United States v. One hundred barrels of Spirits.

on the commission of the offense; title vests in the government from that moment, and it is not within the power of the offender or former owner to defeat the forfeiture by a subsequent transfer even to a bona fide purchaser. United States v. Nineteen hundred and sixty bags of Coffee, 8 Cranch, 398; United States v. Grundy, 3 Id. 338; Wood v. United States, 16 Pet. 342; Caldwell v. United States, 8 How. 366; Clifton v. United States, 4 Id. 242, 248.

Another undisputed principle of law is, that penalties annexed to violations of general revenue laws do not make such laws penal in the sense which requires them to be construed strictly. Nor, on the other hand, are they to be construed with an excess of liberality. But it is the duty of the court to study the whole statute, its policy, its spirit, its purpose, its language, and, giving to the words used their obvious and natural import, to read the act with these aids in such way as will best effectuate the intention of the legislature. Legislative intention is the guide to true judicial interpretation. Taylor v. United States, 3 How. 197, 210; Cliquot's Champagne, 3 Wall. 114.

The way is now cleared for a consideration of the several grounds of forfeiture insisted upon by the government. We shall notice first that which is set out in the fourth count of the information, the words of which are given above. The substance of this is, that these spirits, being subject to a tax imposed by the internal revenue law, were removed from the place where distilled with intent to defraud the United States of such tax. By whom removed, or to what place removed, is not alleged in the information. But on the agreed statement of facts it is admitted that the spirits were "placed in a bonded warehouse in New Orleans, by the owners of the distillery at which they were made; that the claimant paid the taxes thereon," &c. It is also admitted "that the fourth

United States v. One hundred barrels of Spirits.

count in the information is true; but that Henderson, claimant, subsequently to the removal from the distillery, and before removal from the bonded warehouse, paid the tax on the spirits, and was a bona fide purchaser."

Thus, the facts admitted by the parties are, that the spirits were moved by the distiller to and placed by him within the bonded warehouse of the government, and it is charged in the fourth count of the information, that the removal therein alleged was made with intent to defraud the United States of the tax imposed by law upon such spirits. And, as noticed above, the written stipulation admits that the fourth count in the information is true.

The attorney for the United States maintains the sufficiency of this ground of forfeiture under the facts thus alleged and admitted, and relies upon section 14 of the act of July 13, 1866, which, together with the substance of section 45 of the same act, is set out in the statement of the case preceding this opinion. 14 Stat. at L. 151.

Section 14 is general and broad enough in its terms to embrace the removal of spirits, on which there is a tax, when this is done with intent to defraud the United States of the tax, but section 45 is the one specifically relating to the removal of spirits from the place where they are distilled. By this section, the removal of "distilled spirits, from the place where the same are distilled, otherwise than into a bonded warehouse, as provided by law," is prohibited, and is made punishable by penalties differing from those provided in section 14. It is, then, not an illegal act to remove spirits from the distillery to the bonded warehouse. It is to secure the government the tax, that they are thus allowed to be removed. How it can reasonably be predicated of a removal of spirits by the distiller into a bonded warehouse of the government, which is under the custody

United States v. One hundred barrels of Spirits.

of its own officer, that it was done with intent to defraud the United States of the tax thereon, is not readily perceived, and is not explained in the pleadings, in the admission of facts, nor in the argument of counsel.

Without putting a strained or nice construction upon the language of the fourth count, and of the written admission respecting it, it is our opinion that the case, as made, does not fall within those contemplated by the above-mentioned section 14 of the act of July 13, 1866. The removal is the overt, illegal act alleged, and this was rightful; all that is left of the count under consideration is the intent with which the removal was made. We have said above, that it is difficult to see how it could have been made to defraud the United States of the tax; and a mere intent to defraud, formed or existing in the mind of the distiller, which intention has never been executed, or attempted to be, is not made a ground of forfeiture. The only execution, or attempt to execute the unlawful intent alleged, viz: to defraud the United States of the tax on the spirits, is the removal of the spirits by the distiller to the warehouse of the United States, which removal was legal, and not an illegal act.

For these reasons, our opinion is that the spirits in controversy were not forfeited by reason of the facts set forth in the fourth count of the information, and in the written admissions of the parties.

The other grounds of forfeiture relied on by the government are those set forth in the fifth and sixth counts of the information, which allege the failure of the distiller of the spirits in question to make the entries required by law in the book prescribed by the commissioner, and to make tri-monthly reports from the said book. It is admitted that the allegations of the information in this respect are true.

By examining critically the language of the information and of the written stipulation, it will be seen

United States v. One hundred barrels of Spirits.

to admit of doubt whether the distiller, Johnson, was guilty of the aforementioned neglects at and during the period when the spirits in controversy were distilled, or whether his neglect was before or after the distillation of these spirits; but it is clear that the neglect of the distiller in this respect existed at a time when these spirits were in his possession.

Suppose, as the government contends, that section 25 of the act of March 2, 1867, applies to the case, and that the distiller was not in default as to entries and reports at the time the spirits in question were made, but that he made default in these respects while these spirits remained in his possession, are they forfeited by this section, which includes "all spirits made by or for him," or is this language limited to such spirits as are made by or for him while the neglect or refusal to make the required entries or reports continues?

As the counsel for the claimant has not rested his case upon any such ground, we waive its consideration, and proceed to examine the questions made by the respective counsel, so far as it is deemed necessary to do so.

The attorney for the government bases the claim to condemn the property as forfeited, by reason of the facts alleged in the fifth and sixth counts of the information, upon section 31 of the act of July 13, 1866, 14 Stat. at L. 157, which imposes upon the distiller the duty of making the entries and tri-monthly report, and upon section 25 of the act of March 2, 1867, Id. 483, which denounces the penalty of forfeiture for the neglect or refusal of the distiller to perform this duty. But to what the forfeiture extends, or when it is worked, are disputed questions in the case. The attorney for the claimant contends that the above-mentioned section 25, as to penalties. is repealed or superseded by section 5 of the act of March 31, 1868, 15 Stat. at L. 58, which was in force when these spirits were made, and by

United States v. One hundred barrels of Spirits.

which the forfeiture is limited to spirits found on the premises, or, at most, to those owned by the fraudulent distiller, if found elsewhere.

If the act of March 31, 1868, could be considered as entirely repealing the previous act, the conclusion of the claimant's counsel would be correct, viz: that under the act of 1868, spirits which before seizure had passed through a bonded warehouse, from the hands of the distiller into those of the bona fide purchaser, would not be forfeited for the previous frauds or acts of the manufacturer. But the law does not favor repeals by implication, particularly in revenue statutes, the provisions of which, to prevent fraud, are complicated, and enacted frequently at different times to meet special exigencies or defects in previous enactments. To operate a repeal by implication, the repugnance must be clear and positive, so as to leave no doubt as to the intent of Congress. United States v. Sixty-seven packages of Books, 17 How. 85, 93.

By recurring to section 5 of the act of 1868, it will be seen that it is limited to punishing distillers for defrauding, or attempting to defraud the United States of the tax on spirits distilled by them; and to convict the distiller, or to condemn property as forfeited under this statute, an intent to defraud must exist in the mind of the distiller, and be established by evidence. Whereas, under the act of 1866, section 31, and of 1867, section 25, an intent to defraud existing in the mind of the distiller is not made essential; if he neglect to make the entries or report required, the forfeiture in law attaches, although he may be able to. show, as matter of fact, that his neglect was innocent of any fraudulent design. The penalties in section 5 of the act of 1868 being different from those in the former act, it is a repeal by implication, so far as it and the provisions of former acts provide for the same offense, but no further. Norris v. Crocker, 13 How. 439; Sedgw. Const. & Stat.