1. Congress, under the taxing power, may tax intoxicating liquor
notwithstanding their production is prohibited, and the fact that
it does so for a moral end as well as to raise revenue is not a
constitutional objection. P.
256 U. S.
462.
2. Section 3257 of the Revised Statutes, which, for the purpose
of protecting the revenues, made it an offense for a distiller to
defraud, or attempt to defraud, the United States of a tax on the
spirits distilled by him, and penalized the offense by forfeiture
of the distillery, etc., and heavy fine and imprisonment, was
superseded as respects persons manufacturing spirits for beverage
purposes, by § 35, Title II, of the National Prohibition Law, which
imposes a double tax and an additional penalty of $500 or $1,000
only, thus covering practically the same acts and inflicting a
lighter penalty. P.
256 U. S.
463.
3. The repealing effect of this section of the later act is
determined in full recognition of its declaration that the act
shall not "relieve any person from any liability, civil or
criminal, heretofore or hereafter incurred under existing laws,"
but in the light also of settled principles governing the
construction of penal statutes, the Eighteenth Amendment, and the
provisions of the act itself making unlawful the possession of
intoxicating liquors, or property designed for the manufacture
thereof, and providing for their destruction. P.
256 U. S.
463.
4. Section 3279 of the Revised Statutes, requiring distillers of
spirits to exhibit a sign "Registered Distillery" and punishing
violations by fine, § 3281, making it an offense, punishable by
fine and imprisonment, to carry on the business of a distiller
without giving bond, and § 3282, punishing in like manner the
making of mash in any building other than a distillery authorized
by law, were also superseded by the National Prohibition Law,
insofar as concerns the production of intoxicating liquor for
beverage purposes. P.
256 U. S.
464.
266 F. 746 affirmed.
Page 256 U. S. 451
Error to review a judgment of the district court sustaining a
motion to quash, and a demurrer to, an indictment. The facts are
stated in the opinion,
post, 256 U. S.
457.
Page 256 U. S. 457
MR. JUSTICE DAY delivered the opinion of the Court.
This case is here under the Criminal Appeals Act. 34 Stat. 1246.
The indictment is in four counts.
Page 256 U. S. 458
The first count, based on § 3257 of the Revised Statutes, 6
Comp.Stats. § 5993, charges the defendants with unlawfully engaging
in the business of distillers within the intent and meaning of the
internal revenue laws of the United States, and that in fact they
did distill spirits subject to the internal revenue tax imposed by
the laws of the United States, and did defraud and attempt to
defraud the United States of the tax on said spirits. The second
count, based on § 3279 of the Revised Statutes, 6 Comp.States §
6019, charges that the defendants failed to keep on the distillery
conducted by them any sign exhibiting the name or firm of the
distiller, with the words "Registered Distillery," as required by
statute. The third court, based on § 3281 of the Revised Statutes,
6 Comp.Stats. § 6021, charges the defendants with carrying on the
business of distilling within the intent and meaning of the revenue
laws of the United States without giving the bond required by law.
The fourth count, based on § 3282 of the Revised Statutes, 6
Comp.Stats. § 6022, charges the defendants with unlawfully making a
mash fit for distillation in a building not a distillery duly
authorized by law.
The defendants interposed a motion to quash the indictment upon
the grounds that the acts of Congress under which the same was
found were repealed before the finding of the indictment, and that
the acts charged to have been committed by them were after the date
upon which the Eighteenth Amendment to the federal Constitution and
the Volstead Act became effective. Defendants also filed a demurrer
to the indictment on practically the same grounds. The motion to
quash and the demurrer were sustained by the district court. 266 F.
746.
The sections of the Revised Statutes may be summarized as
follows: Section 3257 makes it an offense to defraud or attempt to
defraud the United States of a tax
Page 256 U. S. 459
upon spirits distilled by one carrying on the business of a
distillery, provides for forfeiting the distillery and the
distilling apparatus and all spirits found in the distillery or on
the distillery premises, and subjects the offender to a fine of not
less than $500 or more than $5,000, and imprisonment of not less
than six months or more than three years. Section 3279 requires
distillers to exhibit on the outside of their place of business a
sign with the words "Registered Distillery." A violation of this
section subjects the offender to a fine of $500. Section 3281 makes
it an offense to carry on the business of a distiller without
having given bond. For such offense the penalty is a fine from
$1,000 to $5,000 and imprisonment not less than six months or more
than three years. Section 3282 makes it penal to make or permit
mash to be made in any building other than a distillery authorized
by law. A violation of this section subjects the offender to a fine
of not less than $500 or more than $5,000, and imprisonment of not
less than six months or more than two years.
These statutes have long been part of the federal internal
revenue legislation, and were passed under the authority of the
taxing power conferred upon Congress by the Constitution of the
United States. At the time of their enactment, it was legal, so far
as the federal government was concerned, to manufacture and sell
ardent spirits for beverage purposes. The government derived large
revenue from taxing the business, which it sought to realize and
protect by the system of laws of which the sections in question
were a part. This policy was radically changed by the adoption of
the Eighteenth Amendment to the federal Constitution, and the
enactment of legislation to make the amendment effective. The
Eighteenth Amendment, in comprehensive and clear language,
prohibits the manufacture or sale of intoxicating liquors in the
United States for
Page 256 U. S. 460
beverage purposes, and confers upon Congress the power to
enforce the amendment by appropriate legislation. To this end,
Congress passed a national prohibition law known as the Volstead
Act. 41 Stat. 305. It is a comprehensive statute intended to
prevent the manufacture and sale of intoxicating liquors for
beverage purposes.
Before taking up the sections of the Revised Statutes, some
provisions of the Volstead Act may be appropriately referred to.
Section 3, Title II, provides that, after the Eighteenth Amendment
to the Constitution of the United States goes into effect, it shall
be illegal to manufacture, sell, barter, transport, import, export,
deliver, furnish or possess any intoxicating liquor except as
authorized in the act. Liquor for nonbeverage purposes and wine for
sacramental purposes may be manufactured, purchased, sold,
bartered, transported, imported, exported, delivered, furnished and
possessed, but only as in the act provided, and the Commissioner of
Internal Revenue may issue permits therefor. The act contains many
provisions to make effective the purposes declared in § 3. Section
25 makes it unlawful to have or possess any liquor or property
designed for the manufacture of liquor intended for use in
violation of the act or which has been so used, and provides that
no property rights shall exist in any such liquor or property. The
same section provides for the issue of search warrants, and if it
is found that any liquor or property be unlawfully held or
possessed, or had been unlawfully used, the liquor and all property
designed for the unlawful manufacture of liquor shall be destroyed
unless the court otherwise orders. Section 29 provides that any
person who manufactures or sells liquor in violation of Title II of
the act shall for a first offense be fined not less than $1,000, or
be imprisoned not exceeding six months, and for a second or
subsequent offense shall be fined
Page 256 U. S. 461
not less than $200 or more than $2,000 and be imprisoned for not
less than one month nor more than five years.
In Title III, elaborate provision is made for the production of
alcohol in industrial alcohol plants. It provides for the taxation
of such alcohol, and excepts industrial alcohol plants and bonded
warehouses for the storage and distribution of industrial alcohol
from certain sections of the Revised Statutes.
It is well settled that, in cases of this character, the
construction or sufficiency of the indictment is not brought before
us.
United States v. Keitel, 211 U.
S. 370;
United States v. Stevenson,
215 U. S. 190. For
the purpose of interpreting the statute, we adopt the meaning
placed upon the indictment by the court below.
United States v.
Colgate & Co., 250 U. S. 300. As
that court evidently construed the statutes upon the assumption
that the charges had relation to intoxicating liquors intended for
beverage purposes, we shall follow that view of the indictment in
determining whether the former statutes are still in force.
Section 35,
* in its first
sentence, repeals
Page 256 U. S. 462
all prior acts to the extent of their inconsistency with the
National Prohibition Act, to that extent and no more, and provides
that no revenue stamps or tax receipts shall be issued in advance
for the illegal manufacture or sale of intoxicating liquors, and
that, upon evidence of such illegal manufacture or sale, the tax
shall be assessed in double the amount now provided by law, with an
additional penalty of $500 as to retail dealers and $1,000 as to
manufacturers, and that the payment of such tax or penalty shall
not give the right to engage in the manufacture or sale of such
liquors, or relieve any one from criminal liability.
That Congress may, under the broad authority of the taxing
power, tax intoxicating liquors notwithstanding their production is
prohibited and punished we have no question. The fact that the
statute in this aspect had a moral end in view as well as the
raising of revenue presents no valid constitutional objection to
its enactment.
License Tax
Cases, 5 Wall. 462,
72 U. S. 471;
In re Kollock, 165 U. S. 526,
165 U. S. 536;
United States v. Jin Fuey Moy, 241 U.
S. 394;
United States v. Doremus, 249 U. S.
86. The question remains concerning the applicability of
§ 3257, involving the right to punish for attempting to defraud the
United States of a tax -- did Congress intend to punish such
violation of law by imposing the old penalty denounced
Page 256 U. S. 463
in § 3257, or as provided in the new and special provision
enacted in the Volstead Act?
It is contention of the government that § 35 saves the right to
prosecute as to taxes, as well as the acts charged as violative of
the other sections of the Revised Statutes, because of the phrase
with which the section concludes: " . . . nor shall this act
relieve any person from any liability, civil or criminal,
heretofore or hereafter incurred under existing laws."
It is, of course, settled that repeals by implication are not
favored. It is equally well settle that a later statute repeals
former ones when clearly inconsistent with the earlier enactments.
United States v.
Tynen, 11 Wall. 88. In construing penal statutes,
it is the rule that later enactments repeal former ones practically
covering the same acts, but fixing a lesser penalty. The concluding
phrase of § 35, by itself considered, is strongly indicative of an
intention to retain the old laws. But this section must be
interpreted in view of the constitutional provision contained in
the Eighteenth Amendment and in view of the provisions of the
Volstead Act intended to make that amendment effective.
Having in mind these principles and considering now the first
count of the indictment charging an attempt to defraud and actually
defrauding the government of the revenue tax, we do not believe
that the general language used at the close of § 35 evidences the
intention of Congress to inflict for such an offense the punishment
provided in § 3257, with the resulting forfeiture, fine, and
imprisonment, and at the same time to authorize prosecution and
punishment under § 35 enacting lesser and special penalties for
failing to pay such taxes by imposing a tax in double the amount
provided by law, with an additional penalty of $500 on retailers
and $1,000 on manufacturers. Moreover, the concluding words of the
first paragraph of § 35, as to all the offenses charged, must
Page 256 U. S. 464
be read in the light of established legal principles governing
the interpretation of statutes, and in view of the provisions of
the Volstead Act itself making it unlawful to possess intoxicating
liquors for beverage purposes, or property designed for the
manufacture of such liquor, and providing for its destruction. We
agree with the court below that, while Congress manifested an
intention to tax liquors illegally as well as those legally
produced, which was within its constitutional power, it did not
intend to preserve the old penalties prescribed in § 3257 in
addition to the specific provision for punishment made in the
Volstead Act.
We have less difficulty with the other sections of the prior
revenue legislation under which the charges, already set forth, are
made. We think it was not intended to keep on foot the requirement
as to displaying the words "Registered Distillery" in a place
intended for the production of liquor for beverage purposes which
could no longer be lawfully conducted, nor to require a bond for
the control of such production, nor to penalize the making of mash
in a distillery which could not be authorized by law.
The questions before us solely concern the construction of the
statutes involved, under an indictment pertaining to the production
of liquor for beverage purposes, and we think they were correctly
answered in the opinion of the court below. It follows that its
judgment is
Affirmed.
* Section 35:
"All provisions of law that are inconsistent with this act are
repealed only to the extent of such inconsistency and the
regulations herein provided for the manufacture or traffic in
intoxicating liquor shall be construed as in addition to existing
laws. This act shall not relieve anyone from paying taxes or other
charges imposed upon the manufacture or traffic in such liquor. No
liquor revenue stamps or tax receipts for any illegal manufacture
or sale shall be issued in advance, but, upon evidence of such
illegal manufacture or sale, a tax shall be assessed against, and
collected from, the person responsible for such illegal manufacture
or sale in double the amount now provided by law, with an
additional penalty of $500 on retail dealers and $1,000 on
manufacturers. The payment of such tax or penalty shall give no
right to engage in the manufacture or sale of such liquor, or
relieve anyone from criminal liability, nor shall this act relieve
any person from any liability, civil or criminal, heretofore or
hereafter incurred under existing laws. The commissioner, with the
approval of the Secretary of the Treasury, may compromise any civil
cause arising under this title before bringing action in court,
and, with the approval of the Attorney General, he may compromise
any such cause after action thereon has been commenced."
This section has given rise to different constructions in the
federal courts; in some, it has been held that the National
Prohibition Act has repealed the old revenue laws.
United
States v. Windam, 264 F. 376;
United States v.
Pughac, 268 F. 392;
United States v. Stafoff, 268 F.
417;
Reed v. Thurmond, 269 F. 252.
Contra, United
States v. Sohm, 265 F. 910;
United States v. Turner,
266 F. 249;
United States v. Sacein Rouhana Farhat, 269 F.
33.