Opinion
No. H-278.
June 16, 1930.
Action by the Cuno Engineering Corporation against the United States.
Judgment for plaintiff.
This case having been heard by the Court of Claims upon the report of a commissioner and the evidence, the court makes the following amended special findings of fact:
I. The Cuno Engineering Corporation 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 Connecticut, with its principal place of business located at Meriden, Conn.
II. During the period from July, 1922, to February, 1926, plaintiff was engaged in the business of manufacturing and selling, among other things, electric cigar lighters and combination electric cigar lighters and ash receivers. These articles by virtue of being made in various styles and models were adapted for use in various places. They were constructed and adapted for use on household lighting circuits as well as in connection with storage batteries of the style and voltages commonly used on automobiles, motorboats, etc. The basic elements and functioning of all of the styles of lighters are similar; the same consisting of a removable or interchangeable heating unit contained in a heating unit holder, which in turn is attached to a conducting cord adapted to be connected with the source of the electric current. The interchangeable heating units are wound for various voltages, and one can be selected and inserted in the holder in conformity with the voltage of the energy supply with which the lighter is intended to be used.
III. Plaintiff's Exhibit 5 is illustrative of one form of structure described in the previous finding. The structure of this lighter includes a protective casing containing a spring winding reel for the conducting cord. In this specific form the casing is provided with an attachment bracket and mounting screw having a dual function. The bracket and screw operate to mount the lighter on the edge of a dash or instrument board panel of an automobile or other automotive vehicle. At the same time the bracket and screw automatically provide the proper circuit connection to the grounded side of an automobile having a metal dash. An ungrounded terminal is provided on the lighter casing for the connecting of the ungrounded side of the electric energy supply, and the lighter is provided with a heating unit constructed and designed for six volts, the standard voltage for automobiles.
A second terminal is provided on the casing which may be utilized for the completion of the circuit to the electric energy supply when the lighter is installed in conjunction with an ungrounded source of energy supply or is mounted upon a nonconducting dash or fixture.
This specific form of lighter, as shown by Plaintiff's Exhibit 5, would be capable of use for other purposes, provided there was a free or exposed mounting edge on which the same could be clamped and provided the source of energy conformed to the six-volt standard.
IV. Plaintiff's Exhibit No. 7, a catalogue leaflet or sales advertisement pamphlet, entitled "Electric Match," makes reference to several other modifications, all involving the basic structure and principle set forth in finding II. The lighters are described as follows:
(a) No. 640, "Combination Model," which is a model provided with an interchangeable 21 candle power incandescent light and bracket for mounting under dash having an automatic rewinding reel and switch.
(b) No. 603, "DeLuxe Dash Model," which is a model having an automatic switch and rewinding reel and adapted for mounting on either metal or wood dash; this type requiring a hole to be made in the dash.
(c) No. 634A, "Tonneau Model," is the combination of an electric match with an automatic switch and an ash receiver, stated to be easily mounted on any convenient flat surface, but especially adapted for use in tonneau of automobile.
(d) No. 600, "E-Z-On Dash Model," is the model for mounting on either wood or metal dash and having a six-foot cord, automatic rewinding reel, momentary contact push button switch in handle, and reversible ash guard.
(e) No. 620, "Smoking Set," is a complete electric match with removable ash receiver. This model is provided with six-foot cord, automatic rewinding reel, and automatic switch; the entire set is encased in a black morocco leather case.
(f) No. 641, "Midget Model," is a nickel model with reversible ash guard, momentary contact push button switch, and 2½-foot cord to be mounted at any convenient point, especially adaptable for connecting to radio battery.
The number of sales made to automobile jobbers, and on which the taxes were paid, exceeded the sales made to motorboat supply dealers, other consumers, etc., and plaintiff did not know what definite application was made of the lighters on which the taxes were paid.
The devices taxed by the commissioner in this case were not primarily adapted for use on motor vehicles. They were adapted to general use for the purposes for which they were intended.
V. The plaintiff made and filed its manufacturer's excise tax returns monthly for the period September, 1922, 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. ----------------------|-------|-------------------|-------|--------|-------|----------|------------- July ................ | 1922 | Aug ............. | 1922 | 16 | 2 | $434.14 | 8/28/22 Aug ................. | | Oct ............. | | 4 | 8 | 562.61 | 10/4/22 Sept ................ | | Oct ............. | | 18 | 6 | 617.25 | 10/30/22 Oct ................. | | Dec ............. | | 0 | 4 | 711.19 | 12/1/22 Nov ................. | | Jan ............. | 1923 | 11 | 4 | 754.05 | 1/9/23 Dec ................. | | Jan ............. | | 28 | 4 | 531.09 | 1/30/23 Jan ................. | 1923 | Mar ............. | | 0 | 1 | 379.50 | 3/1/23 Feb ................. | | Mar ............. | | 17 | 4 | 198.32 | 3/29/23 Mar ................. | | May ............. | | 3 | 4 | 383.10 | 5/4/23 Apr ................. | | June ............ | | 3 | 6 | 565.14 | 6/5/23 May ................. | | July ............ | | 5 | 1 | 598.47 | 7/5/23 June ................ | | Aug ............. | | 24 | 2 | 537.86 | 8/31/23 July ................ | | Aug ............. | | 20 | 8 | 804.35 | 8/30/23 Aug ................. | | Oct ............. | | 10 | 3 | 665.51 | 10/6/23 Sept ................ | | Oct ............. | | 25 | 1 | 528.02 | 10/31/23 Oct ................. | | Nov ............. | | 22 | 7 | 860.57 | 11/30/23 Nov ................. | | Jan ............. | 1924 | 11 | 1 | 795.99 | 1/10/24 Dec ................. | | Jan ............. | | 28 | 4 | 592.56 | 1/30/24 Jan ................. | 1924 | Feb ............. | | 22 | 9 | 281.92 | 2/29/24 Feb ................. | | Mar ............. | | 20 | 4 | 269.79 | 3/31/24 Mar ................. | | Apr ............. | | 27 | 9 | 264.20 | 4/30/24 Apr ................. | | June ............ | | 2 | 5 | 336.44 | 6/3/24 May ................. | | June ............ | | 22 | 5 | 213.07 | 6/30/24 June ................ | | Aug ............. | | 1 | 4 | 172.10 | 8/2/24 July ................ | | Sept ............ | | 7 | 0 | 122.67 | 9/9/24 Aug ................. | | Sept ............ | | 13 | 5 | 183.24 | 9/30/24 Sept ................ | | Oct ............. | | 10 | 6 | 152.63 | 10/31/24 Oct ................. | | Nov ............. | | 13 | 7 | 215.22 | 11/29/24 Nov ................. | | Dec ............. | | 12 | 9 | 423.13 | 12/31/24 Dec ................. | | Jan ............. | 1925 | 10 | 9 | 427.24 | 1/31/25 Jan ................. | 1925 | Feb ............. | | 7 | 8 | 115.31 | 2/25/25 Feb ................. | | Mar ............. | | 4 | 1 | 104.55 | 5/5/25 Mar ................. | | Apr ............. | | 13 | 5 | 161.90 | 4/29/25 Apr ................. | | May ............. | | 8 | 9 | 144.27 | 5/28/25 May ................. | | July ............ | | 14 | 0 | 144.15 | 7/30/25 June ................ | | July ............ | | 10 | 3 | 214.69 | 7/29/25 July ................ | | Aug ............. | | 11 | 5 | 303.23 | 8/31/25 Aug ................. | | Sept ............ | | 7 | 5 | 251.57 | 9/28/25 Sept ................ | | Oct ............. | | 7 | 5 | 268.50 | 10/28/25 Oct ................. | | Nov ............. | | 7 | 3 | 219.36 | 11/24/25 Nov ................. | | Dec ............. | | 9 | 7 | 593.59 | 12/31/25 Dec ................. | | Jan ............. | 1926 | 8 | 2 | 196.68 | 1/28/26 Jan ................. | 1926 | Feb ............. | | 6 | 7 | 132.73 | 2/25/26 Feb ................. | | Mar ............. | | 8 | 5 | 135.36 | 3/29/26 ---------------------------------------------------------------------------------------------------- VI. On September 2, 1926, plaintiff filed its claim for refund, No. 355164, of manufacturer's excise tax so paid on electric cigar lighters, combination cigar lighters and ash receivers, for the period July, 1922, to February, 1926, in the amount of $16,567.24, which was duly rejected by the Commissioner of Internal Revenue on May 31, 1927.VII. The plaintiff and all the officers thereof have at all times borne true allegiance to the United States and have not, nor have any of them, in any way voluntarily aided, abetted, or given encouragement to rebellion against the United States; and plaintiff is the sole owner of the claims hereinbefore stated, no part of which has ever been assigned, sold, or discharged.
Alex Koplin, of Washington, D.C., for plaintiff.
R.C. Williamson, of Washington, D.C., and Herman J. Galloway, Asst. Atty. Gen., for the United States.
Before BOOTH, Chief Justice, and WILLIAMS, LITTLETON, and GREEN, Judges.
This is a tax case, involving the exaction of the amount claimed under section 900 of the Revenue Act of 1921 ( 42 Stat. 227, 291). The cited section reads as follows:
"That from and after January 1, 1922, there shall be levied, assessed, collected, and paid upon the following articles sold or leased by the manufacturer, producer, or importer, a tax equivalent to the following percentages of the price for which so sold or leased —
"(1) Automobile trucks and automobile wagons (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), 3 per centum;
"(2) Other automobiles and motor cycles (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), except tractors, 5 per centum;
"(3) Tires, inner tubes, parts, or accessories for any of the articles enumerated in subdivision (1) or (2), sold to any person other than a manufacturer or producer of any of the articles enumerated in subdivision (1) or (2), 5 per centum."
Subdivision 3 of section 600 of the Revenue Act of 1924 ( 43 Stat. 253, 323 [ 26 USCA § 881 note]), reduced the tax rate from 5 to 2½ per cent. The plaintiff is a Connecticut corporation engaged in manufacturing and selling, among other electrical devices, cigar lighters and combination electric cigar lighters and ash receivers. The one issue in this case is whether the electric cigar lighters and combination lighters and ash receivers are taxable as either parts or accessories of an automobile. The facts, we think, are indisputable, and sufficiently appear to characterize the case. That the devices taxed were attached to and used by persons in automobiles is admitted, as well as the fact that the custom of the automotive trade was sought by public advertisements and in catalogues of the plaintiff. Finding IV. We think it clear that article 16 of the Commissioner's regulations, defining parts, has no application here. If the devices are taxable, they fall within the classification designated by the Commissioner as accessories. It reads as follows:
" Definition of Accessories. — An `accessory' for an automobile truck, automobile wagon, or other automobile chassis or body, or motor cycle is any article designed to be attached to or used in connection with such vehicle or article to add to its utility or ornamentation, or any article which is primarily adapted for use in connection with such vehicle or article whether or not essential to its operation or use."
The installation of a cigar lighter and ash receiver is manifestly a convenience to smokers occupying an automobile. It may or may not add to the ornamentation of a car. This is a matter of taste. The defendant asserts that "Congress meant to tax articles used on or in connection with automobiles." If so, the taxing statute has not been so construed by the Commissioner or the courts. Auburn Rubber Co. v. United States, 67 Ct. Cl. 49; Wells Mfg. Co. v. United States, 66 Ct. Cl. 283; Milwaukee Motor Products Co. v. United States, 66 Ct. Cl. 295. The Commissioner has not taxed flower holders, ash receivers, cardcases, toilet cases, vanity cases, baby cribs, or hammocks. Obviously a clear distinction prevails, and was within the intent of the Revenue Act, between an extraneous article or device capable and designed for use as a matter of comfort or luxury to occupants of an automobile, and one so intimately connected with its safe operation and functioning elements that it becomes a component part of the machine's utility. The segregation essential to make depends upon the facts of each case. We have held so more than once. Edison Storage Battery Company v. U.S., 67 Ct. Cl. 543, decided May 6, 1929; Cracker Jack Co. v. U.S., 67 Ct. Cl. 89, decided February 4, 1929. Aside from the general commercial value of the devices here involved, it is difficult to see how they in any wise prolong the life of a car, aid in its operation, or function to overcome any of the various difficulties attendant upon the car's operation, or the incidental inconveniences of automotive travel. A box of safety or loose matches, a separate automatic cigar lighter and ash receiver, clearly constitute a substitute for the devices involved. The electric lighter takes the place of all these, and does no more than serve a personal convenience to the occupant of the car who desires and seeks its use. We think the devices are to be classified alongside flower holders, cardcases, etc., heretofore mentioned. Part of the amount claimed, $434.14, is barred by limitation. Rev. St. § 3228, as amended by the Revenue Act of 1921, § 1316 ( 42 Stat. 314) and the Revenue Act of 1924, § 1012 ( 43 Stat. 342 [26 USCA § 157]).
Judgment is awarded the plaintiff for $16,133.10, with interest as provided by law. It is so ordered.
This case was heard before the appointment of WHALEY, Judge. He therefore took no part in its decision.