or strung." It does not say pearls that can be
strung, or that are assorted or matched so as to be suitable for a
necklace, but pearls "set or strung." We are not concerned with the
reason for the distinction; it is enough that Congress made it. Had
these pearls never been strung before importation, no one would be
heard to argue that they fell directly within the description of
paragraph 434 because they could be strung, or had been collected
for the purpose of stringing
Page 223 U. S. 416
or of being worn as a necklace. Loose pearls -- however valuable
the collection, however carefully matched or desirable for a
necklace -- are not "pearls set or strung."
Nor can it be said that pearls, imported unstrung, are brought
within the description of paragraph 434 because at some time or
from time to time previous to importation, they have been put on a
string temporarily for purposes of display. The paragraph does not
use a generic definition which could be deemed to define pearls
previously strung though imported unstrung, but refers, in terms
which shelter no ambiguity, to their condition when imported. It is
not a case of parts of a described article separately packed to
avoid the specified duty on the article as a whole.
United
States v. Schoverling, 146 U. S. 76,
146 U. S. 82;
Isaacs v. Jonas, 148 U. S. 648;
United States v. Irwin, supra. For here, the imported
pearls, whether regarded separately or taken as a collection, are
not within the description. It is idle to comment on the relative
value of a string to hold the pearls, for this is immaterial. The
statute has furnished the test, and we are not at liberty to make
another.
Second. Although the pearls do not fall directly within
paragraph 434, the question remains whether they are brought within
it by similitude. The similitude clause (§ 7) applies to articles
not enumerated in the tariff act, and hence it governs the rate in
this case only if it be found that the pearls are excluded from the
description of paragraph 436, which enumerates "pearls in their
natural state, not strung or set." May it fairly be said that, in
these two classes of pearls -- those "set or strung" and those "in
their natural state, not strung or set" -- Congress intended to
describe all pearls, or is there a sort of pearls, for example,
those drilled and matched so as to be suitable for a necklace,
which must be said to have been left unenumerated?
In the Customs Act of 1816 (3 Stat. 310), a duty of seven
Page 223 U. S. 417
and a half percent
ad valorem was laid on "precious
stones and pearls of all kinds, set or not set." The Act of 1842 (5
Stat. 548, 555) made the duty seven percent "on gems, pearls, or
precious stones." That of 1846 (9 Stat. 42, 45, 48) fixed the rate
at thirty percent for "diamonds, gems, pearls, rubies, and other
precious stones, and imitations of precious stones, when set in
gold, silver, or other metal," and at ten percent on "diamonds,
gems, pearls, rubies, and other precious stones, and imitations
thereof, when not set." In 1857 (11 Stat.192), and in 1861 (12
Stat. 178, 190), the same distinction was maintained.
In the Revised Statutes (§ 2504, p. 484), we find the
following:
"Precious stones and jewelry. -- Diamonds, cameos, mosaics,
gems, pearls, rubies, and other precious stones, when not set: ten
percentum
ad valorem; when set in gold, silver, or other
metal, or on imitations thereof, and all other jewelry: twenty-five
percentum
ad valorem."
In 1883 (22 Stat. 488, 513, 514) the rate of duty was made
twenty-five percent for "jewelry of all kinds" and ten percent for
"precious stones of all kinds." In 1890 (26 Stat. 600, 601), the
jewelry paragraph (452), which fixed the rate at fifty percent,
embraced all articles, not elsewhere specially provided for, which
were composed of precious metals or imitations thereof (including
those set with pearls) and known commercially as jewelry, and the
following paragraph (453) read: "Pearls, ten percentum
ad
valorem." By the Act of 1894 (28 Stat. 509, 534), the jewelry
rate was reduced to thirty-five percent; the paragraph as to pearls
was changed so that, instead of describing pearls generally it
read: "Pearls, including pearls strung, but not set, ten percentum
ad valorem;" and pearls set were placed with precious
stones set, with a duty of thirty percent.
It will thus be observed that, when pearls were enumerated in
the tariff acts prior to that of 1897, the enumeration
Page 223 U. S. 418
was evidently intended to be comprehensive, and covered all
pearls not included in the provision for jewelry. The Act of 1897
placed "pearls set or strung" in the jewelry paragraph, and then
provided the rate of ten percent for "pearls in their natural
state, not strung or set."
To complete the review of the statutes, it may be added that, in
1909, when new tariff legislation was under consideration, it was
proposed, in the light of the decisions to which we shall presently
refer, that there should be inserted in the act a clause providing
that "collections of pearls selected, matched, or graded, shall be
dutiable as jewelry," and the House bill so provided. H.R. Bill No.
1438, par. 447, 61st Cong., 1st sess., Cong.Rec. vol. 44, p. 1510.
Congress not only refused to make this insertion, but instead
retaining the existing rate on unstrung and unset pearls, omitted
the phrase "in their natural state," and further clarified the
provision by inserting the words "drilled or undrilled," so that
the clause in the Act of 1909 reads: "Pearls and parts thereof,
drilled or undrilled, but not set or strung, ten percentum
ad
valorem." (36 Stat. 68.)
The difficulties that beset the construction of paragraph 436 of
the Act of 1897 sufficiently appear in the cases which have been
brought before the courts. In 1898, Tiffany & Company imported
pierced pearls described in the invoices as "pearls drilled, but
not strung." They were assessed for duty at twenty percent as
unenumerated articles, manufactured in whole or part, under § 6.
The circuit court ( 103 F. 619) held that the phrase "pearls in
their natural state" was a new phrase wholly unknown to merchants;
that the words, having no commercial meaning, must be interpreted
in their plain, natural sense, and that a drilled pearl was not a
pearl in the natural state. It was pointed out that the selection
made by Congress in the use of these words, so interpreted, seemed
an unfortunate one, as the effect was to
Page 223 U. S. 419
attach a higher duty to the lower article. The conclusion was
that Congress had not, as presumably it intended to do, covered all
kinds of pearls in the various jewelry paragraphs, but had "left a
kind of pearl to be covered by one of the catchall paragraphs," and
this the court could not correct. The assessment was sustained.
On a later importation of drilled pearls, this decision was
followed by the collector, and the ruling was affirmed by the
circuit court. T.D. 22,140, G.A. 4692;
Tiffany v. United
States (1901), 105 F. 766. But, while overruling the
importer's protest, the court stated that the similitude clause
should operate before the general clause providing for unenumerated
manufactured articles, and that the imported pearls bore a closer
resemblance to strung pearls than to pearls in their natural state.
This was in effect to hold that drilled pearls were dutiable under
the jewelry paragraph at sixty percent
This decision was reversed by the circuit court of appeals.
Tiffany v. United States (1901), 112 F. 672. It was ruled
that the pearls were not covered by either of the paragraphs 434
and 436; that the similitude clause should be applied, and that the
drilled pearls more closely resembled pearls in their natural state
than strung pearls, and hence that the pearls in question were
dutiable at ten percent. (This was followed in T.D. 23,751, G.A.
5149.) The court, however, indicated that there would be an
exception to this rule when the pearls had been so selected as to
produce a collection "worth more than the aggregate values of the
individual pearls composing it."
Meanwhile, Neresheimer & Company had imported two lots of
drilled pearls, in March and November, 1901, respectively, one
being forty-five and the other thirty-nine in number, the total
value exceeding $123,000. At first they were assessed at the rate
of 20 percent, but after the decision of the court of appeals in
the
Tiffany
Page 223 U. S. 420
case,
supra, both entries were reliquidated and the
articles were assessed by the collector as "pearls strung" at sixty
percent. This was sustained by the Board of General Appraisers
(1902), T.D. 23,748, G.A. 5146. The Board found that the pearls
"were imported in a morocco case, with silk lining, forming a
groove running lengthwise, in which the pearls were placed and by
which they were held; that they were all matched and assorted as to
quality, size, color, and shape, and arranged in a graduated order,
the center being the largest, and gradually decreasing in size to
the last pearl at each end; that the pearls were invoiced as
'drilled pearls,' and are drilled, and when the boxes were opened
gave the appearance of necklaces; that they each constituted
extraordinary collections of such, and were of the finest ever
imported into this country; that, by reason of this matching and
assortment, they in each case possessed a value greatly in excess
of the aggregate values of the individual pearls composing the
collection."
The circuit court affirmed the action of the Board.
Neresheimer v. United States (1903), 131 F. 977. But, on
appeal, the decision was reversed by the circuit court of appeals
(1904), 136 F. 86. Reviewing the conflicting testimony, the court
of appeals concluded that the evidence did not warrant a finding
that the pearls had been assorted so as to acquire the increased
value as a collection which would bring them within the exception
suggested in the
Tiffany case. It was held that they were
dutiable at ten percent "by similitude to paragraph 436."
In 1905, Charles E. Rushmore imported eighty-five pearls which
the appraiser, in a special report, stated had
"been carefully selected, matched, and assorted, and, in fact
are said to have been strung, and require only to be restrung to
form a necklace. They are in the same condition as those passed
upon by the Board in G.A.
Page 223 U. S. 421
5146 (T.D. 23,748)."
The Board of General Appraisers, upon this report, reversed the
ruling of the collector and decided that the duty was ten percent,
on the authority of the Neresheimer case,
supra. No appeal
was taken by the government from this decision; it was rendered on
January 21, 1905, and was circulated by the Treasury Department for
the information and guidance of officers of customs and others
concerned.
It thus appears that, prior to 1906, when Citroen imported the
pearls now in question, unstrung pearls, though drilled and matched
so that they were ready to be strung as a necklace, had been held
dutiable at ten percent. The fact that they were reported to have
been previously strung abroad had not been deemed of consequence in
the
Rushmore case, and the government had acquiesced in
the ruling. Further, the exception indicated by the court in the
Tiffany and
Neresheimer cases was negatived by
the Board of General Appraisers, which in Citroen's case found that
the pearls were not matched as to color and luster with such care
as would enhance their value as a collection. T.D. 28,246, G.A.
6617. And the circuit court of appeals, reversing the circuit
court, held that there was no reason to disturb these findings. "It
is fair to assume," said the court of appeals, that the ruling in
the
Rushmore case "actuated the appellant (Citroen) in
importing and selling the pearls." And it is now asserted by his
counsel at this bar that, should the government succeed, Citroen
would be the only person who would have paid sixty percent duty on
a collection of pearls of the sort which these have been found to
be.
Later, in 1909, while the Act of 1897 was still in force,
Tiffany & Company imported fifty-nine pearls, divided into four
packages, all loose and all drilled. It appeared from the testimony
before the Board of General Appraisers that M. Guggenheim, the
ultimate purchaser,
Page 223 U. S. 422
visited the Paris establishment of Tiffany & Company for the
purpose of purchasing a necklace for his wife, and finding nothing
suitable in stock, he requested the salesman to get a number of
pearls together to make the desired necklace. The assortment was
finally completed, a sketch being made of the necklace as it would
appear when finished, and an order was given for the necklace to be
made by Tiffany & Company at New York from the pearls selected.
While it was not shown that the pearls had been worn abroad, it was
found that they may have been, "and probably were, temporarily
strung in the Paris establishment one or more times to show how the
string of pearls would appear as a necklace." On the authority of
the decision of the circuit court of appeals in Citroen's case, the
Board of General Appraisers sustained the importer's protest,
holding that the pearls were dutiable either directly or by
similitude at ten percent under paragraph 436, T.D. 29,542, G.A.
6864. This was sustained by the circuit court (
United States v.
Tiffany & Co., 172 F. 300), and its decision was affirmed
by the circuit court of appeals,, 178 F. 1006. Petition for writ of
certiorari was denied by this Court. 218 U.S. 675.
In its opinion in the present case, the court below forcibly
expressed its dissatisfaction with the effort to resolve the doubt
as to the meaning of the statute by a comparison "depending not
upon an examination of the articles themselves, but often upon
extrinsic evidence obtained long afterwards." It was a comparison,
said the court,
"which cannot be uniform, which imposes ten percent upon one
aggregation of pearls and sixty percent upon a similar aggregation,
the rate depending upon the ability to obtain evidence of prior use
in foreign countries -- a comparison which does not admit of a
fixed, definite rule, which encourages partiality, promotes
injustice, and has broken down in practical
Page 223 U. S. 423
application. This is illustrated by the fact that, in the cases
which have come to the attention of the court, the most marked
contrariety of opinion has developed as to whether the respective
collection was matched for a necklace and whether a larger price
could be obtained for the pearls singly or in combination."
The court of appeals also stated that it would incline to the
opinion, were the question an open one in that court, "that drilled
pearls are not excluded from paragraph 436."
In this view we think the court was right. As was pointed out by
the Board of General Appraisers: "Pearls just as they come from the
shell are, strictly speaking, only such as are in their natural
state." But the statute deals with the pearls of commerce. It
appears that over seventy-five percent of all large pearls when
they first come into the hands of wholesale dealers are drilled,
usually in a somewhat primitive manner, by the pearl fishers. It
cannot be supposed that Congress contemplated such a disregard of
the facts of trade, and such a radical departure from the policy of
former tariff legislation, as would be involved in a construction
of paragraph 436 which would exclude drilled pearls. Moreover, the
language of the paragraph is "pearls in their natural state, not
strung or set." This implies that the description includes pearls
that can be strung or set, and pearls cannot be strung unless
perforated. The words do not exclude, but embrace, pearls that have
been pierced, provided they are unstrung and unset.
But if drilled pearls, when neither strung nor set, are included
in paragraph 436, the fact that they have been matched or assorted
so as to form a collection suitable for stringing, or of being worn
strung, does not take them out of the paragraph. Its language makes
no distinction of that sort. The selection, or matching, does not
alter the character of the pearls.
We are of the opinion that, as in former tariff acts to
Page 223 U. S. 424
which reference has been made, Congress intended to cover and
did cover all pearls in the two paragraphs, and did not leave a
class of pearls unenumerated. The words in paragraph 436 are to be
taken as describing a condition in antithesis to that described in
paragraph 434, under which, if strung or set, imported pearls are
dutiable as jewelry. Such an interpretation provides a simple and
workable test, permitting certainty and impartiality in
administration which should preeminently characterize the operation
of tariff laws, and fulfils, as we believe, the purpose of
Congress.
We conclude that the similitude clause has no application, and
that, upon the facts shown, the pearls imported in this case were
dutiable under paragraph 436 at ten percent
Judgment affirmed.