Opinion
No. J-179.
October 20, 1930.
Suit by the Bassick Manufacturing Company against the United States.
Petition dismissed.
The plaintiff brings this suit to recover the sum of $2,529.65, with interest thereon, excise taxes paid by plaintiff for the period from September, 1924, to February, 1926, under the provisions of section 600 of the revenue act of 1924.
The issue presented is whether sales by the plaintiff of packages consisting of one grease gun and 19 nipples, adaptable for use, and advertised and sold for use on Ford passenger cars, trucks, and tractors, are subject to the tax as parts or accessories for automobiles.
The case having been heard by the Court of Claims, the court, upon the report of a commissioner, and the evidence, makes the following special findings of fact:
1. The Bassick Manufacturing Company, Inc., during the times hereinafter mentioned was and now is a corporation organized, existing, and operating under and by virtue of the laws of the state of Delaware with its principal place of business located at Chicago, Ill.
2. Plaintiff and all the officers thereof have at all times borne true allegiance to the United States and have not in any way voluntarily aided, abetted, or given encouragement to rebellion against the United States. Plaintiff is a citizen of the United States, the sole owner of the claim hereinafter stated; no action has been had thereon before Congress or any governmental department, and no part of which has ever been sold or assigned.
3. During the times hereinafter mentioned plaintiff was engaged in the business of manufacturing and selling grease guns, connections for grease guns, and nipples.
The articles named constitute a system of high-pressure lubrication which involves what are known as grease nipples and a pressure compressor. The nipples are used to replace the old-style grease cups which are attached to the bearings. This system of lubrication is used in greasing many types of industrial machines and implements as well as automobiles.
The grease guns manufactured and sold by the plaintiff were of various sizes and sold at a wide range of prices, depending largely upon the size and cost of production, there being no material difference either in the construction or practical operation of the different sizes.
The taxes in question were assessed with reference to the manufacture and sale of packages of these articles, consisting of one grease gun, or compressor, and nineteen nipples; that being the number of nipples necessary to replace the grease cups on the chassis of a Ford automobile. The nipples were assorted with reference to their particular utility on Ford cars, being two of one kind, four of another, three of another, etc. These packages were sold by the plaintiff as a unit with the statement on each package, "For Ford passenger cars, trucks, and tractors."
The articles in these packages as put up and sold by the plaintiff were primarily adapted for use on automobiles.
It is not shown in the record that any of these articles so assembled and sold in packages were used otherwise than on automobiles. The plaintiff paid no taxes on grease guns, grease-gun connections, and nipples manufactured and sold by it except those assembled in packages and sold as aforesaid for use on automobiles.
4. Plaintiff made and filed its manufacturers' excise tax returns monthly for the period September, 1924, to February, 1926, inclusive, showing the amount of tax due thereon which was duly assessed on such returns by the Commissioner of Internal Revenue, paid by plaintiff for the months, in the amounts, and on the dates hereinafter set forth, as follows:
------------------------------------------------------------------------- Period | Year | Month | Year | Page | Line | Amount | Date paid ----------|------|-----------|------|------|------|-----------|---------- Sept. ... | 1924 | Oct. .... | 1924 | 55 | 3 | $ 426.70 | 10/30/24 Oct. .... | | Dec. .... | | 11 | 3 | 381.27 | 12/5/24 Nov. .... | | Dec. .... | | 40 | 3 | 197.62 | 12/27/24 Dec. .... | | Jan. .... | 1925 | 58 | 9 | 164.38 | 1/31/25 Jan. .... | 1925 | Mar. .... | | 1 | 8 | 151.09 | 3/3/25 Feb. .... | | Mar. .... | | 50 | 2 | 417.03 | 3/21/25 Mar. .... | | Apr. .... | | 46 | 6 | 707.04 | 4/28/25 Apr. .... | | May ..... | | 43 | 6 | 499.69 | 5/29/25 May. .... | | June .... | | 51 | 2 | 928.77 | 6/30/25 June. ... | | July .... | | 48 | 1 | 1,005.80 | 7/29/25 July. ... | | Sept. ... | | 1 | 3 | 807.82 | 9/1/25 Aug. .... | | Oct. .... | | 0 | 7 | 739.09 | 10/1/25 Sept. ... | | Oct. .... | | 49 | 0 | 589.75 | 10/31/25 Oct. .... | | Dec. .... | | 2 | 6 | 531.81 | 12/1/25 Nov. .... | | Dec. .... | | 52 | 6 | 476.29 | 12/31/25 Dec. .... | | Jan. .... | 1926 | 39 | 9 | 1,031.15 | 1/29/26 Jan. .... | 1926 | Mar. .... | | 5 | 6 | 273.23 | 3/2/26 Feb. .... | | Apr. .... | | 0 | 3 | 571.05 | 4/1/26 -------------------------------------------------------------------------
5. On March 14, 1928, plaintiff filed its claim for refund No. 15832 of manufacturers' excise tax so paid on grease guns, connections for grease guns, and nipples, for the period September, 1924, to February, 1926, inclusive, in the amount of $2,529.65, which was duly rejected by the Commissioner of Internal Revenue on March 30, 1928.
George M. Wilmeth, of Washington, D.C., for plaintiff.
R.C. Williamson, of Washington, D.C., and Herman J. Galloway, Asst. Atty. Gen. (Arthur J. Iles, of Indianapolis, Ind., on the brief), for the United States.
Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
The issue in this case is whether lubricating outfits described in finding 3, consisting of a grease gun and nineteen nipples, assembled in packages, and advertised and sold "For use on Ford passenger cars, trucks, and tractors," are subject to the excise tax provided in section 600, of the Revenue Act of 1924 ( 43 Stat. 253, 322 [ 26 USCA § 881 note, and § 882]) as parts or accessories for automobiles.
Plaintiff contends that since grease guns, grease-gun connections, and nipples are adaptable for use on other than automobiles, and when sold separately are not subject to tax, the grouping together of a grease gun and a sufficient number of nipples to replace the grease cups on the chassis of Ford automobiles, and the advertisement and sale of the articles so grouped, for use on Ford automobiles, does not make such sales taxable within the meaning of the statute.
This contention has been decided adversely to the plaintiff in Fairmount Tool Forging Company v. United States, 42 F.2d 591, 594 (decided by this court June 16, 1930). The court said:
"Tools of general utility, i.e., capable of use for a variety of purposes, may not escape classification as an automobile accessory upon this single fact. This, we think, is apparent. Ordinary monkey wrenches, pliers, hammers, etc., may serve a variety of useful purposes; but when set aside and singled out for an especial purpose, the very necessity of so doing emphasizes the correctness of classifying them as accessories to the purpose. The plaintiff, in order to appeal to a special demand, an essential demand, segregates from his large stock of merchandise the particular units which serve the customers' especial necessities, and gives to the public the merits of his offering by assuring him in public advertisements that the `kits' meet all the especial emergencies that may be remedied by the use of the tools purchased. It is only when this is done that the Commissioner taxes the articles. The fact that tools of this design, functioning as these tools do, were manufactured prior to the advent of the automobile, and are not now, nor never were, especially designed for use on an automobile, is not in and of itself determinative. See Cole Storage Battery Co. v. United States, 65 Ct. Cl. 164; Walker Mfg. Co. v. United States, 65 Ct. Cl. 394; Advance Automobile Accessories Corporation v. United States, 66 Ct. Cl. 304."
The plaintiff in the instant case selected from the large variety of grease guns manufactured by it a gun adaptable in size for satisfactory use in the lubrication of Ford automobiles, put it into a package with nineteen nipples of suitable design for replacement of the grease cups on a Ford chassis, advertised, and offered such package for sale to Ford owners for use on their cars.
Under the rule announced in the cases cited, the articles, grouped into packages and sold by the plaintiff in the manner stated, are primarily adapted for use on automobiles, and the Commissioner of Internal Revenue properly assessed and collected taxes on such sales. See Universal Battery Company v. United States, 281 U.S. 580, 50 S. Ct. 422, 74 L. Ed. 1051, decided by the Supreme Court May 26, 1930.
The plaintiff's petition must be dismissed. It is so ordered.