Lowe v. Farbwerke-Hoechst Co.

HOUGH, Circuit Judge (after stating the facts as above). [1] It cannot now be questioned in any lower court that the Harrison Act is a revenue measure or tax law and- is to be construed as such. United States v. Jin Fuey Moy, 241 U. S. 394, 36 Sup. Ct. 658, 60 L. Ed. 1061, a decision which deprives of authority the judgment of this court in Wilson v. United States, 229 Fed. 344, 143 C. C. A. 464. This being the ruling, it makes no difference that the history of the statute as revealed by public discussions, reports of committees and contemporaneous common knowledge, proves that nothing was further from the mind of Congress than to obtain contributions to the support of government through or by means of this statute. The notorious' fact that it was intended to prevent a secret or unauthorized dissemination of habit-forming drugs is no longer material. It is a revenue act, even though it “has a moral end as well as revenue in view.” 241 U. S. at 402, 36 Sup. Ct. 659, 60 L. Ed. 1061. [2] While “revenue statutes, even though embracing penalties or forfeitures, are not to be construed like penal laws generally, * * * but are to be fairly and reasonably construed so as to carry out the intention of the Eegislatures” (United States v. Stowell, 133 U. S. 12, 10 Sup. Ct. 246, 33 L. Ed. 555), the intention of Congress must be deemed to be the providing of revenue, however difficult of reconciliation with the revenue theory is the “moral end’.’ of the law. This re673 suit necessarily flows from the intimation of the Jin Fuey Case, viz. that to take any other view of the nature of the statute would, to say the least,. produce grave doubts of its constitutionality. [3] Regarding tíie statute in its necessary aspect, it must be held that the word “derivative” is to be taken in its commonly received or popular sense,, as distinguished from special or scientific usage. Farbenfabriken v. United States, 102 Fed. 603, 42 C. C. A. 525, and cases cited. Under this rule as to the construction of revenue or taxation laws the court below was right in holding that, even if it were possible chemically to extract from coca leaveá the component parts of novo-caine, the latter substance could not be called a derivative of coca leaves; it is a derivative of coal tar. It seems equally clear that as a revenue act, the language of the exception in section 6, i. e. “liniments, ointments, or other preparations,” must be held to mean other preparations ejusdem generis; and there was no offer to prove (and it is admittedly not a fact) that novocaine is of the nature of an ointment or liniment, no matter what simpler chemical elements are discoverable in its composition. It follows that unless the defendant below was prepared to show that novocaine was a derivative of coca leaves in the ordinary practical commercial sense of that word, the Farbwerke was not liable to the tax levied by the'first section of the statute, nor within the exception of the sixth section. However foreign to the real congressional purpose the foregoing reasoning and conclusion may be, we are compelled to this holding by controlling authority. Judgment affirmed.