1. Under Jud.Code § 240, certiorari may be granted by this
Court, at the instance of the United States, to review a judgment
of the circuit court of appeals reversing a judgment of conviction
in a criminal case and remanding the case to the district court for
a new trial. P.
268 U. S.
544.
Page 268 U. S. 543
2. Where a commodity shipped in interstate commerce is included
in more than one tariff designation, that which is the more
specific will be held applicable, and where two descriptions and
tariffs are equally appropriate, the shipper is entitled to the one
specifying the lower rate. P.
268 U. S.
546.
3. Evidence reviewed and
held to establish that the
shipments in question were not "gasoline" but "naphtha," and
insufficient to prove that they were not "unrefined naphtha" within
the meaning of a railroad tariff applicable. P.
268 U. S.
546.
4. A lower rate properly may be applied to a product shipped in
an unfinished condition in the course of manufacture than that
applicable to it when finished. P.
268 U. S.
548.
5. In a prosecution of a corporation under the Elkins Act on the
ground that it received concessions through shipping its petroleum
product as "unrefined naphtha," and not as "gasoline," under a
tariff allowing a lower rate for the one than for the other,
evidence of other and contemporaneous shipments of the same product
to other places as "gasoline" under other tariffs offering no rate
on "unrefined naphtha" had no tendency to prove that the product
was not "unrefined naphtha" within the meaning of the tariff in
question. P.
268 U. S.
549.
6. Nor, in such case, did description of the shipments as
"gasoline," in compliance with regulations made by the Interstate
Commerce Commission under the Transportation of Explosives Act
requiring such and similar products to be shipped as "gasoline,
casinghead gasoline or casinghead naphtha," have a tendency to
prove, or amount to an admission by the defendant, that the
gasoline rate was applicable or that the shipments were not
"unrefined naphtha" within the meaning of the tariff, since the
purpose of those regulations was to require a disclosure of the
character of the shipments having regard not to rates, but to the
dangers to be guarded against. P.
268 U. S.
550.
284 F. 90 affirmed.
Certiorari to a judgment of the Circuit Court of Appeals
reversing a conviction under the Elkins Act and remanding the case
with directions to grant a new trial.
Page 268 U. S. 544
MR. JUSTICE BUTLER delivered the opinion of the Court.
Respondent was convicted in the District Court for the Eastern
district of Oklahoma on 99 counts, charging that it received
concessions and discrimination in rates on gasoline shipped by the
Gypsy Oil Company between December 2, 1916, and March 12, 1919,
from Keifer, Drumright, and Jenks, Oklahoma, to defendant's
refinery at Port Arthur, Texas, in violation of the Elkins Act of
February 19, 1903, c. 708, § 1, 32 Stat. 847, as amended by the Act
of June 29, 1906, § 2, c. 3591, 34 Stat. 584, 587. The circuit
court of appeals reversed the judgment and remanded the case with
directions to grant a new trial. 284 F. 90. This Court granted a
writ of certiorari. Section 240, Judicial Code, 262 U.S. 738.
Defendant, insisting that this Court is without jurisdiction,
made a motion to dismiss the writ. The determination of the matter
was postponed to the hearing on the merits. In
United States v.
Dickinson (1909),
213 U. S. 92, it
was held that certiorari could not be granted in a criminal case at
the instance of the United States. Act of March 3, 1891, c. 517, §
6, 26 Stat. 826, 828. But that act was modified by the Act of March
3, 1911, c. 231, § 239, 36 Stat. 1087, 1157, which is as
follows:
"In any case, civil or criminal, in which the judgment or decree
of the circuit court of appeals is made final by the provisions of
this title, it shall be competent for the Supreme Court to require,
by certiorari or otherwise,
upon the petition of any party
thereto, any such case to be certified to the Supreme Court
for its review and
Page 268 U. S. 545
determination, with the same power and authority in the case as
if it had been carried by appeal or writ of error to the Supreme
Court."
The words italicized above were added to the provisions of the
Act of 1891. The phrase "upon the petition of any party thereto" is
not limited by the context. The language, circumstances, and
history of the enactment make clear the intent of Congress to give
this Court jurisdiction on the petition of the United States to
bring up criminal cases on writ of certiorari.
See 46
Congressional Record, pp. 2134, 4001. And the petition may be
granted, notwithstanding the circuit court of appeals remanded the
case for a new trial and did not render a final judgment therein.
American Construction Co. v. Jacksonville Railway,
148 U. S. 372,
148 U. S. 385.
Forsyth v. Hammond, 166 U. S. 506,
166 U. S. 513.
The motion to dismiss the writ is overruled.
The circuit court of appeals said (p. 102):
"It is our opinion that, when all competent and relevant proof
in the case is given a fair and impartial consideration, the
conclusion that the verdict is without support is inevitable,"
and held that the district court erred in denying defendant's
motion that a verdict be directed in its favor. The United States
asserts that this was error.
The pertinent language of the act defining the offense charged
is as follows:
". . . It shall be unlawful for any . . . corporation . . . to
solicit, accept or receive any rebate, concession, or
discrimination in respect to the transportation of any property in
interstate or foreign commerce by any common carrier . . . whereby
any such property shall by any device whatever be transported at a
less rate than that named in the tariffs published and filed by
such carrier . . . or whereby any other advantage is given or
discrimination is practiced."
34 Stat. 587. The gist of each count is that the Gypsy Oil
Company delivered gasoline to interstate carriers by
Page 268 U. S. 546
railroad at places in Oklahoma -- Keifer, Drumright, and Jenks
-- for transportation to Port Arthur, Texas, there to be delivered
to defendant, and that defendant knowingly did accept and receive
from the carriers a concession or discrimination in respect of such
transportation, whereby the property was transported at a rate
substantially less than the lawful rate for gasoline. It is not
alleged what defendant represented the commodity to be, or what, if
any, tariff, was applied. It was shown at the trial that all
shipments referred to in the indictment were made as "unrefined
naphtha," under tariffs specifying rates therefor substantially
lower than the contemporaneous rates on gasoline between the same
points. The rates then in force from Keifer are illustrative. They
were "Oils: Petroleum Oil and its Products . . . listed under the
head of
Petroleum and Petroleum Products,'" 39 cents per 100
pounds; "Gasoline in tank cars," 33 cents, and "Unrefined Naphtha
in tank cars" 19 1/2 cents.
Where a commodity shipped is included in more than one tariff
designation, that which is more specific will be held applicable.
U.S. Industrial Alcohol Co. v. Director General, 68 I.C.C. 389,
392; Augusta Vencer Co. v. Southern Ry. Co., 41 I.C.C. 414, 416.
And where two descriptions and tariffs are equally appropriate, the
shipper is entitled to have applied the one specifying the lower
rates. Ohio Foundry Co. v. P., C., C. & St.L. Ry. Co., 19
I.C.C. 65 67; United Verde Copper Co. v. Pennsylvania Co., 48
I.C.C. 663. It follows that, if the property in question properly
might have been described either as gasoline or as unrefined
naphtha, the lower rate was lawfully applied, and defendant was not
guilty, and the burden was on the United States to prove beyond a
reasonable doubt that the property so shipped was gasoline and was
not unrefined naphtha.
The substance of the evidence as to whether the shipments
complained of were gasoline or unrefined naphtha
Page 268 U. S. 547
is given in the opinion of the circuit court of appeals, and
need not be repeated here. The first distillation of crude oil
takes off the elements more volatile than kerosene, and these,
taken together, are known as the "naphtha fraction." After
treatment with sulphuric acid, this fraction is divided by further
distillation into three products -- gasoline, the lightest,
benzine, the intermediate, and naphtha, which is called "painter's
naphtha," the heaviest. The gravity of such naphtha is around 54
degrees (Baume). Casinghead gasoline is produced by compression of
gases which come from oil wells. Like the lighter ends or elements
first coming off in the distillation of crude oil, casinghead
gasoline is highly volatile and dangerous to handle. Its gravity is
about 88 to 90 degrees, and its vapor tension is from 20 to 30
pounds to the square inch. During the period in question, some of
the painter's naphtha produced at defendant's refinery was shipped
from Port Arthur in tank cars to the casinghead gasoline
compression plants of the Gypsy Company at Keifer and Drumright,
there to be blended -- about one part naphtha to two parts
casinghead gasoline. The gravity of the product was about 70 to 75
degrees, and its vapor tension less than 10 pounds per square inch.
At Jenks, casinghead gasoline was not so blended, but it was
subjected to a treatment called "weathering," which lowered
specific gravity and reduced vapor tension to substantially the
same extent as was effected by the blending with painter's naphtha.
The shipment referred to in each count was casinghead gasoline so
blended or weathered. Such reduction of specific gravity and vapor
tension made permissible its transportation in tank cars, under the
regulations of the Interstate Commerce Commission authorized by the
Transportation of Explosives Act. Act of March 4, 1909, § 233, 35
Stat. 1088, 1135, amending Act of May 30, 1908, § 2, c. 234, 35
Stat. 554; Regulations for the Transportation of Explosives and
Other Dangerous Articles,
Page 268 U. S. 548
effective October 1, 1914, revised July 15, 1918.
* There is
involved no claim on the part of the United States that there was
any violation of the act or regulations.
The tariff on unrefined naphtha, under which the shipments
complained of were made, became effective December 2, 1916. Prior
to that, the blended product was shipped from Keifer and Drumright
to defendant's refinery at the gasoline rate. The compression plant
at Jenks was not put in operation until after that date. None of
the products so shipped as unrefined naphtha was sent to the market
or sold to be used as gasoline. All was used at defendant's
refinery and mixed or blended with other products to make gasoline
which defendant sold; it constituted from 5 to 25 percent of such
gasoline. The casinghead gasoline, before or after such blending or
weathering, did not correspond with specifications for any gasoline
sold in the market for use fuel for motor engines and the like. The
evidence was not sufficient to sustain a finding that the
casinghead gasoline in question was suitable for ordinary or
general use as fuel for such engines. And, on a consideration of
all the evidence, it must be held to have been established
conclusively that such substance was not so used and was not
reasonably suitable for such use. It follows therefore that,
whatever it may be called, the product was not the familiar article
of commerce sold as gasoline.
A lower rate properly may be applied to a product when in an
unfinished condition than that applicable to it when finished. In
National Refining Co. v. M., K. & T. Ry. (1912) 23 I.C.C. 527,
it was held that rates applicable to refined oil were excessive
when applied to carload shipments of the so-called lighter ends of
petroleum
Page 268 U. S. 549
which had been separated from crude oil by a skimming process --
that is, by distillation sufficient to take off the more highly
volatile elements -- but which was useless for commercial purposes
until a further process of refinement had been undergone, and that
a reasonable rate on such product was not more than 2 cents per
hundred pounds in excess of the rates contemporaneously applicable
to crude oil. Subsequent to this decision, tariffs covering
"unrefined naphtha" were put in effect on the lines from Muskogee,
Oklahoma, to Coffeyville, Kansas, and from Oklahoma producing
points to Baton Rouge, Louisiana. The product in that case was
similar to the casinghead gasoline here in question. Both included
the lighter ends or more volatile elements of crude oil; they were
unfinished products, and differed from ordinary gasoline of
commerce in like respects. Presumably this decision and these
tariffs were known to and considered by the shipper and carriers
when the tariff on unrefined naphtha was published. And before that
tariff was put in, defendant's representative applied by letter to
the carriers for a "17-cent rate crude unfinished naphtha" from
Port Arthur to Keifer and from Keifer to Port Arthur. The carrier's
representative testified that they were requested "to put in a rate
on crude naphtha or unrefined naphtha or unfinished naphtha," and
that he did not recall which. The United States suggests that the
shipper did not disclose to the carrier that it intended to ship
the product here in question under the proposed tariff. But the
evidence negatives any purpose to deceive or defraud the carriers,
and shows that the purpose of the carrier was to put in a tariff
covering the unfinished product referred to in the negotiations as
crude unfinished naphtha, crude naphtha, unrefined naphtha, and
unfinished naphtha.
The United States introduced evidence to show contemporaneous
shipments by the Gypsy Oil Company of
Page 268 U. S. 550
such casinghead gasoline to Port Arthur, billed as unrefined
naphtha and to Pittsburg billed as gasoline, and also shipments by
that company and others of the same product to other places, billed
as gasoline. But it was not shown that the carriers had published
any tariff covering unrefined naphtha to Pittsburg or the other
points. In the absence of a rate on unrefined naphtha, such
shipments are without significance. There was nothing to show, and
no reason to presume, that all classifications had been made that
could be made in respect of the numerous products of petroleum, and
of those referred to in the industry as gasoline of one kind or
another. There being no rate on unrefined naphtha or opportunity to
choose between the gasoline rate and some other rate, shipments of
the product as gasoline had no probative value or tendency to show
that the product was not fairly described by and included within
the phrase "unrefined naphtha" in the tariff in question.
The regulations of the Interstate Commerce Commission, revised
July 15, 1918, required liquid condensates from natural gas or from
casinghead gas of oil wells, alone or blended with other petroleum
products, having a vapor pressure of not more than 10 pounds per
square inch, to be shipped as gasoline, casinghead gasoline, or
casinghead naphtha. Unrefined naphtha was not mentioned. The
description of the shipments as gasoline under these regulations
had no tendency to show that the tariff rate on unrefined naphtha
was not applicable. The purpose of the regulations was to require a
disclosure of the character of the shipment, having regard not to
rates, but to the dangers to be guarded against. It was not an
admission on the part of the defendant that the gasoline rate was
applicable or that the shipments were not unrefined naphtha within
the meaning of the tariff. The language of the regulation
illustrates the use of the word "naphtha" to include the casinghead
product.
Page 268 U. S. 551
"Naphtha" is a generic term, and embraces the lighter or more
volatile parts of crude oil down to and sometimes including
kerosene. This takes in all the elements of finished gasoline. The
words "naphtha" and "gasoline" are often used interchangeably to
include the unfinished product of which the gasoline of commerce is
made. The thing shipped was an unfinished product. It was taken to
Port Arthur to be used to make gasoline. The evidence required a
finding that it was naphtha. The insistence of the United States is
that it was not "unrefined." The processes for refining crude oil
in the production of gasoline include the separation and combining
of various elements of the crude product, and are not limited to
the elimination of impurities. The evidence is not sufficient to
sustain a finding that the making of gasoline of commerce by the
use of the blended or weathered casinghead gasoline shipped to Port
Arthur did not involve refining, properly so-called. But, even if
the process was, as contended by the United States, a finishing,
and not a refining, process, it is clear that the phrase "unrefined
naphtha" in the tariff in question was not misleading. and did not
contribute to any deception or fraud. The thing shipped was not
ordinary gasoline, and it was lawful to distinguish it by tariff
designation and to make the specified rate applicable. The words
employed describe the product with sufficient accuracy. The
evidence was not sufficient to sustain a finding that the shipments
in question were not unrefined naphtha.
Motion to dismiss denied.
Judgment affirmed.
* This act has since been further amended (Act of March 4, 1921,
c. 172, 41 Stat. 1444), and the Interstate Commerce Commission
prescribed regulations, effective January 1, 1923.