Joseph Schlitz Brewing Company v. United States

• Decision Date: 20 May 1901
• Docket Number: No. 232,232
• Citation: 181 U.S. 584,45 L.Ed. 1013,21 S.Ct. 740
• Parties: JOSEPH SCHLITZ BREWING COMPANY, Appt. , v. UNITED STATES
• Court: U.S. Supreme Court

181 U.S. 584

21 S.Ct. 740

45 L.Ed. 1013

JOSEPH SCHLITZ BREWING COMPANY, Appt.,

v UNITED STATES.

No. 232.

Argued April 11, 1901.

Decided May 20, 1901.

This was a petition for a drawback upon hops and barley to the amount of $2,371.35, and upon bottles and corks to the amount of $9,817.97, used in the manufacture of bottled beer for export.

The court of claims made a finding of facts, the substance of which is set forth in the margin, and gave judgment for the first item, but rejected the second, and the claimant appealed.

Findings of Fact.

The following are the facts of the case as found by the court:

I. The claimant is a corporation organized under the laws of the state of Wisconsin.

II. Between the 1st day of February, 1893, and the 26th day of October, 1894, the claimant exported from the port of Milwaukee, Wisconsin, bottled beer. The hops, barley, bottles, and corks used in the manufacture of this bottled beer had been imported into the United States from foreign countries, and duties had been paid thereon upon importation. The bottled beer was manufactured by the claimant at Milwaukee, Wisconsin. The imported materials used in the manufacture, when exported, were identified, the quantity of the materials used and the amount of duties paid thereon ascertained, and the fact of the manufacture of the articles in the United States and their exportation were determined under regulations prescribed by the Secretary of the Treasury. The total amount of the duties paid on the materials mentioned so used and exported was $12,189.32, divided as follows: Upon the bottles and corks, $9,817.97; upon the hops and barley, $2,371.35.

III. The Treasury Department has not refused to pay the drawback upon the hops and barley, but such drawback could be paid under the regula- Messrs. Wm. B. King and George A. King for appellant.

Mr. Assistant Attorney General Pradt for appellee

Statement by Mr. Justice Brown:

Mr. Justice Brown delivered the opinion of the court:

This is a claim for a drawback of duties upon certain imported bottles and corks alleged to have been used in the manufacture of bottled beer, subsequently exported.

By § 25 of the tariff act of 1890 (26 Stat. at L. 567, 617, chap. 1244), 'where imported materials on which duties have been paid are used in the manufacture of articles manufactured or produced in the United States, there shall be allowed on the exportation of such articles a drawback equal in amount to the duties paid on the materials used, less one per centum of such duties.' The object of this section is evidently to stimulate domestic manufactures by allowing to the manufacturer a rebate of duties paid upon imported materials used by him in such product.

The theory of the claimant in this connection is that bottled beer is really a different article from ordinary beer, and requires a process of manufacture in which bottles and corks are a material ingredient. Its argument is thus stated in the petition:

'In the manufacture of beer for export it becomes necessary to kill the yeast in the beer in order to prevent second fermentation and consequent ruin of the beer, and, in order to destroy the germs of the yeast, the finished beer must be steamed to the degree necessary to kill such germs, and for that purpose the beer must be inclosed securely in some vessel to prevent the escape of the carbonic acid gas, and of all such vessels a bottle manufactured of glass is the one best adapted for that purpose. Such beer, after being subjected to the process of steaming, is materially different from the beer before being subjected to steaming, and in order to create such different article a closed glass bottle is indispensable, and the bottles and corks, forming a portion of the complete manufactured article known as 'bottled beer,' are, as well as the hops and barley entering into the same, a necessary component part of the article when completed and in a condition ready for export.'

It seems there has been some difference of opinion among the Treasury officials upon this subject, since on March 31, 1886, the then Secretary of the Treasury decided, under a statute similar to the one above cited, that a drawback should be allowed, not only for the hops, rice, and barley used in the manufacture of the beer, but for bottles and corks, and in an official table of drawback duties, published August 17, 1886, bottles and corks imported and used in bottling beer were specifically named as entitled to the benefit of a drawback to the full amount of the duty paid. This ruling remained in force until October 28, 1890, when the assistant secretary decided that imported bottles used in the bottling of fermented liquors made here from domestic grains and hops were not entitled to a drawback under the tariff act of 1890; but, notwithstanding this ruling, it would appear that the drawback continued to be allowed and paid until March 24, 1893, when, in a letter to the collector of customs of New York, the Secretary overruled and rescinded the earlier decisions, and has since refused to allow the drawback.

In our view, the question presents no difficulty whatever. Under the statute, the drawback is allowed only upon 'imported materials . . . used in the manufacture of articles manufactured or produced in the United States,' and subsequently exported. By this is undoubtedly meant...