Summary
In United States v. Two Soaking Units (C.C.A.) 48 F.2d 107, 109, the court reiterated the principle as follows: "It is plain that there could be no seizure of real estate. Apparently there was none, but we need not now inquire further into that, for the attachment under the libel will not be vacated as to any property lawfully seized simply because other property may have been seized unlawfully at the same time. [Citing cases.
Summary of this case from Rising Sun Brewing Co. v. United StatesOpinion
No. 271.
March 9, 1931.
Appeal from the District Court of the United States for the Eastern District of New York.
Libel by the United States against two soaking units and the various other articles and items of personal property seized at premises Nos. 227-279 Pulaski street, Brooklyn, N.Y., contested by the Excelsior Brewing, Inc., and another, claimants. From a decree [ 44 F.2d 650], vacating an attachment and dismissing the libel, libelant appeals.
Reversed.
On August 7, 1930, the Prohibition Administration for the district in which the property was located received information that the police of New York City had entered a garage located at 876 De Kalb avenue, Brooklyn, and found two large trucks each loaded with about 135 beer barrels, two smaller trucks each loaded with a complete four-arm Schlangen racking machine; that while the police were at the premises four other large trucks, each loaded with approximately 135 beer barrels, had driven in and seventeen men had been arrested. Investigation disclosed that the garage was a one-story brick building about 100 feet deep, with a frontage of approximately 75 feet on De Kalb avenue. It had skylights which had been completely boarded up, and all the windows had been covered with sheet steel bolted to the window frames. It had three-inch sliding doors in which there were no windows and these doors were set in concrete grooves about six inches deep. When the doors were shut there was no way of looking into the garage at all. Ventilation was had by means of blowers. What looked like a water drain in the floor proved to have in it a brass pipe with a hose connection and near it lay a hose of the kind known as brewery hose, which was connected to a pressure gauge to be used with one of the racking machines. Tanks of liquid carbonic gas were present, and electric current was running through the electric control pump to these tanks. There were also a number of barrels containing bungs for beer barrels. In short, there was found all the equipment necessary for filling barrels with beer. A decided odor of beer came from the racking machine which had apparently been washed out quite recently. Beer was also smelled at the end of the pipe in the drain and it was observed that this pipe came in from the direction of the Excelsior Brewery which was on Pulaski street on the opposite side of the block across which on De Kalb avenue the garage was located. This brewery was being operated to make cereal beverages under a permit issued in accordance with the provisions of title 2, § 37, of the National Prohibition Act (27 USCA § 58).
Representatives of the Supervisor of Permits, with others, went to the premises of the Excelsior Brewery and asked a Mr. Mandel, the vice president and treasurer, if there was any objection to an inspection of the premises and was assured there was none. This man was asked who owned a garage across the street from the brewery and was told it was owned by the Pulaski Holding Company, Inc., which also owned the brewery buildings. Mr. Mandel was asked if there was any objection to an inspection of the garage, and stated that the title had been, or was about to be, transferred to some one unknown to him and made no objection to its inspection. In the garage, two drains were discovered. They were similar to the one found in the garage on De Kalb avenue, with the same kind of brass pipe outlet in each. Around each of them beer could be smelled. There were pipes in front of the garage which seemed to run under a patch in the pavement extending across toward the brewery. One of these pipes went up toward the garage ceiling, and along the ceiling to the rear, where there was a drop line ending at a faucet. This was opened, and about two quarts of beer, later found by analysis to contain 2.89 per cent. of alcohol by volume, was drawn off. To determine whether the pipe in the drain at the De Kalb avenue garage ran to the Pulaski street garage, dyed water was poured into the pipe in the first garage and came out of one of the pipes in the garage on Pulaski Street. Water poured into the pipe in the other drain at Pulaski street backed up after several pails were used, indicating that the other end of that pipe was not open. The inspection of the brewery was not completed on August 7th. On August 9th, it was determined to dig down through a cobblestone sidewalk at the end of the patch in the pavement in front of the brewery opposite the garage where the cobblestones showed evidence of having been newly laid. Permission for this was duly obtained from the bureau of highways, and, when the ground was opened, pipes apparently running out of the brewery were uncovered. One of them was found, by tapping that pipe and getting the vibration and sound transmitted by it to the uncovered part in the excavation at the sidewalk, to be the brass pipe running into the garage across the street. Thereupon permission to dig up the floor in the brewery was requested and refused. After such refusal, the brewery was seized under section 3453 of the Revised Statutes (26 USCA § 1185). Employees of the brewery were allowed to remain, but no more brewing or dealcoholizing of beer and the removal of property from the brewery was permitted. Section 3453 of the Revised Statutes provides that:
"Possession of Property with Intent to Sell in Fraud of Law, or to Evade Taxes; Seizure. All goods, wares, merchandise, articles, or objects, on which taxes are imposed, which shall be found in the possession, or custody, or within the control of any person, for the purpose of being sold or removed by him in fraud of the internal-revenue laws, or with design to avoid payment of said taxes, may be seized by the collector or deputy collector of the proper district, or by such other collector or deputy collector as may be specially authorized by the Commissioner of Internal Revenue for that purpose, and shall be forfeited to the United States. And all raw materials found in the possession of any person intending to manufacture the same into articles of a kind subject to tax for the purpose of fraudulently selling such manufactured articles, or with design to evade the payment of said tax; and all tools, implements, instruments, and personal property whatsoever, in the place or building, or within any yard or inclosure where such articles or raw materials are found, may also be seized by any collector or deputy collector, as aforesaid, and shall be forfeited as aforesaid. The proceedings to enforce such forfeitures shall be in the nature of a proceeding in rem in the district court of the United States for the district where such seizure is made."
Further investigation begun on August 11th and continued until August 30th, disclosed that the pipe in the De Kalb avenue garage led through the garage on Pulaski street into the brewery and by an ingenious means of concealment in what appeared to be sewer pipes and steam pipes had been brought to a point near the beer storage vats where it could be easily connected by means of a hose to enable beer to be supplied at either garage at will and at the same time be disconnected readily and give to all exposed pipes the appearance of having been placed where they were for legitimate use. In making the investigation after August 11th, the floor on the brewery building opposite the Pulaski street garage was dug up on August 26th at the doorway under which the pipes entered, and it was found that the brass pipe had been cut off at a point about two feet inside the brewery wall and its ends blocked up with cement to a depth of six inches. On September 23, 1930, a libel for forfeiture of the personal property seized was filed pursuant to an order of court directing that it be done. The appellees appeared as claimants and contested the libel on the ground that the seizure of the property on August 9th was unlawful. After hearing, the District Court was of the opinion that the seizure and subsequent search without a search warrant was unlawful and dismissed the libel.
Howard W. Ameli, U.S. Atty., of Brooklyn, N.Y. (Herbert H. Kellogg, J. Bertram Wegman, and Emanuel Bublick, Asst. U.S. Attys., all of Brooklyn, N.Y., of counsel), for the United States.
Louis J. Castellano, of Brooklyn, N.Y., for appellees.
Before L. HAND, CHASE, and MACK, Circuit Judges.
It has been agreed by the parties that the libel is sufficient as a pleading, and no question is raised as to the seizure having been made by the Prohibition Administrator instead of by a collector or deputy collector. We are, therefore, faced with the issue of whether or not any federal officers had the lawful right to seize the property.
It is plain that there could be no seizure of real estate. Apparently there was none, but we need not now inquire further into that, for the attachment under the libel will not be vacated as to any property lawfully seized simply because other property may have been seized unlawfully at the same time. McGuire v. United States, 273 U.S. 95, 47 S. Ct. 259, 71 L. Ed. 556; Quandt Brewery Co., Inc., et al. v. United States, 47 F.2d 199.
When the beer and other personal property was seized on August 9th, it was known that the garage on De Kalb avenue contained beer barrels and all the necessary apparatus for filling those barrels with beer. It was known that that garage was so constructed as to permit whatever was done inside it to be done secretly. It was known that the rather elaborate precautions to hide the interior from view from the outside were not ordinarily resorted to in the construction of garages. It was known that beer had been in the pipe found in the drain in the floor and that beer had been in the racking machine. It was known that the pipe in the drain led to the drain in the Pulaski street garage. It was known that two quarts of illegal beer had been drawn from a faucet in the Pulaski street garage and that the pipe ran under the pavement in the street across to, or at least just outside, the brewery premises, and appeared to run into those premises. It was known that with simple hose connections all these pipes could be made one. It was known that beer was being manufactured in the brewery and that there was a supply of beer in the vats there. All this was certainly enough to lead a reasonable man of ordinary judgment to the conclusion that beer of an unlawful alcoholic content was kept in those vats in the possession of the Excelsior Brewery, Inc., "for the purpose of being sold or removed by him [Excelsior Brewery Inc.] in fraud of the internal-revenue laws, or with design to avoid payment of said taxes," in violation of section 3453 of the Revised Statutes. These facts and circumstances were so clearly sufficient to warrant a seizure of the property of the kind enumerated in the statute that it seems idle to urge the contrary, and we have no hesitation in holding that there was then reasonable cause to believe that this property was possessed in violation of the statute and so could lawfully be seized. Nor was it necessary to obtain a search warrant. The premises in which the property was kept were the brewery buildings of a permittee empowered to manufacture cereal beverages according to the terms of its permit. The officers were entitled to inspect such premises. They had entered lawfully with the knowledge and consent of the owner, and, having so entered, seized the property found in possession of such owner in violation of law and subject to seizure under the above-quoted statute. It is a mistake to assume that, when premises have lawfully been entered, a search and seizure that is reasonable must always be under a search warrant. Hilsinger et al. v. United States (C.C.A.) 2 F.2d 241. When the officers had the permission of the owner to enter and inspect the premises, no entry invito domino by virtue of a search warrant was necessary to accomplish, or would have added to the legality of, whatever seizure they made. United States v. Old Dominion Warehouse, Inc., 10 F.2d 736 (C.C.A. 2).
The search of the premises, made after lawful entry and seizure of personal property but without a search warrant, to disclose just how the beer the officers were then morally certain was being withdrawn unlawfully was piped from the vats to the garages is said to have been contrary to law. It is undisputed that the pipe with which beer was so withdrawn was so cleverly hidden that it took days to trace it to the vats. It is also undisputed that no unnecessary damage was done while the search to do that was made. Such a withdrawal of beer was in violation of the terms of the permit under which the brewery was operated. An adequate inspection of the premises of this permittee required whatever investigation by way of such a search as would disclose the actual facts to show how the permittee was conducting its business to enable the inspector to determine whether or not the terms of the permit were being violated. A preliminary inspection having proceeded to the point where seizure was justified under section 3453, Rev. St., and a seizure having been made, the inspection was completed. As the right to inspect must include the right to make such reasonable investigation in the premises of a permittee of the manner in which the permitted business is conducted as will uncover the truth about it, it is unnecessary to inquire whether or not the search that did this without needless damage was lawful upon any other ground.
Decree reversed.