Hipolite Egg Company v. United States

• Citation: 31 S.Ct. 364,55 L.Ed. 364,220 U.S. 45
• Decision Date: 13 March 1911
• Docket Number: No. 519,519
• Parties: HIPOLITE EGG COMPANY, Claimant of Fifty Cans, More or Less, of Preserved Eggs, Plff. in Err. and Appt., v. UNITED STATES
• Court: United States Supreme Court

220 U.S. 45

31 S.Ct. 364

55 L.Ed. 364

HIPOLITE EGG COMPANY, Claimant of Fifty Cans, More or Less, of Preserved Eggs, Plff. in Err. and Appt.,

v UNITED STATES.

No. 519.

Submitted January 5, 1911.

Decided March 13, 1911.

Messrs. Thomas E. Lannen and Edward T. Fenwick for plaintiff in error and appellant.

[Argument of Counsel from page 46 intentionally omitted] Assistant Attorney General Fowler for defendant in error and appellee.

[Argument of Counsel from pages 47-49 intentionally omitted] Mr. Justice McKenna delivered the opinion of the court:

The case is here on a question of jurisdiction certified by the district court.

On March 11, 1909, the United States instituted libel proceedings under § 10 of the act of Congress of June 30 1906 (34 Stat. at L. 768, chap. 3915, U. S. Comp. Stat. Supp. 1909, p. 1193), against fifty cans of preserved whole eggs, which had been prepared by the Hipolite Egg Company of St. Louis, Missouri.

The eggs, before the shipment alleged in the libel, were stored in a warehouse in St. Louis for about five months, during which time they were the property of Thomas & Clark, an Illinois corporation engaged in the bakery business at Peoria, Illinois.

Thomas & Clark procured the shipment of the eggs to themselves at Peoria, and, upon the receipt of them, placed the shipment in their storeroom in their bakery factory along with other bakery supplies. The eggs were intended for baking purposes, and were not intended for sale in the original unbroken packages or otherwise, and were not so sold. The Hipolite Egg Company appeared as claimant of the eggs, intervened, filed an answer, and defended the case, but did not enter into a stipulation to pay costs.

Upon the close of libellant's evidence, and again at the close of the case, counsel for the egg company moved the court to dismiss the libel on the ground that it appeared from the evidence that the court, as a Federal court, had no jurisdiction to proceed against or confiscate the eggs, because they were not shipped in interstate commerce for sale, within the meaning of § 10 of the food and drugs act, and for the further reason that the evidence showed that the shipment had passed out of interstate commerce before the seizure of the eggs, because it appeared that they had been delivered to Thomas & Clark, and were not intended to be sold by them in the original packages or otherwise.

The motions were overruled and the court proceeded to hear and determine the cause, and entered a decree finding the eggs adulterated, and confiscating them. Costs were assessed against the egg company.

The decree was excepted to on the ground that the court was without jurisdiction in rem over the subject-matter, and on the further ground that the court was without jurisdiction to enter judgment in personam against the egg company for costs.

The jurisdiction of the district court being challenged, the case comes here directly.

Section 2 of the food and drugs act prohibits the introduction into any state or territory from any other state or territory, of any article of food or drugs which is adulterated, and makes it a misdemeanor for any person to ship or deliver for shipment such adulterated article, or who shall receive such shipment, or having received it, shall deliver it in original unbroken packages for pay or otherwise.

In giving a remedy, § 10 provides that if 'any article of food . . . that is adulterated . . . and is being transported from one state . . . to another, for sale, or having been transported, remains unloaded, unsold, or in original unbroken packages, . . . shall be liable to be proceeded against in any district court of the United States within the district where the same is found, and seized for confiscation by a process of libel for condemnation. . . . The proceedings of such libel cases shall conform, as near as may be, to the proceedings in admiralty . . . and all such proceedings shall be at the suit of and in the name of the United States.'

The shipment to Thomas & Clark consisted of 130 separate cans, each can corked and sealed with wax. The eggs were intended to be used for baking purposes. The only can sold was that sold to the inspector for the purpose of having the eggs analyzed. They contained approximately two per cent of boric acid, which the court found was a deleterious ingredient, and adjudged that they were adulterated within the meaning of the food and drugs act of June 30, 1906 (34 Stat. at L. 771, chap. 3915, U. S. Comp. Stat. Supp. 1909, p. 1187).

The egg company, whilst not contending that the shipment of the eggs was not a violation of § 2 of the act, and a misdemeanor within its terms, and not denying the power of Congress to enact it, presents three contentions: (1) Section 10 of the food and drugs act does not apply to an article of food which has not been shipped for sale, but which has been shipped solely for use as raw material in the manufacture of some other product. (2) A United States district court has no jurisdiction to proceed in rem under § 10 against goods that have passed out of interstate commerce before the proceeding in rem was commenced. (3) The court had no jurisdiction to enter a personal judgment against the egg company for costs.

It may be said at the outset of these contentions that they insist that the remedies provided by the statute are not coextensive with its prohibitions, and hence that it has virtually defined the wrong, and provided no adequate means of punishing the wrong when committed. Premising this much, we proceed to their consideration in the order in which they have been presented. The following cases are cited to sustain the first contention: United States v. Sixty-five Casks of Liquid Extracts, 170 Fed. 449, affirmed by the circuit court of appeals in United States v. Knowlton Danderine Co. 99 C. C. A. 667, 175 Fed. 1022, and United States v. Forty-six Packages & Bags of Sugar, in the district court for the Southern district of Ohio, 183 Fed. 642.

The articles involved in the first case were charged with having been misbranded, and consisted of drugs in casks, which were shipped from Detroit, Michigan, to Wheeling, West Virginia, there to be received by the Knowlton Danderine Company in bulk in car-load lots, and manufactured into danderine, of which no sale was to be made until the casks should be emptied and the contents placed in properly marked bottles.

It was contended that the articles, not having been shipped in the casks for the purpose of sale thus in bulk but shipped to the owner from one state to another, for the purpose of being bottled into small packages suitable for sale, and when so bottled to be labeled in compliance with the requirements of the act, were not transported for sale, and were therefore not subject to libel under § 10 of the act.

The contention submitted to the court the construction of the statute. The court, however, based its decision upon the want of power in Congress to prohibit one from manufacturing a product in a state and removing it to another state 'for the purpose of personal use, and not sale, or for use in connection with the manufacture of other articles, to be legally branded when so manufactured;' and concluded independently, or as construing the statute, that the danderine company, being the owner of the property, shipped it to itself, and did not come within any of the prohibitions of the statute. The case was affirmed by the circuit court of appeals (99 C. C. A. 667, 175 Fed. 1022). The court, however, expressed no opinion as to the power of Congress. It decided that the facts did not exhibit a case within the purpose of the statute, saying: 'No attempt to evade the law, either directly, indirectly, or by subterfuge, has been shown, it appearing that the manufacturer had simply transferred from one point to another the product he was manufacturing, for the purpose of completing the preparation of the same for the market. Under the circumstances disclosed in this case, having in mind the object of the Congress in enacting the law involved, we do not think the liquid extracts proceeded against should be forfeited. Reaching this conclusion, we do not find it necessary to consider other questions discussed by counsel and referred to in the opinion of the court below.'

In United States v. Forty-six Packages & Bags of Sugar, the court construed the statute as applying only to transportation for the purpose of sale. To explain its view the court said: 'Following the words 'having been transported' is an ellipse,—an omission of words necessary to the complete contruction of the sentence. Those words are found in the preceding part of the section, and, when supplied, the clause under which this libel is filed reads and means, 'any article of food, drug, or liquor that is adulterated or misbranded within the meaning of this act, having been transported from one state . . . to another for sale [italics ours], remains unloaded, unsold, or in original, unbroken packages, . . . shall be liable," etc. And the court was of opinion that this view was in accord with the other two cases which we have cited. This may be disputed. It may well be considered that there is no analogy between an article in the hands of its owner, or moved from one place to another by him, to be used in the manufacture of articles subject to the statute, and to be branded in compliance with it, and an adulterated article itself the subject of sale, and intended to be used as adulterated, in contravention of the purpose of the statute.

A legal analogy might be insisted upon if cakes and cookies, which are the compounds of eggs and flour which the record presents, could be branded to apprise of their ingredients like compounds of alcohol. The object of the law is to keep adulterated articles out of the channels of interstate commerce, or, if they enter such commerce, to condemn them while being transported or when they have reached their...