United States v. One Ice Box

• Citation: 37 F.2d 120
• Decision Date: 08 January 1930
• Docket Number: No. 37846.,37846.
• Parties: UNITED STATES v. ONE ICE BOX et al.
• Court: U.S. District Court — Northern District of Illinois

37 F.2d 120 (1930)

UNITED STATES v. ONE ICE BOX et al.

No. 37846.

District Court, N. D. Illinois, E. D.

January 8, 1930.

George E. Q. Johnson, U. S. Dist. Atty., and Walter E. Wiles, Asst. U. S. Atty., both of Chicago, Ill., for the United States.

Harry I. Weisbrod, of Chicago, Ill., for claimant.

WOODWARD, District Judge.

Acting under a search warrant issued by United States Commissioner Walker, prohibition agents searched the premises of Stanley Fieza, the claimant. The place searched was fitted up as a saloon. The agents found in the place, and seized and removed therefrom to the government warehouse, a quantity of whisky and colored spirits, as well as a large amount of personal property, consisting chiefly of an ice box, mirrors, bars, cash register, tables, chairs, electric fan, tobacco, bottles, and other miscellaneous articles. All articles seized were in the possession and under the control of the claimant. No tax had been paid for or on account of the whisky and colored spirits so found and seized. The whisky and colored spirits were intended for sale by the claimant.

The United States filed a libel to enforce the forfeiture of the personal property so seized, basing its action on section 3453 of the Revised Statutes (26 USCA § 1185). Fieza appeared and claimed the return of the personal property, other than the whisky and colored spirits.

Fieza was charged by criminal information with and convicted of the unlawful possession of liquor and maintaining a nuisance, in violation of the National Prohibition Act (27 USCA), the violation occurring at the same time and place as the alleged violation of the internal revenue laws. The United States contends that the whisky and colored spirits were in the possession, custody, and control of the claimant for the purpose of being sold by him in fraud of the revenue laws, and that the other personal property seized, which appear to form the stock, furniture, and fixtures of a retail dealer in liquors, were found at the same time and same place, in his possession, custody, and control, and are subject to forfeiture under the statute invoked.

The claimant contends: (1) The prohibition agents had no authority to seize any of the property, other than the whisky and colored spirits; (2) the personal property described in the libel is not subject to forfeiture and condemnation under the statute relied upon by the government; and (3) the conviction of the claimant for possessing liquor and maintaining a nuisance constituted an election by the government, and the government is barred from maintaining this libel in rem.

It is contended that the federal prohibition agents were without power to make the seizure. It is unnecessary, in this connection, to investigate the powers with which they are vested. Whether or not they had the power to make the seizure is immaterial. If the property is declared forfeited, the seizure, though made by an unauthorized person, may be adopted by the government, and, when so adopted, the seizure has the same effect as if originally authorized. United States v. One Ford Coupé Automobile, 272 U. S. 321, 47 S. Ct. 154, 71 L. Ed. 279, 47 A. L. R. 1025.

The main contention is that the forfeiture and condemnation are not authorized by section 3453 of the Revised Statutes (26 US CA § 1185), which reads as follows:

"Sec. 3453. All goods, wares, merchandise, articles, or objects, on which taxes are imposed, which shall be found in the possession, or custody, or within the control of any person, for the purpose of being sold or removed by him in fraud of the internal-revenue laws, or with design to avoid payment of said taxes, may be seized by the collector or deputy collector of the proper district, or by such other collector or deputy collector as may be specially authorized by the Commissioner of Internal Revenue for that purpose, and shall be forfeited to the United States. And all raw materials found in the possession of any person intending to manufacture the same into articles of a kind subject to tax for the purpose of fraudulently selling such manufactured articles, or with design to evade the payment of said tax; and all tools, implements, instruments, and personal property whatsoever, in the place or building, or within any yard or inclosure where such articles or raw materials are found, may also be seized by any collector or deputy collector, as aforesaid, and shall be forfeited as aforesaid. The proceedings to enforce such forfeitures shall be in the nature of a proceeding in rem in the Circuit Court or District Court of the United States for the district where such seizure is made."

The whisky and colored spirits found in Fieza's place are subject to a tax. The United States has the power to impose a tax on illicitly manufactured liquor. The liquor in the possession of Fieza was subject to the basic production tax. United States v. One Ford Coupé Automobile, 272 U. S. 321, 47 S. Ct. 154, 71 L. Ed. 279, 47 A. L. R. 1025; section 605 of the Revenue Act of 1918 (40 Stat. 1057, 1108).

The liquor was intended to be sold or removed "in fraud of the internal revenue laws." The expression, "in fraud of the internal revenue laws" means in violation of such laws. In re Quantity of Tobacco, Fed. Cas. No. 11,500; In re Pollmann (D. C.) 156 F. 221; Toof v. Martin, 13 Wall. (80 U. S.) 40, 51, 20 L. Ed. 481. The contention that the real intent was to violate the National Prohibition Law, and not the internal revenue laws, cannot be sustained. In the case of Commercial Credit Corp. v. United States (C. C. A.) 18 F.(2d) 927, 929, the court say:

"Concealment and removal of the tax-unpaid goods by illegal transportation in the automobile were presumptive evidence of an intent to defraud the United States of the tax thereon, despite the statements of the persons in charge of the vehicle that they were ignorant of the law imposing such tax. The fact that their primary interest may have been to violate the prohibition law need not prevent the court from inferring an intent also to evade the tax law, as such evasion would necessarily result from their concealment and removal of the alcohol. United States v. One Cadillac Automobile, etc. (D. C.) 292 F. 773; United States v. One White One-Ton Truck (D. C.) 4 F.(2d) 413; The Ella (D. C.) 9 F.(2d) 411."

The rule for the construction of this statute is that announced by the Supreme Court in the Cliquot's Champagne, 3 Wall. (70 U. S.) 114, 145, 18 L. Ed. 116, as follows: "Revenue laws are not penal laws in the sense that requires them to be construed with great strictness in favor of the defendant. They are rather to be regarded as remedial in their character, and intended to prevent fraud, suppress public wrong, and promote the public good. They should be so construed as to carry out the intention of the legislature in passing them and most effectually accomplish these objects."

The rule in the Cliquot's Champagne Case was approved in United States v. Stowell, 133 U. S. 1, 10 S. Ct. 244, 245, 33 L. Ed. 555, where the court said: "By the now settled doctrine of this court (notwithstanding the opposing dictum of Mr. Justice McLean in U. S. v. Eighty-Four Boxes of Sugar, 7 Pet. 453, 462, 463 8 L. Ed. 745), statutes to prevent frauds upon the revenue are considered as enacted for the public good, and to suppress a public wrong, and therefore, although they impose penalties or forfeitures, not to be construed, like penal laws generally, strictly in favor of the defendant; but they are to be fairly and reasonably construed, so as to carry out the intention of the Legislature."

An analysis of the section discloses its comprehensiveness. It provides for the seizure and forfeiture under the conditions there stated of (1) the contraband goods; (2) all raw materials intended to be manufactured into contraband goods with intent to sell them in fraud of the revenue laws; and (3) "all tools, implements, instruments, and personal property whatsoever, in the place or building, or within any yard or enclosure where such articles or raw materials are found."

Naturally and grammatically the words "articles" and "raw materials," respectively, as used in the third classification, refer to the contraband articles and contraband raw materials referred to in the first and second classifications. The plain and natural meaning of the language used is that all personal property in the same place where the contraband articles are found is the subject of forfeiture.

This construction accords not only with the plain and obvious meaning of the language used, but is also in harmony with the theory underlying the legislation by Congress on the subject of internal revenue, with the legislative history of the particular section under consideration and with the decisions of the Supreme Court construing an analogous statute.

There are many statutes of the United States providing for the forfeiture of property for violation of the internal revenue laws. In the case of Standard Carpet Co. v. Bowers (D. C.) 284 F. 284, 285, the court said: "The provisions of the Revised Statutes for the seizure * * * of goods for violations of the internal revenue laws are ancient and they are intended to be complete." The legislation of Congress with...