Wallace v. United States

• Decision Date: 10 April 1917
• Docket Number: 2336.
• Citation: 243 F. 300
• Parties: WALLACE v. UNITED STATES.
• Court: U.S. Court of Appeals — Seventh Circuit

243 F. 300

WALLACE v. UNITED STATES.

No. 2336.

United States Court of Appeals, Seventh Circuit.

April 10, 1917

William A. Morrow, of Chicago, Ill., for plaintiff in error.

Charles F. Clyne and Benjamin P. Epstein, both of Chicago, Ill., for the United States.

Plaintiff in error was convicted under an indictment charging violation of the so-called Harrison Drug Act passed December 17, 1914 and by its terms effective March 1, 1915. Of the ten counts of the indictment, Nos. 1 and 2 charge plaintiff in error Wallace and one Davis with conspiracy to commit an offense against the United States by violating said act; count 1 charging the intended offense to be possession of such drugs by Davis, a person who sold and gave away the drugs, and not being registered with, and not having paid the tax provided in the act to, the collector of internal revenue for the First district of Illinois, and count 2 an intended violation of the act through sales of such drugs to be made by Davis he not being so registered or having paid the tax. Counts 3 and 5 charge Davis with violating the act by unlawfully having in his possession the drugs, and counts 4, 5, 6, 7, 9 and 10 charge violation by Davis in unlawfully selling or giving away the drug, and in counts 3 to 10 Wallace is charged with having aided and abetted Davis in doing the unlawful acts charged against Davis in these counts, Davis not being so registered and not having paid the tax.

Wallace alone was tried, Davis having pleaded guilty. The jury found Wallace guilty under counts 2, 6, 9, and 10, and not guilty under the others. Wallace was sentenced to two years' imprisonment and $10,000 fine under count 2, and 5 years under each of counts 6, 9, and 10, the several terms of imprisonment to be concurrently served.

Section 1 of the act, which it is charged the defendants violated and conspired to violate, is in its material parts as follows: 'That on and after the first day of March, nineteen hundred and fifteen, every person who produces, imports, manufactures, compounds, deals in, dispenses, sells, distributes, or gives away opium or coca leaves or any compound, manufacture, salt, derivative, or preparation thereof, shall register with the collector of internal revenue of the district his name or style, place of business, and place or places where such business is to be carried on: Provided, that the office, or if none, then the residence of any person shall be considered for the purposes of this act to be his place of business. At the time of such registry and on or before the first day of July, annually thereafter, every person who produces, imports, manufactures, compounds, deals in, dispenses, sells, distributes, or gives away any of the aforesaid drugs shall pay to the said collector a special tax at the rate of $1 per annum. ' (Certain persons are exempted.) 'It shall be unlawful for any person required to register under the terms of this act to produce, import, manufacture, compound, deal in, dispense, sell, distribute, or give away any of the aforesaid drugs without having registered and paid the special tax provided for in this section. * * * That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make all needful rules and regulations for carrying the provisions of this act into effect.'

Sections 2, 3, and 5 make detailed provision for handling the drugs by persons registered, for making record of drugs received, and for sale or barter of same only in pursuance of a written order on blank forms for which provision is made, and for preservation of such orders and the accessibility thereof to inspection by officials of the Treasury Department, as well as to state and municipal officials who are charged with enforcement of laws or ordinances thereof regulating sale and distribution of such drugs. Section 4 makes it unlawful for any person not registered to ship or carry any of these drugs from one state to another, certain exceptions being enumerated. Section 9 prescribes that any person violating the act shall be fined not more than $2,000, or imprisoned not more than 5 years, or both.

Numerous errors are alleged. Those which we deem important will be stated with the discussion of them in the opinion.

Before KOHLSAAT, MACK, and ALSCHULER, Circuit Judges.

ALSCHULER Circuit Judge (after stating the facts as above).

1. As to each of the counts in the indictment it is contended that because it is not alleged that Davis had his office or residence in the first internal revenue district of Illinois and the allegation of his nonregistry and nonpayment of the tax is only as to said First district, the indictment does not sufficiently allege Davis' nonregistry and nonpayment of the tax. The argument is that, for anything to the contrary appearing in the indictment, Davis might have been registered in some other district, and would therefore have had the right under the act to handle the drugs within the First district of Illinois, without registering with, or paying the tax to, the collector of internal revenue therein. Does registry and payment of the tax in one internal revenue district of the United States entitle the registered person under such registry alone to handle the drugs in all other revenue districts in the United States as he may do in the district of his registry?

Section 1 requires a person proposing to handle the drugs to register 'with the collector of internal revenue of the district his name or style, place of business, and place or places where such business is to be carried on,' and it defines the place of business to be 'the office, or if none, then the residence ' of the person. Distinction is thus made in the act between the 'place of business' and the 'place where such business is to be carried on. ' The act defines the first in prescribing that it shall be considered the office, if any, and, if none, then the residence, of the applicant for registry. But evidently the place where the business is to be carried on may be anywhere in the United States, and may be more than one place, as indicated by the use of the words 'place' or 'places.' But the act does not provide that his place of business-- i.e., his office or residence-- shall be the place where he is required to register. It prescribes in effect that he shall state his place of business (so defined to be his office or residence) by way of information, doubtless for the more certain identification of the applicant for registry and to facilitate official supervision, and tracing of the drugs. For instance, if his office (his place of business, if any, and, if none, his residence) is in New York, unless he intends to carry on the business in New York, he need not register there; but if he desires to carry on the business of selling the drugs in the First district of Illinois, he must register in the First district, and when registering there he registers his place of business as New York, and will then further register the place or places wherein he expects to transact business in Chicago, and in such other places, if any, in which he intends to handle the drugs. But so registering these facts in the First district of Illinois does not entitle him to deal in such drugs in the various places other than said First district, which he may thus enumerate. In order to make sales in any of the other districts which may be so enumerated, the applicant must there register and pay his tax in such district, wholly regardless of whether within any district in which he registers he actually has an office or residence. If, therefore, without registering and paying tax in the First district of Illinois, Davis therein actually dealt in, sold, or gave away the drugs, he was carrying on such business in said First district contrary to the provisions of the act, even though he might have registered and paid tax in some other district. It follows that, with respect to the allegations of nonregistry and nonpayment of the tax, the indictment is sufficient.

2. It is urged that the conspiracy alleged in count 2 fails to charge a conspiracy to unlawfully sell the drugs within the First district of Illinois, within which alone Davis' nonregistry is alleged. The count charges the conspiracy to have been formed at Chicago, which is within such First district, and that in pursuance of the conspiracy Davis did deliver, sell, and give away drugs at Chicago to the various persons alleged in the different overt acts set forth in the count. Under the reasoning and conclusion of the Supreme Court in Hyde v. United States, 225 U.S. 347, 32 Sup.Ct. 793, 56 L.Ed. 1114, Ann. Cas. 1914A, 614, we hold that count 2 sufficiently charges a conspiracy to commit at Chicago the alleged offense.

3. Another objection urged to the indictment is that the counts do not negative the exemptions from the operation of the act as therein created in favor of certain persons. The exemptions referred to consist in the enumeration of certain classes of persons who are excluded from the general prohibition of the act, which the act clearly and completely sets forth wholly apart from the specified exemptions. The rule applicable to such cases is stated by the Supreme Court in United States v. Cook, 17 Wall. 168, 173, 21 L.Ed. 538, in these words:

'If the language of the section defining the offense is so entirely separable from the exception that the ingredients constituting the offense may be accurately and clearly defined without any reference to the exception, the pleader may safely omit any such reference, as the matter contained in the exception is matter of defense and must be shown by the accused.'

The same rule was recently applied by this court in Grand Trunk Ry. Co. v. United States, ...