Murphy, Morris & Co. vs. The Collector of Customs

A steam turbine imported without a dynamo is not a complete machine for generating electricity and must be classified by its component parts; because it merely furnishes power and is not reversible or intended for a ship, it is neither paragraph 250 electricity-generating machinery nor a paragraph 243 marine engine, but paragraph 257 other machinery.

Murphy, Morris & Co. acted as brokers for J. G. White & Co. in the importation at issue. The Tariff Act of 1901 (No. 230) fixed duties for dynamos, generators, exciters, and all other machinery for the generation of electricity for lighting or power under paragraph 250, for marine engines and steam pumps under paragraph 243, and for other machinery not otherwise provided for under paragraph 257.

On October 29, 1904, J. G. White & Co., through its brokers Murphy, Morris & Co., imported certain goods described in their declaration as “one steam turbine, condensing machinery, hot well and pumps, complete with parts and accessories.” The customs officers classified the steam turbine under paragraph 257, letter (b), of the Tariff Act of 1901 (No. 230), and the condensing machinery under the same paragraph. The importers appealed to the Collector of Customs of the Philippine Islands, who affirmed the classification as to the steam turbine and the condensers but sustained the protest as to the pumps. The importers stated that they would abide by the ruling as to the pumps but appealed to the CFI from the ruling of the Collector so far as it related to the steam turbine and the condensers.

At the time of entry, the importers claimed that all the machinery should be classified under paragraph 243. On appeal to the Collector, they claimed that the machinery should either be classified under paragraph 243 or under paragraph 250 as machinery for the generation of electricity. The machinery was imported for use and was actually used by the Manila Electric Railroad and Light Company in its plant in Manila. The importers apparently claimed that it constituted a complete machine for the generation of electricity and should have been classified as one machine, but when they made the entry they did not so classify it; they separated the machinery into the turbine, and the condensers, wells, and pumps, and did not then claim that it should be classed under the paragraph relating to dynamos.

The machinery as imported was not a complete machine for the generation of electricity because no dynamo was imported with it. The steam turbine is a steam engine for furnishing power and does not by itself generate electricity; for that purpose another engine is added to the steam engine, the purpose of the additional engine being to transform the motion of the steam engine. The evidence taken before the Collector and the CFI showed that the machinery was not intended for use in a ship, that the engine could not reverse, and that the essential feature of a marine engine is that it is reversible. If the engine were placed in a ship it could not operate it; it would be necessary, as a witness said, to add auxiliary parts to it for the purpose of making it a reversing engine.

• Paragraph 250 — Complete Machine: Murphy, Morris & Co. (plaintiffs-appellees/importers) argued that the turbine engine and the generator were one complete machine designed to be used for generating electricity and for no other purpose, so the turbine engine should be classified as a component part of the generator under paragraph 250.
• Paragraph 243 — Marine Engine: They claimed that even if the machinery could not be classified under paragraph 250, it should be classified under paragraph 243 as a marine engine.
• Stationary Engines: They further argued that because stationary engines were not mentioned in the Tariff Act of 1901, the legislature intended only two classes of steam engines—locomotive or traction engines and stationary or marine engines—and that marine engines should therefore be held to mean steam motors.
• Entry and Appeal Claims: At entry they claimed all the machinery under paragraph 243; on appeal to the Collector they claimed either paragraph 243 or paragraph 250.

• Paragraph 250 — Noscitur a Sociis: The Collector and the Government argued that under noscitur a sociis, the generic phrase “all other machinery for the generation of electricity” in paragraph 250 is limited to things of a kindred nature with the particularly enumerated dynamos, generators, and exciters, and does not include a steam turbine and pumps and condensers.
• Paragraph 250 — Power vs. Generation: The Collector maintained that such machinery and apparatus is not machinery for the generation of electricity but furnishes power for the operation of machinery for the generation of electricity; if a steam turbine were considered a machine for generation, a turbine water wheel would have to be so considered.
• Paragraph 243 — Marine Engine: The Government maintained that the steam turbine was not a marine engine because it was not intended for use in a ship and could not reverse; an essential feature of a marine engine is reversibility.
• Paragraph 257 — Residual Classification: The Collector classified the steam turbine and condensing machinery under paragraph 257 as other machinery not otherwise provided for and maintained that classification.

• Paragraph 250 — Electricity-Generating Machinery: Whether the steam turbine and condensing machinery are “machinery for the generation of electricity for lighting or for power” under paragraph 250 of the Tariff Act of 1901.
• Paragraph 243 — Marine Engine: Whether the steam turbine is a “marine engine” under paragraph 243 of the Tariff Act of 1901.
• Paragraph 257 — Residual Classification: Whether the steam turbine and condensing machinery are properly classified under paragraph 257 as “other machinery” not otherwise provided for.

• Paragraph 250 — Electricity-Generating Machinery: No. The steam turbine and condensers are not dynamos, generators, exciters, or machinery of the same class; the turbine furnishes power but does not itself generate electricity, and no dynamo was imported with the machinery.
• Paragraph 243 — Marine Engine: No. The engine was not intended for use in a ship and could not reverse; an essential feature of a marine engine is reversibility.
• Paragraph 257 — Residual Classification: Yes. Because the steam turbine and condensers are not specifically provided for elsewhere, they fall under paragraph 257 as “other machinery,” following Cadler and Co. vs. The United States.

• Paragraph 250 — Electricity-Generating Machinery: Paragraph 250 covers dynamos, generators, exciters, and all other machinery for the generation of electricity for lighting or power, also transformers. The SC first held that the machinery as imported was not a complete machine for generating electricity because no dynamo was imported with it; it had to be separated into its component parts and each part considered separately. The steam turbine is a steam engine for furnishing power and does not by itself generate electricity; another engine is added to transform its motion. Applying noscitur a sociis, the phrase “all other machinery for the generation of electricity” is limited to things of a kindred nature with dynamos, generators, and exciters. The steam turbine and condensers are not of that class. The Collector’s distinction was adopted: such machinery is not machinery for generation but furnishes power for the operation of machinery for generation. If a steam turbine were considered a machine for generation, a turbine water wheel would have to be so considered. The CFI’s paragraph 250 classification cannot be sustained.
• Paragraph 243 — Marine Engine: Paragraph 243 covers marine engines and steam pumps, hydraulic, petroleum, gas, and hot or compressed air motors. The evidence before the Collector and the CFI showed that the machinery was not intended for use in a ship, that the engine could not reverse, and that the essential feature of a marine engine is reversibility. If placed in a ship, the engine could not operate it; auxiliary parts would be needed to make it a reversing engine. The importers’ further argument that stationary engines are not mentioned and that marine engines should be held to mean steam motors cannot be sustained. Cadler and Co. vs. The United States held that a steam engine used as a motor for a rice-cleaning plant must be classified under paragraph 257 as “other machinery” because it was nowhere else specifically mentioned.
• Paragraph 257 — Residual Classification: Paragraph 257 covers “other machinery and detached parts not otherwise provided for.” Since the steam turbine was not a complete electricity-generating machine under paragraph 250 and was not a marine engine under paragraph 243, the SC held that the Collector properly classified the steam turbine under paragraph 257. No mention of the condensers was made in the appellee’s brief, and the SC also held that the condensers were properly classified by the Collector under the same paragraph.

• Noscitur a sociis — Where a statute describes things of a particular class or kind and adds generic words preceded by “other,” the generic words are usually limited to things of a kindred nature with those particularly enumerated unless the context or history of the statute repels that inference; the principle applies to revenue laws as well as penal enactments. The SC applied it to paragraph 250, limiting “all other machinery for the generation of electricity” to machinery of the same class as dynamos, generators, and exciters, so the steam turbine and condensers were excluded.
• Classification of incomplete machines by component parts — When imported machinery is not a complete machine for the claimed purpose because a necessary component is absent, it must be separated into its component parts and each part classified separately. The SC applied this because no dynamo was imported with the steam turbine and condensing machinery, so the importation was not a complete electricity-generating machine.
• Residual tariff classification — Articles not specifically provided for under a tariff act fall under the residual “other machinery” clause. The SC applied paragraph 257 to the steam turbine and condensers after rejecting classification under paragraphs 250 and 243, following Cadler and Co. vs. The United States.
• Marine engine — The essential feature of a marine engine is that it is reversible and intended for use in a ship. The SC held the steam turbine was not a marine engine because it was not intended for use in a ship and could not reverse.

• 'That this machinery as imported was not a complete machine for the generation of electricity is clear because no dynamo was imported with it. It must therefore be separated into its component parts as was done by the Collector, and these parts must be considered separately.' — The SC rejects treating the imported turbine and condensers as one complete electricity-generating machine and requires separate classification of the component parts.
• 'Where a statute describes things of a particular class or kind accompanied by words of generic character preceded by the word "other", the generic words will usually be limited to things of a kindred nature with those particularly enumerated unless there be something in the context or the history of the statute to repel such as inference. This is on the principle of noscitur a sociis, which is held applicable to revenue laws as well as penal enactments.' — The SC adopts the statutory-construction rule that limits paragraph 250’s generic “other machinery” phrase to machinery of the same class as dynamos, generators, and exciters.
• 'Such machinery and apparatus is not machinery for the generation of electricity, but furnishes power for the operation of machinery for the generation of electricity.' — The SC adopts the Collector’s distinction between machinery that generates electricity and machinery that merely furnishes power to operate electricity-generating machinery.
• 'If this engine were placed in a ship it could not operate it; it would be necessary, as a witness said, to add auxiliary parts to it for the purpose of making it a reversing engine.' — The SC uses this factual finding to reject the claim that the steam turbine is a marine engine under paragraph 243.

• Cadler and Co. vs. The United States, 8 Phil. Rep., 303 — Followed; held that a steam engine used as a motor for a rice-cleaning plant must be classified under paragraph 257 as “other machinery” because it was nowhere else specifically mentioned.
• Adams vs. Bancroft, 3 Summer, 384; 1 Fed. Cases, 84 — Cited in the Attorney-General’s argument, adopted by the SC, for the rule that noscitur a sociis applies to revenue laws as well as penal enactments.

• Paragraph 243, Tariff Act of 1901 (No. 230) — Covers marine engines and steam pumps; hydraulic, petroleum, gas, and hot or compressed air motors, N.W., 100 kilos, $1.50. Applied: the steam turbine was not a marine engine because it was not intended for use in a ship and could not reverse.
• Paragraph 250, Tariff Act of 1901 (No. 230) — Covers dynamos, generators, exciters, and all other machinery for the generation of electricity for lighting or power, also transformers, N.W., 100 kilos, $5.00. Applied: the steam turbine and condensers were not within this paragraph because they were not of the same class as dynamos, generators, and exciters and no dynamo was imported.
• Paragraph 257, Tariff Act of 1901 (No. 230) — Covers other machinery and detached parts not otherwise provided for: (a) of copper and its alloys, N.W., 100 kilos, $4.00; (b) of other material, N.W., 100 kilos, $1.00; with a proviso that none of the articles under paragraphs 252 to 257 shall pay less than 20 per centum ad valorem. Applied: the steam turbine and condensers were classified under paragraph 257 as other machinery not otherwise provided for.