Peter Hand Co. v. United States

2 F.2d 449, 1924 U.S. App. LEXIS 2073
CourtCourt of Appeals for the Seventh Circuit
DecidedJuly 19, 1924
DocketNo. 3410
StatusPublished
Cited by8 cases

This text of 2 F.2d 449 (Peter Hand Co. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peter Hand Co. v. United States, 2 F.2d 449, 1924 U.S. App. LEXIS 2073 (7th Cir. 1924).

Opinion

PAGE, Circuit Judge.

This is an appeal from a decree awarding an injunction to abate a nuisance under the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138¼ et seq.). The defendants (appellants) urge several reasons why the bill should have been dismissed at the close of tho trial, for failure to prove material allegations.

The record shows that tho marshal entered the premises under a search warrant, and that thereafter defendants were operating under a special permit from the court to manufacture and dispose of certain materials on hand. It is claimed that thereby the nuisance, if any had existed, was abated. No authorities are eited, and it is not made clear why defendants, whose property was under surveillance of the court, through its marshal with a seareh warrant, can be heard to say that as to them the nuisance was abated because they were allowed to operate for special and limited purposes under the court’s special permit.

It is contended that there is no proof that the individual defendants were in active control of the business. All defendants filed answers, the individual defendants answering in their individual capacities and as officers and agents of the corporation. From the record it appears that John F. Heuer was president and treasurer, Joseph Watry secretary, Harry P. Heuer vice president, and George Schled brewmaster. There was no denial that they were in active control, as charged, and, under federal equity rule 30, if such matters are not denied, the bill is, as to them, taken as confessed.

[450]*450The contention that there is no evidence of a sale is not well taken. The testimony of the witness Nottoli is that he got a truck load of beer at the brewery from Grasso. He knew Grasso so intimately that he called him Eddie, describes him as manager, and says he paid him for the beer.

It is urged that the charge of manufacture is not sustained, because it is said that the government’s testimony shows that “defendant corporation had a right to manufacture under a government permit.” Defendants were permitted to ask, on cross-examination of a prohibition agent, whose business it seems to have been to watch breweries and not to issue permits, if the brewery had a permit, and he said that it had, to which he added, on suggestion of the district attorney, “so far as I know.” This is very unsubstantial proof of a permit, which, if there was one, wás in the possession of the brewery. Whether the witness referred to the special permit from the court is not clear; but, if the brewery was operating under a license, there is positive evidence in the record that it sold real beer and that it violated the law on |day 23, 1923. Later in the year, in some containers where the brewmaster said there was near beer, real beer was found. It was the duty of the defendants to keep within the law, and when they accepted the permit, if they had one, they accepted the burdens and obligations cast upon them by the law. Section 37 of title 2 of the Volstead Act (Comp. St. Ann. Supp. 1923, § 10138½x) provides:

“In any case where the manufacturer is charged with manufacturing or selling for beverage purposes any malt, vinous, or fermented liquids containing one-half of 1 per centum or more of alcohol by volume, or in any case where the manufacturer, having been permitted by the commissioner to develop a liquid such as ale, beer, porter, or wine containing more than one-half of 1 per centum of alcohol by volume in the manner and for the purpose herein provided, is charged with failure to reduce the alcoholic content of any such liquid below such one-half of 1 per centum before withdrawing the same from the factory, then in either such case the burden of proof shall be on such manufacturer to show that such liquid so manufactured, sold, or withdrawn contains less than one-half of 1 per centum of alcohol by volume. In any suit or proceeding involving the alcoholic content of any beverage, the reasonable expense of analysis of such beverage shall be taxed as costs in the case.”

One accepting a permit under the provisions of the act may not be heard to say that he is not bound by the terms of the act. The burden was upon defendants to show that they had a permit, and that the liquid manufactured, sold, or withdrawn contained less than one-half of 1 per cent, of alcohol by volume.

It is also urged that there is no evidence to show that the corporation or any of its agents or officers knew of the alleged violation of May 23, 1923. One of the men who got beer on that occasion went there at 4:30 in the afternoon, and did not leave until 2:30 or later in the morning. There is evidence that one or more of the officers were there. One with a vivid imagination may see ways in which unauthorized persons may pillage the property of another, take away and remove it without his knowledge or consent, but the evidence repels any such conclusion in this ease. It is the duty of a corporation and its officers, having a permit under the Prohibition Act to dealeoholize, to see to it that the privileges they have are not made the basis of law violations. Here the evidence shows that at 4:30 in the afternoon at least half a dozen trucks and many men went into the brewery of defendant, without force, loaded the trucks with real beer, and then were not permitted to leave, but played cards until 2:30 in the morning, when they left on direction from some one inside the brewery. That the officers were ignorant of such a situation is unbelievable. Defendants put but one witness on the stand, who testified only as to the question of property value. The case is supported by the uneontradicted testimony of the government witnesses and many facts and circumstances shown in the evidence, from which the inferences to be drawn are not favorable to the defendants.

In one instance, it appears that a large number of barréis of real beer were found upon the premises. Notwithstanding the fact that there appears to have been good empty vats into which the. beer might have been placed, the claim is urged that it was put into barrels because of a broken vat. The evidence shows that the near beer and the real beer vats were so close together that in barreling the change from near to real beer might have been accomplished by the shifting of one end of a hose from the near beer vat to the real beer vat, a condition not calculated to ward off suspicion nor to ally, it when once aroused.

Again, from ordinary fences surrounding the premises there grew, from time to time, [451]*451high board fences, surmounted with barbed wire entanglements, which were carried to roofs, sheds, and buildings, that were so low as to possibly afford access to the brewery. On an occasion in 1923, when tho officers visited the plant and asked the privilege of making an inspection in connection with the issuance or cancellation of a government permit, which does not appear, the officers were refused the privilege of making tho inspection. Without giving too much weight to these circumstances, we are of opinion that they do not show much anxiety on the part of the defendants to keep within the law.

Two constitutional questions are raised:

First. That section 22 of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138½k) authorizes the court to “penalize and punish” defendants by depriving them of their property without due process of law. This question has been many times decided adversely to defendants’ contention. U. S. v. Boynton (D. C.) 297 F.

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Cite This Page — Counsel Stack

Bluebook (online)
2 F.2d 449, 1924 U.S. App. LEXIS 2073, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peter-hand-co-v-united-states-ca7-1924.