*1 498
MILLER, COLLECTOR OF INTERNAL REVENUE, NUT MARGARINE COMPANY
v. STANDARD OF FLORIDA.* Argued January 6j February 15, 1932. Decided 1932. 251.
No. 555; 366; Tepper, 332, 334; 140 152 Md. 126 Me. Atl. Woodworth v. Estate, 536; Dempster’s 459, 462-464; 136 Atl. In 247 Mich. 226 re 243; 454-455; 338; 148 114 Eason, Miss.146, Williams N. W. v. So. (N. ; App. Y.) 472, 771; Div. 476 221 Storum, Matter 220 N. Y. S. of 40, 44; 530; 144 Trust Co. N. C. S. E. In Brinkley, 196 v. re Estate 7; 256; Pruden, Root, 422, 428; 199 N. 154 S. E. Re 58 N. D. C. 598; 93; Mitchell, 87, 226 N. W. 117 Oh. Palmer v. St. 158 N. E. Ogilvie’s 326, 331-334; 826; 187; Pa. 139 Estate, 291 Atl. National 30, 37; 549; McNeal, Bank v. 148 C. Whaley Union S. 145 S. E. v. seq.; 841; 149 Jones, 328, Moss, 152 C. et Moss 158 S. 333 S. E. v. 246; 597; 88, 155 E. 161 Madding, S. C. S. Wade 93 v. Tenn. (2d) 642; seq.; 515; Elben Jordan, et 28 S. W. v. 161 Tenn. (2d) 65; Battaglia (Tex. Battaglia, Civ. App.) 33 S. W. v. 290 W. S. Thomas, (2d) (Tex. 296, 298; App.) 558; Turner 30 W. v. S. Civ. Hogan’s Estate, 1007, 1008; McConnell, In re 297 153 Pac. Price v. 572; 515; Stacy Culbertson, 50, 51; 149 Va. S. E. v. 160 S. E. Singer, 527; Estate 213 Wis. N. W. 479. 192 apparently directly contrary; either Cases Sutton’s Exec Ky. Administrator, ; 1075; Barr’s 219 543 utor v. 293 S. W. v. Sizemore Guardian, Ky. 713; (2d) (the 2 222 S. W. later Sizemore’s Ken 395; Mefford, Ky. 127; tucky (2d) 151, 231 21 cases v. S. W. Mefford Ky. 208; Mason’s and Mason’s Administrator 239 39 Guardian, (2d) 211, apparently disagree view); with earlier 213-214, S. W. Hallbom, 402; 344; Minn. In re Estate 179 229 W. Tax N. Com Rife, 83; 162 390; Estate, N. E. mission v. 119 Oh. St. Fisher’s 516; 736; 459; Atl. Estate, In re Cross’ Pa. Wash. 278 Pac. * Together Rose, Revenue, Collector Internal No. Margarine Company Nut Florida. Standard *2 500- Whitney Seymour, with whom Solicitor Gen- North
Mr. Thacher, Attorney Youngquist, Assistant General eral Conner, H. M. Key, Sewall A. Clarence Char- Messrs. on the est, brief, Harrison F. McConnell were petitioners. *4 George N. Murdock and E. M. Mcllvaine,
Messrs. Milam and Robert R. Milam Messrs. A. Y. whom were on brief, respondent. delivered the of the opinion Court. Butler Justice Mr.
No. Respondent, a manufacturer of Southern Nut Prod- in the uct,” brought this Southern District of suit Florida restrain from petitioner collecting respondent, from tax selling any or from dealers product, purporting under Oleomargarine August levied Act of May Stat. amended 9, 1902, Act. Petitioner alle- answered, denying essential Stat. the. gations complaint. "Respondent applied for a tem- porary the court found that it injunction, would suffer unless injury restrained irreparable petitioner pend- were final of the ing disposition case, granted At the trial oral and application. respondent introduced *5 documentary evidence together with specimens the of product be sought taxed. The court found that the ma- of allegations complaint terial the were established the granted evidence and permanent injunction. The record in condensed form the states substance of the testimony not but does contain the documents which were made exhibits and introduced in evidence. The Circuit Court found, of Appeals appears' and it from testimony the brought that omitted up, constitute material exhibits a of the evidence the part received and that is con- record sistent with the trial in of court’s conclusion the respect facts; it held R. S., § and affirmed apply does decree. F. (2d) 79, 82, suit (26 154):
That declares “No C., section U. S. § or collec- for the the assessment restraining purpose This any any tion of shall in court.” be maintained tax suit was commenced December complaint, in the record, the evidence contained and documents judicial taken, following which show the may notice facts:
In commenced, and thereafter April, 1928, respondent on, Florida, carried at manufacture Jacksonville, Nut of Southern Product. no animal sale It contained exclusively oil; oil, fat but'was made cocoanut peanut harmless it matter; water and was sold salt, coloring baking seasoning. cartons for pound cooking, one Respondent built a business up valuable sale dealers in Florida and other States. In the Commissioner Internal Rev- January, to the a Higgins Manufacturing enue Company issued ” sell Nut-Z-All permit to manufacture' and without oleomargarine He paying tax thereon. revoked December same permit year purported such a tax of that The com- upon assess some product. it
pany, protest under to the collector having paid him brought Rhode an action Island, in. to recover court district State States
United *6 evidence,- including hearing After exacted. amount so in the Bureau of of chemists Rev- testimony Internal the in collector, April, of the the court enue called in behalf was not in that the made imitation 1924, product found butter, was not intended to be as or semblance sold butter, and was not or as oleomargarine taxable the Thereupon such. 297 Eed.' Commissioner with the Revenue, approval Internal the Secretary Treasury, of the the court’s promulgated decision as Decision thus Treasury informing all concerned that product subject was not tax. In August, the deputy in answer commissioner, inquiry by to an made thelnstitute Margarine Manu- “ facturers as to the taxability of Nut-Z-All,” a letter sent stating: “The having court held the oleomargarine, taxable as the fact that advertise .retailers butter, sell or-as it as a substitute for butter, would not render or the manufacturers under the them liable . internal revenue law.”
April 1,1927, Commissioner, contrary court’s decree, Treasury Decision response and his deputy’s inquiry, to the Institute’s promulgated Treasury Decision ” “ products which declared similar to Nut-Z-All . if oleomargarine as look taxable colored to like butter. Higgins Manufacturing Company brought Then the suit in for Rhode the federal court Island .to restrain the enforcing from the tax on its product. collector The of the allegations complaint court, upon admitted dismiss, found that the.facts motion to there alleged identical with taxability were those shown respect the collector was case; that threatening earlier to en- adjudged had been tax which if illegal; force the plaintiff’s be collected business should would be tax 1927, granted and, temporary injunction, July ruined, 20 F. (2d) 948, permanent which was made in December following.
In July, 1927, Baltimore Company Butterine brought suit the Supreme Court of the District enjoin the Columbia to deputy Commissioner and' his from enforcing the tax declared in Treasury Decision product Nu-ine,” which was identical in content and Appearance “Nut-Z-All” made by the Higgins Manufacturing Company, Nut Southern made Product by respondent this case. court the product granted not taxable permanent injuncr a tion. cases, appeal
No was taken in any of the above men- And tioned. an petitioner, by letter, answering in- *7 quiry by made advised respondent,, its respondent that product would be taxable oleomargarine. not as on the
Relying Higgins decision Mfg. Page, Co. v. 297 Fed. Decision Treasury 3590, the deputy commis- the injunctions sioner’s letter to Institute and the above referred to, respondent product believed the which it pro- posed to manufacture and sell would not be taxable as oleomargarine, upon of and, receipt petitioner’s letter^ manufacture commenced and sale of the product. 1928, pursuant,
In to instructions sent by the dep- him uty stating commissioner that respondent’s product was taxable held colored.oleomargarine, as the petitioner de- a manded and threatened to collect tax of ten. a cents pound upon product. respondent’s petitioner But made ” the tax on no effort to collect Nut-Z-All which- at the being trial time of the was sold Excluding Florida. cost, respondent’s
the tax from net profit was approxi- mately per pound. three cents The enforcement of the Oleomargarine against respondent Act would impose a tax respondent would be unable that to pay, subject would it the penalties and heavy to forfeiture its plant together 506 product hand, and manufactured materials the on
with business. destroy would that the exaction of ten cents asserts complaint of a is a tax, really guise penalty while per pound, butter, is competition eliminate imposed Congress to the power granted of the in excess therefore McCray But, having regard by Constitution. treat imposition U. we States, 195 S. United oleomargarine as a valid Act excise by upon tax. laid not extend to brought suits does The rule § (Lipke Lederer, penalties collection to restrain Wardell, 562; Regal Drug Corp. v. 260 U. S. U. S. 386) not apply. does error assign not here as the finding
Petitioner does be- not respondent’s product oleomargarine. was low that grounds that upon reversal the statute for- He seeks injunction against the collection the tax bids even if assessed; that this assessment erroneously was made under color of office and his not was Commissioner that, if capricious, there is arbitrary any exception is application this case not within it. J here opinion We are of as below and claimed that, by respondent, question was taxable oleomargarine by § defined of the It Act as follows: is “ That for purposes this act certain manufac *8 substances, extracts, and mixtures tured certain certain and such mixtures and compounds, including compounds ‘ designated shall and butter, with be known as oleomar All garine ’, namely: substances heretofore known oleo as margarine, oleo, butterine, oleomargarine-oil, lardine, su compounds and all mixtures ine, and of oleomar neutral; oleo, oleomargarine-oil, garine, butterine, suine, lardine, all neutral; extracts; and lard extracts tallow all and and tallow, compounds lard, of beef-fat, suet, and mixtures annotto, coloring and lard-oil, vegetable-oil matter, other in imitation or semblance intestinal offal fat made fat, and calculated or intended to made, or when butter, of so as butter or for butter.77 sold in remained force until July
That definition 10, 1930, the Act of July Stat. It was amended material later, effective twelve months which parts are printed margin.* hyphen phrase and a in “vegetable-oil” was eliminated comma was Words, between words and serted those annotto.” added are shown italics and words deleted are within brackets.
When the Act of 1886 passed was various imitations of ingredients and substitutes butter, principal swine, being which were the fats of cattle manu- and were and in large quantities. factured sold Products such as respondent’s, fat, which no animal were contain unknown quantities and were not made in substantial until much nothing There is in the or that has been Act, later. attention, brought suggest our that Congress antici- of the art later to pated development, An- occur. been to color long
notto had used butter and and cheese make oleomargarine then used to resemble being was but- material found in coloring ter. It is a association with covering content of tree seeds. the. oil certain “ * purposes of this Act That for the certain manufactured Sec. 2. extracts,
substances, compounds, and certain mixtures certain and compounds including such mixtures and shall be known butter, ‘ oleomargarine,’ namely: designated All substances and as heretofore oleomargarine, oleo, oleomargarine oil, known, butterine, as lardine, compounds and suine, neutral; oleomargarine, oleo, all mixtures butterine, neutral; oleomargarine oil, suine,-and all lard ex- lardine, extracts; compounds all tallow, tracts and tallow mixtures and fat, oil or lard, vegetable fat, suet, oil, oil, beef lard annatto, fish fish fat; coloring matter, (1) fat, and other intestinal and offal made —if (2) semblance of butter or in imitation or so calculated [when made] (3) butter, or or or for churned, emulsi- intended to be sold butter cream, water, fied, milk, liquid, containing or other mixed ,” 1 per moisture in centum or salt. excess common *9 508
When sale and use the colorant is contained prepared mar- oily mass that then well-known a stiff was “ ” vegetable-oil words annotto appropriately ket. The “vege- The between describe that substance. hyphen ” ” “ any table oil and the absence of punctuation so com- mark them that the words following signify ” “ col- and indicate that such pounded annotto qualify is oring meant. And that construction material was connection use the same strongly'supported by the “ coloring the words and other matter.” omit, the under the Act Regulations promulgated to read making phrase comma and add a thus hyphen The determi annotto.” Commissioner’s oil, vegetable oleomargarine neces that is respondent’s nation that elementary is sarily was based on that version. It taxpay are in favor of interpreted liberally tax laws to be defining may and that taxed be things ers words to be re beyond- their must be import. extended clear Doubts taxpayers. solved the Government and in favor Merriam, 179, 263 U. United States S. Bowers v. 188. Co., Albany legislative Y. & 273 S. 350. N. U. The show history Act of 1930 passage amendatory that Congress the Commissioner well as the found that enlargement an of the necessary definition in order to was products cover such as respondent’s. used language original Act was. not clear definite sufficiently products include no containing animal fat. The Com missioner’s rendition the governing phrase was without warrant. His determination respondent’s product er oleomargarine was and taxable under Act was and, in view of earlier roneous his and the interpretations final, arbi court which must decisions had become trary and It was without force. Interstate capricious. Co., Commission & R. U. S. Commerce v. Louisville N. White, 91. Kwock Jan Fat 253 U. S. v. Mann, United States Brock.
Independently of, and cases to, arising prior the enactment of the (Act provision 2,1867,14 March Stat.
475) which became
S., §
R.
3224,
court in harmony
this
the
with'
generally
rule
followed
of equity
courts
that -a suit
not lie
will
to restrain the collection of a tax
upon
ground
sole
illegality.
The principal
rea
son
that,
is
as courts are
authority
without
to apportion
or equalize
taxes
to make assessments, such suits would
enable those liable for
taxes
some
delay
amount
to
pay
ment or
to
possibly
escape their lawful burden
so to
and
interfere with
the collection
thwart
of revenues
the support of the government. And this court likewise
recognizes
that,
the rule
in cases where complainant shows
that
in addition to the
illegality
an
in the
exaction
guise of a tax there
special
exist
and extraordinary cir
cumstances
sufficient
bring
case within some
head
acknowledged
of equity jurisprudence,
may
a suit
enjoin
maintained to
Chicago,
Dows
collector.
v.
11
Georgetown,
Hannewinkle v.
108.
Wall.
State 92 Railroad 575, U. S. 614. Section 3224 is declaratory of the principle first mentioned and is as be construed near may harmony be. in it and with Telephone upon reasons which it rests. Cumberland Telegraph & Kelly, Co. v. 316, 160 Fed. 321. Baker v.
Baker, Bradley 87, 13 Cal. People, 95. 8 v. Colo.
604; 9 Pac. 2 783; Sutherland, ed., 2d Lewis § 454. The section does refer specifically to the rule applicable to cases involving exceptional circumstances. The general sufficient, words are not employed require it would disclosing specific language undoubtedly that purpose, warrant Congress inference that intended to abrogate salutary that and well established rule. This court has in a Snyder given § effect to 3224 number cases. v.
Marks,
Dodge Osborn,
191.
v.
240
109 U. S.
U. S.
Dodge Brady,
v.
U. S. 122.
It has
121.
never
absolute,
has repeatedly
rule to be
but
indi-
held the
exceptional circumstances
extraordinary cated
Wallace,
Hill
v.
inapplicable.
its provisions
render
Osborn, supra, 12.
v.
Dodge
Dodge
U. S.
Pont, 262 U.
v. du
S.
Cf. Graham
Brady, supra.
Co.,
.511 edy that, by at It is law. clear reason of the special and extraordinary facts and circumstances, does not § apply. The lower rightly entitled respondent .courts injunction.
No. 252. This case in the was decided Circuit Court Appeals at the same time (2d) as No. 49 F. presents same question, governed and is by the foregoing opinion.
Decrees affirmed. Stone, Mr. Justice dissenting. In my opinion, R. S. says n which that No § suit for the purpose restraining the assessment or collection tax any shall be maintained in any court,” cannot rightly be construed as permitting present suit, whose sole purpose enjoin tois the collection of a tax. Enacted in 1867, statute, this for more than sixty years, has been consistently applied precluding relief, whatever ' equities alleged. joins
Mr. Justice Brandéis inme this opinion. . UNITED STATES CARTRIDGE CO. UNITED
STATES. *12 Argued January 15, No. 348. February 15, 1932. 1932. Decided