Where the function of a natural ingredient, such as palm oil,
used in manufacturing oleomargarine is so slight that it probably
would not be used except for its effect in coloring the product so
as to look like butter, the product is artificially colored, and
subject to the tax of ten cents a pound under par. 8 of the Act of
May 9, 1902, Chap. 784, 32 Stat. 193.
As the record in this case shows that the use of palm oil
produced only a slight effect other than coloration on the product,
it falls under the rule adopted in
Cliff v. United States,
195 U. S. 159,
that the use of a natural ingredient must be for something more
substantial than coloration in order to relieve the oleomargarine
of the tax of ten cents a pound.
Page 216 U. S. 345
A statute may not be evaded, nor it purpose made to yield to
what is nonessential, and thus render it a means to accomplish the
deception it was meant to prevent.
The facts are stated in the opinion.
Page 216 U. S. 348
MR. JUSTICE McKENNA delivered the opinion of the Court.
The certificate cannot easily be condensed, therefore we give it
in full. It is as follows:
"In this case, which has been argued and submitted to this
court, questions of law arise concerning which the court desires
the instruction and advice of the Supreme Court of the United
States."
"The plaintiff in error brought suit (at law) in the trial court
to recover the amount paid to the defendant in error, as collector
of internal revenue, under constraint, as a tax of ten cents per
pound, assessed by the Commissioner of Internal Revenue, for the
manufacture by the plaintiff in error of 284,998 pounds of
oleomargarine under due authority to engage in such business.
Issues were joined and, upon written stipulation by the parties,
were submitted to the court for trial without a jury. After hearing
the testimony, the trial court made and filed a special finding of
facts upon the several issues so submitted, and thereupon judgment
was rendered against the plaintiff in error, whereof reversal is
sought on writ of error."
"The tax in controversy of ten cents per pound purports to be
assessed under the provisions of section 8 of the act of Congress
approved May 9, 1902, published as chap. 784, 32
Page 216 U. S. 349
Stat.193, and the present inquiry involves only the following of
such finding of facts,
viz.:"
"(1) That in June, 1902 after the above-mentioned enactment, the
Commissioner of Internal Revenue officially promulgated and
published and issued in regular course by the United States
Treasury Department, the regulation as to 'artificial coloration,'
in language as follows:"
"
Regulation as to Artificial Coloration"
" If, in the production of oleomargarine, the mixtures of
compounds set out in the law of 1886 are used, and these compounds
are all free from artificial coloration, and no artificial
coloration is produced by the addition of coloring matter as an
independent and separate ingredient, a tax of one-fourth of 1 cent
per pound only will be collected, although the finished product may
look like butter of some shade of yellow. For example, if butter
that has been artificially colored is used as a component part of
the finished product oleomargarine (and that finished product looks
like butter of any shade of yellow), as the oleomargarine is not
free from artificial coloration, the tax of ten cents per pound
will be assessed and collected. But if butter is absolutely free
from artificial coloration or cottonseed oil free from artificial
coloration, or any other of the mixtures or compounds legally used
in the manufacture of the finished product oleomargarine has
naturally a shade of yellow in no way produced by artificial
coloration, and through the use of one or more of these
unartificially colored legal component parts of oleomargarine the
finished product should look like butter of any shade of yellow,
this product will be subject to a tax of only one-fourth of 1 cent
per pound, as it is absolutely free from artificial coloration that
has caused it to look like butter of any shade of yellow."
"Which said 'Regulation as to Artificial Coloration' thenceforth
continued to be the regulation of the commissioner's office when
the oleomargarine hereinafter referred to was made and sold by the
plaintiff. "
Page 216 U. S. 350
"(2) The rulings and assessments in question by the Commissioner
of Internal Revenue were made in 1903."
"(3) The oleomargarine, on account of which said assessment was
levied by said Commissioner of Internal Revenue, and said reduced
amount thereof was required by him to be paid by said plaintiff,
was composed of oleo oil, lard, milk, cream, salt, and two
vegetable oils commonly known as cottonseed oil and palm oil, and
of nothing else. The proportion of palm oil present in said
oleomargarine was about one half of one percent (1/2%) of the total
volume of said oleomargarine. Palm oil is a pure vegetable oil
derived from the fruit of palm trees, which grow in certain parts
of Africa, and has about the consistence of pure butter. Palm oil
consists almost entirely of palmatine and olein, which are the
chief constituents of pure butter. Palm oil is perfectly wholesome,
is readily digested, and has long been used as an article of food
in countries where it is produced. Palm oil was successfully
employed in oleomargarine prior to May, 1902, and is a proper
constituent of oleomargarine. The oleomargarine involved in this
suit looked like butter of a shade of yellow, and such resemblance
to butter of a shade of yellow was caused by the presence of the
palm oil used in said oleomargarine, and the levy of said
assessment by said Commissioner of Internal Revenue was based upon
and because of such resemblance to butter of a shade of yellow,
resulting from such use of palm oil in said oleomargarine. In
addition to coloring the oleomargarine in resemblance to butter,
the palm oil probably gives to the oleomargarine slightly better
grain of texture, causing it to act more like butter in the frying
pan, and it also caused said oleomargarine to have a better
physiological effect upon the persons who ate it; but such function
of the palm oil, other than as coloring matter, was slight, and but
for the coloring imparted to the oleomargarine would not probably
have been actually used in its manufacture."
"Upon the foregoing facts, distinguishing the case from that
presented in
Cliff v. United States, 195 U. S.
159, as we
Page 216 U. S. 351
understand the facts there reported, the questions of law
concerning which this court desires the instruction and advice of
the Supreme Court are these:"
"First. With the oleomargarine caused 'to look like butter' by
the use of natural palm oil as one of the ingredients -- 'a pure
vegetable oil,' named in the statute as an ingredient of
oleomargarine -- which not only gives the coloration sought for the
finished product, but otherwise (in some degree) improves the
texture, quality, and healthfulness of the oleomargarine, can such
use be denominated 'artificial coloration,' within the terms and
meaning of the statute referred to, fixing the rate of
taxation?"
"Second. For the purpose of assessing the statutory tax on the
oleomargarine described in the first question, is the rate of
taxation dependent, either (1) upon the ratio which the quantity of
palm oil used bears to the other ingredients or (2) the extent or
ratio of other benefits than that of coloration given by the palm
oil?"
"Third. Can the fact that the manufacturer intended and used the
palm oil for coloration of the oleomargarine enter into the
determination of the amount taxable under the statute?"
It, as it will be observed, is implied in the certificate, and
it is also contended at bar, that the facts of this case
distinguish it from
Cliff v. United States, supra. What
the decision was in that case therefore becomes the first subject
of inquiry. And an element of that inquiry is the act of Congress
under which the tax in controversy was imposed, of which §§ 2 and 8
are only necessary to quote (24 Stat. 209, chap. 840, Aug. 2,
1886):
"SEC. 2. That, for the purposes of this act, certain
manufactured substances, certain extracts, and certain mixtures and
compounds, including such mixtures and compounds with butter, shall
be known and designated as 'oleomargarine,' namely, all substances
heretofore known as oleomargarine, oleo, oleomargarine oil,
butterine, lardine, suine, and neutral;
Page 216 U. S. 352
all mixtures and compounds of oleomargarine, oleo, oleomargarine
oil, butterine, lardine, suine, and neutral; all lard extracts and
tallow extracts, and all mixtures and compounds of tallow, beef
fat, suet, lard, lard oil, vegetable oil, anotto, and other
coloring matter, intestinal fat, and offal fat made in imitation or
semblance of butter, or, when so made, calculated or intended to be
sold as butter or for butter."
"SEC. 8. That upon oleomargarine which shall be manufactured and
sold, or removed for consumption or use, there shall be assessed
and collected a tax of 2 cents per pound, to be paid by the
manufacturer thereof, and any fractional part of a pound in a
package shall be taxed as a pound:
provided, when oleomargarine
is free from artificial coloration that causes it to look like
butter of any shade of yellow, said tax shall be one-fourth of one
cent per pound [italics ours]."
The defendant in that case was charged with having knowingly
purchased and received for sale oleomargarine which had not been
properly stamped according to law. It was shown that out of 160
ounces of which the compound was composed, only one and one-half
ounces were palm oil, and the following ruling of the Commissioner
was introduced in evidence:
"This office rules that, where so minute and infinitesimal a
quantity of a vegetable oil is used in the manufacture of
oleomargarine as is proposed to be used in palm oil, and through
its use the finished product looks like butter of any shade of
yellow, it cannot be considered that the oil is used with the
purpose or intention of being a
bona fide constituent part
or element of the product, but is used solely for the purpose of
producing or imparting a yellow color to the oleomargarine, and
therefore that the oleomargarine so colored is not free from
artificial coloration, and becomes subject to the tax of ten cents
per pound."
The contention was that Congress having, in § 2, defined
oleomargarine to consist of certain substances, the color
Page 216 U. S. 353
which resulted from the use of such substances, or any of them,
was a natural, not an artificial, coloration. The contention, and
the argument of counsel to support it was given at length, so that
its full extent and strength should be shown. Among other things,
this was said:
"Howsoever minute may be the quantity of palm oil used, it is
nonetheless a vegetable oil, a statutory, or, so to speak, a
natural, ingredient of oleomargarine, and displaces in the finished
product an equal volume of some other statutory ingredient of
oleomargarine, as, for instance, cottonseed oil."
And it was argued that the statute conferred
"no power upon the Commissioner to prescribe the formula for the
manufacture of oleomargarine, or the proportion of the different
ingredients, or to exclude any ingredient except upon the ground of
its being deleterious to health."
The argument could not be misunderstood or evaded. It asserted
the purity of the oleomargarine under the law, and that its color
came from its purity, not from any illegal addition to it. The
contention therefore was direct, and unqualified by any
consideration of the relative quantity of the ingredients. Its
force was recognized, but it was nevertheless rejected, and in
reply it was pointed out that the statute was not enacted to permit
the manufacture of oleomargarine, but to prevent its sale "as and
for butter." And it was decided
"that, when any substance, although named as a possible
ingredient of oleomargarine, substantially serves only the function
of coloring the mass, and so as to cause the product to 'look like
butter of any shade of yellow,' it is an artificial
coloration."
It was stated that palm oil is a vegetable oil, and one of the
substances authorized to be used by § 2 in the composition of
oleomargarine. But this, it was added, did not exempt the product
from the higher tax if the palm oil or any other "statutory
ingredient," to use the phrase of counsel, was used only for
coloring. The statute was carefully analyzed, and the words, "and
other coloring matter" in § 2 were declared to have an obvious
purpose. "It was to prevent," it was said,
"excluding from the operation of the statute
Page 216 U. S. 354
anything in its nature oleomargarine [that is, to exempt from
the higher tax anything in its nature oleomargarine] by the
addition of a substance not in reality an ingredient, but serving
substantially only the purpose of coloring the product to cause it
to look like butter."
And it was further said:
"the fact that one of the ingredients of this compound is palm
oil does not show that such oil does anything else than color the
product composed of other ingredients, and if it does substantially
only this, it is rightfully styled an artificial coloration."
This language brings us to the point of distinction between that
case and the case at bar. It is put beyond controversy that
oleomargarine may be subject to the higher tax though its color
result from a "statutory ingredient." To relieve from such
consequence, the ingredient must be there in substantial quantity
-- in quantity substantial enough to contribute to the product
something more than color. And this, it is insisted, the palm oil
does in the case at bar, and the case is therefore, it is further
insisted, distinguished from the
Cliff case. The
contention is that the defendant in the
Cliff case
"stood upon the narrow proposition that palm oil being a
vegetable oil, and therefore being a statutory ingredient of
oleomargarine, it made no difference whether the amount of it used
was small or large or whether the sole purpose of its use was to
impart the desired color; coloration due to its use was not, within
the meaning of the statute, 'artificial coloration.'"
It is further urged that "Cliff made no effort whatever to show
what, if any, were the effects of palm oil upon the oleomargarine
other than giving color to it," but admitted, for the purpose of
the case, "that the sole and only function of the palm oil was to
make the oleomargarine
look like butter of a shade of
yellow.'"
He did not show, as he might have shown, it is further
urged,
"what are found as facts in this case -- namely, that palm oil,
in its nature, is suitable for food; that, for many years prior to
1902, it had been used for food, and that, when
Page 216 U. S. 355
so used, it was found healthful and digestible, and that palm
oil had been successfully used in oleomargarine
prior to May 9,
1902, the date of the passage of the amendment which, for the
first time, made the tax upon oleomargarine that
is free
from artificial coloration smaller than the tax upon oleomargarine
that
is not free from artificial coloration. Prior to May
9, 1902, all oleomargarine was taxed under the original
oleomargarine law passed in 1886 at the rate of two cents per
pound, regardless of whether it was free or not free from
artificial coloration."
Are these contentions sustained by the facts certified? Do they
show that the palm oil has substantially any other purpose than to
color the product? It is certified that palm oil is a purely
vegetable oil, "is perfectly wholesome, is readily digested, and
has long been used as an article of food in countries where it is
produced." These are useful qualities, undoubtedly, and the extent
of their contribution by the presence of one-half of one percent of
palm oil is attempted to be estimated. It is the ingredient, the
certificate says, that gives to the oleomargarine a "shade of
yellow" and makes it resemble butter -- that is, enables it to seem
what it is not, and so far at least, to defeat the purpose of the
law against coloration. And the certificate further recites
that,
"in addition to coloring the oleomargarine in resemblance to
butter, the palm oil probably gives to the oleomargarine slightly
better grain of texture, causing it to act more like butter in the
frying pan, and it also caused said oleomargarine to have a better
physiological effect upon the persons who ate it; but such function
of the palm oil, other than as coloring matter, was slight, and,
but for the coloring imparted to the oleomargarine, would not
probably been used in its manufacture."
We do not think these facts take the case out of the ruling in
the
Cliff case. There is no more substantial contribution
of character to the compound in this case than in that. The amount
of palm oil used in that case was something greater than in this,
and the purpose of its use was the same. It, of
Page 216 U. S. 356
course, added whatever qualities it possessed and could exist in
a fraction of one percent of the product of which it made a part.
This did not need explicit statement, and it gains nothing now by
explicit statement. What effect is claimed for it? It gives, it is
said, a slightly better grain of texture, a better physiological
effect upon those who eat it. But those effects are "slight," it is
certified. What is meant by "slight?" It is the word of a rather
indeterminate meaning. It usually implies unimportance or
insignificance, and is practically given that meaning in the
certificate. The palm oil, it is certified, contributes so little
to the value or quality of the oleomargarine that, but for its
coloring power, it would not be used. It may be, as counsel says,
that the motive of its use cannot make it illegal, and that one
cannot become an offender against the law by doing what it permits.
But the question here is not what the law permits. That was decided
in the
Cliff case. The question here is whether we shall
exaggerate a slight use of a "statutory ingredient" into a
substantial use of it, and by doing so bring its use within the
permission of the statute and relieve the product of which it is a
"slight" part from a tax of ten cents.
We have so far considered this case on the authority of the
Cliff case, deeming it unnecessary to repeat the reasoning
of the latter, as though the question was
res integra. It
may be well, however, to develop the argument of counsel somewhat
further. It is presented in a summary way in the following
syllogism:
"First premise: color due to the use of an authorized food
ingredient, not artificially colored, is not artificial coloration
(
McCray case)."
"Second premise: palm oil, being a vegetable oil, suitable for
food, and its nature such as to make oleomargarine suitable for
food, and being itself not artificially colored, is an authorized
food ingredient (
Cliff case)."
"Conclusion: therefore color due to the use of palm oil is not
artificial coloration. "
Page 216 U. S. 357
The premises and conclusions are assumed by ignoring, not by
following, the cases cited to support them. The error arises by
making the term "authorized food ingredient" unqualified, and by
disregarding what the
Cliff case makes essential. The
quality of suitableness for food of an ingredient is made
determinative, and wholly determinative, disregarding its quantity,
its relation and proportion to other ingredients, and this, counsel
indeed contends for, and is the proposition presented in the second
question certified. But the contention contravenes the rule in the
Cliff case, where the distinction was made between the
mere addition of an authorized food ingredient and its service in
the compound for something more substantial than coloration. We now
repeat it. Any other rule would give too easy a way to evade the
statute, and make its purpose yield not to what is essential to the
manufacture of oleomargarine, but what is nonessential, and render
a law which was intended to prevent deception an easy means to
accomplish it.
We are not called upon to consider whether the first premise of
counsel's syllogism is sustained by
McCray v. United States,
supra, but we are concerned to say, to meet a contention of
counsel, that it will not be put into antagonism with the
Cliff case by the meaning we have given the latter. On the
contrary, the cases support each other. In both, this Court
declined to follow arguments based upon the mere letter of the
statute, in destruction of its manifest intention. The contention
in the
McCray case was that butter, whether artificially
colored or not, was an authorized ingredient of oleomargarine, and,
when added to oleomargarine, made it free from artificial
coloration. This was pronounced an "obvious
non sequitur."
The product, it was said, would be "oleomargarine," but it would
not be "oleomargarine free from artificial coloration within the
intendment of the proviso" of § 2.
It follows from these views that the first question
certified must be answered in the affirmative; the second and third
questions do not call for specific answers on this record.