United States v. 673 Cases of Distilled Spirits and Wines

• Decision Date: 05 July 1947
• Docket Number: Civ. A. No. 677.
• Citation: 74 F. Supp. 622
• Court: U.S. District Court — District of Minnesota
• Parties: UNITED STATES v. 673 CASES OF DISTILLED SPIRITS AND WINES.

74 F. Supp. 622

UNITED STATES

v.

673 CASES OF DISTILLED SPIRITS AND WINES.

Civ. A. No. 677.

District Court, D. Minnesota, Third Division.

July 5, 1947.

COPYRIGHT MATERIAL OMITTED

Victor E. Anderson, U. S. Atty., of St. Paul, Minn., for the United States.

Lewis L. Drill and O. A. Blanchard, both of St. Paul, Minn., for claimants.

JOYCE, District Judge.

Libel by United States of America against 673 cases of distilled spirits and wines for violation of the internal revenue laws. Samuel H. Taran and Jerry M. Londer, claimants. Claimants filed a motion for a dismissal of the libel for want of lawful seizure of the liquors in question, which was denied without prejudice to claimants to renew it on the trial, and the case was set down for trial on the merits. United States v. 673 Cases of Distilled Spirits and Wines, D.C., 65 F.Supp. 896. At the commencement of the trial on the merits, claimants renewed their motion for dismissal of the libel for want of lawful seizure of the said liquors and also moved to suppress all of the evidence which was obtained by means of such allegedly unlawful seizure.

The libel alleges that Sam. H. Taran and Herman Paster, individually and as copartners, under the firm name of Mayflower Novelty Company, and others unknown, violated the internal revenue laws by engaging in business as wholesale liquor dealers without having paid the special tax provided therefor as required by Section 3253 of Title 26 U.S.C.A. Int.Rev. Code; and possessing liquor intended for use in violating the internal revenue laws under Section 3116 of Title 26 U.S.C.A. Int.Rev.Code.

The answer filed by Sam Taran states that he is the sole owner of the liquor in question; that he operated the Mayflower Novelty Company at 2218 University Avenue, St. Paul, Minn., and that Herman Paster was merely his employee. A claim of ownership was filed by Taran, and another such claim was interposed by Jerry M. Londer as to a portion of the liquors involved. Londer also filed an answer to the libel.

It appears from the evidence that the Mayflower Novelty Company is a corporation organized under the laws of Minnesota for the purpose of engaging in the coin operated machine business, that during the period in question here Taran was its manager and Herman Paster an employee subordinate to Taran. In April 1943 Taran rented a storeroom on the second floor of the Kedney Warehouse, 389 East 8th St., St. Paul, stating to the warehouse manager that he was "interested in a finance company" and that he desired storage space for liquor financed by this company. In June or July of 1943 he also rented room 420 and another fourth floor room at the same warehouse, at which time he stated that part of this space was desired for liquor being financed for the Snelling Liquor Store of St. Paul. Taran furnished his own locks for these storerooms and paid the rent on a flat monthly basis, thereby absolving the warehouse management of any responsibility for their contents as well as the duty of keeping records of storage withdrawals or additions. The liquor that was stored in these rooms was generally handled by a Negro employee of the Mayflower Company, James Tiffin, who was sometimes assisted by a fellow employee, Lee, and occasionally by Herman Paster. Early in October of 1943 the St. Paul branch of the Federal Alcohol Tax Unit received reliable information that a wholesale liquor business was being conducted at the premises of the Mayflower Novelty Company and pursuant to such information two investigators were detailed to keep said premises under surveillance. While so engaged in the late afternoon of October 5th, they observed a large truck back into the loading station of the building, remain there a little over an hour, and then pull out preceded by Herman Paster in his car. The investigators followed the truck to the intersection of U. S. Highways Nos. 10 and 8, northwest of St. Paul, where they observed Paster turn around and head back toward St. Paul, the truck proceeding west on Highway 10. They continued to trail the truck to Fargo, North Dakota, where they stopped it and discovered that it contained a load of 380 cases of liquor. The driver and owner of the truck, Rex McCann, a contract trucker of Missoula, Montana, showed them a bill of lading therefor which listed "Idaho State Liquor Commission" as consignee and destination as "State Liq. Store No. 24, Wallace, Idaho", which he alleged had been given him by Herman Paster. The investigators confiscated, inventoried, and stored this load of liquor at Fargo and then returned to St. Paul accompanied by McCann The latter, upon their arrival there, pointed out the Kedney Warehouse as the place where he, with the aid of Paster and Jim Tiffin, had loaded half of the confiscated liquor. He then told them that the remainder of the liquor had been transferred to his truck in the loading station of the Mayflower Company building, another truck having immediately prior thereto unloaded such liquor therein. McCann also gave the information that he was hauling the liquor for R. E. McDonel, a tavern operator of Wallace, Idaho, as he had done with a previous load from the Kedney Warehouse in late September of 1943, and that he had no idea why the bill of lading was made out as it was, but that he knew that he was not to deliver the load to Liquor Store No. 24 in Wallace. As a result of this information, two Alcohol Tax agents went to the Mayflower premises on October 6th and asked Sam Taran for permission to inspect the premises, which was given. In two different rooms in the building, a total of 142 cases of distilled spirits and wines were found. These cases were inventoried and each room placed under a "detainer" notice. These notices were signed by Taran and were regularly renewed until the liquor was removed from the premises. Taran claimed he had bought the liquor from various dealers for the purpose of entertaining and furnishing gifts for his customers. On October 8th several Alcohol Tax Unit agents went to the Kedney Warehouse without a search warrant and inquired about any liquor that might be stored there by the Mayflower Company and were informed that the records were kept at the main office on University Avenue. While these records were being checked two agents remained at the warehouse and, upon inquiry as to the identity of two men who came into the premises, were informed that they were employees of the Mayflower Company — Tiffin and Lee. The latter obtained several hand trucks and followed by the agents went to the second floor storeroom, where they remained standing before the locked door for a considerable period of time. One of the government agents then went up to them, identified himself and asked the Negro to open the door, which he did. The agents observed that the room contained a considerable number of cases of liquor and then ordered the door to be locked again. The agents took these two employees into custody and also Paster when he arrived about an hour later. The three were then taken to the Alcohol Tax Unit where a statement was obtained from Paster. Later on that same afternoon the hinges were removed from the door on room 420 of the Kedney Warehouse, where more liquor was found. The contents of both rooms were inventoried and detainer notices signed by Paster were posted on the doors and such notices were regularly renewed until October 14th, when the 531 cases contained in the Kedney Warehouse room and the 142 cases at the Mayflower Company premises were removed to government storage.

1. The libel alleges violation of Section 3253 and also "that certain property used and intended for use in such violation was seized by agents of Alcohol Tax Unit and is subject to forfeiture within the meaning of Section 3116 of the Internal Revenue Code. Section 3116 provides that "It shall be unlawful to have or possess any liquor or property intended for use in violating the provisions of this part, or the internal-revenue laws, or regulations prescribed under such parts or laws, or which has been so used, and no property rights shall exist in any such liquor or property. * * *"

It might be well to first note the recent decision of the Eighth Circuit Court of Appeals in the case of United States v. Windle, 8 Cir., 158 F.2d 196, wherein a libel was filed by the United States of America for forfeiture of a 1940 Dodge coupe and its contents consisting of approximately 48 gallons of whiskey. While the libel stated that the distilled spirits were at the time of seizure being offered for sale in violation of Title 26 U.S.C.A. Int.Rev. Code, § 3253, it further stated that the liquor and automobile became forfeited to the United States under 26 U.S.C.A. Int. Rev.Code, § 3116. The District Court for the Southern District of Iowa entered a judgment dismissing the automobile from the libel and ordering its return to the intervener, from which judgment the United States appealed. On appeal it was held that an automobile used with intent to carry on the business of a wholesale liquor dealer without paying required tax and keeping proper records is subject to forfeiture under Section 3116, even though the dealer may also be operating in violation of and subject to the sanctions of Section 3253, and that Section 3116 provides for forfeiture in any case of intended violation of revenue laws relating to intoxicating liquors as an aid to the enforcement of such revenue laws. By virtue of the rule contained in the Windle case it must be held that the liquors in question are subject to forfeiture under the provisions of Section 3116.

2. It is elementary that the burden of proof is upon the government to show affirmatively the existence of every fact which is an element of a proceeding for forfeiture of distilled spirits as alleged in the information of libel. Jackson v. United States, D.C., 21 F. 35; In re Quantity of Distilled Spirits, Fed.Cas. No. 11494; and United States v. One Marmon...