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Continental Can Co. v. United States

decided: November 25, 1959.


Author: Moore

Before CLARK, Chief Judge, MOORE, Circuit Judge, and J. JOSEPH SMITH, District Judge.

MOORE, Circuit Judge.

Petitioner, Continental Can Company, Inc,*fn1 petitions for review of an order of the Federal Maritime Board ("the Board") made in a proceeding instituted by the Board on its own motion against petitioner. the issues were: (1) whether petitioner, in shipping by ocean carrier from the United States to Venezuela glass containers, called "packer's tumblers," manufactured by it, misclassified the containers as "Bottles or Jars, Empty, Glass" instead of classifying them as "Tumblers"; and (2) whether petitioner misclassified the containers "knowingly and willfully."*fn2

The Board Examiner as his "Ultimate Findings of Facts and Conclusions" found in substance that packer's tumblers are primarily empty glass jars used as glass containers for packaging; that they were ordered as containers by customers of petitioner engaged in the business of manufacturing and packing food products; and that the containers "may and often have a re-use as drinking glasses by the purchaser of the packaged product." He concluded that these packer's tumblers fell within the classification "Bottles or Jars, Empty, Glass" rather than "Tumblers." In addition he found that the applicable tariffs published by the United States Atlantic & Gulf-Venezuela and Netherlands Antilles Conference ("the Conference") were ambiguous and that ambiguous tariffs as a matter of law must be resolved against the carrier or the Conference. The Examiner recommended that petitioner's motion that the proceeding be discontinued be granted.

The Board (two members) made additional findings of fact, rejected the Examiner's conclusions and held that "it is obvious that respondent's [petitioner here] classification was not correct." It also found that petitioner "knowingly and wilfully violated section 16 of the Act." The third member of the Board dissented, holding that a packer's tumbler is "first and foremost a glass container - a jar - manufactured for the primary purpose of packaging food stuffs" and that its use as a drinking glass is "both secondary and incidental to its primary use." He therefore concluded that the classification used by petitioner was proper and that at least the tariffs were ambiguous, justifying the selection of the Bottles and Jars tariff.

The facts are not in dispute, the case having been heard upon a stipulation of facts to which numerous exhibits were annexed. During the periods of time in which the shipments in question were made two tariffs (VEN-6 and VEN-7) were in effect. The classifications which might have been relevant*fn3 to a shipper of such merchandise were:

"Item 1000 * * *

Tumblers, viz:

Glass * * *"; and

"Item 115 * * *

Bottles or Jars; Empty, Glass (not Cut Glass or Vacuum), with or without their equipment of Caps, Covers, Stoppers, or Tops (not Nipples) * * *"

The glassware being shipped consisted of glass containers. These containers were listed on a special price list issued by petitioner entitled "Packers Tumblers." Petitioner also published separate catalogues and price lists for its glassware and drinking glasses, i. e., tumblers.

When shipping the containers to Venezuela petitioner had to choose between the classification "Bottles or Jars; Empty, Glass" and "Tumblers." There was no special tariff for "packers tumblers." At the time this decision had to be made there was a publication entitled "Glossary of Packaging Terms" published by the Packaging Institute, Inc. Therein "Packer's tumbler" was defined as: "A jar, pressed, without neck, used for the packing of certain products and suitable for re-use for drinking purposes." The then current Webster's New International Dictionary, Second Edition, 1944, defined "tumbler" as a "drinking glass without a foot or stem * * *." Furthermore, in interstate shipments by rail packer's tumblers of the same type here in question were being placed in the category of bottles and jars for tariff purposes. With the knowledge that the "packer's tumblers" were to be used as food containers and that such use as might be made of the container by the ultimate purchaser as a drinking glass was entirely secondary, petitioner was wholly justified in considering the containers as glass jars. They were not sold by petitioner or purchased by petitioner's customers as drinking glasses. Nor would any housewife, desirous of acquiring drinking glasses for her dining table, be likely to do so by purchasing a variety of food products in containers subsequently to be elevated in status from the kitchen to the dining room after the family had eaten its way through a dozen jars of jelly, cheese, marmalade and peanut butter. The primary purpose of a packer's tumbler, i. e., to contain food, is certain. Thereafter its fate is more uncertain and precarious. The erstwhile container may find its way into the garbage can, a picnic basket, the kitchen or the carpenter shop as a container of nails or paint brushes. In any event packer's tumblers in their secondary stage are highly expendable. In direct contrast are drinking glasses ("tumblers") which are usually not subjected to such experiences except fortuitously. Their classification is and should be entirely different.

In reaching their decisions, neither courts nor administrative bodies should ignore the realities of life and disregard common knowledge even though such knowledge may not have achieved a place within the purview of judicial notice. Many food items today are sold in containers which may ultimately be used for other purposes. This potential additional use is, as petitioner concedes*fn4 "a help in marketing the packaged product." This possibility, however, does not change the container character of the article shipped to the food packager. The packager is not buying tumblers nor reselling tumblers.Furthermore, ...

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