United States v. Griggs, 18878.
| Decision Date | 11 March 1939 |
| Docket Number | No. 18878.,18878. |
| Citation | 26 F. Supp. 912 |
| Parties | UNITED STATES v. GRIGGS. |
| Court | U.S. District Court — District of Maryland |
Bernard J. Flynn, U. S. Atty., of Baltimore, Md., for the United States.
Edward L. Ward, of Baltimore, Md., for defendant.
The indictment in this case, in nine counts, charges the defendant with various violations of the federal oleomargarine law. See 26 U.S.C.A. ch. 9 § 970 et seq. He has demurred to the third, fourth, sixth, seventh and eighth counts of the indictment. These will now be severally considered.
To understand the point of the demurrers it is necessary to have in mind an outline of the statutes. They were passed and enacted by Congress under the taxing power. Section 971 imposes a tax on oleomargarine at the rate of one-quarter of a cent per pound for uncolored oleomargarine, and at the rate of ten cents per pound for yellow oleomargarine. It classes the persons who deal in oleomargarine and are subject to the statutes, as (1) manufacturers; (2) wholesalers and (3) retailers. The taxes, to be paid by the manufacturer, are represented by coupon stamps which must be attached to the original package. Manufacturers are defined and regulated particularly in section 972; wholesale dealers in section 973 and retail dealers in section 974. The primary purpose of the law is to secure the tax and prevent evasions thereof; but there is the incidental purpose of preventing deception of the purchaser of yellow oleomargarine in the requirement as to the branding of the package in which the article is sold either at wholesale or retail with the word "oleomargarine". Section 972(b) (1) and (2) provides that:
Sec. 974 defines a retail dealer as one who sells oleomargarine "in less quantities than ten pounds at one time"; and provides that such retail dealers "must sell only from original stamped packages * * * and shall pack, or cause to be packed, the oleomargarine sold by them in suitable wooden, tin-plate, or paper packages which shall be marked and branded as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe". Regulations No. 9 relating to the taxes on oleomargarine, Article 29, requires that all original packages shall be branded with the word "oleomargarine"; and Art. 28 (c) provides that . Article 54, relating to the retailer, provides that "oleomargarine packed by the manufacturer by cartons or wrappers branded as prescribed in Article 29 may be sold by a retail dealer from the original stamped container without further branding; but if the manufacturer's package is not subdivided into prints or rolls, the retail dealer must wrap the oleomargarine at the time of sale in a new covering which must be branded with his name and address and the word `oleomargarine'." Section 978(a) to (j), both inclusive, provides penalties for various violations of the statutes with respect to the manufacture, packing, branding and sale of oleomargarine by any of the persons dealing therein.
The third and fourth counts. Both these counts are similar in form, differing only as to the quantity of oleomargarine. They are professedly based on section 978 (a) of the penalty clause of the statutes, which reads as follows:
"(a) Every person who knowingly sells or offers for sale, or delivers or offers to deliver, any oleomargarine in any other form than in new wooden, tin-plate, or paper packages as described in section 972 (b) (1) and (2), or who packs in any package any oleomargarine in any manner contrary to law, or who falsely brands any package or affixes a stamp on any package denoting a less amount of tax than that required by law shall be fined for each offense not more than $1,000, and be imprisoned not more than two years."
The third count charges that the defendant "being then and there a retail dealer in oleomargarine having paid the special tax to the Collector of Internal Revenue at Baltimore, being a person who sold, vended and furnished oleomargarine for the use and consumption of others, did unlawfully and feloniously offer for sale and offer to deliver 4442 pounds of colored oleomargarine not then and there in and from the original stamped packages as required by law." On analysis of the count it appears that the essential averments are (1) that the defendant is a retail dealer; (2) that he offered for sale and delivery a certain amount of colored oleomargarine and (3) not in and from the original stamped packages as required by law.
A comparison of the language of the third count with the language of section 978 (a) shows at once that the count does not follow literally the language of the section, which has three subdivisions; (a) selling in any other form than in new wooden, tin-plate or paper packages as described in section 972(b) (1) and (2); (b) packing in any package contrary to law, and (c) falsely branding or stamping any package. It is obvious that the count does not charge a violation of either (b) or (c). And it would seem equally clear that the count is not based on (a). The essential averment of the count lies in the charge that the defendant, a retail dealer, offered for sale oleomargarine "not then and there in and from the original stamped packages as required by law." The dispute here is over the word "in" as contained in the above phrase. There is no provision in the statutes which requires the retail dealer to sell only "in and from" original stamped packages. Section 974(b) requires him to sell only "from original stamped packages, in quantities not exceeding ten pounds"; but it does not require the retailer to sell "in" the original stamped package. Indeed as the manufacturer's original package is required to contain not less than ten pounds, and as the wholesaler must sell only in an original package, there is apparently no way in which the retailer can lawfully buy a package of less than ten pounds. And as he is permitted to sell at one time only in quantities less than ten pounds, it is obvious that he has to break the original package to make his sale. Therefore literally it is impossible for him to lawfully sell "in the original package". The Regulations are not referred to in the third and fourth counts of the indictment but by reference thereto, as bearing on the construction of the statutes, it is found that Article 51 provides "a retail dealer may sell not exceeding 10 pounds at one time taken from an original package or packages". And by Article 54(d) it is provided that . These regulations do not indicate that the administrative construction of the statutes is such that the retailer is required to sell the oleomargarine in and from the original package but only by article 54(d) that the oleomargarine must be kept in the original package until removed for sale. Therefore it appears that the Government would not make out its case under the third count by merely proving that the oleomargarine when offered for sale by the...
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