1. Failure to enter an exception to an order of the district
court overruling pleas of former jeopardy and res judicata
does not preclude their consideration on review where the facts
were agreed to by stipulation entered of record. P. 282 U. S.
2. A tax on retail liquor dealing sought to be recovered under §
701, par. 9, of the Revenue Act of 1924, which was passed in lieu
of a similar provision in the Act of 1918, repeated in the Act of
1921, is properly treated as having been imposed by an Act in force
prior to the enactment of the National Prohibition Act (1919). P.
282 U. S.
3. The "tax" imposed by § 35, Title 2, of the National
Prohibition Act, which provides for the assessment and collection
of a "tax" in "double the amount now provided by law" upon evidence
of an illegal sale under the Act, is not a true tax, but a penalty.
P. 282 U. S.
4. A tax is an enforced contribution to provide for the support
of government; a penalty, as the word is here used, is an exaction
by statute as punishment. If an exaction be clearly a penalty, it
cannot be converted into a tax by calling it such. Id.
5. A statute must be construed, if fairly possible, so as to
avoid not only the conclusion that it is unconstitutional, but also
grave doubts upon that score. P. 282 U. S.
Page 282 U. S. 569
6. In § 5 of the Willis-Campbell Act (1921), by which laws and
penalties respecting taxation of and traffic in intoxicating
liquor, in force when the National Prohibition Act was enacted, are
continued in force, with the proviso that, where any act violates
any such prior law and also the National Prohibition Act,
conviction under one shall be a bar to prosecution under the other,
the word "prosecution" must be construed to include a civil action
to recover a penalty for an act declared to be a crime. P.
282 U. S.
7. Statutes amended are to be read, as to all subsequent
occurrences, as if they had originally been in their amended form.
P. 282 U. S.
8. A civil action to recover taxes imposed by R.S. § 3244 and §
701 of the Revenue Act of 1924, and the additional taxes and
penalties provided by § 35, Title 2, of the National Prohibition
Act, is barred, under § 5 of the Willis-Campbell Act, by a prior
conviction based on the same transaction as the taxes. P.
282 U. S.
37 F.2d 269 affirmed.
Certiorari, 281 U.S. 713, to review a judgment of the circuit
court of appeals which reversed a judgment of the district court
for the government, 2 F.2d 706, in a suit to recover from the
respondent taxes and penalties.
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
Respondent was sued in a federal district court for nonpayment
of taxes and penalties. The petition alleged that he had sold
intoxicating liquor at various times in his restaurant, and by
reason thereof had become a retail liquor dealer and incurred
liabilities as follows: in the sum of $37.50, retail liquor
dealer's tax under Rev. St. § 3244 for a period of nine months,
doubled under § 35,
Page 282 U. S. 570
Title 2, of the National Prohibition Act; $4.68 penalty imposed
by R.S. § 3176, as amended for failure to make and file a return as
a retail liquor dealer; $1,500, special tax under § 701 of the
Revenue Act of 1924 for engaging in the business of retail liquor
dealer in Louisiana contrary to the law of that state, being for a
period of nine months and doubled under § 35; $500, penalty, in
addition to the retail liquor dealer's tax imposed by § 35.
Prior to the commencement of the action, respondent had been
convicted and fined upon an information filed by the United States
under the National Prohibition Act, charging him with the same
unlawful sales of intoxicating liquor set forth in the petition as
the basis for the imposition of the taxes and penalties sought to
be recovered. There is no dispute about the facts. They are alleged
in the petition and, in detail, made the subject of a stipulation
of the parties in the district court. Pleas of former jeopardy and
of res judicata
were overruled by the district court, 26
F.2d 706, a jury was waived, and judgment for the United States
entered for the full amount sued for. The court of appeals reversed
the judgment on the ground that the action was barred by § 5 of the
Willis-Campbell Act. 37 F.2d 269.
The point is made that respondent failed to enter an exception
to the order of the district court overruling the pleas, but, since
the facts were agreed to by stipulation entered of record, the
failure to note an exception to the order will not preclude their
consideration. Certainly it does not appear that an exception was
necessary to direct the mind of the trial court to the precise
point to afford opportunity for reconsideration, which is one of
the functions of an exception. United States v. U.S.
Fidelity Co., 236 U. S. 512
236 U. S. 529
Fillippon v. Albion Vein Slate Co., 250 U. S.
, 250 U. S. 82
And an exception is not necessary to open for our consideration a
question of law apparent on the record, as it is here, where there
Page 282 U. S. 571
in the record to indicate waiver of the respondent's rights.
Denver v. Home Savings Bank, 236 U.
, 236 U. S.
By § 35, Title 2, of the National Prohibition Act, c. 85, 41
Stat. 305, 307 (U.S.C. Title 27, § 52), it is provided that the
"shall not relieve anyone from paying any taxes or other charges
imposed upon the manufacture or traffic in [intoxicating] 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."
Section 5 of the Willis-Campbell Act, c. 134, 42 Stat. 222, 223
(U.S.C. Title 27, § 3), so far as pertinent here, provides:
"That all laws in regard to the manufacture and taxation of and
traffic in intoxicating liquor, and all penalties for violations of
such laws that were in force when the National Prohibition Act was
enacted shall be and continue in force, as to both beverage and
nonbeverage liquor, except such provisions of such laws as are
directly in conflict with any provision of the National Prohibition
Act or of this Act; but if any act is a violation of any of such
laws and also of the National Prohibition Act or of this Act, a
conviction for such act or offense under one shall be a bar to
prosecution therefor under the other."
By § 701, par. 9, of the Revenue Act of 1924, c. 234, 43 Stat.
253, 327 (U.S.C. Title 26, § 206), it is provided that every person
carrying on the business of retail liquor dealer, etc., in any
state, etc., contrary to the laws of such state, etc., or in any
place where the carrying on of such business is prohibited by local
or municipal law shall pay, in addition to all other taxes, $1,000.
Page 282 U. S. 572
was passed in lieu of a similar provision in the Revenue Act of
1918, repeated in the Revenue Act of 1921. The government
accordingly treats the item sought to be recovered under § 701 as
having been imposed by an act in force prior to the National
Prohibition Act. With that view we agree.
Of the four items involved, two unmistakably are penalties, and
are so denominated. The other two, notwithstanding they are called
taxes, are in their nature also penalties. Putting aside for later
consideration the item of $4,68, we consider, for the present, only
the other three items.
By § 35, supra,
it is provided that, upon evidence of
an illegal sale under the National Prohibition Act, tax shall be
assessed and collected in double the amount now provided by law.
This, in reality, is but to say that a person who makes an illegal
sale shall be liable to pay a "tax" in double the amount of the tax
imposed by preexisting law for making a legal sale, which existing
law renders it impossible to make. A "tax" is an enforced
contribution to provide for the support of government; a "penalty,"
as the word is here used, is an exaction imposed by statute as
punishment for an unlawful act. The two words are not
interchangeable one for the other. No mere exercise of the art of
lexicography can alter the essential nature of an act or a thing,
and if an exaction be clearly a penalty, it cannot be converted
into a tax by the simple expedient of calling it such. That the
exaction here in question is not a true tax, but a penalty
involving the idea of punishment for infraction of the law is
settled by Lipke v. Lederer, 259 U.
, 259 U. S.
-562. See also Regal Drug Corp. v. Wardell,
260 U. S. 386
There is nothing in United States v. One Ford Coupe,
272 U. S. 321
Murphy v. United States, 272 U. S. 630
the contrary. The first of these cases was a proceeding to forfeit
an automobile because used in violation of law; the other
Page 282 U. S. 573
was a suit in equity to enjoin the occupation and use of
premises for a year because used in the commission of offenses
under the National Prohibition Act, and to abate the maintenance as
a nuisance. The distinction made by these four cases is that, in
the first two, the purpose of the proceedings was punishment,
while, as to the other two, the purpose in the first case was to
enforce a simple tax, not one which had been, as here, converted,
by a change of its nature, into a penalty, and. in the second case.
the purpose was prevention. Murphy v. United States,
p. 272 U. S. 632
Respondent already had been convicted and punished in a criminal
prosecution for the identical transactions set forth as a basis for
recovery in the present action. He could not again, of course, have
been prosecuted criminally for the same acts. Does the fact that
the second case is a civil action, under the circumstances here
disclosed, alter the rule?
In United States v. Chouteau, 102 U.
, a distiller and his sureties were sued upon a
bond, one of the breaches of which was that the distiller had
removed spirits from his distillery, without first paying the tax
thereon. To this it was pleaded that, before the suit was brought
two indictments had been found against the distiller for the same
removals, and that, upon the recommendation of the Attorney General
the government and accepted a specified sum in compromise and
satisfaction of the indictments, which were thereupon dismissed and
abandoned. The court held that the compromise was the same in
principle as a conviction in the criminal proceedings, and that the
action was barred, and at page 102 U. S. 611
"Admitting that the penalty may be recovered in a civil action,
as well as by a criminal prosecution, it is still as a punishment
for the infraction of the law. The term 'penalty' involves the idea
of punishment, and its character is not changed by the mode in
which it is inflicted, whether by a civil action or a criminal
Page 282 U. S. 574
compromise pleaded must operate for the protection of the
distiller against subsequent proceedings as fully as a former
conviction or acquittal. He has been punished in the amount paid
upon the settlement for the offence with which he was charged, and
that should end the present action, according to the principle on
which a former acquittal or conviction may be invoked to protect
against a second punishment for the same offense. To hold otherwise
would be to sacrifice a great principle to the mere form of
procedure, and to render settlements with the government delusive
In United States v. McKee,
4 Dill. 128, where the
defendant was indicted, convicted, and punished for conspiring with
others to defraud the United States by unlawfully removing
distilled spirits from their distilleries without the payment of
taxes, it was held by Mr. Justice Miller and Judge Dillon, sitting
together, that this constituted a bar to a civil suit to recover
the penalty of double the amount of the taxes of which the
government had been defrauded by means of the conspiracy, the
transactions in both cases being the same. To the same effect,
see United States v. Gates,
25 Fed.Cas. 1263, Case No.
In the light of these decisions, it is clear that, if the
Willis-Campbell Act be so construed as to justify a recovery in
this case, a grave question as to the constitutionality of the act
will be presented. The decisions of this Court are uniformly to the
effect that "[a] statute must be construed, if fairly possible, so
as to avoid not only the conclusion that it is unconstitutional,
but also grave doubts upon that score." United States v. Jin
Fuey Moy, 241 U. S. 394
241 U. S. 401
United States v. Standard Brewery, 251 U.
, 251 U. S. 220
Baender v. Barnett, 255 U. S. 224
255 U. S. 226
Doubts as to the meaning of the Willis-Campbell Act, in respect of
the questions here for consideration therefore must be resolved in
accordance with this rule.
Page 282 U. S. 575
Section 5 of that act continues in force all laws in regard to
taxation of, and traffic in, intoxicating liquor and penalties for
violations of such laws as were in force when the National
Prohibition Act was enacted; but with the proviso that a conviction
for an act or offense under one shall be a bar to prosecution under
the other. The question whether this proviso applies to the present
case turns mainly upon the scope and meaning of the word
"prosecution," since there is no doubt that respondent had been
convicted under the National Prohibition Act of the offense of
making the same illegal sales as those alleged as a basis for the
imposition of the "taxes" and penalties sought to be recovered in
the civil action. The government contends that the word implies a
criminal proceeding, and cannot be extended to include a civil
action. But an action to recover a penalty for an act declared to
be a crime is, in its nature, a punitive proceeding, although it
take the form of a civil action, and the word "prosecution" is not
inapt to describe such an action. In the McKee
Mr. Justice Miller evidently held that opinion,
since he used both the words "offense" and "prosecution" in
characterizing the civil action there under consideration. In any
event, we should feel bound to resolve a greater doubt than we now
entertain in favor of that interpretation of the word so as to
avoid the grave constitutional question which otherwise would
We find no merit in the contention of the government that, as
additional amounts resulted from doubling the taxes imposed by R.S.
§ 3244 and § 701 of the Revenue Act of 1924, and adding penalties,
the civil action, insofar as the additional amounts are concerned,
arose solely under the National Prohibition Act, and not, as the
Willis-Campbell Act contemplates, under preexisting acts. Except
for these prior statutes, there would be no basis for seeking to
impose a liability on respondent for the
Page 282 U. S. 576
amounts sued for in the civil action. Section 35 of the act in
effect amended the preceding statutes in the particulars stated,
and, as thus amended, these statutes now are to be read, as to all
subsequent occurrences, as if they had originally been in the
amended form. Blair v. Chicago, 201 U.
, 201 U. S. 475
Pennsylvania Co. v. United States, 236 U.
, 236 U. S. 36
Kelleher v. French, 22 F.2d
, 347; Cumberland Telephone & Tel. Co. v. City of
200 F. 657, 660-661; Farrell v. State,
N.J.Law, 421, 423-424; Russell v. State,
161 Ind. 481. To
hold that the acts of respondent in question were not violations of
these preceding laws as amended, as well as of the National
Prohibition Act, would be to give a narrow and strained application
to this provision of the Willis-Campbell Act, and to raise the very
doubts in respect of its constitutionality which we are bound to
avoid if reasonably it can be done.
The government seeks to draw a distinction between the item of
$4.68 and the other items on the ground that the former constitutes
a penalty for failure to make and file a return, and respondent was
never charged with, or convicted of, an offense involving that
omission. Neither the court of appeals nor the district court dealt
with the question. The decisions in both courts proceeded upon the
theory that all of the items were subject to the same rule, and the
record plainly indicates that this was and had been the theory of
the government throughout until it came to the preparation of its
final brief in this Court. The distinction now made was not
referred to in the government's petition for certiorari, or in the
brief filed in support of it. The point suggests questions which
the court of appeals should have been given an opportunity to
decide -- that is to say, whether a second jeopardy results from
the fact, if it be such, that the recovery of the penalty depends
upon proof of the same criminal offense of which respondent had
theretofore been convicted, and
Page 282 U. S. 577
whether requiring under penalty a return as a retail liquor
dealer, amounting, as it plainly does, to an admission of criminal
liability, violates the rule against compulsory self-incrimination.
In this situation, we do not now feel called upon to consider or
decide the point. If the government, in view of the foregoing and
of our decision upon the questions in respect of which the writ of
certiorari was granted, shall still desire to press its contention,
it will be given an opportunity to do so by first presenting it to
the trial court.
The judgment of the court of appeals will be affirmed. and the
cause remanded to the district court for further proceedings in
conformity with this opinion, without prejudice to the further
consideration and determination by the district court of the
question of liability in respect of the item of $4.68.