Agnew v. Haymes

• Citation: 141 F. 631
• Decision Date: 09 November 1905
• Docket Number: 576.
• Parties: AGNEW, Collector of Internal Revenue, et al. v. HAYMES.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

141 F. 631

AGNEW, Collector of Internal Revenue, et al. v. HAYMES.

No. 576.

United States Court of Appeals, Fourth Circuit.

November 9, 1905

Thos L Moore, U.S. Atty. (John C. Blair, Asst. U.S. Atty., on the brief), for plaintiffs in error.

A. C Edmunds and N. H. Hairston, for defendant in error.

In the year 1901 T. J. Haymes, the plaintiff below, was operating a registered grain distillery at Elba, in the county of Pittsylvania, Sixth collection district, Va. The distillery had a surveyed capacity for the consumption of three bushels of material a day, and a required yield of 3 1/2 gallons of distilled spirits per bushel. In the month of June, 1901, the distillery was examined by Rives and shelly, officers of the internal revenue, and also by Revenue Agent C. H. Ingram who, on the 19th of that month, made his report in writing to the Commissioner of Internal Revenue, advising the latter of various conditions and circumstances in and about the distillery which indicated that the same was being operated with intent to defraud the United States of the tax upon spirits distilled there, and of nonpayment of the taxes on spirits already produced and removed from the distillery. Acting upon the information derived from this report, and also from reports of Rives and Shelly, on the 28th of June, 1901, the Commissioner of Internal Revenue, by letter, advised Park Agnew, the collector of the Sixth Virginia district, that, in the opinion of his office, the circumstantial evidence was sufficient to warrant the seizure of Haymes' distillery, and directed the collector to take such action. In obedience to this instruction, the collector, on the 9th of July, 1901, through his deputy, John R. Brown, made a seizure of the distillery and fixtures, together with the spirits on hand, as forfeited to the United States for violations of the internal revenue laws. After the seizure, the case was transmitted to the United States attorney for the Western District of Virginia, for proceedings in rem against the property, under the statute, and thereupon, on the 26th of October, 1901, an information was duly filed, in the District Court of the United States for the Western District of Virginia, against the said property, alleging its forfeiture to the United States under the provisions of section 3257 of the Revised Statutes (U.S. Comp. St. 1901, p. 2198). Haymes filed his bond, as required by statute, in the sum of $250,000, for costs, and was allowed to intervene as claimant of the property. We assume, also, that he, by some form of pleading, denied the cause of forfeiture alleged in the information, although this does not appear in the record. The case was continued until the 15th of April, 1902, when, at the regular term of the United States District Court, at Danville, Va., without a trial of the issue or hearing upon the merits, this order was entered: 'United States, Plaintiff, v. 1 Still, etc., claimed by T. J. Haymes, Defendant. In Rem.

'This day came the United States attorney, and came also the said claimant, defendant in this case. Whereupon, on motion of said United States attorney, for good cause shown, it is ordered that this case be dismissed, and stricken from the docket of this court.'

No certificate of reasonable cause of seizure was entered by the court. The record does not show that the property was restored to Haymes, but it is evident from what took place afterwards that it was, or at least so much of it as was still in the custody of the officers at the time the proceeding in rem was dismissed. It appears from the record that soon after the seizure and the transmission of the case to the United States attorney, the property under seizure went into the custody of the United States Marshal for the Western District of Virginia. On the 20th of August, 1902, Haymes brought the present suit in the circuit court of Pittsylvania county, Va., against Park Agnew, collector of internal revenue, and John R. Brown, his deputy who made the seizure, for the recovery of damages alleged to have resulted from the seizure of the property. Upon petition of defendants, the case was removed for trial to the Circuit Court of the United States for the Western District of Virginia. Haymes filed his declaration in his suit against the defendants, in which he alleged, in substance, as is grounds for damages, that they had, on the 9th of July, 1901, unlawfully, wrongfully, and without any reasonable or probable cause, and against his will and protest, seized and taken possession of his distillery, distillery premises, distillery apparatus, tools and fixtures, together with 295 1/2 gallons of distilled spirits, and had unlawfully held and detained the same for one year from the date of the seizure. That whilst the said property was so unlawfully and wrongfully in the possession and control of the said defendants, they negligently, carelessly and wrongfully broke, damaged, injured and destroyed the same, so that 110 gallons of the distilled spirits were entirely wasted, and the machinery and tools rendered unfit for use. There is a further allegation that, by reason of the seizure and detention of the property, etc., the plaintiff was greatly injured in his credit and reputation and brought into public scandal, disgrace, and infamy among his neighbors and business men, and that for this cause, he has not been able to secure the credit necessary for the conduct of his business; and, as an additional ground for damages, that he had been obliged to lay out and expend the sum of one hundred dollars, in order to secure the release of his property. And for these causes he demanded damages in the sum of nineteen hundred ($1,900) dollars. In connection with this declaration, the plaintiff filed an amended bill of particulars, as follows:

'T. J. Haymes v. Park Agnew, Collector. Amended Bill of Particulars.

"To damages sustained by plaintiff by closing up his business from July 9, 1901, to April 1, 1902 ..................................	$ 950 00
"To damage to credit and reputation of plaintiff ...................	900 00
"To amount paid out in having property released from seizure .......	50 00
	----------
"Making a total damage claimed of .............................	$1,900 00"

A demurrer filed by defendants for misjoinder of causes of action was overruled by the court, to which the defendants excepted. The defendants then entered a plea alleging that plaintiff had recovered damages against S. Brown Allen and the Fidelity & Deposit Company, in a suit originally brought by the plaintiff in the circuit court of Pittsylvania county, Virginia, and afterwards removed for trial to the Circuit Court of the United States for the Western District of Virginia, upon the same cause of action as in the present case, which recovery had been settled and satisfied, and was a bar to recovery in this action. It does not appear of record that this plea was relied on or that any consideration was given it by the court. Thereupon the defendants entered their plea of general issue, and the case was brought to trial before a jury.

At the close of the testimony the defendants requested the court, among others, to give the following instructions to the jury: 'The court further instructs the jury that, if they believe that the reports and facts laid before the Commissioner of Internal Revenue by the visiting officers, Rives and Shelly, and by the revenue agent, C. H. Ingram, were such as to lead a reasonable and cautious man to honestly entertain the belief that the law was being violated by T. J. Haymes, the plaintiff, in the operation of his distillery, and that, in consequence of such facts and circumstances being made to appear to the commissioner, he, in good faith in the discharge of his official duty, directed the seizure of the plaintiff's property, then the plaintiff cannot recover any damage in this case on account of such seizure. The court further instructs the jury that if they believe from the evidence in this case that there were such circumstances as would indicate the law was being violated, and, in consequence of such circumstances, the distillery was seized, then the plaintiff cannot recover. ' Both of these instructions were refused by the court, and the defendants duly excepted. The court gave the jury the following instruction: 'The court instructs the jury that, if they believe from the evidence in this case that the plaintiff's distillery was seized and held by the defendants, or by their direction and authority, without there having been any violation of the law by the plaintiff, then they must find for the plaintiff such actual damages as he has sustained by reason of said seizure, not to exceed nineteen hundred ($1,900) dollars. In estimating such damages, the jury shall take into consideration the loss of profit sustained by the plaintiff, during the time the business was suspended; and the loss to him by damage to his credit and reputation; and as to each item they shall not, in any event, allow more than was stated in the bill of particulars as to each item. ' This instruction was objected to by the defendants, which objection was overruled and exception taken.

The jury returned a verdict in favor of plaintiff for $600, and the court, after refusing a motion by defendants to set the verdict aside, entered the following judgment in this case: 'T. J. Haymes, Plaintiff, v. Park Agnew et al., Defendants. Trespass on the Case.

'The motion of the defendants that the verdict be set aside and a new trial granted, having been argued by counsel, it is considered by the court that the said motion be, and it is hereby, overruled. It is further considered by the court that the plaintiff recover of the...