United States v. Alexis Club

• Decision Date: 30 December 1899
• Citation: 98 F. 725
• Parties: UNITED STATES v. ALEXIS CLUB.
• Court: U.S. District Court — Eastern District of Pennsylvania

98 F. 725

UNITED STATES v. ALEXIS CLUB.

United States District Court, E.D. Pennsylvania.

December 30, 1899

James M. Beck, U.S. Atty., and Francis F. Kane, Asst. U.S. Atty for the United States.

Thos R. Elcock and Matthew R. Dittman, for defendant.

McPHERSON District Judge.

The facts upon which the question for decision arises appear in the following special verdict:

'The jury find in the above-entitled case the following facts:

'That the defendant is a bona fide organization organized in the year 1871, and incorporated under the laws of the state of Pennsylvania on the 10th day of December, 1881.

'That prior to July 1, 1897,and for some time after July 1, 1898, the said defendant had its club house and headquarters at the northeast corner of Seventh and Vine streets, in the city Philadelphia, and in the First collection district of the state of Pennsylvania.

'That the said defendant had, during the period last mentioned, a bar on the third floor of the said club house, and kept a stock of malt and spirituous liquors for the consumption of the members of the said club only, and sold and furnished to them in quantities not exceeding five wine gallons; that is to say, simply by the glass or single drink. That the said liquors were purchased by a committee of the said club known as the 'refreshment committee,' which made a weekly report to the general weekly meeting of the members of the club of all purchases made on behalf of the said club. That after a resolution had been passed at such meeting of members for the payment of all purchases made, orders were signed by the president of the club, attested by the secretary, and the treasurer made payment out of the club's funds.

'That members of the club purchased with money from the steward c checks which were used in payment for all refreshments bought, said checks being only sold to and used by members of the club. The furnishing of liquors was a mere incident to the use and enjoyment of the club. That, as a matter of fact, checks were not purchased in equal amounts by members of the club, it being optional with each member to purchase none, or to purchase any quantity he might desire, and the money derived from the sale of such checks went into the treasury of the club.

'That the said club owned the property in fee simply at the northeast corner of Seventh and Vine streets, having owned the same since June, 1884, which cost the defendant, together with the library, over $20,000. Literary and musical entertainments for the members, their families and friends, were given from time to time, and, among other modes of recreation, the club maintained a bowling alley, pool and billiards, chess, and checkers.

'That the membership of the said club was limited, and among the requisites for membership the applicant was required to be a citizen of the United States.

'That the collector of internal revenue for the First collection district aforesaid returned the said defendant organization as a retail liquor dealer, and assessed a tax of $25 as such retail liquor dealer from July 1, 1897, to June 30, 1898. That said tax was not paid, and that, in accordance with law, a penalty of fifty per cent. was added, making a total indebtedness of $37.50 for the period last mentioned.

"That the said collector, on the last day of July, 1898, again returned the said defendant organization as a retail liquor dealer, and assessed a tax of $25 as such retail liquor dealer from July 1, 1898, to June 30, 1899, which latter sum not having been paid, the penalty of fifty percent. was again added, making further indebtedness of $37.50, and a total indebtedness of $75 for taxes and penalties claimed to be due the plaintiff by the defendant as such retail liquor dealer as aforesaid from July 1, 1897, to June 30, 1899."

'Upon the foregoing facts the jury find a special verdict in favor of the United States and against the defendant in the sum of seventy-five dollars ($75), if the court should be of the opinion that the law is with the plaintiff; otherwise, they find for the defendant.'

The question for decision is this: Upon the foregoing facts, is the defendant a retail dealer in liquors, within the meaning of section 3244 of the Revised Statutes? That section provides in its fourth clause that such dealers shall pay a special tax of $25, and then goes on to give the following definition of a retail dealer; 'Every person who sells or offers for sale foreign or domestic distilled spirits or wines, in less quantities than five wine gallons at the same time, shall be regarded as a retail dealer in liquors. ' That the defendant is a 'person' is not now denied, and the question, therefore, may be stated thus: Is the transaction described by the special verdict such a 'sale' of liquor by the club to its members as the section intends? If so, the defendant falls within the statutory definition, and must pay the tax. If not, no tax is imposed by the section.

Whether a club organized in good faith for the purpose of social enjoyment sells drink to its members when they order and receive this...