State v. Crescent Cigar and Tobacco Co.

• Decision Date: 30 January 1928
• Docket Number: 11,095
• Court: Court of Appeal of Louisiana — District of US
• Parties: STATE OF LOUISIANA v. CRESCENT CIGAR AND TOBACCO CO

7 La.App. 659

STATE OF LOUISIANA v. CRESCENT CIGAR AND TOBACCO CO

No. 11,095

Court of Appeals of Louisiana, Orleans

January 30, 1928

Decree Supreme Court, Writ Denied March 14, 1928.

Appeal from First City Court, Hon. Val. J. Stentz, Judge.

Action by State of Louisiana against Crescent Cigar and Tobacco Co.

There was judgment for defendant and plaintiff appealed.

Judgment reversed.

J. C Pearce, of New Orleans, attorney for plaintiff, appellant.

Frymire & Ramos, Guion & Upton, of New Orleans, attorneys for defendant, appellee.

OPINION

CLAIBORNE, J.

This is a suit to enforce the penalty under the tobacco tax law.

The plaintiff alleged that although the defendant is supposed to be engaged solely in the wholesale business of selling tobacco products, H. C. Comish, an assistant supervisor of public accounts, did, on December 22nd, 1926, go into the place of business of the defendant at 420-422 Poydras street and purchased at retail 600 cigarettes for the price of $ 3.54, and also one box of cigars containing 50 five cents cigars for $ 1.85, and that neither the cigarettes nor the box of cigars had any tobacco tax stamps affixed to them as required by Act 197 of 1926; that the said Comish was not in the business of selling cigarettes or cigars, and purchased them for his own personal use, and therefore defendants had no right to sell them to said Comish unstamped, and that no questions were put to him inquiring whether he was purchasing for resale or for his own personal use; that the above facts constitute a violation of said Act 197 of 1926 by the defendant and a first offense under Section 9 thereof, imposing a penalty of $ 20;

2nd. That on December 22nd, 1926, W. A. Cooper, also an assistant supervisor of public accounts, went into the same place of business of the defendants and also purchased from them one box of cigars containing 50 five cents cigars for $ 1.85, which also did not have any tax stamps affixed thereon; that said Cooper was not in the business of selling cigars, and purchased said cigars for his own use without any questions being asked of him; the sales ticket being made out to cash; that the above facts constitute another violation of the above Act and second offense calling for a penalty of $ 50 under said Act;

3rd. That on December 23rd, 1926, the same Cooper again went into defendant's place of business and did buy from them for his own use 50 five cents cigars for $ 1.85 in a box also unstamped; that this fact constituted a third offense under said Act for which defendants are liable to a penalty of $ 100;

4th. That on December 23rd, 1926, the same Comish hereinabove mentioned again went into defendant's place of business and purchased for his own use 400 cigarettes for $ 2.36, also unstamped; that this fact constitutes a fourth offense for which defendant is liable to a penalty of $ 100 under the Act.

That the plaintiff is also entitled under the last clause of Section 10 of said Act to such reasonable attorney's fees as the court, in its discretion, may allow and, to $ 2.50 for the amount of tax stamps which should have been affixed by the defendants upon the cigars and cigarettes sold by them as hereinabove.

Therefore, plaintiff claims judgment for $ 272.50 and for attorney's fees.

The defendants admitted that they were a corporation doing a wholesale business in tobacco products, admitted the sale on December 22nd of 600 cigarettes for $ 3.54, also a box of cigars for $ 1.85, and that no tobacco tax was affixed on either the cigars or the cigarettes; it also admitted the three other sales. It denied all the other allegations of the petition, and specially denied that the purchasers were Comish or Cooper, or that they purchased said cigars and cigarettes for their personal use, and that they were not in the retail business; they denied that they did not have the right to sell tobacco products to them; denied that said sales were retail sales, or constituted retail business; they admitted that the purchasers were strangers to them and that no questions were put to them inquiring whether the purchasers were buying for resale or for their personal use; they also admitted that the sale tickets were made out for cash.

There was judgment in favor of defendant dismissing plaintiff's suit.

Plaintiff has appealed.

Comish and Cooper, sworn as witnesses, both corroborate the allegations of the petition concerning their official position, the purchase of the cigars and cigarettes by them from defendants for their personal use, the absence of any stamps on the cigars or cigarettes, and the absence of any questions put to them as to whether they were retail dealers. They also testified that at the time they were buying there were various other people there buying tobacco, among them motormen and conductors of the Public Service. Comish testified that he went to the store of defendant; that he walked to the window and told the gentleman he wanted three cartons of Chesterfield cigarettes and a box of E1 Trelles cigars and the man he spoke to wrote an invoice, kept the duplicate, and gave him the original and said: "Go up to the counter and get your tobacco," and he went to the man, paid him, and walked out with the merchandise; the cigarettes were in small cartons, ten packages to the carton, 200 Chesterfields to each carton; the mode of procedure was as follows:

He walked in the door and there is an open window there, and a gentleman sitting at the desk; he asked for 400 Chesterfields, and handed in the money for them, and the gentleman handed him the two bills, original and duplicate, and he carried them both to the counter, and the person who puts up the packages keeps the duplicate and gives him the original and the tobacco; employees of the department have gone back and talked to people there, and told them they were representing the State and asked if they could buy tobacco and they were refused. On cross-examination the witness testified:

"Q. What did you think when you got this statement with the notation: 'These goods bought for resale purposes,' what did you think that meant?

"A. I didn't pay any attention to that until I had gotten outside.

"Q. What did you think of it after you got on the outside and saw it?

"A. I read what was on there and noticed my other slip on the next day and it didn't have that on it.

"Q. Did you place any construction on this at all?

"A. No, sir.

"Q. Didn't it occur to you that if the Crescent Cigar and Tobacco Company had written on a bill of goods: 'These goods were sold for retail purposes only,' you couldn't use them for any other purpose?

"A. I knew there was no question asked as to that.

"Q. I asked you when you got this bill in box car letters: 'These goods bought for resale purposes,' what did you understand that to mean?

"A. I noticed that after I had gotten out of the store.

"Q. Well, after you saw it, what impression did that make on you?

"A. It was just merely a rubber stamp placed on there, because no questions were asked me.

"Q. Well, when you received the one on your next purchase, on the 23rd, without the rubber stamp on it, you didn't consider that was significant?

"A. I thought that was perhaps an oversight that the rubber stamp was not put on it."

The witness further testified that he paid for the fifty cigars $ 1.88 a box less two per cent discount the regular wholesale price in the original package; and that those cigars sell at retail five cents a piece; he has had reports that he could buy those cigars at defendant's store, time after time, even when they knew that they were for the personal use of the purchaser.

Cooper's testimony was practically the same as that of Comish.

J. S DeBen, vice-president and manager of the defendant company, admitted that the company had made the sale set forth in the petition. He testified that "we don't sell to consumers"; they have a sign in their store stating that they are "wholesalers only"; on one occasion a purchaser was asked whether he was purchasing for resale or for his own account, and when he answered that he was purchasing for himself the goods were taken away from him and the price paid refunded to him; he knows of no other case besides the ones sued for in which purchasers have bought for their own use; about 2500 retailers in the city buy in his store; it is not unusual for a dealer to buy one carton of cigarettes; prior to the tobacco tax law it was not his habit to ask a purchaser where his place of business was and whether he was a retailer; now they ask everybody who comes in, if they do not know him, whether they are retailers or not; there are 20 cigarettes to a package and ten packages to a carton, and fifty cartons to a container shipped from the factory; it is unusual for a retailer to buy the latter; his business is conducted now in the same manner in which it was prior to the tobacco tax law; since the tobacco tax law went into effect he has given orders to his employees "to be careful to sell only to dealers and try not to let anyone come in and buy goods unless they know them or had reason to believe they were dealers"; he discussed this matter with his attorney and the result was that he purchased a rubber stamp to be placed on his goods; the stamp bore the words: "These goods bought for resale purposes," and was placed on their invoices "to show that the goods were sold to them as dealers and not to be consumed"; their employees had instructions to use those stamps, and as far as he knew they followed those instructions; their policy is not to sell to consumers as it would affect their business with retail dealers; he is not personally acquainted with all his customers nor familiar with their names; whenever a sale is made a slip is...