United States v. American Brown Boveri Electric Corp.

Graham, Presiding Judge,

delivered the opinion of the court:

The appellee imported certain merchandise at the port of New York which was classified as manufactures of metal under paragraph 399 of the Tariff Act of 1922. It was claimed to be free of duty as models under paragraph 1620, or dutiable, alternatively, under paragraph 372 or 1459 of said act. No contention is made here that the articles are dutiable under either of the alternative claims, but appellee-relies upon said paragraph 1620. The other alternative claims will, therefore, not be considered.

The United States Customs Court sustained the protests under said paragraph 1620, and the Government has appealed.

The articles in question were exported by Brown Boveri & Co. (Ltd.), of Baden, Switzerland, to the American Brown Boveri Electric Corporation, of Camden, N. J. They are denominated in the invoices as “patterns of individual wheel drives.” The exhibit is about 5 inches in height, 6 inches in length, and 4 inches in width, and consists of a solid brass platform on which are mounted three supports, also of brass, on which supports are suspended an axle and two brass flanged car wheels, on the outside of one of which wheels is a brass-cogged wheel with an attachment by which the axle and car wheels may move in various directions without affecting the cogged or drive-wheel. Attached to the supports upon which the axle is mounted are two small levers with suitable attachments by which the operation of the mechanism can be demonstrated. On the side of the axle support is a brass plate upon which appear the letters, in large, plain type, “B B C.” The whole arrangement is well and substantially made and has evidently been prepared with care and considerable expense. These articles are exact reproductions in miniature of a patented device perfected by one Buchli, of the Swiss Locomotive' Works, and the patent of which is owned by Brown Boveri & Co. (Ltd..). The American. Brown Boveri Corporation has imported approximately 150 of the articles in question, 40 of these being involved in the present proceedings. Mr. Reed, sales engineer and executive assistant of the importer, testified, when asked what the imported articles were:

Q. This is a miniature, is it not? — A. Oh, yes; it is simply a desk piece which we give out freely to railroad executives to play with and study and it has created a great deal of interest in the country both from railroad mechanical people and from our competitors, and provides something that we are all glad to get.

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Q. To whom did you give out the models which you imported? — A. I gave them out pretty well to most all executives of all important railroads, most all railroad presidents, and chief mechanical executives of railroads in this territory.

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Q. These models are distributed with a view to selling the merchandise? — A. With a view to interest them, first, to show them how the device works.

Q. And ultimately with the idea of selling this device? — A. Well, we hope to. We probably distributed 150 of the models, and we certainly will not obtain business from the 150 companies that have them.

The only evidence of any other use of the articles in question is the testimony of Mr. Reed that, on one occasion, his company built a device like the one in question, of full size, using one of the imported articles as a model. As to the particular articles imported here he testified:

Q. Did you see them at the time of importation? — A. Yes; I put them in stock.

From the record it is apparent that the imported articles ate made and distributed to be used not as models, but for advertising purposes alone. It makes no difference that the number of articles imported was small; identically the same legal rule would apply to these 40 articles as would to an importation of 40,000 for the same purposes.

The particular paragraph involved here is paragraph 1620 of the free list in the Tariff Act of 1922. It reads as follows:

Pab. 1620. Models of inventions and of other improvements in the arts, to be used exclusively as models and incapable of any other use.

It is argued that this language includes the articles before us. We are of opinion that, judging the matter not only by the language of the above statute but by the legislative history of the paragraph as well, it is not the congressional intent that articles such as the ones imported here should be classified under paragraph 1620. There is enough doubt and ambiguity about the statutory language that we may have recourse to the legislative history as an aid to construction. The Tariff Act of July 24, 1897, paragraph 616, provided:

616. Models of inventions and of other improvements in the arts, including patterns for machinery, but no article shall be deemed a model or pattern which can be fitted for use otherwise.

Under this statute two models of steamships of the Hamburg - American Line were imported at the port of New York, and were assessed for duty under paragraph 193 of the said act of July 24, 1897, as manufactures of metal. They were claimed to be free under the provisions of said paragraph 616. The United States Circuit Court of the Southern District of New York, in Boas v. United States, 128 Fed. 470, held that these articles were “not models of inventions ” but that they were models of improvements in the arts and were therefore free under said paragraph. In another case under the same act, T. D. 25942, 9 Treas. Dec. 19, the Board of General Appraisers had before it certain wooden forms called molders’ patterns, which had been assessed as manufactures of wood under paragraph 208 of the said act and were claimed to be free as patterns under said paragraph 616. The Board of General Appraisers called attention, in an extended opinion, to the fact that the manufacture of molders’ patterns was a large industry in the United States and that such patterns were, in reality, tools of a trade, of short life, constantly worn out and replaced, and were not the kind of patterns intended by the statute, but that, rather, the term “ patterns for machinery ” referred to patterns to be used for construction in the same manner as a model might be. This judgment was reversed in Hoe & Co. v. United States, 141 Fed. 488, affirmed in 147 Fed. 201, without opinion. In the opinion filed in 141 Fed. 488, there is a discussion of the scope and extent of the meaning of the word “ patterns.” Townsend, Circuit Judge, in concluding the opinion, expresses doubt as to the scope of this word, but resolves such doubt in favor, of the importer and holds the molders’ patterns to be patterns within the meaning of the statute in question. This was the status of affairs when the Tariff Act of August 5, 1909, was prepared and enacted.

The “Notes on Tariff Revision” furnished to the committees of Congress in 1908 during the preparation of said Tariff Act of August 5, 1909, referred to the judicial constructions of the said paragraph 616 and made certain suggestions to the congressional committees in the following language:

Decisions and Interpretations. — In the case of Boas v. United States, 128 Fed. Rep. 470; T. D. 25024, February 3, 1904, two models of steamships of the Hamburg-American Line, made at the shipbuilding yards in Germapy by the same company as that which constructed the steamships of which they are exact models, on a scale of 75 to 1, showing in detail the hulls, upper works, hoisting engines, propellers, twin screws, etc., and of the value of about a thousand dollars each, intended for exhibition in the steamship company’s offices, were held to be free of duty under this paragraph, the judge taking the view that they were models of improvements in the arts.

Comments and Suggestions. — It would seem that an interpretation of this paragraph more in harmony with the intention of the lawmakers is that found in T. D. 22981 (April 23, 1901), wherein the Treasury Department refused to pass free of duty the miniature copy of a steamship. In that ruling the following language appears:

In reply I have to state that a model of invention or improvement in the arts, or pattern for machinery, is construed by this department to mean an object, plan, or design from which working machines, devices, or structures are to be made. It is assumed that the miniature in question is but the representation of the exterior of the vessel, intended to be used as an attractive advertisement, and that the details of construction are not exhibited by it, as would be the case with a true model. The department must, therefore, adhere to the opinion expressed in its telegram of the 15th instant, that the article in question is not entitled to free entry under said paragraph 616.

Following these suggestions the Congress adopted and incorporated in said act of August 5, 1909, paragraph 629, which was the exact language recommended in said “Notes on Tariff Revision” (p. 747) and which reads as follows:

629. Models of inventions and of other improvements in the arts, to be used exclusively as models and incapable of any other use.

It will be observed from an inspection of this paragraph that certain important changes had been made: First, “patterns for machinery” was omitted; second, such models were only to be admitted as were “to be used exclusively as models.”

Plainly these changes were made to cure the defects pointed out in the Boas and Hoe cases. Models, to be models under this paragraph, must be used as such and, following the ordinary protective ideas embodied in this and similar statutes, the statute was corrected to protect the American makers of patterns used in the arts and trades.

A change in the language of a statute has always been construed by us to import a change in meaning unless the contrary is made plainly to appear in other ways. No principle is better settled in our court than this. United States v. Hudnut, 16 Ct. Cust. Appls. 463, T. D. 42546; United States v. Post Fish Co., 13 Ct. Cust. Appls. 155, T. D. 41022.

Paragraph 551 of the Tariff Act of October 3, 1913, continued the language of paragraph 629 of the act of August 5, 1909, and has been continued unchanged in paragraph 1620 of the Tariff Act of 1922.

The imported articles are not, in our opinion, used exclusively as models, and are not intended to be so used. They are sent gratuitously to people who have not asked for them and who may or may not want them for any purpose. The statute says they must be used “exclusively” as models. The use of an object as a model imports that it must be used for modeling something. The verb “model,” as defined by Webster's New International Dictionary, 1925, is—

2. To plan on form after a pattern; to form in model; to form a model or pattern for; to shape; mold; fashion; frame; * * *

In other words, it is apparent that what the Congress intended to do was to provide for the free admission into this country of models which were to be used for the making or building of something. We do not believe it was the intention to permit a manufacturer in some foreign country with a subsidiary American corporation to prepare any desired number of miniature reproductions of goods which it had to sell, and distribute them through the United States gratuitously and evade the payment of duty under the claim that they were models and used exclusively as such. Great abuses will necessarily follow from any such construction of the law, which seems to be framed in careful and exact language, with the idea of not permitting any such construction.

It is not the policy of this Nation, as expressed in the Tariff Act of 1922, to admit advertising matter free of duty. Reference is had to paragraph 1528 of the free list, permitting the free admission of certain scientific charts and expressly providing that if the same contain advertising matter thej’- shall not be free of duty. In other words, if wo were to agree with the contentions of appellee, printed advertising matter may be dutiable, while elaborate devices, like the one here before us, are free. We can not believe there was any such congressional intent.

It is argued that this construction is untenable because of the second limitation contained in the statute, which reads, “and incapable of any other use.” It is said, in support of this view, that if the paragraph is to be limited to forms, structures, or patterns from which articles, natural in size and practical in use, are to be fashioned or constructed, practically all models would be excluded from the paragraph for the reason that they could be used in advertising and as paper weights and ornaments.

In our opinion the phrase “incapable of any other use” in the statute alludes to a substantial, practical use for some utilitarian purpose, arising from the structure of the article itself, and not some accidental, occasional, or fugitive use.

If articles claimed to be models are capable of performing the functions of the objects or structures which they were designed to represent, this phrase of the statute would apply, for in such case they would not be “incapable of any other use”; or an article might be entered as a model and yet, by reason of its structure, be capable of performing some function entirely outside of the functions which the article itself, when built, would perform. In other words, “incapable of any other use” goes to the functions that may be performed by an article which the phrase “incapable of any other use” is designed to cover, while an article that does not perform any other functions growing out of its structure must still be imported to be used exclusively as a model, which would exclude its free admission for advertising purposes, unless such use was incidental or fugitive.

Of course, a railroad executive might consider one of the imported “patterns of individual wheel drives” as an appropriate ornament for his desk, and he might use it as such. However, if it was imported “to be used exclusively as a model” in the building of a machine suitable in size and construction for practical.uses, it would not be excluded from the paragraph by virtue of the language “and incapable of any other use,” contained in the statute, merely because, in the opinion of one, it was a suitable ornament for a desk. This is but an incidental or fugitive use. These articles were not imported “to be used exclusively as models,” but, on the contrary, were admittedly imported to be used for advertising purposes. This being so, they are not entitled to classification under paragraph 1620.

'For the reasons given the judgment of the court below should be and is reversed.