Graupner v. Blair

• Decision Date: 24 January 1928
• Docket Number: No. 553.,553.
• Citation: Graupner v. Blair, 23 F.2d 947 (W.D. Pa. 1928)
• Parties: GRAUPNER et al. v. BLAIR, Com'r of Internal Revenue, et al.
• Court: U.S. District Court — Western District of Pennsylvania

23 F.2d 947 (1928)

GRAUPNER et al. v.BLAIR, Com'r of Internal Revenue, et al.

No. 553.

District Court, M. D. Pennsylvania.

January 24, 1928.

Beidleman & Hull and Thomas D. Caldwell, all of Harrisburg, Pa., for complainants.

Warren C. Graham, of Philadelphia, Pa., for defendants.

JOHNSON, District Judge.

This is a bill in equity for the review of the decision of the Commissioner of Internal Revenue, revoking the permit issued to complainants to manufacture cereal beverages.From the pleadings in this case and from the evidence taken for the Commissioner of Internal Revenue, on which his decision was based, which is used by the parties in this review, the court finds the following facts:

1.On or about the 1st day of June, 1926, complainants were granted, under the authority of the National Prohibition Act(27 USCA), by the Commissioner of Internal Revenue, the permit to manufacture cereal beverages.Under the regulations of the United States Treasury Department promulgated under the National Prohibition Act, the term of said permit was during the year 1926, until action would be taken upon any application duly filed for a renewal thereof for the year 1927.

2.Complainants aver that under the authority vested in them by the permit so granted they have expended large sums of money in the conduct of their business, and in the proper maintenance of suitable places and appliances for the conduct of said business.

3.On the 6th day of October, 1926, there was issued by R. E. Joyce, acting federal prohibition administrator for the Western district of Pennsylvania, a citation under the authority of the National Prohibition Act, directed to the complainants, to appear before a representative of the administrator in the federal courtroom, Harrisburg, Pa., on the 5th day of November, 1926, to show cause why the aforesaid permit should not be revoked and canceled, on the ground that the complainants were not in good faith conforming to the terms of said permit, the provisions of the National Prohibition Act, and the regulations promulgated thereunder.

4.In compliance with the aforesaid citation, the complainants appeared at a hearing before Lester Griffith, Esq., acting as agent of the Commissioner of Internal Revenue, under the authority of the National Prohibition Act, at which hearing testimony was taken on behalf of the government and on behalf of the complainants.

5.On or about the 29th day of November, 1926, John D. Pennington, prohibition administrator of the Western district of Pennsylvania, issued an order revoking the said permit.

6.A rehearing was held at Philadelphia, Pa., on July 15, 1927, before Warren G. Graham, a reviewer designated by Samuel O. Wynne, federal prohibition administrator, and on the 17th day of October, 1927, the reviewer refused to reinstate the permit, and this decision was approved by Administrator Wynne.

7.On September 10, 1926, 24 one-half barrels, containing more than one-half of 1 per cent. alcohol by volume, were found in the washroom of the complainant's brewery, located in Harrisburg, Dauphin county, Pa.

8.This was sour beer taken from the vats in the brewery, not for the purpose of sale or disposal outside of the brewery.

9.The employees in the brewery of complainants were in the habit of tapping the vats and drinking the beer before the alcoholic content was reduced, and one of the complainants directed the...