United States v. Eleven Thousand One Hundred and Fifty Pounds of Butter

• Decision Date: 17 April 1912
• Docket Number: 3,679.
• Citation: 195 F. 657
• Parties: UNITED STATES v. ELEVEN THOUSAND ONE HUNDRED AND FIFTY POUNDS OF BUTTER (MILTON DAIRY CO., Claimant).
• Court: U.S. Court of Appeals — Eighth Circuit

195 F. 657

UNITED STATES v. ELEVEN THOUSAND ONE HUNDRED AND FIFTY POUNDS OF BUTTER (MILTON DAIRY CO., Claimant).

No. 3,679.

United States Court of Appeals, Eighth Circuit.

April 17, 1912

(Syllabus by the Court.)

The intention of Congress in enacting and the true construction of the clause 'any butter in the manufacture or manipulation of which any process or material is used with intent or effect of causing the absorption of abnormal quantities of water, milk or cream,' in Act of May 9 1902, c. 784, Sec. 4, 32 Stat. 194, 195 (U.S. Comp. St. Supp. 1911, p. 969), is to bring butter containing an abnormal quantity of water, milk, or cream into the class of adulterated butter and to subject it to forfeiture, and its manufacturer to the fines and penalties denounced for a violation of the regulations therein concerning adulterated butter when, and when only, some process or material is used in its manufacture or manipulation, with the intent or effect of introducing into the butter, by absorption, an abnormal quantity of water, milk, or cream.

The presence in butter of an abnormal quantity of moisture does not make it 'adulterated butter' under this act.

Proof of the presence of an abnormal quantity of moisture in butter and of a removal of the butter without a compliance with the regulations concerning the taxing and branding of 'adulterated butter' is insufficient to bring such butter within the class of adulterated butter or to sustain its forfeiture as such.

The true construction of the regulation of the Secretary of the Treasury, to the effect that butter having 16 per cent. or more of moisture contains an abnormal quantity and is classed as adulterated butter under the clause of the act quoted above, is that it merely defines and fixes the measure of an abnormal quantity of moisture in the butter under this clause.

The regulation so construed is void because, while the Secretary and his subordinates had authority to investigate each case and to decide, for administration purposes in the light of the facts and circumstances of the particular case, whether or not the butter involved therein was adulterated butter and taxable as such, they had neither express nor implied authority by a general regulation to give an authoritative and final definition of the terms, or such a construction of the statute, which should govern all future cases.

If, on the other hand, the correct interpretation of this regulation is, as counsel for the government claims, that it makes all butter which contains 16 per cent. or more, or an abnormal quantity, of moisture 'adulterated butter,' whether the abnormal quantity was introduced into the butter by the use of some process or material with intent or effect of causing it to be absorbed by the butter or not, then the rule is unauthorized and void, because it has the effect to subject classes of property to forfeiture, and classes of persons to fines and penalties, that are excluded therefrom by the plain terms of the law.

Implied authority in an executive officer or department to repeal extend, or modify an act of Congress may not be inferred from legislative authority to enforce it.

And a regulation of such an officer, or department, made under legislative authority to make rules to enforce an act of Congress which has the effect to subject classes of property to forfeiture, and classes of persons to fines and penalties under the act, that are excluded therefrom by the terms of the statute, is unauthorized and void.

The definition of offenses, the classification of offenders, and the prescription of the punishment they shall suffer, are legislative and not executive functions.

Violations of regulations of an executive officer, which are not in themselves violations of any legislative act or common law are not criminal, in the absence of a previous legislative act prescribing a punishment therefor, and neither forfeitures, fines, nor penalties may be prescribed, imposed or inflicted therefor, either by executive officers, or by courts.

Charles C. Houpt, U.S. Atty.

W. H. Lightner (Lightner & Young, on the brief), for defendant in error.

Before SANBORN, ADAMS, and CARLAND, Circuit Judges.

SANBORN Circuit Judge.

This writ of error questions a judgment of dismissal of a bill of information filed by the United States to forfeit 11,150 pounds of butter claimed by the Milton Dairy Company, a corporation. There was a trial by a jury, and at the close of the evidence the court dismissed the suit on the grounds that the evidence failed to sustain the libelant's cause of action and that a certain regulation of the Secretary of the Treasury was unauthorized under the law.

Was there any substantial evidence to sustain a verdict for the libelant if the regulation challenged had been duly authorized? The Act of Congress approved May 9, 1902, 32 Stat.c. 784, Sec. 4, pp. 194, 195, defines butter to mean 'the food product usually known as butter and which is made exclusively from milk or cream, or both, with or without common salt, and with or without additional coloring matter. Act August 2, 1886, 24 Stat.c. 840, Sec. 1, p. 209 (U.S. Comp. St. 1901, p. 2228). It then declares that:

'Adulterated butter is hereby defined to mean a grade of butter produced by mixing, reworking, rechurning in milk or cream, refining, or in any way producing a uniform, purified or improved product from different lots or parcels of melted or unmelted butter, or butter fat, in which any acid, alkali, chemical or any substance whatever is introduced or used, for the purpose or with the effect of deodorizing, or removing therefrom, rancidity, or any butter or butter fat with which there is mixed any substance foreign to butter, as herein defined, with intent or effect of cheapening in cost the product, or any butter in the manufacture or manipulation of which any process or material is used, with intent or effect of causing the absorption of abnormal quantities of water, milk, or cream.'

And it imposes a special tax on such butter and on the business of making it, requires it to be stamped and branded, and prescribes drastic penalties, one of which is the forfeiture of the product, for the failure of the manufacturer to pay these taxes, and for removing the butter, or causing it to be removed, without paying the taxes upon it and stamping and branding it.

The charge in the libel against this butter was 'that in the manufacture and manipulation of said butter the process adopted by the said Milton Dairy Company, the manufacturer thereof, had the effect of causing the absorption and incorporation therein of an abnormal quantity of water, that is to say, that the moisture content of said butter was then and there in excess of 16 per cent., contrary to said act of Congress and the rules and regulations of the Secretary of the Treasury, made and promulgated pursuant to the said act'; that the manufacturer had not paid the special taxes upon it as adulterated butter and was removing it without stamping it or branding it as such. The answer was a denial that any process or material had been used in the manufacture or manipulation of this butter with the intent or effect of causing the incorporation or absorption by it of an abnormal quantity of water, milk, or cream, and an averment that it had been made without the use of any such process and that it was not subject to the taxes and regulations imposed upon adulterated butter. The regulation of the Commissioner of Internal Revenue approved by the Secretary of the Treasury, upon which the libelant relies in this case, was made soon after the passage of the act of 1902, and it reads in this way:

'The definition of adulterated butter as contained in the Act of May 9, 1902, embraces butter in the manufacture of which any process or material is used whereby the product is made to 'contain abnormal quantities of water, milk or cream,' but the normal content of moisture permissible is not fixed by the act. This being the case it becomes necessary to adopt a standard for moisture in butter which shall in effect represent the normal quantity. It is therefore held that butter having 16 per cent. or more of moisture contains an abnormal quantity and is classed as adulterated butter.'

In this state of the law and the regulation the libelant introduced evidence tending to prove that the butter here in controversy contained more than 16 per cent. of moisture and rested. It presented no evidence that any process or material was used in the manufacture or manipulation of the butter with the intent or effect of causing the absorption thereby of abnormal quantities of water, milk, or cream. Was this proof sufficient to charge the butter with the special taxes as adulterated butter and the manufacturer with the drastic penalties denounced for the failure to pay it?

The customary and lawful process of making butter from milk or cream, or both, was, when the act of 1902 was passed, and has ever since been, a process of elimination of some, but not all, of the moisture from the milk, cream, and butter. The milk and cream from which moisture is expelled in order to produce butter is a liquid before the process is applied. When the butter commences to appear in the course of its manufacture, it contains much more than 16 per cent. of moisture, and, when the lawful process has been completed, it is common knowledge that much of the butter produced thereby still contains a larger moisture content than 16 per cent. But butter produced by this simple process of the elimination of moisture which retains more than 16 per cent. of its original water, milk, or cream, is not butter which has been caused to absorb an abnormal quantity of those substances by any process or material...