Case Name: JONES v. UNITED STATES
Court: United States Court of Appeals for the Fourth Circuit
Jurisdiction: United States
Decision Date: 1909-03-12
Citations: 170 F. 1
Docket Number: No. 875
Parties: JONES v. UNITED STATES.
Judges: Before GOFF and PRITCHARD, Circuit Judges, and BOYD, District Judge.
Reporter: Federal Reporter
Volume: 170
Pages: 1–14

Head Matter:
JONES v. UNITED STATES.
(Circuit Court of Appeals, Fourth Circuit.
March 12, 1909.)
No. 875.
Internal Revenue (§ 40 ) — Violation of Revenue Daws — Place of Sale os Diquob.
A retail liquor dealer who has his internal revenue tax paid stamp duly posted in his place of busines: is not subject to prosecution for carrying on business without paying the special tax therefor because of the shipment of a quantity of liquor from his stock on an order received by mail by an express company C. O. P. to the purchaser at another place. In such case the sale is completed, and the property passes when the goods are delivered to the carrier; the collection and transmission of the price being merely an incident of the express business.
[Ed. Note. — For other cases, see Internal Revenue, Dec. Dig. § 40. ]
Pritchard, Circuit Judge, dissenting.
In Error to the District Court of the United States for the Northern District of West Virginia, at Clarksburg.
Melvin G. Sperry, for plaintiff in error.
Reese Blizzard, U. S. Atty., and E. M. Showalter, Asst. U. S. Atty.
Before GOFF and PRITCHARD, Circuit Judges, and BOYD, District Judge.
For other eases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
BOYD, District Judge.
.Charles H. Jones, the plaintiff in error, the defendant below, was indicted jointly with one J. R. Hickman (the two composing the firm of Jones & Hickman) on the charge of carrying on the business of retail liquor dealer without payment of the special tax imposed by law. Section 3242a, Rev. St. (U. S. Comp. St. 1901, p. 2095). Jones was tried separately on this indictment at Clarksburg, in the Northern District of West Virginia, at the October term, 1908, of the United States District Court for said District, was convicted by the jury, and was sentenced by the court to pay a fine of $100 and to be imprisoned in a jail for 30 days. The case is before us on a writ of error to review the action of the trial court in refusing to instruct the jury as requested by the defendant, and also upon exception to instructions given by the court to the jury.
The case went to the jury on the facts disclosed by the testimony offered by the government (the defendant did not introduce any testimony); the said facts being in substance as follows:
The firm of Jones & Hickman (composed of C. H. Jones and J. R. Hickman) was a retail liquor dealér in Clarksburg, W. Va., in the year 1905. The said firm had its located place of business at Clarksburg, and it had paid for, procured, and had posted in said place the special' tax stamp required by the internal revenue laws of the United States, and the said stamp covered the time of the sale hereinafter mentioned. That in or about the month of December, 1905, one U. T. Horton, residing at Grafton, W. Va., sent a written. order by mail addressed to Jones & Hickman at Clarksburg, W. Va., directing the said firm to ship him (Horton) at Grafton a half gallon of whisky by express C. O. D.; the price of the' whisky being $2. In response to this order, Jonhs &'Hickmari segregated from the stock in their place of business at Clarksburg the half gallon of whisky so ordered, put it in a package, and delivered it to the express company's agent at Clarksburg, consigned to U. T. Horton, Grafton, W. Va., C. O. D. .The package reached Grafton in due course, and was there delivered by the express agent to Horton- upon the payment of $2, the price of the whisky, and the express charges for freight; and the $2, the price of the whisky, was thereafter remitted by the express company to Jones & Hickman at Clarksburg.
Upon this state of facts the defendant moved the court to charge the jury as follows:
"That the shipment of liquor made by the defendant from his place at Clarksburg, in Harrison county, to th? town of Grafton, in Taylor county, by the United States Express Company C. O. D., and upon the written order of the purchaser living at Grafton, directing the same to be so shipped, was a sale at Clarksburg at the storehouse or saloon of the defendant, and not a sale at Grafton. "
The court refused to give the instruction, to which defendant's counsel excepted. The court then charged the jury as follows:
"Gentlemen, the court instructs you: That a sale involves at least, three elements: First, on the part of the purchaser, a consent to buy; second, on the part of the seller a consent to sell; third, the delivery of the article; and ordinarily, fourth, the payment of the purchase price, and that all of those elements enter into a sale. That a whisky seller who has license to sell in Clarksbiifg and receives an order can send it to the person who orders it in the ordinary course of-business and run the risk of the man's paying, in the ordinary course of business, but, if he sends it O. O. I>. — in other words, makes of the express agent his agent to complete that sale and deliver it in case it is paid for at Grafton — that then he is guilty of selling at Grafton, and not at Clarksburg."
To this instruction as given by the court the defendant's counsel then and there duly excepted. ' The assignments of error are based upon bills of exception as above.
There is but a single question presented in this case, and that is whether the transaction detailed constituted a sale of liquor at Grafton. In other words, whether Jones & Hickman, who were doing a lawful business as retail liquor dealer in Clarksburg, violated the law by taking a half gallon of whisky from the stock in their place of business and delivering it to the express company at Clarksburg for shipment upon Horton's order to him at Grafton C. (3. D. The disposition of this question rests entirely upon where the sale was made. Was it made at Clarksburg when tlie liquor was taken from the stock of the dealer in its lawful place of business as ordered by Horton, or at Grafton where Horton received the package and paid to the express agent the amount of the C. O. D. and the express charges for carriage? It is insisted by the United States attorney in his argument (by brief) that the sale to Horton was not consummated at Clarksburg, that the contract was not completed until the package of liquor reached Grafton, and was there delivered to the purchaser upon the payment by him of the price. It is true that, itnder local prohibitory laws of some of the stales, the place of delivery of spirituous liquors has been made the place of sale, and the courts of these states have upheld these laws, but aside from these we have found no declaration to that effect from any source which wc consider sufficiently authoritative to bind us. In our opinion the bargain was struck and the sale was completed at Clarksburg. The defendant's firm received Horton's letter, in which he ordered the liquor, stated the price, directed the manner of shipment and the method of payment. By the terms of the order the sale was consummated at the place of business in Clarksburg, and the express company was constituted the agent of the purchaser to transport the article purchased, and to receive and remit to the seller the price. We find this view of transactions of the character involved here very forcibly presented in a number of decisions by the Supreme Court of the state of West Virginia, notably in the case of State v. Flanagan, 38 W. Va. 53, 17 S. E. 792, 22 L R. A. 430, 45 Am. St. Rep. 820, in which the court held:
"A licensed liquor dealer doing business as such in cue county is no' liable 1o indictment in another county for retailing liquors therein without a license where he shipped by express O. O. D. to a person in the latter county a package of whisky, as per his order by postal card, sent through the mail, and which was received In the former county. Such facts show that the sale was made in the former county, and not in the latter."
And also in the case of State v. Davis, 62 W. Va. 500, 60 S. E. 584, 14 L. R. A. (N S.) 1112, decided by the Supreme Court of Appeals of West Virginia in November, 1907, from which we quote as follows:
"A sale by a retail dealer in intoxicating liquors, in which delivery is made within the town or county in which he has a license, in fulfillment of an order received and accepted at the place of business designated in his license from his .stock of goods kept in that place, is deemed by the law a sale at the place of business, and not a sale at the place of delivery, unless it appears that the place of delivery was agreed upon as the place of sale."
The principle is- also fully sustained in a leading Pennsylvania case. Commonwealth v. Fleming, 130 Pa. 138, 18 Atl. 622, 5 L. R. A. 470, 17 Am. St. Rep. 763. In the opinion in that case our view is distinctly-stated in the following language:
"Where a purchaser orders goods sent him C. O. D. and the order is accepted by the seller, and goods delivered to the carrier, the sale on the part of the seller is complete. When the purchaser orders goods sent him O. O. D. and the order is accepted by the seller and the goods delivered to the carrier, the latter becomes the agent for the receipt and transmission of the price. The sale is complete on the part of the seller. And, whether the carrier receives the price or not at the time of delivery, he is liable to the seller for the price. A licensed liquor dealer who receives an order from a purchaser residing in another county where the dealer has no license to send him liquor C. O. D., and accepts the order and delivers the liquor to a carrier under agreement to collect on delivery, cannot be convicted of selling liquor without a license in the county where the purchaser resides, as the sale is complete on the part of the dealer when he delivers the liquor to the carrier at his place of business."
In the case of the United States v. Lackey (C. C.) 120 Fed. 577, Judge McDowell, of the Western District of Virginia, held that, where' "a licensed liquor seller received orders from customers living in a. place where he was not authorized to sell, and filled such orders by. separating the liquor from his stock in his place of business, and delivering the packages, marked with the customers' names, to a private carrier, to-be carried to the customers and to be delivered at their places of residence on payment of the price, under such circumstances the sales were completed in the seller's place of business, where he was licensed to sell." State decisions almost without number could be collected sustaining the general proposition that upon an order for goods to be shipped by the vendor to the vendee the sale-is complete when such goods are delivered to the carrier. In the case of Ober & Sons, v. Smith, 78 N. C. 313 (reprint 274), the Supreme Court of that state, Faircloth, J., delivering the opinion, holds that:
"As soon as an order for goods is accepted by tbe vendor, tbe contract is completed without further notice to the vendee; and such contract is fully performed on part of vendor by delivery of the goods in good condition to the-proper carrier. A delivery to a carrier designated by the vendee is of the same legal effect as a delivery to the vendee himself."
And in Gwyn v. Railway Company, 85 N. C. 429, 39 Am. Rep. 708, Chief Justice Smith delivering the opinion of the court, it is decided that the sale of a specific chattel by words "in praesenti" transfers the vendor's title to the vendee with a right to retain possession until the purchase money is paid, in the absence of any contrary intent expressed or implied. In this last case the court cites with approval Ober v. Smith, supra. In another case, that of the Norfolk Southern Railway v. Barnes, 104 N. C. 25, 10 S. E. 83, 5 L. R. A. 611, Shepherd, J., delivering the opinion of the court, it is held that where a buggy was. sold by A. to B., and delivered to a carrier by the vendor to be delivered to the vendee upon the payment of the price, as soon as the vehicle was delivered to the carrier, the right of property passed to the vendee, and the right of possession remained in the vendor until the price was paid. And the same doctrine is reiterated in Bank v. Miller, 106 N. C. 347, 11 S. E. 321. And the doctrine is also laid down as' a general principle in both Benjamin and Hilliard on Sales.
We do not need to further cite declarations of the local courts to support the principle involved. The question, however, we are considering has not been directly before the Supreme Court of the United States, and therefore we have not the benefit of a decision of that court. There are several decisions, however, of the Supreme Court under the interstate commerce act in which the reasoning employed tends strongly to fortify the view we entertain. Notably the case of the American Express Company v. Iowa, 196 U. S. 133, 25 Sup. Ct. 182, 49 L. Ed. 417. The transaction involved in that case was a shipment by the American Express Company of four packages of intoxicating liquors from Rock Island, Ill., to Tama, Iowa, C. O. D., $3 to be collected on each package atul 35 cents for carriage on each. These packages upon their arrival at Tama were seized in the hands of the express agent by the state authorities on the ground that they contained intoxicating liquor held by the express company for sale. The Supreme Court of the state of Iowa held that the seizure was legal, but upon writ of error the Supreme Court of the United Slates reversed that judgment. In that case reference is made to the case of Caldwell v. North Carolina, 187 U. S. 622, 23 Sup. Ct. 229, 47 L. Ed. 336. This was a case in which Caldwell was representing a Chicago company, which shipped pictures and frames to Greensboro, N. C., upon order. At Greensboro the company had this agent, who received the merchandise, put the pictures and frames together, and delivered them to the purchasers who had ordered them from Chicago. The state authorities sought to collect a tax from Caldwell, the agent, as a dealer in North Carolina. The Supreme Court held that he was not liable.
In the opinion in that case the court says:
"It would seem evident that if the vendor had sent the articles by an express company, which should collect on delivery, such a mode of delivery would not have subjected the transaction to state taxation. The same could be said if the vendor himself or by a personal agent bad carried and delivered the goods to the purchaser."
When the Supreme Court declared that, if these goods shipped to Greensboro had been sent C. O. D., the transaction would have not been subject to state taxation, what did it mean? The court certainly did not intend to declare that, under the authority vested in Congress to regulate interstate commerce, legislation could be enacted which would deprive the state of North Carolina of its power to levy a tax upon sales of specific articles made within the limits of the state, nor can we believe that when the court held that a C. O. D. express package delivered to the vendc-c by the carrier, at the place of destination, could not be made the subject of taxation by the state in which the point of delivery was located as a sale in such state, the law still remained that such a delivery constitutes a sale at the place of destination which would subject the transaction to a tax on the part of the United States. It seems to us to follow, therefore, that what the court did intend to say was that where orders were sent from Greensboro to the Chicago concern directing the shipment of certain goods to the person sending the order, and the Chicago con- cera did ship in obedience to. the order and sent the goods by express to Greensboro C. O. D., the transaction was consummated in Chicago, and was therefore not taxable as a sale in North Carolina.
The case of the Norfolk & Western Railway Company v. Sims, 191 U. S. 441, 24 Sup. Ct. 151, 48 L. Ed. 254, is a case altogether in line with the Caldwell Case in support of the position we take. In this last case a resident of North Carolina ordered from a corporation in Chicago a sewing machine. The machine was shipped under a bill of lading to the order of the buyer, but this bill of lading was sent to the express agent at the point of delivery in North Carolina, with instructions to surrender the bill on payment of a C. O. D. charge. The contention was that the consummation of the transaction by the express agent in transferring the bill of lading upon payment of the C. O. D. charge was a sale of the machine in North Carolina, which subjected the company to a license tax. The contention was held untenable, and the contract of sale held to be completed in Chicago. Also in the case . of the Adams Express Company v. Kentucky, reported in 206 U. S. 129, 27 Sup. Ct. 606, 51 L. Ed. 987, it is held that:
"A statute of Kentucky, making penal all shipments of liquor 'to he paid for on delivery, commonly called O. O. D. shipments,' and further providing that the place where the money is paid or the goods delivered shall be deemed to be the place of sale, and that the carrier and his agent delivering the goods shall be jointly liable with the vendor, is as applied to shipment from one state to another an attempt to regulate interstate commerce, and beyond the power of the state."
It is true that these decisions we have cited by the Supreme Court of the United States were rendered in construing and applying the interstate commerce act, and yet we must conclude that, if the Supreme Court entertained the opinion that a package of goods sent by express C. O. D. in obedience to an order from the consignee to the shipper that süch a transaction did not constitute a sale until the package reached its destination and was delivered to the consignee upon the payment ,of the C. O. D. charges, these decisions would have contained some expression to that effect. On the contrary, however, the court especialty in the case last cited, indirectly at least, discusses the proposition we have in the case before us. In the Kentucky case the state alleged that the liquor was being shipped into the state by the express company, and that the alleged consignee did not order the goods. In regard to this the Supreme Court, Mr. Justice Brewer delivering the opinion, says:
"We do not mean to intimate that an express company may not also be engaged in selling liquor in a state contrary to its laws, or that the fact that the consignee did not order a shipment might not be evidence for a jury to consider upon the question whether the company was not, in addition to its express business, also selling liquor contrary to the statutes."
We understand from this language that, where a bona fide order had been sent and the goods shipped in response to it, that completed the transaction so far as the sale was concerned. But, if the express company without orders carried the goods and delivered them, that such might be shown ás tending to prove that the company itself was the dealer, and the sale was made by the express company to the person to whom it delivered the goods. The expressions of the Supreme Court which we have quoted discredit the suggestion that a C. O. 15. package regularly sent upon a bona fide order is sold at the place of delivery. If such were the law, not only would the legal dealer in liquor who delivered his goods upon order to a carrier for shipment to a point other than his place of business be guilty, but the carrier's agent, who is the instrumentality for the delivery of the liquor and the receipt of the price, at the place of the destination would also be guilty of a violation of the law. We cannot construe the law so as to lead to such a result. In our case the express company acted simply as a common carrier, transported the package of liquor from Clarksburg to Grafton, there to be delivered to the purchaser; the collection of the C. O. U. charges and the transmission of the money to the seller being a mere incident of the express business. We may say as a general proposition that actual delivery of a chattel is not in all cases necessary to the consummation of a sale. The mutual assent of the parties to the contract that the property in the chattel is to pass from the seller to the buyer for the money or price offered constitutes a sale at common law. Therefore, when the defendant's firm received Horton's order at Clarksburg where a legal business was being conducted by his firm as a retail liquor dealer and the spirits ordered by Horton were separated from the stock, packed and delivered to the express agent, the sale was completed, and, as stated above, the express company was the agent of the purchaser to carry the spirits, deliver them to Horton, receive the price, and transmit it to the seller.
Mr. Benjamin in his work on Sales, § 302, discussing this proposition, cites as authority the case of Dutton v. Solonionson, 3 Bos. & P. 383, which says:
"It was tmitad as already settled law that, where a vendor delivered goods to a carrier by order of the purchaser, the appropriation is determined, the delivery to the carrier is a delivery to the vendee, and the property vests immediately."
We conclude, therefore, that the District Court was in error in its refusal to give the defendant's prayer for instruction to the jury, and also in error in the instruction as given by the court to the jury.
The judgment of the District Court is therefore reversed.