Source: https://supreme.justia.com/cases/federal/us/282/568/
Timestamp: 2019-04-20 08:17:44+00:00

Document:
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. 570.
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. 571.
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. 572.
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. 574.
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. 575.
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. 576.
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. 575.
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.
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.
in the record to indicate waiver of the respondent's rights. Denver v. Home Savings Bank, 236 U. S. 101, 236 U. S. 103-104.
"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."
"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."
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.
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, supra, 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?
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 and useless."
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. 15,191.
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. S. 210, 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.
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 case, supra, 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 arise.
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. S. 400, 201 U. S. 475; Pennsylvania Co. v. United States, 236 U. S. 351, 236 U. S. 36; Kelleher v. French, 22 F.2d 341, 347; Cumberland Telephone & Tel. Co. v. City of Memphis, 200 F. 657, 660-661; Farrell v. State, 54 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.
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.

References: § 701
 § 35
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 § 3244
 § 701
 § 35
 § 5
 § 3176
 § 701
 § 35
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