UNITED STATES V. lJEAN LINSEED-OIL CO.
In re THOMAS. (Circuit Court of Appeals, Sixth Circuit. No. 522.
OLEOMARGARINE-USE IN NATIONAL SOLDIERS' HOME-REGULATION BY STATE.
April fI, 1898.)
The governor of the Soldiers' Home at Dayton, Ohio, in serving to the Inmates as food oleomargarine furnished by the government, is not subject to the law of the state prescribing the manner in which oleomargarine shall be used in eating houses. The legislature having no power to regulate the conduct of such institution, the statute is to be construed as not applying thereto.
Appeal from the Circuit Court of the United States for the Western Division of the Southern District of Ohio. This was an application by J. B. Thomas, governor of the Soldiers' Home at Dayton, Ohio, for a writ of habeas corpus to release him from imprisonment under state process for alleged violation of the state statutes in serving to the inmates of the Home oleomargarine, without first complying with the state regulations in that regard. The petitioner was discharged by the circuit court (82 Fed. 304), and the present appeal was taken from its order. C. B. Bosler and D. L. Sleeper, for appellant. Judson Harmon and D. W. Bowman, for appellee. Before LURTON, Circuit Judge, and SEVERENS and CLARK, District Judges. PER CURIAM. The facts of this case are stated in the opinion of Taft, circuit judge, who heard the case in the court below. His opinion is reported in 82 Fed. 304. With respect to the question of law involved, we concur in the reasoning upon which Judge Taft's opinion proceeds (and which we are content to adopt as our own), and in the conclusion which he reached, save that we prefer to rest our approval of the order made by the court below upon the ground that, inasmuch as the legislature of Ohio had no power to regulate the conduct of this administrative agency of the national government by such a statute as is here in question, it ought to be presumed that the legislature did not intend it to have such an application, and that the statute should be construed ly. The order of the court below is affirmed, with costs.
UNITED STATES v. DEAN LINSEED-DIL CO. (Circult Court of Appeals, Second CircUit. No. 57. 1.
APJ:1l 7, 1898.)
Where linseed, on which a duty of 20 cents per bushel had been paid, was manufactured Into 011 and oil cake, and the 011 exported, the drawback, under section 22 of the act of August 27, 1894, should be computed In proportion to the value which the 011 cake bears to the oU, and not in proportion to the weight which the exported oU cake bears to the weight of the imported . linseed. 78 Fed. 467, reversed.
87· FEDERAL REPORTER.
Linseed-oll cake, manufactured from Imported linseed, Is not waste, but Is a manufactured article, and was therefore entitled to the drawback provided by section 22 of the act of August 27, 1894 (28 Stat. 551). Wallace, Circuit Judge, dissenting,
In Error to the Circuit Court of the United States for the Eastern District York.' ,
This iSllmlt of error torevlewa'judgment of the cirCuit court for the Eastern district of' New York 1n an action against the United States, which was brought under the provisions of section 30f the act of March 3, 1887 (24 Stat. 505), known as the "Tucl,er Act." The material facts found by the circuit court are o,sfollo)Vs: In December, the, Dean I,inseep,-Oil Company, the petitIoner, impotfedlnto the United States 11,944 bushels of linseed, or f1lLxseed, of 56 pounds each, and In that month,and in January, 1895, 23,704 other bushels imported into the United States, partly of linseed, of 56 pounds per bushel, by the petltioneraJ;ld partly by Qtherpersons, who transferred and delivered the same to the petitioner; and upon these Importations the statutory duty of 20 cents 'per bushel'was duly paid. 'Thereafter the petitioner, which Is a corporation for the manufacture of products, from linseed, manufactured said linseed Into all, and the by-product known as, "011 cake," by the following process: The sl1ed wa,s crushed, ,PY passed through Iron rollers. The crushed seed was conveyed to a. mll,cplne clllle,d a "mulling machine." In that machine, heated steam was Introdueed,'and th'e pressed seed was subjected to the mulling process; that Is, It was constantl,ystlrred, by revolving wheels. The, process was con· tinued until the crushed seed was SOftened and heated and moistened to a certain extent. It was then placed In s'creens of duck cloth; one screen being placed above the other, and duck cloths over each screen, when filled. These screens were fitted into an hydraUlic press, and the arrangemimt was such that by means of the hydraulic press the oil was pressed, and ran out Into troughs or vessels, and was thence conveyed to tanks, where it was allowed to settle. What remaIned In the press was the 011 cake, one cake being the result of the pressure of each ,ot, these screens to the form,. The edges of the cake were trimmed. It was then piled or corded, 110 that It might dry. out, and It was then placed 111. bRill, which were proP,erly marked, and It was then ready to be used. The all product, after settling, was barreled, and was ready for use. Of the matter composing each busbel of seed, weighing 56 pounds, 35,87 pounds nppeared In the cake, and 19.91 pounds appeared In the all. The treasury regu-lations of March 29, 1895, state,(and the accuracy of the statement seems to be conceded) that the average value of imported oil seed Is '$1.62 per bushel of POVnds, andtliat from a bushel of linseed 2.654 gallons of all are obtained. The value ot the 011 cake exported' by the petitioners was about $21 per ton of poundS, and the value of the IlJiseed Qllextracted from the Imported seed was 52 cents Pel' ,gallon. lj'rom a bushel of linseed, 35.87 pounds atoll cake are obtained., Therel1-fter the to England' the cake made from said different and presented to the collector of customs at 'New York a claim or "clalms for the drawback alleged to be allowed by law on the cake so exported. All the requirements Imposed either by the statute or by the regulations of the secretary of the treasury were complied with. Section 22 of the tariff actQ;f August 27, 1894 (28 Stat. 551), provides as tallows: "Where imported material' on *hlch duties have been paid are used .In the manufacture or produced I,n the United there shall be allowed of articles on the exportafiOli O'f'Such articles' a ilrawback equal In amolint to the duties paid on the materials used, less one of such duties." A similar section first appeared in section 4 of the act of August 5, 1861 (12 Stat. 293), and 'JUs section. 301.9 ,of the Ilevised Statutes, aDd was contained In the tariff act of 1890; but I,n,' the tariff July 14, 1870 (16 Stat. 263), It was provided, in ,the par!igra;Ph)mposln$ i1'dutyqponllilseed. that no drawback should be allowed on 011 cake 'liiade from Imported' seed;, and this proviso was continued In the paragrapho( 'ea<)h tarift' ,. aCt. Miich imposed a duty 'uponlll1seed, untll the act of 18M, In :\vas' omitted;! The 'circuit court found that the number ot articles affected by the construction of the drawbacks, where sev-
UNITED S'l'ATESV. DEAN LINSEE.D-OIL CO.
era1 artjcleS are manufactured from one imported Is very great; that among them are castor oil and castor pomace, tin plate, locomotives, glass, wire, refined sugar, and syrup which comes from imported raw sugar and refined sugar, and syrup which comes from Imported molasses, articles mauufactured from tin plate, and articles manufactured from wool, and cleaned 'rice manufactured from 'uncleaned rice, and bags made from Imported material. From August 5, 1861, down to the present time, the practice of the treasury department, where several articles were manufactured from the same Imported material, has always been to calculate and to pay the drawback by distributing the duty paid on the imported material between such articles in proportion to their values, and not In proportion to their weights, as well where the Imported material paid a specific as where it paid an ad valorem duty. Such calculation and payment have been under treasury regulations. This question was established after investigation, in 1861, Into the values of the various products of raw sugar, of linseed, aud of other Imported articles. After the provision of the act of 1894, by which a drawback upon oil cake was no longer prohibited, the treasury department issued a regulation, dated March 29, 1896, which instructed collectors to act in accordance with the general practice, and, taking the portion of the· imported seed resulting in the 011 cake at 35.87 pounds per bushel, and first ascertaining the value of such cake, to calculate the drawback as being such proportion (less 1 per cent.) of the duty paid on the seed as the value of the oil cake was to the value of the oil and oil cake. The collector estimated, in accordance with these instructions, the amount of drawback which was due to the petitioner, and found the aggregate to be $1,498.46, and tendered to the petitioner debenture certificates for that amount, which It did not accept. If the drawback should be computed in proportion to weights, the aggregate upon the oil cake would be $4,521.07. The petition was brought to recover that sum, and judgment was rendered in Its favor for that amount.
James Byrne and Robert H. Roy, for the United States. S. B. Clarke and Elihu Root, for defendant in error. Before WALLACE,LACOMBE, and SHIPMAN, Circuit Judges. SHIPMAN, Oircuit Judge (after stating the facts as above), The im· mediate question in this case is, shall the total drawback, less the 1 percent. retained by the government, be divided between the oil and the oil cake in proportion to their weight or their value? Inasmuch as the duty is imposed by weight, the petitioner contends that the drawback shall be divided by weight. The decision depends upon the construction which shall be given to a general statute which has a very large class of articles within its scope, and therefore is an important statute both to the manufacturer and to the government. 'When an imported material, upon which duties have been paid, is manufactured into two separate products, the statute is silent as to the proportion in which the drawback shall be divided among the respective products. A court, therefore, is permitted to adopt the construction of the statute or the method of division which shall seem to it the most reasonable and just, and therefore the one most in accordance with the probable intention of the legislation. It will be seen, by a glance at the list of articles heretofore given which are affected by the statute in regard to drawback, that, from many imported articles upon which duties are paid by weight, two or more products of different values are manufactured, and that the principal product, and the one of chief value, is often light in weight, while the secondary or byproduct is bulky, but cheap. This is noticeable in the products from the castor bean, from sugar, and· from tin plate. From a
81 FEDERAL REPORTER.
bushel of linseed, 2:6 gallons of oil are produced, which used 19.91 pounds of the alld are worth at least $1.36, while 35.87 pounds appeared in, the by-product of cake, wllich is worth a fraction over 1 cent .per pound; If the duty of 20. cents per is divided according to weight, each pound wi:ll pay 5/14 of a cent, and and bulky secondary product will receive a drflwback far disproportionate to its value. This seems uureasonable,andthere is also a lack of equity. towards the government, in compelling it to return a drawback by the pound upon an article which sells at $21 by the ton. The purpose of the drawback provision is to. make "duty free imports which are manufactured here and then returned" to some foreign country. Campbell v. D. S., 107 U. S. 407, 2 Sup. Ct. 759. The manufacturer from imported sf!ed, who sells his linseed oil in this country, and exports his oil cake, if he receives his ciflpyback on the oil cake by weight, receives an unreasonably large amount of return duty, as between the oil whicli he 'sells in this country and the oil cake which he exports. He keeps in thiecountry the valuable part of his imported article, he part, and receives about 18/20 of the duty. The same lack of;equity would show itself in the case of each by-product throughout the list of manufactured articles which are entitled to be. a drawback. The uniform practice of the treasury department,since 1861, has been, where several articles were manufactured from the' same imported material, to .pay the drawback by distributing the duty paid 'between the manufactured articles in proportion to their values, whether the original duty was specific or ad valorem. It is true that the drawback on oil cake' did not exist between 1870 and 1894,but' the general statute existed, and was applicable to a large number of mannfactured articles. The importance of adherence to a long-continued and reasonable construction, of a statute by the officers of the department whose- duty it has been to execute it, when the statute is of an ambiguous character, has been frequently commented upon.by the supreme conrt ever since the case of Edwards v. Darby, 12 Wheat. 206, hl 'which the court said:
"In the construction of a doubtful and ambiguons law, the contemporaneous construction of those who were called upon to act under the law, and were appointed to carry Its provIsions Into effect, Is entitled to veO' great respect."
The uniform construction of (th>e treasury department seems to usreasonable,and equitable to the importer and the government. The government makes the point that the petitioner is not entitled to any drawback,becanse oil cake is not a manufactured article, but is wa.ste. The supreme court, in. Campbellv. D.· S., supra,which was anractionto.recovei.' drawback upon linseed-oil cake, proceeded in their opinion upon the undisputed theory that it was a mamttactured article; and it has been recognized as such by the treasury department from 1861, whenever it was not withdrawn by legislation from the statute in regard to the drawback. The article is a different thing from the tobacco scraps or tobacco clippings, which in Seeberger v. Castro, 153 D. S. 32, 14 Sup. Ct. 766, wele held ,not to be a manufactured article; not being fit for
COFFMAN, V. CAS'fNEB.
nse in the condition in which they were imported, except for a new manufacture. The petitioner is therefore entitled to the amount found due by the collector, viz. $1,498.46. The judgment of the circuit court is reversed, and the case is remanded to that court, with instructions to enter a new judgment for the petitioner in accordance with this opinion, and for the costs permitted by the act of March 3, 1887.
(April 20, 1898.)
WALLACE, Circuit Judge (dissenting). I am unable to concur in the judgment in this cause. Imported 'materials, viz. "linseed," were used in the production here of two manufactured articles, viz. linseed oil and oil cake. The plaintiff, upon exporting the oil cake produced from a given number of pounds of the imported linseed, was entitled to a drawback, under the provisions of section 22 of the act of congress of August 27, 1894, which provides as follows:
"Where ,Imported materials, on which duties have been paid, are used in the manufacture of articles manufactnred 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."
Upon 'the linseed used in the oil cake the plaintiff had paid a duty of 20 per cent. for every 56 pounds, amounting to $4,521.09. According to the judgment of the court, the plaintiff is entitled to a drawback of only about 6 per cent. for every 56 pounds, amounting to $1,498,46;(upon the theory that it is to be allowed, not upon the number of pounds of the linseed used in the oil cake, but pursuant to a mathematical formula adopted by the treasury department. The statute gives no sanction for such a mode of computing the drawback. The only inquiry which it permits is as to the quantity of the imported material in the exported article and the duty originally paid thereon. The mathematical formula which has been applied cannot possibly lead to a result which satisfies the statute. It is true that between 1861 and 1870, while a similar statute was in force, it was the usage of the officers of the treasury department to compute the drawback according to this formula, but the case is not one for the application of the rule that where a statute is ambiguous the practical interpretation given by the executive officers charged with its administration is entitled to great weight. The statute is not ambiguous, but is as plain as language can make it. In my opinion the judgment of the court below was correct, and should be affirmed.
COFFMAN v. CASTNER et at (Circuit Court of Appeals, Fourth Circuit. May 8, 1898.1 No. 23l.
TRADE-MARKS AND TnADE· N Alims-GEOGRAPIIJCAL
No one has; or can acquire, the exclusive right to use the name "Pocahontas." as descriptive of either the locality or character of coal mined In wh:iUS !mown as the "Great Pocahontas Coal Field of Virginia and West Virginia," but all producers of coal in that section have the right to so Hehealing denied Ma;r 111, 1898.
N AME'll-R POC'AHON'rA8 COAL. ·