Lawrence & Tuttle (Edward N. Glad and Robert Glenn White of counsel) for the appellant.

John W. Douglas, Assistant Attorney General (Morris Braverman, trial attorney), for the appellee.

Before OLIVER and NICHOLS, Judges, and WILSON, Senior Judge

NICHOLS, Judge: This is an application for review of a decision and judgment of Richardson, J., reported as Minkap of California, Inc. v. United States, 54 Cust. Ct. 641, Reap. Dec. 10972.

The merchandise consists of ladies' sweaters exported from Japan during the period between June and December 1957 and entered at the port of Los Angeles. The sweaters were appraised at values greater than the entered values on the basis of cost of production, as that value is defined in section 402 (f), Tariff Act of 1930 (now section 402a (f) of said tariff act, as amended by the Customs Simplification Act of 1956). It is claimed that the sweaters should be appraised, as entered, on the basis of export value, as that value is defined in section 402 (d), Tariff Act of 1930 (now section 402a (d) of said tariff act, as amended).

It was stipulated at the trial that the sweaters were composed either of 25 percent silk and 75 percent lamb's wool, or 20 percent Angora and 80 percent lamb's wool and that they were in all material respects the same as the sweaters having the same style numbers involved in Minkap of California, Inc., by Frank P. Dow Co., of L.A. v. United States, 46 Cust. Ct. 723, Reap. Dec. 10033, affirmed sub nom. United States v. Minkap of California, Inc., by Frank P. Dow Co., Inc., of L.A., 48 Cust. Ct. 708, A.R.D. 144. The record in that case was incorporated herein.

The merchandise in the incorporated case was obtained from three sources of supply: Takii & Co., Minomo Seni K. K., and Tokyo Marusangumi Co., Ltd. The merchandise supplied by the first two was appraised on the basis of cost of production and that supplied by the third on the basis of export value.1 It was stipulated that no foreign value existed for such or similar merchandise during the period. Plaintiff claimed that the merchandise procured from the first two suppliers was similar to that supplied by Marusangumi and was duti

1 R59/14153, style No. 602.

able on the basis of export value. The trial court sustained the claim, stating (p. 729):

In the instant case, testimony was given by Mr. Wada that offers were made at certain prices. This evidence was corroborated, insofar as offers to Minkap were concerned, by Mr. Gonick. It was not contradicted by anything in the record. Mr. Wada at the time had been managing director of Tokyo Marusangumi; he had visited firms in this country to solicit business; he stated positively that he had offered the merchandise to various firms at named prices which did not vary because of quantity.

On review, this division also sustained the claim. United States v. Minkap of California, Inc., by Frank P. Dow Co., Inc., of L.A., supra. The court stated (pp. 712-713):

In this case, there is before us the uncontradicted testimony of a qualified witness, who was competent, through experience as managing director of a Japanese manufacturer and exporter, and by personal contact with American importers, to set forth market conditions, as they relate to statutory export value, that control appraisement of the present merchandise. The testimony of the witness, Wada, shows that, during the period in question, he offered sweaters, like those in question, for export to various firms in the United States, at certain prices which did not vary according to the quantity purchased. Corroboration thereof is found in the testimony of a partner of Minkap who stated, with reference to all of the various styles in question, that "We received offers and samples on all the sizes."

At the trial of the instant case, further testimony was taken and the court held that plaintiff had failed to make out a prima facie case. Minkap of California, Inc. v. United States, supra. The court stated that a different evidentiary picture confronted the court from that in the previous cases, in that the witness then was sure of his answers, gave his testimony in a clear and convincing manner, and satisfied the court as to the truth and accuracy of his statements concerning the offerings, but that his later testimony was uncertain and indefinite on essential matters and in derogation of the positive statements he had made. The court said:

*** The end result is that this court is left in a quandry by the testimony as to who, in some instances, the principals were on both sides that were involved in the making and receiving of the alleged sweater offerings, the period of time during which the alleged offers were made, and even the prices at which these offerings were made ***

The court also noted that, instead of the style names and numbers being associated with the Marusangumi sweaters generally, they were confined to the Minkap offerings and that Mr. Wada did not remember the style identification of the other offerings. It also found that the

testimony of plaintiff's rebuttal witnesses was insufficient to establish offerings or prices to others than Minkap.

The resolution of the issue before us requires an examination of both records in order to determine the extent to which the testimony in the first case has been changed, weakened, or repudiated, and whether the facts established now would support a finding of export value.

According to the record, Minkap at and before the period involved herein purchased sweaters from various suppliers in Japan. Its method of doing business was for the designs of sweaters to be drawn, samples made and given to the supplier for counter samples, and the supplier's offer submitted as to price. When Minkap's customer approved, orders were sent to Japan. The styles involved herein were designated by women's names (Alma, Barbara, etc.) or numbers, and sweaters in those styles and the yarn compositions mentioned were sold to Leroy Knitted Sportswear, Inc., the sole customer for ladies' sweaters. Minkap did not sell these styles to anyone else, but the manufacturers were said to be free to sell to others.

Before the period involved herein, Marusangumi had had an exclusive arrangement with Elliot Knitwear Corp., which had terminated about the end of 1956. This arrangement was made by a "gentlemen's agreement" and not a (written) "contract" and was understood by Mr. Wada to apply only as long as the importer continued to buy. At the termination of this arrangement, Mr. Wada made an investigation to find who were the biggest importers in this country; he (or his firm) sent them letters, and in January 1957, he came over to meet them. He listed a number of firms which he said he approached, but at the second hearing he stated that he personally did not meet representatives of all of those firms and he declined to pinpoint dates, stating that he had been here on several occasions and could not recall exactly when he met certain importers. Other testimony corroborates his statements that he visited the United States in 1957 and that he met representatives of some of the firms mentioned. As a result of Mr. Wada's activities, Minkap approached Marusangumi when it needed additional supplies in 1957, sent samples, and received counter samples and offers. Quotations were made and received at the prices stated by Mr. Wada. No purchases were made except for style No. 602 in the Angora and wool blend and No. 600 in the silk and wool blend.

At the original hearing, there were received in evidence exhibits 25 and 26 which Mr. Wada testified his staff made up according to the specifications received from Minkap. Each is made up of sheets, with holes on the left margins, apparently from a ledger, with a name or style number at the top, a drawing of a particular style sweater, measurements for various sizes, a notation of the yarn composition,

samples of buttons, and a price. The drawings and measurements are done by pen and ink. The yarn compositions are in lead pencil. Prices are shown in yen and dollars. Some of the yen figures are in pen and ink. Other yen figures and most of the dollar figures are in pencil. The yen and dollar figures do not reflect a uniform currency conversion rate. The sheet for style 600 has a pen and ink notation reading: "June 1, 1957. Old price $33.99. Revised price $32.35." It seems a reasonable inference that these sheets were not all prepared at the same time; it is reasonable to infer that they were used in Marusangumi's offices in preparing quotations for Minkap. They offer no internal evidence of having any relation to transactions with anyone except Minkap. At the second hearing, Mr. Wada stated that those records showed his firm's selling prices during 1957 for those sweaters, and that they were the prices at which anyone could purchase who cared to buy for exportation to the United States.

According to Mr. Wada, there was no exclusive arrangement with Minkap prohibiting him from offering the same styles to others, and he made offers to all Marusangumi's customers at the Minkap prices. A number of such customers was listed. At the second hearing, Mr. Wada admitted that he did not make all the offers personally; some were made by his staff and reported to him. Some of the offers were oral and some in writing; some were made in Japan and some in the United States. Different style names and numbers were used in making these offers, the names, Alma, etc., being used to Minkap alone.

Of the other witnesses who testified, Herman Gross, president of Elliot Knitwear Corp., stated that he had purchased sweaters from Marusangumi during the period June to December 1957 and that he had been offered sweaters in the blends here involved by Mr. Wada both in Japan and in New York from November 1956 through 1957. He had requested a sample of a sweater in the silk and wool blend but he was not seriously interested in it. The merchandise was not offered by the names Alma, Barbara, etc., but by manufacturer's numbers, and he did not recall the prices.

Mr. Eli E. Albert testified that his firm purchased sweaters from Marusangumi during 1957 and that, from June to December 1957, Mr. Wada had offered sweaters in the silk and wool, and Angora and wool. blends. He did not buy any of the former but did buy some sweaters in the Angora blend. Although he stated that Mr. Wada came to his office frequently, he said that the offers were made to him through the mail. He did not produce any copies of the offers but stated that the Alma sweater was offered at the prices listed in "this" book; that he bought the Alma style in a different blend but it was offered in the silk and wool blend at "the prices listed on these sheets." Counsel for the plaintiff interprets this testimony as referring to exhibits 25 and 26 and, in the absence of other "sheets," we assume it does.

Mr. Lowe of China Consolidated Corp., testified that he had made a verbal agreement with Mr. Wada for exclusive purchasing rights for the west coast with the exception of Minkap but had never been offered sweaters in the silk and wool blend nor any styles in women's names. He admitted he might possibly have been offered those styles

in later years.

Witnesses from other firms to which Mr. Wada testified that he or his firm had offered sweaters in the styles and blends here involved stated that they had no recollection of such offers, although normally such offers would come to their attention.

In the instant case, in order to prevail, plaintiff is required to establish prices at the time of exportation at which sweaters in the styles and yarn composition here involved were freely offered by Marusangumi to all purchasers in the principal markets of Japan in the usual wholesale quantities and in the ordinary course of trade for exportation to the United States.

It is clear, and all parties concede, that Mr. Wada is the key witness. If his testimony does not convince, plaintiff's case must fail. The trial judge said that, in the second trial, Mr. Wada recanted the testimony he had given in the earlier one. (This word "recants" is in the headnote, which by our practice, the court prepares, and which sums up findings and holdings in the text.) It is important to avoid unfairness to an honorable gentleman, a Japanese national and resident, not fluent in English, who appears to have been doing his best to assist the court. The record shows he did not think the interpreter very good at either Japanese or English at the first trial. He read his testimony at the first trial, as transcribed, before he took the stand in the second. Then he pointed out, without evasion or equivocation, that he had found important errors. At the very outset, he volunteered that he had "appeared on behalf of the company, rather than as an individual," at the former trial. One supposes he intended to mean that at the former trial he did not distinguish between his knowledge and that of his company, or between what he did and what other officers or agents of his company did. This ought to have been apparent because at the former trial he repeatedly said "we" when “I” would have been more responsive. It may also mean that his company had an interest in the outcome of the litigation. At any rate, it seems the statement of a man who had been honestly confused about what was required of him in testimony at a trial in a (to him) foreign country. The most striking change not accounted for, thus, is with respect to the period during which he made offers, extended, at the second trial, to 1956-1958, inclusive.

There were conflicts of testimony between Mr. Wada and Mr. Wada, and between Mr. Wada and other witnesses. Judge Richardson had