Defendants Brief — Felsenheld v. United States

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Fane,

Gnthe Supreme Court of the Gnited States,

Ocroser Tzrm, 1901.

FELSENHELD, CLAIMANT OF 288 )

P of “Merry World Tobacco,”

aintiff in error, ;

Tae Unirep States or AMERICA, DEFEND-

ant in error. ;

ON A. CERTIFICATE FROM THE UNITED STATES CIRCUIT —

COURT OF AP 7EALS FOR THE FOURTH CIPCUIT.

BB‘EF FOR DEFENDANT IN ERROR,

JAMES M. BECK, ASSISTANT ATTORNEY-GENERAL, AND CHARLES J.

FAULKNER, SPECIAL COUNSEL FOR THE GOVERNMERT.

Inthe Supreme Court of the United States.

OctTosperR TERM, 1901.

EMANUEL FELSENHELD, CLAIMANT OF 288

packages of “Merry World Tobacco,”

Jaintiff in error y r

] ’ . No. 205.

Tue Unrrep SraTes oF AMERICA, DEFEND-

ant in error.

BRIEF FOR DEFENDANT IN ERROR,

JAMES M. BECK, ASSISTANT ATTORNEY-GENERAL, AND CHARLES J.

FAULKNER, SPECIAL COUNSEL FOR THE GOVERNMENT.

STATEMENT OF THE CASE.

Prior to the 4th of November, 1891, it had been

the practice and custom of the manufacturers of smok-

ing tobacco to include in sealed packages of tobacco

articles of weight and value (Record, 4), which, by

circular No. 371 issued by Commissioner of Internal

Revenue Mason, was prohibited (Record, 4). Between

1891 and 1897 the manufacturers of smoking tobacco,

under circular No. 371, ceased to include such articles

in said packages, but substituted for them coupons, which

were included in these sealed packages, similar to

17733—02——1

those set forth in the information (Record, 2 and 3), a:

shown by the statement of facts (Record, 9 and 10),

This practice seems to have been permitted by the

Department, as there was no provision of law prohib-

iting it.

The attention of Congress being called to this prac-

tice (the only one then existing where anything was

included in the sealed packages of smoking tobacco),

on the 24th day of July, 1897, in what is known as

the “Dingley bill,” passed a law which will be found

as the third clause of the tenth section of said act,

amending section No. 3394 of the Revised Statutes of

the United States, as amended, as follows:

None of the packages of smoking tobacco or

fine-cut chewing tobacco and cigarettes pre-

scribed by law shall be permitted to have packed

in, or attached to, or connected with, them any

article or thing whatsoever, other than the manu-

facturers’ wrappers and labels, the internal-

revenue stamp and the tobacco or cigarettes,

respectively, put up therein, on which tax is re-

quired to be paid under the internal-revenue

laws; nor shall there be affixed thereto, or

branded, stamped, marked, written, or printed

upon said packages or their contents, any

promise or offer of, or any order or certificate

for, any gift, prize, premium, payment, or re-

ward,

On the 24th day of July, 1897, Commissioner For-

man issued a Department circular, No. 106, Internal

Revenue No. 477, instructing the collectors of internal

revenue in the several districts, among other things, to

208

notify manufacturers of tobacco of the provisions of

the statute heretofore cited, and that a violation of

the same would subject the property to seizure. (Rec-

ord, 5 and 6.)

Commissioner Forman, on August 2, 1897, issued

Department circular No. 115, Internal Revenue No.

479, for reasons not stated, modifying his instructions

in the previous Departmental circular No. 106, direct-

ing that before seizure of the property for violations

of this provision of the law the matter should be re-

ferred to his office for instructions. (Record, 6).

Commissioner Forman, in his report made to the

Secretary of the Treasury, 1897, recommended that

this law be amended so as to authorize the Commis-

sioner of Internal Revenue to prescribe, by regulations,

what such packages may contain. (Record, 7.)

In February, 1898, Commissioner Scott recom-

mended that this clause of section 10 be amended by

authorizing the inclosure in packages of tobacco of

coupons similar to the one set out in the information,

stating that, under the existing law, the office of the

internal revenue did not permit the same to be in-

closed (Record, 8), and, subsequently, on the 20th of

May, he addressed a letter to a member of the Senate

suggesting a further amendment permitting such

coupons to be put in packages of tobacco, subject to

such regulations as the Commissioner of Internal

Revenue, with the approval of the Secretary of the

Treasury, may prescribe (Record, 9). No action was

taken by Congress modifying the statute as suggested

by Commissioner Scott.

On August 6, 1898, Commissioner Scott addressed a

letter to the Secretary of the Treasury reviewing this

matter, alleging that some of the manufacturers had

continued the practice, and suggesting that a test case

be brought to determine the legal questions involved.

€Record, 10.) Accompanying said letter was a “pro-

posed circular” prepared by the manufacturers them-

selves, in which they provided, by regulation, the weight

of the article or thing that could be packed in a package

of tobacco. (Record, 10 and 13.) The letter of Com-

missioner Scott was referred by the Secretary of the

Treasury to the Attorney-General, and on August 19,

1898, the Assistant Attorney-General, James EK. Boyd,

forwarded his opinion to the Secretary of the Treasury

in which he expressed the opinion, “this legislation un-

doubtedly involved several important legal questions

which I think should be passed upon by the courts”

(Record, 14), and concluded his opinion by the follow-

ing suggestion: “I would suggest, therefore, that the

Commissioner of Internal Revenue cause to be insti-

tuted through some one of the collectors, a proceeding

by which the validity and scope of this law can be

tested by the courts.” (Record, 15.)

In pursuance to the suggestion of the Attorney-

General's Office, on October 17, 1898, the district

attorney filed information against 288 packages of

“Merry World Tobacco” and monition issued upon

such information, and the property seized by A. B.

White, collector of internal revenue for the district of

West Virginia, in said district, was attached and taken

into posession by the marshal of said district, April,

1899 (Record, 2).

At the time of the seizure of the said tobacco by the

said White, there was in each of said packages a small

slip of paper called a coupon, with printed words and

figures on both sides thereof, which coupon had been

placed within such package at the time when it was

packed in the manufactory and prepared for sale

(Record, 2.)

At the October term, Emanuel Felsenheld appeared

in open court and claimed the said property (Record, 9),

and in open court admitted the value of the same to be :

$54, agreeing that it might be considered of that value

for all purposes, and prayed leave to enter into bond in

accordance with the practice in such cases (Record, 3).

TE Se Te

It was—

en Ma te

further agreed that for a considerable time

before the institution of the present case

there had been frequent complaints made to the

Government by private persons or corporations,

who were interested in the DISCONTINUANCE BY

THE DEFENDANT and others of the USE OF SAID

coupons (Record, 15).

And further—

it was because of said complaints that the above

entitled case was instituted and being prose-

cuted, and also because of the insistence by pri-

vate persons or corporations, who were inter-

ested in the CONTINUANCE BY THE DEFENDANT and

others, in the UsE oF saID coupons (Record, 15),

which admission was that the defendant, as a manufac-

turer, had packed in said packages said coupons.

That if admissible evidence, the record shows, that

in the opinion of Commissioner Mason (Record, 4),

Commissioner Forman (Record, 8), Commissioner

Scott (Record, 10), and the manufacturers of smoking

tobacco (Record, 13), they regarded that it was neces-

sary in the interest of the Government, either by law or

departmental regulations, that this subject should be

controlled and regulated.

But as to the several documents and expres-

sions of opinion by departmental officers herein-

before contained, the genuineness of said docu-

ments and the fact that such expressions of

opinion were made, is admitted, and not the

relevancy of said documents and expressions, nor

the truth of any fact stated in them nor the correct-

ness of any such opinions (Record, 12), and:

On the 4th of April, 1899, an order was entered by

which it was agreed between the United States and

Emanuel Felsenheld to “waive any and all formalities

and omissions, should any such be found in these proceed-

ings on either side.” In April, 1900, the case, by agree-

ment of parties waiving a jury, was submitted to the

court for its decision and issue joined on the informa-

tion. At the same time an agreed statement of facts,

in writing, signed by the United States district attorney

and the attorney for the said defendant, was filed and

made a part of the record (Record, 1-14), and the

judge, acting in lieu of a jury, rendered his opinion,

holding that “the tenth section of the act of July 24,

1897, under which this information was filed, is a con-

stitutional exercise of legislative power by Congress;

that the claimant and defendant willfully and know-

ingly violated the provisions of said statute by packing

in the 288 packages of tobacco seized the coupons de-

scribed in the record; and that the seizure and attach-

ment for the violation of the provisions of the statute

was legal and valid,” and judgment of forfeiture was

thereupon rendered (Record, 15).

Exception was taken to the ruling of the court and

petition filed for a writ of error (Record, 15).

After argument before the circuit court of appeals

for the fourth circuit, the court indicated to counsel

that in its judgment certain questions should be certi-

fied to this court for its determination. Thereupon the

following questions were certified (Record, 16):

First. Whether the third clause of the tenth section of

the act of Congress of July 24, 1897, if the prohibition of

that statute be applied to the cuupons described in the

foregoing statement of facts, was in sccordance with or in

conflict with the Constitution of the United States.

Sec nd. Whether, if the said section be properly con-

strued, the coupons described in the foregoin statement

of facts are within its prohibition.

Third. Upon the facts stated, was the seizure set forth

in the information of the packages of Merry World tobacco

therein described, or was the judgment of forfeiture ren-

dered in this case justified under section 3453 of the

Revised Statutes?

Fourth. Upon the facts stated, was the seizure set forth

in the information of the packages of Merry World tobacco

therein described, or was the judgment of forfeiture ren-

dered in this case justified under section 3456 of the

Revised Statutes.

Before entering into the discussion of the questions

certified by the circuit court of appeals, it is deemed

proper, that the attention of the court should be di-

rected to several suggestions which are apparently

relied upon by the plaintiff in error, the solution of

which will tend to abreviate the discussion of the ques-

tions certified.

It is submitted to the court, that the expressions of opinion by

the officers of the Internal Revenue Bureau, as to the wisdom

or necessity of the enactment ef the third clause of the tenth

section of the act of 1897, are not relevant testimony in con-

sidering the constitutionality of that enactment.

In determining the constitutionality of the act, the

only rule which we are aware of that would justify the

court in considering the acts of executive officials is,

that which holds, that in cases where the construction

of the act is doubtful,

That a long continued construction of the statute adopted

and acted upon by executive officers is persuasive on the court

in construing the same.

This rule refers to the acts of such executive officials

upon whom is devolved the duty of acting under such

statute, but not to any expression of opinion as to the

wisdom or necessity of the enactment; such evidence

is clearly irrelevant.

The Government, when it agreed to permit the ex-

pressions of opinion of certain officers of the Internal

Revenue Bureau to be included in the facts agreed,

made the following reservation:

But as to the several documents and expres-

sions of opinion by the Department officers here-

inafter contained, the genuineness of said

documents and the fact that said expressions of

opinion were made is admitted, and not the rel-

evancy of said documents nor the truth of any

facts stated in them nor the correctness of any

such opinions (Record, 2).

And on page 15 the following reservation is made:

The right is reserved to either party to object

at the hearing to the relevancy of anything con-

tained in this statement.

The constitutional right of the Congress to enact a

provision of law, can not be made to rest upon the

fluctuating opinions of Commissioners of Internal Rev-

enue, as to the necessity for the regulations, which, in

the judgment of Congress, are deemed essential in the

enforcement of the collection of the revenue of the

Government. No better illustration of the weakness

of this position of the plaintiff in error could be shown

than in the case at bar. The record shows, that Com-

missioner Miller approved a provision substantially the

same as feund in the tenth section. It shows that

Commissioner Mason, without authority of law, was

compelled to intervene and prohibit the inclosure of

articles in packages of tobacco to prevent fraud in the

collection of the revenue (Record, 4). On the other

side, it tends to show that Acting Commissioner For-

man, at one time, was in favor of the repeal of this pro-

vision so far as it affected the use of coupons (Record,

6 and 7), and Commissioner Scott was in favor of the

amendment of the law permitting coupons of certain

weight to be included in said packages, provided,

that in determining the weight of these pack-

ages for purposes of taxation, the weight of

inclosed labels, advertisements, and vouchers

shall be included (Record, 9).

But no expression of opinion was given by Com-

missioner Wilson as to his judgment in re‘erence to

this matter, although he was at the time this suit was

instituted, and when it was submitted the head of the

Internal Revenue Department of the Government.

It must be recognized by the court as an unsound

position, that such testimony should be introduced as

relevant upon the question submitted for its decision:

Had Congress the constitutional power to enact this

provision?

If such evidence is relevant to the inquiry submit-

ted to the court for its adjudication, the question would

arise in every case in which the constitutionality of a

custom or revenue regulation was raised, not whether

the act upon its face is constitutional and within the

granted powers of the Congress, but whether in the

judgment of a subordinate executive official, such regu-

lations were “not absolutely necessary, but appro-

priate and not prohibited, but really calculated to

effect the objects intrusted to the Government,” which

in this case involves the weight of the package (Hep-

burn v. Griswold, 8 Wallace, 615), or, as expressed in a

different form by Justice Peckham, in 173 U. S., 524:

Whether the means adopted were the best and

most convenient to accomplish that purpose was

a question for the judgment of Congress, and its

decision must be conclusive in that respect.

Justice Peckham, in this quotation, recognizes the

distinct proposition of law, that if Congress has the con-

239

stitutional power to enact regulations regulating and

protecting ihe collection of the revenue of the Govern-

ment over a particular subject-matter, that the ‘‘means

adopted” by the Congress is “conclusive” upon the

courts. This decision, one of the latest rendered, cuts

up by the roots the proposition of the claimant, that in

this case, he can introduce testimony as to the “degree

of necessity” (12 Wallace, 539) ior the enactment of

this provision, based upon the judgment of an execu-

tive official.

Mr. Russell on page 13 and Mr. Warner on page 25

of their briefs, virtually admit the constitutional power

of Congress to exclude from tobacco packages “articles

or things,” such as, in their construction of this statute,

it applies to; and Commissioner Scott, as heretofore

quoted, regards it important, if this statute is modified

so as to prevent the use of coupons, that the weight of

the coupons should be included as a part of the pack-

age and taxed as tobacco.

These admissions of the plaintiff in error, through

his counsel, that Congress had the right to prohibit

certain articles or things from being included in pack-

ages of tobacco, in our judgment, surrenders the entire

contention made in their briefs on this point, as under

the decisions of 12 Wallace, 589; 173 U. S., 524; 8

Wallace, 615; and, as stated by Chief Justice Mar-

shall in McCullough v. State of Maryland (4 Wheaton,

423):

To undertake here to inquire into the degree

of its necessity would be to pass the line which

circumscribes the judicial department and to

tread on legislative ground. This court dis-

claims all pretensions to such a power.

This doctrine of Marshall’s is fully sustained in 165

U. S., 537, where, in speaking of the oleomargarine

law, the court says:

Protection to purchasers in respect of getting

the real and not the spurious article can not be

held to be the primary object in either instance,

and the identification of dealer, substance, quan-

tity, ete., by marking and branding must be re-

garded as means to effectuate the objects of the

act in respect of revenues.

Tobacco is taxed by weight and is put up in pack-

ages in quantities prescribed by law.

Can the latter paragraph of the third clause of the tenth sec-

tion influence the issues presented by the record?

Counsel for plaintiff in error devote much time to

the discussion of the constitutionality, and the relation

of the last paragraph in the third clause of the tenth

section, which reads as follows:

Nor shall there be affixed thereto, or branded,

stamped, marked, written, or printed upon said

packages or their contents any promise, or offer

of, or any order or certificate for, any gift, prize,

premium, payment, or reward.

Although admitting that the Government has always

insisted that a judgment of forfeiture of the property

described in the information rests upon the violation

of the first clause of said section, which reads as

follows:

None of the packages of smoking tobacco and

fine-cut chewing tobacco prescribed by law

shall be permitted to have packed in, or at-

tached to, or connected with them, any article

or thing whatsoever, other than the manufac-

turer’s wrappers and labels, the internal revenue

stamp and the tobacco or cigarettes, respec-

tively, put up therein, on which tax is required

to be paid under the internal-revenue laws.

We will examine the contention made by the plain-

tiff in error—

First. As to the proper construction to be given to the third

clause of the tenth section of the act of 1897; and

Second. Whether the two paragraphs of said clause are so

dependent one upon the other that both must stand or fall .

together.

An examination of this third clause will convince the

mind of the court that the Congress, in the enactment

of it, had two distinct objects in view, which they ex-

pressed in the two paragraphs of said clause:

First. What is the true construction of the first paragraph

of the third clause of the tenth section?

An analysis of the first paragraph will show the pur-

pose of Congress to define clearly and explicitly what

should constitute a package of smoking or chewing

tobacco, which is accomplished by both negative and

affirmative provisions.

Three distinct offenses are denounced by the first

paragraph of this clause:

1, packing in,

2, attaching to, and

3, connecting with

any

package of smoking tobacco or fine-cut chewing

tobacco * * * any article or thing what-

soever.

lat a

The Congress, recognizing the necessities growing

out of the character of the business they were legisla-

ting in reference to, and that the language used, as

above quoted, was sufficiently broad and comprehen-

sive to exclude everything except tobacco, which would

have necessarily interfered with the packing of said

tobacco in many of the kinds of coverings that were

then used in the business, declared affirmatively in

the same paragraph what, in its judgment, should con-

stitute such a package, both as to its contents and as

to the exterior wrapper:

1, the manufacturer's wrapper,

2, the manufacturer’s labels,

3, the internal-revenue stamp, and

4, the tobacco or cigarettes.

The court will observe that this affirmative declara-

tion of what should constitute a package of tobacco

limited the comprehensive term used in this para-

graph. This paragraph determines clearly and defi-

nitely what shall constitute a LAWFUL PACKAGE of

tobacco or cigarettes if Congress had the constitu-

tional power to enact the provision.

This paragraph is complete in itself and effectual in

carrying out the purposes and objects of the Congress.

It is capable of being executed and enforced in accord-

ance with the legislative intent, wholly independent of

the second paragraph of said clause.

The first count found in the information rests upon

this first paragraph (Record, 1), and the evidence

found in the case agreed, sustains the allegation of the

first count, to wit:

There was in each of said packages a small

slip of paper called a coupon, * * * which

had been placed within such package at the

time when it was packed in the manufactory and

prepared for sale. (Record, 2.)

What is the true construction of the second paragraph

of the third clause of the tenth section?

We can not agree with the views expressed by the

counsel for the plaintiff in error in their construction

of the second paragraph of the third clause of the

tenth section of this act. It provides—

Nor shall there be affixed thereto, or branded,

stamped, marked, written, or printed upon said

packages, or their contents, any promise or

offer of, or any order or certificate for, any gift,

prize, premium, payment, or reward.

The Congress having determined by the first para-

graph what shall constitute a lawful package of tobacco,

proceeds to define a new and distinct offense, not in

any way linked to or connected with the first para-

graph, but entirely independent of it.

When this paragraph is analyzed, no doubt of the

purpose or intention of the Congress, in its enactment,

will embarrass the court. Whatever may be thought

as to its constitutionality, which, in our judgment, is

not involved in the decision of the questions certified

to this court, its meaning and purpose is not involved

in doubt.

No “promise or offer of, or any order or certificate

for any gift, prize, premium payment, or reward”

shall be—

1, attached to the package;

2, or branded, stamped, marked, written, or

printed upon said package;

3, or branded, marked, stamped, written, or

printed on their contents.

The violation of any of these prohibited acts would,

if that provision is constitutional, constitute a distinct

offense entirely independent of any provision found in

the first paragraph.

In the argument submitted by the counsel for plain-

tiff in error it is only necessary to meet their construc-

tion of this paragraph, to refer to the third offense

defined by it. It is suggested, why has Congress in

the second paragraph provided that “no promise or

offer, ete., of any gift, prize, premium payment or

reward shall be branded, stamped, marked, written

or printed on their contents,” if the first paragraph

prohibits “any article or thing whatsoever” from being

placed in said packages. If the Congress deemed it

wise to enact a provision prohibiting such a promise

or offer as is described in the statute from being con-

nected with or included in packages of tobacco, and it

had the constitutional right to do so, it was necessary

to pass this provision constituting this offense, as it had

in the first section authorized the packing of the man-

ufacturers’ wrapper in said tobacco packages, it would

not have been in violation of the first paragraph to

have printed upon the manufacturers’ wrapper, author-

ized by the first paragraph, the contents found upon

the coupons which were packed in the packages seized

in this case. The printing upon said wrapper, could

not, under any construction, have been construed as

violating the provision prohibiting packing in such

packages ‘‘any article or thing whatsoever.”

This illustration draws the clear distinction between

the first and second paragraphs, and must satisfy the

court that the case at bar falls only within the influ-

ence of the first paragraph.

In addition to the manufacturers’ wrapper which is

permitted under the first paragraph to be placed in the

package of tobacco, that paragraph also provides for

packages of cigarettes (which are usually wrapped with

paper), and this provision of the second paragraph

would have prohibited the “branding, printing, stamp-

ing, ete., of any promise or offer of any gift, premium,

or reward,” etc., upon the wrappers of which these ciga-

rettes are made. It might be suggested that this illus-

tration of the legislative purpose could not be true, as

printing or stamping a promise or offer upon the pa-

per in which cigarettes are wrapped would be con-

sumed in the use. Those who framed this paragraph

were more familiar with the details of the tobacco

business than the layman in the methods of the manu-

facture of cigarettes. Such a promise or offer could

have been printed upon said paper to deliver an article

based upon the number of empty cigarette boxes or

trade-marks of a particular company, when returned

to that company.

17733—02——2

Second. Are these two paragraphs of said clause so de-

pendent one upon the other that they both must stand or

Jall together?

We contend that the question of the constitutionality

of the offenses described in the second paragraph, will

not be passed upon by the court in a case, in which the

record shows that the judgment rendered of forfeiture

of this property, comes alone within the influence of

the first paragraph; that the offense denounced in the

first paragraph, is not affected by any provision con-

tained in the second paragraph; that the offense de-

fined in the first paragraph is in no way dependent

upon, nor is it modified or controlled by, any provision

found in the second paragraph; that the court could,

if it deemed right and proper, hold the second para-

graph to be an unconstitutional exercise by the Con-

gress of the powers granted to it, and yet it would in

no way affect the enforcement of the provisions of the

first paragraph, if the court should be of the opinion

that it was a constitutional exercise of legislative power.

It is immaterial how closely the valid and invalid pro-

visions are shown in the act, if distinct and separable.

(Commonwealth v. Hitchins, 5 Gray (Mass.), 482.)

These two paragraphs not being dependent, condi-

tional, or connected, but being wholly independent of

each other, must each be separately tested as to its

constitutionality. (Allen v. Louisiana, 103 U. S., 80;

Pollock v. Farmers’ Loan and Trust Co., 158 U.S., 601.)

We understand the purpose of Congress in the

enactment of the first paragraph, was to protect the

Government in the collection of its revenue, laid upon

an article in which it had determined that the weight

of the article taxed, should determine its rate.

We assume that the purpose of the Congress in the

enactment of the second paragraph, was to prohibit

the instrumentalities, which it deemed necessary to

employ in the collection of a tax on tobacco, from

being made the vehicle or channel ‘“‘to assist in the dis-

semination of matter condemned by its judgment.” (In re

Rapier 143, U. S., 145.)

In the discussion of the questions certified by the

circuit court of appeals for the fourth circuit to your

hovorable court for its opinion, we will ask the indul-

gence of the court to change the order, in which the

same were certified, and discuss first the second ques-

tion asked by said court:

Whether if the said section (referring to the third clause of

the tenth section of the act of Congress of July 24, 1897) be

properly construed, the coupons described in the foregoing

statement of facts, are within its prohibition.

We understand this question to present the inquiry

whether, assuming the third clause of the tenth section

to be constitutional, it is the opinion of the court that,

if properly construed, it would exclude from packing

in said packages of tobacco, coupons of the character

described in the information.

To sustain the contention of the plaintiff in error,

that the proper construction of the first paragraph of the

third clause of the tenth section, was not intended by

Congress to exclude the packing in packages of tobacco

“coupons or vouchers,” counsel have referred to the

circulars found in the agreed statement of facts from

the Commissioners of Internal Revenue, giving expres-

sion to their opinion of the necessity for such legisla-

tion, the relevancy of which we have previously

discussed.

They further rely upon the case of Platt v. Union

Pacific R. R. Co. (99 U.S., 48), in which the court

uses this language:

All will concede in construing the act of 1863

we are to look at the state of things existing,

and in the light then appearing seek for the

purposes and objects of Congress in using the

language it did. And we are to give such con-

struction to that language, if possible, as will

carry out the Congressional intentions.

They also rely upon the case of Maxwell v. Dow

(176 U.8., 581), in which the court in speaking of the

construction of a constitutional amendment uses the

following language:

The language of a constitutional amendment

should be read in connection with the new con-

dition of affairs out of which the occasion for its

adoption may have arisen and then construed

* * * so far as it is reasonably possible to

forward the known purpose or object.

There is another principle, applied by the courts in

the construing of statutes, and which has been fully

sustained and acted upon by your honorable court in

the case of Thornley v. United States (113 U.S., 118):

Where the meaning of the statute is plain it

is the duty of the courts to enforce it according

to its obvious terms. In such a case there is no

necessity for construction.

We shall attempt to answer the second question cer-

tified, first, by showing that the cases of Platt v. Union

Pacific R. R. Co. and Maxwell v. Dow are not applica-

ble in the consideration of this question, but that it is

controlled by the principle announced in Thornley v.

United States, and, secondly, that if the court looks

into—

“the state of things existing” at the date of the

enactment of this law or “to the condition of

affairs out of which the occasion for its adoption

may have arisen”—

it will be satisfied, that it was the intention of Con-

gress to include “coupons and vouchers” in its prohi-

bition.

Is not the meaning of the statute perfectly plain?

Is the language used susceptible of two constructions?

Does it not prohibit the packing in with smoking

tobacco or cigarettes “ any article or thing whatsoever?”

No doubt can exist that the “coupon or voucher” is

an “article or thing.” Congress, however, to avoid

any possibility of misunderstanding upon the part of

the executive officers, or the court, if it was necessary

to pass upon it, was not satisfied to permit its intention

to rest upon a negative prohibition, but deemed it wise

to declare affirmatively, the particular “article or

thing” which should be included in a sealed package of

tobacco—first, manufacturers’ wrappers, and, secondly,

the tobacco or cigarettes inclosed therein. The lan-

guage of this section leaves nothing for construction.

By providing the articles that may be included, it ex-

cludes by necessary intendment, all “articles or things”

not mentioned therein.

Should the court, however, not agree with the con-

tention of the Government, that the language of the

paragraph is so clear that there is “‘no necessity for

construction,” and shall deem it proper in ascertaining

the intention of Congress, to “look at the state of

things existing” at the date of the enactment of this

law, to determine the ‘purposes and objects of Congress

in using the language” referred to, it will find that the

facts certified, will demonstrate that the “state of things

existing” when this statute was enacted will sustain the

position taken by the Government, that the main pur-

pose of Congress in its passage was, to exclude from

said packages “coupons or vouchers” which are the

subject of investigation under this information.

The court will observe that prior to the 4th of

November, 1891, it was the practice of manufacturers

of smoking tobacco to include in sealed packages many

foreign articles (Record, 4) such as pocketknives, pho-

tographs, or other similar things (Record, 11); that on

that date, Commissioner Mason, realized the importance

of excluding such “ foreign articles” from sealed pack-

ages of tobacco, that the weight provided by law

should correspond with the stamp required to be

placed upon the package, directed the collectors to

notify the manufacturers of that ruling. This action

of the Commissioner was taken without any direction

from Congress. An abuse had grown up which, in his

judgment, it was necessary to correct under the implied

authority that a package of tobacco means a package

containing tobacco and nothing else. The circular he

issued was as follows:

Manufacturers of tobacco, in marking the

gross, tare, and net weight of packages of to-

bacco, should include in the gross the full

weight of the package and all its contents.

The tare should include the weight of the pail,

lining, covering, etc., so that the tare subtracted

from the gross will give the net weight of the

tobacco contained therein and expressed by the

stamp. Great care should be exercised by

the collectors to prevent foreign articles of any

kind being included in any of the packages.

A practice has grown up, which seems to be on

the increase, by which manufacturers have

included in statutory packages many foreign

articles. This practice should be discontinued.

A PACKAGE OF TOBACCO MEANS A PACKAGE CON-

TAINING TOBACCO AND NOTHING ELSE.

This circular, which at that time struck at the only

evil existing, which was packing in these sealed pack-

ages knives, photographs, and similar articles, was suf-

ficiently broad, however, in its language to exclude

“coupons and vouchers.” A short period after issuing

this circular No. 371, Commissioner Mason modified its

language, as the counsel for plaintiff in error says

(Mr. Warner's brief, p. 24), by interpreting the word

“article” to embrace “articles of merehandise” (Rec-

ord, 11). From 1891 to the passage of this act, in

1897, the manufacturers ceased to include “articles of

merchandise” in said packages, substituting coupons

(Record, 2-3, 9-10). This practice was permitted by

the Department during six years, there being no provision

of the statute prohibiting it. The purpose of Congress in

the original enactment is further shown by its refusal

to yield to the suggestion of an amendment limiting

the language used in the act (Record, 8 to 13, inclusive).

Four sessions of Congress have passed, since its enact-

ment, and yet it remains undisturbed as passed in July,

1897. The construction of this statute by the Com-

missioner of Internal Revenue is shown by circular

106, Internal Revenue No. 477, to be in accord with

the contention of the Government (Record, 6), and

this action of the Department, as to its construction

of the law, has never been withdrawn by it (Record, 8).

The facts agreed present to the court this condition

of affairs as existing on the 24th of July, 1897, when

this law was passed: First, that the only “articles or

things” then included in a sealed package of smoking

tobacco or cigarettes were “coupons or vouchers”

similar to those set up in this information; second,

that the word “article,” as used in circular No. 371,

issued by Commissioner Mason November 4, 1891, had

been construed by the Department to prohibit the pack-

ing in said packages of tobacco “ articles of merchan-

dise;” and, third, explains the reason for the additional

words used by Congress, “or things whatsoever,” thus

leaving the construction of the Commissioner of the

word ‘‘article” to stand, and broadening his ruling to

remove the abuse then existing of packing “ coupons

or vouchers” in the sealed packages.

The wisdom and necessities for this action of Congress is fully

sustained by the agreed statement of facts contained in the

record.

The question of difference, if any, between Con-

gress and the Internal Revenue Bureau has not been,

as to the necessity of having a law or regulations to

control the packing in of sealed packages of tobacco

extraneous articles or things, but only the extent to

which that law or regulation should go. Should it, as

provided by Congress, exclude all extraneous “articles

or things whatsoever,” or should it be limited, by per-

mitting “articles or things” of inappreciable weight to

be included in a sealed package of tobacco? If Con-

gress had adopted the latter view, and not excluded all

things except such as were necessary in carrying on

the trade, the counsel for plaintiff in error (Mr. Rus-

sel, on p. 13, and Mr. Warner, on p. 25, of their

briefs), would have admitted the constitutionality of

this enactment. Congress, however, must have been

of the opinion, that the proper means to reach the evil

and protect the revenue was, not by classifying the

foreign articles or things that should be included in a

package, but prohibiting all such articles not necessary

in carrying on the trade in smoking tobacco.

Commissioners Scott and Foreman who did not fully

agree with Congress as to the necessity of this provi-

sion of the statute, recognized, however, its validity,

and concurred in the opinion, that it was necessary to

enact a law, or to promulgate a regulation, that should

govern and control the subject (Record, 8, 9). Com-

missioner Scott, in a communication to the Secretary

of the Treasury recommended that certain regulations

should be issued by the Department to regulate the

use of coupons and vouchers. Under what authority

he suggested these regulations we are unable to state,

but that in his judgment such regulations were neces-

sary to protect the revenue, should “coupons or

vouchers” be permitted to be inelosed in such pack-

ages, there can be no doubt (Record, 9).

The difficulty of regulating this subject by law is

shown by the recommendations made by the Commis-

sioner. He recommended, first, that nothing should

be contained in the package that appreciably increased

the size of the package, or that weighed more than one

one-thousandth of a pound; second, that no advertise-

ments, or anything in any way in aid of any lottery or

other scheme involving chance or hazard; third, any-

thing of a pictoral nature, except manufacturers’ trade-

marks, labels now permitted on the outside of pack-

ages, and, fourth, that the weight of coupons should be

taxed as part of the weight of the tobacco.

This illustration of the views of the Commissioner

shows, that in the opinion of the Department, there ex-

isted a necessity for the regulation of this subject, with

a view of protecting the Government in the collection

of its revenue. Even the manufacturers of tobacco, in

their proposed circular (Record, 9, 11, 13), fully agreed

with the Commissioner as to the necessity for a regu-

lation of “coupons and vouchers” if permitted to be

inclosed in said packages (Record, 13).

We therefore find that Congress, the Internal Rev-

enue Bureau, and the manufacturers of smoking to-

bacco and cigarettes, all concur in the opinion, that it

was necessary and proper in the public interest, and

that this subject-matter should be controlled by law or

administrative regulations.

The judgment of Congress, however, as shown by

its enactment, was that as the article was taxed by

weight, the only safe and proper means by which the

revenue could be protected, was to exclude all extra-

neous matters except the manufacturer’s wrapper, which

was allowed as incident to the putting up of the tobacco

in the character of packages prescribed by law.

We conclude, therefore, that Congress in passing the

first paragraph of the third clause of the tenth section in-

tended its prohibition to inclide the “coupons or vouchers”

set forth in the information and the agreed statement of

facts; that no other construction under the language of the

law and the conditions surrounding the subject at the date

of its enactment can be given to said paragraph.

Having presented the view of the Government, in

reference to the purpose and intention of Congress to

include, as within the prohibitions of the first paragraph

of the third clause of the tenth section of the act of

July 24, 1897, “coupons or vouchers,” we will proceed

to discuss the first question submitted by the certificate

of the circuit court of appeals for the determination

of this court:

1. “Whether the third clause of the tenth section of the act

of Congress of July 24, 1897, if the prohibition of that statute

be applied to the coupons described in the foregoing statement of

facts, was in accordance with or in conflict with the Constitution

of the United States.”

The information filed by the district attorney of the

United States for the district of West Virginia rests

upon the following provisions of the statute:

None of the packages of smoking tobacco

and fine-cut chewing tobacco prescribed by

law shall be permitted to have packed in, or

attached to, or connected with them, any

article or thing whatsoever, other than the

manufacturer’s wrappers and labels, the internal-

revenue stamp and the tobacco or cigarettes,

respectively, put up therein, on which tax is

required to be paid under the internal-revenue

laws.

A brief statement of the history of this enactment by

Congress may not be inappropriate. Embodying this

provision as an amendment to section 3394 of the Re-

vised Statutes was not the result of a sudden whim or

caprice upon the part of the legislature. The necessity

for its enactment had been brought to its attention, and

especially to the consideration of the Ways and Means

Committee, first, by a joint resolution presented by

Mr. Evans, and, secondly, by a bill offered by Mr.

Cummings during the first session of the F ifty-fourth

Congress, which joint resolution and bill, upon inspec-

tion, will be found to contain in substance similar pro-

hibitions.

Delicate duty of the court.

In exercising the delicate constitutional duty of pass-

ing upon the validity of an act of a coordinate branch

of the Government, the court can not be influenced in

its action by the questions whether or not the act, in

the opinion of the judge, is one which will operate

according to natural justice, nor, as stated in Ex Parte

McCardell (7 Wallace, 574), is the “court at liberty

to inquire into the motives of the legislature?” We

can only examine its power under the Constitution.

Cooley’s Cons. Limitations, chap. 7, secs. 4,5, 6.

Commonwealth v. McCloskey, 2 Rawle, 374.

Fletcher v. Peck, 6 Cranch, 87.

8 Wallace, 548.

In the latter case Chief Justice Chase uses the lan-

guage:

The power to tax may be exercised oppres-

sively upon persons, but the responsibility of

the legislature is not in the courts, but to the

people by whom its members are elected.

Nor can the court overlook that other important rule

of constitutional interpretation, sustained so fully in all

our adjudications, that it becomes the duty of the judge

in construing the laws of Congress, wherever consis-

tent with their context and language, to uphold their

constitutionality.

Presser v. Illinois, 116 U.S., 252.

Parsons v. Bedford, 3 Pet., 433.

United States v. Coombe, 13 Pet., 72.

Grenade Co. v. Brown, 112 U.S., 261.

Is the third clause of the tenth section, if construed to

embrace coupons or vouchers, constitutional ?

It is admitted as an undisputed proposition of con-

stitutional law, that the Government of the United

States is one of enumerated and defined powers, whose

limits are prescribed and whose powers are distributed

between the three coordinate departments. To the

Congress has been committed, by its terms, all legisla-

tive power. When a law of Congress is assailed, we

must therefore look to the National Constitution, to see

if the grant of power is broad enough to embrace it.

But, as stated by the Chief Justice, in Hepburn y,

Griswold (8 Wallace, 613):

It is not necessary, however, in order to prove

the existence of a particular authority to showa

particular and express grant. The design of

the Constitution was to establish a government

competent to the direction and administration

of the affairs of a great nation, and, at the same

time, to mark, by sufficiently definite lines, the

sphere of its operations. To this end it was

needful only to make express grants of general

powers, coupled with a further grant of such

incidental and auxiliary powers as might be

required for the exercise of the powers expressly

granted.

The only limitation to the exercise of the “incidental

and auxiliary powers,” expressed by the Constitution

itself, is found in that clause which provides, the

“power to make all laws necessary and proper for car-

rying into execution the powers expressly granted to

Congress or vested by the Constitution in the Govern-

ment, or any of its departments or officers.”

Although, under our constitutional system, each of

the coordinate branches of the Government are en-

tirely separate and independent of the other, yet it has

frequently been necessary for the judicial department

to review the action of the Congress, as its action

affected the right of the citizen, and, if repugnant, to

declare that action in conflict with the grant of power.

This has never been done, however, in doubtful cases,

or unless upon clear and strong convictions upon the

part of the courts, that the act was beyond the powers

conferred. Even then it has been done with great re-

luctance. As stated by Chief Justice Marshall, in the

case of Fletcher v. Peck (6 Cranch, 128):

The question, whether a law be void for its

repugnancy to the Constitution, is, at all times,

a question of much delicacy, which ought sel-

dom, if ever, to be decided in the affirmative

in adoubtful case. * * * The opposition

between the Constitution and the law should be

such that the judge feels a clear and strong

conviction of their incompatibility with each

other.

And Justice Strong, in announcing the opinion in the

Legal Tender Cases (12 Wallace, 531), approving the

quotation just given, adds:

It is incumbent, therefore, upon those who

affirm the unconstitutionality of an act of Con-

gress to show clearly that it is in violation of

the provisions of the Constitution. It is not

sufficient for them that they succeed in raising

a doubt.

The same view has been taken Ly Chief Justice

Chase, in the well-considered opinion of Veazie Bank

v. Fenno (8 Wallace, 548), where, in discussing the

tax of 10 per cent on State banks, he answers this

question: “Is the tax so excessive as to indicate the

purpose on the part of Congress to destroy the fran-

chise of the bank, and is, therefore, unconstitutional?”

He replies:

The first answer to this is that the judicial can

not prescribe to the legislative departments of

the Government limitations upon the exercise of

its acknowledged powers. The power to tax

may be exercised oppressively upon persons,

but the responsibility of the legislature is not in

the courts, but to the people by whom its mem-

bers are elected.

All the decisions of the Supreme Court, when treat-

ing of the duty of the judiciary, in considering the con-

stitutionality of an act of Congress, rest their reasoning

upon the application of the principle announced by

Chief Justice Marshall in the case of McCulloch v. State

of Maryland (4 Wheaton, 423), from an examination of

which it is easy to see that in the discussion of the sub-

ject he had in mind both the express grants as well as

the “incidental and auxiliary” grants of power:

Where the law is not prohibited, and is really

calculated to effect any of the objects intrusted

to the Government, to undertake here to in-

quire into the degree of its necessity, would be to

pass the line which circumscribes the judicial

department, and to tread on legislative ground.

This court disclaims all pretensions to such a

power.

and (4 Wheaton, 421):

Let the end be legitimate, and within the

scope of the Constitution, and all means which

are appropriate, which are plainly adapted to

that end, and which are not prohibited.

may constitutionally be employed to carry it into

effect. .

This latter quotation is but a different way of stat-

ing the same proposition by the same distinguished

judge, as found in the case of United States v. Fisher

(2d Cranch, 396), in which he says:

Any means which are in fact conducive to

the exercise of a power granted by the Consti-

tion.

and again in the case of McCulloch v. The State of

Maryland, he enlarges the language made in the quo-

tation from that case by using the language, “any

means calculated to produce the end.”

No clearer announcement of this principle has been

made than that found in the civil rights case (p. 51,

109 U.S.) by Justice Harlan:

But it is for Congress, not the judiciary, to

say that legislation is appropriate—that is, best

adapted to the end to be obtained. The judi-

ciary may not, with safety to our institutions,

enter the domain of legislative discretion and

dictate the means which Congress shall employ

in the exercise of its granted powers. That

would be sheer usurpation of the functions of a

coordinate department, which, if often repeated

and permanently acquiesced in, would work a

radjcal change in our system of government.

17733—02——3

This but reiterates in different language the doctrine

as declared by Marshall in 4 Wheaton, 421, in which

he says:

The sound construction of the Constitution

must allow to the national legislature that dis-

cretion, with respect to the means by which the

powers which it confers are to be carried into exe-

cution, which will enable that body to perform

the high duties assigned to it in the manner

most beneficial to the people.

This principle was further approved by the court in

its exact language (12 Wallace, 539), and the éourt in

that case concluded the discussion of the principles

that would affect the constitutionality of the act, and

of its duty under such circumstances, in the following

language :

Before we hold the legal-tender act unconsti-

tutional, we must be convinced that they were

not appropriate means or means conducive to

the execution of any or all of the powers of

Congress, or of the Government, not appropri-

ate in any degree (for we are not judges of the

degree of appropriateness), or we must hold that

they were prohibited.

This extract from the opinion of the court in the

legal-tender cases is but a reaffirmation found in the

case of Hepburn v. Griswold (8 Wallace, 615), in which

the court in construing the language found in the Con-

stitution, “All laws necessary and proper for carrying

into execution,” uses this emphatic language :

It must be taken, then, as finally settled, so

far as judicial decisions can settle anything, that

the words ‘all laws necessary and proper for

carrying into execution’ powers expressly

granted or vested have, in the Constitution, a

sense equivalent to the words, laws not abso-

lutely necessary indeed, but appropriate, plainly

adapted to constitutional and legitimate ends;

laws not prohibited, but consistent with the let-

ter and spirit of the Constitution; laws really

calculated to effect the objects intrusted to the

Government.

In the opinion delivered by Justice Peckham (173

U.S., p. 314):

It is always an exceedingly grave and delicate

duty to decide upon the constitutionality of an

act of the Congress of the United States. The

presumption, as has frequently been said, is in

favor of the validity of the act, and it is only

when the question is free from any reasonable

doubt that the court should hold an act of the

law-making power of the nation to be in viola-

tion of that fundamental instrument upon which

all the powers of the Government rest. This

is particularly true of a revenue act of Congress.

The provisions of such an act should not be

lightly or inadvisedly set aside, although they

be plainly antagonistic to the Constitution it is

the duty of the court to so declare. ‘The power

to tax is the one great power upon which the

whole national fabric is based. It is as neces-

sary to the existence and prosperity of a nation

as is the air which he breathes to the natural

man. It is not only the power to destroy, but

it is also the power to keep alive.

And further, on page 524, he says:

Instead of a memorandum, Congress might

have required a sworn report, with the proper

amount of stamps thereon, to be made at certain

regular intervals, of all sales made subject to the

tax. Other means might have been resorted to for

the same purpose. Whether the means adopted

were the best and most convenient to accomplish

that purpose was a question for the judgment of

Congress, and its decisions must be conclusive in

that respect.

The means actually adopted do not legally

interfere with or obstruct the internal commerce

of the States, nor are such means a restraint

upon that commerce so far as to render the

means adopted illegal. That Congress might

have adopted some other means of collecting the

tax which would prove less troublesome or annoying

to the taxpayer can surely be no reason for holding

that the method set forth in the act renders the tax

invalid. As it has the power to impose the tax,

the means to be adopted for its collection within

reasonable and rational limits must be a question

Sor Congress alone.

Principles applied to the facts of the case.

In considering these authorities and applying the

principles which they lay down, the court should re-

member that in the 3362 section of the Revised Statutes

as amended, all smoking tobacco is required to be put

up and prepared “in packages containing 2, 4, 8, and 16

ounces each ;” that by an amendment in the war-revenue

aw of 1898 the packages were reduced in weight to

1%, 24, 34, and a new provision made for a 1-ounce

package. That smoking tobacco is taxed by package

according to its weight, and that the stamp of the Gov-

ernment is evidence of the weight of the tobaceo—not

the weight of the package, but the weight of the tobacco

contained in it. Had the Government the right, in the

administration of this law and for its efficient enforce-

ment, to prevent any article from being inclosed within

a sealed package, which would have increased the

weight of the package containing the taxable subject?

Had it the right to provide that no article of greater

weight than one-tenth of an ounce, or of any other

weight, should be inclosed within the sealed package?

If it had the right to legislate against increasing the

weight of the contents of a package, so as to exclude

articles of a given weight being packed therein, can

there be a question that it had the right to exclude all

substances, except that which was the subject of taxa-

tion from being placed therein?

If the Government was under the necessity, in sus-

taining the constitutional power of Congress to enact

this provision, to rely upon the “incidental and auxil-

iary powers” found in the Constitution, and not upon

an express grant of power, it seems to us, we should

have little difficulty in convincing the court that the

question presented by this record is not one of power,

but one of policy or expediency. To declare this law

unconstitutional, the court must hold that it was not

“necessary or proper” in carrying into execution any

grant of power to Congress. It must be prepared to

say that the “means” employed by Congress were not

“adapted to the end” which Congress had in view, the

efficient administration of a constitutional impost; that

the ‘‘means” adopted were not “means calculated to

produce the end,” to wit, the true weight of the subject of

taxation.

The personal opinion of the individual composing

the court, as to its appropriateness to accomplish the

purpose of Congress, can not be substituted for the

express judgment of Congress.

Congress has the right to select the means.

Is the court prepared to say, in the language of

Marshall, that it ‘feels a clear and strong conviction”

that as an administrative measure it was not within

the power of Congress to consider this means, among

others, to enforce the correct weight of the contents of the

subject to be taxed contained within the sealed packages?

Weight, and that alone, is the basis on which the tax

of the Government is determined. Has it not the

right to guarantee the correctness of this basis? Is

the court prepared to say that the method adopted by

Congress should not have been considered by it as a

“means calculated to produce the end”—to prevent

the fraudulent underweight of the subject of taxation

contained in these sealed packages—and therefore it is

repugnant to the Constitution? If the court can not

hold that the “‘means” adopted by Congress as an

administrative measure to effectuate the exercise of a

constitutional power, was not excluded from its considera-

tion, it must admit the right of Congress to select

this means for the enforcement of the exercise of a

constitutional power. Within this limitation the legis-

lature is certainly supreme. It is, then, not a question

of power, but, as I have stated, of selection, of policy, of

expediency. To urge the courts to enter this field is to

request that it shall do that which so early in our his-

tory was repudiated by Chief Justice Marshall when

he stated that it would be to “pass the line which cir-

cumscribes the judicial department and tread on leg-

islative ground.”

As decided by Justice Peckham (173 U. S., p. 524):

Instead of a memorandum, Congress might

have required a sworn report, with the proper

amount of stamps thereon, to be made at cer-

tain regular intervals, of all sales made subject

to the tax. Other means might have been

resorted to for the same purpose. Whether the

means adopted were the best and most conven-

ient to accomplish that purpose was a question

for the judgment of Congress, and its decisions

must be conclusive in that respect.

The means actually adopted do not legally

interfere with or obstruct the internal commerce

of the States, nor are such means a restraint

upon that commerce so far as to render the

means adopted illegal. That Congress might

have adopted some other means of collecting

the tax which would prove less troublesome or

annoying to the taxpayer can surely be no

reason for holding that the method set forth in

the act renders the tax invalid. As it has the

power to impose the tax, the means to be

adopted for its collection within reasonable and

rational limits must be a question for Congress

alone.

The object and purpose of the act.

The “purpose and end” of this statute is to raise

revenue for the support of the National Government

by imposing a tax upon smoking and other tobacco,

and to provide such regulations as in the judgment of

Congress will protect the revenue and enforce the col-

lection of the taxes levied. This being the object, the

power of Congress is found in the first article, section

8, of the Constitution, which provides: “The Congress

shall have the power to lay and collect taxes, duties,

imposts, and excises.” This is an express grant of

power. There is no limitation upon this grant of

power that can affect the case at bar, nor is there any

question raised by the defendant as to the right of

Congress to tax the contents of these packages. The

sole and only defense offered is, that in providing the

regulations for the enforcement of this grant of power,

Congress has employed ‘“ means” which, in the judg-

ment of the defendant, are repugnant to the Constitu-

tion. But, as Chief Justice Chase said in the case of

Hepburn v. Griswold, that in carrying out the powers

conferred upon Congress it did not depend upon

whether the law was “absolutely necessary, but appro-

priate,” and “not prohibited,” but a law really calcu-

lated to effect the object intrusted to the Government.

Chief Justice Fuller, in the case of In re Kollock

(165 U.S., pp. 536, 537), said:

The act before us is on its face an act for

levying taxes, and although it may operate in

so doing to prevent deception in the sale of

oleomargarine as and for butter, its primary

object must be assumed to be the raising of

revenue. And considered as a revenue act the

designation of the stamps, marks, and brands is

merely in the discharge of an administrative

function and falls within the numerous instances

of regulations needful to the operation of the

machinery of particular laws, authority to make

which has always been recognized as within

the competency of the legislative power to

confer.

Protection to purchasers in respect of getting

the real and not the spurious article can not be

held to be the primary object in either instance,

and the identification of dealer, substance, quan-

tity, ete., by marking and branding must be re-

garded as means to effectuate the objects of the act

in respect of revenue.

Illustrations of the necessity, in the judgment of Congress,

for stringent regulations similar to those enacted in the

first paragraph of the third clause of the tenth section

of the act of 1897, made with the object of facilitating

the collection of the tax imposed, and to prevent frauds

upon the revenue.

By an examination of the questions hereinafter re-

ferred to, the court will realize at once that the enact-

ment of the law under discussion was not a departure

in revenue legislation. It will be found to follow in

the beaten track that has been marked by many similar

statutes:

Act of August 27, 1894, section 68; the fol-

lowing sections of the Revised Code; sections

3362, 3363, 3364, 3381, 3384, 3387, 3392.

An act passed by Congress after the fullest discus-

sion found in the 29th Statutes at Large, 604, entitled

“An act to allow the bottling of distilled spirits in

bond,” illustrates the case at bar, and the views which

Congress had of its power over these taxable subjects.

The prohibitions found in that act are equally as

effective as those found in the tenth section.

Some adjudicated cases.

The Revised Statutes require that before any pack-

age of either liquor, cigars, chewing or smoking tobacco

are sold there shall be placed upon them the stamp pro-

vided by law. In the case of United States v. Keys (10

Fed. Rep., 876), the court held that the payment of that

tax without putting the stamp upon the package was

not a compliance with the law, and in discussing the

statute used this language:

The Government has imposed a tax on all

kinds of manufactured tobacco, even refuse,

scraps, and sweepings; having required it to be

put up in a particular way or ways, and to be

stamped with stamps for the payment of the tax,

and the stamps canceled; and have imposed this

penalty, not for having in possession manufac-

tured tobacco on which the tax had been paid,

but manufactured tobacco on which stamps have

not been placed and canceled. Congress has as

much power to say the tax shall be paid in a

particular way—that is—as it has to impose any

tax, and all its requirements in that behalf must

be complied with.

In the case of United States v. Jacobi (12 Blatch., 491),

the court, in passing upon section 3397 Revised Stat-

utes, which prohibits the putting on of any “stamp in

the similitude or likeness of any other stamp required

to be used, * * * whether the same be a custom

or internal-revenue stamp,” held that the indictment

for this offense did not involve the question whether

the tax was paid or not, but the question of fraud upon

the public.

Justice Caldwell, in delivering the opinion in the

case of United States v. 133 Packages of Spiritous Liquors

and Wines (22 C. C. A., 228), in passing upon section

3449 Revised Statutes, “prohibiting the shipment, trans-

ferring, or receiving of liquors or wines under any than

the proper name or brand known to the trade as designat-

ing the kind or quality of the contents of the packages,”

said:

The contention of the learned counsel for

the claimant, that this section is nothing but a

trade-mark regulation, is not tenable. It is one

of the numerous regulations prescribed by the

internal revenue law, intended to prevent frauds

on the revenue in the manufacture, removal,

shipment, and sale of distilled spirits and other

liquors, and to aid in the detection of such

frauds. The regulations for this purpose are

very extensive and extremely minute. They

embrace every step in connection with the

manufacture and handling of spirits, from the

introduction of the raw material into the dis-

tillery down to the rectification of the product

and its removal, shipment, and sale. * * *

Before any court would be authorized to hold

an act of Congress obsolete and inoperative it

would have to appear conclusively that it was

totally inoperative for any lawful or useful pur-

pose. When the statute relates to a subject-matter

within the constitutional competency of Congress to

legislate upon, the presumption is that it serves a

useful purpose. When a statute is susceptible of

two constructions, one which would render it

valid and operative, and the other to press it

beyond the constitutional competency of Con-

gress to enact, or render it inoperative, the

former construction will be adopted. The sec-

tion is none the less a revenue regulation because

its enforcement may tend to discourage the piracy

of trade-marks, and prevent frauds upon those who

consume the contents of the packages. These are

mere incidents of the statute and not its primary

object. Congress has an undoubted right to

legislate to prevent frauds upon the public

revenue, and the validity of such legislation is

not affected by the fact that it incidentally tends

to the discovery or suppression of private frauds.

Should the court sustain the principle upon which

rests the contention of the plaintiff in error, its decision

would tend to render uncertain and doubtful many of

the provisions of the custom and internal-revenue laws

which are regarded as necessary in the collection of

the revenue.

After a full review of the authorities to which I have

referred, bearing on the constitutionality of an act of

Congress, the object of which is to put in force and

give effect to an express grant of power, and applying

the well-recognized rules of constitutional interpretation

as to what are “proper and necessary laws” which, as

stated by Marshall, is the exercise of discretionary

power by Congress in the employment “of means not

prohibited, but which are really calculated to effect

the objects intrusted to the Government,” we can not

perceive how the law, now under consideration, could

be other than valid. Under our complicated system

of internal taxation, the rights of the third party would

be most seriously affected unless Congress was at lib-

erty to make stringent provisions for their administra-

tion and enforce strict compliance with the same. All

similar provisions, when submitted to the test of judicial

criticism, have been upheld. Should the contention of

the plaintiff in error be sustained in this cause, the

principle upon which the court’s decision must rest

would necessarily throw into chaos and confusion the

administration of both the internal-revenue and the cus-

tom laws of the country. We are at a loss to perceive

upon what theory the court would base a decision that

this clause of the tenth section of the act of July 24,

1897, was unconstitutional and void.

Packages of smoking tobaceo, under the law of

Congress, are taxed by weight, and the stamp of the

Government is intended, and, in fact, does, in the mind

of the public, fix and determine that question. Being

sealed, to allow extraneous substances, of whatever

character, to be included within the package, and thus

by negligence or fraud reduce the weight of the con-

tents, would make the Government a particeps criminis

in the fraud perpetrated upon the public. Having a

right to tax the subject-matter; having the right to

prescribe the size and weight of contents; having the

right to provide that no sale shall be made except in

original and full packages, as put up under the pro-

visions of law; having the right, as decided in the case

of In re Rapier (143 U. S., 110), to prevent the facili-

ties furnished by any of its departments from being

used for improper purposes, can there be any question

in the mind of the court that the prohibition contained

in the first part of the third clause of the tenth section

is a constitutional exercise of the powers conferred

upon the Congress, and is, therefore, valid?

The illustrations which we have given show, that

when the Government has once taken possession of a

subject for the purpose of exercising its grant of power

to tax the same, that its policy, as manifested by its

enactments, has been, first, to execute its powers of

taxation; second, to guard against frauds upon the

revenue, and third, to prevent any possibility of its

being made a participant in a fraud upon the public

through the use of the “means” which it has found

necessary to employ in carrying out those powers.

The third question asked of your honorable court is:

3. Upon the facts stated, was the seizure set forth in the infor-

mation of the packages of Merry World tobacco therein described,

or was the judgment of forfeiture rendered in this case justified

under section 3453 of the Revised Statutes?

In answer to this question the Government would

submit:

1. That the agreement of counsel removed this question from

the consideration of the court below;

2. That under the proceedings in the case, the question of seiz-

ure could not have been considered by the court below and will

not be by this court;

3. That section 3453 denounced against the offense the penalty

of forfeiture; and

4. That the seizure was properly made under said section.

First. That the agreement of counsel removed this question

Srom the consideration of the court below.

The following consent agreement was entered in this

case of the Ist day of July, 1899:

And the said district attorney and the said

claimant, by his counsel, respectively, waive

any and all informalities and omissions, should

any such be found in these proceedings on

either side.

The Government had been liberal with those who

had been violating this law, anxious not to enforce its

penalty until its validity and extent was passed upon

by the judicial department of the Government. For

that reason it did not seek to seize all of the tobacco

that was forfeited by reason of this statute, but selected

a manufacturer who had a small amount, that a test

case could be made with as little inconvenience to the

citizen as possible. We have understood that for this

reason this consent order was entered; that the merits

of the case could, without legal quibble or technical

reliance, be brought before the court for its considera-

tion and judgment.

———

Second. That under the proceedings in this case, the

question of seizure could not have been considered by the

court below and will not be by this court.

This was a proceeding in rem, to subject to forfeiture

the property, the subject of taxation, which had been

packed in fraud of the provisions of the internal-rey-

enue law.

As decided by Justice Swain, in the case of Cliquot’s

Champagne (3 Wallace, 145):

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 char-

acter, 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.

Justice Story, discussing a similar statute, in the

case of Wood v. The United States (16 Peters, 359),

after approving the instructions of the district judge,

“that no question in relation to the mere seizure of the

goods is in issue, or material under the pleadings in

this case,” proceeds to observe:

It is of no consequence whatsoever what were

the original grounds of seizure, whether they

were well founded or not, if, in point of fact, the

goods are by law subject to forfeiture; for the

the United States are not bound by the acts of

the seizors to the causes which influenced them

in making the seizure, nor by any irregularity

on their part in conducting it, if, in point of fact,

the seizure can now be maintained, as founded

upon an actual forfeiture thereof at the dime of

seizure.

Third. That section 3453 denounced against the offense

the penalty of forfeiture; and

Fourth. That the seizure was properly made under said

section.

We will discuss the third and fourth propositions

together, as they involve the construction of the same

statute. It is as follows:

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 seizgd 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. The proceed-

ings 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 facts, as shown in the case agreed, are that

these packages containing the “coupons or vouchers”

were packed by the Merry World Tobacco Company,

of Wheeling, W. Va., in the “manufactory and pre-

17733—02——4

pared for sale;” that the promise was made that the

purchaser had bouglit a definite share in any of

the articles mentioned on the voucher (Record, 2); that

Emanuel Felsenheld claimed the ownership of said

tobacco which had been seized.

These facts being established, there was shown upon

the part of the United States, if the first paragraph of

the third clause of the tenth section is constitutional,

probable cause for the present prosecution, and Judge

Story, in deciding the case of Wood v. The United States

(16 Peters, 366), observes that—

probable cause must, in this connection, mean

reasonable ground or presumption that the

charge is, or may be, well founded.

If, therefore, the plaintiff in error relied upon any

defense, in reference either to forfeiture or seizure of

these goods, the burden of proof was upon him — This

view is fully sustained in Cliquot’s Champagne (3 Wal-

lace, 343-344), the court closing the discussion of

the question of the onus probandi with the following

remarks:

The applicability of the rule alike in cases

arising under all the revenue laws was assumed

by the eminent counsel concerned and by the

court. * * * This tacit recognition is equiva-

lent to an express declaration.

In the case of the United States v. 580 Barrels of Dis-

tilled Spirits (5 Blatch., 410), the court, in discussing

this question, says:

We are inclined to think that upon the seiz-

ure of the goods for an alleged violation of law,

if the complainant relies upon a conformity with

it as a defense, he is bound to establish the af-

firmative by proof; that it would be unreason-

able and not consistent with the rules of evidence

to call on the Government to establish a nega-

tive. The means of furnishing the evidence are

in the possession of the claimant. * * *

The adoption of the seizure by the Government

cures any defect in this respect.

If the contention of the Government is correct, that

the Congress had the right to prohibit, under the pen-

alty of seizure and forfeiture, the packing in these

packages of tobacco the “‘coupons or vouchers” set out

in the information; that in the exercise of that consti-

tutional power, the Congress expressed its judgment by

this enactment; that the packages of tobacco put up in

fraud of the revenue law were in possession or custody or

within the control of any person; that they were not

claimed by the Merry World Tobacco Company, but

by one Emanuel Felsenheld, the conclusion under the

decisions as to the onus probandi rests upon the de-

fendant, the facts agreed were sufficient to show that

they were removed in fraud of the internal-revenue

law, and the right of seizure and forfeiture, under sec-

tion 3453 of the Revised Statutes, can not be questioned.

4. Upon the facts stated, was the seizure set forth in the infor-

mation of the packages of Merry World tobacco therein described,

or was the judgment of forfeiture rendered in this case justified

under section 3456 of the Revised Statutes?

If for any reason that might be suggested to the

mind of the court, the seizure and forfeiture of this

property is not valid under section 3453, which we

have discussed, can there be a doubt of the forfeiture

of the property under section 3456 of the Revised

Statutes and the right to seize such forfeited property,

under section 3166 and 3460 of the Revised Statutes,

Why the circuit court of appeals should have limited

the question as to seizure (if such is the true construc-

tion of its language) to section 3456, which provides

for the forfeiture when the right of seizure is sustained

by other sections referred to, we are at a loss to under-

stand. Nor can we see the relevancy of the request

for an answer, from this honorable court, as to the

question of seizure under the decisions hereinbefore

referred to of Wood v. The United States (16 Peters,

359), and United States v. 508 Barrels of Distilled

Liquor (3 Blatch., 410), as under these decisions, the

court, acting by consent in lieu of a jury, could not

have been called on to pass upon the question of

seizure.

Clause 3 of paragraph 10 of the act of 1897 provides

no penalty for its violation. This frequently occurs in

the legislation of Congress, but it has seldom given rise

to any difficulty as there have been found general pro-

visions to meet such omissions. The penalty in this

case would have been determined by section 3368 of

the Revised Statutes but for the limitation contained

in that section. It provides:

No manufactured tobacco shall be sold or

offered for sale unless put up in packages and

stamped as prescribed by law.

The limitation found in the latter part of the section,

however, limits the penalty to offenses of violations of

538

the provision found in chapter 6 of title “35, internal

revenue.” The amendment made in the act of 1897

(now spoken of as the third clause of the tenth section)

amends section 3394 of the Revised Statutes found in

“title 35, internal revenue, chapter 7.” For this rea-

son the Government has relied upon the penalty of for-

feiture as coming within the spirit and language of

section 3456, which imposes a penalty for doing any-

thing by this title prohibited, which language embraces

all violations of the provisions of the statute included

within the “title 35, internal revenue.” It provides as

follows:

If any distiller, rectifier, wholesale liquor

dealer, or manufacturer of tobacco or cigars

shall knowingly or willfully omit, neglect, or

refuse to do or cause to be done any of the

things required by law in the carrying on or

conducting of his business, or shall do anything

by this title prohibited, if there be no specific

penalty or punishment imposed by any other

section of this title for the neglecting, omitting,

or refusing to do or causing to be done the

thing required or prohibited, he shall pay a pen-

alty of one thousand dollars; and if the person

so offending be a distiller, rectifier, or wholesale

liquor dealer, all distilled spirits or liquors owned

by him or in which he has an interest as owner,

and if he be a manufacturer of tobacco or cigars,

all tobacco or cigars found in his manufactory,

shall be forfeited to the United States.

The agreed statement of facts shows that these

“coupons or vouchers” were packed in each of the

packages seized “when it was packed in the manu-

factory and prepared for sale” (Record, 2); that it had

been the practice and custom of manufacturers of

smoking tobacco to include such coupons in said

packages (Record, 2, 3); that there had been “fre-

quent complaints made to the Government by private

persons or corporations who were interested in the dis-

continuance by the defendant and others of the use of

said coupons” (Record, 15); that “because of the in-

sistence by private persons or corporations who were

interested in the continuance by the defendant and others

of the use of said coupons” this seizure of property and

information was made (Record, 15); that the defendant

claimed to be the owner of the tobacco seized (Record,

1); that the collector was specially authorized by the

Commissioner of Internal Revenue to seize the articles

or things mentioned in the information.

It needs no argument to show that, under the law,

no one but a manufacturer could pack within these

sealed packages the coupons set out in the information;

nor could interested parties desire the ‘discontinuance

by the defendant of the use of said coupons” unless he

was a manufacturer; nor could other persons or cor-

porations be interested in the continuance by the ‘‘de-

fendant in the use of the coupons” unless he was the

manufacturer of the tobacco seized.

The facts admitted in the case agreed bring the case

clearly within section 3456, which declares the penalty

of forfeiture of this tobacco. The property being for-

feited, the right to seize the same is found in sections

3166 and 3460 of the Revised Statutes.

The principle decided in the case of United States

v. Two Hundred Barrels of Whisky (95 U. S., 571), in

which the court was passing upon a similar statute en-

acted in 1868, will be found to govern and control the

penalties for a violation of section 3394, as amended by

the third clause of the tenth section of the act of 1897.

Chief Justice Waite, in delivering the opinion of the

court, on page 574, in speaking of what was then sec-

tion 96 of the act above referred to, said:

Section 96 was, however, undoubtedly in-

tended to impose upon rectifiers and wholesale

liquor dealers the duty of doing, or causing to

be done, everything pertaining to their respec-

tive occupation which was necessary, in order to

enable others acting under the iaw to do what

was required of them. If they feiled in this,

and there was no other penalty provided for

the neglect, they were subjected to the provi-

sions of that section. If, however, by any other

section a specific duty was imposed upon them,

which, if performed, would enable the other

parties to act in the proper manner, and a pen-

alty was prescribed for the omission to perform

such duty, they were not to be proceeded

against under section 96. It was not intended

by Congress to add, in that section, to the

already existing penalties for an offense, but to

provide for omitted cases only.

The court in the case cited, clearly announces the

principle which should control in the case now before

the court: That where no specific penalty is prescribed

for the doing or the omission to do a particular thing,

the punishment should be controlled by the general

provision. In this case Congress has affixed no spe-

cific penalty for the violation of section 10. Section

3363, we believe, can not be relied upon, as the of-

fense is not included in the sixth chapter of the thirty-

fifth title. Section 3456, found under the head of title

35, internal revenue, embraces in its scope section

3394, as amended by the tenth section of act of 1897,

it being part of said “ title.”

The evidence hereinbefore referred to certainly pre-

sents a case of probable cause, and sufficient on which

to rest the judgment of the court if not contradicted

by any evidence in the record. And if such evidence

existed it was the duty of the plaintiff in error to pre-

sent it to the court below. This has not been done.

Wood v. The United States, 16 Peters, 336;

Cliquot’s Champagne, 3 Wallace, 148, 4;

United States v. 508 Barrels Distilled Spirits,

5 Blatch., 410.

James M. Beck,

Assistant Attorney-General.

CuarLes J. FAULKNER,

Special Counsel for Government.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.