The defendant, a manufacturer of clothing, on the 10th May, 1864, entered into a contract with the government to make a certain number of cavalry pantaloons, and was to receive for the same $4.52 for each pair. Under this contract the defendant made and delivered in the month of October following 1,800 pairs, and was paid for the same. The internal .revenue act of 1864 (section 94) imposes a duty on ready made clothing &c.. a tax of 5 per cent, ad valorem. This suit is brought to recover the tax on these articles, assessed to the amount of $406. 80.
It is admitted that the clothing was made out of materials of which, in the month of October, when the pantaloons were delivered, tlje,market value exceeded the price paid by thq government, but the cost of manufacture- was more than 5 per cent, of the value of the pantaloons when manufactured. The tax imposed was 5 per cent, on the price received by the defendant for the goods. The 96th section of the act, among other things, provides, “all goods, wares and merchandize, and articles made or manufactured ' from materials which have been subject to, and upon which internal duties have been actually paid; or materials imported upon which no duties have been paid or upon which no duties have been imposed by law, where the increased value of such goods and articles so manufactured, shall not exceed the amount of 3 per cent, ad valorem, shall be exempt from duty.” It is insisted on the part of the defendant that this clause in the section exempts the articles in question from duty. But, on looking at the clause, it will be seen, that the defendant has not brought himself within it. The manufactured goods or clothing, there referred to and exempt, must be made out of materials which have already paid the internal duty, or be imported, and upon which duties have been paid, or which have been imported exempt from duty. It is in respect to clothing made or manufactured out of goods of this character, and in this condition, when, iff the increased value shall not exceed 5 per cent, the exemption duty is permitted. On this ground, alone, we think the plaintiffs are entitled to recover. We are also inclined to think, on the theory of the defendant, that he should have proved the cost of the material to him, and not relied on the market value at the time of *1218the delivery of the clothing. Judgment for | plaintiffs for $406. 80 with interest. j
[Affirmed by the supreme court. 10 Wall. (77 ! U. S.) 58.]