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The record abundantly sustains the contention of the importers that cod oil is commonly used for stuffing or dressing leather. Indeed, but a small fraction of it is used in the arts for any other purposes. But "common use" or "predominant use" is not the only qualification. The oil must also be one "fit only" for the enumerated uses. It matters not that some other article is better fitted and more frequently used for the nonenumerated use, so long as cod oil is fit for such use. The evidence shows that it is fit, inter alia, for the manufacture of blacking, and has been so used to a substantial extent. This fact would remove cod oil from the designation of the main clause in the paragraph; but, if the evidence on that branch of the case were less persuasive than it is, we are still of the opinion that cod oil is not covered by the paragraph, being within the exception. The testimony as to commercial designation is voluminous, the importers undertaking to sustain the proposition that the words "fish oils" had a commercial designation which so restricted the class of articles they covered as to exclude cod oil. The witnesses are not entirely in accord, but the phraseology of the tariff indicates quite plainly the meaning which congress gave to those words, which must be assumed to have the same meaning in both paragraphs of the same act. One of the witnesses for appellant (a dealer in oils) indicated the use of the phrase in common speech:

"Any man who is not in the oil trade will say every oil that is made from the fish would be called 'fish oil,' though commercially different designations are used to distinguish one oil from the other."

Now, it seems quite clear that congress used the words "fish oils" in the sense in which they are used in common speech. Paragraph 42 provides for "seal, herring, whale, and other fish oil." Evidently these words are not used with technical precision; for neither the seal nor the whale is a fish, and therefore oil made from them, or from any part of them, is not technically fish oil. Nor are the words used with a close appreciation of commercial distinctions; for, if the evidence in this case be held sufficient to establish the proposition that cod oil is not known to the trade as a "fish oil," it is equally sufficient to establish the proposition that neither seal oil nor whale oil is fish oil in trade; but congress understood at least whale oil to be a fish oil, and therefore used the phrase "seal, herring, whale and other fish oil."

The decision of the circuit court is affirmed.

(113 Fed. 244.)


(Circuit Court of Appeals, Third Circuit. January 13, 1902.)

No. 17.

1. INTERNAL REVENUE-WAR REVENUE ACT OF 1898-CONSTITUTIONALITY. Section 27 of the war revenue act of 1898, imposing a tax upon the gross receipts of refiners of oil and sugar, held constitutional.


Under section 27 of the war revenue act of 1898, which imposes an excise tax "on the gross amount of all receipts" of sugar refiners "in

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their business" in excess of $250,000 annually, rentals from wharves owned by a c rporation organized for and engaged in the business of sugar refining, and used as a necessary adjunct to said business, are receipts in the business, to be included in computing its gross income for the purpose of such tax.


Interest received by such company on corporate funds deposited or invested for the time being, while not in use, is also a part of its receipts in the business, and subject to the tax.


War Revenue Act 1898, § 27, which provides that every person, company, etc., doing the business of refining petroleum or sugar, or owning a pipe line, whose gross annual receipts exceed $250,000, “shall be subject to pay annually a special excise tax" on the amount of their gross receipts in excess of said sum, and which further provides that a true and accurate return of the amount of gross receipts as aforesaid shall be made and rendered monthly by such persons or companies, requires the payment of such tax annually, and on annual receipts; and a regulation of the commissioner requiring the assessment and collection of the tax monthly, on the monthly returns, is unauthorized.

Gray, Circuit Judge, dissenting in part.

In Error to the Circuit Court of the United States for the Eastern District of Pennsylvania.

John G. Johnson, for plaintiff in error.

J. W. Thompson and James B. Holland, for defendant in error.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.

DALLAS, Circuit Judge. The plaintiff below (and here) is a corporation erected under the law of Pennsylvania for the purpose "of refining sugar, which will involve the buying of the raw material therefor and selling the manufactured products, and of doing whatever else should be incidental to the said business of refining." The defendant is the collector of internal revenue for the First district of Pennsylvania. The action was brought to recover certain sums of money which he had exacted under section 27 of the war revenue act of 1898, and which the plaintiff had paid under protest. That section is as follows:

"That every person, firm, corporation, or company carrying on or doing the business of refining petroleum, or refining sugar, or owning or controlling any pipe line for transporting oil or other products, whose gross annual receipts exceed $250,000, shall be subject to pay annually a special excise tax equivalent to one quarter of one per centum on the gross amount of all receipts of such persons, firms, corporations, and companies in their respective business in excess of said sum of $250,000. And a true and accurate return of the amount of gross receipts as aforesaid shall be made and rendered monthly by each of such associations, corporations, companies, or persons to the collector of the district in which any such association, corporation or company may be located, or in which such person has his place of business."

The parties agreed upon a special verdict, the material portions of which are set out in the opinion of the court below (109 Fed. 76), and need not be here repeated.

1. The first and most important question raised by the assignment of errors is whether the above section is unconstitutional. This question, however, the learned judge of the circuit court declined

to discuss, because "the present suit is a test case, destined for the supreme court of the United States"; and for the same reason we also refrain from discussing it, and deem it expedient to merely state our affirmance of the constitutionality of the section, upon the ground that the presumption in favor of its validity has not been clearly confuted.

* * **

2. The use which the plaintiff really made of its wharves was in "carrying on or doing the business of refining sugar.' They were part of the plant of that business, and, as it was actually conducted, they were an essential condition of it. Consequently their receipts were its receipts, and as such they were properly comprised in the assessment. Adams Exp. Co. v. Ohio State Auditor, 165 U. S. 194, 17 Sup. Ct. 305, 41 L. Ed. 683.

3. The interest received by the plaintiff upon its corporate funds, either deposited in bank or invested in income-producing securities, was also rightly included. The special verdict states that it was "interest upon its investments of moneys and property as explained by the testimony of Mr. Ball"; and it appears from that testimony that the only business of the plaintiff was sugar refining, and that this interest was received by it upon investments or deposits of such part of the capital of that business as at the time being was not in active use therein. Mr. Ball, it is true, also testified that it did not have anything to do with sugar refining; but the question for our decision is not whether this interest was derived from the refining of sugar, which, of course, it was not, but whether or not it was received in the business of sugar refining, and upon this very different question the facts found are conclusive. The funds of the corporation, however any portion of them may have been temporarily applied or held, were all embarked in the sugar refining business, and to it, therefore, all receipts which those funds produced necessarily belonged. Any diminution of them would certainly have been its loss, and it seems to be equally clear that their augmentation, however occasioned, must have been its gain. Except in connection with and as incidental to that business, the plaintiff was neither an investor nor a depositor, and therefore, by becoming either the one or the other, it did not engage in an additional and separate busi


4. The learned judge, in deciding that the collector had been justified in demanding monthly payments, said:

"The tax is, no doubt, an annual tax, in the sense that it is paid each year; and, if provision for its assessment and collection had been made by the act, such provision would have been obligatory, both upon the government and upon the refiner."

But he was of opinion that the act contained no such provision, and that therefore the regulation of the commissioner of internal revenue directing its monthly assessment and collection was authorized by section 3447 of the Revised Statutes. We are unable to concur in the construction which was thus given to section 27 of the act of June 13, 1898. It is, of course, a possible one, but its correctness is at least so questionable as to render it inadmissible to impose a duty upon a citizen. Hartranft v. Wiegmann, 121 U. S.

609, 7 Sup. Ct. 1240, 30 L. Ed. 1012; U. S. v. Isham, 17 Wall. 496, 21 L. Ed. 728. But aside from this consideration, the meaning attributed by the court below to the phrase "shall be subject to pay annually" is not, we think, its natural meaning. The requirement, as directly and plainly expressed, is for payment annually, and upon annual receipts; and, this being so, there is, in our opinion, no warrant for inferring from the quite distinct provision for monthly returns that it was intended that monthly payments might also be demanded, and upon monthly receipts. The tax, moreover, is only on gross annual receipts in excess of $250,000; and it cannot be supposed to have been contemplated that any person or company whose first return, as in the present instance, exhibited gross receipts exceeding that amount, would be subject to a different rule respecting the time of payment from that which would apply to others, whose gross annual receipts might be shown to be greater than $250,000 only by a later return. We have already pointed out that it is not necessary to put an interpretation upon this section which might involve such inequality in its administration, and, except by necessity, no such interpretation could be justified.

Solely upon the ground that the circuit court erred in holding that the plaintiff was required to pay the tax in question otherwise than annually, its judgment is reversed, and the cause is remanded to that court for further proceedings to be there taken in conformity with this opinion.

GRAY, Circuit Judge. Agreeing with the opinion of the court as written in paragraphs 1, 2, and 4, I am compelled to dissent from that expressed in paragraph 3, to the effect that the interest received by the plaintiff in error upon its deposits in bank, and as dividends from investments in shares and other securities, should be included in the amount of gross receipts in its business of sugar refining, returned for assessment and taxation. Keeping in mind the wellsettled rule that the citizen is exempt from taxation unless the same is imposed by clear and unequivocal language, and that, where the construction of a tax law is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid, I cannot assent to the affirmance of the judgment of the court below in this respect. I do not think that the income derived from such investment of funds is in any proper sense receipts in the business of sugar refining. The very term "gross receipts" in "the business" would seem to exclude all such receipts as the interest upon investments here referred to.

(113 Fed. 248.)


(Circuit Court of Appeals, Fifth Circuit. February 11, 1902.)

No. 1,043.


On the trial of one indicted under Rev. St. U. S. § 3296, for the removal and concealment of distilled spirits on which the tax had not been paid, testimony was offered that, on the night before the whisky was removed, accused broke the lock of the warehouse where it was stored. Defendant objected on the ground that he had been indicted under section 3268 for breaking such lock, and at the last term of the court had been tried thereon and acquitted. Held that, though such acquittal could be considered by the jury in considering the credibility of the witnesses, it was not ground for excluding the testimony.


On the trial of defendant for removing whisky on which the tax had not been paid from a distillery warehouse belonging to his father, a witness testified that he was employed by a revenue officer to get up evidence against the guilty parties; that, while concealed under the father's house, witness heard some men discussing the removal of the whisky, and the best way to get out of the trouble, and it was his impression that one of the voices was that of defendant, but he was not quite certain. Held, that the admission of such testimony was error.

In Error to the District Court of the United States for the Middle District of Alabama.

Wm. C. Oates, for plaintiff in error.

W. S. Reese, Jr., and J. Sternfeld, for the United States.

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

McCORMICK, Circuit Judge. The plaintiff in error was indicted under section 3296 of the Revised Statutes of the United States, which reads:

"Whenever any person removes, or aids or abets in the removal of, any distilled spirits on which the tax has not been paid, to a place other than the distillery warehouse provided by law, or conceals or aids in the concealment of any spirits so removed, or removes, or aids or abets in the removal of any distilled spirits from any distillery warehouse, or other warehouse for distilled spirits authorized by law, in any manner other than is provided by law, or conceals or aids in the concealment of any spirits so removed, he shall be liable to a penalty of double the tax imposed on such distilled spirits so removed or concealed, and shall be fined not less than two hundred dollars nor more than five thousand dollars, and imprisoned not less than three months nor more than three years."

There were five separate counts in the indictment, each charging different ones of the specific acts against which this section denounces a penalty. The verdict in the case was, "We, the jury, find the defendant guilty as charged in the indictment;" and the judgment and sentence ordered that the defendant be imprisoned in the state prison at Nashville, in the state of Tennessee, for the term of two years, and pay fine of $500 and costs. The defendant brought this writ of error. Numerous errors are assigned, but we notice only two.

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