Lee v. United States

13 Ct. Cust. 269 | C.C.P.A. | 1925

Smith, Judge,

delivered the opinion of the court:

In this case William A. Foster & Co., customs broker, imported for the account of Harry C. Lee & Co. golf balls which were entered at the port of New York at the invoice value, the price actually paid for them by Harry C. Lee, senior member of Harry C. Lee & Co., the firm for whose account the merchandise was imported and entered.

The goods were appraised at their entered value, but on appeal to' reappraisement by the collector they were finally appraised on December 21, 1922, at 11 shillings 9 pence per dozen, an advance over the invoice price and entered value.

Oh the 23d day of January, 1923, Harry C. Lee & Co. filed a petition with the Board of General Appraisers which alleged and prayed, for a finding that the entry of the merchandise was made without any intent to defraud the revenue of the United States or to conceal or misrepresent the facts of the case or to deceive the appraiser as to’ the value of the ‘merchandise. The petition was filed under that part of paragraph 489, which reads as follows:

Pah. 489. * * * Such additional duties shall not be construed to be penal and shall not be remitted nor payment thereof in any way avoided, except * * * upon the finding of the Board of General Appraisers, upon a petition filed and supported by satisfactory evidence under such rules as the board may prescribe, that the entry of the merchandise at a less value than that returned upon final appraisement was without any intention to defraud the revenue of the United States or to conceal or misrepresent the facts of the case or to deceive the appraiser as to the value of the merchandise. • * * *

On the hearing of that petition the evidence showed without contradiction that the importation was made by William A. Foster & Co. for the account of Harry C. Lee & Co., and that the golf líalls were purchased by Harry C. Lee, senior member of the firm, in the summer of 1921 while he was on a visit to Scotland. It appears from the record that Harry C. Lee visited the president of the Craigpark Electric Bulb Co., whom he had known for 20 years, and inquired whether that company had anything which could be used in the United States. The president took Lee through the company’s works and after stating that the factory was idle announced that the company would make golf balls if Lee would undertake to sell them in the United States. Although Lee’s firm had not dealt in imported golf balls, he agreed without bargaining or haggling to take the golf balls at the price stated in the consular invoice.

The golf balls purchased were known as "Mono” golf balls, and that type of ball and its value was unknown to Lee. Before shipment of the golf balls Lee asked in a general way for the "Mono” ball, but not finding it listed he decided that the value of the ball would be determined by the market made for it by his firm.

Whether Lee made inquiry from wholesale dealers of golf balls as to the market value of the "Mono” ball does not appear from the evidence, and his testimony produces the very decided impression that he and his firm had no information whatever as to the value of the "Mono” ball other than the price paid for it to the Craigpark Electric Bulb Co. If an importer has no information and knows of no circumstance or circumstances which would raise a reasonable doubt in the mind of a prudent business man as to the true market value of purchased goods, the price paid for them in the ordinary course of trade in a free open market may well be accepted by him as their market value. Harry C. Lee purchased the " Mono ” balls from a man whom he had known for 20 years and for the purpose of creating a market for them in the United States. He bought them with full information that the factory of the company from which the purchase was made was idle, and as a business man he should have known that manufacturers frequently find it advantageous to keep their factories in operation even if goods are produced and sold at less than their market value.

Lee knew nothing of the value of imported golf balls, but be did know tbe circumstances surrounding bis purchase, and these circumstances put him upon notice that be might be getting tbe balls at a bargain and at less than their market value. Therefore be could not rely on tbe price paid as market value and was bound to make inquiry of dealers in golf balls and of those acquainted with tbe market as to tbe price at which such or similar merchandise was freely offered for sale in tbe usual wholesale quantities and in tbe ordinary course of trade, etc., to all purchasers in tbe principal markets of tbe country of exportation.

No such inquiry was'made by tbe importer and tbe attempt by him to find out whether “Mono” balls were listed measured bis investigations as to tbe value of tbe importation. Even if “Mono” balls were not listed or sold, tbe record discloses no effort whatever on importer’s part to ascertain either tbe listing or tbe value of merchandise similar to “Mono” balls.

Tbe importing bouse did not know tbe market value of “Mono” balls or of similar merchandise. Because of tbe circumstances surrounding tbe purchase, it could not depend on tbe price paid for tbe balls as tbe market value thereof. Consequently when tbe goods were entered at tbe purchase price paid as their market value, Harry C. Lee & Co., by its authorized agent, stated a value to tbe customs officials which tbe firm did not know to be true, which it bad no good or sound reason to believe to be true, and which proved to be incorrect. In our opinion tbe board was justified in denying tbe petition and in refusing tbe finding prayed for.

Tbe judgment of tbe board is therefore affirmed.