United States v. Villari. 160 F. 77

UNITED STATES v. VILLARI, MITCHELL & CO. UNITED STATES v. W. L. RATHBUN & CO. (two cases).

(Circuit Court of Appeals, Second Circuit.

December 4, 1907.)

Nos. 26, 24, 25 (3,767, 3,762, 3,765).

1. Customs Duties — Fkuit in Packages — Allowance fob Decay — “Dutiable Merchandise.”

The rule that fruit imported in a rotten and wholly worthless condition does not constitute dutiable merchandise applies as well to fruit in packages as to fruit in bulk; and in the assessment of duty on fruit imported in packages allowance should be made for the decayed portions, even though not separated from the sound, but all being sold together at auction.

2. Same — Evidence—Estimation oe Decay — Representative Packages.

In proof of the amount of decay in an importation of fruit in packages, evidence was given as to the percentage of decay in certain sample packages which represented each of the lots in question, had been used as the basis of auction sales, and consisted of at least 10 per cent, of all the packages. Held, that the percentage thus shown for the sample packages might be taken as showing the amount of decay in the other packages also.

Appeals from the Circuit Court of the United States for the Southern District of New York.

*78In the Rathbun Cases there was no opinion below. The decision in the Villari Case is reported in 147 Fed. 766. The Circuit Court reversed a decision by the Board of United States General Appraisers (G. A. 5,865; T. D. 25,843), which had affirmed the assessment of duty by the collector of customs at the port of New York.

The importations in controversy consisted of oranges, lemons, limes, and grape fruit, in boxes; each piece of fruit being wrapped separately in paper. The collector imposed duty on the entire amount imported, without any allowance for decay. The importers contended that such allowance should be made, in accordance with the rule established by the decision of the Supreme Court in Lawder v. Stone, 187 U. S. 281, 23 Sup. Ct. 79, 47 L. Ed. 178. It was there held that the decay of fruit should not be considered a damage on account of which duty should be abated only in case of abandonment under the provisions of Customs Administrative Act June 10, 1890, c. 407, § 23, 26 Stat. 140-(U. S.- Comp. St. 1901, p. 1930), but that it should be regarded rather as a case of nonimportation by reason of which no duty could properly accrue. In that case the fruit was imported in bulk and the decayed portion was in the form of worthless, unmerchantable slush. The Board of General Appraisers overruled the importers’ contentions for the following reasons, as stated in the board’s opinion:

“SOMERVILLE, General Appraiser. The witnesses who testified at the hearing before the board do not seem to have examined more than about' 10 per cent, of the packages covered by their invoices, and the percentages of the decayed fruit out of the entire quantity of fruit which they did examine have been loosely estimated as running in most cases from about 20 per cent, to 50 per cent. The injury done to the fruit by decay is spoken of as a damage, and there is no pretense that these estimates are more than an approximation, based upon the judgment of the witnesses as to the probable fractional part of the importation actually spoiled or decayed. All the goods appear to have been sold in original packages, and there was no separation of the fruit alleged to be decayed from that which was sound at the time the sale was conducted. In this respect the present case differs widely from that of Lawder v. Stone, supra. The court there found that a portion of pineapples had rotted so as to become worthless slush, commercially valueless, condemned under the sanitary regulations of the city of Baltimore, and dumped overboard. In the case now before us it appears that in some instances the fruit brought prices equivalent to the . market price of sound fruit, and in other instances somewhat less. On the whole, we cannot see that the testimony in the eases under consideration differs greatly from that introduced in the Oase of Max-field & Co., G. A. 5,779 (T. D. 25,552), where we held that the importer had failed to show with sufficient certainty and by satisfactory evidence the quantity of merchandise, if any, which was so destroyed as to become 'valueless, and that under the rule laid down by the Supreme Court in the Lawder Case, 187 U. S. 281, 23 Sup. Ct. 79, 47 L. Ed. 178, the mere fact that the goods were damaged so as to be merchantable to a less extent than sound fruit would not, in our judgment, constitute a nonimportation. * * * We are, moreover, of opinion that, where a deduction of duty is claimed for an alleged nonimportation of goods, proof as to the amount of decay in one package out of every ten is not sufficient to authorize the board in finding that a like percentage of loss occurred in other eases or packages which were not examined. * * * In our judgment, the present cases fail to come within the principle settled in the Lawder Case, supra; and the testimony, moreover, is too vague to justify us in granting any relief in any instance.”

On appeal to the Circuit Court additional evidence was taken, establishing the percentage of decay in certain sample packages from each of the lots in question, which packages had been selected as the basis of auction sales and consisted of at least 10 per cent, of the packages in each lot. This evidence, together with that taken by the Board of General Appraisers, showed the facts to be the same as in Courtin & Golden v. U. S. (C. C.) 143 Fed. 551, and to resemble the case of Stone v. Shallus, 143 Fed. 486, 74 C. C. A. 506, in that the fruit was imported in packages, rather than in bulk, but differing from the latter *79ease in that there the decayed portions had been culled out, while here they were sold unseparated from the sound in the packages in which imported. The Circuit Court reversed the decision of the Board of General Appraisers, on the authority of the Courtin & Golden Case, supra.

D. Frank Lloyd, Asst. U. S. Atty.

Walden & Webster (Howard T. Walden, of counsel), for importers.

Before LACOMBE, COXE, and NOYES, Circuit Judges.