A partnership may be prosecuted as an entity under § 222(a) of
the Motor Carrier Act for "knowingly and willfully" violating
certification requirements and motor carrier regulations of the
Interstate Commerce Commission and under 18 U.S.C. § 835 for
"knowingly" violating regulations for the safe transportation in
interstate commerce of explosives and other dangerous articles. Pp.
358 U. S.
121-127.
(a) The words "knowingly and willfully" in § 222(a) and the word
"knowingly" in § 835 do not eliminate partnerships from the
coverage of these statutes. Pp.
358 U. S.
125-126.
(b) A partnership can violate each of these statutes quite apart
from the participation and knowledge of the partners as
individuals. Pp.
358 U. S.
126-127.
Reversed.
MR. JUSTICE HARLAN delivered the opinion of the Court.
This case raises issues similar to those involved in
United
States v. American Freightways Co., 352 U.S. 1020, where a
dismissal of an information charging a partnership entity with
violations of 18 U.S.C. § 835 was affirmed by an equally divided
Court.
Appellees, two partnerships, were charged, as entities, in
separate informations with violations of 18 U.S.C. § 835, which
makes it criminal knowingly to violate Interstate
Page 358 U. S. 122
Commerce Commission regulations for the safe transportation in
interstate commerce of "explosives and other dangerous articles."
Appellee A & P Trucking Company was also charged with numerous
violations of 49 U.S.C. § 322(a) (§ 222(a) of the Motor Carrier Act
of 1935). [
Footnote 1] The
District Court dismissed, on motion, the informations on the ground
that a partnership entity cannot be guilty of violating the
statutes involved. The Government appealed directly to this Court
under the Criminal Appeals Act, 18 U.S.C. § 3731, and we noted
probable jurisdiction. 356 U.S. 917. For reasons set forth below,
we hold that the informations were erroneously dismissed.
49 U.S.C. § 322(a), the comprehensive misdemeanor provision of
the Motor Carrier Act, provides that
"any person knowingly and willfully violating any provision of
this chapter (Part II of the Interstate Commerce
Page 358 U. S. 123
Act), or any rule, regulation, requirement, or order [of the
Interstate Commerce Commission] thereunder, or any term or
condition of any certificate, permit, or license, for which a
penalty is not otherwise herein provided, shall, upon conviction
thereof, be fined. . . ."
The Motor Carrier Act also contains its own definition of the
word "person":
"The term 'person' means any individual, firm,
copartnership, corporation, company, association, or
joint-stock association; . . ."
(Italics supplied.) 49 U.S.C. § 303(a).
18 U.S.C. § 835 provides that
"whoever knowingly violates any such regulation [ICC regulations
pertaining to the safe transport of dangerous articles] shall be
fined not more one year, or both; . . ."
The section makes such regulations binding on "all common
carriers" engaged in interstate commerce. And 1 U.S.C. § 1, part of
a chapter entitled "Rules of Construction" and in light of which §
835 must be read, provides that,
"in determining the meaning of any Act of Congress, unless the
context indicates otherwise -- . . . the words 'person' and
'whoever' include corporations, companies, associations, firms,
partnerships, societies, and joint stock companies, as
well as individuals; . . ."
(Italics supplied.) The word "whoever" in 18 U.S.C. § 835 must,
therefore, be construed to include partnerships "unless the context
indicates otherwise." [
Footnote
2]
We think that partnerships as entities may be proceeded against
under both § 322(a) and § 835. The purpose
Page 358 U. S. 124
of both statutes is clear: to ensure compliance by motor
carriers, among others, with safety and other requirements laid
down by the Interstate Commerce Commission in the exercise of its
statutory duty to regulate the operations of interstate carriers
for hire. In the effectuation of this policy, it certainly makes no
difference whether the carrier which commits the infraction is
organized as a corporation, a joint stock company, a partnership,
or an individual proprietorship. The mischief is the same, and we
think that Congress intended to make the consequences of infraction
the same.
True, the common law made a distinction between a corporation
and a partnership, deeming the latter not a separate entity for
purposes of suit. But the power of Congress to change the common
law rule is not to be doubted.
See United States v. Adams
Express Co., 229 U. S. 381. We
think it beyond dispute that it has done so in § 322(a), for, as we
have seen, "person" in that section is expressly defined in the
Motor Carrier Act to include partnerships. We think it likewise has
done so in § 835, since we find nothing in that section which would
justify our not applying to the word "whoever" the definition given
it in 1 U.S.C. § 1, which includes partnerships. Section 835 makes
regulations promulgated by the ICC for the transportation of
dangerous articles binding on all common carriers. In view of the
fact that many motor carriers are organized as partnerships, rather
than as corporations, the conclusion is not lightly to be reached
that Congress intended that some carriers should not be subject to
the full gamut of sanctions provided for infractions of ICC
regulations merely because of the form under which they were
organized to do business. [
Footnote
3] More particularly, we perceive
Page 358 U. S. 125
no reason why Congress should have intended to make partnership
motor carriers criminally liable for infractions of § 322(a), but
not for violations of § 835. [
Footnote 4]
It is argued that the words "knowingly" (§ 835) and "knowingly
and willfully" (§ 322(a)) by implication eliminate partnerships
from the coverage of the statutes because a partnership, as opposed
to its individual partners, cannot so act. But the same inability
so to act in fact is true, of course, with regard to corporations
and other associations; yet it is elementary that such impersonal
entities can be guilty of "knowing" or "willful" violations of
regulatory statutes through the doctrine of
respondent
superior. Thus, in
United States v. Adams Express Co.,
supra, in which the Adams Express Co., a joint stock
association, was indicted for "wilfully" receiving sums for
expressage in excess of its scheduled rates, Mr. Justice Holmes
said, 229 U.S. at
229 U. S.
389-390:
"It has been notorious for many years that some of the great
express companies are organized as joint stock associations, and
the reason for the amendment hardly could be seen unless it was
intended to bring those associations under the act. As suggested in
the argument for the government, no one, certainly not the
defendant, seems to have doubted that the statute now imposes upon
them the duty to file schedules of rates. . . . But if it imposes
upon them the duties under the words 'common carrier,' as
interpreted, it is reasonable to suppose that the same
Page 358 U. S. 126
words are intended to impose upon them the penalty inflicted on
common carriers in case those duties are not performed. . . ."
"The power of Congress hardly is denied. The constitutionality
of the statute as against corporations is established,
New York
Central & Hudson River R.R. Co. v. United States,
212 U. S.
481,
212 U. S. 492, and no reason
is suggested why Congress has not equal power to charge the
partnership assets with a liability and to personify the company so
far as to collect a fine by a proceeding against it by the company
name. That is what we believe that Congress intended to do. . .
."
The policy to be served in this case is the same. The business
entity cannot be left free to break the law merely because its
owners, stockholders in the
Adams case, partners in the
present one, do not personally participate in the infraction. The
treasury of the business may not with impunity obtain the fruits of
violations which are committed knowingly by agents of the entity in
the scope of their employment. [
Footnote 5] Thus pressure is brought on those who own the
entity to see to it that their agents abide by the law. [
Footnote 6]
We hold, therefore, that a partnership can violate each of the
statutes here in question quite apart from the participation and
knowledge of the partners as individuals.
Page 358 U. S. 127
The corollary is, of course, that the conviction of a
partnership cannot be used to punish the individual partners, who
might be completely free of personal guilt. As in the case of
corporations, the conviction of the entity can lead only to a fine
levied on the firm's assets.
Reversed.
[
Footnote 1]
The information as to appellee A & P Trucking Company
charged in one count an offense under 18 U.S.C. § 835 through the
transportation by truck of chromic acid without the markings or
placardings prescribed by 49 CFR § 77.823(a). It charged in 34
other counts offenses under 49 U.S.C. § 322(a), consisting of
failure to comply with 49 CFR § 191.8, which prescribes physical
examinations and certificates for drivers of trucks (one count),
violation of 49 CFR, 1958 Cum.Pocket Supp., § 193.95(a), which
requires that common carrier trucks be equipped with fire
extinguishers (one count), and violation of 49 U.S.C. § 306(a),
which forbids the operation of a common carrier truck in interstate
commerce without a certificate of convenience and necessity (32
counts). The information as to appellee Hopla Trucking Company
charged two violations of 18 U.S.C. § 835 in that Hopla shipped
methanol, a flammable liquid, without properly marking or
placarding the truck as required by 49 CFR § 77.823(a), and without
its driver's having in his possession a paper showing the
prescribed labels required for the outside containers of the
methanol as required by 49 CFR § 77.817.
Subsequent to the filing of the information against A & P
Trucking Company, 49 U.S.C. § 322(a) was amended to increase the
fines provided for its violation.
See 49 U.S.C. (Supp. V)
§ 322(a).
[
Footnote 2]
It is significant that the definition of "whoever" in 1 U.S.C. §
1 was first enacted into law as part of the very same statute which
enacted into positive law the revised Criminal Code. 62 Stat. 683,
859 (1948). The connection between 1 U.S.C. § 1 and the Criminal
Code, which includes § 835, is thus more than a token one, the very
same statute which creates the crime admonishing that "whoever" is
to be liberally interpreted.
[
Footnote 3]
Congress has specifically included partnerships within the
definition of "person" in a large number of regulatory Acts, thus
showing its intent to treat partnerships as entities.
See
e.g., Civil Aeronautics Act, 52 Stat. 979, 49 U.S.C. §
401(27); Federal Communications Act, 48 Stat. 1066, 47 U.S.C. §
153(i); Shipping Act, 39 Stat. 729, 46 U.S.C. § 801; Tariff Act, 46
Stat. 708, 19 U.S.C. § 1401(d).
[
Footnote 4]
The fact that § 835 provides for imprisonment, as well as fine,
for its violation, whereas § 322(a) provides only for fines, does
not lead to a different conclusion.
Cf. United States v. Union
Supply Co., 215 U. S. 50.
[
Footnote 5]
Since the two informations were held insufficient on their face,
we must, for present purposes, accept as true their allegations
that the offenses charged were not inadvertently committed.
[
Footnote 6]
Gordon v. United States, 347 U.S. 909,, relied on by
appellees, is not the contrary. That case held merely that
individual partners could not be convicted of "willfully" violating
the Defense Production Act of 1950 without a showing that they had
knowledge of the criminal acts of their agents.
Cf. United
States v. Dotterweich, 320 U. S. 277.
Here the Government does not seek to hold the individual partners,
but only the partnerships as entities.
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK, MR. JUSTICE
FRANKFURTER, and MR. JUSTICE WHITTAKER concur, dissenting in
part.
18 U.S.C. § 835, unlike the Motor Carrier Act, has not
explicitly subjected partnerships to criminal liability, and I do
not think that such liability should be implied, for we are dealing
with a penal statute which should be narrowly construed.
As Chief Justice Marshall wrote in
United
States v. Wiltberger, 5 Wheat. 76,
18 U. S. 95,
"The rule that penal laws are to be construed strictly is
perhaps not much less old than construction itself. It is founded
on the tenderness of the law for the rights of individuals and on
the plain principle that the power of punishment in vested in the
Legislative, not in the Judicial, Department."
With that approach, we would not allow this criminal sanction to
attach under 18 U.S.C. § 835. A corporation is an artificial,
legally created entity that can have no "knowledge" itself, and it
said to have "knowledge" only through its employees. On the other
hand, a partnership means A, B, and C -- the individuals who
compose it. In this country, the entity theory has not in general
been extended to the partnership. Judge Learned Hand summarized the
history in
Helvering v. Smith, 90 F.2d 590, 591-592. If
Dean Ames had had his way, the mercantile or entity theory of the
partnership would have prevailed. But those who took up the
drafting of the Uniform Partnership Act after his death adhered to
the common law attitude toward a partnership -- that
Page 358 U. S. 128
it is an aggregation of individuals. That is to say, the Act
adopted the aggregate, rather than the entity, theory. And that Act
is in force in about three-fourths of the States. One who combs the
reports today can find cases espousing the entity theory. But they
are in the minority, and consciously reject the other theory. As
Professor Williston has shown, the main stream of American
partnership law follows the British course of treating the
partnership in the pluralistic sense. The Uniform Partnership Act,
63 U. of Pa.L.Rev. 196, 208. We should therefore assume that this
criminal statute, written against that background, reflects the
conventional aggregate, not the exceptional entity, theory of the
partnership.
We are dealing with a statute where liability depends on
"culpable intent," as stated in
Boyce Motor Lines, Inc. v.
United States, 342 U. S. 337,
342 U. S. 342.
The partners could not be held criminally responsible for the acts
of their employees.
Gordon v. United States, 347 U.S. 909.
The partnership, being no more than the aggregate of the partners,
should stand on the same footing unless Congress explicitly
provides otherwise. Title 1 U.S.C. § 1 defines "person" in any Act
of Congress to include a partnership, "unless the context indicates
otherwise." The context of 18 U.S.C. § 835 does indicate otherwise,
for the Act punishes only those who knowingly violate it. The
aggregate theory of partnership law teaches that there can be no
vicarious criminal liability where no partner is culpable
If the rule of strict construction of a criminal statute is to
obtain, 18 U.S.C. § 835 must be read narrowly to reflect the
prevailing view of partnership law. If the entity theory is to be
applied for the purpose of imposing criminal penalties on
partnership assets, where the partners are wholly innocent of any
wrongful act, it should be done only on the unequivocal command of
Congress, as is the case under the Motor Carrier Act.