United States v. Makaroff

Hatfield, Judge, delivered the opinion of the court; This is an appeal from a judgment of the United States Customs Court. Caviar, consisting of the roe of the sturgeon imported in tin containers, was assessed for duty at the port of New York at 30 per centum ad valorem under paragraph 721 of the Tariff Act of 1922, the pertinent part of which reads as follows: Par. 721. * * * caviar and other fish roe for food purposes, packed in ice or frozen, prepared or preserved, by the addition of salt in any amount, or by other means, 30 per centum ad valorem. It is claimed by appellees that the merchandise is dutiable at 10 per centum a,d valorem as a nonenumerated unmanufactured article under paragraph 1459 which reads as follows: Par. 1459. That there shall be levied, collected, and paid on the importation of all raw or unmanufactured articles not enumerated or provided for, a duty of 10 per centum ad valorem, and on all articles manufactured, in whole or in part, not specially provided for, a duty of 20 per centum ad valorem. The same parties and the same issues were before this court in United States v. Makaroff, 14 Ct. Cust. Appls. 304, T. D. 41912. Dissatisfied with the decision in that case, the importers brought this action in the court below for the purpose of retrying the issues, and, on the trial, introduced the record in the former case, together with some additional testimony. In the former case we summed up the issues in the following language: Prom the evidence in the case it appears: That the merchandise is obtained from fish called sturgeon; that the roe is removed from the tubes in which it is contained in the belly of the fish, and forced through'a sieve, so as to separate the roe from the tissue and blood of the fish, into a solution of 5 or 6 gallons of — 533 — ■clear water containing about “two or three spoons of table salt, sweet salt”; that the purpose of using the solution of salt and water is to cleanse the roe and to harden it or give it rigidity; that the roe is then put in cheesecloth and the water permitted to drain off; that no salt or other preservative is added to it; that it is bought and sold, sometimes as “fresh caviar” and sometimes as “fresh unsalted caviar”; that it usually has a sweet taste, although some has a slightly salty flavor; that it is imported in tin containers which are not hermetically ■sealed; and that it is imported and must be kept under refrigeration or in a very ■cold place,.otherwise it will not keep longer than a day or two. There the witness Kouyoumdjoglou testified on direct examination, in part, as follows: Q. Well, now, it drops into a barrel with five or six gallons of water in it?— A. With two or three spoons of table salt. Q. Of table salt. Now, what is the 'purpose of putting that salt, the quantity of salt, in the water? — A. We think it gives some rigidity to the caviar, makes it rigid. <3- Rigid? — A. Fes. ■Q. Well does it assist in further cleansing the caviar? — A. It helps to clean it. ■Q. It helps to clean it? — A. It helps to clean it. (Italics ours.) On cross-examination the witness said: Q. Now, you said that when you make the caviar you put it through this ■sieve and the eggs fall through into the salt water? — A. Into the salt water. Q. You say that hardens the eggs? — A. This salt water cleans the eggs and gives ■the eggs some rigidity. Q. Rigidity; makes them harderl — A. Fes. He * * * * * * Q. Oh, I see. Well, if you take the fish roe out of fish?- — A. Yes, sir. Q. (Continuing.) When you take the fish roe out of the fish and you don’t put it in this sieve and squeeze out the eggs into the salt water, how long will it keep? — A. I think it keeps, but I don’t know how long, because — well, always, in Turkey, when we prepare caviar we take the caviar and put it in salt water. Q. That is, you always put it in salt water? — A. Yes; live salt water. ‡ * * * * H* * Q. Now, at any time from the time that the fish, from the time that the roe is removed from the fish until the time that it is packed in this tin as imported, is there any salt added directly to the fish?- — A. Never Q. Is there any other ingredient added to the fish? — A. Nothing else. Q. So that the only salt is the salt that is put in this water? — A. In this solution; in this water. Q. Yes. Now, you testified that you examined some of Mr. Makaroff’s caviar when it arrived here? — A. Yes, sir. Q. Did you open the tin? — A. Fes. I sell the caviar that Mr. Maharoff imports. Q. I see. You are selling some of that which Mr. Makaroff imports? — A. Yes. Q. Now, when you inspected it did you find any salt physically present in the tin?' — -A. No. Q. What was in there? — A. Just fresh caviar. Q. Was there any liquid of any kind? — A. Nothing. Q. Did you taste it? — Yes, sir. Q. What sort of taste did it have? — A. Sweet taste. Q. When you tasted it it did not taste salty¶ — A. No. (Italics ours.) — 534 — In the case now before us, Kouyoumdjoglou was called as a witness for the purpose of correcting or changing his testimony. We quote: Q. I refer again, Mr. Kouyoumdjoglou, to your testimony in the previous case, in which you stated that this caviar was immersed in a solution of salt and water to cleanse it and also to harden it. Was the hardening one of the -purposes of the immersion in that solution?■ — A. No, sir. % jJ; i{c Q. What is the purpose, Mr. Kouyoumdjoglou, of the immersion of this caviar in a solution of salt and water?' — A. Just to cleanse it and wash the eggs. Q. Now, you previously testified that it was also for the purpose of hardening. How do you reconcile those two statements? >}{ jj: A. The hardening is accidental. The main thing is to wash the eggs. By Mr. Jordan: Q. Then it is not put in for the purpose of hardening? — A. No, sir. Justice Brown. Why don’t they use fresh water instead of salt water to wash them? The Witness. I think you could wash with fresh water, but we use always a little salt in the fresh water. ‡ Hí # * * * He A. I said when the eggs, the main thing is to put the fish eggs in salty water, is to clean the eggs, that makes it a little harder, and if it is hard or not does not make any difference. Justice McClelland. What counsel wants to know is whether you always had an accidental hardening or whether sometimes you did not have. that accidental hardening as the result. Was there always more or less hardening? The Witness. There is, more or less. We don’t pay any attention to whether it is more hard or soft. The main thing is to clean the eggs. H* sfc 'Jfi ifc ‡ He sjt Q. After it is washed, before it is put on the market, isn’t a certain amount of salt put in all caviar that you ever seen? — A. I don’t know what amount they put in the fresh and unsalted caviar. Justice McClelland. What counsel wants to know is this: Did you ever see caviar put in tins that did not have some salt in it? The Witness. Yes, your honor. (Italics ours.) The witness Patrikiadies testified that there are three kinds of caviar — fresh, pressed, and bockooya. Among other things, he said: Q. Just state generally what is done to that kind of caviar. — A. When the fish is caught they open the belly and then the fisherman puts his hands inside and tastes the grain, and then, according to his experience, he classifies what kind of caviar he is to make out of this grain. Q. When you say what kind of caviar what do you mean? — A. I mean if the (¡rain is hard and not very well matured then he makes fresh caviar. If it is soft then he classifies that to make pressed caviar or other kinds of caviars which are imported into this country. * * * * * % # Q. Now, take the kind that is selected to be used as fresh caviar; please state just what is done to that. — A. When the fisherman sees that the egg is hard enough or is good for making fresh caviar he takes the whole thing, the grains, with the intestines, and he passes then over a sieve, and then the grains come out and the intestines and membranes stay on the sieve. When the whole thing is finished he has got the grain in a special container. — 535 — Q. Where'does the grain, as you call them, drop; from the sieve into what?— A. Into a container; and then I saw two ways of going further than that. In passing over the sieves the caviar is not altogether clean, and a few membranes here, a few broken eggs they pass over the sieve. And then he takes pure salt and mixes that with caviar, or he takes pure salt with some kind of chemicals like uroiropin, like formaldehyde, and mixes that with caviar. Q. Now, does he use formaldehyde or any of these ingredients you have mentioned in handling the caviar of the kind imported by Mr. Makarojf? — A. No; he uses pure salt only, because these chemicals are prohibited by the United States Government. Q. What is the purpose of using this salt that you speak of? — A. The using of salt is for cleaning purposes. * * * * * * * Justice McClelland. What are the processes of cleaning? The Witness. Sometimes in passing over the sieves too much blood passes over the sieves and too much membranes, so they prefer to clean the caviar and dissolve the membranes with pure salt, to clean the caviar with brine, and in salty water. By Mr. Jordan: Q. Then you have two methods of cleaning this caviar, either by the dry salt or by the salt in solution. Will you state again why they select the one method or the other for cleaning? — A. To my knowledge they use brine always when the caviar is more mature, by passing over the sieves. * * * * * * * Q. When you say that kind of caviar is cleaned by the dry-salt method, in just what way is it cleaned? — A. To my knowledge, that is always when the caviar has been passed from the sieves, always a few membranes here and a little bit of blood is passing from the sieves, too, when they put in salt the membranes practically get dissolved and blood loses its color and the caviar will look all right. Q. And that is the purpose of applying dry salt, to remove the membranes which still cling to the egg; is that correct? — A. Yes, sir. Q. Is the product caviar until that membrane has been removed; do you understand the question? — A. Fes; I do. I should say yes, or no, both ways. Q. What is your best opinion, that it is not caviar until it has been separated naturally from the membrane and the blood? — A. Yes, sir. ^ * * * ‡ ❖ * Q. I am speaking now o’f the washing of the caviar which has been selected for fresh caviar; what is the percentage of salt in that, about? — A. It depends, as I said, on the fat of the caviar. Caviar which is caught in March is more fat than the caviar which is caught in May. Secondly, if they use the same kind of salt for cleaning purposes the one would taste sweet and the other a little bit salty. Q. In the previous case, Mr. Kouyoumdjoglou who was the previous witness in this case, testified that in cleaning this kind of caviar they used Z or S teaspoons of salt in about 5 to 10 gallons, I believe, of water. Do you agree with that, as to the quantity of salt used? — A. I agree that the caviar prepared for Europe varies between half of 1 per centum and per centum. Q. How about that cleaned for shipment to the United States? — A. The same. ‡ # ‡ sfi ‡ * ‡ Q. Referring again to the method of cleaning this fresh caviar with dry salt, will you please describe that process of cleaning in detail? — A. I told you when it passed from the sieves the eggs are accumulated in a special container, and there are eggs wnth pieces of membranes and some blood, sometimes, and the fishermen put — 536 — them inside the salt, and the salt is immediately dissolved inside by the moisture of the eggs, and he makes a kind of brine, and this brine goes all through the caviar, and it is mixed like that, and the membranes and blood and all this drains, and the caviar is pure. Q. You mean that the salt solution is drained oS? — A. Yes. Q. How? — A. They have a small hole in the bottom, and everything drains off. Q. And that leaves the clean caviar in the container? — A. Yes, sir. Q. The same way when this fresh caviar is washed in a solution of lpá per centum of salt and water, after the eggs and the particles of membranes, and so forth, have dropped off into that solution, tell us the process from there on.— A. After they have been washed they drain the solution and the caviar stays clean, and then they take that and put it into small containers and tins. Q. How is this kind of caviar sold in the United States by you, under what name, what do you call it? — A. Fresh caviar. Cross-examination: Q. Did you ever sell caviar as mallasolf — A. Yes. Q. What does mallasol mean? — A. Little salt. Q. That is what you sell as fresh caviar? — A. No; mallasol is the caviar which has the appearance of being fresh'caviar, but is a little bit salty. Justice McClelland. Are you familiar with this caviar that we have here this morning? Justice McClelland. What do you call it? Is it mallasol or is it fresh caviar? The Witness. You can call that as fresh and mallasol. too. By Mr. Folks: Q. You can call it both? — A. Yes, sir. Q. It has a salty taste? — A. It has got a slightly salty taste. Q. Did you ever know of any caviar of any kind that you imported yourself that you sold in the markets of the United States without a salty taste? — A. I don’t know of any kind. All the caviars are very slightly salty or they are a little bit more salty. (Italics ours.) These witnesses testified that the hardening of the eggs by the salt water did not make the eggs more valuable for use as a food product. The witness Kicklefs testified for the Government. He had had experience many years ago in the preparation and packing of the roe of the sturgeon in Russia. He said that “mallasol caviar” is also called “fresh caviar”; that it is prepared by the use of salt; and that all caviar is prepared by the addition of salt. We quote from his testimony: Q. How much salt do you add after you put it through the sieve? — A. That is all according to how salty it should be. If you make mallasol caviar you add less salt. If you make salty caviar you add more salt. This salt is stirred into the roe by hand by the caviar maker. Not every man is a caviar maker. While stirring the salt into the caviar the man has it in his hand and he feels if the egg hardens enough to be drained. When that time arrives that roe ought to be drained; for that purpose you have other sieves, fine sieves, ready, and you pour that caviar on those sieves. You let the roe drain or a caviar maker knows for how long. Then it is filled in cans on a drain board, where lids are put on, and put on a drain board with the weight against the cans. After they are drained then they are washed, rubbers put on, and they are ready for shipment. (Italics ours.) — 537 — The witness Webster, who testified for the Government, said that, while he had never seen caviar prepared, his firm imported large quantities; that he had sold fresh caviar; and that it was always salty. In this connection he said: A. Fresh caviar usually contains very little salt; pressed caviar contains a great deal of salt, and has been pressed by some process in Russia to make it more or less of a mass. H* sfc sjs * * ❖ Q. State why the salt is used in caviar? — A. To preserve it, to cleanse it, and also to season it. Q. Did you ever hear of any caviar being sold without any salt in itl — A. No. Q. You never heard of that? — A. No. ■ Q. You never had any of that kind? — A. No. Q. Has any of it ever been offered to you? — A. No. * ‡ * * ‡ * * Q. Did you ever hear of mallasol caviar? — A. Yes. Q. Have you ever seen any of it? — A. I have. Q. Have you ever tasted it? — -A. I have. Q. Does that contain any salt? — A. It does. (Italics ours.) The court below, in an opinion by Brown, Justice, said: This is a retrial of the issue decided on a rather meager record by the Court of Customs Appeals in T, D. 41912 (50 Treas. Dec. 552). After careful consideration of the record, we hold that the weight of the evidence shows-that the washing of the caviar with a weak salt solution was for cleansing rather than for the hardening of the eggs or other preparation, the matter apparently left in doubt on the previous record. The protests were, accordingly, sustained. We think that, in order that this opinion may be thoroughly understood, it would be well to again refer to our decision in the Makaroff case, supra. We said: The witness, J. J. Kouyoumdjoglou, in testifying for the importer said: That when the roe was separated from the sturgeon it was “caviar”; and that the purpose of using salt water in the preparation of the caviar is not only for cleansing purposes, but also to harden the eggs. If the use of the comparatively mild solution of salt water was solely for the purpose of cleansing the eggs, they could not be said to have been prepared or preserved within the statutory provisions. United States v. Brown & Co. et al., 10 Ct. Cust. Appls. 47, T. D. 38295; United States v. Stone & Downer, 12 Ct. Cust. Appls. 293, T. D. 40296; Cone & Co. (Inc.) v. United States, 14 Ct. Cust. Appls. 133, T. D. 41672. Has not this process advanced the merchandise beyond a state of mere cleanness? No other processing is necessary in order to prepare the caviar for use as a food. Whether it could be used as a food without first hardening the eggs does not appear from the record. A process which hardens a substance otherwise soft and pliable and thereby prepares it or makes it more valuable for its intended use is certainly a process of preparation; and the substance so processed has been advanced in condition or prepared for its intended use. Its character has been changed. In this hardened condition the caviar is ready for use as a food, and it is kept in this condition by refrigeration. — 538 — The collector’s classification is consistent with a finding that the caviar is prepared either by the addition of salt in any amount, or by other means. Therefore, whether or not the evidence be considered as sufficient to prove affirmatively that the caviar has been prepared, the presumption of correctness attending the decision of the collector has not been overcome by evidence, which, at least, tends to sustain it. In that case it appeared, from the testimony of the witness Kou-youmdjoglou, that the purpose of using a mild solution of salt water— from 5 or 6 to 10 gallons of water containing “two or three spoons of table salt” — was to give the eggs rigidity, to harden them, and, incidentally, to clean them. This witness, testifying in the case at bar, repudiates a considerable portion of his former testimony. He now says that the sole purpose of putting the eggs in salt water is to cleanse them, and that, while the salt water does harden them, this result is incidental to the cleansing process and does not improve the eggs for food purposes. In the former case it appeared that the so-called fresh caviar usually had a sweet taste, although some had a slightly salty flavor. It now appears, from the testimony of the witness Patrikiadies, who testified for the importers, that all caviar has a slightly salty taste; that the caviar in question is called “fresh caviar” and “mallasol”; and that the term “mallasol” is understood to mean “little salt.” He further said that the eggs are sometimes prepared by the addition of dry salt; that the salt is dissolved into a brine by the moisture from the eggs; that the brine is drained from the eggs through an opening in the bottom of the container; and that, when salt water is used, the solution consists of as much as IK per centum of salt. It is perfectly obvious, from the testimony in this case, that it was the object of the importers to bring their case within the following statement of the law, which appears in the opinion of this court in the Makaroff case, supra: * * * If the use of the comparatively mild solution of salt water was solely for the purpose of cleansing the eggs, they could not be said to have been prepared or preserved within the statutory provisions. * * * This language was intended to apply to the facts as they appeared in that case. There it appeared that the solution of salt and water contained such little salt as to make it seem improbable that its use could be for any other than a cleansing purpose. However, in view of the positive assertions of the witnesses for importer, that the purpose of using salt water was to harden and to give the eggs rigidity, it seemed unnecessary to state the general rule applicable to so-called cleansing processes. Without attempting to give a full and comprehensive definition, the rule may be stated, however, in the following language: “Asa general rule, a mere cleansing process, the purpose of which is to isolate the article of commerce from impurities, and which does not advance it beyond a clean state or condition, and which does — 539 — not affect the article per se, can not be said to be” a process of manufacture, preparation, or preservation of an article. United States v. Brown & Co. et al., 10 Ct. Cust. Appls. 47, T. D. 38295; United States v. Stone & Downer, 12 Ct. Cust. Appls. 293, T. D. 40296; Cone & Co. (Inc.) v. United States, 14 Ct. Cust. Appls. 133, T. D. 41672.) It appeared affirmatively in the Makaroff case, supra, that the purpose of immersing the eggs in a solution of salt water was to harden and to give the eggs rigidity, and, accordingly, we held in that case that the merchandise had been subjected to a process of preparation which affected the roe of the sturgeon per se. In the record now before us, it appears that the eggs are immersed in a solution containing a much higher percentage of salt, and that they are sometimes prepared by the addition of dry salt. It further appears that the caviar thus prepared always has a slightly salty flavor. Obviously, then, to some degree, the salt must permeate the eggs. They are hardened, flavored, and, to some extent, preserved. This conclusion is reached from the testimony of the witnesses for the importers. When the testimony of the witnesses for the Government is considered, it clearly appears that the purpose of using salt, dry or in solution, is to cleanse, flavor, and harden the eggs, and, to some degree, preserve them. But whatever the purpose, the result is the same. The eggs are hardened; they are flavored; they are prepared or preserved “by the addition of salt in any amount”; and, accordingly, they are dutiable under paragraph 721, supra. We think that it is unnecessary to make any extended comment regarding the apparent ease with which two of the witnesses for importers contradicted the testimony given by them on the trial of the Makaroff case, supra. In our opinion the findings of the court below are contrary to the weight of the evidence. Accordingly, the judgment entered on such findings is erroneous, and must be reversed.