Anderson v. Newhall

• Decision Date: 10 March 1908
• Docket Number: 146.
• Citation: 161 F. 906
• Parties: ANDERSON v. NEWHALL.
• Court: U.S. Court of Appeals — Second Circuit

161 F. 906

ANDERSON v. NEWHALL.

No. 146.

United States Court of Appeals, Second Circuit.

March 10, 1908

These proceedings were brought in behalf of Charles W. Anderson United States internal revenue collector for the Second district of New York, plaintiff in error and defendant below against E. Harold Newhall, defendant in error and plaintiff below. The case involves the following provisions of law:

'That on and after the passage of this act, all merchandise coming into the United States from Porto Rico * * * shall be entered at the several ports of entry upon payment of fifteen per centum of the duties which are required to be levied * * * upon like articles of merchandise imported from foreign countries; and in addition thereto, upon articles of Porto Rican manufacture coming into the United States and withdrawn for consumption or sale upon payment of a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture. ' Extract from Foraker Act April 12, 1900, c. 191, Sec. 3, 31 Stat. 77.

'Distilled spirits, spirits, alcohol, and alcoholic spirit, within the true intent and meaning of this act, is that substance known as ethyl alcohol, * * * including all dilutions and mixtures of this substance. ' Extract from section 3248, Rev. St. (U.S. Comp. St. 1901, p. 2107).

'There shall be levied and collected on all distilled spirits on which the tax prescribed by law has been paid, a tax of seventy cents on each proof gallon. ' Extract from section 3251, Rev. St. (U.S. Comp. St. 1901, p. 2108).

'All products of distillation, by whatever name known, which contain distilled spirits or alcohol, on which the tax imposed by law has not been paid, shall be considered and taxed as distilled spirits. ' Section 3254, Rev. St. (U.S. Comp. St. 1901, p. 2111).

The opinion filed by the court below reads as follows:

HOUGH, District Judge. It is provided by the act of April 12, 1900, c. 191, Sec. 3, 31 Stat. 77, commonly known as the 'Foraker Bill,' that 'upon articles of merchandise of Porto Rican manufacture (there shall be assessed) a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture. ' The plaintiff, having imported from Porto Rico certain bay rum, has been compelled, after due protest, to pay a tax, not upon the bay rum, but upon the alcohol therein contained, the Treasury Department holding that, while no 'internal revenue tax is imposed on bay rum as such, a tax is imposed upon the spirits therein contained. ' Int. Rev. Dec. 404, of 1901. The statutes imposing the tax here in question are asserted to be Rev. St. Sec. 3248 (U.S. Comp. St. 1901, p. 2107), and section 48 of chapter 349 of Act Aug. 27, 1894, 28 Stat. 563 (U.S. Comp. St. 1901, p. 2109), amending Rev. St. Sec. 3251 (U.S. comp. St. 1901, p. 2108). It being admitted that there is no internal revenue tax upon bay rum as such, and that bay rum is an article of merchandise, and also a manufactured article of merchandise, it appears to me that the plain language of the Foraker bill requires a direction in favor of the plaintiff.

The act first above quoted from is the last statute on the subject, and what it plainly requires must be observed. It may be true that it was the purpose of that act to produce equality between American and Porto Rican producers; but, if apt words have not been used for that purpose, the assumed existence of the purpose furnishes no reason for straining the meaning of the words that were employed. The words are to be taken not only in their plain, but in their commercial, meaning; and it is not to be doubted that when a merchant speaks of bay rum he means a thing which is commercially wholly different from the 'distilled spirits, spirits, alcohol and alcoholic spirits' attempted to be defined by Rev. St. Sec. 3248. It follows that as there is no internal revenue in the United States upon bay rum as 'bay rum,' there is no tax upon the like article when of Porto Rican manufacture, and imported into the United States from that island.

Turning to the contention of the defendant, I cannot agree that bay rum is either a dilution or a mixture of distilled spirits, within the meaning of section 3248. If it is, it would follow that a long list of other articles commercially known by distinctive names should be regarded as 'mixtures' of distilled spirits because liquor in some form is found in them.

As to section 3251 as amended, the operative words are that 'there shall be levied * * * on distilled spirits that * * * may be * * * produced in the United States' a certain tax. It is certainly straining this statute to make it...