CALF LEATHER TANNERS'ASS'N v. Morgenthau, 6461.

• Decision Date: 11 November 1935
• Docket Number: No. 6461.,6461.
• Citation: 65 App. DC 93,80 F.2d 536
• Parties: CALF LEATHER TANNERS' ASS'N et al. v. MORGENTHAU, Secretary of the Treasury.
• Court: U.S. Court of Appeals — District of Columbia Circuit

65 App. DC 93, 80 F.2d 536 (1935)

CALF LEATHER TANNERS' ASS'N et al. v. MORGENTHAU, Secretary of the Treasury.^*

No. 6461.

United States Court of Appeals for the District of Columbia.

Argued October 10, 1935.

Decided November 11, 1935.

A. K. Shipe, of Washington, D. C., for appellants.

Leslie C. Garnett, U. S. Atty., and John J. Wilson and Henry A. Schweinhaut, Asst. U. S. Attys., all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, GRONER, and STEPHENS, Associate Justices.

STEPHENS, Associate Justice.

Appeal from a judgment in the Supreme Court of the District of Columbia dismissing a petition for a writ of mandamus directing the Secretary of the Treasury to comply with paragraph 1530 (d) of section 1 of the Tariff Act of 1930, Public No. 361, approved June 17, 1930, 46 Stat. 666 (19 U.S.C.A. § 1001, par. 1530 (d), as construed by the United States Court of Customs and Patent Appeals in United States v. John B. Stetson Co., T.D. 46319, 63 Treas.Dec. 642.

This suit is here upon the pleadings. The appellants, as plaintiffs below, filed a petition, and an amended petition, praying for the issuance of a writ of mandamus against the appellee, as defendant below, and for a rule to show cause why such writ should not be issued. The appellee made answer to the petition and again to the amended petition. Appellants replied to the answer to the amended petition, and to this reply the appellee demurred. The trial court treated the demurrer as searching the record, and held that no cause of action was stated in the petition and amended petition. The appellants then elected to stand upon these pleadings, whereon the trial court dismissed them and discharged the rule to show cause.

The case for the appellants, as set forth in their pleadings, is this: The appellants, all citizens of the United States, are, except the Calf Leather Tanners' Association, American manufacturers, producers or wholesalers of leather; they tan and finish calf and kip leather, used principally in the manufacture of shoes and sundry leather goods. Their products compete with foreign importations of like kinds not made from American products. The appellant Calf Leather Tanners' Association is an association organized to foster the calf leather industry in the United States; all of the other appellants belong to it. The appellee is Secretary of the Treasury of the United States and as such is required to assess and collect customs duties on all duty-bearing imports. The Tariff Act of 1930 imposed a duty by paragraph 1530 (d), set out in full in the margin,¹ of 30 per cent. ad valorem upon leather of all kinds, "grained, printed, embossed, ornamented, or decorated, in any manner or to any extent * * * or by any other process (in addition to tanning) made into fancy leather." By paragraph 1530 (b) (4), 19 U.S.C.A. § 1001, par. 1530 (b) (4), set out in full in the margin,² it imposed a duty of 15 per cent. ad valorem upon "side upper leather, * * * patent leather, and leather made from calf or kip skins, rough, partly finished, or finished."

In July, 1930, there was submitted to the Secretary of the Treasury, i. e., to appellee's predecessor in office, under section 516³ of Public No. 361 (19 U.S.C.A. § 1516), a request (made by the appellants, they assert, and this is herein assumed, though the record is not clear) for a ruling upon what kinds of leathers were properly dutiable at 30 per cent. ad valorem under paragraph 1530 (d), above.⁴ Domestic tanners contended that all leathers enumerated in the paragraph, whether or not commercially known as fancy leather, were so dutiable. Shoe manufacturers on the contrary took the position that no leathers were dutiable under the paragraph at 30 per cent. unless they were commercially known as fancy leathers. The Secretary held that the latter was the correct view. T.D. 44213, 58 Treas.Dec. 160.

On August 21, 1930, the John B. Stetson Company, not a party to the suit at bar, made two entries of imported leather at the port of Philadelphia under the Tariff Act of 1930. They were classified by the collector for duty as grained sheepskin under paragraph 1530 (d), i. e., at 30 per cent. The importer filed protest, asserting at the hearing in the United States Customs Court that the goods were dutiable at 25 per cent. under paragraph 1530 (c)⁵ of the act (19 U.S.C.A. § 1001, par. 1530 (c) as finished leather. This protest was sustained (John B. Stetson Co. v. United States, T.D. 45615, 61 Treas.Dec. 878), and the government appealed to the United States Court of Customs and Patent Appeals which, in United States v. John B. Stetson Co., T.D. 46319, 63 Treas.Dec. 642, reversed the trial court, thus holding the imports dutiable at 30 per cent. under paragraph 1530 (d).

It is asserted by the appellants that in the Stetson Case the government, in support of its position that the imports were dutiable under paragraph 1530 (d) at 30 per cent., contended that any leather which has been "boarded"⁶ is "grained" and that any grained leather is fancy leather within the provisions of paragraph 1530 (d); and the appellants assert that the Stetson Case, not having been appealed from and the time within which an appeal can be prosecuted having expired, establishes what the government contended.

By letters of July 7 and August 26, 1933, directed by the Collector of Customs in New York City to the Commissioner of Customs, the Treasury Department was called upon to rule, under the Stetson Case, as to the proper classification of "English leather lining sides," and briefs were filed on the question.⁷ Domestic tanners asserted that under the Stetson Case any leather which has been boarded is grained leather and therefore subject to duty under paragraph 1530 (d) at 30 per cent., whereas importers contended that leather is not "grained" as that term is used in paragraph 1530 (d) merely because it has been slightly boarded so as to render it softer and more pliable and thus more desirable for use in the manufacture of shoes. In a letter, directed to the Collector of Customs in New York City, stating the question and commenting upon the course of reasoning in the Stetson Case, the Commissioner of Customs, on October 25, 1933, ruled as follows:

"The Bureau does not read the court's decision as holding that merely because a leather has been boarded it is ipso facto a grained leather, or that leather which has been boarded for the temporary purpose of making it more pliable so as to be more easily used in the manufacture of shoes is necessarily a grained leather. In this connection it is noted that the Court in its decision stated that the operation of `boarding' was to produce a surface finish upon the leather which would otherwise not have been there.

"The Bureau is of the opinion, therefore, that only leather upon which a clearly perceptible grain has been produced by some process of manipulation, should, under the court's decision, be classified under paragraph 1530 (d) as a grained leather, and that leather, such as English leather lining sides, boarded for the purpose of softening it and facilitating its further manufacture, is not so dutiable by reason of a slight change in the surface finish not producing such a grain. You will be governed accordingly."

In addition to all set out above, there are, in the appellants' pleadings, allegations of damage by reason of the alleged refusal of the Secretary, appellee, to impose a duty upon grained leather according to the statute and the Stetson Case, and the consequent competitive importation of foreign-made products; and the assertions thus made, as above set forth, constitute the case of appellants for a writ of mandamus against the Secretary.

The appellants contend that the instructions of the Bureau of Customs of the Treasury Department in the letter of October 25, 1933, are palpably violative of the decision of the United States Court of Customs and Patent Appeals in the Stetson Case interpreting paragraph 1530 (d) of the Tariff Act. They assert that under that decision and act it is the clear and purely ministerial duty of the Secretary to instruct all customs officials to impose and collect a duty of 30 per cent. upon "* * * all boarded or grained calf and kip leathers in accordance with * * *" paragraph 1530 (d) as construed in the Stetson Case, or in the alternative to instruct them to impose and collect such duty upon "* * * all leather, which after tanning, has been grained or embellished in any manner, or to any extent, whether by `boarding' by hand or machine, or by any other process * * *," or to amend the instructions issued by the Bureau of Customs so as to instruct all customs officials that "* * * all leathers, in which the actual grain of the skin is brought out, accentuated and raised by a process of handboarding or any other process producing such effect is grained leather and dutiable at 30% as fancy leather * * *" within paragraph 1530 (d); and the appellants pray that a writ of mandamus issue in the terms of one of the alternatives above set forth.

Very briefly stated, the appellants' contention is that under the statute and the Stetson Case any leather which has been "boarded" is "grained" and therefore dutiable at 30 per cent., and that it is hence the plain duty of the Secretary of the Treasury so to instruct all customs officials. The letter of the Commissioner of Customs of October 25, 1933, ruling, in effect, that leather which has been "boarded" but only for the purpose of softening and facilitating its further manufacture, is not dutiable at 30 per cent. by reason of a slight change in the surface finish not producing a clearly perceptible grain, is, say the appellants, a plain violation of the statute as construed in the Stetson Case and a departure from the plain duty of the Secretary.

To this case for the appellants, the appellee asserts the following: First. The appellants have not a sufficient...