G.R. No. L-7269, January 27, 1912
CASTLE BROS., WOLF & SONS, plaintiffs-appellants, vs. H. B. McCOY, as Insular Collector of Customs, defendant-appellee.

FACTS

The plaintiffs imported into the Philippines from the United States certain merchandise, including roasted and ground coffee, ground nutmeg, ground cloves, ground mace, ground thyme, and ground coriander seed. The Collector of Customs exacted duties on these goods under the Tariff Act of 1909. The plaintiffs paid under protest, arguing that the goods were products or manufactures of the United States and should be admitted duty-free under Section 12 of said Act. The protest was overruled. The parties stipulated the following facts in the Court of First Instance: (1) The coffee was either imported into the U.S. already roasted and ground and then packed there, or imported as green coffee and then roasted, ground, and packed in the U.S. The spices were imported into the U.S. in whole form and then ground there. (2) All articles were shipped directly from the U.S. to the Philippines. The Court of First Instance sustained the Collector, ruling that the processes applied did not constitute “manufacture.” The plaintiffs appealed.

ISSUE

Whether the roasting and grinding of coffee and the grinding of the specified spices constitute “manufacture” within the meaning of Section 12 of the Tariff Act of 1909, thereby entitling the articles to duty-free admission as products or manufactures of the United States.

RULING

No. The Supreme Court affirmed the decision of the lower court. The Court held that the processes of roasting and grinding coffee, and grinding spices, do not constitute “manufacture” under the Tariff Act of 1909. The Court defined “manufacture” by considering the purpose of the tariff law and existing precedents. It cited rulings, including People ex rel. Union Pacific Tea Co. v. Roberts and City v. Coffee Company, which established that such processes do not create a new article with a distinctive name, character, or use; the commodities remain coffee and spices, merely prepared for use. The application of labor or mechanism does not automatically result in a manufactured article. Examples given include that scouring wool or cleaning cotton is not manufacturing. The Court also noted that U.S. Treasury decisions had consistently held that roasting and grinding coffee is not manufacture. Therefore, the articles were not duty-free, and the duties collected were proper.