Accardo v. Fontenot, 16402
| Decision Date | 23 December 1920 |
| Docket Number | 16403,16406.,16402 |
| Citation | 269 F. 447 |
| Parties | ACCARDO v. FONTENOT, Internal Revenue Collector. STRUVE v. SAME. CARLISI v. SAME. |
| Court | U.S. District Court — Eastern District of Louisiana |
Hugh M Wilkinson, of New Orleans, La., for plaintiffs Accardo and Struve.
Jones T. Prowell, of New Orleans, La., for plaintiff Carlisi.
Henry Mooney, U.S. Atty., of New Orleans, La., for defendant.
In these three cases bills in equity were filed against the collector of internal revenue to enjoin the collection of certain taxes and penalties assessed against the plaintiffs by the Commissioner of Internal Revenue under the provisions of section 35, tit. 2, of the National Prohibition Act. With slight differences, they present the same state of facts. On a rule to show cause why a preliminary injunction should not issue they have been submitted on one and the same argument.
The material facts, as appearing by the bills and supplemental bills, and not denied, are these:
Accardo Case.
On August 28, 1920, plaintiff's premises were raided by prohibition officers and a quantity of wine destroyed by them, and other liquors in his possession seized and carried away. An information was subsequently filed against him charging him with unlawful possession of the said wine and liquors, but not with having made an illegal sale. A tax and penalties were assessed against him by the Commissioner of Internal Revenue, under the provisions of section 35, tit. 2 of the National Prohibition Act, amounting to $557.29, and written demand was made for its payment by the collector on October 29th. On his refusal to pay, after 10 days, a penalty of 5 per cent. was added and a second demand in writing made. On December 2, 1920, he was tried by a jury and acquitted. Notwithstanding his acquittal, the collector is proceeding with a writ of distraint, and proposes to seize his property to enforce collection of the tax and penalties assessed.
Struve Case.
Plaintiff was arrested on a warrant from a United States commissioner based on an affidavit charging an illegal sale of liquor. He gave bond of $1,000 for his appearance before the commissioner, but no hearing has been held, no indictment returned, and no information has been filed by the district attorney. A tax and penalties were assessed against him, totaling $559.66, practically the same as in the Accardo Case. To prevent a seizure of his property, plaintiff gave bond in the sum of $1,025, which was accepted by the collector. Thereafter a warrant of distraint was issued by the collector, under which plaintiff's bank account was seized and $34 appropriated, and the collector threatens to proceed against the bond for the balance of the assessment.
Carlisi Case.
There was a seizure of liquor and a subsequent assessment of the tax and penalties, but no criminal charge of any kind has been made, although collection by distraint is threatened.
In none of these cases was the plaintiff required to make, or given the opportunity of making, a return, nor was notice of any kind given before the assessment was made.
The United States attorney has filed motions to dismiss the bills, on the ground they are without equity, and relies on section 3224, R.S. (Comp. St. Sec. 5947), as depriving the court of jurisdiction. No objection to the jurisdiction of the court as such is urged, but that question may be noticed incidentally.
The court has jurisdiction of all suits arising under the revenue laws, regardless of amount. Judicial Code, Sec. 24, par. 5 (Comp. St. Sec. 991(5)); Downes v. Bidwell, 182 U.S. 244, 21 Sup.Ct. 770, 45 L.Ed. 1088. A suit arises under a law of the United States whenever its correct solution depends on the construction of that law, and the right set up by a party may be defeated by one construction or sustained by the other. Gold Washing & Water Co. v. Keyes, 96 U.S. 199, 24 L.Ed. 656.
The correct solution of these cases requires a construction of the internal revenue laws, in connection with section 35, tit. 2, of the National Prohibition Act, which itself must be considered a revenue law, if the contention of the government is to prevail.
Section 3224, R.S., provides:
'No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.'
Section 35 of title 2 of the National Prohibition Act provides:
(1) Are the taxes (so called) and the penalties prescribed by section 35, tit. 2, of the National Prohibition Act, taxes within the meaning of R.S. Sec. 3224.
(2) Are the provisions of the internal revenue laws (R.S. Sec. 3172 et seq. (Comp. St. Sec. 5895 et seq.)), relative to the assessment and summary collection of internal revenue taxes applicable to the assessment and collection of the taxes and penalties prescribed by section 35, tit. 2, of the National Prohibition Act.
Taking up the first question, it is well settled that Congress may impose taxes for the purpose of regulating any business or occupation, if there is the slightest color of raising revenue, and these taxes may be so excessive as to actually prohibit. An example of this is found in the Act of January 17, 1914 (Comp. St. Secs. 6287a-6287f), imposing a tax of $300 per pound on the manufacture in the United States of smoking opium. Nevertheless, if any one chose to pay the tax, he could indulge in the business. So with the internal revenue taxes. Although one might be guilty of a criminal offense by not paying his taxes promptly, still the tax is primarily intended to raise revenue.
On the other hand, the taxes and penalties provided for by section 35, tit. 2, of...
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Thome v. Lynch
...I think, in entire accord with those of the District Court for the Eastern District of Louisiana, as given in case of Accardo v. Fontenot (December 23, 1920) 269 F. 447. As bearing upon some of the questions involved, see, Frayser & Co. v. Russell, 3 Hughes, 227, Fed. Cas. No. 5,067; Bornio......
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Fontenot v. Accardo
...the purpose of restraining the collection of penalties were not prohibited by section 3224. The opinion of the District Judge appears in 269 F. 447. correctness of these rulings depends upon the proper construction of section 35 of the National Prohibition Act, hereinafter, for brevity's sa......
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McNally v. Jackson
...a matter exceeding $3,000 in value. Such is the exact language of the statute. Besides the above cases, plaintiff also cites Accardo v. Fontenot (D. C.) 269 F. 447, and Fontenot v. Accardo (C. C. A.) 278 F. 871. In the former of these cases Judge Foster said: "The court has jurisdiction of ......
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Green v. Page, 221.
...That this view is taken by the Treasury Department is evidenced by said decision 3911. See, also, decision of Judge Foster in Accardo v. Fontenot (D. C.) 269 F. 447, which was affirmed by the Circuit Court of Appeals of the Fifth Circuit, 278 F. That the remedy at law is not complete needs ......