Hensley v. United States

• Decision Date: 31 January 1949
• Docket Number: No. 11921.,11921.
• Citation: 171 F.2d 78
• Parties: HENSLEY et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

171 F.2d 78 (1948)

HENSLEY et al. v.UNITED STATES.

No. 11921.

United States Court of Appeals Ninth Circuit.

November 29, 1948.

Writ of Certiorari Denied January 31, 1949.

Louis B. Whitney, of Phoenix, Ariz., for appellantEugene V. Hensley.

Fred A. Ironside, Jr., of Phoenix, Ariz., for appellants, James W. Hensley and others.

Frank E. Flynn, U. S. Atty., and E. R. Thurman, Asst. U. S. Atty., both of Phoenix, Ariz., for appellee.

Before HEALY, BONE and ORR, Circuit Judges.

Writ of Certiorari Denied January 31, 1949.See69 S.Ct. 491.

BONE, Circuit Judge.

Appellants, who were wholesale liquor dealers, appeal from a judgment of conviction upon the verdict of a jury under an indictment¹ containing 69 counts.The first 68 were identical save as to the description of the then wholesale liquor dealer, the place of business, the names of the accused, the date of the offense, and the names and addresses on a certain "Form 52-B" of the person or persons to whom distilled spirits were sent.

Each of these 68 counts charged that certain appellants(individual and/or corporate) specified therein, then being wholesale liquor dealers operating under basic permits, as such were required to keep a record of distilled spirits disposed of by them on Form 52-B prescribed by the Commissioner of Internal Revenue to be used for the purpose of indicating thereon, among other things, the name and address of the person or persons to whom distilled spirits were sent.These counts charged that in violation of Title 26, U.S.C.A. § 2857 certain of the appellants made false entries in Form 52-B as to the name and address of person or persons to whom distilled liquors were sent by the appellants named in each count.Counts 1 and 2 are typical examples of the general form and scope of each of the first 68 counts, charging substantive offenses.²

Each of these first 68 counts against individual and/or corporate defendants is brought into direct relationship to Form 52-B, by a general preliminary charge therein that the defendant or defendants named therein were required to keep a record of distilled spirits disposed of by them on this Form 52-B, such "record" being for the purpose of indicating (among other matters) the name and address of the person or persons to whom distilled spirits were sent.(See type of allegation in paragraph 1 of Count 1, footnote 2.)

All appellants were found guilty on count 69 which was a conspiracy charge.It accused appellants of conspiring to make certain of the "false entries" referred to in the various 68 counts above referred to, certain overt acts related thereto being alleged.Some of the counts were dismissed on motion of appellee; one defendant was acquitted on all counts and appellants convicted on certain others.These convictions result in this appeal.

Appellants do not question the sufficiency of the evidence with respect to any of the counts upon which they were respectively found guilty.Their contentions in this court present only questions of law relating to the cited statute, and the scope and general effect of the regulations promulgated thereunder.

The pertinent language of the statute(Section 2857, supra) is as follows:

"(a) Requirements.Every * * * wholesale liquor dealer who sells, or offers for sale, distilled spirits * * * shall keep daily, at his place of business * * * a record of distilled spirits received and disposed of by him, and shall render under oath correct transcripts and summaries of such records: * * *.The records shall be kept * * * in such form, and under such rules and regulations as the Commissioner, with the approval of the Secretary, may prescribe.

"The records required to be kept under the provisions of this section and regulations issued pursuant thereto, shall be preserved for a period of four years, and * * * shall be available * * * for inspection * * *.

"Every * * * wholesale liquor dealer who refuses or neglects to keep such records in the form prescribed by the Commissioner, with the approval of the Secretary, or to make entries therein, * * * or makes any false entry therein, * * *."(Emphasis ours.)

Penalty provisions appear in the section.

Certain regulations were promulgated by the Commissioner pursuant to Section 2857 referred to in the caption of the indictment and upon which the indictment is asserted to be predicated, i. e., Sections 194.75 to 194.81 inclusive of Title 26, Code of Federal Regulations, the pertinent provisions of which are as follows:

"194.75 Records to be kept by wholesale liquor dealers.(a) Every wholesale dealer in liquors who sells distilled spirits in quantities of 5 wine gallons or more to the same person at the same time shall keep Record 52, `Wholesale Liquor Dealer's Record,' and render monthly transcripts, Forms 52A and 52B, `Wholesale Liquor Dealer's Monthly Report,' and Form 338, `Wholesale Liquor Dealer's Monthly Report (Summary of Forms 52A and 52B).'

"(b) Daily entries shall be made on Record 52 of all distilled spirits received and disposed of, as indicated by the headings of the various columns, and in accordance with the instructions printed thereon * * *."

Pursuant to the statutory authority above quoted, the Commissioner, by regulations above referred to, "prescribed" and promulgated the official record "form" to be used by wholesale liquor dealers, that form being 52-B here involved.It is printed with ruled column spaces in which certain information is to be entered by the wholesale liquor dealer consisting, (among other data) of the names and addresses of person or persons to whom distilled spirits were sent, and the date of the sending, the kind and quantity of the distilled spirits so sent and the name of the distiller or rectifier of the said spirits.The said information so required in the form is indicated by the caption at the head of one of the columns, the directive reading "to whom sent * * * name * * * address."

Appellants specify numerous errors at the trial all of which we have considered.In essence these claims of error are contentions which may be summarized as follows:

A

Section 2857 plainly prescribes that a wholesale liquor dealer keep "a record of distilled spirits received and disposed of by him"; it does not prescribe that such a dealer keep "a record of the names and addresses of the person or persons to whom distilled spirits were sent."The Commissioner is only authorized, by this statute, to prescribe the "form", that is to say, "the physical arrangement" in which the "record of distilled spirits received and disposed of" shall be kept.

B

Under Section 2857 there is no such crime as that charged in the indictment.

Before 1936the statute specifically required the wholesale dealer to "provide * * * a book, to be prepared and kept in such form as may be prescribed by the Commissioner of Internal Revenue, and shall, * * * enter in such book, * * * the name and place of business of the person or firm to whom such spirits are to be sent," and if the dealer did "make any false entry" it was a crime.This entry was specifically eliminated by the 1936amendmentand the present statute does not even mention, let alone require that entry.Neither does the present statute make it a crime to violate a regulation of the Commissioner.Here the Commissioner did not confine himself to that which the statute required — he purports to add a requirement not in the statute.

C

Section 2857 does not constitutionally empower or constitutionally delegate power to the Commissioner alone, or with the approval of the Secretary, to promulgate a regulation requiring the use of a form, or prescribe a form, wherein wholesale liquor dealers must by an entry indicate the name and address of the person or persons to whom distilled spirits were sent (as in Form 52-B).For this reason the statute does not support convictions on the instant indictment which charges the making of false entries on Form 52-B respecting the names and addresses of those to whom distilled spirits were sent by appellants.

D

The regulations themselves do not require wholesale liquor dealers to make entries on Form 52-B showing such names and addresses; furthermore, the quoted regulations and the portion of said Section 2857 upon which the indictment is founded are unconstitutional and lacking in due process in that this portion of the statute, and the regulations, set up no ascertainable and immutable standard of guilt.³

Appellants contend that the holdings in and logic of such cases as United States v. Eaton, 144 U.S. 677, 12 S.Ct. 764, 36 L.Ed. 591;United States v. Grimaud, 220 U.S. 506, 31 S.Ct. 480, 55 L.Ed. 563, andViereck v. United States, 318 U.S. 236, 63 S.Ct. 561, 87 L.Ed. 734, support their contentions above outlined.We do not agree.

It will be noted that the command of the regulations, supra, is that the dealer shall keep a record Form 52-B, and daily entries shall be made thereon "of all distilled spirits received and disposed of" as indicated by...