Argued November 29, 30, 1909. Decided January 3, 1910.
The construction given by the Department charged with executing a tariff act is entitled to great weight; and where for a number of years a manufactured article has been classified under the similitude section this court will lean in the same direction; and so held that the Japanese beverage, sake, is properly dutiable under § 297 of the tariff act of July 24, 1897, c. 11, 30 Stat. 151, 205, as similar to still wine and not as similar to beer. After a departmental classification of an article under the similitude section of a tariff law, the reenactment, by Congress, of a tariff law without specially classifying that article may be regarded as a qualified approval by Congress of such classification.
Mr. Thomas Fitch and Mr. W. Wickham Smith, with whom Mr. John M. Thurston was on the brief, for petitioner:
In cases of doubtful classification of articles the construction is to be in favor of the importer. Powers v. Barney, 5 Blatchf. 202; Adams v. Bancroft, 5 Sumner, 384; Hartranft v. Wiegmann, 121 U.S. 609; Am. N. T. Co. v. Worthington, 141 U.S. 468; United States v. Wiggleworth, 2 Story, 369; United States v. Davis, 54 F. 147; Matheson Co. v. United States, 71 F. 394; Hempstead Sons v. Thomas, 122 F. 538.
While the highest rate of duty will be imposed where the similitude is equal, yet, in determining whether there is or is not an equality, the doubt will be resolved in favor of the importer. Tiffany v. United States, 112 F. 672; Re Guggenheim Smelting Co., 112 F. 517; United States v. Dana, 99 F. 433; Re Herter Bros., 53 F. 913; Mandell v. Seeberger, 39 F. 760. And see also United States v. Wotton, 53 F. 344; United States v. Schoverling, 146 U.S. 76; Von Bernuth v. United States, 146 F. 61; Hahn v. United States, 100 F. 635.
There is no force in the suggestion that the decision in the Woozens Case, G.A. 2786, establishes any rule of construction. That rule can only be invoked after long continued practice in the same case. Merritt v. Cameron, 137 U.S. 542; United States v. Johnson, 173 U.S. 363, 377; Cross v. Burke, 146 U.S. 82, 87.
The doctrine of commercial designation does not apply, and if it did the weight of evidence is against the Government.
That sake is not a spirituous beverage is shown by numerous decisions, six of state, two of Federal, courts besides one of this court. The testimony of five importers and two Government appraisers shows that sake is not a wine by commercial designation. Statistics of Japanese immigration show that the commercial world has never acquiesced in its classification as a wine. The rulings of the internal revenue department show that there it has for years been classed and taxed as a beer. The customs laws show that the quantity of alcohol in a beverage is not the test by which it is classified. The evidence conclusively shows that in material from which made, in process of manufacture, in chemical composition, in stability, in taste and in manner of use there are wide dissimilitudes between sake and still wine.
The sole similitude between wine and sake is in alcoholic strength. The General Board of Appraisers, the United States Circuit Court for the Southern District of New York, the United States Circuit Court for the Second Circuit and the United States Circuit Court for the Northern District of California all decided that the one similitude in alcoholic strength was not sufficient as against the many dissimilitudes to establish a substantial similitude between sake and wine. The United States Circuit Court of Appeals for the Ninth Circuit decided that the one similitude of alcoholic strength overcomes all dissimilitudes.
Mr. J.C. McReynolds, Special Assistant to the Attorney General, with whom The Attorney General was on the brief, for the United States:
The action of the collector is presumptively correct and the burden is on the importers to establish their contention; the judgment of the Circuit Court of Appeals should be approved, therefore, even though this court should think the weight of evidence against that conclusion. Arthur v. Unkart, 96 U.S. 118; Earnshaw v. Cadwalader, 145 U.S. 247, 262; Erhardt v. Schroeder, 155 U.S. 124; United States v. Ranlett, 172 U.S. 133, 146. Similarity is a question of fact. Herman v. Miller, 127 U.S. 363, 370.
As this classification has existed since 1894 no hardship whatever has been imposed on the importer. United States v. Hermanos, 209 U.S. 337. And see Robertson v. Downing, 127 U.S. 607; United States v. Healy, 160 U.S. 136; United States v. Falk, 204 U.S. 143; Hill Bros. v. United States, 151 F. 476; Morningstar v. United States, 159 F. 287.
The similitude clause has long been a part of tariff legislation. See tariff act of 1842 and all subsequent ones. Stuart v. Maxwell, 16 How. 150, 160. As to the construction of that clause see Arthur v. Fox, 108 U.S. 125; United States v. Roessler Co., 137 F. 770; Greenleaf v. Goodrich, 101 U.S. 278, 283; Weilbacher v. Merritt, 37 F. 85; Mandell v. Seeberger, 39 F. 760; Keary v. Magone, 40 Fed. Rep. 873; Re Herter Bros., 53 F. 913; United States v. Dana, 99 F. 433; Hahn v. United States, 100 F. 635; Tiffany v. United States, 112 F. 672; Re Smelting Co., 112 F. 517; Waddell Co. v. United States, 124 F. 301; Rich v. United States, 177 F. 293.
Sake is similar to still wines as measured by use, quality and material, and although there may be some similarity to beer there is a greater similarity to still wine.
Something can be said on both sides of the question of similarity, and if the case turned simply upon that question it might be difficult to reach a satisfactory conclusion. In such a case the construction given by the Department charged with the execution of the tariff acts is entitled to great weight. As said by Mr. Justice McKenna, delivering the recent opinion of the court in United States v. Hermanos, 209 U.S. 337, 339:
"We have said that when the meaning of a statute is doubtful great weight should be given to the construction placed upon it by the department charged with its execution. Robertson v. Downing, 127 U.S. 607; United States v. Healey, 160 U.S. 136. And we have decided that the reenactment by Congress, without change, of a statute which had previously received long continued executive construction is an adoption by Congress of such construction. United States v. Falk, 204 U.S. 143, 152."
In the decision of this case Mr. Justice White and Mr. Justice Peckham concurred solely because of the prior administrative construction.
Prior to 1894 sake was classified by similitude to distilled liquor and subjected to a duty of $2.50 per proof gallon under paragraph 329, act 1890, 26 Stat. 567, 589, c. 1244, and $2 under Schedule A, act 1883, 22 Stat. 488, 494, c. 121.
In July, 1894, Y. Woozeno protested against this classification, claiming the liquor was dutiable under the act of 1890 by similitude to still wine. He was sustained by the Board of General Appraisers in opinion dated October 4, 1894 (T.D. 15392, G.A. 2786). The Treasury Department acquiesced, and has acted accordingly until the present time; no protest against the practice was entered until March, 1902. Three years after the ruling in the Woozeno case, Congress passed the tariff act of 1897, which in no way modified the provisions upon which the appraisers had previously based their decision. This in effect confirmed their action. In March, 1902, Hackfeld Co., Honolulu, protested against the classification of "sake" by similitude to still wine, but the prior ruling was sustained by the appraisers and the importer acquiesced in the decision. In the tariff act of 1909 sake is specially enumerated with still wine, (paragraph 307):
"Still wines, including ginger wine or ginger cordial, vermuth, and rice wine or sake, and similar beverages not specially provided for in this section, . . . if containing more than fourteen per centum of absolute alcohol, sixty cents per gallon." 36 Stat. 11, 40, c. 6.
In April, 1903, Nishimiya imported some sake at New York, and protested against the classification by similitude to still wine. The board of appraisers sustained the collector, but on appeal to the Circuit Court for the Southern District of New York the Circuit Judge thought that sake was not sufficiently like either wine or beer to be classified by similitude, and held it to be a non-enumerated manufactured article. This conclusion was sustained by the Circuit Court of Appeals for the Second Circuit. United States v. Nishimiya, supra.
Thus it appears that prior to 1894 sake was classified by similitude to distilled liquor, and then on a protest by an importer it was classified by similitude to still wine, and that ruling has been followed from that time to the present, receiving in the meantime at least a qualified approval by Congress. It was accepted without challenge until 1902. Then, a protest against it having been overruled, it remained unchallenged for another year. After this, and in the latest tariff act, Congress has in terms put sake in the category with still wines.
Under these circumstances we think the intent of Congress in respect to the classification of sake is clearly manifested, and the judgment of the Court of Appeals is