Court Opinion

ID: 8854913
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:26:20.325181+00
Date Added: 2024-06-11T17:05:37.504582
License: Public Domain

MORROW, District: Judge
(dissenting). In the title of the Revised Statutes of the United States, relating to internal revenue, special taxes are required to be paid by persons engaged in or carrying on certain specified occupations. Section 3232 provides that:
“No persons shall he engaged in or carry on any trade or business hereinafter mentioned until he has paid a special tax therefor in the manner hereinafter provided.”
The fourth subdivision of section 3244, as amended by section 18 of the act of February 8, 1875, and as further amended by section 4 of the act of March 1, 1879, provides that:
“Wholesale liquor dealers shall each pay one hundred dollars. Every person who sells or offers for sale foreign or doine.stie distilled spirits, wines, or malt liquors, otherwise than is hereinafter provided, in quantities of not less than five wine gallons at the same time, shall be regarded as a wholesale liquor dealer.”
*998Section 3242, as amended by section 16 of the act óf February 8, 1875, provides:
“That any person who shall carry on the business of a * * * wholesale liquor dealer, * * * without having paid the special tax as required by law, * * * shall, for every such oifense, be fined,” etc.
Williams, Dimond & Co. are shipping- and commission merchants, doing business in San Francisco. On the 17th day of October, 1892, the commissioner of internal revenue assessed a special tax against the firm, amounting to $200, together with a penalty of 50 per cent, amounting to $100, making a total assessment of $300. The assessment was made on the ground that the firm had been carrying on the business of wholesale liquor dealers during the two years ending June 30, 1893; and the question, in the circuit court, was whether, under the provisions of the Revised Statutes, the firm of Williams," Dimond & Co. had been so engaged in and carrying on the business of wholesale liquor dealers during the period mentioned. The case was tried by the court without a jury, and the findings'of fact and conclusions of law were separately stated. The court found specifically, as a fact, that the defendants in error had not been engaged in the business of wholesale liquor dealers in the following findings:
“(4) Tbe plaintiffs were not, during any portion of tbe term comprised in tbe said assessment of tax, engaged in tbe wholesale liquor business, nor did they carry on such business, or sell or offer for sale foreign or domestic distilled spirits or wines in quantities of less than five wine gallons at tbe same time, nor did they, during any portion of said time, contemplate so doing. * * *”
“(9) In executing such orders in the manner already stated, tbe plaintiffs were not engaged in the business of wholesale liquor dealers, nor did they at any time sell or offer for sale foreign or domestic distilled spirits or wines in quantities of not less than five wine gallons at the same time.”
The orders, referred to in the last finding, were orders-to purchase wines or liquors, received by Williams, Dimond & Co. from foreign correspondents, and executed by them, as agents or brokers, through regular wholesale liquor dealers. The court further found, in the seventh finding, that:
“The plaintiffs were not purchasers for their own use in such cases, and did not at any time claim or assert title to the purchases made under orders from tbe foreign correspondents. They did not carry any liquor in stock, nor would they sell liquor, or offer to obtain liquors for any person applying to them for such purpose. Except under the circumstances hereinbefore stated, — that is, upon the request of a foreign correspondent, — tbe plaintiffs had nothing to do with the purchase or handling of liquors.”
The court found, as a conclusion of law, that the tax complained of was unlawfully assessed; and that the plaintiffs were entitled to a judgment.
Where a case is tried by the court without a jury, its findings upon questions of fact are conclusive, and this court can consider only the rulings of the lower court on matters of law, properly presented in a bill of exceptions, and the further question, where the findings are special, whether the facts found are sufficient to sustain the judgment rendered. Tyng v. Grinnell, 92 U. S. 467, 469; Stanley v. Supervisors, 121 U. S. 535, 547, 7 Sup. Ct. 1234; *999Smith v. Gale, 144 U. IS. 509, 525, 12 Sup. Ct. 674. The findings In this case to which I have referred are clearly sufficient to support the judgment, and, in my opinion, no inferences can be drawn from the other findings of the court, relating to the purchases made by the defendants in error as agents of foreign correspondents, that will overcome or contradict the specific findings that they did not carry on the business of selling or offering for sale foreign or domestic distilled spirits, wines, or malt liquors. But, assuming that findings Nos. 4 and 9 should be properly treated as conclusions of law, rather than as findings of fact, I am still of the opinion that the defendants in error are not within the provisions of the statute. It is alleged in the complaint, and admitted in the answer, that they were, at all times mentioned, copartners, doing business as shippers and commission merchants. They had no store or place where distilled spirits, or wines, or malt liquors were kept for sale or in stock. They did not, in the language of the statute, "engage in or carry on the business” of selling or offering for sale distilled spirits, wines, or liquors. The provision and penalty were intended to apply, in my opinion, to liquor dealers who sell as a business; that is to say, to those who distinctively engage in ihe business of selling and offering for sale spirits, wines, or liquors, and not to a person or firm who, while engaged in another and entirely different commercial pursuit, occasionally, and as a matter of convenience to their foreign correspondents, act as their agents or brokers in the purchase from regular dealers of wines and liquors for shipment to such foreign correspondents. In 5 Am. & Eng. Enc. Law, p. 123, a “dealer” is defined as “one who makes a business of buying and selling; he is the middleman between the producer and consumer of a commodity.” A single act of buying and selling is not: sufficient. Overall v. Bezeau, 37 Mich. 566. The mere fact that'the transaction, as between the defendants in error and the foreign correspondents for whom they bought, was, practically, a purchase, and that the profit to the defendants consisted in the commission which they charged their customers for this transaction, loses its force, so far as the applicability of the section of the statute is concerned, when it is noticed that the original vendors charged the defendants with the amount of the purchase, and were paid by them, because they did not know, and would not give credit to, the foreign correspondents. In Slack v. Tucker & Co., 23 Wall. 321, a firm of commission merchants sold by samples, and the sales were their own. The goods came into their possession as soon as it was necessary to fulfill these contracts of sale. The court, distinguishing between a factor who had possession of the goods and a broker who had not, held that the merchants in that case were wholesale dealers. Applying this distinction in the present case, the defendants in error would not toe liable to the tax.