Appeal from the District Court of the United States for the District of New Jersey; Guy S. Fake, Judge.
Before THOMPSON and BIGGS, Circuit Judges, and DICKINSON, District Judge.
The appellants were tried to a jury upon an indictment of four counts. The jury returned a verdict of guilty as to both appellants upon both the second and fourth counts.
The second count charges a violation of the provisions of section 3258 of the Revised Statutes of the United States, 26 U.S.C.A.§ 1162, modified as hereafter set out, in that the appellants had in their possession and custody and under their control a still set up and had failed to register it with the district supervisor of the Alcohol Tax Unit in the Bureau of Internal Revenue in the Fourth District of the United States.This count also charges that the still was intended by the appellants for the unlawful production of distilled spirits for beverage and commercial purposes. The fourth count of the indictment charges that the appellants concealed distilled spirits, upon which the tax had not been paid, theretofore removed to a place other than a bonded warehouse, with intent to defraud the United States.
The circumstances of the case are as follows: Upon the evening of August 18, 1936, agents of the Alcohol Beverage Control Unit of the State of New Jersey located a still in a building in East Brunswick township, Middlesex county, N.J. This still was not in operation and no one was discovered upon the premises. The agents kept a continuous watch upon the building housing the still until the morning of August 23, 1936, when the appellants entered the building. The agents waited an half hour, entered the building, and placed the appellants under arrest. At this time, Kulas was engaged in disconnecting the pipe between the pump and the cooker on the still; Czarnecki was upon the column itself, engaged in disconnecting it.
Eleven cans of alcohol, designated as "high wine," were found within the building. There was also present a quantity of coke and material ordinarily used to operate a still. The still itself was not in operation. The appellants testified that they had come upon the premises to steal the still, with the intention of selling the material which composed it as junk.
As to the Conviction of the appellants upon the Second Count of the Indictment.
In order to set forth a brief history of section 3258 of the Revised Statutes, we state that this section was derived from the Act of July 20, 1868, c. 186, § 5, 15 Stat. 126, and from the Act of December 24, 1872, c. 13, §§ 1, 2, 17 Stat. 401, 402, was repealed by the National Prohibition Act, 27 U.S.C.A. § 1 et seq., and was re-enacted and revived by the Act of November 23, 1921, c. 134, § 5, 42 Stat. 222, the Willis-Campbell Act, 27 U.S.C.A. § 3, supplemental to the Nationl Prohibition Act. United States v. Stafoff, 260 U.S. 477, 43 S. Ct. 197, 67 L. Ed. 358. By subsequent legislation the designation of that officer of the United States by whom and with whom a still set up should be registered has been changed from time to time. It is the contention of the appellants that section 3528 has been wholly superseded and repealed by implication by article 14 of Regulation, 3, promulgated by Bureau of Prohibition, Treasury Decision No. 54, authorized by the Prohibition Reorganization Act of May 27, 1930, 46 Stat. 427, 27 U.S.C.A.§§ 101-108. They contend this because article 1j r requires every person, including any proprietor of an industrial alcohol plant, having possession, custody, or control of a set up still to register it with the district supervisor, meaning the supervisor of permits in the Bureau of Industrial Alcohol; that therefore the second count of the indictment by its language does not charge an offense against the United States. The appellants further contend that, since article 14 contains exceptions to the requirement of registration (for example glass laboratory stills of small capacity), these exceptions must be negatived in the indictment. In the case at bar, since the count under discussion does not negative the exceptions, the appellants urge that it is insufficient in this re aspect as well. United States v. Carney, D.C., 228 F. 163; United States v. Wood, D.C., 159 F. 187.
The appellants take the position that article 14 of Regulations 3 is still in full force and effect and must be held to be itself unmodified because of the decision of this court in Helvering v. Druggists' Specialities Co., 3 Cir., 76 F.2d 743.
We are unable to accept this conclusion. The decision of this court referred to held simply that title 3 of the National Prohibition Act, 27 U.S.C.A. § 71 et seq., was still in force despite the Twenty-First Amendment. The decision in Helvering v. Druggists' Specialities Company cannot be construed to mean that the provisions of section 3258 of the Revised Statutes, 26 U.S.C.A. § 1162, modified by article 14 of Regulations 3, could not be further modified by regulations properly issued pursuant to the authority of subsequent statutes.
This is what in fact occurred. That provision of section 3258, requiring registration of set up still with the collector of the district, first changed by article 14 of Regulations 3, was further modified. The designation of an officer of the United States to receive registrations was again changed pursuant to the authority of the Act of June 30, 1932, as amended by the Act of March 3, 1933, c. 212, title 2, § 16, 47 Stat. 1517, 1518, 5 U.S.C.A. §§ 124 to 128. Executive Order No. 6639, effective March 10, 1934, 5 U.S.C.A. § 132 note, was issued by the President under the authority of the act referred to. By this Executive Order the Commissioner of Internal Revenue, subject to the approval of the Secretary of the Treasury, was empowered to prescribe regulations for the enforcement of the law under such provisions of the National Prohibition Act and amendments thereto which had not been rendered inoperative by the Twenty-First Amendment. Accordingly, the Commissioner of Internal Revenue issued Treasury Decision No. 4432, the third paragraph of which imposed upon the Deputy Commissioner in charge of the Alcohol Tax Unit and upon his assistants all the rights and duties conferred upon the Secretary of the Treasury and the Commissioner by Executive Order No. 6639, and section 4(a) of the Reorganization Act of March 3, 1927, c. 348, § 4(a), 44 Stat. 1382, 5 U.S.C.A. § 281c(a), 26 U.S.C.A. § 1340, in so far as these relate to duties to be performed under paragraph 2 of the Treasury Decision. the right and duty to receive the registration of set up stills thereupon passed to the Deputy Commissioner of Internal Revenue in charge of the Alcohol Tax Unit. Paragraph 4 of the Treasury Decision, however, provided that all regulations prescribed for the enforcement of the law, therefore administered by the Commissioner of Industrial Alcohol and his assistants or by the Bureau of Industrial Alcohol, should continue in effect as Regulations of the Bureau of Internal Revenue. Paragraph 4 of the Treasury Decision also provided that the term "Supervisor or Supervisors of Permits," whenever used in the regulations, should be held to mean "District Supervisor."
The effect of the changes worked in respect to section 3258 consists of nothing more than a substitution of another officer for registration in lieu of the collector of the district as originally designated by the statute. The change so worked is binding upon the public and fulfills the requirement of law.*fn1 We are therefore of the opinion that the right and duty to receive the registration of set up stills was vested in the district supervisor of the Alcohol Tax Unit as the agent and assistant of the Deputy Commissioner of Internal Revenue at the time referred to in the indictment. If the appellants had in their possession and custody or under their control a still set up and had not registered in with the officer designated, they committed a violation of the law.
The appellants also contend that, if we hold that section 3258 is not repealed by article 14 of Regulations 3, we are then bound to conclude that section 3258 applies only to stills for the production of beverage liquors, and that article 14 of Regulations 3 applies to stills for the production of commercial alcohol. We can see no basis for such a contention. We are of the opinion that section 3258, modified as indicated, applies to all set up stills and that no plausible argument can be ...