Mellet & Nichter Brewing Co., Inc. v. United States

• Decision Date: 09 November 1923
• Docket Number: 10298.
• Citation: 296 F. 765
• Court: U.S. District Court — Eastern District of Pennsylvania
• Parties: MELLET & NICHTER BREWING CO., Inc., v. UNITED STATES.

296 F. 765

MELLET & NICHTER BREWING CO., Inc., v. UNITED STATES.

No. 10298.

United States District Court, E.D. Pennsylvania.

November 9, 1923

Francis J. McCarthy, of Philadelphia, Pa., for the motion.

Francis B. Biddle, of Philadelphia, Pa., for the United States.

McKEEHAN District Judge.

This case is before the court on the defendant's motion to quash the search warrant and on defendant's petition that the service and return of the search warrant be set aside and an order entered directing the return of the seized property. There is no dispute as to the facts.

The defendant is a Pennsylvania corporation which owns and operates a brewery in Pottsville, Schuylkill county, under a permit for the year 1923, issued by the United States Treasury Department on June 20, 1923, bearing serial number 'Pa. L-60,' which permit has not been revoked and is now in full force and effect.

On September 12, 1923, upon the sworn application of Frank D Tippett, a general prohibition agent, supported by several affidavits by members of the Pennsylvania state police force a general prohibition agent, and a chemist of the United States Bureau of Internal Revenue, the United States commissioner for the Eastern District of Pennsylvania issued a search warrant to said Tippett, his assistants, deputies and aids, commanding them to enter upon the defendant's premises, which were described in the warrant by metes and bounds, to search the premises for the articles and things described in the warrant and to seize and bring same before him.

The affidavits upon which this warrant was issued were to the effect that on August 6th an empty Oldsmobile truck owned and driven by one James D. Dobbin, of Forrestville, backed up to the loading platform at the defendant's brewery and was there loaded with twelve kegs, and that again on September 1st, nine half barrels were similarly placed on a Reo truck at the loading platform; that on both occasions the trucks were followed from the brewery, their contents seized; and that, upon analysis, the kegs and half barrels were found to contain beer of an alcoholic volume of approximately 4 per cent. Upon these facts the applicant Tippett complained that the defendant's establishment was being conducted in violation of the National Prohibition Act (Comp. St. Ann Supp. 1923, Sec. 10138 1/4 et seq.), 'and that there are contained in and upon said premises above described large quantities of beer containing more than one-half of 1 per centum of alcohol by volume, and fit for use for beverage purposes in tanks, casks, tubs, barrels, kegs, bottles, cases and other containers together with large quantities of hops, malt, malt compound, and extracts, cereals, yeast, mash, cases, bottles, casks, barrels, hogsheads, vats, pasturizers, dealcoholizers, filters, coolers, labeling machines, crowners, bottle washers, crowns, corks, malt grinders and hoppers, mixers and conveyors, contrivances, machines and materials as to the exact nature and description of which the deponent is uninformed, all of which are intoxicating liquor and property designed for the manufacture of intoxicating liquor, and that said intoxicating liquor and property designed for the manufacture of intoxicating liquor were unlawfully had and possessed by the said Mellet & Nichter Brewing Company, Inc., and were and are intended for use in violation of title 2 of this act of Congress.'

On September 13th (the day after the issuance of the warrant) Tippett and his assistants seized the entire plant and equipment of the defendant, putting the place in the custody of guards and excluding the defendant company from operating or occupying its property. On September 20th, the prohibition agents turned the place over to the United States marshal for this district, who now has custody and possession of the entire property. The day after the seizure, the prohibition agent made a so-called 'return' on the search warrant, which really consists of an inventory of all property found on the premises, the inventory comprising some 80 different items, and including an elevator, engines, boilers, machinery, pumps, a truck, ten horses, fourteen wagons, and a large number of tubs and casks and various utensils and supplies.

I am of opinion: First, that beer and property used in the making of beer, while in the possession and on the property of a brewing company holding a brewery permit issued by the United States Treasury Department, cannot lawfully be seized under a search warrant issued on an affidavit charging that beer in excess of the authorized alcoholic content is being illegally taken away from said brewery; and, second, that irrespective of the existence of a permit, the seizure of the real estate and entire plant and equipment of this defendant, under the guise of a warrant of search and seizure, was illegal.

The first question has already been decided by two District Courts of the United States, with which decisions I concur. In Francis Drug Co. v. Potter, 275 F. 615, decided by the United States District Court for the District of Massachusetts, the defendant corporation held a permit, under the National Prohibition Act, to keep and sell intoxicating liquor in accordance with the provisions of the act. Evidence was brought to the attention of the prohibition enforcement officers that an illegal sale of liquor for beverage purposes had been made at the drug company's place of business, whereupon an application for a search warrant which stated that liquors were illegally kept on said premises was filed. The United States commissioner thereupon issued a search warrant, upon which the liquors that formed a part of the stock in trade of the drug company were seized and turned over to the state prohibition director. The court held that the mere fact of an illegal sale on the drug company's premises was not sufficient to warrant the finding that its stock of liquor was being held for illegal purposes, since its possession of the seized liquor was not unlawful under the terms of its permit, and the liquor was ordered returned to the respondent.

In re Alpern, 280 F. 432, decided by the United States District Court for the Western District of New York, was a similar case. There the Alpern & Gritz Drug Company held a permit issued by the Commissioner of Internal Revenue to sell and dispense intoxicating liquors under the provisions of the National Prohibition Act. The liquors in its possession were seized upon a search warrant issued on information that the petitioner had sold liquor illegally. In ordering that the seized liquor be returned to the drug company, Judge Hazel said:

'That the petitioners had a permit to keep and sell intoxicating liquor for lawful purposes at their drug store is unquestioned in this proceeding. Therefore the possession of the liquor seized was not unlawful. The Commissioner of Internal Revenue is empowered by section 9 of the Prohibition Act to issue an order citing permittees to appear before him at a specified time and answer any complaint there may be with reference to their failure in good faith to conform to the provisions of the act, or to violation by them of the laws of any state relating to intoxicating liquor. The statute states that on the return of the citation, which shall be accompanied by a copy of the complaint, a hearing must be held within the judicial district and within 50 miles of the place where the offense is alleged to have been committed, and if it is ascertained as a result of the hearing that the permittees were guilty of willfully violating the prohibition laws, or have failed in good faith to conform to its provisions, then the permit shall be revoked, and none shall be granted them within one year thereafter. The permittees in such case have the right of review before a court of equity, and during the pendency of the action the permit 'shall be temporarily revoked.'

'It will be observed that the statute in plain and unambiguous terms prescribed the manner in which a permit to possess liquor by a permittee may be revoked. No proceedings to revoke have been begun against the petitioners. In the circumstances the possession by them of the intoxicating liquor seized by the prohibition agent was not unlawful and as to such liquor there was insufficient ground for issuing a search warrant or making a seizure of liquor thereunder.'

A similar view was apparently taken by Judge Gibson of the United States District Court for the Western District of Pennsylvania, in the unreported case of In re Petition of Crescent Beverage Company, No. 922, May Term, 1923, in equity.

In the instant case, the petitioner had the right under the terms of its permit and under the terms of section 37 of title 2 of the National Prohibition Act (Comp. St. Ann. Supp. 1923, Sec 10138 1/2x) to develop by the usual methods of fermentation and manufacture a beer containing more than one-half of 1 per cent. of alcohol by volume under and subject to the provisions of the act requiring the reduction of the...