Bailey v. United States

• Decision Date: 05 February 1919
• Docket Number: 3209.
• Citation: 259 F. 88
• Parties: BAILEY v. UNITED STATES.
• Court: U.S. Court of Appeals — Sixth Circuit

259 F. 88

BAILEY v. UNITED STATES.

No. 3209.

United States Court of Appeals, Sixth Circuit.

February 5, 1919

In Error to the District Court of the United States for the Western District of Tennessee; John E. McCall, Judge.

Criminal prosecution by the United States against Mrs. William H Bailey. Judgment of conviction, and defendant brings error. Reversed.

INTERNAL REVENUE 39, 40-- SPECIAL TAX ON BUSINESS-- 'CARRYING ON BUSINESS OF RETAIL LIQUOR DEALER.'

To subject a person to conviction for violation of Rev. St. Sec 3242 (Comp. St. Sec. 5965), by 'carrying on the business of a * * * retail liquor dealer' without having paid the special tax, a single sale is not sufficient, unless made under circumstances which warrant the inference by the jury that defendant either had liquor on hand, or was ready and able to procure it, for purposes of sale.

Jere Horne, of Memphis, Tenn., for plaintiff in error.

Wm. D Kyser, U.S. Atty., of Memphis, Tenn.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

DENISON Circuit Judge.

Mrs. Bailey was convicted of carrying on the business of a retail liquor dealer without having paid the special tax therefor, and in violation of R.S. Sec. 3242 (U.S. Comp. St. 1916, Sec. 5965). The government proved the sale of a drink and of a half pint to Bryant. Mrs. Bailey testified that Bryant was a personal acquaintance; that he came to her residence in the evening; that after a time he expressed need for whisky, and wanted her to let him have some; that she declined, saying she had none; that, after further urging from him, she told him she had a small quantity, less than a quart, which she had for personal or household use, and that she could not let him have from this quart the pint which he requested, but would let him have a half pint; that she did so, and that, although she declined to charge for it, he pressed payment upon her, which she finally accepted; and that this was the entire transaction. The court charged the jury that, even if her testimony were fully accepted and believed, nevertheless she would be guilty under the indictment, and the rightfulness of this charge is the question brought here for review.

The statute says:

'Every person who carries on the business of a * * * retail liquor dealer * * * without having paid the special tax as required by law, shall, for every such offense, be fined,' etc.

Obviously, the 'such offense' which is punished is to 'carry on the business of a retail liquor dealer. ' This phrase would not seem to be difficult of definition, either from the standpoint of the words used or from that of the purpose of the law. There must not only be a 'business,' but it must be 'carried on.' The purpose of the law was to raise revenue by an occupation tax. Both these considerations imply that there must be something more than a single casual sale, disconnected from any habitual or intended practice. There cannot be a 'business carried on,' unless there is either an actual or intended adherence to that course of conduct which alone can constitute the adoption and practice of a business or occupation. Of course, it need not be the sole business or occupation, or even one of any comparative importance as relating to the other business or occupation of the same person; nor would it be necessary that any particular quantity of material should be kept on hand for sale for any particular length of time; but both the ability and the willingness to make sales from time to time, whenever appropriate conditions might arise, seem to us to be required, by the plain meaning of the words, in order to make out an offense against this statute.

Perhaps it is rightly to be assumed that no other construction would ever have been attributed to this section, save for the supposed effect of another section of the act. Revised Statutes, Sec. 3244 (U.S. Comp. St. Sec. 5971), fixes the amount of the tax to be paid. The fourth subdivision says: 'Retail dealers in liquors shall pay $25. Every person who sells or offers for sale foreign or domestic distilled spirits or wines in less quantities than five wine gallons at the same time shall be regarded as a retail dealer in liquors.'

From this it is argued that the more general language of section 3242 is defined and limited, and that therefore a single sale, inherently and necessarily and always, makes the seller a taxable retail liquor dealer. The language of section 3244 does not require this conclusion. 'One who sells' is not necessarily synonymous with 'one who makes a sale.' Even where standing by itself, 'one who sells' may well imply an habitual rather than an isolated act. It seems equivalent to 'one who is selling'; but when this definitive phrase is considered in connection with the fact that it is found in the law taxing occupations and in relation to the tax which is imposed only upon carrying on business, and that the phrase serves the main, if not the only, purpose of distinguishing between different kinds of business-- wholesale and retail-- section 3244 seems to us to lend no substantial support to the thought that it is thereby made immaterial whether or not there is any 'business carried on,' in the ordinary and usual sense of these words.

It is further to be noted that the language of section 3244 is inappropriate for a single sale. It is 'one who sells * * * in quantities less,' etc. In strictness of language, this plainly refers to a plurality of transactions. One who makes only a single sale does not sell 'in quantities.' This distinction would be overnice as a substantial basis of interpretation; but it demonstrates that section 3244 does not imperatively and finally require that the language of section 3242 should have a forced and unreasonable construction.

Revised States, Sec. 3244, seems to have been superseded by section 4 of the Act of March 1, 1879 (U.S. Comp. St. 1916, Sec. 5973). The arrangement here found emphasizes the conclusion that the phrase 'one who sells' was adopted, not to define what 'carrying on business' means, but rather to distinguish between different kinds of business. It is repeated four times, always as incidental to the definition of a business; and in defining 'dealers in malt liquors' it says that one who sells malt liquors, 'but who does not deal in spirituous liquors,' shall pay a lesser tax, thus again implying that the higher tax is to be paid by those who 'deal in' spirituous liquors.

It is true that in the provisions of the law which relate to taxes on tobacco, as found in subsections 6, 7, 8, and 9 of R.S Sec. 3244, the tax-fixing provisions said that every person should be regarded as a retail dealer in tobacco 'whose business it is to sell,' and that the definition of a retail liquor dealer as 'one who sells' and of a retail tobacco dealer as 'one whose business it is to sell' carries a suggestion that the former definition is broader than the latter. We do not overlook this suggestion, but we cannot think it has sufficient force to overcome the other considerations involved. Further, this subsection 7, which referred to retail leaf tobacco dealers, has been superseded by section 35 of the Act of August 5, 1909 (U.S. Comp. St. Sec. 6175), wherein it is said that 'every...