1. Section 10 of the Prohibition Act, in providing that no
person shall manufacture, purchase for sale, or transport any
liquor with out making a record of the transaction in detail,
applies to persons authorized by other sections of the Act to deal
in nonbeverage liquor under government permit; it was not intended
to add to the crime of unauthorized dealing a second offense
whenever the person so dealing should fail to make a record of his
own wrongdoing. P.
271 U. S.
356.
2. General terms descriptive of a class of persons made subject
to a criminal statute may and should be limited where the literal
application of the statute would lead to extreme or absurd results,
and where the legislative purpose gathered from the whole Act would
be satisfied by a more limited interpretation. P.
271 U. S.
362.
5 F.2d 527 affirmed.
Error to judgments of the district court quashing
indictments.
MR. JUSTICE STONE delivered the opinion of the Court.
The two defendants in error in each of these cases were indicted
in the Eastern District of Pennsylvania for a conspiracy to sell
intoxicating liquors without making a permanent record of the sale,
in violation of § 10, Title II
Page 271 U. S. 355
of the National Prohibition Act of October 28, 1919, c. 85, 41
Stat. 305, 310.
The indictment in No. 726 charged that the defendant Katz
conspired with the defendant Senn to sell for the Stewart
Distilling Company to Senn a quantity of whisky, without making a
record of the sale. A similar offense was charged against the
defendants named in the indictment in No. 727.
Demurrers and motions to quash were interposed to both
indictments on the ground that they failed to charge any crime. In
support of this contention, it was argued that § 10, which requires
a permanent record to be made of sales of intoxicating liquors,
applies only to persons authorized by the National Prohibition Act
to sell alcoholic liquor, and that the indictment failed to allege
that either of the defendants charged with making the sales or the
Stewart Distilling Company held a permit or was otherwise
authorized to sell. The indictments were quashed by the district
court. 5 F.2d 527. The cases come here on writ of error to the
district court, under the provisions of the Criminal Appeals Act of
March 2, 1907, c. 2564, 34 Stat. 1246.
The overt act charged in each indictment was the sale of whisky
by one defendant to the other. This is an offense under the
National Prohibition Act, but, as the defendants in each case were
only one buyer and one seller, and as the agreement of the parties
was an essential element in the sale, an indictment of the buyer
and seller for a conspiracy to make the sale would have been of
doubtful validity.
Compare United States v. N.Y.C. & H. R.
Co., 146 F. 298;
United States v. Dietrich, 126 F.
664;
Vannata v. United States, 289 F. 424, 427. This
embarrassment could be avoided in an indictment for a criminal
conspiracy only if the buyer and seller were charged with
conspiring to commit a substantive offense having an ingredient in
addition to the sale, not requiring
Page 271 U. S. 356
the agreement of two persons for its completion.
See
Chadwick v. United States, 141 F. 225.
Hence, the government takes the position that the seller of
intoxicating liquor is required by the statute to keep a permanent
record of his sales, whether lawful or unlawful, and that failure
to do so is itself a crime, from which it would follow that a
conspiracy to effect a sale without such a record is an indictable
offense. No question is made but that persons authorized to deal in
alcoholic liquors under the Prohibition Act are required to make
permanent records of their transactions. But the government, to
support a charge of conspiracy applicable to buyer and seller,
relies on the literal application of Title II, § 10:
"No person shall manufacture, purchase for sale, sell, or
transport any liquor without making at the time a permanent record
thereof showing in detail the amount and kind of liquor
manufactured, purchased, sold, or transported. together with the
names and addresses of the persons to whom sold, in case of sale,
and the consignor and consignee in case of transportation, and the
time and place of such manufacture, sale, or transportation. The
Commissioner may prescribe the form of such record, which shall at
all times be open to inspection as in this Act provided."
Section 34 provides:
"All records and reports kept or filed under the provisions of
this Act shall be subject to inspection at any reasonable hour by
the Commissioner or any of his agents or by any public prosecutor
or by any person designated by him, or by any peace officer in the
state where the record is kept, and copies of such records and
reports duly certified by the person with whom kept or filed may be
introduced in evidence with like effect as the originals thereof,
and verified copies of such records shall be furnished to the
Commissioner when called for."
To uphold the contention of the government, therefore, the
language of § 10 must be taken to apply not
Page 271 U. S. 357
only to those who hold government permits authorizing them to
deal in intoxicating liquors under a familiar system of regulation,
to whom it admittedly is applicable, but to every criminal violator
of the National Prohibition Act, even though making only a single,
isolated sale. It must be taken also to extend the provisions of §
34, clearly applicable to such permittees, in such a way as to
present the incongruity of a system of records to be kept by
criminal violators of the Act who are not permittees, in a form
which the Commissioner may prescribe, which may be introduced in
evidence on the certification of the person "with whom kept," and
verified copies of which are to be furnished on demand, presumably
by the criminal keeping the record.
We are not now concerned with any question of legislative power
to establish such a system, but only with the question whether it
was the intention of Congress to do so.
All laws are to be given a sensible construction, and a literal
application of a statute which would lead to absurd consequences
should be avoided whenever a reasonable application can be given to
it consistent with the legislative purpose.
See Hawaii v.
Mankichi, 190 U. S. 197,
190 U. S. 212,
and cases there cited. In ascertaining that purpose, we may examine
the title of the act (
United States v.
Fisher, 2 Cranch 358,
6 U. S. 386;
United States v.
Palmer, 3 Wheat. 610,
16 U. S. 631;
Holy Trinity Church v. United States, 143 U.
S. 457,
143 U. S.
462), the source in previous legislation of the
particular provision in question (
United
Seates v. Saunders, 22 Wall. 492;
Viterbo v.
Friedlander, 120 U. S. 707;
United States v. Morrow, 266 U. S. 531,
266 U. S.
535), and the legislative scheme or plan by which the
general purpose of the Act is to be carried out.
See Platt v.
Union Pacific R. Co., 99 U. S. 48,
99 U. S. 63-64;
Bernier v. Bernier, 147 U. S. 242,
147 U. S.
246.
One purpose of the National Prohibition Act was to suppress the
entire traffic in intoxicating liquor as a beverage.
Page 271 U. S. 358
Grogan v. Walker & Sons, 259 U. S.
80,
259 U. S. 89.
But the Eighteenth Amendment did not prohibit the use of
intoxicating liquor for other than beverage purposes, and an
important purpose of the Act, as its title [
Footnote 1] and contents show, was to regulate the
manufacture, transportation, and use of intoxicating liquor for
other than beverage purposes.
Section 3, Title II which prohibits the manufacture, sale, and
possession of intoxicating liquor, expressly provides that:
"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 herein provided, and the commissioner may,
upon application, issue permits therefor. . . ."
To make the prohibitions of the Act effective, and to provide
for the production and use of liquor for nonbeverage purposes, it
became necessary for the government to regulate and supervise those
uses of intoxicating liquor which were not prohibited. Congress had
before it the provisions of the Revenue Law governing distillers,
rectifiers, and brewers, requiring detailed records of all
transactions, and laying down other regulations designed to promote
the effective collection of liquor taxes; it also had before it the
regulatory system devised by the Internal Revenue Bureau for
carrying into effect the prohibitory legislation contained in the
Food Control Act of August 10, 1917, c. 53, 40 Stat. 276, and
subsequent war legislation.
See 21 T.D. 7, No. 2788.
The business affected by this legislation was lawful business,
subject to governmental regulation; records of
Page 271 U. S. 359
transactions were required to be kept, as a condition of
receiving government permission to operate, and such records were a
convenient and necessary means for protecting the interests of the
government with respect to its revenues. When Congress came to
enact the National Prohibition Act, a similar method of permit or
license and a similar system of records afforded a convenient means
for the regulation and control of those dealing with alcoholic
liquors for the nonbeverage purposes as authorized by the
statute.
The reports of the committees of the Senate and House having the
bill in charge, as well as the statute as adopted, indicate clearly
that the purpose of Congress was to take over an established and
well known system of granting permits and requiring reports and
records for the purpose of regulating and controlling such portion
of the liquor traffic as had not been prohibited by the Eighteenth
Amendment and the National Prohibition Act. [
Footnote 2] The
Page 271 U. S. 360
report of the Senate Committee is also persuasive that the
provisions of Title II, § 34, already quoted, relating to "all
records and reports kept or filed under the provisions of this
Act," refer to records and reports required of permittees.
[
Footnote 3] Nowhere in the
reports of the committees does it appear that any such novel
legislation was being proposed as is here contended for by the
government. On the contrary, it is stated in the report of the
House Judiciary Committee, p. 7, that:
"Title 2 for the enforcement of the Eighteenth Amendment has in
it no new or experimental features. Every provision in it has
precedents in state or federal legislation."
The government does not suggest that there is in fact any
precedent in
Page 271 U. S. 361
legislation, state or national, for the interpretation which it
urges here.
Of the thirty-nine sections in Title II of the Act, which deals
with national prohibition, more than half, including the seven
sections which precede § 10, contain provisions authorizing or
regulating the manufacture, sale, transportation, or use of
intoxicating liquor for nonbeverage purposes. [
Footnote 4] These provisions, read together,
clearly indicate a statutory plan or scheme to regulate the
disposition
Page 271 U. S. 362
of alcoholic liquor not prohibited by the Eighteenth Amendment,
in such manner as to minimize the danger of its diversion from
authorized or permitted uses to beverage purposes. These provisions
plainly relate to those persons who are authorized to sell,
transport, use or possess intoxicating liquors under the Eighteenth
Amendment and the provision of § 3 of the Act, already quoted.
No section of the Act requiring records to be made of dealings
in alcoholic liquors relates to any but dealings authorized or
permitted under the statute, unless it be § 10. The question is
thus presented whether the requirement of § 10 that "no person
shall . . . sell . . . liquor without making at the time a
permanent record thereof" is a regulatory measure applicable to
persons authorized to deal in nonbeverage liquors, or whether it
was intended to add to the crime of manufacturing, selling or
transporting, a second offense, whenever the person committing the
crime should fail to make a record of his own wrongdoing. When the
statute is read as a whole and the implications of the latter
interpretation are taken into account, we think that it is not a
reasonable or a fairly admissible interpretation.
General terms descriptive of a class of persons made subject to
a criminal statute may and should be limited where the literal
application of the statute would lead to extreme or absurd results
and where the legislative purpose gathered from the whole Act would
be satisfied by a more limited interpretation.
United States v.
Jin Fuey Moy, 241 U. S. 394;
Holy Trinity Church v. United States, supra; 74 U.
S. Kirby, 7 Wall. 482;
United States v. Palmer,
supra.
In
United States v. Palmer, the defendants, not
citizens of the United States, were indicted for a robbery
committed on a foreign vessel on the high seas, under a statute
which provided that, "if any person or persons shall commit,
Page 271 U. S. 363
upon the high seas, . . . out of the jurisdiction of any
particular state, murder or robbery, . . . " such offender should
be guilty of piracy, and punishable with death. Chief Justice
Marshall pointed out that Congress, under its constitutional power
to define and punish piracy, had authority to make a statute
applicable to the defendants, but, applying the principle of
statutory construction to which we have referred, he held that the
words "any person or persons," although broad enough to comprehend
every human being, could not, in view of the exceptional
consequences of a literal application and the intent of the
legislature, as derived from the title of the Act and a reading of
the whole statute, be construed to apply to persons, not citizens,
who committed offenses on foreign vessels on the high seas.
In
United States v. Jin Fuey Moy, supra, the defendant
was indicted for a conspiracy "to have in . . . possession" of
another person, not registered, a quantity of opium, in violation
of the Opium Registration Act of 1914, which declared it unlawful
for "any person" who had not registered and paid the prescribed tax
to have in his possession or control any of the drug in question.
This Court held that the words "any person not registered" could
not be taken to apply to any person in the United States, but must
be read, in harmony with the purpose of the Act, to refer to
persons required by law to register.
We think the reasoning of these cases applicable here, and that
the words "no person" in § 10 refer to persons authorized under
other provisions of the Act to carry on traffic in alcoholic
liquors. It is not without significance that the Commissioner has
never made any regulation with respect to records of bootlegging
transactions, and that the published regulations contain no
suggestion that § 10 has any application except to persons who hold
permits or are otherwise authorized by law to traffic in
intoxicating
Page 271 U. S. 364
liquor.
See National Lead Co. v. United States,
252 U. S. 140,
252 U. S.
145.
Affirmed.
MR. JUSTICE BRANDEIS dissents.
[
Footnote 1]
"An Act to prohibit intoxicating beverages, and to regulate the
manufacture, production, use, and sale of high-proof spirits for
other than beverage purposes, and to insure an ample supply of
alcohol and promote its use in scientific research and in the
development of fuel, dye, and other lawful industries."
[
Footnote 2]
Report No. 151 of the Senate Judiciary Committee, Aug. 18, 1919,
to accompany H.R. 6810, which became the National Prohibition Act,
contains the following statement on pp 20:
"The provisions requiring those who sell or manufacture liquor
for nonbeverage purposes to secure a permit is a continuation of
the system now enforced by the federal authorities. It is the most
effective means to insure obedience to the law, and prevents the
diversion of liquor for illegal purposes. It is a slight burden on
the law-abiding citizens who are dealing in liquor for legal
purposes."
Report No. 91, part 1, of the House Judiciary Committee, June
30, 1919, to accompany H.R. 6810, contains the following statement
on p. 2:
"Title 2, to enforce prohibition under the Eighteenth Amendment
to the Constitution, contains substantially the same features at
title 1, and in addition a system of permits such as is now in
force under regulations of the Revenue Department, Treasury
Decision 2788, and in the various prohibition codes. These permits
are designed to prevent diversion of liquor from legal to
illegitimate uses. This system greatly lessens prosecution by
making it difficult for persons to obtain liquor except for
legitimate purposes. In addition to the permit system, which is
also provided for in title 3 (the industrial alcohol section), the
Act carries a number of the more essential penal provisions of the
ordinary prohibition codes, such as those against advertising
liquor."
[
Footnote 3]
The Senate Report pages 7-8, contains the following statement
with reference to the provisions of the present § 34 of the
National Prohibition Act:
"The requirement of § 35 [now 34] that the Commissioner file all
the reports, statements, and information required by Title II as a
part of the files of his office in a permanent record,
alphabetically arranged, with an indorsement showing the date when
filed, etc., and to furnish certified copies of such reports,
statements, and information to any person requesting the same, is
deemed by the committee an unnecessary requirement, and one which
will result in cumbering the office of the commissioner with
reports, information, and data which would serve no useful purpose;
that, for all practical purposes, it will be sufficient if all
records and reports kept on file under the provisions of the Act
shall be subject to inspection by the Commissioner or any of his
agents, or by any public prosecutor or any person designated by
him, and that copies of such records and reports, duly certified,
may be introduced in evidence with like effect as the originals
thereof. The committee has amended § 35 [now 34] accordingly.
Section 10, it will be observed, authorizes the Commissioner to
prescribe the form of the permanent record to be made by the
manufacturer, purchaser, seller, or transporter of any liquor, and
requires that such permanent record be at all times open to
inspection by the Commissioner or his agents."
[
Footnote 4]
The following examples may be noted:
§ 4 exempts from the operation of the Act denatured alcohol,
medicinal and toilet preparations, etc. It authorizes the
manufacture of these articles and the purchase and possession of
alcoholic liquors for that purpose under government permit, and
requires the manufacturer to "keep the records, and make the
reports specified in this act and as directed by the
Commissioner."
§ 5 provides for the revocation of permits, if the product
manufactured does not comply with the requirements of § 4.
§ 6 prohibits the sale, purchase, transportation, or
prescription of liquor without a permit from the Commissioner,
issued as prescribed in the section, except the purchase and use
for medicinal purposes and for the treatment of alcoholism. This
section also exempts sacramental wines from the provisions of the
Act, except as to the requirements of § 6 for permits (save for
purchase) and to the requirements of § 10 for the keeping of
records.
§ 7 authorizes physicians to prescribe liquor under government
permit, and requires a record of such prescriptions.
§ 9 authorizes proceedings for the revocation of permits for the
violation of the Act, and § 27 provides that seized liquor may,
under order of the court, be ordered sold to persons holding
permits to purchase.
§ 11 requires manufacturers and wholesale or retail druggists,
to keep, as part of the records required of them a copy of all
permits to purchase on which sales are made, and prohibits them
from selling except to persons having permits to purchase.
§ 12 requires manufacturers of liquor for sale to attach to
every package a label describing its contents.
§ 13 makes it the duty of every carrier to make a record at the
place of shipment of the receipt of any liquor transported, and §
14 requires the packages carried to be labeled in a specified
way.