UNITED STATESt'. ONEDISTILLEBY.
Henry
"
; Ross,J. Sections 3257, 3281, 3305,3453, and 3456 of the Revised ,Statutes of the United States areas follows: , "Sec. 3257. Whenever any engaged in carrying on the business of a defrauds, or attempts to defraud, the United States, of on the 'spirits distilled, by him, or auy part thereof, he shall the distiijery and ,distilling appa),'attis used, him, and ,all spirits, all raw mateproduction ofdistillell spirits, found in II,eAistil1eryand on,the 1'lals distillery and shall be, fined, not less than,fivtl dollars 110r 'Dlqretbilh li;v,e thousand dollars,' an4,be impriso;ned less., years."" , ' . ,," ) ,',' " " ." "sec; 32Hl. Every person who carrill8' on the businesllof·a distiller ,wi_hout engages, ba.ving;giv,el1 bond, as,requi1'ed by;hiw, or ofa'llistilier with to the United St<Ltes of the,tax on 1;>y ,!lim, or of any ,part thereof, shaH, fqr eV,ery sqch ot'fense,b(:l fined, not less t'tlan, thousand dollars nor O1ore than live thoudol!ars, and imprisoneij' not less than montbsnolj mor.e,thlmtwo : :A,ndaU distillel;1 i sp":its or wines, ,aud al}stills or, otller fit .u8t'd or fOl' the ,compoun'd,Ingof 8.uchperson,whereverf<mnll, 4isor fOlmd \n the or InC4plJ.pre, t,hj!re,with, !in,d ,with or cop.a of and rigllt, title, in pf such pel'8lm'inthe lot or tract 'onimd on which such distillery' 'i,ssitullted, an,d·,1ll1 right, title, and interest therl'in of every person who knowingly has suffered ,<>l"penuittedtbebusiness ofa distHIer to be there carried: or has (lonni ved an,d per&\},nal by or in poasessiondf any per1l0A permitted or' suffered, any building, :'bart to be used for: purposes, of ingress or egreslltQ, or 'tillery, wliichshall be,foUlid in any building, yard, hiqlosure, '!i,ndall 'the title; and interest of everypersotdnany premises used 'fodtigress or egress 1jJ()"9rfrotri such distillery, wno 'has knowingly sUffered or petu'litted s,uqb, pl'rlili$estobe used :for such Ingress or egress, shall be forfeited to'the ,Statel:!." ",' , " .,; , Whenever any false is Pll;lde in, or any entry r1lq\l.lrlld to , "Seo. be made 'isoJ'nitted frolIl, either of sai<J books mentioned, in, thll, preoeding.ectlons, with intenttodefrliudoi' to' conceal from the reveuli,6 ''(lers '8ny t'aetor particular required, to'be stated and entered in either'of said ,books,"or to mislead in reference thereto, or any' distiller.' asafores<\id; omits O,r W ,provide either of said books, 01' cancels, obliterates. or deiltroyS ,of either ,of said books, or any entry therein. with intent ·to,qefraud, /lny Of ,permits the to be done, or such 1lOQks, 0.1' e,ither of. ar:e dace-d when reglllred by any revenue officer, distillery ,and the lot· ol'tril:ct of land onwhic!J it stands, arid all personal saidptemlse8used in the business there on, ,shall be forfeited to the :United States. And every personwhlJ false entry,' orblnitsto I,\11Y eptry bel'einbefore required to: ,he'IDade, with the intent'/lffdresaid, :01' whq,cRUses or procures the same to fr/ludulently olliliter,iltes, Or qe8t1'oys any part of said books. or any eptry therein,Qr: ,failstoprodtJce such books,oi-either: of them, shall be filled not 'hundred nor more tban' ii, ve dolla'rs, and imllris<;lne? ':ii9,t ;1¥ss than Sht'moilths, years."'" " " " . '" ,,1/1..: ). :'l ;All good&. wares. ,mer.obail4!lilJe, arUoles.,01' objects
or
pm-
848
FEDERAL REPORTER ,vol.
43.
taxes are Imposed, which shall be found in the possession or custody, or within the control. of any persoll. for the purpose of being sold or removed by him in fraud of the internal revenue lawll. or with design to avoid payment of said taxes. may be seized by the collector or deputy collector of the proper district. or by such other collector or deputy collector as may be specially authorized by the commissioner of internal revenue for that purpose. and shall be forfeited to the United States. And all raw materials found in the possession of any person intending to manufacture the same into articles of a kind subject to tax for the purpose of fraudulently selling such manufactured articles. or with;design to evade the payment of said tax. and all tools. implements. instruments. and personal property whatsoever in the place'or building, or within any yard or inclosure where such articles or raw materials are found. ,may also be seized by any collector or deputy collector. as aforesaid, and shall be ibrfeited, as aforesaid. The proceedings to enforce such forfeiture shall be in the nature of a proceeding in rem in the circuit court or distl'fct court -of the United States for the district where such seizure is made." "See. 3456. If any distiller, rectifier, wholesale liquor dealer. or manufact· urer of tobacco or cigars, 'Shall knowingly or willfUlly omit, neglect. or refuse to do, or cause to be done, any of the things req uired by law in the carrying on or conducting of his business, or shall do anything by thia title prohibited. if there be no specific penalty or punishment imposed by any other section of this title for the neglecling, omitting. or refusing to do. or for the doing or causing to be done, the thinK required or prohibited. he shall pay a penalty of one thousand dollars; and it' the person so oft'endingbe a distiller, rectifier. or wholesale [liquor] dealer, all distilled spirits or liquors owned by him, or in which he has any interest as owner, and, if he-be a manufacturer of tobacco or cigarS,all tobacco or cigars found in hismanufaclory, shall be forfeited to the United States." . . on these sections, an information was filed by the district attorney on the 13th of November, 1888, and amended on the 11 th of January,1889, for the forfeiture of certain real and personal property therein specific!tlly described, and which was seized by the collector of internal reVenue for this district on the 1st day of Novemher, 1888, consisting of five acres o( lalld, situated about four miles from the city of Fresno, -upon 'which stand the distillery and winery buildings and distillery and winery. premises theretofore occupied by the Fruitvale Wine & Fruit .Com pany, a corporation organized and existing pursuant to the laws of the sta:te of California, together with all and singular the bUildings standillgUp,oh s/lid winery and distillery premises; also, one still, one elevator, Qne grapestennner, one lot of belting, one cauldron, one Eluction ,pump, one wine-press, one wine-tank; two trucks, one windmill and twelve wine-tanks. sixty-nine puncheons, five fermenting tubs, one lot of hose, one grind-stone, and Howe scales, one lot of lumber for tanks, one lot of three:hundred gallons of sweet wine, one lot of hoop iron and ,pi qorsEl' and tread-wheel j also,. thirty-nine puncheons, eighteen ,wine-hmks, two fermenting tanks, seventy-eight barrels, twenty-nine balf barrels, nine cords of wood, fi'fteen tons of grapes, four hundred feet of hose. seventy tpousand gallons of claret, thirty-eight thousand gallons 'of white wine, two thousandgaUons of port wine, one thousand gRllonsor' br!lDdy,' four hundred and fifty gallons of alcohol,. ten thou:of w:asA for brandy,and aU the toolst implements, and
UNIT1W STATES t1. ONE DISTILLE.RY.
849
utensils used by said Fruitvale Wine & Fruit Company in the manufacture of distilled spirits. The amended information alleged as grounds for a decree of forfeiture of the property in question in substance as follows: . (l) Tbat on the 1st dayof June, 1888, the said Fruitvale Wine & Fruit Company had in its possession, custody, and control certain proof brandy and high proof spirits, for the purpose of selling and removing the same in fraud of the revenue laws, and with the design of avoiding payment of the taxes due the government. (2) That the said Fruitvale Wine & Fruit Company, being a distiller of distilled spitits, and engaged in carrying on that business at the aforesaid distillery, did defraud the government during the months of July, August, September, ·October, November,and December, U:l87, of the tax on a large quantity of spirits distilled byit, by the fraudulent removal of such spirits from the distillerywbere tbe same had been distilled to a place otberthan a distillery, bonded or designated warehouse, or place of depository, without the tax thereon being paid, and without the packages in which tbe same was constamped or branded, and without the law' in relation to distilled spiriLs'beingcomplied with in any manner,and with tbeintent to defraud the government of the tax due on said spirits. . (3) That the said Fruitvale Wine & Fruit Company, as such distiller, during the months of July, August, September, October, November, and December, 1!:187, with intent to defraud the government of the tax due on spirits distilled by it, made, through its secretary, W. Moore Young, false entrit's in the books reqUired by law to kept by it, and omitted to do other things, and perform otht'r acts in relation thereto, required by law to be performed, and by such means defrauded the government. (4) That the said Fruitvale Wine & Fruit Company, as such distiller, did, during the months of July, August, September, October, November, and December, 1887, knowingly and willfully omit, neglect, and refuse to do or cause to be done any of the acts required by law in carrying on its business of distilling, and did during the same time, in carrying on its said business, commit'acts probibited by the law.
It is alleged that at all of the times referred to Wolters, Helm, Austin, and Kauffman, who are claimants herein, were holders of stock of the Fruitvale Wine & Fruit Company,and were cognizant of all of the alleged fraudulent acts and omissions on the part of the corporation, and that they subsequently, with full knowledge of such fraudulent acts and omissions, purchased all of the said property. Wolters, Helm, Austin, and Kauffman appeared as claimants and filed an answer to the amended information, in which all of the allegations of fraud on their part are denied, and which sets up that they are the owners of all of the property described in the information, or so much of it as actually existed at the time ofseizurej that they acquired certain described portions of it by purchase at ,a public sale made by the assignee of the Fruitvale Wine & Fruit Company on the 9th of June, 1888, for the sum of $7,700, whichsqm they paid, and thereupon received possession of the property purchased; that th.ereupon claimants formed a partnership for the purpose of operating the winery on the premises, and added thereto necessary machinery and buildings to the extent of $5,000 in value; that on or about ..Tune 20, 1888, and while claimants were in possession oftha v.43F.no.12-54 '
, ',lI'EDERALBEPORTEilt',:voL43.' and in good faith making large.and expensiv.e additions ;ther:etq, the property was seized by the collector for .viollition of the revenue laws Fruitvale Wine, & Company in the year 1887; that, by reason of negotiations with the revenue officials:, Jlhe'pr9,pej:1ty;was, On Qr ab.out, claimants ,'restQred,:tJo.itsposse8sion, w,hereupon, they ,proceedt;ld to, make further limpi'ovements .and ,in the business of operat'jug tliti: winery, adding from 'thetrperson81 funds, in the purchase of ,and machinEjry, the S\l.ID of $25 ,000, pursued the busistqck, illl'Elspects W:ith tne la \VS o.f' the 'U ulted Stil.tes and .the rules,(lnpregu.lationsof tpe, l1epllortment; that.: afterwards" to-witrpn, or about the 2d day, of November, 1888,01\ account of. the 'alleged t1vl'Ongful Wine&FruitCompany occurring ;iH t'he by, agl,l.Pil" .the . , qffi<?e", thyreof .QrltliQtlt, 1888, when :witbheldArQt:n claimants were restored to possession; by, giv,ing, a'bond in the ·sum of to-wi.t, on the i 8th the said ,,:ere, ,b,y:t,he ip i:lf:' . &l;,Frult COlI}PflPY and ,to,prevent the sale, ofaaid, PEopeJ1tY,-Agd"tQ,),'eQl),ver andtppreYent further loss and damage by the suspension of:theil(business" the. claimants we,re ;comi!e1led'to.Rnd'did'pll.yunder',pt'6teat )to the -colleotor the sum of to' pe' duei'liWd 6wing rrbm the Fmitvale Wine & Fruit f ; faI1u,(e,;()t that corporation Xegul11-ti.o,nsof ,the department during the year 1887; seizure, on or about June 20, 1888, and the second seizure, on or about November 2, 1888,claimatlts' added'itothe >prernl'sesCertain desbrlbed propertY-lithe i aggregate value' Of whioliwas Over ;;$25,000; all of which 'W'as'lncluded in the seizure of Novembel"2d, and· also 1n that of Decen18; 188S',withoutfaultdrr their' part. ,They 'that the 1,000 galilons ofbhthdY,', or the450 gallol'lsof alcohol, or the' ba:rrels containing the 'Mme, fou:n:din their possesSion atthetime of the seizure in November, :constituted t any, part of :the' 'property alleged to been found' in the possessioft oflthe Fruitvale Wine & Frnit:Comparty oklor about June 1, 1887 ,orthat llliid brandy or alcohol, OF tbebarrels containing the same, ever that 'company at the distillery 01' elsewhere. They deny that they I ,Meither·of them, ;evei' or received from the FrUitWle Wine & Fruit Companyany ibrandy or alcohol or other high proof spirits: 'knowing that the oompany:had defrauded, or sought to defraud, or had .failed to' applY' or gought. to avoid ,the 'paymEint"i1f taxes due tbereon,or that the same had' for any cause' beoornefoH'eited tothegoVtlrnrnent·· ' :; Hocr J'" · , I i ' . ,I." The adhtit thai they afstock 'ih'the'FtuitV'ala WiI1e&' but they, or;either i · ,c. '."'_,' ",, __ ... ', . , " ' , ',' . .' . ',' " , q .
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UNI'l'EDSTATES
v.
ONE DISTILLERY.
851
of them, had any knowledge of the aUeged frauds on the part of that corporation or its officers, or ever heard of them until after the seizure of the property by the collector. By an amendment to their answer, filed on the 21st of August, 1890, the claimants set up thisdefertse: That after thelasfseizure, and on the 20th of December, 1888, W. Moore Young was iridicted by the United States grand jury upon five separate connts, charging that he had committed unlawful acts against the revenue laws while secretary of the Fruitvale Wine & Fruit Oompany, upon which indictment he was tried, and. on the 20th of February, 1889, convictednpon the first count and acquitted as to the other four; the record of his conviction being made a part of the amended answer. The first count of the indictment charged that, as secretary of the Wine & Fruit Company, it became the duty of Young to sign and execute eaeh month a statement in writing showing the date, kind of material used, time of operation and amount of. brandy distilled by the company of which he was secretary. That during the month of September, 1887, he signed and executed a report for the previous month, in which he knowingly made false and fraudulent statements concerning the matters and things required of him by the law. The second count made a similar charge respecting his statement for the month of September, the third in respect to October, the fourth in respect to November, and. the fifth in respect to December, 1887. The amended answer avers thatII At all the times mentioned in the indictment said Young was a stockholder in the said company, and that at all the times mentioned in t.he indictment company was the owner of all the real and personal property upon which. and in connection with whith, the distillery was situated and operated: that it was by virtue of his position as secretary that he was enabled tosip;n and execute the documents mentioned in the Indictment, and thatlt'wlls only as IIllch officer that he could have signed the docnlDt'nts; that the whole of the capital and property of the corporationCQnsisted of said distillery and winery premises, with the appurtenancps to each, and that the capital stock in said corporation ownt'd by said Secretary Young represented the interest arid propt"rty which he then had in and owned In said distillery, winery, etc.: that thl' distillery and distillery prplDisps, winery, and real lind personal property mentioned in the llbel are the same distillery and distillery prl'mises. Winery, and real and personal property mentioned and referred,to in said indictment against said Young; that the alll'g'd frauus, concealments, and removals. of distilled spirits, and the other fl"aull ulent acts set forI h j u said libel, are the same frauds, concealments, and removals, and other unlawful acts, hiquired of and investigated upon the trial of said Young, and In respect to which he was convicted; that all thl' evidence which would he eS88ry to establish the various assignments and charges of fraud set ont In the libel was uspd and introduced upon the trial of said Young; that at the time of the allep;ed commission of tile acts for Which a forfeiture is sOIll!:ht to be enforced in this action, said Young was one of the owners of all the-property, real and personal, upon which a forfeiture could be decreed by the court." . To this'uefense, the distdct attorney, on behalf of the government, demurred, and the questiop of its sufficiency, accepting as true the facts . aUeged, .is now for The indictment agaiQ.stXollng was based on section 3451 of the Itevised Statutes t which is .8S follows:
862
J'EDERAL REPORTER,
vol. 43.
"Every person who simulates or falsely or fraudulently executes or signs any bond, permit, entry, or other document required by the provisions of the internal revenue laws. or by any regulation made in pursuance thereof, or who procures the same to be falsely or fraudulently executp.,d, or who advises. aids in, or connives at such execution thereof, shall be imprisoned for a term not les8 than one year nor more than five years; and the property to which such false or fraudulent instrument relates shall be forfeited." The case of U. S. v. McKee, 4 Dill. 128, was a 'civil action brought by the government to recover the liability, denounced by section 3296 of the Revised Statutes, of double the amount of taxes of which the United States had been defrauded by the unlawful removal of whisky from the distilleries of various persons, in which removals it was charged the defendant aided and abetted. The defendant interposed two defenses: (1) That he,had been theretofore indicted, convicted, and punished for the same offenses. (2, That for those offenses he had been, pardoned by the president. To that answer the government demurred. Mr. Justice MIL'LER, with whom concurred Judge DILLON, in overruling the demurrer; held that, if the specific acts of removal on which the civil suit was brought wel"e the same which were proved in the indictment, the former conviction and judgment constituted a bar to the civil suit, on the ground that oUr laws forbid that any oneshllll be twice punished for the same crime or misdemeanor. That case was cited with apparent approval by the supreme court in C(Jffey v. U. S., 116 U. S. 445,,6 Ct. Rep. 437. ' The circumstance that the civil suit was unde'rone section of the Revised Statutes,and the criminal prosecution tinder another, was not considered to affect the question, nor is any reason 'percejv,ed why should. The decision was based upon the averments that both proceed, ings were for the same acts or transactions.' If the government caUllot be 'permitted to maintain a civil action for the recovery of money denounced' as a penalty' for a violation of one of the sections of the statute, where the same party had been previously prosecuted and, convicted and punished for the same acts or transactions ,under another section, it would seem, for the same 'reasons, to follow necessarily that the government cannot be permitted to maintain a civil action for the forfeiture of the property ·of a person for the acts or'· transactions for which it ·has previously prosecuted, convicted; and punished him. It is,true that in the present case, Young, the person heretofore indicted, coovi<::te4; and punished under section 3451 of the Revised Statutes, iSDQtliplain:;lant, and that the claimants, Wolters. Helm, Austin, in their original answer that they acquired by. purchase aka public sale, made by the assignee of the Fruitvale Wine & Fruit Company' on the 9tp day of June, 1888, all of the property in questiohthen In 'existence, and have since owned the same, together with But it must be remembered that the pleadings show that the alleged fraudulent acts' of commissioIl and omission upon whioh: 'thegovei'rJ.. ment's right, toa decree of forfeiture is based ocourred in they-ea,r 1887" lind that it is the esttiblished doctrine of the supreme court that' the forfeiture took effect immediately upon the commission of nounced by the statute. U. S. v. Stowell, 133 U. S. 1, 10 Sup. Ct. Rep.
UIHTED STATES V. ONE DISTILLERY.
853
The right which the government by this suit asks the court to enforce is the right which vested in it in 1887 to take the property as forfeited by the fraudulent acts on the part of the Fruitvale Wine & Fruit Company. U. S. v. StoweU,8'upTa. When that right accrued, Young, as an owner of stock in that corporation, had an interest in every part and parcel of the property of the company. The government had the right to proceed by civil action to enforce the forfeiture of the property because of the frauds, or to prosecute the parties engaged in it criminally j but for the same acts it could not: do both, according to the ruling inthe cases to which reference has been made. It does not seem to me to be material that Young does not here appear as a claimant. lithe facts be as alleged, and upon the demurrer they are to be taken as true, the government indicted, convicted, and punished him for certain frauds committed in relation to the property in question j and for the same fraudulent acts and omissions that were introduced in proof in support of . that indictment it asks the court in the present suit to decree a forfeiture of the property, the right to which accrued to the government, as has been seen, at the time of the commission of the frauds, and when Young, as a stockholder in the corporation, was interested in every part and parcel of the property. To take the property in which he hasan interest is to take his property; and, for the same acts and omissions, to punish him criminally and also take his property, is, for the samtl offenses, to punish him twice. . . TheciTcumstance that Wolters, Helm, Austin, and Kauffman have not been prosecuted for the fraudulent acts and omissions that are made the basis of the present action does not relieve the government's case of the difficulty. To take the property from one stockholder is to take it from all, and I can see no valid reason why the plea in bar of the action may not be interposed by anyone interested in the property. Indeed, according to the admiralty practice by which. this proceeding is the .court protects and holds the property for. tbe benefit of the true owner, whoever he may be. 2 Conk. Adm. 54. ·.Demurreroverruled.
854
F.EPERAL REPORTER,
vol. 43.·
LEwIS
et al.
V.BA.RNHARDT
et 01.
Court, N. D.
S. D. October Ill, 1890.)
1; WILLfl-DBVISB.......EsTATE TAIL. Under Rev. St. Ill. c. 80, § 6, which .provides that the grantee of an estate tail
shall take an estate for life, and that "the remainder shall pass in fee-simple to the person to whom the estate tail WOuld, on the death of the first 'grantee in tail, first .pass, according to the course of the comlDon law," land devised to the testator's wife and the heirs of her body will, on .her death without issue, pass to the heirs of the testator.
II.:. RECORDS-CONSTRUCTIVB 'NOTIOB· .A.book in the county clerk'a office, showing the names of purchasers of government land in the coUnty, being kept only for purposes of taxation, is not constructive notice to subsequent purchasers. Following Betser v. Rankin, 77 Ill. 2ls9. & VBNDOl;\ AND VENDEB-BoNA FIDE PURORASBR-NoTICE. After a purchaser of land hBS taken possession under his contract and made valuable improvements, the recording of a copy of a will affecting his vendor's title is npt. OQnstructive notice to him, though D,lade. before t.he delivery of his deed, since his title relates back to the execution of his contract. '- ADVERSE POSSESSION-TAX-TITLE.
...Under Rev. St. Ill. o. 88, § 6, which makes seven years' possession and payment of taxes under oolor of title constitute good title, one who purchases in good faith from. the bolder of a tax-title, withOut. notice that his vendor owned an estate for lite iIi .the land at the time of the tax-sale, can, by seven years' possession, and paymeptqf taxes even durIng t.he life of Ju. vendor, obtain good title as against the reversioner. . ,. '. a tax-deed is relied upon onlyu color of title in support. of the statute of limitations, evidence thai the deed was notfounde.d upon a proper judgment is immatei'iaL' , " ' OP TITLB.
Go SDIJ1....coLOR
by Romeo Lewis and. others, heirs of Romeo Lewis, deceased, against Abraham Barnhardt and Josephus Gish. Rev. St. Ill. c. 30, §6" provides that, Hin cases where by the common law any person or persons might hereaftel'Lbecome seised in fee-tail·of any lands, * * * such person or persons * * * shall become seised thereof for his or her natural life only, and the remainder shall pass, in fee-simple absolute, to the person or persons to whom the estate tail 'Would, on the death of tlJefirst grantee, devisee, or donee in tail, first . PIlSS, Mcording to the course of the common law." Thomas Millikin, Pal'flW W. Smith, and Puterbaugh Puterbaugh, for . plaintiffs. Williams k Capen, W.,f. Gibson, and W. G. Randall, for defendants. BLODGETT, J. This is an action of ejectment for the recovery of a tract of abQut 820 acres ofland in Woodford county, in this state. The facts ,material to the questions involved in the case are all admit- . te4 bya written stipulation on file, and are briefly.these: "That in 188.8, Romeo Lewis, then of Oxford, Butler county, Ohio, entered at tbe'United States Janq.offlce in Springfield, in this statt>, the lands in question, together Wltll. other lands, makingaltogt'ther abouj;: sixteE'l?- hundred acres.. ' That Baid Romeo Lewis died testate. at his residence.in Oxford. Ohio, orl 'the' 24th. dayaf June, '1843. left no issue surViving him, but left a widow/,Uilnt,;N::I..ewiB. That on the '8th day of January; 1842, said Romeo Lewis executedlliis.last will and testament; which was duly probated in the proper COU1·t in Butler county, Ohio, on the 13th day. of· July,. 1843, and un· .
At, ;Law,