Page images

dealer, or manufacturer of tobacco or cigars, shall knowingly or willfully omit, neglect, or refuse to do or cause to be done any of the things required by law in the carrying on or conducting of his business, or shall do anything by this Title prohibited, if there be no specific penalty or punishment imposed by any other section of this Title for the neglecting, omitting or refusing to do, or for the doing or causing to be done the thing required or prohibited, he shall pay a penalty of one thousand dollars; and if the person so offending be a distiller, rectifier, or wholesale liquor dealer, all distilled spirits or liquors owned by him or in which he has any interest as owner, and if he be a manufacturer of tobacco or cigars, all tobacco or cigars found in his manufactory shall be forfeited to the United States. [R. S.]

Act of July 20, 1868, ch. 186, 15 Stat. L. Distilled Spirits, (1869) 20 Fed. Cas. No. 164.

11,495. The word “liquor" between the words To work a forfeiture under this section it “wholesale ” and “ dealer” where they last must be made to appear that there had been a appear in this section was added by Act of wilful neglect to do something, or omission Feb. 27, 1877, ch. 69, 19 Stat. L. 249.

to do something, or a refusal to do something, To add to the already existing penalties for required by law in the process of carrying on an offense was not intended by Congress in or conducting the business referred to. U. S. this section, but to provide for omitted cases 1. Three Barrels Whiskey, (1896) 77 Fed. only. This section was “ undoubtedly in Rep. 963. tended to impose upon rectifiers and wholesale Å distiller does not omit, neglect, or refuse liquor-dealers the duty of doing or causing to do or cause to be done anything which to be done everything pertaining to their the law does not require him but some other respective occupations which was necessary, person to do. U. S. v. Thirty-Seven Barrels in order to enable others acting under the Apple Brandy, (1870) 28 Fed. Cas. No. law to do what was required of them. If

16, 466. they failed in this, and there was no other For a violation of section 3320, R. S., this penalty provided for the neglect, they were

section does not provide a penalty, as a specisubjected to the provisions of that section. tion 3289, R. S. WU. S. v. Two Hundred Barli, however, by any other section a specific rels Whiskey, (1877) 95 U. S. 571, construduty was imposed on them, which, if per ing sections 25, 57, and 96 of the Act of July formed, would enable the other parties to act 20, 1868, from which these various Revised in the proper manner, and a penalty was pre

Statutes sections taken. See also U. scribed for the omission to perform such duty, S. 1'. Thirty-Four Barrels Distilled Spirits, they were not to be proceeded against under

(1871) 28 Fed. Cas. No. 16,641. But see U. this section. U. S. v. Two Hundred Barrels S. 1. 133 Casks Distilled Spirits, (1870) 1 of Whiskey, (1877) 95 U. S. 574. See also Sawy. (U. S.) 188; U. S. v. Ninety-Five BarU. S. v. 1,412 Gallons Distilled Spirits, (1873)

rels Distilled Spirits, (1870) 27 Fed. Cas. No. 10 Blatchf. (U. S.) 428; U. S. 1. One Recti 15,889. fying Establishment, (1869) 27 Fed. Cas. For a violation of section 10 of the Act of No. 15,952; U. S. 1'. 133 Casks Distilled July 24, 1897, the remedy is provided by this Spirits, (1870) 1 Sawy. (U. S.) 188; U. S. section. U. S. 1'. 288 Packages Merry World

Ninety-Five Barrels Distilled Spirits, Tobacco, (1900) 103 Fed. Rep. 453. (1870) 27 Fed. Cas. No. 15,889; U. S. v. Rules and regulations promulgated by the Forty-Eight Hundred Gallons Spirits, (1871) commissioner of internal revenue cannot have 4 Ben. (U. S.) 471; Quantity Distilled the effect of bringing a case under the operaSpirits, (1869) 3 Ben. (U. S.) 552.

tion of the penalty provided in this section The person "so offending" is one who had when it is already covered by another statuoffended under the conditions previously tory penalty. U. S. v. Two Hundred Barrels stated, and immediate connection between the Whiskey, (1877) 95 U. S. 571. penalty and the forfeiture, indicated by the Criminal proceedings bar forfeiture. – The conjunction and,” expresses and shows an government has the right to proceed by civil intent to express an addition to the penalty,

action to enforce the forfeiture of the propwherever the penalty of one thousand dollars erty because of the frauds, or to prosecute the has been incurred, and nothing more. U. S. parties engaged in it criminally; but for the 1. 1.412 Gallons of Distilled Spirits, (1873)

same acts it could not do both. The con10 Blatchf. (U. S.) 428.

viction of a stockholder of a corporation, on Knowledge that the Act is a violation of an indictment under section 3451, R. S., is law, and an intention to violate the law, is a bar to a civil action for forfeiture based on not necessary to hold a person a violator of the same fraudulent acts and omissions that the law, but to incur the penalties under this were introduced in proof in support of the insection he must have a knowledge that he is dictment, and such plea in bar may be interdoing or omitting to do the act forbidden or posed by any one interested in the property. required, and intend so to do. U. S. 1. One U. S. 1. One Distillery, (1890) 43 Fed. Rep. Rectifying Establishment, (1869) 27 Fed. 846, affirmed on a question of pleading, Cas. No. 15,952. See also U. S. v. McKim, (1899) 174 U. S. 149. (1869) 26 Fed. Cas. No. 15,693; Quantity



Sec. 3457. [Package inıluded in forfeiture of goods.] In every case where any goods or commodities are forfeited under any internal-revenue law, all casks, vessels, cases, or other packages whatso[e]ver, containing, or which shall have contained such goods or commodities, respectively, shall be forfeitex. [R. S.]

Act of July 13, 1866, ch. 184, 14 Stat. L. 151.

Sec. 3458. [Goods seized may be delivered to marshal before process issues.] Any goods, wares, merchandise, articles, or objects which may be seized, under the provisions of section thirty-four hundred and fifty-three, by any collector or deputy collector, may, at the option of the collector, be delivered to the marshal of the district, and remain in the care and custody and under the control of said marshal, until he shall obtain possession by process of law. And the cost of seizure made before process issues shall be taxable by the court. And where any whisky or tobacco, or other article of manufacture or produce, requiring brands, stamps or marks of whatever kind to be placed thereon, shall be sold upon distraint, forfeiture, or other process provided by law, the same not having been branded, stamped, or marked, as required by law, the officer selling the same shall, upon sale thereof, fix or cause to be affixed the brands, stamps, or marl:s, so required, and deduct the expense thereof from the proceeds of such sale. R. S.]

Act of June 30, 1864, ch. 173, 13 Stat. L. the taxes, is discharged by a seizure and sale 240; Act of July 13, 1866, ch. 184, 14 Stat. of the spirits and the application of the proL. 112.

ceeds to the payment of the tax due thereon. Discharge of bond. — The distiller's ware U. S. v. Ulrici, (1884) 111 U. S. 38. house bond, given to secure the payment of

Sec. 3459. [Bailing of goods seized sale for want of bail.] When any property which is seized under the foregoing provisions of section thirty-four hundred and fifty-three is liable to perish or become greatly reduced in price or value by keeping, or when it cannot be kept without great expense, the owner thereof, or the marshal of the district, may apply to the collector of the district to examine it; and if, in the opinion of the said collector, it shall be necessary that the said property should be sold to prevent such waste or expense, he shall appraise the same; and thereupon the owner shall have said property returned to him upon giving bond in such form as may be prescribed by the Commissioner of Internal Revenue, and in an amount equal to the appraised value, with such sureties as the collector shall deem good and sufficient, to abide the final order, decree, or judgment of the court having cognizance of the case, and

the amount of said appraised value to the collector, marshal, or otherwise, as he may be ordered and directed by the court, which bond shall be filed by said coilector with the United States district attorney for the district in which said proceedings în rem may be commenced: Provided, That in case said bond shall have been executed and the property returned before seizure thereof by virtue of the process aforesaid, the marshal shall give notice of pendency of proceedings in court to the parties executing said bond, by personal service or publication, and in such manner and form as the court may direct, and the court shall thereupon have jurisdiction of said matter and parties in the same manner as if such property had been seized by virtue of the process aforesaid. But if said owner shall neglect or refuse to give said bond, the collector shall issue to a deputy collector or to the marshal aforesaid an order to sell the same; and the deputy collector or marshal shall thereupon advertise and sell the said property at public auction in the same manner as goods may be sold on final execution in said district; and the proceeds of the sale, after deducting the

to pay

reasonable costs of the seizure and sale, shall be paid to the court aforesaid, to abide its final order, decree, or judgment.

judgment. [R. S.] Act of June 30, 1864, ch. 173, 13 Stat. of the District Court to the sureties on a bond L. 241; Act of July 13, 1866, ch. 184, 14 given under this section. A motion made on Stat. L. 112.

a special appearance to quash the notice beThe bond taken under this section is re cause twenty days had not been given as garded as a substitute for the property, but required by rule of the United States Disonly in a case of seizure under section 3153, trict Courts was overruled, as this section supra, and not when judgment stands upon prescribed the mode of proceeding in the case a cause of forfeiture under some other pro as to notice, and not the rule of the court visions of the internal revenue laws. U. S. referred to. U. S. v. 17 Empty Barrels,

Ninety-Two Barrels Rectified Spirits, (1875) 3 Dill. (U. S.) 285. (1871) 8 Blatchf. (U. S.) 480. See also U. The power of sale conferred upon a colS. v. Ninety-Two Barrels Rectified Spirits, lector is ministerial and not judicial; and a (1871) 5 Ben. (U. S.) 323; Tracey 1. Corse, sale made by a collector, in a case 'not within (1874) 58 N. Y. 149.

the statute, neither divests nor confers any Personal service of notice ten days before title.” Tracey v. Corse, (1874) 58 N. Y. 149. the term fixed for trial was given by order

Sec. 3460. [Proceedings on seizure of goods valued at $500 or less.] In all cases of seizure of any goods, wares, or merchardise, as being subject to forfeiture under any provision of the internal-revenue laws, which, in the opinion of the collector or deputy collector making the seizure, are of the appraised value of five hundred dollars or less, the said collector or deputy collector shall, except in cases otherwise provided, proceed as follows:

First. He shall cause a list containing a particular description of the goods, wares, or merchandise seized to be prepared in duplicate, and an appraisement - thereof to be made by three sworn appraisers, to be selected by him, who shall be respectable and disinterested citizens of the United States residing within the collection-district wherein the seizure was made. Said list and appraisement shall be properly attested by the said collector or deputy collector and the said appraisers, for which service each of the said appraisers shall be allowed the sum of one dollar and fifty cents a day, to be paid in the manner provided by law for other necessary charges of collectors.

Second. If the said goods are found by the said appraisers to be of the value of five hundred dollars or less, the said collector or deputy collector shall publish a notice, for three weeks, in some newspaper of the district where the seizure was made, describing the articles, and stating the time, place, and cause of their seizure, and requiring any person claiming them to appear and make such claim within thirty days from the date of the first publication of such notice.

Third. Any person claiming the goods, wares, or merchandise so seized, within the time specified in the notice, may file with the said collector or deputy collector a claim, stating his interest in the articles seized, and may execute a bond to the United States in the penal sum of two hundred and fifty dollars, with sureties to be approved by the said collector or deputy collector, conditioned that, in case of condemnation of the articles so seized, the obligors shall pay all the costs and expenses of the proceedings to obtain such condemnation; and upon the delivery of such bond to the collector or deputy collector, he shall transmit the same, with the duplicate list or description of the goods seized, to the United States district attorney for the district, and said attorney shall proceed thereon in the ordinary manner prescribed by law.

Fourth. If no claim is interposed and no bond is given within the time above specified, the collector or deputy collector, as the case may be, shall give ten days' notice of the sale of the goods, wares, or merchandise by publication, and, at the time and place specified in the notice, shall sell the articles so seized at public auction, and, after deducting the expense of appraisement and sale, he shall deposit the proceeds to the credit of the Secililiy vi tlie Treasury. [R. S.]

[ocr errors]

Act of July 13, 1866, ch. 181, 14 Stat. L. neither compulsory nor exclusive, and a 169; Act of June 6, 1872, ch. 315, 17 Stat. claimant may adopt and pursue any other L. 257.

existing remedy in a case of an alleged unlawThis section is primarily intended to govern ful seizure. Cardinel Smith, (1867) the conduct of the collector in the disposi- Deady (U. S.) 197. tion of goods seized as forfeited to the United The term "goods” is broad enough to States, and in no way affects his liability to cover animate property, and the words an action by the party aggrieved in case of an “ goods, wares,

merchandise" include unlawful seizure. Cardinel 7. Smith, (1867) mules used to effect a secret and unlawful reDeady (U. S.) 197. See North Carolina v. moval of spirits from a distillery warehouse. Vanderford, (1888) 35 Fed. Rep. 282.

Pilcher 1. Faircloth, (1902) 135 Ala. 311. The provisions of the third clause are


Sec. 3461. [Application for remission and return of proceeds distribution.] Within one year after the sale of any goods, wares, or merchandise, as provided in the preceding section, any person claiming to be interested in the property sold may apply to the Secretary of the Treasury for a remission of the forfeiture thereof, or of any part thereof, and a restoration of the proceeds of the sale; and the said Secretary may grant the same upon satisfactory proof, to be furnished in such manner as he shall prescribe: Provided, That it shall be satisfactorily shown that the applicant, at the time of the seizure and sale of the said property, and during the intervening time, was absent, out of the United States, or in such circunstances as prevented him from knowing of the seizure, and that he did not know of the same; and also that the said forfeiture was incurred without willful negligence or any intention of fraud on the part of the owner of said property. If no application for such restoration is made within one year, as herein before prescribed, the Secretary of the Treasury shall, at the expiration of the said time, cause the proceeds of the sale of the said property to be distributed according to law, as in the case of goods, wares, or merchandise condemned and sold pursuant to the decree of a competent court. [R. S.]

Act of July 13, 1866, ch. 184, 14 Stat. L. 169; Act of June 6, 1872, ch. 315, 17 Stat. L. 257.

Sec. 3462. [Search-warrants.] The several judges of the circuit and district courts of the United States, and commissioners of the circuit courts, may, within their respective jurisdictions, issue a search-warrant, authorizing any internal-revenue officer to search any premises within the same, if such officer makes oath in writing that he has reason to believe, and does believe, that a fraud upon the revenue has been or is being committed upon or by the use of the said premises. [R. S.]

Act of July 13, 1866, ch. 184, 14 Stat. L. Compensation of commissioner. This 152.

statute imposes upon the commissioners the All the requirements for search-warrants, duty of issuing suck warrants where proper to be set out in the application, are not application thereof is made, although no comstated in this section. The Fourth Amend pensation is provided, and in case a commisment to the Constitution provides that “no sioner refuses, on proper application, to issue warrants shall issue, but upon probable cause, a search-warrant, the power to remove him supported by oath or affirmation, and par is vested in the court which appointed him. ticularly describing the place to be searched, (1903) 24 Op. Atty.-Gen. 685. and the persons or things to be seized.” (1903) 24 Op. Atty.-Gen. 685.

Sec. 3463. [Detection and punishment of frauds.] The Commissioner of Internal venue, with the approval of the Secretary of the Treasury, is authorized to pay such sums, not exceeding in the aggregate the sum appropriated therefor, as he may deem necessary for detecting and bringing to trial and punishment persons guilty of violating the internal-revenue laws, or conniving at the same, in cases where such expenses are not otherwise provided for by law. [R. S.]

[ocr errors][ocr errors][ocr errors]

Act of March 2, 1867, ch. 169, 14 Stat. L. 473.

A “violation ” of the internal-revenue laws has been committed when there has been an omission by taxpayers to perform a duty required by law, and to expose this omission of duty is a detection of such violation. · Though different degrees of moral delinquency may exist, the effect upon the revenues of the United States is precisely the same whether a tax legally payable is tacitl. withheld or is evaded by active frauds." (1876) 15 Op. Atty.-Gen. 136.

The offer of a reward, in cases which, in the judgment of the commissioner of internal revenue, could not be reached by the ordinary means of dividing forfeitures with informers, is within the authority vested in the commissioner and secretary, and a proper exercise of their official discretion. Williams v. U. S., (1876) 12 Ct. Cl. 192.

Approval of secretáry. - A promise by the commissioner of internal revenue to pay an informer ten per cent. upon moneys which might be collected as the result of information furnished could impose no obligation on the government unless it was approved by the secretary of the treasury, and in such case an allowance by a commissioner — a different person from him who made the promise — of a smaller amount, with the approval of the secretary, is all that the claimant can

recover. Green v. U. S., (1881) 17 Ct. Ci. 238.

An allowance to a claimant of the “sum of $2,000, less $888 paid him whilst in the employ of the government assisting to obtain evidence which resulted in the compromise of the case, leaving $1,112 as a balance; said $1,112 and $888 salary heretofore paid being 10 per cent. of the amount recovered in compromise as aforesaid, to be paid from the appropriation for punishment for violation of internal-revenue laws,” is an allowance of a reward of $1,112. The fact that the commissioner and secretary chose to state the method by which they arrived at this conclusion does not in the least affect the conclusion itself.” Crane v. U. S., (1888) 23 Ct. Cl. 94.

Entitled to reward on verdict of guilty. When the commissioner of internal revenue offered a reward for “ information " which should lead to the “forfeiture” of an illicit distillery, and to the “ conviction” of the person engaged in operating it, an informer became entitled to the reward when a dict of guilty was rendered; and the fact that judgment on the verdict was not prayed for by the district attorney, and on his motion was suspended “on payment of all costs," would not defeat the informer's right. Williams v. U. S., (1876) 12 Ct. CI. 192.


Sec. 3464. [Purchasing for the Government goods subject to tax.] The privilege of purchasing supplies of goods imported from foreign countries for the use of the United States, duty free; which now does or hereafter shall exist by provision of law, shall be extended, under such regulations as the Secretary of the Treasury may prescribe, to all articles of domestic production which are subject to tax by the provisions of this Title. [R. S.]

Privilege of purchasing goods, duty free, taxes, but the article is freed from all the see CUSTOMS DUTIES.

incidents of taxation. U. S. v. Mullins, (C. The withdrawal free of tax does not in C. A. 1902) 119 Fed. Rep. 334. volve the regauging and the adjustment of

Sec. 3465. [Construction of certain revenue acts.] An act entitled "An act further to provide for the collection of duties on imports,” passed March second, eighteen hundred and thirty-three, shall not be so construed as to apply to cases arising under an act entitled “An act to provide internal revenue to support the Government, to pay interest on the public debt, and for other purposes," passed June thirtieth, eighteen hundred and sixty-four, or any act in addition thereto or in amendment thereof, nor to any case in which the validity or interpretation of said act or acts shall be in issue. [R. S.]

Act of March 2, 1833, ch. 57, 4 Stat. L. 632-635; Act of June 30, 1864, ch. 173, 13 Stat. L.


Sec. 5484. [Extortion by internal-revenue informers.] Every person who shall receive any money or other valuable thing under a threat of informing, or as a consideration for not informing against any violation of any internalrevenue law, shall, on conviction thereof, be punished by a fine not exceeding two thousand dollars, or by imprisonment not exceeding one year, or both, at the discretion of the court, with costs of prosecution. [R. S.] Act of July 13, 1866, ch. 184, 14 Stat. L. A state court has jurisdiction under sec

tion 5328, R. S.. of the offense of extorting This section is a part of chapter 6 of title money by threatening to inform, or as LXX of the Revised Statutes.

consideration for not informing, against a



« PreviousContinue »