Tidewater Oil Co. v. United States
171 U.S. 210 (1898)

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U.S. Supreme Court

Tidewater Oil Co. v. United States, 171 U.S. 210 (1898)

Tidewater Oil Company v. United States

No. 149

Argued April 29, 1898

Decided May 31, 1898

171 U.S. 210

Syllabus

The Court of Claims made the following findings of fact in this case. I. During the years 1889, 1890 and 1891, the claimant was a corporation existing under the laws of New Jersey, organized in 1888 and having a factory for carrying on its business at Bayonne in that state. II. In 1889 and 1890, the claimant imported from Canada box shooks, and from Europe steel rods, upon which importation duties amounting in the aggregate to $39,636.20 were paid to the United States, of which sum $837.68 was paid on the importation of the steel rods. III. The box shooks imported as set forth in finding II were manufactured in Canada from boards, first being planed and then cut into required lengths and widths, intended to be substantially correct for making into boxes without further labor than nailing the shooks together. They were then tied up in bundles of sides, of ends, of bottoms, and of tops of from fifteen to twenty-five in a bundle for convenience in handling and shipping. IV. The shooks so manufactured in Canada and imported into the United States as aforesaid were at the claimant's factory in Bayonne, New Jersey, constructed into the boxes or cases set forth in Exhibit E to the

Page 171 U. S. 211

petition herein by nailing the same together with nails manufactured in the United States out of the steel rods imported as aforesaid and by trimming when defective in length or width to make the boxes or cases without projecting parts, i.e., the shooks were imported in bundles of ends, of sides, of tops, and of bottoms, each part coming in bundles separated from the bundles of other parts. From one of these bundles of ends the ends of a box are selected, to which the sides taken indiscriminately from any bundle of sides are nailed by nailing machines; then the sides are trimmed off even with the ends by saws; then by bottoming machines bottoms taken from any bundle of bottoms are nailed on; then the bottoms are trimmed even with the sides by saws; then, after being tilled with cans, the tops are nailed on, and then the boxes or cases are ready for exportation. The cost of the labor expended in the United States in the necessary handling and in the nailing and trimming of the boxes as aforesaid was equal to about one-tenth of the value of the boxes. The principal part of the labor performed in trimming the boxes was occasioned by the Canadian manufacturer's not cutting the shooks into the required lengths and widths for use in making the boxes, and for which the claimants sometimes charged the cost of such trimming to the Canadian manufacturer. Held that the company, when exporting these manufactured boxes, was not entitled to be allowed a drawback under Rev.Stat. § 3019.

This was a petition by a corporation of New Jersey for a drawback of duties paid upon certain shooks imported from Canada, and steel rods imported from Europe, which were manufactured into boxes or cases by the petitioner in its factory at Bayonne, New Jersey, and were subsequently exported to foreign countries.

The Court of Claims made the following findings of fact:

"1. During the years 1889, 1890, and 1891, the claimant was a corporation existing under the laws of New Jersey, organized in 1888, and having a factory for carrying on its business at Bayonne in that state."

"2. In 1889 and 1890, the claimant imported from Canada box shooks, and from Europe steel rods, upon which importation duties amounting in the aggregate to $39,636.20 were paid to the United States, of which sum $837.68 was paid on the importation of the steel rods."

"3. The box shooks imported as set forth in finding 2 were manufactured in Canada from boards, first being planed and then cut into required lengths and widths, intended to be substantially

Page 171 U. S. 212

correct for making into boxes without further labor than nailing the shooks together. They were then tied up in bundles of sides, of ends, of bottoms, and of tops of from fifteen to twenty-five in a bundle for convenience in handling and shipping."

"4. The shooks so manufactured in Canada and imported into the United States as aforesaid were, at the claimant's factory, in Bayonne, New Jersey, constructed into the boxes or cases, set forth in Exhibit E to the petition herein, by nailing the same together with nails manufactured in the United States out of the steel rods imported as aforesaid, and by trimming, when defective in length or width, to make the boxes or cases without projecting parts -- i.e. the shooks were imported in bundles of ends, of sides, of tops, and of bottoms, each part coming in bundles separated from the bundles of other parts. From one of these bundles of ends, the ends of a box are selected, to which the sides taken indiscriminately from any bundle of sides are nailed by nailing machines; then the sides are trimmed off even with the ends by saws; then, by bottoming machines, bottoms taken from any bundle of bottoms are nailed on; then the bottoms are trimmed even with the sides by saws; then, after being filled with cans, the tops are nailed on, and then the boxes or cases are ready for exportation."

"The cost of the labor expended in the United States in the necessary handling and in the nailing and trimming of the boxes as aforesaid was equal to about one-tenth of the value of the boxes."

"The principal part of the labor performed in trimming the boxes was occasioned by the Canadian manufacturer's not cutting the shooks into the required lengths and widths for use in making the boxes, and for which the claimants sometimes charged the cost of such trimming to the Canadian manufacturer."

"5. The boxes or cases made as aforesaid were exported from the United States to foreign countries, in conformity with the regulations of the Treasury Department then in force, to-wit, Treasury regulations of 1884, sections 966, 967, and 968, hereinafter set out, relating to drawbacks upon the exportation

Page 171 U. S. 213

of articles wholly manufactured of imported materials, and cases so manufactured were entered for such drawback upon the exportation thereof."

"6. For about four years prior to July 31, 1889, the Treasury Department had allowed and paid a drawback upon the exportation of boxes made from imported shooks fastened together with nails made from imported steel rods as aforesaid, and the Treasury Department was requested to pay the drawback on the exportation of the boxes or cases set forth in Exhibit E to the petition, but refused, for the reasons set forth in the following communication addressed to the collector of customs at New York:"

" Treasury Department, July 31, 1889"

" Sir: Referring to department letter of March 2, 1885, addressed to the then collector at your port, in which a rate of drawback was established on shooks used in the manufacture of boxes, you are informed that the department has recently given the matter further consideration, and it appears upon investigation that the boxes are made complete in Canada, with the exception of nailing, and that the only manufacture which they receive in this country consists in their thus being nailed together, which part of the labor is omitted to be done in Canada merely for convenience in shipping to the United States."

" The boxes appear to have been manufactured complete abroad, and, in the condition imported, resemble the finished furniture imported in pieces, which the department has heretofore held to be dutiable at the rate applicable to finished furniture. (See Synopsis, 4272.)"

" The simple act of nailing them together is not, in the opinion of the department, a manufacture, within the meaning of section 3019, Revised Statutes, and the authority to allow drawback thereon is hereby revoked."

" You will accordingly receive no further entries for drawback in such cases."

" Respectfully yours George C. Tichnor"

" Assistant Secretary"

" Collector of Customs, New York "

Page 171 U. S. 214

"7. The Treasury regulations of 1884, referred to in finding 5, viz., articles 966, 967, and 968, are as follows:"

" Art. 966. On articles wholly manufactured of imported materials on which duties have been paid, a drawback is to be allowed, on exportation, equal in amount to the duty paid on such imported materials, less 10 percent thereof, except on exportations of refined sugars, in which case the legal retention is 1 percent"

" Art. 967. The entry in such cases will be as follows, and must be filed with the collector at least six hours before putting or lading any of the merchandise on board the vessel or other conveyance for exportation."

Here follows a form of entry for exportation, with oaths of exporter, and of the proprietor and foreman of manufactory.

Article 968 contained a form of bond for exportation.

Upon the foregoing findings, the court found the ultimate fact, so far as it was a question of fact, that the boxes or cases so exported were not manufactured in the United States, and, as a conclusion of law, that the claimant was not entitled to recover, and the petition was dismissed. Whereupon petitioner appealed to this Court.

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