Source: https://www.law.cornell.edu/supremecourt/text/321/383
Timestamp: 2019-04-25 03:59:43+00:00

Document:
JOHNSON et al. v. YELLOW CAB TRANSIT CO.
Argued: Jan. 6, 7, 1944.
We may assume that because of the clean hands doctrine a federal court should not, in an ordinary case, lend its judicial power to a plaintiff who seeks to invoke that power for the purpose of consummating a transaction in clear violation of law. 4 But this does not mean that courts must always permit a defendant wrongdoer to retain the profits of his wrongdoing merely because the plaintiff himself is possibly guilty of transgressing the law in the transactions involved. 5 The maxim that he who comes into equity must come with clean hands is not applied by way of punishment for an unclean litigant but 'upon considerations that make for the advancement of right and justice.' Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245, 54 S.Ct. 146, 148, 78 L.Ed. 293. It is not a rigid formula which 'trammels the free and just exercise of discretion.' Ibid., 290 U.S. pages 245, 246, 54 S.Ct. page 148, 78 L.Ed. 293. Therefore, before deciding the applicability of the maxim to the case at hand, we must examine the particular transactions and circumstances involved together with the federal laws which are alleged to taint these transactions with illegality.
It is first contended that purchase and delivery of the liquors was in violation of U.S.C., Title 10, § 1350, 10 U.S.C.A. § 1350, set out in the margin. 6 The agreed facts, summarized above, sufficiently show that the transactions were not in violation of this statute.
Petitioners next argue that the liquor transactions here involved were in violation of the assimilative crimes statute. 7 This statute, it is said, adopts all of the various penal statutes of Oklahoma relating to liquor and makes them the federal law applicable to the Fort Sill Reservation. Cf. United States v. Press Publishing Company, 219 U.S. 1, 31 S.Ct. 212, 55 L.Ed. 65, 21 Ann.Cas. 942; Franklin v. United States, 216 U.S. 559, 30 S.Ct. 434, 54 L.Ed. 615. Petitioners' argument as to the applicability of the assimilative crimes statute raises at least three distinct questions, no one of which is easily resolved: (1) Which, if any, of the Oklahoma penal statutes are so designed that they could be adopted by the assimilative crimes statute and applied to Fort Sill? 8 See opinions of Circuit Court of Appeals, supra; cf. Murray v. Joe Gerrick & Co., 291 U.S. 315, 54 S.Ct. 432, 78 L.Ed. 821, 92 A.L.R. 1259. (2) If there are Oklahoma statutes which could be so adopted, are all or any of them in conflict with federal policies as expressed by Acts of Congress other than the assimilative crimes statute or by valid Army Regulations 9 which have the force of law? 10 Cf. Stewart & Co. v. Sadrakula, 309 U.S. 94, 99-104, 60 S.Ct. 431, 433 436, 84 L.Ed. 596, 127 A.L.R. 821. (3) Assuming that certain Oklahoma statutes are adaptable, and are not inconsistent with federal policies, would such statutes make penal the liquor transactions here stipulated to have taken place? Inextricably involved in each of the three questions is the further problem of whether certain of the Oklahoma liquor statutes may be inconsistent with Oklahoma's constitution as interpreted by the Oklahoma Supreme Court. See opinions of the Circuit Court of Appeals, supra; Ex parte Wilson, 6 Okl.Cr. 451, 119 P. 596; Morse v. State, 63 Okl.Cr. 445, 77 P.2d 757.
Nor is it any answer to say that the carrier should be compelled to sue in the Oklahoma state courts to reclaim the liquors in order to give the Oklahoma courts the opportunity collaterally to pass upon the question of whether these liquor transactions violate the federal assimilative crimes statute. That broad question, though some parts of it involve a consideration of the proper scope of the state law adopted by the federal government, is in the final analysis a question of the correct interpretation of a federal criminal statute, and therefore an issue upon which federal courts are not bound by the rulings of state courts. People of Puerto Rico v. Shell Co. (P.R.), Limited, 302 U.S. 253, 266, 58 S.Ct. 167, 173, 82 L.Ed. 235. Indeed Congress has vested in the federal courts exclusive jurisdiction over the trial of all federal crimes. Judicial Code § 256 as amended, 28 U.S.C.A. § 371. And so, even if the carrier could bring suit in an Oklahoma state court to reclaim the liquor, a point which is itself subject to some doubt, 11 the federal District Court should not for that reason refuse relief in the present suit.
The ultimate question in this part of the case is whether the carrier, whose complete good faith is in no way questioned, should have the court's doors shut to it. So to hold would be to say that the state officials, who so far as this record shows, had no search warrant or judicial process of any kind, 12 could retain liquors which they seized without authority of law. We do not find here any 'unconscientious or inequitable attitude' on the part of the carrier. International News Service v. Associated Press, 248 U.S. 215, 245, 39 S.Ct. 68, 74, 63 L.Ed. 211, 2 A.L.R. 293. And so far as this record shows, the carrier, in seeking relief in the courts against the unlawful seizure, has proceeded in the only 'practicable and adequate way' 13 available.
The facts establish that which was done, if it had been done in Oklahoma proper, would under its laws have constituted a misdemeanor. Delivery of the liquor on the Reservation would therefore be an offense under the federal criminal law by virtue of the Act of June 6th, 1940, 54 Stat. 234, whereby Congress made applicable to the Reservation the penal laws of Oklahoma in existence on February 1, 1940, 18 U.S.C. 468, 18 U.S.C.A. § 468. But even if there were doubt that the importation of the liquor into the Reservation under the circumstances of this record would offend the Criminal Code of the United States, on the ground that the act if committed within the jurisdiction of Oklahoma 'by the laws thereof in force on February 1, 1940 * * * would be penal', equity should resolve the doubt in favor of law by denying the extraordinary remedy of injunction instead of resolving it against law by granting the injunction.
'Whoever * * * shall do * * * any act or thing which is not made penal by any laws of Congress, but which if committed or omitted within the jurisdiction of the State, Territory, or district in which such place is situated, by the laws thereof in force on February 1, 1940, and remaining in force at the time of the doing * * * of such act or thing, would be penal, shall be deemed guilty of a like offense and be subject to a like punishment.' 18 U.S.C. 468, 18 U.S.C.A. § 468.
There is no such law. Long before the Twenty-first Amendment, Congress did provide that 'The sale of or dealing in, beer, wine or any intoxicating liquors by any person in any post exchange or canteen or army transport or upon any premises used for military purposes by the United States, is hereby prohibited.' Act of February 2, 1901, § 38, 31 Stat. 748, 758, 10 U.S.C. 1350, 10 U.S.C.A. § 1350. Plainly, the purpose of this legislation is not to supplant social policies in regard to alcoholic liquor in the various States within which the many federal enclaves are located except to the extent of providing minimum regulations to restrict the free dealing in liquor at all Army posts including those within wet States. The specific barrier thus erected by Congress against the liberal liquor policies of some States should not now be used as a qualification of the generality of the Assimilative Crimes Statute in order to serve as a barrier against the prohibitory laws of other States. No such policy can be drawn from the Act of 1901quite the opposite is implied. And assuming that the military could assert such a policy in the interest of Army morale, there is wholly lacking any manifestation that the Army deems it necessary for the morale of its officers that at Fort Sill conduct should be permitted which if committed in the surrounding territory of Oklahoma would offend its penal laws. So far as the War Department has indicated a policy, its policy like that of the Assimilative Crimes Statute is to adopt on military reservations the laws of their respective States. Thus, in reference to A.G. 250.1, § VI, par. 4 (1-20-43) of Circular No. 29 of the War Department, Jan. 25, 1943, provides: 'Beer of an alcoholic content not in excess of 3.2 per centum by weight may be sold or dealt in upon any of the mentioned premises unless a State enactment of the State in which the premises are located prohibits the sale of or dealing in such beer throughout the entire State.' And the Judge Advocate General has said that 'War Department policy does not favor sale of such (3.2) beer by exchanges in States where its sale is absolutely prohibited * * *.' Bulletin of the Judge Advocate General of the Army, July 1942, p. 100, § 310.
In my view therefore it was an inequitable exercise of discretion to issue this injunction. Of course, 'Equity does not demand that its suitors shall have led blameless lives.' Loughran v. Loughran, 292 U.S. 216, 229, 54 S.Ct. 684, 689, 78 L.Ed. 1219. But where the relief sought is not as to something past and collateral, but where it is the very means, as is the case here, for completing an outlawed transaction, a court of equity should withhold its aid and not become the promoter of wrongdoing. The possible illegality of the seizure of the liquor by the Oklahoma enforcement officers is quite irrelevant to our problem. 'A question of public policy is presentednot a mere adjudication of adversary rights between the two parties.' Weil v. Neary, 278 U.S. 160, 171, 49 S.Ct. 144, 149, 73 L.Ed. 243. The abstention which equity exercises, as it should here, under the shorthand phrase of the 'clean hands doctrine' is not due to any desire to punish a litigant for his uncleanlines. 'But the objection that the plaintiff comes with unclean hands will be taken by the court itself. It will be taken despite the wish to the contrary of all the parties to the litigation. The court protects itself.' Mr. Justice Brandeis in Olmstead v. United States, 277 U.S. 438, 485, 48 S.Ct. 564, 575, 72 L.Ed. 944, 66 A.L.R. 376. It is hardly seemly for a federal court to order the return of liquor seized with full knowledge by the court that the carrier would use the liquor to share in the commission of a misdemeanor. The penal statute here applicable is a police regulation violation of which ought not to be furthered by a federal court. While its violation does not imply moral turpitude, Congress has required that army officers should also conform to the law of a State on which military reservations are located in matters that are outside military concern.
The Oklahoma liquor statutes pertaining to liquor imports provide one illustration of the difficulties inherent in this question. These penal statutes are designed to enforce a system of licensing such imports by special permits issued by a state agency. Okl.Stat.1941, Title 37, §§ 4148. Importation of liquors without a special permit is made penal. Ibid., §§ 41, 46. To hold, therefore, that the assimilative crimes statute adopts Oklahoma's penal liquor laws the Court might further have to hold that that statute compels federal officials on the Fort Sill Reservation to apply for and obtain state permits before they can lawfully import any liquors for any purpose. And a strong argument might be made that had Congress intended such a drastic result, it would have considered the problem and used more express language. See Note 7, supra; Senate Report No. 1699, Senate Judiciary Committee, 76th Cong., 3d Sess.; House Report No. 1584, House Judiciary Committee, 76th Cong., 3d Sess. Cf. Collins v. Yosemite Park Co., 304 U.S. 518, 533, 58 S.Ct. 1009, 1016, 82 L.Ed. 1502.
At least one other provision of Oklahoma legislation may well be found to outlaw the delivery of the shipment for the completion of which the carrier is seeking the aid of the federal court. Chapter 16, p. 16, § 1 of the Laws of 1939 makes it 'unlawful for any person * * * to import, bring, transport, or cause to be brought or transported into the State of Oklahoma, any intoxicating liquor * * * without a permit first secured therefor as hereinafter provided.' 37 O.S.A. § 41. Permits may be issued, under § 2 of that Act, only for the importation of alcohol for scientific, mechanical, medicinal or sacramental purposes. 37 O.S.A. § 42. Since the importation of the liquor here involved cannot possibly be said to fall within the classifications for which permits are granted, these statutory provisions as applied to the circumstances in this case are penal, and as such, may be applicable to the Reservation under the Assimilative Crimes Act. 54 Stat. 234, 18 U.S.C. 468, 18 U.S.C.A. § 468. See infra.
Debra Faye LEWIS, Petitioner, v. UNITED STATES.
UNITED STATES of America, Appellant, v. Gerald H. SHARPNACK.
PRECISION INSTRUMENT MFG. CO. et al. v. AUTOMOTIVE MAINTENANCE MACHINERY CO.

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