K.B. DIV.

hat the conestablished,

for the ap

that question
nst the respe
a sale of milk
substance, and
handed. Undet
Drugs Act 198
power to mak
ve been na

r the purpose of
he milk is
do not purpo

ways in which

he

established

genuine. . . ." The Board of Agriculture have accordingly made regulations dated the 6th Aug. 1901, which provide that "Where a sample of milk contains less than

3 per cent. of milk fat it shall be presumed for the purposes of the Sale of Food and Drugs Acts 1875 to 1899, until the contrary is proved, that the milk is not genuine by reason of the abstraction therefrom of milk fat or the addition thereto of water." The regulation does not purport to contain a definition of genuine milk; its function is to offer a mode of proof that the sample of milk is not genuine. In the present case an analyst's certificate was put in evidence, and it showed a deficiency of milk fat in the milk sold to the extent of at least 46.3 per cent. of that which should have been present.

The sample of milk had therefore only about one half of the milk fat which it ought to have had. It is to be observed upon the wording of the Sale of Milk Regulations 1901, that when the analyst's certificate shows a certain result it is presumed until the contrary is proved that the milk is not genuine by reason of the abstraction of milk fat or the addition thereto of water. It is clear that the milk there referred to and about which the presumption arises is the milk which has been sold and not the milk in bulk. In the present case, the analyst's certificate having been put in, the burden of proof shifted to the respondent to show that the milk was genuine milk, and thereupon the respondent undertook to establish the defence which was put forward successfully in Hunt v. Richardson (115 L. T. Rep. 114; (1916) 2 K. B. 446)—in other words the defence that the milk that was sold was sold in the condition in which it came from the cow. It is to be observed that in Hunt v. Richardson (sup.) nothing was added to or subtracted from the milk that was sold. In the words of A. T. Lawrence J., as he then was: "In this case it is found as a fact that the milk in question was when sold the morning product in its natural condition of a herd of good cows. It had nothing abstracted from it and nothing added to it. It was genuine new milk." In these cases the important moment to look at is the moment of sale, and the important milk is the milk that is sold. The question is whether the milk when sold was itself in the condition in which it came from the cow. The justices have found that the defence was made out merely because when the milk was put in the churn some time before the sale it was in the same

66

[K.B. Div.

There is, however, no finding that the milk which was sold was at the time of sale in the condition in which it came from the cow. What is said is that the milk was allowed to stand and the cream to rise to the top and that the milk was drawn out of a tap some distance down the churn near the bottom and that the cream had risen from it.

Dyke v. Gower (65 L. T. Rep. 760; (1892) 1 Q. B. 220), which was decided in 1892, is a similar case to the present one. There a retail milk seller poured into a pail eight barn gallons of unskimmed milk which she sold therefrom in small quantities to her customers, dipping it out of the pail from time to time with a measure. The sale of the contents of the pail extended over several hours, and during the whole of that time, owing to the neglect of the seller to keep the milk stirred, the cream was continuously rising to the surface. When not more than two quarts of milk remained in the pail an inspector purchased a pint of milk which was served to him from the pail and which upon analysis showed a deficiency of 33 per cent. of fatty matter. The seller did not disclose the deficiency to the inspector.

It was found that the deficiency was entirely due to the manner in which the earlier customers had been served and the seller was found guilty of an offence against sect. 9 of the Sale of Food and Drugs Act 1875, in selling the milk without disclosing its condition. Lord Coleridge, C.J., in the course of his judgment, said: "A milk seller had milk sent up to her from the country in comparatively large quantities; she poured it into a pail and sold it in small quantities to her customers, for that purpose dipping it from time to time out of the pail with a measure. It is a matter of common knowledge that, unless milk is frequently stirred, there is a tendency on the part of the cream or fatty matter of the milk to rise to the top, leaving the lower portion of the milk denuded of the fat which it originally contained. The milk seller sold the milk in that condition." A little later the Chief Justice went on to say: "In the course of the sale of the greater portion of the pail, owing to a neglect to keep the milk stirred, there had been, unconsciously perhaps, abstracted from the milk its fatty matter to an extent which injuriously affected its quality." What was done in that case was said to be abstraction of fatty matter. But abstraction from what? The abstraction which is in question in the section is the abstraction of milk fat from that portion of milk whien is sold. It was not by the dipping of the measure into the churn that the cream was taken out of that milk. The abstraction of the cream from the milk that was sold was due to natural causes. The cream rose to the top before the sale took place. What is the difference in principle between that case and the present one? The charge against this respondent is that he sold milk which was not genuine. What is the real difficulty in the view that if a person places milk in a receptacle well

the cream in the milk will rise to the top, and leaves it without being stirred till the cream has risen, and then sells milk drawn by means of a tap from the lower portion of the churn, he cannot be heard to say that the milk so sold is in the same condition as that in which it came from the cow? The matter has been discussed in two cases in Scotland. In Knowles v. Scott (1918) S. C. (J.) 32 the Lord Justice-General (Lord Strathclyde) said: “I am very far from saying that it might not be abstraction of milk fat from the milk to allow it to stand for some time and, without removing the cream from the top, to serve customers with the milk from the bottom of the can. I can conceive of circumstances in which I would be prepared to hold that that was abstraction." In the particular circumstances of that case the decision was in favour of the appellant, but that was because there was no statement of fact in the case that

it was the practice, by some well-known

method, to restore the milk to its original condition. That expression of opinion was followed in Penrice v. Brander (1921) S. C. (J.) 63. In that case a farmer was charged with contravening sect. 6 of the Sale of Food and Drugs Act 1875 by selling sweet milk which was not genuine in the sense that it contained less than 3 per cent. of milk fat. The alleged deficiency of fat was established, but it was also proved that the milk had not been directly tampered with, the deficiency being due to the milk having stood for some time in the cans and to the samples having been drawn from the tap at the bottom after the cream had I risen. It was further proved that sellers of milk recognised the necessity of redistributing the milk fat, and that the method which the accused instructed his servant to follow, but which his servant omitted on the occasion in question, was to draw off a quantity of milk from the bottom of the can and to pour it in at the top before proceeding to sell the milk. The Sheriff-Substitute held that the offence had been proved, and the appeal against that decision was dismissed. The Lord JusticeClerk (Lord Scott Dickson) said (1921) S. C. (J.) 63, at p. 65: "The case is really concluded, I think, by the case of Knowles v. Scott (sup.). It is true that the decision in that case was in favour of the accused; but I think it is apparent, from the opinions delivered, that that was solely due to the fact that the case did not contain a finding that there was a wellknown method of redistributing the fat in the milk which the accused had failed to adopt. In the present case we have a finding to that effect, and I have no doubt but that the judges who decided Knowles' case (sup.) in favour of the accused would have decided the present case in favour of the prosecutor, had it come before them." A little later the learned judge said: “ In this case I think we have enough to show that there has been abstraction, for, although there was no artificial means used except confining the milk in a closed vessel, the necessary result was that, by the operation of

the cream ascended to the got the milk drawn off bottom got-at any rate f of poorer quality than th cow." Lord Dundas gav same effect. Lord Ormid:

'The peculiarity of the cas this, that the process of al sense, a natural one which 1 aid from the seller of the receive any assistance fro process of abstraction was permanent withdrawal fro milk fat, and could be recti the simple process of remi appellant's failure to apply makes him, in my opinion, li In other words, we are rem employed in 1892 in Dyk where Lord Coleridge used to a neglect to keep the Scottish decision is not bind but it is entitled to respect on which it is based harmo judgment in Dyke v. Gowe circumstances I do not thin justices to find that the san the appellant was at the t condition in which it came f analyst's certificate having was a presumption which that the milk was not genu I think that the appellan right-namely, that the mi not of the nature, substan the article demanded, as of the Sale of Food and Dr respondent knew what res certain steps were not taken instructed his servant to s starting on his round, but t do so. There was no SU method which was propose milk was impracticable; wh before the justices was tha were not taken because the the appellant gave to his carried out. In my opinion to an erroneous conclusio must be allowed.

[K.B. DIV.

nd people whe a tap at the me time-m oduced by the dgment to the

aid, at p. 6
ms to me to be
ction was, in a
red no artifical
k and did not
him. But this
t necessarily a
ne milk of the
by the seller by
and it is the
process which
to conviction

to the phrase
Gorcer (5)
words "owing
stirred." The
upon this court.
d the reasoning
s well with the
up.). In thes
was open to th
of milk sold t
of sale in

the cow. Th
n proved, ther
s not rebutte

In the resu

contention
old to him

and quality d
ired by sect.
Act 1875. The
might follow
d he according
the milk befor

servant failed a
stion that the
or remixing th
was put forwar
iese precautions
structions wid
rvant were

he justices came
and the appe

ew of the facts
urt and the an
orward, I think
the milk wh
drawn off from
om of the chur
x fat of the n

the cream in the
at the top. h
ly question
gasked for ne
him was of t
y of the artis
as it new mulk

lations 1901

not sa

K.B. Div.]

genuine if there has been no abstraction of milk fats or addition of water. It merely provides that an analyst's certificate that the sample of milk contains less than 3 per cent. of milk fat raises a presumption, until the contrary is proved, that the milk is not genuine by reason of the abstraction therefrom of milk fat or the addition thereto of water. But it leaves it open to the vendor to rebut that presumption, and, just as the vendor may rebut it by showing that the milk is in the same state as it came from the cow, so also the prosecution may show that even though there has been no interference with the milk by the hand of man, nevertheless the milk is not genuine new milk. I think that gets rid of the difficulty as to whether or not there has been abstraction. It is true that sect. 9 of the Sale of Food and Drugs Act 1875 appears to contemplate the abstraction by a person from an article of food of any part of it so as to affect injuriously its quality, substance, or nature, and it may be that the Sale of Milk Regulations 1901 contemplate the same thing, but even if they do the purchaser of milk is not bound to show that there has been some personal interference with the milk by the hand of man.

[K.B. Div.

case one must also take into consideration the decision in Few v. Robinson (126 L. T. Rep. 94; (1921) 3 K. B. 504), where the judges agreed in laying down what Hunt v. Richardson (sup.) really did decide—namely, that in order to create an offence under sect. 6 of the Act of 1875 it must be shown that the milk has been adulterated either by the addition of some foreign substance or the abstraction of one of its constituent elements. In the present case the only evidence given of the adulteration was the production of an analyst's certificate showing a deficiency of milk fat to the extent of 46.3 per cent. The explanation given by the respondent was that the milk had been put into a churn and that, contrary to his instructions, it had not been stirred, and consequently the cream in the milk had risen to the top, whereas the milk that had been sold was drawn from the bottom of the churn by means of a tap. The Sale of Milk Regulations 1901 provide that "Where a sample of milk . contains less than 3 per cent. of milk fat it shall be presumed for the purposes of the Sale of Food and Drugs Acts 1875 to 1899, until the contrary is proved, that the milk is not genuine, by reason of the abstraction therefrom of milk fat, or the addition thereto of water." It is said that that presumption has been rebutted in the present case because there is a finding by the justices that the milk was put into the churn in the same state as it came from the cow, and from that time until the sample was taken no one had access to the churn or could have tampered with the milk, and that consequently there had been no abstraction of milk fat from the milk. I cannot agree with that contention. What is abstraction? We have the decision of the Divisional Court in Dyke v. Gower (sup.). In that case a milk seller put a quantity of milk into a pail and sold it in small quantities to customers by dipping it from time to time out of the top of the pail with a measure, and owing to the fact that the sale of the milk extended over several hours the cream in the milk was continuously rising to the top; owing to the failure of the seller to keep the milk stirred, the upper portion of the milk that was sold contained more cream than the lower portion. It was held that owing to the neglect of the seller to keep the milk stirred there had been

It may be that the collection of the cream at the top of the milk is due to natural causes, but if the cream does collect at the top of the milk it is the duty of the vendor by stirring the milk to see that the milk at the bottom of the churn has its proper proportion of cream.

66

I should have been prepared to follow the decision in the Scottish case of Penrice v. Brander (sup.), and more especially the judgment of Lord Ormidale, who said: The peculiarity of the case seems to me to be this, that the process of abstraction was, in a sense, a natural one which required no artificial aid from the seller of the milk and did not receive any assistance from him. But this process of abstraction was not necessarily a permanent withdrawal from the milk of the milk fat, and could be rectified by the seller by the simple process of remixing; and it is the appellant's failure to apply that process which makes him, in my opinion, liable to conviction." I only wish to add that in my view the decision which we are giving does not in any way conflict with the decision in Hunt v. Richardson (sup.). In that case no question arose as to milk fat having been abstracted from the milk that was sold. I agree that this appeal ought to be allowed.

SHEARMAN, J.- I am of the same opinion, but I desire to add a few words to what has been already said. The summons in this case was under sect. 6 of the Sale of Food and Drugs Act 1875 for unlawfully selling to the prejudice of the purchaser milk which was not of the nature, substance, and quality of the article demanded by the purchaser. In all these cases one has to start with the decision in Hunt v. Richardson (sup.). In that case the judges were trying to reconcile conflicting

decicie

-unconsciously perhaps abstracted from the milk at the bottom of the pail its fatty matter to an extent which injuriously affected its quality. That is the converse case to the present case, because here all that was done was to pour new milk into a churn and allow it to stand, with the result that the cream in the milk rose to the top, and then to sell milk which was drawn from the bottom of the churn by means of a tap. I think it cannot be said that the respondent did not abstract the milk fat from the milk as sold. He put the milk into the churn, well knowing the fat in the milk would rise to the top of the milk unless it was kept stirred. That is the only thing that was done here. The presumption that milk is not

K.B.]

of milk fat can be rebutted, but it is not rebutted if some fat has been abstracted from the milk, and in the present case there was evidence that some fat had been abstracted from the milk sold to the appellant. I agree that the appeal must be allowed.

Appeal allowed and case remitted. Solicitors for the appellant, Gibson and Weldon, for Wellington, Clifford, and Matthews, Gloucester.

Solicitors for the respondent, Smiles and Co., for Steel and Broom, Stow-on-the-Wold.

Tuesday, March 3.

(Before RowLATT, J.)

COMMISSIONERS OF INLAND REVENUE V. ANGLOCHILIAN NITRATE and RAILWAY COMPANY. (a) Revenue Corporation profits tax-Deductions— Excess profits duty-Excess profits made but duty set-off against deficiencies in previous accounting periods-Finance Act 1920 (10 & 11 Geo. 5, c. 18), s. 53, sub-ss. (1) (2) (g). The respondent company appealed against assessment to corporation profits tax for the accounting period ended the 31st Dec. 1920.

Sect. 53 of the Finance Act 1920 provides : "(1) For the purpose of this part of this Act profits shall be taken to be the actual profits arising in the accounting period, and shall not be computed by reference to the income tax year or on the average of any years.

'(2) Subject to the provisions of this Act, profits shall be the profits and gains determined on the same principles as those on which the profits and gains of a trade would be determined for the purposes of Sched. D set out in the First Schedule to the Income Tax Act 1918

duty paid by him du accord with his profits period."

For two of the six acco the 31st Dec. 1919 the re excess profits assessable while for the other fo the company had losses. of duty assessable on th in respect of the two 145,6771., against whic off in respect of the four amounting to 354,9681. of 209,2917. 10s. duty against the excess prof the accounting period t which amounted to 86,81 of duty available as a se profits duty assessable fo in question, no assess duty was made by the Co Revenue for that period that no deduction for ea therefore, admissible in ment of the respondent c profits tax, while the contended that the dut question was payable an off in respect of the prio the Crown could not by re an assessment relieve the from liability to the Commissioners decided in dent company and red accordingly. Upon a opinion of the court, Held, that no deduction excess profits duty, as was payable or paid by th for this accounting perio

CASE stated under the s. 56 (6), and the Income by the Commissioners for of the Income Tax Acts f King's Bench Division of

Justice.

At a meeting of the on the 10th Dec. 1923, for t appeals, the Anglo-Chilian Company Limited (here respondent company "), assessment to corporation sum of 30,4001. 17s. for t from the 1st Jan. 1920 to made upon the responde Commissioners of Inland provisions of the Finance The sole question on the determination of this co the circumstances detailed should be made for excess puting the company's lia profits tax.

The provisions for th

nuafito for the numaon of a.