(277 F.)

sidered upon the grounds that the acts of Congress under which the same were found were repealed before the finding of the indictment, and that the acts charged to have been committed by them were after the date upon which the Eighteenth Amendment to the Constitution and the Volstead Act became effective. This indictment involved:

(1) A charge that the defendants unlawfully engaged 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.

(2) That the second charge, which was based on section 3279, U. S. R. S., charged that the defendants, failed to keep on the distillery, conducted by them, any sign exhibiting the name or firm of the distiller, etc., as required by statute.

1

(3) The defendant was charged with carrying on the business of distilling within the intent and meaning of the revenue laws of the United States without giving bond required by law, in violation of section 3281, U. S. R. S.

(4) The defendant was charged with unlawfully making a mash fit for the distillation of alcoholic liquors, in a building not a distillery, duly authorized by law, in violation of section 3282, R. S. U. S.

"These statutes long constituted a part of the internal revenue legislation of the United States 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 much revenue from taxing the business, which it sought to realize and protect by the systems of law 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 and sale of intoxicating liquors in the United States for beverage purposes, and confers upon Congress the power to enforce the amendment by proper legislation. To this end Congress passed the 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." U. S. v. Yuginovitch, supra.

This, then, is an interpretation by the Supreme Court of the United States of the intent and purpose of the statutes as they stood prior to the enactment of the Volstead Act, and an interpretation of the intent and purpose of the Volstead Act as well. The court then proceeds, after consideration of the power of Congress under this broad authority to tax intoxicating liquors, notwithstanding their production is prohibited and punished, and notwithstanding the fact that the statute in this aspect had a moral end in view, as well as the raising of revenue, and holds that these present no valid constitutional objection to its enactment, and yet it was not necessary in that case to determine, and it was not determined, that such a tax was actually imposed, or that the penalties imposed by section 35 were or were not intended to be taxes, as a part of the system for obtaining revenue for the government, as distinguished from penalties for the violation of a prohibition statute.

It must be conceded, I think, that Congress, in the exercise of its power to provide for the raising of revenues, might lawfully impose a tax upon illicit distilling of spirituous liquors, and if such an authority had been exercised in a general plan outlined for the raising of revenue in which this was an item that had evidently been duly considered, and an intent and purpose to raise money in that way, it might be determined a tax, rather than a penalty. As said by the Supreme Court in this case, "by the enactment of the Volstead Law, this business, that had been taxed by the government, was destroyed," and it was no longer possible to raise the great amount of revenue theretofore assessed thereon, and that system of raising revenue must necessarily have been abandoned by the passage of the constitutional amendment and the enactment of the Volstead Law. Then, again, one of the outstanding phases of this statute, as suggested in this Supreme Court opinion, was to protect, by this system of laws, this large revenue from taxing this then legitimate business interest. The court specifically emphasizes the fact that this policy was radically changed by the adoption of this amendment and the enactment of this legislation.

[2] Viewing the administration of this statute in the light of the allegations of this bill and the facts that have developed in the investigation of these and other cases, it does not seem reasonable to attribute to Congress an intent and purpose that sovereignty should be exercised by administrative officers of the government for the purpose of taxation-this harsh and drastic procedure by an administrative officer, not in the enforcement of a general plan of taxation for the purpose of raising revenue, but in the power and the exercise of that power by an administrative officer in the exceptional case and independent of any general scheme or plan for the raising of revenue. To say that Congress contemplated this action is to say that they contemplated its administration in the way that has been demonstrated in these and other cases.

The levy of this tax upon the individual that is poor, because he has violated a statute, committed a misdemeanor, violated the police regulations of the country, and without a hearing, without notice, charge up to him large sums of money, immensely more than any of these plaintiffs here can possibly pay, file it in the proper county office, and thus constitute it a lien against anything that the plaintiff then had, or might thereafter acquire, with no hope on the plaintiff's part that he may ever be able to pay it, with no possibility of ever being relieved from it, not even by bankruptcy proceedings, and with an intent and purpose on the part of Congress to forever bar him from the possibility of progress along the lines of developing a home or the necessities of himself or family, if he is married, for the future, all in the name of a desire to raise revenue.

Conceding that Congress foresaw the enforcement of this statute in this way, it would, at the same time, have foreseen that a very negligible amount of revenue would thus be obtained, because of the poverty of the class of people who are naturally charged with a violation of these statutes. On the other hand, if there was an earnest effort on the part

(277 F.)

of Congress to enforce the amendment to the Constitution, to prohibit the manufacture, possession, sale, and traffic in intoxicating liquors, and if in their judgment the imposition of these large penalties, as such, would tend to accomplish an enforcement of the statutes, the rights of those against whom these penalties were unjustly assessed can be preserved, because, if these are penalties, and if that was the intent and purpose of Congress, it is conceded that they cannot be taxed by an officer in the way this statute has been attempted to be enforced. All claims must necessarily be brought in some form of proceeding, and the question of the violation of the statute on the part of the citizen must be judicially determined. I cannot believe that it was ever the intent and purpose of Congress that a deputy collector of internal revenue, taking the word of various special agents, should list the reports made by them, and with that as a foundation, and that only, assess these harsh penalties, indiscriminately, against the citizenship of the country, and then sustain it in the name of the intent and purpose to raise revenue for the support of the government.

I have no antipathy toward this law. I believe that it should be enforced, just as any other law. I believe, however, that a defendant, charged with a violation of this statute, should have his day in court, and an interpretation of this statute that closes to him forever the hope of financial progress, by placing this lien against him, is to imply an intent and purpose on the part of Congress, inconsistent with the intent and purpose of the act. I am, therefore, of the opinion that such of these provisions of the Volstead Act as may be enforced against violators of that law are penalties, and not taxes; that such penalties cannot be assessed by an internal revenue collector, without giving the person charged his day in court. Finally, the procedure by distraint for the collection of these penalties, as threatened in these cases, cannot be sanctioned. There has been no adjudication in court as to the liability of the plaintiffs. This liability is denied. There has been no hearing. Distraint under such circumstances is not due process of law. Thome v. Lynch, supra, and cases cited.

In each of these cases, the motion for preliminary injunction is granted, and counsel may prepare proper preliminary injunctions in said cases, respectively, enjoining and restraining defendant, and all persons acting under his direction or control, pending final determination of said cases, respectively, under and by virtue of warrants for distraint, issued or threatened, as set forth in the complaint in said cases, respectively; said warrant for distraint purporting to be for the purpose of collecting certain alleged taxes and penalties from said. plaintiffs, respectively, as set forth in their respective complaints. The issue of the preliminary injunction in each of said cases is conditioned that the plaintiff, or some one in his behalf, shall make and file in this court a bond or undertaking to the United States, to be approved by the court, or the clerk of this court, for the benefit of all persons interested, in the sum of $150; the said bond or undertaking conditioned that said plaintiff will pay such costs or actual damages as may be awarded by this court to such persons interested, in case it shall be finally determined that the preliminary injunction was erroneously issued.

The restraining order heretofore issued shall remain in force in each case, for the period of 10 days from the date hereof, within which time plaintiff in each case may make and present the bond herein provided for.

UNITED STATES v. VARIOUS DOCUMENTS, PAPERS AND BOOKS OF BRIGGS & TURIVAS et al.

(Circuit Court of Appeals, Seventh Circuit. December 14, 1921.)

No. 2980.

Courts 405 (4)-Circuit Court of Appeals without jurisdiction to review action of Commissioner.

The Circuit Court of Appeals is without jurisdiction to review an order or judgment of a United States Commissioner on a writ of error to the District Court.

In Error to the District Court of the United States for the Eastern Division of the Northern District of Illinois.

Proceeding by the United States against various documents, papers and books taken on search warrant, and claimed by Briggs & Turivas, a corporation. The United States brings error to review an order of a United States Commissioner. Dismissed.

Robert A. Milroy, of Chicago, Ill., for the United States.

John L. Hopkins and William Burry, both of Chicago, Ill., for defendant in error.

Before BAKER, ALSCHULER, and PAGE, Circuit Judges.

BAKER, Circuit Judge. Commissioner Mason of Chicago, on the affidavit and oral testimony of a revenue agent, issued a search warrant on which the marshal seized various documents, papers, and books For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes