ONE MILLION PILLS

Evening Star, Issue 12366, 2 December 1904, Page 6

ONE MILLION PILLS

THE SUPREME COURT’S OPINION ABOUT BILE BEANS. Mr Justice Williams recently heard argument on a special case stated for’ the opinion' of th® Court in reference to Bile Beans. Mr Sim appeared for Kempthome, Prosser, and Co., and Mr Fraser appeared for Air Chamberlain, Collector of Customs. In March last the company imported by the Warrimoo one million pills, and paid Customs duty on the same as druggists’ sundries of the value of £133 6s Bd, which was the fair market value of the pills as defined by law, unless the pills ought to have been treated as a proprietary medicine within the meaning of section 6 of the Customs and Excise Duties Act of 1895. The Collector of Customs afterwards claimed that the pills were a proprietary medicine within the meaning of section 5, and should therefore be treated as being of the market value of £1,250 for the purpose of Customs duty, and demanded a further sum of £lB4 4s for additional duty. The company paid this extra sum under protest. The said pills are compound cathartic pills, made in America in accordance with formula No. 160 set out in Parke, Davis, and Co.’s pill book, and may be made and sold by any person in New Zealand or elsewhere. The pills were imported into New Zouth Wales by Chas. Markell and Co., who import large quantities of the said pills and sell them at 2s 8d per 1,000 to various persons, including C. E. Fulford and Co., of Sydnov, who are the proprietors in Australia and New Zealand of the trade mark “Bile Beans for Biliousness,” and sell the pills under that trade mark in Australia and New Zealand. Kempt-horn®, Prosser, ahd Co. act as agents for 0- E. Fulford and 00. for the side in New Zealand of the said pills. The questions for the opinion of the Court were whether in th© circumstances the said pills were a patent or proprietary medicine within tho meaning of section 5 of the Customs Act., 1895; and whether the facts disclose a dispute as to the proper rate of duty within the meaning of section 53 of the Customs Laws Consolidation Act, ‘IBB2. His Honor to-day gave judgment as follows : —ln order to bring the pills in question within section 5 of tbs Customs and Excise Duties Act, 1895, it must appear that they ore a patent or proprietary medicine, although when imported they may not have been in a state fit for sale, as such medicine, or may have required some further preparation or ingredient before being in a state fit for retail sale as such medicine. It is essential, however, that the pills, at the time of their importation in bulk, should come within the designation of a proprietary medicine, although they may not be in a state fit for sale as such a Now, the term “ proprietary medicine” was considered in the Court of Appeal in the case of Sharknd v. the Commissioner of Cuskunk (11, N.Z.L.R., 557). In my judgment in that case I said : “ 1 should define a proprietory medicine to be a medicine in which there is either some secret ingredient or some secret rood© of composition, or a medicine compounded according to some formula which no one but the manufacturer and persons authorised by him have the right to make use of. A proprietory- medicine involves the notion of a proprietor. If a medicine be one of which the formula has been made public, and which can, in practice. be compounded and sold by any apothecary, and that without infringing the rights of any person, I do not see how it can be called a proprietory medicine.” The pills in question do not come within the above definition. Parke, Davies, and Co., manufacturing chemists, in the United States, have a pill hook with formulas for 714 different kinds of pills. The pills in question are compounded according to formula. 160 in that book, the only difference being that the pills are reduced from three grains to 2 grains. Anyone can import, make, and sell these pills. There is no secret about them. As pointed out in the above case, the question .of whether the pills are a proprietary medicine cannot depend upon who the importer is. or on any right he may have, not with respect to the pills themselves, but to a trade mark which he has not affixed, and may never affix, and which he may affix to any kind of pills be pleases. The trade mark and the receptacles to which, it is affixed form, no part of the medicine. I think, therefore, that the pills as imported are not a patent or proprietory medicine, and that question (a) must be answered in the negative. The further question is whether the facts stated in the case disclose a dispute within the meaning of section 52 of the Customs Laws Consolidation Act, 1882. The dispute here is whether the pills come under tie head of patent or proprietary medicines in the schedule to the Customs Acts, or under the head of druggists’ sundries. The ad valorem duty on both is the same, but the contention of the defendant is that if they are proprietary medicines the Act provides that they one to be valued according to tho value of such medicines when sold as proprietary medicines by retail in the country from which they were exported. The defendant therefore' contends that this is not a dispute as to the proper rate of duty payable, but a dispute as to the value of the goods, and that it therefore does not come .within section 62 of the Customs Laws Consolidation Act, 1882, but under section 46. Section 46 seems to me to apply only to the ease where there is no dispute about what the goods are, or under what head they are taxable, but the only question is ns to their true value. Tf proprotiirv medicines and druggists’ sundries had a different ad valorem rate, there is no doi/bt that the dispute as to what bead these pills came under would be a dispute under section 52. And if the amount of duty payable depends upon which head they come under, a dispute as to this may well he considered as a dispute as to the proper rate of duty, “ amount ” being in such circumstances properly read as equivalent to “rate.” This is the more certain because, apart from section 52, there is no provision in tho Customs Acts for the settlement of a dispute as to under which head of the schedule to the Acts a particular article comes, and the whole object of section 52 is to provide for the settlement of such disputes. The answer, therefore, to question (b) will be in the affirmative.