Ketterer v. Lederer

• Decision Date: 13 October 1920
• Docket Number: 2071.
• Citation: 269 F. 153
• Parties: KETTERER v. LEDERER, Collector of Internal Revenue.
• Court: U.S. District Court — Eastern District of Pennsylvania

269 F. 153

KETTERER v. LEDERER, Collector of Internal Revenue.

No. 2071.

United States District Court, E.D. Pennsylvania.

October 13, 1920

Lincoln L. Eyre and J. Washington Logue, both of Philadelphia, Pa for plaintiff.

Webster S. Achey, Special Asst. U.S. Atty., and Chas. D. McAvoy, U.S Atty., both of Philadelphia, Pa., for defendant.

DICKINSON District Judge.

The real question involved in this case is that of the power of the court to restrain by injunction process the collection of an internal revenue tax, and the propriety of the exercise of the power, if possessed. The averments of the bill are undenied, and we have been asked to allow or disallow the issuance of a preliminary injunction upon the averments as the proofs in the case.

The amount involved is not large, and because of this the suggestion was made that the execution process, which the defendant is proposing to put in force, be not executed until the case could be fully heard, and the important questions of the rights of the plaintiff in the bill involved in the motion fully considered. Acquiescence in this suggestion as first made has been since withdrawn, and we are asked to decide the question raised on the motion.

The plaintiff is a dealer in intoxicating liquors, and paid a revenue license as such. Before the enactment of the Eighteenth Amendment to the Constitution and the passage of the laws made in the enforcement thereof, no more would have been asked of him. By this legislation the right of sale, which the plaintiff would otherwise have had, has been much curtailed.

The act of Congress enforcing the Eighteenth Amendment has several objectives. One is to make it a criminal offense to do what the plaintiff is charged with having done, and another is to subject such persons to the payment of a special tax to which they would not be otherwise subject, and to subject them to all the ordinary processes for the collection of this special tax.

The power of the court to restrain the defendant from distressing the plaintiff by the collection of this tax is asserted, and the exercise of the power invoked on the two broad grounds First, that the defendant is attempting to impose and collect a fine for supposed criminal acts, and that it is no less the infliction of punishment because it is called a tax, and second, that the National Prohibition Act (Act Oct. 28, 1919 c. 85,41 Stat. 305), at least as to this provision of...