64 F. 481 | W.D. Pa. | 1894
During the years 1893 and 1894, Armour & Co. paid an annual tax to the United States of $480, as wholesale dealers in oleomargarine, and as such made monthly returns to the government of the amounts of their1 sales, with the names of the purchaser's. On October 1.8, 1894, E. P. Kearns, Esq., collector of internal revenue for the Twenty-Third district of Pennsylvania, being of opinion such returns were false and fraudulent, summoned C. B. Clark, resident manager of said firm, to appear before him to testify -in a certain case arising under the internal reverme law's, depending before me, wherein Armour & Co., wholesale dealers in oleomargarine, wiro were required as such by law
The question presented is one of grave moment. It is earnestly contended that such an inspection is lawful; that it is necessary for the efficient administration of the revenue service, and the collection by the government of its just dues; that only dishonest men will object to its allowance; that the honest one has nothing to fear from such an examination. But this is begging the entire question. Books and papers are the private and absolute prop
“Papers are the owner’s goods and chattels. They are his dearest property^ and are so far from enduring a seizure that they will hardly bear an inspection.”
In Re Pacific Railway Commission, 32 Fed. 241, Justice Field said:
“Of all the rights of the citizen, few are of greater importance, or more essential to his peace and happiness, than the right of personal security; and that involves, not merely protection of his person from assault, hut exemption of his private affairs, books, and papers from tile inspection and scrutiny of others. Without enjoyment of this right, all others would lose half their value.”
So highly was this right to one’s papers esteemed that, within certain limits, il. was preserved from legislative action in the constitution,- — the fourth amendment, — “the right: of the people to be secured in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated.” The exclusive possession of them is reckoned one of the absolute rights of the citizen. Such possession is not to be invaded, save for proper cause; and any individual, public or private, who seeks to invade it, must have the warrant of legal authority for so doing. If no such warrant can be found, the silence of the books is an unanswerable argument against the validity of the claim. Nor should such claim rest upon mere implication or analogies. The absolute rights of the citizen remain absolute until the íaw, by as absolute and certain provisions, abridges those rights.
Applying these fundamental principles to the case in hand, we may say that, the books in question are the private property of the respondents; and no one can take them from their custody, or has a right to inspect them, against their consent, without express warrant of law, and the burden of showing such a right rests on him who claims it. Does such right exist in the collector in the present case? The contention of the government is that by section 3 of (he act of 2d August, 1886 (24 Stat. 209), a special tax was imposed on wholesale dealers in oleomargarine; that section 41 of the act of 1st October, 1890, provided for their keeping such books and making such returns as might be prescribed by the commissioner of internal revenue with the approval of the secretary of the treasury; that such regulations were prescribed 12th March, 1891 (Internal Revenue Regulations, ser. 7, No. 9, p. 44), as follows:
“Wholesale dealers in oleomargarine will make monthly returns on form 217, showing in detail the serial numbers of packages and number of pounds of oleomargarine received direct from manufacturers and other wholesale dealers, also the quantity disposed of, with the name and address of each person to whom sold or returned.”
It is then contended: That wholesale dealers in oleomargarine, making these returns, are subject to the provisions of section 3173, Rev. St, which provides, in part, as follows:
“And if any person on being' notified or required as aforesaid shall neglect or refuse to render such list or return within Ihe time required as aforesaid, or whenever any person who is required to deliver a monthly or other return of objects subject to tax fails to do so at the time required, or delivers any*484 return, which, in tire opinion of the collector, is false or fraudulent, or contains any undervaluation or understatement, it shall be lawful for the collector to summon such person or any other person, having possession, custody or care of books of account containing entries relating to the business of such person, or any other person he may deem proper, to appear before him and produce such books at a time and place named in the summons, and to give testimonj'’ or answer interrogatories, under oath, respecting any objects liable to tax or the' returns thereof.”
That sections 3174, 3175, Rev. St., provide for the service of such summons, and for the application' for an attachment to the district judge, in case of a refusal by the person summoned to comply, and that the foregoing constitute a warrant for the action of the collector.
The determination of the present case, in onr view, involves three questions (for it is to be noted that Armour & Oo. do not claim exemption from the production of their books by reason of the fact that they would tend to criminate them), as follows: First. Does section 3173, Rev. St, apply to wholesale dealers in oleomargarine? Second. If so, is the monthly return required of such dealer, viz. one “showing in detail the serial numbers of packages and number of pounds of oleomargarine received direct from manufacturers and other wholesale dealers, also the quantity disposed of, with the name and address of each person to whom sold or returned,” such a one as is contemplated by said section, which provides, “Whenever any person who is required to deliver a monthly return or other return of objects subject to tax fails to do so at the time required, or delivers any return which, in the opinion of the collector, is false or fraudulent or contains an undervaluation or understatement, it shall be lawful,” etc.? Third. Do the averments of the petition, with the denials of the answer and the absence of all testimony, afford the satisfactory proof required by section 3175, Rev. St., to warrant the grant of an attachment?
When the act of 30th June, 1864, of which section 3173 is a part, was passed, oleomargarine was not a commercial commodity, or recognized as a subject of possible taxation, if indeed it even existed at that time. It was first made subject to special tax by the act of 2d August, 1886 (24 Stat. 209), which was “An act defining butter, also imposing a tax upon and regulating the manufacture, sale, importation and exportation of oleomargarine.” This act was not a supplement or amendment to other revenue legislation, but -was a distinct and independent one. It created a complete and comprehensive system, in itself, and, by its various sections, regulated the taxation, manufacturing, selling at wholesale and retail, the import and export, of oleomargarine; provided for its analysis; and fixed punishments for violation of its provisions. By section 3 thereof, certain general provisions of the revenue system were extended to the new subject of taxation. After enumerating the persons subject to tax it provides:
“And sections 3232, 3233, 3234, 3235, 3236, 3237, 3238. 3239, 3240, 3241 and 3243 of the Revised Statutes of the United States are, so far as applicable, made to extend to and include and apply to the special taxes imposed by this section and to the persons upon whom they are imposed.”
After due consideration, we are of opinion that Rev. St. § 31.73, does not apply to wholesale dealers in oleomargarine. Such being this case, a discussion of the two other questions is needless, as the present rule must be discharged. And it is so ordered.