Respondents Brief — United States v. La Franca

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IN THE 3

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1930.

No. 74

THE UNITED STATES OF AMERICA,

Petitioner,

versus

ANTHONY LA FRANCA.

On Writ of Certiorari to the United States Circuit Court of

Appeals for the Fifth Circuit.

BRIEF FOR ANTHONY LA FRANCA.

~ E. HOWARD M’CALEB,

E. HOWARD M’CALEB, JR.,

Attorneys.

January, 1931.

BONTCOMERT-ANDREE PRINTING CO. INC. 430-432 CHARTBES. BO.

se

SUBJECT INDEX.

Page

Opinions below , 1

Statutes involved 1

Statement 5

Questions presented 5

ARGUMENT:

I. The suit is one for penalties and not taxes 6

II. The suit being for the recovery of penalties it is barred

by Section 5 of the Willis-Campbell Act 9

III. The suit being for the recovery of penalties, and the de-

fendant having already been punished by fine and im-

prisonment for the same act or offense, it is barred by

the Fifth Amendment of the Constitution prohibiting

o

double jeopardy 1)

IV. Assessments made and doubled under Section 35 of the

National Prohibition Act, based on Paragraph 9, Section

701 of the Revenue Act of 1924, produces an ‘Uunconsti-

tutional use of the latter statute, in violation of the

‘Tenth Amendment of the Constitution 19

Conclusion 24

CITATIONS.

Cases: Page

@ Albrecht v. United States, 273 U.S.1 . 12

Coffey v. Noel, 11 Fed. (2nd), 399 6

Coffey v. United States, 116°'U. S. 445 15

Child Labor Tax Case, 259 U. S. 20 9

Clark Distilling Co. v. Western Maryland R. Co., 242 U. S.

315 ; nee 23

Denver v. Holmes Savings Bank, 236 U. S. 101 11

Dukich v. Blair, 3 Fed. (2nd) 302 (270 U. S. 670) 6

Ex parte Lange, 18 Wall. 168 (85 U. S. XXI 876) 11, 13-14

Feinberg v. United States, 2 Fed (2nd) 955 11

Graham v. West Virginia, 224 U. S. 616 19

Hebert v. Louisiana, 272 U. S. 312 12, 21

In re Leszynsky, Federal Cases No. 8279 19

Ree re

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vali apis iei, LAM OSE

li

CITATIONS—‘(Continued).

Cases: Page

Jasper v. Hellmich, 4 Fed. (2nd), 852 6

Ledbetter v. United States, 170 U. S. 607 12

Lipke v. Lederer, 259 U. S. 557 6, 7, 8, 9, 20

‘Mound Coal Co. v. Jeffrey Mfg. Co., 233 Fed. 956 11

Murphy v. United States, 272 U. S. 630 15

Nalle v. Oyster, 230 U. S. 165 10

O’Sullivan v. Felix, 233 U. S. 318 8

Regal Drug Corporation v. Wardell, 260 U. S. 386 6, 7, 8, 20

Rosen v. United States, 271 Fed. 651 11

United States v. Bullinger, 290 Fed. 395 19

United States v. Chouteau, 102 U. S. 603 11, 12,19

United States v. Gates, Federal Cases, No. 15191 15, 19

United States v. Lanza, 260 U. S. 377 21, 22

United States v. McKee, Federal Cases No. 15688 . fy.

United States v. Mount Clements Beverage Co., 23 Fed.

(2nd), 885 19

United States v. One Ford Coupe, 272 U.S. 321 6.8

United States v. Wiltberger, 5 Wheat. 76 18

United States v. Yuginovich, 256 U. S. 450 8

Statutes: Page

National Prohibition Act. c. 85, 41 Stat. 305, Title II, sec. 35

(U. S. C., title 27, Sec. 52) 1, Sy, 6; 8, 11, 12. 16. 20

National Prohibition Act, c. 85, 41 Stat. 316, Title II, sec. 29

(U. S. C., title 27, Sec. 46) 4.16

Reed Amendment (Act of Mar. 3, 1917, c. 162, 39 Stat. 1058) 23

Revenue Act of 1924, c. 234, 43 Stat. 253, Sec. 701, par. 9

(U.S. C., title 26, Sec. 206) 3, 7, 20, 23

Revised statutes: Page

Sec. 6176, as amended 6

Webb-Kenyon Law ‘Act of Mar. 1, 1913, c. 90, 37 Stat. 699) 23

Willis-Campbell Act, c. 134, 42 Stat. 222, Sec. 5 (U.S. C.,

title 27, Sec. 3) * 2,18

st ENC NRPS Mies

IN THE

SUPREME COURT OF THE UNITED. STATES

OCTOBER TERM, 1930.

No. 74

THE UNITED STATES OF AMERICA,

Petitioner,

versus

ANTHONY LA FRANCA.

On Writ of Certiorari to the United States Circuit Court of

Appeals for the Fifth Circuit.

BRIEF FOR ANTHONY LA FRANCA.

OPINIONS BELOW. ;

The opinion of the District Court (R. 7) is reported

in 26 F. (2d) 706, and that of the Circuit Court of Appeals

(R. 28) in 37 F. (2d) 269.

STATUTES INVOLVED.

Section 35, Title II, of the National Prohibition

Act, ec. 85, 41 Stat. 305, 317 (U. S. C., Title 27, Sec. 52) |

which provides: '

“All provisions of law that are inconsistent

with this Act are repealed only to the extent of such

$ret con

Pe 2 ne,

RUS Mah RAE tir nd sao. Aide a

inconsistency and the regulations herein provided

for the manufacture or traffic in intoxicating liquor

shall be construed as in addition to existing laws.

This Act shall not relieve anyone from paying any

taxes or other charges imposed upon the manufac-

ture or traffic in such liquor. No liquor revenue

stamps or tax receipts for any illegal manufacture

or sale shall be issued in advance, but upon evidence

of such illegal manufacture or sale a tax shall be

assessed against, and collected from, the person re-

sponsible for such illegal manufacture or sale in

double the amount now provided by law, with an ad-

ditional penalty of $500 on retail dealers and $1,000

on manufacturers. The payment of such tax or

penalty shall give no right to engage in the manu-

facture or sale of such liquor, or relieve anyone

from criminal liability, nor shall fhis Act relieve any

person from any liability, civil or criminal, hereto-

fore or hereafter incurred under existing laws.”

Section 5 of the Willis-Campbell Act, c. 134, 42

Stat. 222, 223 (U.S. C., Title 27, Sec. 3), which provides:

“That all laws in regard to the manufacture

and taxation of and traffic in intoxicating liquor,

and all penalties for violations of such laws that

were in force when the National Prohibition Act

was enacted, shall be and continue in force, as to

both beverage and nonbeverage liquor, except such

provisions of such laws as are directly in conflict

with any provision of the National Prohibition Act

or of this Act; but if any act is a violation of any

of such laws and also of the National Prohibition

Act or of this Act, a conviction for such act or of-

fense under one shall be a bar to prosecution there-

for under the other. All taxes and tax penalties

—_

provided for in section 35 of Title II of the National

Prohibition Act shall be assessed and collected in the

same manner and by the same procedure as other

taxes on the manufacture of or traffic in liquor.”

Section 701, Paragraph 9, of the Revenue Act of

1924, c. 234, 43 Stat. 253, 327 (U.S. C., Title 26, Sec. 206),

which provides:

“Every person carrying on the business of

a brewer, distiller, wholesale liquor dealer, retail

liquor dealer, wholesale dealer in malt liquor, retail

dealer in malt liquor, or manufacturer of stills, as

defined in section 3244 as amended and section 3247

of the Revised Statutes, in any State, Tggritory, or

District of the United States contrary to the laws

of such State, Territory, or District, or in any place

therein in which carrying on such business is pro-

hibited by local or.municipal law, shall pay, in ad-

dition to all other taxes, special or otherwise, im-

posed by existing law or by this Act, $1,000. The

payment of the tax imflosed by this subdivision shall

not be held to exempt any person from any penalty

or punishment provided for by the laws of any

State, Territory, or District for carrying on such

business in such State, Territory, or District, or in

any manner to authorize the commencement or con-

tinuance of such business contrary to the laws of

such State, Territory, or District, or in places pro-

hibited by local or municipal law.

The taxes imposed by this section shall, in the

case of persons upon whom a corresponding tax is

imposed by section 1001 of the Revenue Act of 1921,

be in lieu of such tax.”

Section 29, Title II of the National Prohibition Act,

ce. 85, 41 Stat. 316 (U. S. C. Title 27, Sec. 46) which

provides:

“Any person who manufactures or sells liquor

in violation of this chapter‘shall for a first offense

be fined not more than $1,000 or imprisoned not

exceeding six months, and for a second or subse-

quent offense shall be fined not less than $200 nor

more than $2,000 and be imprisoned not less than

one month nor more than five years.

Any person violating the provisions of any

permit, or who makes any false record, report, or

affidavit required by this chapter, or violates any

of the provisions of this chapter, for which offense

a special penalty is not prescribed, shall be fined

for a first offense not more than $500; for a second

offense not less than $100 nor more than $1000,

or be imprisoned not more than ninety days; for

any subsequent offense he shall be fined not less

than $500 and be imprisoned not less than three

months nor more than two years. It shall be the

duty of the prosecuting officer to ascertain whether

the defendant has been previously convicted and to

plead the prior conviction in the affidavit, informa-

tion, or indictment. The penalties provided in this

chapter against the manufacture of liquor without a

permit shall not apply to a person for manufacturing

nonintoxicating cider and fruit juices exclusively

for use in his home, but such cider and fruit juices

shall not be sold or delivered except to persons hav-

ing permits to manufacture vinegar.”

nel Santa w

STATEMENT.

The case has been correctly stated by the United

States in its brief. (Brief of the United States 5-7). In

order to avoid repetition, we, accordingly, adopt the Gov-

ernment’s statement.

Questions Presented:

(1) Whether a suit for alleged taxes derived from

Sec, 3244 Revised Statutes, Sec. 701, Paragraph 9 of the

Revenue Act of 1924, and doubled and assessed under Sec.

35, Title II of the National Prohibition Act, is one for taxes

or penalties.

(2) If the suit is one for penalties and not for

taxes, whether recovery is barred, because of the defend-

ant’s previous conviction under the National Prohibition

Act for the same act or acts, by virtue of Sec. 5 of the

Willis-Campbell Act. ee

(3) Ifthe suit is one for penalties and not for taxes,

whether recoverv is barred, because of the defendant’s pre-

vious conviction under the National Prohibition Act for

the same act or acts, by virtue of the Fifth Amendment of

the Const‘tution prohibiting double jeopardy.

(4) If the suit is one for penalties and not for

taxes, whether recovery of a penalty assessed under Sec.

35 of the National Prohibition Act and based upon Section

701, paragraph 9 of the Revenue Act of 1924, is barred be-

cause of a claimed unconstitutional result by virtue of the

Tenth Amendment of the Constitution.

FREER IS oar

viola

ARGUMENT.

| I.

The suit is one for penalties and not taxes.

It is of first importance to determine whether this

suit is for taxes or for penalties. For, confessedly, if it be

determined that this is a suit for a pure tax, then the re-

maining points raised by us are of no avail, as we would

be submerged by the jurisprudence of this Court. (U.S. v.

One Ford Coupe, 272 U. S. 321, 326).

But, the suit is not for taxes. Lipke v. Lederer,

259 U. S. 557; Regal Drug Co. v. Wardell, 260 U. S. 386;

Dukich v. Blair, 3 Fed. (2nd) 302, 270 U. S. 670; Jasper v.

Hellmich, 4 Fed. (2nd) 852; Coffey vu. Noel, 11 Fed.

(2nd) 399.

The amount sought to be recovered is $2,042.18 (R.

5). This sum is made up of several items. These items

will be discussed in order.

One item of the total alleged to be due is for $4.68.

This amount is characterized in the petition as a penalty

provided for by Sec. 3176 of the Revised Statutes, because

the defendant (being a retail liquor dealer) failed to file a

return. That this item is a penalty for not complying with

the law is not open to argument.

Likewise recovery sought.of the penal sum of $500

for being a retail liquor dealer in violation of Sec. 35 of

the National Prohibition Act, means that such recovery

is based on punishment for law violation.

—_

The other two items sought to be recovered are the

sum of $37.50 retail liquor dealer’s tax under Sec. 3244 of

the Revised Statutes assessed and doubled under Sec. 35 of ;

the National Prohibition Act and $1500 (nine months’

special tax for being a retail liquor dealer in violation of :

the law of Louisiana as provided for by Section 701, para-

graph 9 of the Revenue Act of 1924), and assessed and -

doubled under Sec. 35 of the National Prohibition Act. :

It is our claim that suit for recovery of the above

items assessed and doubled by Sec. 35 of the National Pro-

hibition Act is one for penalties and not taxes. And we

claim further that the matter is not open to argument,

having been definitely concluded by Lipke v. Lederer, and

Regal Drug Co. v. Wardell, supra.

In Lipke v. Lederer the suit was for an injunction

to restrain the collection by distraint of an assessment

made under Section 35 of the National Prohibition Act.

The injunction was granted and upheld by this Court be-

cause the Government was seeking the collection of penal-

ties and not taxes. In determining that the assessment

was a penalty and not a tax, the opinion said (pp. 561-

562):

“The mere use of the word ‘tax’ in an act pri-

marily designed to define and suppress crime is not

enough to show that within the true intendment of

the term a tax was laid. Child Labor tax case, 259

U. S. 20. When by its very nature the imposition

is a penalty it must be so regarded. Helwig v. U.

S., 188 U. S. 605. Evidence of crime Section 29 is

essential to assessment under Section 35. It lacks

all the ordinary characteristics of a tax whose pri-

mary function ‘is to provide for the support of the

“

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7,

al

8 NTN atagte

Government’, and clearly involves the idea of pun-

ishment for infraction of the law, the definite func-

tion of a penalty.”

O’Sullivan v. Felix, 233 U.S. 318.

Regal Drug Co. v. Wardell was a similar case to

that of Lipke v. Lederer. This Court merely affirmed the

~ law as laid down in Lipke v. Lederer, viz: That where a

tax is assessed and doubled under Section 35 of the National

Prohibition Act, an act primarily designed to suppress

crime, such assessment loses all characteristics of a tax,

and becomes a penalty or punishment for violation of law.

The Court will note that recovery is sought here of

the same kind of penalties under Sec. 35 of the National

Prohibition Act as were assessed in Lipke v. Lederer, supra,

and Regal Drug Co. v. Wardel!, supra.

The subsequent case of United States v. One Ford

Coupe (272 U. S. 321), did not alter or in any way change

the law laid down by the Court in Lipke v. Lederer and

Regal Drug Co. v. Wardell. In fact, the opinion cites Lipke v.

Lederer with approval and distinguishes it from the case

decided. (See U.S. v. One Ford Coupe, 272 U. S., at page

$28).

In the One Ford Coupe case, the court merely re-

affirmed what it had held in United States v. Yuginovich,

256 U. S. 450, and kindred cases, namely, that the Govern-

ment may tax what it prohibits. We have no dispute with

this jurisprudence. The Ford Coupe case was a forfeiture

4

f

proceeding under Section 3450 of Revised Statutes, the

forfeiture of the automobile being sought because the Gov-

ernment was defrauded of the tax on the liquor. The Court

held that the tax as laid and assessed under the internal

revenue laws was a true tax.

But the situation here is different. The assess-

ments here were not made under any internal revenue laws,

but under a law primarily designed to suppress crime, viz:

Sec, 35 of National Prohibition Act, and are in truth

penalties incurred by law violation and not taxes. Lipke

v. Lederer, supra; Child Labor Tax Case, 259 U.S. 20.

Il.

The suit being for the recovery of penalties, it is

barred by the Section 5 of Willis-Campbell Act.

The defendant, La Franca, has plead guilty and has

been punished for the acts or offenses which the govern-

ment attempts to punish him for in this suit. The convic-

tion of the defendant is pleaded in the petition. (R. 3, 4).

The Circuit Court of Appeals held that the limita-

tions of Section 5 of the Willis-Campbell Act, barring prose-

cution under the Internal Revenue Laws and under the

* National Prohibition Act where there was a former con-

viction under one or the other would apply to the case at

bar. (R. 28-30).

This opinion speaks for itself. We, therefore, de-

vote our argument to the other points of law raised below

and not covered by the Court’s opinion.

ET as LEM Wes 9

10

Ill.

The suit being for the recovery of penalties, and the

defendant having already been punished by fine and im-

prisonment for the same act or offense, it is barred by the

Fifth Amendment of the Constitution prohibiting double

jeopardy.

It is of no moment, whether this Court agrees with

the reasoning of the Court below in finding for the defend-

ant. The decree is correct. Because if the action is not

barred by Section 5 of the Willis-Campbell Act, it is barred

by the Constitution, (viz: The Fifth Amendment thereof)

prohibiting double jeopardy.

But it is said by the United States in its brief that,

although we assigned as error on appeal the overruling of

this plea, (R. 24) that because the record doesn’t show

that a bill of exception was taken to the overruling of the

said plea, it is not now available to us.

This contention is without merit. The plea of

former jeopardy in this case was practically in the form

of a general demurrer, inasmuch as the Government had

plead in its: petition the conviction of the defendant for

the same act or acts for which it is now trying to again

punish him. (See R. pages 3-4, Petition paragraph 14).

It was not necessary to take evidence to substantiate the

facts alleged in the plea when those facts were admittedly

part of the Government’s pleadings. Hence, when the plea

was overruled an exception was unnecessary as.all facts or

questions bearing on the plea were contained on the face

of the pleadings. See Nalle v. Oyster, 230 U. S. 165;

11

Denver v. Holmes Savings Bank, 236 U. S. 101; Mound

Coal Co. v. Jeffrey Mfg. Co., 288 Fed. 956 (C. C. A. 4).

Rosen v. U. S. (C.C. A. 2), 271 Fed. 651, and Fein-

berg v. U.S. (C. C. A. 8), 2 Fed. (2nd) 955, cited by the

Government are inapposite.

Although the Fifth Amendment of the Constitution

prohibiting double jeopardy has been given a very broad

and liberal construction by this Court (Ex parte Lange,

18 Wall 168; U. S. v. Chouteau, 102 U. S. 603), let us see

whether the plea of former jeopardy here, meets the original

test of practice. Defendant here, as shown by the record,

was prosecuted criminally and convicted for the same acts

for which the United States is now attempting to recover

these penalties. The parties are the same, the acts on which

recovery is sought are the same, and also the fact that

jeopardy attached to the defendant at the time of his plea

of guilty, leaving only for this Court to decide whether or

not this action is one in which former jeopardy can be

sustained.

The above statement is not altogether admitted by

the Government. For it contends that the offense which

was committed is not the same. However, an examination

of Sec. 35 of the National Prohibition Act, under which

recovery of the penalties are sought, discloses Posada

but upon evidence of such illegal manufacture or sale a

tax shall be assessed against, and collected from, the

person responsible * * *”. ( Word in italics ours). So

that the only evidence required to recover the penalty

according to the very terms of Sec. 35 of this Act, is proof

of the unlawful sale or sales for which the defendant had

re es ny s

~ i]

12

already been punished. It is conceded that a person in the

doing of a criminal act may commit more than one offense

or offend the laws of more than one sovereign, or several

laws of the same sovereign. To this effect are the holdings,

in Hebert v. Louisiana, 272 U. S. 312, and Albrecht v.

U. S., 2732 U. S. 1. But these cases do not decide that

where-a-persen has committed one offense and has been

prosecuted and convicted, that he can be again proceeded

against for the same offense and be punished by use of the

same and identical evidence and no more.

It is also contended by the Government that it was

compelled to prove that La Franca was a retail liquor

dealer, in addition to the proof of the unlawful sale of

the liquor. But the contention is erroneous because the

statute (Sec. 35 National Prohibition Act) requires only

evidence of the illegal sale as a condition precedent to the

assessment of the punishment. Accordingly, Ledbetter v.

U. S., 170 U. S. 607, 610, relied on in Government’s brief

(P. 32) is without application.

Having thus established that the parties are the

same, that the evidence used is identical and that the act

of the defendant is the same, it is in accordance with the

Fifth Amendment of the Constitution and with the juris-

prudence of this Court, that the plea of former jeopardy

should be sustained.

One of the early leading cases on the question of

former jeopardy that amply covers the situation here is

that of U.S. v. man U.S. 603 (26 L. Ed. 246).

In that case the United States filed suit on a distiller’s

bond against the principal and sureties thereof for penal-

—

13

ties alleged to have been incurred because of the distiller’s

violation of the bond. It appeared that two indictments

had been found against the distiller, one of which contained

counts for the specific offenses which constituted the whole

ground and cause of the present action. Under the

authority of an act of Congress, a compromise with the

Government was effected by which a specific sum was paid

by the distiller in full settlement of said indictments and

prosecutions, and said indictments were accordingly dis-

missed and abandoned. The question presented to the

Court was whether sureties on a distiller’s bond should be

subjected to a penalty attached to the commission of an

offense when the principal has effected a full and complete

compromise with the Government, under sanction of an act

of Congress, of prosecutions based upon the same offense.

Mr. Justice Field delivered the opinion of the Court

and in holding that former jeopardy will apply said:

“Admitting that the penalty may be re-

covered in a civil action, as well as by a criminal

prosecution, it is still as a punishment for the in-

fraction of the law. The term penalty involves

the idea of punishment, and its character is not

changed by the mode in which it is inflicted, whether

by a civil action or a criminal prosecution. The

compromise pleaded must operate for the protection

of the distiller against subsequent proceedings as

fully as a former conviction or acquittal. He has

been punished in the amount paid upon the settle-

ment for the offense with which he was charged,

and that should end the present action, according

to the principle on which a former acquittal or con-

viction may be invoked to protect against a second

punishment for the same offense. To hold other-

wise would be to sacrifice a great principle to the

ONE GRE GE RE I ne Sian

a PS BLA LAMA PIEE ON SE AB 2 BE Bee) i IIA GLE

14

mere form of procedure, and to render settlements

with the Government delusive and useless.

“Whilst there has been no conviction or judg-

ment in the criminal proceedings against the dis-

tiller here, the compromise must on principle have

same effect. The Government through its appropri-

ate officers has indicated, under the authority of

aun Act of Congress, the punishment with which it

vill be satisfied. The offending party has re-

sponded to the indication and satisfied the Govern-

ment. It would, therefore, be at variance with right

and justice to exact in a new form of action the

same penalty. For, as it was justly said by this

Court, in Ex parte Lange, speaking through Mr.

Justice Miller, ‘If there is anything settled in the

jurisprudence of England and America, it is that

no man can be twice lawfully punished for the same

offense. And, though there has been nice questions

in the application of this rule to cases in which the

act charged was such as to come within the defini-

tion of more than one statutory offense, or to bring

the party within the jurisdiction of more than one

court, there has never been any doubt of its entire

and complete protection of the party where a second

punishment is proposed in the same court, on the

same facts, for the same statutory offense. The

principle finds expression in more than one form in

the maxims of the common law.’ (18 Wall. 168

[85 U.S. XXI, 8761|).~

In the case of U. S. v. McKee (Federal cases

15,688), the defendant had been convicted and punished

under a section of the Revised Statutes for conspiring with

certain distillers to defraud the United States by unlaw-

fully removing distilled spirits without payment of the

taxes thereon. He was afterwards sued in a civil action

by the United States under another section, to recover a

penalty of double the amount of the taxes lost by the con-

_—_

15

spiracy and fraud. The Court held that the two alleged

transactions were but one, and the suit for the penalty was

barred by the judgment in the criminal case. The decision :

was put on the ground that the defendant could not be ;

-wice punished for the same crime, and that the former con-

viction and judgment were a bar to the suit for the penalty.

It is our claim that the McKee case is identical in

principle with the case at bar. This case has been cited

and quoted from with approval by this Court in Coffey v.

U.S., 116 U.S. $45. eg

Another case upholding the principle we are en- :

deavoring to maintain here is United States v. Gates

(Federal cases No. 15,191). The defendant in that case

was indicted and convicted, under Act of August 30th,

1342, for smuggling and clandestinely introducing into the

United States certain goods with intent to defraud the

revenue of the Government, and was sentenced by fine

ond imprisonment. Thereafter, a civil suit was filed ;

igainst Gates by the Government, to recover the penalty

imposed by statute, for landing the same goods without a

permit. The defendant pleaded in bar, the conviction,

entence and punishment aforesaid, and the Court held

that by general principles of law, the Government having

once punished the defendant was prohibited from prosecut-

ing him again for acts constituting the same offense.

SUEY RYE ER IN LN tine aX) toy?

ae

The case of Murphy v. United States, 272 U. S.

(30, may be likened to the case here by analogy. In that

case the defendant had been acquitted of maintaining a

liquor nuisance on their premises in violation of Section 21

of the National Prohibition Act, and their place was sub-

eee Ronee

NICU TS te BITES LENT

16

sequently proceeded against under the provisions of Sec-

tion 22 in rem, with a view to closing the same for one

year as a result of the same violation of law for which

they were acquitted. They plead former jeopardy, and the

Court in denying their plea said that it could be denied

only upon the theory that a proceeding under Section 22

of the National Prohibition Act was not a punishment and

that if it were a punishment the plea of former jeopardy

would have to be sustained.

The Government contends that the constitutional

limitation on the right to proceed twice against the same

person for the same offense, is of no avail if Congress

designates the penalties to be imposed as cumulative as

distinguished from aiternative.

This contention is based upon a false premise, be-

cause it is assuming that the penalties assessed in Section

35 of the National Prohibition Act are cumulative with the

penalties provided for in Sec. 29 of the Act, under which

the defendant has already been punished. But there is no

language contained in Section 35 or in other parts of the

Act or of the Willis Campbell Act to warrant such a con-

clusion. On the contrary, Section 29 of the Act clearly

sets forth the punishments which are to be inflicted. For

the pertinent part of Section 29 reads:

2

“Any person who manufactures or sells

liquor in violation of this chapter shall for a first

offense be fined not more than $1000, or imprisoned

not exceeding six months * * *,”

17

This is indicative that Congress when enacting this

section intended that the penalties of fine and imprison-

ment should be alternative for first offenders.

There is no language in Section 35 that evidences

an intention on the part of Congress to make the penalties

therein assessed, cumulative with the penalties contained

in Section 29.

Section 35 was evidently intended to and does cover

eases of violation of regulations as defined in Sec. 1

whereby a party holding a permit to engage in the manu-

facture and sale of intoxicating liquors under specified

conditions conformable to the Eighteenth Amendment and

the National Prohibition Act and who has paid a tax under

Internal Revenue Statutes, has violated these conditions,

and regulations resulting in an illegal manufacture or sale.

Noscuntur a sociis. The interpretation contended for by

us is manifested by the letter and spirit of Sec. 35, and re-

jects the idea of an additional penalty on conviction of an

illegal manufacture and sale of intoxicating liquors fully

covered by Sec. 29 disassociated from those regulations and

conditions governing the traffic in intoxicating liquors. In

short, a license or permit to engage in a lawful business

does not authorize an illegal act under the guise of such

a permit.

The Willis Campbell Act afterwards passed, re-

enacted the former internal revenue laws, taxes and penal-

ties. It is unreasonable to assume as the Government con-

tends that because Congress reendcted all the statutes in

force prior to the Eighteenth Amendment, that it intended

that all the penalties thereunder should be cumulative and

18

in AA+inn +

aaa MUsALlsULL LU

o the penalties provided for in the National

Prohibition Act. It is submitted that a sound interpreta-

tion is, hat Congress in reenacting the former internal

revenue laws intended to discourage illicit liquor enter-

prises by taxation, by the larger penalties provided for

under certain sections of the Revised Statutes, and by

giving the enforcement officers more laws to work with.

But this law manifests no intention to cumulate

penalty upon penalty, because it will be remembered that

Section 5 of this Act says:

“* * * but if any act is a violation of any

of such laws and also of the National Prohibition

Act or of this Act, a conviction for such act or

offense under one shall be a bar to prosecution there-

for under the other.”” (Words in italics ours).

This limitation is nothing more than an expression

of legislative intention to curtail proceedings for additional

or subsequent punishment after conviction.

We therefore submit that unless the statute in

plain and unmistakable terms sets forth that the penalties

therein are cumulative, a former conviction plead against

the subsequent prosecution for the same; act or offense

will bar the second proceeding. United States v. Wilt-

berger, 5 Wheat. 76, 95.

Hence, it follows that the cases cited by the Govern-

ment on this point have no application. For these were

all cases where the statute in unmistakable terms provided

for cumulative punishment.

_— '

19

The case of In re. Leszynsky, Fed. Cas. No. 8279,

relied on by the Government, is a colorful illustration of a

statute providing for cumulative penalties. The statute,

Sec. 3318, Revised Statutes, specified a penalty of $100

in addition to imprisonment and fine. The opinion dis-

tinguishes the case from that of United States v. McKee and

United States v. Gates, supra, relied on by us.

United States v. Mt. Clemens Beverage Co. (E. D.

Mich.) 23 Fed. (2nd) 885; United States v. Bullinger (E.

D. N.Y.) 290 Fed. 395, relied on by the Government are at

variance with the law laid down by this Court in United

States v. Chouteau, supra.

The case of Graham v. West Virginia, 224 U. S.

616, also relied on by the United States is without applica-

tion to the case at bar. In that case additional punishment

was imposed on a defendant upon a showing that he was a

second offender. It was not a case of producing the same

evidence to convict for the same offense. But additional

evidence, that of former conviction was necessary to give

the Court the right to mete out the additional punishment.

IV.

Assessments made and doubled under Section 35

of the National Prohibition Act, based on Paragraph 9,

Section 701 of the Revenue Act of 1924, produces an un-

constitutional use of the latter statute, in violation of the

Tenth Amendment of the Constitution.

This point is raised by us, only in the alternative

and affects the largest penalty sought to be recovered by

the United States.

ae

20

The petition claims a penaily of $1500 from the

defendant (See R. 3, petition par. 11) derived and based on

paragraph 9 Section 701 of the Revenue Act of 1924 and

assessed and doubled under section 35 Title II of the

National Prohibition Act.

The pertinent part of the basic statute reads as

follows:

“Every person carrying on the business of a

brewer, distiller, wholesale liquor dealer, retail

liquor dealer, * * * as defined in Section 3244, as

amended and section 3247 of the Revised Statutes,

in any State, Territory or District of the United

States, contrary to the laws of such State, Territory,

or District, * * * shall pay in addition to all other

taxes special or otherwise imposed by existing law

or by this Act, $1,000.00.” (From par. 9, Sec. 701

of the Act of 1924).

This statute undoubtedly lays a tax, and an assess-

ment under its provisions would be valid. But the Govern-

ment doesn’t assess under the provisions of this act. In-

stead it doubles the tax and assesses it under the provisions

of Sec. 35, Title II of the National Prohibition Act. By

this process, it transforms the tax into a penalty by virtue

of Lipke v. Lederer, supra, and Regal Drug Co. v. Wardell,

supra.

Hence' the result is that the Government is attempt-

ing to penalize this defendant for violating the law of the

State of Louisiana.

We challenge the right of the United States to

punish a person for violating a State law. This Govern-

——— a

21

ment is one of the delegated powers, and all power not.

delegated to the United States by the Constitution is re-

served to the several states. There is no power vested

in the Federal system authorizing Congress to penalize a

person for violating a State law and it never was the in-

tention of Congress that Sec. 701 of the Revenue Act of

1924 could or would be used in such a manner so as to

bring about an unconstitutional result.

The power granted to the Government by the

Eighteenth Amendment did not give the right to impinge

upon the plenary power of the States to punish violations

of their own laws. For Section 2 of the Amendment reads:

“The Congress and the several States shall

have concurrent power to enforce this article by

appropriate legislation.”

The United States was given concurrent power with

the several States to enforce prohibition. No plenary

power that was vested in the sovereign State prior to the

Amendment was taken away. It merely delegated the

power to Congress co-extensively with the several States

to prohibit the traffic in intoxicating liquors. See U. S. v.

Lanza, 260 U.S. 877.

™

The powers of Congress and the several States

respecting the enforcement of the Eighteenth Amendment

has been fully discussed by this Court in tHe case of Hebert

v. Louisiana, 272 U. S. 312. In that case Hebert was

indicted in the United States Court for violation of the

National Prohibition Act. While the indictment in the

United States Court was pending, he was arrested and

charged in the Louisiana State Court for the same offense.

Vad RE ep er

AES

22

Hebert challenged the right of the State Court to proceed

against him under the State law, and cited Sec. 256 of the

Federal Judicial Code to substantiate his plea. The Court,

in denying him relief under the State law, said:

“The Eighteenth Amendment contemplated

that the manufacture of intoxicating liquor for

beverage purposes may be denounced, as a criminal

offense, both by the federal law and by the State

law, and that these laws may not only co-exist but

be given full operation independently of each other.

* * *))

(U.S. v. Lanza, supra).

This opinion not only recognizes the concurrent

powers of the United States and the State of Louisiana

to deal with the prohibition of intoxicating liquors, but

also recognizes that the powers of each sovereign are exclu-

sive as to the punishment of the crime for violating the

law of that particular sovereign.

For it is said:

“The provision in Section 256 ofthe Federal

Judicial Code has no bearing on the authority of

a State Court to entertain an accusation\for an

offense against the State law. That provistan re-

lates to offenses ‘cognizable under the authorit\ of

the United States.’ Only offenses against

laws of the United States are cognizable under its

authority. Those against State laws are cognizable ™

only under the authority of the State. And this is

true where the same acts are an offense against

both a law of the United States and a law of the

State.”’ (Words in italics ours).

In order to sustain the validity of the result sought

to be obtained here, the Government has claimed that this

*

23

statute (Sec. 701 of the Revenue Act of 1924) is analogous

to the Reed Bone Dry Amendment, ana the Webb Kenyon

Law (39 Stat. at L. 699). This attempted analogy is un-

sound, and is distinguishable from the statute here. The

Reed Amendment and the Webb Kenyon law were statutes

passed by Congress under the interstate commerce clause

of the Constitution prohibiting generally the transporta-

tion, etc., of liquor to or from States which had enacted

local prohibition statutes.

The leading case upholding the constitutionality of

this type of statute is that of James Clark Distilling Co. v.

Western Maryland R. Co., 242 U. S. 315. The attack

made on the Webb Kenyon law was, not that it violated

the Tenth Amendment, but was that it was not a uniform

law and was further violative of the Fifth Amendment.

The opinion holds that inasmuch as Congress had under

its general power to regulate interstate commerce the right

to prohibit the interstate transportation of liquor from

one State to another, irrespective of whether the State or

States were dry by local legislation or not, that merely

because Congress saw fit to exercise a lesser power in

making the transportation, etc., of intoxicating liquor un-

lawful into States which had local prohibition laws, did

not make the law void for want of uniformity or violate

the Fifth Amendment regarding due process of law.

The situation under the foregoing acts have no

analogy to the case at ber. Under those acts, Congress

FA aot CELT a

24

made it a crime to ship liquor into a dry state or territory.

The gravamen of the offense in a case under such a statute

is not the violation of the State law, but the transportation

in interstate commerce into dry territory. Congress, by

virtue of its power to regulate interstate commerce, could

not punish the local law violation. No more than it could

amend the Dyer Act (prohibiting the transportation of

stolen automobiles) and declare that whoever should be

guilty of stealing an automobile in violation of a state

law should pay a penalty of $1000.00. The right of Con-

gress to prohibit the transportation of stolen automobiles

in interstate commerce, however, is unquestioned.

In the case at bar, Congress is attempting to penalize

the violation of the law of another sovereign, a matter

over which it has no jurisdiction or authority, while in

the other statutes Congress is merely punishing, not the

violation of a local law, but of its own law, under its power

to regulate interstate commerce.

CONCLUSION.

The judgment of the Circuit Court of Appeals should

be affirmed.

Respectfully submitted,

E. HOWARD M’CALEB,

E. HOWARD M’CALEB, JR.,

Attorneys.

January, 1931.

ADDENDA.

In addition to the points presented in our original

brief, we desire to urge the following:

A general demurrer was filed to the petition, was

overruled by the District Court and duly excepted to by

respondent. (R. pp. 10, 11).

The question under this general demurrer is:

Whether the penalties provided for in Sec. 35, Title

II, National Prohibition Act apply in every case of law

violation or should be restricted to those cases where the

person responsible has obtained liquor revenue stamps or

tax receipts.

Sec. 35 provides: “All provisions of law that are in-

consistent with this act are repealed only to the extent of

such inconsistency and the regulations herein provided for

the manufacture or traffic in intoxicating liquor shall be

in addition to existing laws”. The word “regulations” as

used, refers to the regulations of the Commissioner of In-

ternal Revenue. This word is so defined by Section I, Title

II of the Act. The regulations, as being in addition to in-

ternal revenue laws, can only apply to non-beverage liquor

(liquor used for medicinal purposes, etc.), inasmuch as

the Constitution and the Prohibition Act forbid the manu-

facture or sale of beverage liquor.

The section proceeds: “This Act shall not relieve

any one from paying any taxes or charges imposed upon

the manufacture or traffic in such liquor”. The words

(t)

“Such liquor” mean non-beverage liquor sold or manufac-

tured under the regulations of the Commissioner above

provided for. This sentence evidences the intention of

Congress that persons who manufactured or sold liquor for

non-beverage purposes under governmental regulations and

permits would not be relieved from paying taxes on such

liquor.

Continuing, it is provided that, “No liquor revenue

stamps or tax receipts for any illegal manufacture or sale

shall be issued in advance This manifests a pro-

hibition against officers of the internal revenue bureau

from issuing any revenue stamps or tax receipts to anyone

manufacturing or selling liquor except where such person

is a lawful dealer. And such lawful dealer is one who is

doing business under Governmental regulations. In short,

one who sells or manufactures non-beverage liquor. The

sentence goes on “* * * but upon evidence of such illegal

manufacture or sale a tax shall be assessed against, and

collected from, the person responsible for such illegal manu-

facture or sale in double the amount now provided by law,

with an additional penalty of $500.00 on retail dealers

and $1000.00 on manufacturers”. The words “such il-

legal manufacture or sale’’ show an intention to associate

or connect the illegal manufacture or sale here with that

in the beginning of the sentence, and evidences an inten-

tion to limit the assessment of the penalties imposed to

cases where the person responsible has sold or manufac-

tured liquor illegally under the guise of Government stamps

* S 8

.

or tax receipts.

We contend that the true intention expressed by

Congress in the above sentence is as follows: that govern-

(wt)

A

| pe a

, el, 2 eee

ment officers are prohibited from issuing stamps or tax

receipts in advance for any law violation, but in the event

any person has issued to them stamps or tax receipts and

under the protection of the same commits a violation of

law, then the so-called double taxes and penalties shall be

imposed.

If we are right in the proposition advanced, the re-

maining sentence of Sec. 35 can have no bearing on the

case.

The petition does not allege that respondent sold

liquor illegally after obtaining revenue stamps or tax re-

ceipts, and, therefore, under the construction of Sec. 35

urged by us, he did not become liable for the penalties

therein provided for.

The general demurrer should be maintained; other-

wise, we rely on the points raised by us in the original

brief.

Respectfully submitted,

E. HOWARD M’CALEB,

E. HOWARD M’CALEB, JR.,

Attorneys.

(iii)

MATA NAD

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