Petition for a Writ of Certiorari — Draper & Co. v. Commodity Credit Corp.
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FILeD
AUG 26 1954
ROLD 8. WILLEY, Clerk
IN THE
Supreme Court of the United States
Octoser Term, 1954
No. 30 %
DRAPER & COMPANY, INCORPORATED,
Petitioner,
v.
COMMODITY CREDIT CORPORATION.
PETITION FOR WRIT OF CERTIORARI
EDWARD C. PARK,
73 Tremont Street,
Boston, Massachusetts,
Attorney for Petitioner.
LAWYERS BRIEF &@ PUBLISHING Co.
BOSTON, MASS.
SUBJECT INDEX.
-————_——
PAGE
Petition for Writ of Certiorari ....................-. 1
Opinions of the Courts Below ................... 1
WU, Gere es te te. enn 2
SU PIII oie cate la cao 2
aoe Wee SONNE oc ee ee 3
asemnees OC Ui Oaks 3
The Reasons Relied on for the Writ .......... 13
Appendix ‘‘A’’—Opinion of the Court, May 6, 1954 .... 16
Appendix ‘‘B’’—Commodity Credit Corporation Char-
ter Act Paragraphs (c) and (g) of Text of Section 3
as Found in 15 U.S. C. See. 714 (b) ...........0005. 30
Appendix ‘‘C’’—Tariff Act of 1930, Par. 1101 ........ 32
TABLE or Cases.
American Stevedores v. Porello, 330 U. S. 446, 458 .... 13
Graver Tank Co. v. Linde Air Prod. Co., 339 U. S. 605,
tg RETR CER TCS Fe eB CIEE BES et he i 13
Mulfort v.'Smith, 307'U. 8. 38, 47 .................... 10
National L. R. B. v. Waterman S. S. Corp., 309 U. S.
«pipe Beet: MET OO Pe LET No 14
Orvis v. Higgins, 180 F. 2nd 537, C. A.-2.............. 14
Tennessee Coal Iron & R. Co. v. Muscoda Local No. 123,
137 F. 2nd 176, 180 (CCA.-5), affirmed by the Court
Sen TB. Oe OS a ae 14
United States v. National Association, R. E. B., 339 U.S.
wcian Posty RET OE LEE TOOT PMO. Betas oe 14
United States v. 25 Packages of Panama Hats, 231 U. S.
358, 362
2 OR OOO CSA * OD CORES OE O54 ee Uae bb Be 6le
Il.
STaTuTEs.
PAGE
Commodity Credit Corporation Charter Act, 62 Stat.
1070, as amended by 63 Stat. 154, 15 U.S.C. See. 714... 3
Section 4 (ec), 15 U.S. C. See. 714 b(c) .......-.-- ee 3
Supplemental Appropriations Act of 1951 (P. L. 848,
81st Congress, 64 Stat. 1044), Chapter X ............ 12
Tariff Act of 1930, paragraph 1101, as amended by Sec-
tion 33 of the Customs Administrative Act of 1938,
52 Stat. 1090, 19 U. S. C. See. 1001, par. 1101 ........ 3
paragraph 1101 (b) ..........cccccccccscecceees 5, 6,8
Section 313 (e), 19 U.S. C. A. See. 1313 (e) ...... eae
es Sy I RED bccn scm ewanksansnsseeppeee 2
MISCELLANEOUS,
Federal Rules of Civil Procedure, Rule 52 (a) ....7, 13,14
Public Announcement LS-262 ............... eee eee 3
Restatement of the Law: Contracts, Sec. 275 .......... 13
T. D. 46515 (9), 64 Treasury Decisions, page 38; U. S.
Treasury Department, Digest of Customs and Related
Laws and of Decisions Thereunder, 1935, Vol. 1,
0 REPS er errr re hr kee 8
IN THE
Supreme Court of the United States
Ocroser Term, 1954
__. E
DRAPER & COMPAN Y, INCORPORATED,
Petitioner,
v.
COMMODITY CREDIT CORPORATION.
PETITION FOR WRIT OF CERTIORARI
Draper & Company, Incorporated, prays that a writ of
certiorari issue to review the judgment of the United States
Court of Appeals for the First Circuit in the above entitled
cause,
Opinions of the Courts Below
The opinion of the District Court for the District of
Massachusetts is reported at 113 F. S. 796. The opinions
of the Court of Appeals for the First Circuit are reported
at 213 F. 2nd 36, 43. The decision of the Court of Appeals
is by a majority of the Court, Judge Woodbury dissenting
“for the reasons stated in the opinion of the District
Court.’’ (R. 229). The opinion of the District Court ap-.
pears in the copies of the record (printed for the use of the
Court below at page 202). A copy of the opinion of the
Court of Appeals is appended to the petition.
2
: Jurisdiction .
The judgment of the Court of Appeals was entered on
May 6, 1954 (R. 230). A petition for rehearing filed on
May 20, 1954, was denied on June 14, 1954 (R. 233). Juris-
diction of this Court to issue the writ applied for is in-
voked under 28 U.S. C. See. 1254 (1).
Questions Presented
The questions which this Court is asked to review in-
volve the power of the Court of Appeals to substitute its
finding of fact for that of the trial court sitting without a
jury.
If the phrase ‘‘in bond’’, as used in a contract between
the parties, was so ambiguous that resort to evidence out-
side the contract was required to ascertain its meaning,
was the interpretation placed upon it by the trial court a
finding of fact, which should not be set aside unless clearly
erroneous?
If, as the Court of Appeals conceded, strong arguments
were presented in support of the interpretation adopted by
the trial court, and that interpretation was consistent with
usage in the trade and statutes and regulations and was
supported by oral evidence, may the Court of Appeals
place another construction upon the words on the basis of
other evidence which seems to such Court more persuasive?
Was the conclusion of the trial court that the alleged
breach of the petitioner’s contract with the respondent, if
such there was, was not material enough to excuse perform-
ance by the respondent, a finding of fact, which should not
be set aside unless clearly erroneous?
3
The Statutes Involved
Commodity Credit Corporation Charter Act. 62 Stat.
1070, as amended by 63 Stat. 154, 15 U. S. C See. 714
Tariff Act of 1930, paragraph 1101, as amended by Sece-
tion 33 of the Customs Administrative Act of $938, 52 Stat.
1090, 19 U.S. C. See. 1001, par. 1101.
The pertinent text is set forth in an appendix to the
petition.
Statement of the Case
The petitioner was the plaintiff and the respondent was
the defendant in an action for damages commenced in the
District Court of the United States for the District of
Massachusetts. The damages sought were for breach of
contracts to accept and pay for wool duly tendered by the
plaintiff.
The jurisdiction of the District Court was based on the
provisions of Section 4(c) of the Commodity Credit Corpo-
ration Charter Act, 15 U. S. C. See. 714 b(e).
The sole defense to the suit was that the plaintiff had
not fully performed its contracts in that the wool was not
‘tin bond’? when tendered. The defendant also counter-
claimed for liquidated damages. The District Court de-
termined that the wool was ‘‘in bond’’ and entered judg-
ment for the plaintiff.
The case was tried in the District Court upon stipulated
facts and additional oral and documentary evidence. Brief-
ly summarized the evidence established the facts herein-
after set forth.
About December 6, 1950, the defendant issued its Publie
Announcement LS-262 stating its intention to purchase
4
about 30,000,000 pounds of foreign wools (R. 203). The
announcement provided, inter alia:
‘Wool offered for sale to the Commodity Credit
Corporation under this announcement must meet the
specifications as set out in Schedule A attached here-
tc as provided in paragraph 3 hereof, and must not
have had United States Custom’s duties paid there-
on’’ (R. 203).
* * * * *
‘9. Eligible Wool. Wool eligible for sale to Com-
modity Credit Corporation shall be wool offered to
Commodity Credit Corporation for delivery in bond in
the warehouse in the continental United States desig-
nated by the vendor in the offer of sale. However,
unless otherwise announced, only wool offered for de-
livery at the Boston Army Base, Boston, Massachu-
setts will be considered’’ (emphasis ours) (R. 204).
The Boston Army Base was not then a bonded ware-
house (R. 210).
On December 18, 1950, the plaintiff sent to the defend-
ant a telegraphic offer reading as follows (Ex. 5, R. 38):
‘‘Undersigned offers to CCC, Subject to Terms and
Conditions of Announcement LS-262 Ninety Eight
Thousand Greasy Pounds of Wool Item 234 at One
Dollar Eighty Seven Cents per Pound clean Basis, In
Bond, to be delivered in Boston Army Base, Boston,
not later than March fifteenth, 1951, estimated total
value One Hundred Eighteen Thousand Dollars’’.
This offer and two other like offers differing only in the
price or quantities mentioned were accepted by the de-
fendant (R. 205).
It is to be noted that the telegraphic offers were not ‘‘for
delivery in bond in the warehouse’’ but ‘‘for delivery at
the Boston Army Base’’, and that the words ‘‘In Bond”’
in the telegraphic offers modify the price quoted.
5
The plaintiff bought wool in Argentina, imported it into
the United States, and tendered physical delivery of it to
the defendant at the Boston Army Base in April, 1951,
within the delivery period as extended by the defendant
(R. 205). The duties on the wool had not been paid and
the wool was then entered for warehouse under plaintiff's
General Term Bond (R. 206). The defendant rejected all
except one hundred bales as not within the description of
Item 234, but later extended the time for delivery to Sep-
tember 30, 1951, to enable the plaintiff to replace the bal-
ance of the wool (R. 206). 178 bales which were in a eus-
toms bonded warehouse and were purchased by the plain-
tiff, were delivered and accepted in July, 1951 (R. 206).
Another 237 bales, weighing 124,727 pounds, a quantity
enough to complete performance of the contracts by the
plaintiff, were tendered on September 7, 1951, but the ten-
der was refused (R. 207). The only question in the case
was whether the defendant was justified in refusing to
accept these 237 bales.
The 237 bales were fully up to the physical specifica-
tions of the contracts, and United States customs duties
had not been paid thereon, although the plaintiff was con-
tingently liable for the duties under its General Term Bond
(R. 207). It is the history rather than the intrinsie ehar-
acter of this wool which prompted the defendant’s refusal
to aceept it. The sole reason given was that at the time of
the tender the wool was no longer ‘‘in bond’’ (R. 207).
After the defendant’s rejection of 300 bales in April,
1951, but before the extension of the time of delivery to
September 30, 1951, the plaintiff sold 126 bales of those
rejected to a carpet manufacturer, and these bales were
given conditionally free entry under the provisions of
paragraph 1101(b) of the Tariff Act of 1930 (R. 206). The
6
provisions of that paragraph, which appear in the appen-
dix, permit wool to be entered conditionally free of duty
for use in the manufacture of carpets and certain other
articles, under bond to pay the duties if the wool is diverted
to some other use. Thereafter, the plaintiff learned that
the defendant had permitted others to regrade wool pre-
viously rejected, so as to make it conform to the physical
specifications of their contracts, and it repurchased the
126 bales, together with 23 other bales which it had im-
ported and sold to the carpet manufacturer and which had
been given conditionally free entry under said paragraph
1101 (b) (R. 206, 212). It then proceeded to regrade the
149 bales repurchased, together with five other bales which
it had imported and entered for warehouse, and produced
261 bales, of which it tendered the 237 in question (R. 206).
All deliveries made by the plaintiffs and accepted by the
defendant were physical deliveries, not deliveries by ware-
house receipts, that is, they were deliveries ‘‘in store at the
Boston Army Base”? rather than deliveries ‘‘in bond in the
warehouse’’ (R. 207).
At the trial the plaintiff contended that, since the con-
tracts required physical deliveries at the Boston Army
Base, i. e., out of customs custody, it was under no duty to
make delivery of wool ‘‘in bond’’, if in fact those words
meant ‘‘in customs eustoedy’’. It also contended that the
words ‘‘in bond’’ did not mean ‘‘in customs custody’’. The
District Judge did not pass on the first contention because
he found that the words ‘‘in bond”’ did not mean ‘‘in cus-
toms custody’’ (R. 209), and concluded that wool given con-
ditionally free entry under paragraph 1101 (b) of the
Tariff Act of 1930 was ‘‘in bond”’ (R. 212).
7
The Court of Appeals assumed that deliveries required
were of wool ‘‘in bond’’, and said in the majority opinion
(R. 222):
‘‘The fundamental question presented for our de-
cision on the above facts is whether or not the 237 bales
of wool tendered by the plaintiff and rejected by the
defendant on September ¢, 1951, were ‘in bond’ as re-
quired by paragraph 2 of Announcement LS-262,
which was specifically made part of the contracts en-
tered into by the parties.
‘*The plaintiff contends that wool ‘in bond’ means
wool upon which customs duties were not paid but were
secured by bond * * * The defendant, on the other
hand, argues that the phrase ‘in bond’ was intended by
the parties to mean wool which has not been released
from the custody of the Customs authorities and has
not therefore entered the domestic commerce of the
United States’’ (R. 222).
It is to be noted that the Court of Appeals treated the
question of the meaning of the words ‘‘in bond”’ as one for
its decision, unaffected by the provisions of Rule 52 (a) of
the Federal Rules of Civil Procedure that:
‘*Findings of fact shall not be set aside unless clearly
erroneous and due regard shall be given to the oppor-
tunity of the trial court to judge of the credibility of
witnesses’’,
There is no suggestion in the majority opinion that the
finding of the District Court as to the meaning of the words
was plainly erroneous. Indeed, it is said (R. 223):
“The plaintiff has presented strong arguments in
support of its interpretation of the phrase ‘in bond’.
It contends that the phrase is generally used to qualify
a quoted price, rather than as a reference to the status
of physical custody over imported goods maintained
by the Customs authorities before release for consump-
tion. To substantiate its contention the plaintiff intro-
duced in evidence exhibits of confirmations of sales be-
tween it and third parties in which a quoted price is
8
followed by the letters ‘1.B.’ or in ‘In Bond’. Further-
more in the contract between the defendant and the
Quartermaster General the words ‘in bond’ are imme-
diately followed by the words ‘without payment of cus-
toms duties’, In addition, the plaintiff cites instances
in the cusioms statutes, regulations, and treasury de-
cisions in which the phrase ‘in bond’ is not synonymous
With ‘in customs custody’, see 19 U. S. A. 1318 (e).
1065(a); 19 C.b.R. 18.1(a); or in which ‘in bond’ is
the autonym of ‘duty paid’. See 19 U.S.C.A. 1554”’.
Certainly, it was permissible to use the words ‘‘in bond’’
us describing wool entered conditionally free of duty under
the provisions of paragraph 1101(b) of the Tariff Act of
1930, though therein deseribed as ‘‘under bond.’? Such
wool has been described as ‘tin bond’? in Treasury De-
cisions ; see T.D. 46515 (9), 64 Treasury Decisions, page 38;
U. S. Treasury Department, Digest of Customs and Re-
lated Laws and of Decisions Thereunder, 1935, Vol. a
pages 086-087. Congress has used the words ‘‘in bond”’
as describing salt entered conditionally free of duty for
use in curing fish under the provisions of Section 313 (e)
of the Tariff Act of 1930, 19 U.S.C.A. See. 1313 (e). There
are many other instances in the statutes and Customs Regu-
lations, not referred to in the majority opinion, in which the
words ‘‘in hond”’ are used as describing imported goods not
in customs custody, but we presume that we need not here
lubor the point, since the opinion intimates that normally
‘tin bond”? and ‘‘in customs eustody”’ are not synonymous.
It is said (R. 223):
‘*We do not believe, however, that the usage of the
phrase in plaintiff’s dealings with third persons and
its usage in customs statutes and regulations is as
persuasive in revealing what the parties meant as (1)
the evidence in the record which discloses what actually
transpired between these two parties in preparing
| fiiemnaeeman asians
and formulating their contracts and (2) provisions in
the contracts which indicate what the parties intended
the phrase ‘in bond’ to mean.”
Perhaps it is enough to reiterate that the majority opin-
ion does not conclude that the trial court's findings were
clearly erroneous. Indeed, since the four judges who con-
sidered the evidence divided equally interpreting it, such a
conclusion might seem difficult to reach and maintain, But
some brief comment should be made with respect to some of
the writings outside the contract, which the majority opin-
ion considered ‘persuasive’, although not shown to have
been brought to the plaintiff's attention, and brief refer-
ence made to parts of the oral evidence not mentioned in
the opinion, to which the trial Judge might have given
weight.
The majority opinion relies principally upon the lan-
guage of certain recommendations to the defendant with
respect to the latter’s wool purchase program, submitted
by the Boston Wool Trade Association through its Wash-
ington Counsel on November 6, 1950. The reecommenda-
tions bore the typed signatures: ‘Executive Committee,
Public Relations Committee, Committee for Emergency
Cooperation, Boston Wool Trade Association’’ (R. 20). It
appeared from oral evidence that the President of the
plaintiff was the Chairman of the Public Relations Commit-
tee, and that at the time of the trial he was familiar with
the recommendations. But he denied that he was ‘‘Chair-
man of the Committee that participated in drafting those
recommendations’? (R. 124), and testified that “I didn *t sub-
mit anything that I know of” (R. 125). The evidence was
clearly insufficient to affect the plaintiff with knowledge of
the specific language of the recommendations before the
contracts were made.
I!
10
The language of the recommendations upon which the
majority opinion relied was, we think, more ambiguous than
any language in the contract. It is found under the head-
ing ‘‘Eligibilities of Offerings’’ (Exh. 2, R. 31):
‘*(b) All wool that has not entered the commerce
of the United States, namely wool in-bond, is eligible
regardless of whether it was purchased or had arrived
prior to date of sale to C.C.C.’’
The majority opinion treats the words ‘‘all wool that
has not entered the commerce of the United States’’ as
synonymous with ‘‘all wool in customs ecustody’’. This
unusual interpretation is in conflict with a decision of this
Court construing the words ‘‘enter or introduce * * * into
the commerce of the United States’’ and holdiyg that
when goods ‘‘were unloaded and placed in general order,
they were actually introduced into that commerce’’.
United States v. 25 Packages of Panama Hats,
231 U.S. 358, 362.
Wool entered for warehouse and stored in a bonded
warehouse may be and is sold and resold in the trade with-
out removal from the warehouse, deliveries being effected
by transfers of warehouse receipts (R. 207). Such wool
has, of course, entered the commerce of the United States,
even though it remains in customs custody. (See Mulfort v.
Smith, 307 U. S. 38, 47). If the words ‘‘all wool that has
not entered the commerce of the United States’’ are to be
given a special meaning, they might more reasonably have
been construed as meaning ‘‘all wool upon which customs
duties have not heen paid but are secured by bond’’.
The opinion relies also upon certain language in the con-
tract between the defendant and the Quartermaster Gen-
eral dated December 5, 1950 (Exh. 3, R. 34). There was
no evidence that the plaintiff saw this contract before its
11
own contracts were made, and it should not have been
affected by its language. Moreover, the provisions quoted
are mere recitals that the Quartermaster General would
buy from the defendant ‘wool produced outside the United
States’’ and that the defendant should ‘inspect the wool
at the port of entry or in the designated bonded ware-
houses promptly after arrival’’; they throw no light on the
words ‘‘in bond’’,
The opinion quotes from parts of the oral testimony of
the plaintiff’s President, but ignores explicit statements by
him which the trial court might have accepted. For in-
stance, on cross examination by Counsel for the defendant
(R. 130-131) :
**Q. May I also bring your attention to your direct
testimony with respect to the delivery of wool in Sep-
tember at the Army Warehouse on the Boston Army
Base. Would you at that time have stated that the
wool that was delivered had heen delivered in the same
in bond status as the wool that was delivered in April
of that year to the Boston Army Base?
sh, yee”
And, on re-direct (R. 144):
“*Q. In September, 1951, you had not paid the duty
on this wool which you tendered at that time?
‘A. That is right.
**Q. Have you paid it since that time?
‘A. No. * * * It is still in bond as far as we
know.”’
The plaintiff also contended at the trial that, even if
there had been a technical failure of performance on its
part, the breach was not material enough to justify the
defendant’s refusal to accept the wool, particularly in view
of the fact that plaintiff offered to pay any duties which
might be assessed on the importation of the wool (R. 207).
The trial court so concluded, saying:
12
‘“‘This wool is for the most part regraded from wool
which was specifically purchased abroad and imported
by plaintiff for the purpose of supplying wool to de-
fendant under its purchasing program. It is wool
which except for that program might never have been
imported. While it may have been temporarily di-
verted to a proposed domestic use while plaintiff was
not aware that it could be regraded, plaintiff promptly
recovered it, regraded it, and offered it to the defend-
ant. It was exactly the type of wool which defend-
ant’s purchasing program was intended to bring in and
should have been accepted’’ (R. 212).
The majority opinion of the Court of Appeals states
(R. 227):
‘¢We do not agree. As we have already stated, the
wool tendered by the plaintiff had entered the domestic
commerce of the United States. The purpose of the
government’s purchasing program was only to pur-
chase wool directly from foreign sources or wool which
had remained in Customs custody. The program did
not contemplate purchasing wool which at some time
or other had come from a foreign source and subse-
quently had entered the domestic commerce of the
United States’’.
What the purpose of the Government’s purchasing pro-
gram may have been is not clear from the record. It does
not appear from the statutory authority, Supplemental
Appropriations Act of 1951 (P. L. 848, 81st Congress, 64
Stat. 1044), whiez provided in Chapter X, swbtitle ‘‘Quar-
termaster Corps’’, in pertinent part as follows (R. 203):
««* * * Contracts may be made for the purchase of
100,000,000 pounds of raw wool, woolen garments,
fabrics and knitting yarns for use of all the Armed
Services’’.
Even if the purpose of the program was as inferred in
the majority opinion, the question whether the deliveries
tendered by the petitioner in September 1950 would have
13
fairly and adequately tended to accomplish that purpose
called for a conclusion of fact. See Restatement of the
Law: Contracts, See. 275,
The Reasons Relied on for the Writ.
The majority opinion clearly violates the provisions of
Rule 52(a) of the Federal Rules of Civil Procedure, quoted
above.
If resort to facts outside the contract itself was required
to ascertain the meaning of the words ‘‘in bond’’, the de-
termination of such meaning was a finding of fact.
American Stevedores v. Porello, 330 U.S. 446, 458.
‘As it stands the clause is ambiguous. Evidence
might well have been taken as to the intention of the
parties, but was not * * * From the record it is not
clear whether the Distriet Court made any finding as
to the meaning of the contract. We believe its inter-
pretation should be left in the first instance to that
court, which shall have the benefit of such evidence as
there is upon the intention of the parties.’’
The trial court’s conclusion that the breach, if any, was
not so material as to exeuse performance by the respond-
ent was also a finding of fact.
Graver Tank Co. v. Linde Air Prod. Co., 339 U.S.
605, 609.
‘‘Like any other issue of fact, final determination
requires a balancing of credibility, persuasiveness and
weight of evidence. It is to be decided by the trial
court and that court’s decision, under general prin-
ciples of appellate review should not be disturbed un-
less clearly erroneous.’’
In that case this Court held that a determination of
‘‘equivalence’’ in a patent case was a finding of fact, not
to he set aside unless clearly erroneous,
7
14
If the Court of Appeals decided that the trial court’s
conclusions as to the meaning of the words ‘‘in bond’’ and
as to the materiality of any breach were not findings of
fact subject to Rule 52(a), it has decided a federal ques-
tion in a way in conflict with applicable decisions of this
Court.
If, on the other hand, the Court of Appeals disregarded
the provisions of Rule 52(a), it has so far departed from
the accepted and usual course of judicial proceedings as to
call for an exercise of this Court’s power of supervision.
United States v. National Association, R. E. B.,
339 U.S. 485, 495.
‘‘Tt is not enough that we might give the facts an-
other construction, resolve the ambiguities differently,
and find a more sinister cast to actions which the Dis-
trict Court apparently deemed innocent * * * We are
not given those choices, because our mandate is not
to set aside findings of fact ‘unless clearly erro-
neous’ ’’.
Compare National L. R. B. v. Waterman S. S. Corp., 309
U. 8. 206, 208.
Under what circumstances a Court of Appeals has power
to substitute its findings for those of the trial court sitting
without a jury, is an important question of federal law
(see the discussion by Judge Frank in Orvis v. Higgins,
180 F. 2nd 537, C. A.-2). If it has not been settled by this
Court, it should be. This Court has said in United States
v. Yellow Cab Co., 338 U. S. 338, 342, that
‘‘a choice between two permissible views of the
weight of evidence is not ‘clearly erroneous’ ’’.
In Tennessee Coal Iron & R. Co. v. Muscoda Local No.
123, 137 F. 2nd 176, 180 (CCA.5), affirmed by this Court
in 321 U. S. 590, the Court of Appeals said:
15
‘‘Even when there is no dispute about the facts, if
different reasonable inferences may fairly be drawn
from the evidence, an appellate court is forbidden to
disturb the findings based on such inferences unless
they are clearly erroneous”’.
If doubt remains as to the power of a Court of Appeals
to revise the final determinations of a trial judge, it should
be resolved by this Court. It must be of moment in the
administration of justice in the federal courts that the line
between the work to be done by trial courts and by courts
of appeal be clearly marked. If an appeal may succeed
because two judges in the Court of Appeals are persuaded
that words of doubtful meaning should be given another
meaning than that, not plainly erroneous, placed upon them
by the trial court, the appellate jurisdiction will surely
be expanded.
A decision that, although ‘‘strong arguments” sup»orted
the conclusion reached by the trial judge, the evidence upon
which they were based was not ‘‘as persuasive’’ as other
facts, should not he left as a precedent.
Wherefore, it is respectfully submitted that this petition
should be granted.
DRAPER & COMPANY, Incorporated,
By its attorney,
EDWARD C. PARK,
73 Tremont Street,
Boston 8, Mass.
16
Appendix “A”
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 4782.
COMMODITY CREDIT CORPORATION,
DEFENDANT, APPELLANT,
v .
DRAPER & COMPANY, INCORPORATED,
PLAINTIFF, APPELLER.
APPEAL FROM JUDGMENT OF THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
{113 F. Supp. 796]
Before Macruper, Chief Judge, and Woopsury and Har-
TIGAN, Circuit Judges.
Edward H. Hickey, Attorney, Department of Justice,
with whom Warren FE. Burger, Assistant Attorney Gen-
eral Anthony Julian, United States Attorney, and Pauw A.
Sweeney, Attorney, Department of Justice, were on brief,
for appellant.
Edwaré C. Park, with whom Charles C. Worth and
Withington, Cross, Park & McGann were on brief, for ap-
pellee.
OPINION OF THE COURT.
May 6, 1954.
Hartican, Circuit Judge. The plaintiff Draper & Com-
pany, Inc., instituted this action against the defendant Com-
fn, > rice
17
modity Credit Corporation, in the United States District
Court for the District of Massachusetts. The complaint
alleges that the parties had entered into certain contracts
and that the plaintiff has duly performed all of the condi-
tions required by the contracts but that the defendant
wrongfully refused to accept delivery of and pay for ship-
ments of wool tendered by the plaintiff. In its answer the
defendant alleges that it refused to accept and pay for the
wool tendered to it because the plaintiff’s voluntary acts
had rendered the wool ineligible for sale or delivery to the
defendant under the terms of the contracts. The defendant
also filed an amended counterclaim for liquidated damages
specified in the contracts. The district court held that the
wool tendered by the plaintiff met the conditions imposed
by the contracts and entered judgment on July 13, 1953 for
the plaintiff for the sum of $76,831.04 with interest thereon
from September 30, 1951 to July 9, 1953, in the amount of
$8,182.52 and costs and dismissed the defendant’s counter-
claim.
The following facts were either stipulated by the parties
or were unchallenged findings made by the district court.
1. Plaintiff, Draper & Company, Inc., is a corpora-
tion organized under the laws of the Commonwealth
of Massachusetts engaged in the buying and selling
of domestic and foreign wools.
2. Defendant, Commodity Credit Corporation, is
a federal corporation created by the Commodity Credit
Corporation Charter Act (62 Stat. 1070, 15 U. S. ¢.,
714).
2 On September 27, 1950, Congress enacted the
Supplemental Appropriations Act of 1951 (P.L. 843,
81st Congress, 64 Stat. 1044) which provided in Chap-
ter X, subtitle ‘‘Quartermaster Corps’’, in pertinent
part as follows:
‘** * * contracts may be made for the purchase
of 100,000,000 pounds of raw wool, woolen garments,
18
fabrics and knitting yarns for use of all the Armed
Services.’’
4. On or about October 25, 1950, the defendant sent
to the various Wool Trade Associations a telegram,
* * * inviting each association to send a representative
to the United States Department of Agriculture in
Washington, D. C., to participate in a discussion of a
procurement program under which defendant would
acquire certain foreign wools for the Quartermaster
General of the Department of the Army.
5. In response to defendant’s telegram, on or about
November 7, 1950, the Boston Wool Trade Association,
through its Washington counsel submitted ‘“Recom-
mendations for Purchase Agreement to Cover Com-
modity Credit Corporation Wool Purchases”’ dated
November 6, 1950, * * *.
6. The Committee of the Boston Wool Trade Asso-
ciation which prepared such Recommendations was
composed among others, of the Public Relations Com-
mittee the Chairman of which was Mr. Malcolm Green,
President of plaintiff corporation.
7. Pursuant to P. L. 843, the Quartermaster Gen-
eral, Department of the Army, on December 5, 1950,
entered into a Wool Purchase Contract with the de.
fendant, Commodity Credit Corporation, authorizing
said defendant to acquire and sell to the Quartermas-
ter General 30,000,000 pounds (minus the tolerance of
5%) clean hasis of wool produced outside the United
States. Said contract further provided that delivery
to Commodity Credit Corporation under its purchase
contract would be in bond without payment of cus-
tom duties.
8. In accordance with its contract with the Quar-
termaster General, the defendant on or about Decem-
ber 6, 1950, issued Public Announcement LS-262 stat-
ing its intention to purchase about 30,000,000 pounds
of wool and setting forth the terms and conditions up-
on which offers to sell could be made.
9. Announcement LS-262 contained the following
provisions :
‘‘The Commodity Credit Corporation hereby an-
nounees its intention to purchase wool in a quantity
of approximately 30,000,000 pounds clean basis.
19
Wool offered for sale to the Commodity Credit Cor-
poration under this announcement must meet the
specifications as set out in schedule A attached here-
to, as provided in paragraph 3 hereof, and must not
have had United States Customs’ duties paid there-
on. Such wool is to be offered for sale to Commodity
Credit Corporation on or before June 30, 1951.
Commodity Credit Corporation reserves the right
to reject any or all offers and to increase or de-
crease the quantity of wool with respect to which it
invites offers of sale. Such wool will be purchased
subject to the following terms and conditions :
“2. Eligible Wool. Wool eligible for sale to
Commodity Credit Corporation shall be wool
offered to Commodity Credit Corporation for de-
livery in bond in the warehouse in the continental
United States, designated by the vendor in the offer
of sale. However, unless otherwise announced, only
wool offered for delivery in store at the Boston
Army Base, Boston, Massachusetts, will be con-
sidered, * * *
“3. Specifications. Only the types and grades
of wool shown in Schedule A attached hereto will be
considered for acceptance under this announce-
ment.’’
Schedule A attached to the announcement listed by
numbered items the types and grades of wool which
the defendant considered purchasing. Item 234 was
described as follows:
‘“‘Buenos Aires 5—S (40-s) Super Fleeces, fully
skirted, Practically free 514”—8”,”’
10. The terms and conditions of the announcement
were specifically made part of the contracts entered
into by the plaintiff and the defendant and were ar-
rived at after consultation and upon the recommenda-
tions of representatives of the wool trade including
the president of the plaintiff corporation.
11. On December 18, 1950, the plaintiff made tele-
graphic offers, in the form prescribed by the announce-
ment and confirmed as therein provided, to sell to the
defendant ninety-eight thousand pounds of wool, item
234, at a dollar and eighty-eight cents per pound, clean
20
basis, in bond, and an additional ninety-eight thousand
pounds of wool, item 234, at a dollar and eighty-seven
cents per pound, clean basis, in bond. Both offers were
for delivery at Boston Army Base, Boston, not later
than March fifteenth, 1951. On December 20, 1950, the
defendant sent the plaintiff a telegram accepting the
offers, and thereafter confirmed the contract in writ-
ing. The contract was designated by the defendant by
the symbols A1PM (FF) 27042. * * *
12. On December 26, 1950, the plaintiff made a tele-
graphic offer, in the form preseribed by the announce-
ment and confirmed as therein provided, to sell to the
defendant one hundred and ninety-six thousand pounds
of wool, item 234, at one dollar and eighty-eight cents
per pound, clean basis, in bond, for delivery at Boston
Army Base, Boston, not later than March fifteenth,
1951. On December 27, 1950, the defendant sent the
plaintiff a telegram accepting the offer, and thereafter
confirmed the contract in writing. The contract was
designated by the defendant by the symbols AIPM
(FF)—27058. ° * *
13. Each contract provided that it would be satis-
fied by delivery of the contract quantity within a plus
or minus tolerance of 10% in pounds. Each contract
further provided for liquidated damages upon plain-
tiff’s failure to deliver wool at the rate of 5% of the
contract sales price.
14. On January 2, 1951,.The Bureau of Customs,
at the request of the Quartermaster General, design-
nated the Boston Army Base a Customs Bonded Ware-
house, Class 2, for the purposes of the wool purchase
program.
15. At the request of the plaintiff, the contracts
were amended, extending the delivery date to April
30, 1951.
16. The plaintiff bought wool in Argentina, im-
ported it into the United States, and tendered physi-
eal delivery of the same to the defendant at the Boston
Army Base in April of 1951. The duties on this wool
had not been paid, and the wool was entered for ware-
house under plaintiff’s General Term Bond.
21
The defendant accepted only one hundred bales, or
about 98,000 pounds, under the contract made on De-
cember 20, 1950, and rejected the balance as not in
conformity with the description of item 234.
17. In May, 1951, the plaintiff sold 126 of the
rejected bales to Bigelow-Sanford Carpet Company.
These bales were withdrawn from warehouse condi-
tionally free of duty under par 1101, Tariff Act of
1930, and responsibility for any duties was trans-
ferred to Bigelow-Sanford under its bond.
18. In June, 1951, plaintiff wrote the defendant
asking that the delivery dates on the remaining two
contracts be extended in order that the woo] previously
rejected could be replaced hy the plaintiff. The de-
fendant agreed to and extended the time for perform-
ance under the contracts to September 30, 1951,
19. The plaintiff purchased from the Bigelow-San-
ford Carpet Company approximately 178 bales of Item
234, which were in a enstoms bonded warehouse and
under the custody of the United States Customs Bu-
reau. This wool, approximately 169,414 pounds in the
grease, tendered for delivery by plaintiff in July was
accepted by the defendant in part performance of the
contract of December 27, 1950, thus leaving a balance
of approximately 126,586 pounds to be delivered in
completion of the contracts.
20. The plaintiff also repurchased the 126 bales of
wool, previously rejected by the defendant, from Bige-
low plus twenty-three other bales which plaintiff had
imported from Argentina in April, 1951, and had sold
to Bigelow for carpet manufacture. The additional
twenty-three bales had been entered conditionally free
of duty under bond.
21. The plaintiff then proceeded to regrade the 149
bales of wool so repurchased from Bigelow together
with five other bales of wool which plaintiff had im-
ported and entered for warehouse in February and
April, 1951.
22. As a result of the regrading, the plaintiff ob-
tained 261 bales of wool of which it set aside 237 bales
for tender to the defendant under its contracts. These
237 bales had a net weight of 124,727 pounds.
22
23. On September 7, 1951, the plaintiff tendered
delivery of the 237 bales of regraded wool to the de-
fendant at the Boston Army Base, but the defendant
refused to accept them.
24. On September 7, 1951, the duties on the 237 bales
had not been paid but the plaintiff was contingently
liable therefor under its General Term Bond.
25. The 237 bales were fully up to the physical
specifications of the contracts, and an inspection cer-
tificate so stating was signed but not issued to the
plaintiff. The sole reason given by defendant for its
refusal to accept the wool was that defendant con-
sidered the wool as ineligible under the contract since
it had been regraded from wool which had been given
a conditional free entry under a *‘carpet bond’’ and
hence was regarded by defendant as not being wool
‘in bond’’ within the terms of the contract.
The fundamental question presented for our decision on
the above facts is whether or not the 237 bales of wool
tendered by the plaintiff and rejected by the defendant
on September 7, 1951 were ‘‘in bond’’ as required by para-
graph 2 of Announcement LS-262, which was specifically
made part of the contracts entered into by the parties.’
The plaintiff contends that wool ‘‘in bond’’ means wool
upon which custom duties were not paid but were secured
by bond. Since the duties on the wool tendered by the plain-
tiff had not been paid but were secured under the plain-
tiff’s General Term Bond, the plaintiff asserts that the
defendant was not justified in refusing to take delivery of
the tendered wool. The defendant, on the other hand,
argues that the phrase ‘‘in bond’’ was intended by the
parties to mean wool which has not been released from the
custody of the Customs authorities and has not therefore
entered the domestic commerce of the United States. It
argues that, since the rejected wool had been released by
*See Findings Nos. 9 and 10, supra.
23
the Customs authorities under a ‘‘carpet bond’’ and thus
had entered the domestic commerce of the United States,
it was justified in refusing to take delivery of the wool.
The plaintiff has presented strong arguments in support
of its interpretation of the phrase ‘‘in bond.’ It contends
that the phrase is generally used to qualify a quoted price,
rather than as a reference to the status of physical custody
over imported goods maintained by the Customs authori-
ties before release for consumption. To substantiate its
contention, the plaintiff introduced in evidence exhibits of
confirmations of sales between it and third parties in which
a quoted price is followed by the letters ‘I. B.”? or “In
Bond.’’ Furthermore in the contract between the defend-
ant and the Quartermaster General the words ‘‘in bond”?
are immediately followed by the words ‘without payment
of customs duties.’’ In addition, the plaintiff cites instances
in the customs statutes, regulations, and treasury decisions
in which the phrase ‘in bond’? is not synonymous with ‘‘in
customs custody,’’ see 19 U.S. C. A. §§ 1313(e), 1563 (a) ; 19
C.F. R. § 18.1 (a): or in which ‘‘in bond”? is the antonym of
“duty paid.”? See 19 U.S.C. A. § 1554.
We do not believe, however, that the usage of the phrase
in plaintiff’s dealings with third persons and its usage in
customs statutes and regulations is as persuasive in reveal-
ing what the parties meant as (1) the evidence in the record
which discloses what actually transpired between these two
parties in preparing and formulating their contracts and
(2) provisions in the contracts which indicate what the
parties intended the phrase ‘‘in bond”? to mean.
Mr. Green, president of the plaintiff, testified that he
participated in discussions with the defendant in connec-
tion with its wool procurement program and that he assisted
in drafting Announcement LS-262. He further testified that
24
following these conferences a memorandum entitled ‘‘Ree-
ommendations For Purchase Agreement To Cover C.C. C.
Wool Purchases’’ was sent to the defendant by the Boston
Wool Trade Association. One of the committees of the
Boston Woo! Trade Association which signed these recom-
mendations was the Public Relations Committee of which
Green was chairman. Mr. L. Thornton Davis, who accepted
the plaintiff’s offers to sell the wool designated in the
December wires on behalf of the defendant, testified that
he participated in the conferences and meetings with the
representatives of the wool trade and in the drafting of
Announcement LS-262. The district court found that the
terms and conditions of the announcement were arrived at
after consultation and upon the recommendations of repre-
sentatives of the wool trade including the president of the
plaintiff corporation. Paragraph 2 of the recommendations
states:
‘69. Euicrrinity oF OFFERINGS.
‘*(a) Wool must have originated outside the United
States, Canada, Mexico, Iceland, Alaska.
‘*(b) All wool that has not entered the commerce
of the United States, namely wool in-bond, is eligible
regardless of whether it was purchased or had arrived
prior to date of sale to C. C. C.”’
The recommendations thus contain a definition of ‘‘in
bond’’ that substantiate the defendant’s interpretation of
these words. Admittedly the recommendations were not
incorporated into the contracts. But, in view of the fact
that the terms and conditions of the contracts were arrived
at upon the basis of these recommendations, we believe that
the definition of the phrase in the recommendations is a
strong indication of what the parties intended that phrase
to mean in their contracts. And it is clear that the wool
tendered by the plaintiff on September 7, 1950, had prior
25
to that date entered the commerce of the United States. On
May 16, 1951, the plaintiff made warehouse withdrawals
of this wool conditionally free of duty for the purpose of
carpet manufacture. The wool was then sold and delivered
to Bigelow-Sanford Carpet Company of New York, N. Y.
Furthermore, the record reveals that the main source of
the defendant’s wool procurement program was intended
by the parties to be foreign wool offered directly to the
defendant upon its arrival in this country. The telegram
sent by the defendant to the various Wool Trade Associa-
tions states: “*Commodity Credit Corporation has been re-
quested to undertake the acquisition of certain foreign
wools for the Department of the Army. In an effort to
develop a program which will not disrupt normal marketing
conditions, you are invited to send representatives of your
organization interested in foreign wools to participate in
a discussion of a procurement program * * *.”? The con-
tract between the defendant and the Quartermaster Gen-
eral specifies in Paragraph 1 that: “* * *CCC will ac-
quire and sell to The Quartermaster General 30,000,000
pounds (plus or minus a tolerance of five percent) clean
basis, of wool produced outside the United States * * ye
and in Paragraph 2 that: ‘«* * * CCC will inspect the wool
at the port of entry or in the designated bonded warehouses
promptly after arrival. * * *” Announcement LS-262
states in Paragraph 11 that: “«* * * The vendor shall
notify the Area Wool Office, Livestock Branch, 408 Atlantic
Avenue, Boston 10, Massachusetts, upon the arrival in the
bonded warehouse of wool tendered under this announce-
ment. * * *’? Also Paragraph 18 states: ««* * « At the
time of arrival of shipments of wool under contract to
Commodity Credit Corporation a separate declaration mus}
be made to the Customs Bureau for each Item, * * *”?
26
But under the terms of the contracts one type of wool
is eligible for sale to the defendant, even though it may not
have arrived from a source outside the United States im-
mediately prior to its tender to the defendant. This wool
is the so-called ‘‘spot wool,’’ as defined in Paragraph 12
of Announcement LS-262.2 There is no dispute that ‘‘spot
wool’’ is in customs custody. Paragraphs 7 and 12 of the
announcement contain detailed provisions on the manner
in which ‘‘spot wool’? is to be weighed and how a vendor
may request an inspection of it. There are no similar pro-
visions in the contracts, however, for wool that has been
released from the custody of the Customs authorities and
has entered the domestic commerce of the United States.
By explicitly specifying that wool (1) which is stored in
a bonded warehouse within certain areas and (2) upon
which United States Customs duty has not been paid, we
believe the parties have indicated the extent to which wool
tendered from non-foreign sources is eligible for sale to
the defendant.
Also, the testimony of the plaintiff’s president, Mr.
Green, clearly indicates that the parties intended ‘‘spot
wool’’ to fix the boundary of wool eligible for sale to the
defendant from sources within the United States. He testi-
fied:
“* * * This Committee was invited to Washington
to work out a program that Congress passed to buy
*“12. Spot wool. Vendors who propose to offer wool to CCC, under this
announcement, that is stored in a bonded warehouse within the Eastern Sea-
board Area of the United States at, or north of, Philadelphia, Pennsylvania, and
upon which United States Customs duty has not been paid, may request the
Area Wool Office, Livestock Branch, Boston, Massachusetts, to make an inspec-
tion of the wool prior to offering such wool to CCC. The request for inspection
must give full uateres of the wool, including the item number under which
it will be offered to CCC, and must be accompanied by a representative sample.
CCC will, when feasible, endeavor to make such inspection and advise the
vendor whether or not the wool meets the specifications of the item number
under which the wool will be offered to CCC and, if the wool is accepted by
CCC, will issue a certificate as provided in paragraph 11 of this announcement.
27
30,000 (sic) pounds of foreign wool to bring in for
this country. This Committee was purely invited down
there to assist them to line up the types of wools after
the Quartermaster had advised them what grades they
wanted. They were there to assist them to line up the
types of wool, and so forth, and the terms of contract,
and so forth, and they started off by wanting every-
thing imported into the country. They wound up by
allowing people to sell CCC wool that had been in bond
for any amount of years, sitting in the country.
‘“*Q. What does that mean to you ‘wool in bond’?
“A. It is wool in bond, just under the custody of
Customs.”’
The plaintiff contends that even if the contract meant
that the wool must remain in Customs custody until deliy-
ery, the breach was not material enough to excuse perform-
ance by the defendant. It is argued that the wool was for
the most part bought and imported by the plaintiff specif-
ically for delivery under the contracts and that, while it
may have been temporarily diverted to domestic use be-
cause the plaintiff was not aware it could be regraded, the
plaintiff promptly recovered it, regraded it, and then offered
exactly the type of wool which the defendant’s purchasing
program intended to be brought into this country.
We do not agree. As we have already stated, the wool
tendered by the plaintiff had entered the domestic com-
merce of the United States. The purpose of the govern-
ment’s purchasing program was only to purchase wool
directly from foreign sources or wool which had remained
in Customs custody. The program did not contemplate pur-
chasing wool which at some time or other had come from
28
a foreign source and subsequently had entered the domestic
commerce of the United States. In analogous situations the
consequences of releasing wool under a ‘‘carpet bond”? in
accordance with the provisions of 19 U.S.C. § 1001, par.
1101(b) are not merely ‘‘technical.’’ For example, goods
in the custody of Customs may be re-exported without the
payment of duties. 19 U.S.C.A. § 1557. If the goods are
released by the Customs authorities conditionally free of
duties, however, the importer may not |: ter re-export them
without the payment of duties. 19 U.S.C.A. § 1558, Khos-
rovschahi & Co. v. United States, 39 C.C.P.A., Customs, 40
(1951). Also, there was testimony that it was the estab-
lished practice of the Customs authorities under the pro-
visions of 19 C.F.R. 10.91(c) to refuse to restore to Cus-
toms custody goods which have been withdrawn under a
‘carpet bond.”’
With respect to the defendant’s amended counterclaim,
Paragraph 20 of Announcement LS-262 provides:
‘*90. Liquidated Damages. The vendor shall pay
to CCC, as liquidated damages, and not as a penalty,
an amount equal to five (5) percent of the sales price
specified in the Offer to Sell, of any wool which the
vendor shall fail to deliver to CCC in accordance with
an accepted Offer to Sell, unless such failure to deliver
is one for which the vendor is excused pursuant to the
provisions of paragraphs 4 or 19 of this announcement,
and vendor, by submitting an Offer to Sell pursuant
to this announcement, agrees that any such unjustified
failure of delivery will damage CCC in the amount
specified.”’
The quantity of wool deliverable under the contract desig-
nated by the defendant by the symbols AIPM (FF) 27042
was 196,000 pounds. From this figure the plaintiff is per-
29
mitted to deduct 19,600 pounds under the provisions of
paragraph 5 of the Announcement? and 98,000 pounds for
woo] delivered to the defendant in April of 1951.4 The clean
content of the wool rejected was 70%,5 and thus the clean
weight of the wool which the defendant failed to deliver
under this contract was 54,880 pounds. Five percent liquid-
ated damages on this quantity of wool at the contract price
of $1.88 per pound amounts to $5,158.72. By the same
process, the liquidated damages under the contract desig-
nated by the defendant by the symbols A1PM (FF) 27058
amounts to $459.68. The defendant, therefore, is entitled
to recover $5,618.40 on its amended counterclaim.
The judgment of the district court is vacated and the
case is remanded to that court for entry of judgment for
the defendant on its amended counterclaim in the amount
of $5,618.40.
Woopeury, Circuit Judge, (dissenting). I would affirm
the judgment for the reasons stated in the opinion of the
District Court.
*“5. Tolerance. The contract shall be considered to be satisfied by the deliv-
ery of the contract quantity, within a plus or minus tolerance of ten (10)
Percent in pounds, without regard to shrinkage results.”
United States Customs Bureau, whose determinations, subject to the appeals
a by the regulations of the United States Customs Bureau, shall be
30
Appendix “B”
COMMODITY CREDIT CORPORATION CHARTER
ACT PARAGRAPHS (c) AND (g) OF TEXT OF
SECTION 3 AS FOUND IN 15 U.S.C. SEC, 714 (b)
GENERAL Powers oF CoRPORATION
The Corporation—
(c) May sue and be sued, but no attachment, injunction,
garnishment, or other similar process, mesne or final, shall
be issued against the Corporation or its property. The
district courts of the United States, including the district
courts of any Territory or possession, shal] have exclusive
original jurisdiction, without regard to the amount in
controversy, of all suits brought by or against the Corpora-
tion: Provimep, That the Corporation may intervene in any
court in any suit, action, or proceeding in which it has an
interest. Any suit against the Corporation shall be
brought in the District of Columbia, or in the district where-
in the plaintiff resides or is engaged in business. No suit
by or against the Corporation shall be allowed unless (1)
it shall have been brought within six years after the right
accrued on which suit is brought, or (2) in the event that
the person bringing such suit shall have been under legal
disability or beyond the seas at the time the right accrued,
the suit shall have been brought within three years after
the disability shall have ceased or within six years after
the right accrued on which suit is brought, whichever
period is longer. The defendant in any suit by or against
the Corporation may plead, by way of set-off or counter-
claim, any cause of action, whether arising out of the same
transaction or not, which would otherwise be barred by
a
such limitation if the claim upon which the defendant's
cause of action is based had not been barred prior to the
date that the plaintiff’s cause of action arose: Provipep,
That the defendant shall not be awarded a judgment on any
such set-off or counterclaim for any amount in excess of
the amount of the plaintiff’s claim established in the suit.
All suits against the Corporation shall be tried by the
court without a jury. N otwithstanding any other provision
of sections 714-7140 of this title, the Federal Tort Claims
Act shall be applicable to the Corporation. Any suit by
or against the United States as the real party in interest
based upon any claim by or against the Corporation shall
be subject to the provisions of the subsection (c) of this
. section to the same extent as though such suit were by or
against the Corporation, except that (1) any such suit
against the United States based upon any claim of the
type enumerated in section 1491 of Title 28, may be brought
in the United States Court of Claims, and (2) no such
suit against the United States may be brought in a district
court unless such suit might, without regard to the provi-
sions of sections 714-7140 of this title, be brought in such
court.
31
(g) May enter into and carry out such contracts or
agreements as are necessary in the conduct of its business.
State and local regulatory laws or rules shall not be ap-
plicable with respect to contracts or agreements of the
Corporation or the parties thereto to the extent that: such
contracts or agreements provide that. such laws or rules
shall not be applicable, or to the extent that such laws or
rules are inconsistent with such contracts or agreements.
32
Appendix “C”
TARIFF ACT OF 1930
Par. 1101. (a) Wools: Donskoi, Smyrna, Cordova,
Valparaiso, Ecuadorean, Syrian, Aleppo, Georgian, Turkes-
tan, Arabian, Bagdad, Persian, Sistan, East Indian, Thibe-
tan, Chinese, Manchurian, Mongolian, Egyptian, Sudan,
Cyprus, Sardinien, Pyrenean, Oporto, Iceland, Scotch
Blackface, Black Spanish, Kerry, Haslock, and Welsh
Mountain; similar wools without merino or English blood;
all other wools of whatever blood or origin not finer than
40s; and hair of the camel; all the foregoing, in the grease or
washed, 24 cents per pound of clean content; scoured, 27
cents per pound of clean content; on the skin, 22 cents per
pound of clean content ; sorted, or matchings, if not scoured,
25 cents per pound of clean content: Provipep, That a
tolerance of not more than 10 per centum of wools not finer
than 44s may be allowed in each bale or package of wools
imported as not finer than 40s.
(b) Any of the foregoing may be entered or withdrawn
from warehouse without the payment of duty by a manu-
facturer, processor, or dealer upon the filing of a bond to
insure that any wool or hair entered or withdrawn there-
under shall be used only in the manufacture of press cloth,
camel’s hair belting, knit or felt boots, heavy fulled lumber-
men’s socks, rugs, carpets, or any other floor coverings. A
manufacturer, processor, or dealer may be relieved of
liability under his bond with respect to any wool or hair
so entered or withdrawn which is transferred in its im-
ported or any other form to another manufacture, proces-
sor, or dealer who has filed a bond to insure that the mer-
chandise so transferred shall be used only in the manufae-
33
ture of the above-enumerated articles. If any wool or hair
so entered, withdrawn, or transferred under bond is used
or transferred for use in its imported or any other form in
any manner otherwise than in the manufacture of the
articles enumerated above, there shall be levied, collected,
and paid on the merchandise so used or transferred in
violation of the bond the regular duties which would apply
to such merchandise if imported in its condition at the
time of such use or transfer. Such duties shall be paid by
the manufacturer, processor, or dealer whose bond is charg-
ed with the wool or hair at the time of such use or transfer;
but such duties shall not be levied or collected on any mer-
chandise (except white soft wastes, white threads and noils,
which shall be dutiable at seven-eighths of such regular du-
ties when used or transferred for use otherwise than in
the manufacture of the enumerated articles) resulting in
the usual course of manufacture of such enumerated manu-
factured articles which cannot be used (with or without fur-
ther preparation) in the usual course of the manufacture of
such enumerated articles, or which is exported or destroyed.
When any wool or hair which has been entered or with-
drawn under bond as provided for in this subparagraph is
used or transferred for use, in its imported or any other
form, otherwise than in the manufacture of the above-
enumerated articles and prior to such use or transfer there
shall have been combined or mixed with such wool or hair
any other merchandise, the whole or the combination or
mixture shall be presumed to be composed of wool or hair
entered or withdrawn under bond, as provided for in this
subparagraph, unless the manufacturer, processor, or
dealer liable for the payment of the duties shall establish
the quantity of bonded wool or hair in such combination
34
or mixture. Every manufacturer, processor, or dealer who
has given a bond pursuant to the provisions of this sub-
paragraph shall report any use or transfer of merchandise
in violation of the terms of his bond, within thirty days
after such use or transfer, to the collector of customs in
whose district the bond is filed; and for failure to so re-
port, such manufacturer, processor, or dealer shall be liable
to a penalty equal to the value of the merchandise so usec
or transferred at the time and place of such use or transfer.
Such penalty shall be in addition to the duties above
provided for. The Secretary of the Treasury is authorized
to prescribe such regulations and the form, conditions, and
amounts of such bonds as may be necessary to carry into
effect the provisions of this subparagraph.
(ec) For the purposes of this schedule:
(1) Wools and hair in the grease shall be considered
such as are in their natural condition as shorn from the
animal, and not cleansed otherwise than by shaking, wil-
lowing, or burr picking;
(2) washed wools and hair shall be considered such as
have been washed, with water only, on the animal’s back
or on the skin, and all wool and hair, not scoured, with a
higher clean yield than 77 per centum shall be considered as
washed ;
(3) scoured wools and hair shall be considered such as
have been otherwise cleansed (Not including shaking, wil-
lowing, burr picking, or carbonizing) ;
(4) sorted wools or hair, or matchings, shall be wools
and hair (other than skirtings) wherein the identity of in-
dividual fleeces has been destroyed except that skirted
35
fleeces shall not be considered sorted wools or hair, or
matchings, unless the backs have been removed; and
(5) the Official Standards of the United States for
grades of wool as established by the Secretary of Agricul-
ture on June 18, 1926, pursuant to law, shall be the stand-
ards for determining the grade of wools. As amended
June 25, 1938, 5 p. m. E.S.T., ¢. 679, § 33 (a), 52 Stat. 1090.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.