Eastman v. United States, 13032

• Decision Date: 04 March 1946
• Docket Number: No. 13032,13033.,13032
• Citation: 153 F.2d 80
• Parties: EASTMAN et al. v. UNITED STATES. HENDIN v. SAME.
• Court: U.S. Court of Appeals — Eighth Circuit

153 F.2d 80 (1946)

EASTMAN et al. v. UNITED STATES.

HENDIN v. SAME.

Nos. 13032, 13033.

Circuit Court of Appeals, Eighth Circuit.

January 16, 1946.

As Modified on Denial of Rehearing March 4, 1946.

Louis B. Sher, of St. Louis, Mo., for appellants.

Arthur A. Hapke, Asst. U. S. Atty., of St. Louis, Mo. (Harry C. Blanton, U. S. Atty., of Sikeston, Mo., on the brief), for appellee.

Before SANBORN, WOODROUGH, and JOHNSEN, Circuit Judges.

WOODROUGH, Circuit Judge.

These consolidated cases present for review judgments of conviction under the 14th count of an indictment charging defendants with engaging in the business of purchasing distilled spirits "for resale at wholesale" without having the basic permit prescribed by law, in violation of 27 U.S.C.A. § 203(c) (1). The defendants in Case No. 13,032 are the owners of and conduct the business of buying and selling liquor at the Peoples Liquor Store, 2601 Market Street, Saint Louis, Missouri, and defendant in case No. 13,033 is charged as the manager of the store. The owners of the business had obtained a federal wholesale liquor dealer's stamp which permitted them to sell in the course of their business distilled spirits in quantities of five gallons or more to the same person at the same time, but it was proved and not disputed that they did not have the basic permit required by the federal statute under which they were indicted to entitle them to engage in the business of purchasing liquor for "resale at wholesale". The relevant provisions of that statute are:

"In order effectively to regulate interstate and foreign commerce in distilled spirits, wine, and malt beverages, to enforce the twenty-first amendment, and to protect the revenue and enforce the postal laws with respect to distilled spirits, wine, and malt beverages: * * *

"(c) It shall be unlawful, except pursuant to a basic permit issued under this chapter by the Secretary of the Treasury —

"(1) To engage in the business of purchasing for resale at wholesale distilled spirits, wine, or malt beverages; * * *".

27 U.S.C.A. § 207, relating to the penalty, provides: "* * * Any person violating any of the provisions of section 203 or section 205 of this title shall be guilty of a misdemeanor and upon conviction thereof be fined not more than $1,000 for each offense. * * *"

The words "resale at wholesale" are defined in the controlling regulation of the Federal Alcohol Administration¹ as meaning a "sale to any trade buyer" and there is no question that the business of buying and selling to such trade buyers is treated in the law and regulations as an entirely distinct business, taxed and regulated by provisions different from those applicable to dealers who have license to sell to persons other than trade buyers.

It is contended on these appeals that the evidence was insufficient to sustain the convictions and that verdicts should have been directed for each of the defendants, but a study of the record has convinced that the evidence was sufficient as to defendants in No. 13,032.

It was clearly established that it was a part of the liquor business carried on by defendants in their store at the described premises to purchase and make very numerous sales of liquor to various persons in quantities of five or more gallons at one time, and we think the jury was justified in concluding from the circumstances in evidence before it that defendants knowingly and wilfully included the making of sales to trade buyers and violated the statute as charged.

The statute is in the form of a prohibition against engaging in the business of buying liquor to sell to trade buyers because under the scheme of liquor regulation the government goes to the source of the liquor and checks and taxes from the original distiller on down to the consumer. The laws and regulations provide a complete scheme intended to be made effective through the reports and accountings that are required from the handlers. Thus these defendants were required to and did undertake to make reports in respect to their large volume sales to the Internal Revenue Department. The evidence is that their reports over the period in question stated that they had in a great many instances purchased and sold on specified dates, large quantities of liquor to persons residing at described addresses. The quantities so reported as bought and sold to the named individuals are so greatly in excess of any normal individual consumption requirements that, without explanation, the natural and reasonable inference from the transaction would be that further handling of the liquors was intended. But when a special investigator of the Alcohol Tax Unit inquired of defendant Eastman what steps he took to determine whether the large volume customers were dealers or consumers, Mr. Eastman stated that he put down the name given and that he was no detective. The gist of the defendants' position appears to be that a retail liquor dealer may escape the excise for buying to sell to trade buyers, and the penalties, by merely shutting his eyes to the nature of his sales.

The reports of large volume sales of the Peoples Liquor Store stated among other things, that on June 5, 1943, the store received from itself 100 cases of whiskey which were sold to P. H. Clark of Joplin, Missouri, on the following June 7, and that on July 7, 1943, the store sold to Fannie Gladdish 12 cases of liquor which had been received by the store from itself on the same day. The reports do not show when the store actually received the liquor from distributors.

In connection with the sale charged to Clark, witness P. H. Carlisle testified that he accompanied one Sanders to the Peoples Liquor Store and that Sanders carried on the sales transaction but presented Carlisle with a bill for the 100 cases at the bar of the store, and that later he paid Sanders and received the liquor. Carlisle testified that he thought he gave the name P. H. Clark to Sanders. Carlisle further stated that he operated a tavern at Joplin, Missouri, but was not asked whether he was a liquor dealer at the time of the 100-case purchase.

Fannie Gladdish testified that at the time of her purchase of 12 cases of liquor, for which she paid about $700, she was manager of a tavern, that a liquor license had been taken out in her name, and that she had a federal Retail Liquor Dealer's Stamp. She further testified that she took the liquor purchased from the Peoples Liquor Store to her tavern and placed it in the stock room.

The evidence discloses that many of the large volume sales were reported as made to persons who could not be found by federal inspectors and were unknown in the neighborhood in which the defendants' reports indicated they resided. Others were made to persons who disclaimed having purchased liquor in the amounts stated in the reports. The largest single sale shown was one involving 170 cases.

The sale to Fannie Gladdish was proven conclusively to have been made to a dealer licensed as such at the time of the sale. Proof of that sale, together with the testimony of Carlisle and the evidence regarding the other extremely large volume sales reported, justified the conclusion that defendants sold to dealers.

Defendants contend that there was no evidence that they "engaged in the business" of purchasing for resale at wholesale and point out that there was no evidence as to when the liquor was purchased by them, or that it was purchased for other than retail purposes. However, defendants do not deny that they purchased the liquor for sale at their retail store. The statute which defendants are charged with violating must be construed so as to give effect to the legislative intent if that can reasonably be ascertained. Speeter v. United States, 8 Cir., 42 F.2d 937. The rule that criminal laws are to be strictly construed and defendants are not to be convicted under statutes too vague to apprise them of the nature of the offense, does not require distortion or nullification of the evident meaning and purpose of the legislation. United States v. Gaskin, 320 U.S. 527, 64 S.Ct. 318, 88 L. Ed. 287. In Arnold v. United States, 8 Cir., 115 F.2d 523, 526, we said: "As this is a criminal statute, it must be construed strictly, and it cannot be enlarged by implication or intendment beyond the fair meaning of the language used. It should not, of course, be...