State v. Intoxicating Liquors

• Decision Date: 11 March 1920
• Parties: STATE v. INTOXICATING LIQUORS (McADOO, Claimant).
• Court: Maine Supreme Court

109 A. 257

STATE

v. INTOXICATING LIQUORS (McADOO, Claimant).

Supreme Judicial Court of Maine.

March 11, 1920.

Agreed Statement from Supreme Judicial Court, Penobscot County, at Law.

Controversy between the State and Wm. G. McAdoo, Director General of Railroads, Involving the right of the latter to certain whisky seized by a county sheriff. The municipal court ordered the liquors forfeited. An appeal was taken to the Supreme Judicial Court for Penobscot county, and thence brought to the law court on an agreed statement of facts. Claim sustained and liquors seized ordered returned to claimant.

Argued before CORNISH, C. J., and SPEAR, HANSON, WILSON, and DEASY, JJ.

Guy H. Sturgis, Atty. Gen., Albert L. Blanchard, Co. Atty., of Bangor, and Arthur L. Robinson, of Portland, for the State.

Charles H. Blatchford, of Portland, for claimant.

CORNISH, C. J. The general outline of this case is as follows:

Ninety-one cases of Scotch whisky were seized at Bangor on October 22, 1918, at the inward freight shed of the Maine Central Railroad Company by the sheriff of Penobscot county. The liquors were duly libeled and claim was filed by James E. Gibbons, the freight agent of the company at Bangor, for and in behalf of William G. McAdoo, Director General of Railroads, then operating the railroads of the country under a proclamation ot the President of the United States dated December 26, 1917, and the act of Congress of March 21, 1918 (U. S. Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115 3/4 a-3115 3/4 p). Hearing was had in the municipal court, and the liquors were ordered forfeited to the state. An appeal was taken to the Supreme Judicial Court for Penobscot county and thence brought to the law court on an agreed statement of facts.

From that statement it appears that the liquors seized and libeled were part of a shipment of 400 cases of Scotch whisky imported in June, 1917, by the Loma Grande Company of Chicago, Ill., from Glasgow, Scotland, through the port of New York, and entered at the port of Chicago for warehousing in bond; the bond given by the importer bearing date June 27, 1917.

On September 30, 1918, 96 cases were withdrawn by the Loma Grande Company from the bonded warehouse at Chicago for transportation via the Grand Trunk Railway and rewarehousing at the port of Bangor, Me. The statutory transportation bond for this rewarehousing was given by the Loma Grande Company. The total amount of duties and revenue tax due on the liquors so withdrawn was $1,041.69, and the 91 cases seized by the sheriff were a part of the 96 cases withdrawn at Chicago.

On September 28, 1918, a "carrier's United States customs manifest of goods subject to customs inspection" had been issued reciting that the goods were shipped by the Loma Grande Company "in bond via Grand Trunk Railway, consigned to the collector of customs at Bangor, final destination, Bangor, Me., consignee, % William McGinnls, W. A. Ross & Bros."

It is inferable from the agreed statement that the Loma Grande Company had sold these 96 cases to W. A. Ross & Bros., and they in turn had sold them to William McGinnis, who, after the goods had been duly rewarehoused at the customs house in Bangor, intended that the same should ultimately be sold in this state in violation of law.

The liquor was loaded on a car of the Grand Trunk Railway at Chicago, duly sealed by a representative of the collector of customs of that port, and moved forward under original seal protection to Island Pond, Vt, on the line of the Grand Trunk Railway, at which point it became necessary to transfer it to another freight car on the line of the Maine Central Railroad, which car was also duly sealed by a customs inspector. At North Stratford, N. H., the property was again transferred and sealed by another customs inspector; this car arriving at Bangor via Maine Central Railroad on October 18, 1918, under the seals so applied at North Stratford. The car was placed for unloading on that day. By permission of the deputy collector at Bangor the car was unloaded by representatives of the claimant and the liquor was placed by them in the inward freight shed of the Maine Central Railroad Company. It was seized at this shed by the sheriff four days later, on October 22, 1918. Neither payment nor tender of the unpaid customs duties thereon was made by the sheriff.

The claimant does not seek to regain the liquor as a common carrier on the ground that its seizure by state authorities was in violation of the commerce clause of the Constitution of the United States (article 1, § 8, cl. 3), which vests in the federal government the constitutional right to regulate commerce between the several states. Under that clause and under the act of Congress of August 8, 1890, the Wilson Act, so called (U. S. Comp. St. 1916, § 8738), the courts held that the shipment of intoxicating liquors from one state into another was protected from state interference until the interstate shipment had terminated, that is, until actual, or perhaps' constructive, delivery to the consignee. Heymann v. Southern Railway Co., 203 U. S. 270, 27 Sup. Ct. 104, 51 L. Ed. 178, 7 Ann. Cas. 1130; State v. Intox. Liquors, 102 Me. 385, 67 Atl. 312, 120 Am. St. Rep. 504; State v. Intox. Liquors, 104 Me., 463, 72 Atl. 331. 23 L. R. A. (N. S.) 1020. This protection, however, was withdrawn by the passage of the act of March 1, 1913, the Webb-Kenyon Act, so called (U. S. Comp. St. 1916, § 8739), so that such a claim by a carrier can be no longer maintained.

The claimant rests his case upon another and entirely different ground, namely, the exclusive power of the United States governing the imposition and collection of duties on imports under the federal Constitution and the acts of Congress passed in furtherance thereof. Article 1, § 8, cl. 1, reads:

"The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States."

This power is vested solely in the federal government, which can establish such methods for the collection of its duties as may seem advisable. They are to be self-administered and not to be thwarted or hampered by the State (U. S. v. Snyder, 149 U. S. 214, 13 Sup. Ct. 846, 37 L. Ed. 705), even in the attempted exercise of its police power (Flaherty v. Hanson, 215 U. S. 515, 30 Sup. Ct. 179, 54 L. Ed. 307). A state law which, in itself, is valid as regulating purely internal and intrastate affairs is nugatory when it comes into collision with an act of Congress regulating the collection of duties on imports. These fundamental and firmly established principles of law underlie the problem which has been submitted to this court.

The first question, therefore, which arises is whether the act of the state authorities in seizing and holding the liquors in the instant case constituted an interference with the federal authorities in their constitutional right to collect the duties on these imported goods and to employ every power and means authorized by Congress to enable them to enforce such collection. If the act of the sheriff deprived the federal authorities of a single remedy possessed by them, even though others remained, it must be held to be an invasion of the federal domain and therefore nugatory. To permit one remedy or mode of protection to be taken away would open the door to repeated invasions and to the destruction of all methods for the preservation of its rights of collection. The collection of duties is as sacred a constitutional right as the power to impose them.

In order to answer this vital question of interference or noninterference it is necessary to determine whether at the time of the seizure the goods can be said to have been in any sense in the actual or constructive custody of the United States, either through ifs customs officials or other designated agents or representatives, and also whether that custody could be retained until all accrued duties and taxes were paid.

We think both questions should be answered in the affirmative, and, if so, it follows that the act of seizure by the state official was unwarranted.

I. Custody by the United States Either Through its Customs Officials or other Designated Agents or Representatives.

Let us briefly trace these goods from the moment of their importation until their seizure, and ascertain whether at any time, and, if so, when, they were out of the actual or constructive custody of the United States government It appears that they arrived at the port of New York on the steamship Tuscania from Glasgow, Scotland, but were not entered in the New York custom house. The importer and owner, the Loma Grande Company, being a resident of Chicago, Ill., preferred to make that port the port of entry, as it had a legal right to do. The goods were therefore shipped to Chicago. The owner then had the right either to pay the duties and take the goods from the possession of the government or to withhold payment, enter them in a bonded warehouse, giving a warehouse bond, and leave them in the possession of the government. It adopted the latter course. The goods were therefore deposited in the warehouse and a warehousing bond was given, with a guaranty company as surety, conditioned within three years either to withdraw the goods on payment of the duties and charges or to export them. This bond is given by the importer simply as further security for the duties, not in payment of them. U. S. v. Lyman, 1 Mason, 482, Fed. Cas. No. 15,647. The condition of the bond is not directly for the payment of duties but for the withdrawal or exportation of the goods within the three-year period—

"because the government does not intend either to hold the goods indefinitely or to look to the goods alone for the payment of the duties or to take the risk of loss that may attend holding them." U. S. v. Georgi (D. C.) 44 Fed. 255, 257.

See, also, Clark v. Peaslee, 1 Cliff. 545,...