Cunard S.S. Co. v. Mellon

• Citation: 284 F. 890
• Parties: CUNARD S.S. CO., Limited, et al. v. MELLON, Secretary of the Treasury, et al., and ten other cases.
• Decision Date: 23 October 1922
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

284 F. 890

CUNARD S.S. CO., Limited, et al. v. MELLON, Secretary of the Treasury, et al., and ten other cases.

United States District Court, S.D. New York.

October 23, 1922

These cases come up upon motions by the defendants to dismiss the bills, and by the plaintiffs for final decrees upon the answers. The pleadings have been so drawn on both sides as to raise the merits of the controversy, and it is not necessary to set them forth in detail. The facts are these:

Since the enactment of the War Prohibition Act (Comp. St. Ann Supp. 1919, Secs. 3115 11/12f-3115 11/12h), in November 1918, which was followed in January, 1920, by the Eighteenth Amendment and the National Prohibition Act (41 Stat. 305), it has been the continuous custom of all transatlantic passenger steamers to bring into the port of New York limited stocks of wines and liquors as part of their sea stores. This was done with the consent of the public authorities, who promulgated regulations recognizing the practice, but providing that while within the territorial waters of the United States they should remain intact under seal. The theory on which the authorities proceeded, acting on an opinion at that time given by the Attorney General, was that, as part of the ship's stores, these wines and liquors, if sealed and kept on board, were not to be regarded as brought within the country at all, or as subject to its municipal law, in accordance with the general rule that, as respects what happens upon the deck of a foreign ship, the municipal law does not apply, except in cases where the peace of the sovereign is at stake, Later the permission so given was further extended to allow the ships to dispense to their crews their customary ration of wine, as was in some cases required by the laws of the country from which they came.

This being the posture of affairs, on May 15, 1922, the Supreme Court decided in the cases of Grogan v. Walker, and Anchor Line v. Aldridge, 258 U.S. . . ., 42 Sup.Ct. 423 66 L.Ed. * * *, that the bare transit of liquors across the territory of the United States was transportation within the Eighteenth Amendment. Thereafter the present Attorney General, after consideration, on October 5, 1922, rendered an opinion to the Secretary of the Treasury that these decisions covered passenger steamers plying in and out of the ports of this country. The President thereupon publicly announced that after a given date he should proceed to execute the law in accordance with this opinion, and this created the situation out of which these bills arise.

The practice of all steamers has been freely to sell wines and liquors out of these stocks to their passengers on east-bound voyages, when once outside the league limit, and to replenish them in Europe, so that they should suffice for a round trip. The stocks in question are therefore carried into the port, kept there under seal, and carried out again, only for the entertainment of passengers embarking from the United States. Besides the wines and liquors so used, the steamers carry a stock for the use of their crews. In the case of the French, Italian, and Belgian ships, the law of their flag requires them to supply a ration of wine, and in those cases it is possible that the ships may not be able to obtain clearance unless they comply with this provision. Furthermore, the use of wines, beers, or liquors among the peoples, except Americans, from whom the crews of all the ships are drawn, is habitual, and these beverages are regarded as a necessary part of their ration.

Among the plaintiffs are two lines which sail under the American flag. These the authorities have always treated like the foreign lines; they have freely sold their wines and liquors at sea, and brought them into port under the same restrictions and with the same privileges as the rest. They are now, however, subject to the same proposed action by the defendants.

The defendants are not the same in all the suits. In some cases the Secretary of the Treasury is joined, in some the United States Attorney for the Southern District of New York, and in some the zone officer, but the collector of the port of New York and the local Prohibition Director are defendants in all.

Van Vechten Veeder, of New York City, for plaintiffs Oceanic Steam Nav. Co., Limited, Liverpool, Brazil & River Plate Steam Nav. Co., Limited, United S.S. Co. of Copenhagen, Royal Mail Steam Packet Co., Netherlands American S.S. Co. (Holland America Line), and Pacific Steam Nav. Co.

Lucius H. Beers, of New York City, for plaintiffs Cunard S.S. Co., Limited, and Anchor Line (Henderson Bros.).

Joseph P. Nolan, of New York City, for plaintiff Compagnie Generale Transatlantique.

Reid L. Carr, of New York City, for plaintiffs United American Lines and others.

Cleatus Keating and John M. Woolsey, both of New York City, for plaintiffs International Mercantile Marine and International Navigation Co., Limited.

William Hayward, U.S. Atty., and John Holley Clark, Jr., Asst. U.S. Atty., both of New York City, for defendants.

LEARNED HAND, District Judge (after stating the facts as above).

It is conceded, and indeed could not be disputed, after Grogan v. Walker and Anchor Line v. Aldridge, decided May 15, 1922. 258 U.S. . . ., 42 Sup.Ct. 423, 66 L.Ed. . . ., that, had the liquors here in question been a part of the ships' cargo, the bills would not lie. It makes no difference that they were not to be broached while carried within territory of the United States; the carriage would be transportation none the less. But because they are part of the ships' stores, in the sense that that term is generally understood, the plaintiffs argue that they do not fall within the same rule. This argument rests upon two alternative premises: First, that 'transportation' involves a place where, and a person to whom, the goods are to be delivered; and, second, that a ship's stores have by long custom been treated as a part of the 'furniture' (Brough v. Whitmore, 4 Term R. 206), or 'appurtenances' (The Dundee, 1 Hagg.Adm. 109), of the ship which do not without particular mention become subject to the municipal law of the ports into which she enters, any more than the ship herself.

Even if 'transportation' were defined to involve some delivery, I do not see how that would help the plaintiffs. These liquors are carried for delivery at sea to the passengers and crew, and when so delivered their transportation ends. There appears to me no significant distinction in the fact that the place of delivery is the ship itself. The passengers, and, for that matter, the crew, are not the same person as the owner, and, if the passage of title or possession has anything to do with the matter the title to, and possession of, the bottle or the dram, passes when it is handed to its consumer. The carriage within the limits of the port of New York is a part of a transit whose purpose from the beginning is that very delivery. The fact that the place and the person are undefined is as irrelevant as it would be if a collier cleared to search out and coal at sea friendly cruisers during war, as happened in 1914.

Therefore I might admit the plaintiffs' interpretation of the word, if it were necessary. Nevertheless it seems to me at best very doubtful whether it carries with it any such limitation. The cases on which the plaintiffs rely come only to this: That the jurisdiction of the United States under the interstate commerce clause does not terminate until delivery after a transit across state lines. Gloucester Ferry Co. v. Pa., 114 U.S. 196, 5 Sup.Ct. 826, 29 L.Ed. 158; Rhodes v. Iowa, 170 U.S. 412, 18 Sup.Ct. 664, 42 L.Ed. 1088; Louisville & Nashville R.R. v. F. W. Cook Brewing Co., 223 U.S. 70, 32 Sup.Ct. 189, 56 L.Ed. 355; Danciger v. Cooley, 248 U.S. 319, 39 Sup.Ct. 119, 63 L.Ed. 26. From this it does not follow that the term 'transportation,' as used in this statute, implies delivery to another than the person who carries the liquors. Suppose, for example, a parcel of liquor, made after the amendment, and carried off to be laid away in a cache. There can be no question, I believe, that two separate crimes would be committed, 'manufacture' and 'transportation.'

Nor does it seem to me that the thirteenth and fourteenth sections of title 2 of the Prohibition Act help the plaintiffs. Under these carriers are required to mark the consignor's and consignee's names on the outside of all packages. But it does not follow that a regulation like this of one kind of transportation imputes to the word itself any of the conditions which it enacts. In common use, to transport means to carry about, and I see no reason why it should mean less in section 3. The law clearly intended, by immobilizing liquor, to make surreptitious traffic in it impossible, and its policy would as well cover movements which might be incidental to, as those which immediately terminated in, a delivery to some one else. The case of Street v. Lincoln Safe Deposit Co., 254 U.S. 88, 41 Sup.Ct. 31, 65 L.Ed. 151, 10 A.L.R. 1548, did not decide anything to the contrary; it turned upon the fact that the possession of the liquor in the leased room and in the house were both lawful, and that the movement from one to the other could not be unlawful. To apply it to the cases at bar is to beg the question, because the lawfulness of the possession here depends upon whether this is transportation under the statute. The steamers have no express warrant of law, as Street had, for the possession of the liquor. I conclude therefore, that the carriage in question is 'transportation.' The first point being thus disposed of, I come to the second. It is a very plausible argument to say that ship's stores ought not to fall within the general language of section 3; so...