Chaffee & Co. v. United States

85 U.S. 516 (1873) 18 Wall. 516

CHAFFEE & CO.
v.
UNITED STATES.

Supreme Court of United States.

Messrs. G. Hoadly and J.F. Follett (with whom were E.M. Johnson and J.D. Cox), for the plaintiff in error.

Mr. S.F. Phillips, Solicitor-General, contra.

Mr. Justice FIELD delivered the opinion of the court.

The object of the demurrer to the declaration was to raise the question whether the penalty prescribed by the forty-eighth section of the Revenue Act of June 30th, 1864, was intended to apply to any persons except those in whose possession, custody, or control the goods seized are found, and who then hold them for the purpose of sale, with design to avoid the payment of the duties. That section authorizes the forfeiture of dutiable goods when held for sale with that design, and of the raw materials and tools intended for use in the manufacture of such goods, and imposes a penalty upon the person who, with that purpose and design, has the goods in his possession or custody, or under his control. It is the possession with the unlawful purpose that the act was intended to reach by a forfeiture of the goods found with the party, and the punishment of such party. The defendants contend that such possession must exist when the seizure is made; the government insists that it is immaterial when the possession existed, if it was accompanied at the time with the unlawful purpose.

When this case was argued the court consisted only of eight judges, and upon the question raised by the demurrer they are equally divided in opinion, and therefore no decision can be had thereon.

It does not appear by the record on what special grounds the motion in arrest of the judgment was made, but it was assumed in the argument of counsel that not only the question, which we have already mentioned as arising upon the demurrer, was presented on the motion, but also the further question, whether the action, being debt against several, and the plea being nil debet, judgment could be entered against any less than the whole number surviving, except upon a plea of personal disability of the acquitted defendant, not inconsistent with the truth of the original declaration, such as coverture, infancy, or bankruptcy. The action was originally brought against four defendants, Highland Chaffee, Sidney Chaffee, William Chaffee, and Hutchins, who are described as late partners doing business under the firm name of H.D. Chaffee & Co. During the progress of the cause Highland Chaffee died. William Chaffee pleaded that he was not, at the time designated in the declaration, or at any other time, a member of the firm of H.D. Chaffee & Co., or interested in its business, and on the trial the plaintiffs abandoned their claim against him and allowed judgment to pass in his favor. Sidney Chaffee and Hutchins pleaded both not guilty, and nil debet, and the verdict of the jury was that the defendants owed the plaintiffs the sum of two hundred and thirty-five thousand and six hundred and eighty dollars, in manner and form as they had complained against them. Now the argument is, that as the declaration alleges a joint liability of all the defendants, the plea of nil debet by two of them — that they were not indebted to the plaintiffs in manner and form as alleged — puts in issue such joint liability, and the finding against the two with the acquittal of the other, showed that the plea of nil debet was true, and that there was no such joint liability, but the contrary established; and, therefore, the judgment should be arrested. The answer to the argument is, that the rule stated as to the effect of the plea of nil debet only applies where the action is debt upon a simple contract. The action of debt lies for a statutory penalty, because the sum demanded is certain, but though in form ex contractu, it is founded in fact upon a tort. The necessity of establishing a joint liability in such cases does not, therefore, exist; it is sufficient if the liability of any of the defendants be shown. Judgment may be entered against them and in favor of the others, whose complicity in the offence, for which the penalty is prescribed, is not proved, precisely as though the action were in form as well as in substance ex delicto.

The testimony admitted on the trial, to which the defendants specially excepted, consisted of the certificate-books of certain collectors of tolls on the Miami Canal. That canal extends from Cincinnati to Toledo, in Ohio, passing through Tippecanoe. The nearest collector's office north of this place was at Piqua, the nearest south of it was at Dayton. Between these points there were four distilleries, three besides that of the defendants. The canal belongs to the State, but was leased in 1861 to private parties for ten years, which term was extended, in 1867, for ten years more. The act of the legislature authorizing the lease provided that it should vest in the lessees such rights, privileges, and franchises then exercised by the State, as might be necessary to manage, control, and keep in repair the canal and collect tolls for its navigation, with the right to appoint superintendents and collectors, who should exercise the same power and authority in the collection of tolls and water rents and the levy of fines, as could then be exercised by similar officers and agents appointed by the State; and that the lessees should be governed by the rules and regulations for navigating the canals then in force, subject to such alterations as might thereafter be established by law. By an act of the State then in force, passed in 1840,^[*] no boat or float was allowed to start on a voyage on the canal without having a clearance from the collector at the nearest point of departure, or to pass any collector's office on the canal without producing the clearance with its bills of lading. In order to obtain the clearance, the master of the boat or float was required to present the bills of lading to the collector, and before it could be issued, it was the duty of the collector to make out from the bills of lading, in a book to be provided for that purpose, a certificate containing a description of the articles composing the cargo of the boat or float, properly classified and designated with reference to the rates and amount of tolls chargeable thereon; and that certificate was to be signed by the master, and, if required, its correctness was to be attested by his oath or affirmation. On the arrival of the boat or float at its place of destination, no part of the cargo could be unladen, landed, or removed from the canal until the clearance and bills of lading were presented to the collector at the place and his permit obtained.

It was proved on the trial that, between the dates mentioned in the declaration, the defendants had paid taxes on over six thousand barrels of whisky manufactured by them. But the plaintiffs endeavored to prove that a larger quantity was transported by vessel or rail from Tippecanoe between these dates, and that there was no other distillery at that place, except the one owned by the defendants, from which it could have been received; and thus show that the defendants had had in their possession or custody within that period, distilled spirits for sale with the design of avoiding the payment of duties thereon, as alleged in the declaration. For this purpose they gave in evidence, against the objection of the defendants, the certificate-books of the collectors of tolls at Piqua, above Tippecanoe, and at Dayton, below it; and also a certificate-book kept by the collector at Cincinnati, showing the arrivals of freight at that port. The certificates stated the place from which the whisky was received, and its quantity, but not the parties to whom it belonged, or by whom it was shipped. The collector at Dayton testified as to the sources of information from which he made up the certificates, and it was admitted that the collectors at the other points would testify substantially to the same effect as to the sources of the information on which they acted. These were generally the freight bills presented by captains of boats, as required by the act of 1840; but sometimes the bills were not presented, and then the simple statements of the captains were received, if they were well known. The collectors had no personal knowledge of the truth of the statements contained in the certificates; and though when a clearance was wanted they were at liberty to require the oath or affirmation of the captains signing the certificates to their correctness, it does not appear that either oath or affirmation was ever exacted. Some of the captains, but not all of them, were produced as witnesses at the trial as to their carriage of whisky from the distillery of the defendants, but they were not examined as to the genuineness of their signatures to the certificates; nor were the signatures of the other captains, who were not produced, proven, nor their death shown or absence accounted for. All the certificates were admitted without distinction. When the books were offered, objection was taken to their introduction, on the general ground that they were hearsay evidence and transactions between third parties. Subsequently a similar objection was taken to each of the certificates on a motion to exclude them from the jury.

The books were not public records; they stood on the same footing with the books of the trader or merchant. The fact that the lease was from the State did not change the character of the entries made by the collectors, who were simply agents of the lessees, and not public officers of the State. Their admissibility must, therefore, be determined by the rule which governs the admissibility of entries made by private parties in the ordinary course of their business.

And that rule, with some exceptions not including the present case, requires, for the admissibility of the entries, not merely that they shall be contemporaneous with the facts to which they relate, but shall be made by parties having personal knowledge of the facts, and be corroborated by their testimony, if living and accessible, or by proof of their handwriting, if dead, or insane, or beyond the reach of the process or commission of the court. The testimony of living witnesses personally cognizant of the facts of which they speak, given under the sanction of an oath in open court, where they may be subjected to cross-examination, affords the greatest security for truth. Their declarations, verbal or written, must, however, sometimes be admitted when they themselves cannot be called, in order to prevent a failure of justice. The admissibility of the declarations is in such cases limited by the necessity upon which it is founded.

We do not deem it important to cite at length authorities for the rule and its limitation as we state it. They will be found in the approved treatises on evidence, and in the numerous cases cited by counsel on the argument. In this court the case of Nicholls v. Webb, reported in 8 Wheaton,^[*] and that of Insurance Company v. Weide, reported in 9 Wallace,^[†] are illustrations of the rule. In the first case, it was held that after the death of a notary, his record of protests was admissible upon proof of his death and handwriting, the court observing that it was the best evidence the nature of the case admitted of, that the party being dead, his personal examination could not of course be had, and that the question was, whether there should be a total failure of justice or secondary evidence should be admitted to prove the facts. In the second case, the books and ledger of the plaintiffs were admitted in evidence to show the amount and value of goods lost by the burning of their store, upon the testimony of the parties who made the entries that they were correct, the court holding that the books "would not have been evidence per se, but with the testimony accompanying them, all objections were removed;" and referring to cases decided in the Supreme Court and Court of Appeals of New York, in support of the ruling. In both of these cases the entries were made by parties personally cognizant of the facts. This knowledge of the party making the entry is essential to its admissibility. His testimony, if living, would be rejected if ignorant of the facts entered, and it would be strange if his death could improve its value in that respect.

The cases of Fennerstein's Champagne and Cliquot's Champagne, reported in the 3d Wallace,^[*] do not infringe upon this rule. Those were cases where it became necessary to establish the market value of certain wines in France, and such value could only be ascertained by sales made by dealers in those wines in different parts of the country, and the prices at which they were offered for sale, and circumstances affecting the demand for them. It would not be proved by a single transaction, for that may have been exceptional; the sale may have been made above the market price, or at a sacrifice below it. Market value is a matter of opinion which may require for its formation the consideration of a great variety of facts. To arrive at a just conclusion prices-current, sales, shipments, letters from dealers and manufacturers, may properly receive consideration. A party, without having been previously engaged in any mercantile transaction, may be able to give with great accuracy the market value of an article the dealing in which he has watched, and in stating the grounds of his opinion as a witness, he may very properly refer to all these circumstances, and even the verbal declarations of dealers.^[†] Now in the cases in 3d Wallace, statements of dealers in the champagne, or of agents of dealers, made in the course of their duties as agents, and letters from dealers and prices-current, were admitted as bearing upon the point sought to be established, the market value of the wines. There is no analogy between these cases and the one at bar. What was the market value of the wines in France was, as already said, a matter of opinion. Whether the defendants had in their possession or custody, between certain dates, 200,000 gallons of distilled spirits, or any other quantity, for the purpose of selling the same with a design to avoid the payment of duties thereon, was a question of fact and not of opinion.

If now we apply the rule which we have mentioned to the certificate-books of the canal collectors their inadmissibility is evident. They were not competent evidence as declarations of the collectors, for the collectors had no personal knowledge of the matters stated; they derived all their information either from the bills of lading or verbal statements of the captains. Nor were the books competent evidence as declarations of the captains, because it does not appear that the bills of lading were prepared by them, or that they had personal knowledge of their correctness, or that their verbal statements, when the bills of lading were not produced, were founded upon personal knowledge; and besides, many of the certificates were admitted without calling the captains who signed them, and without proof of their death or inaccessibility.

It remains to consider the exceptions taken to the charge to the jury. These are sixteen in number, and are directed principally to the error which pervades the whole charge, consisting in the instruction reiterated in different forms, that after the government had made out a primâ facie case against the defendants, if the jury believed the defendants had it in their power to explain the matters appearing against them, and did not do so, all doubt arising upon such primâ facie case must be resolved against them. As we have stated, the defendants had paid taxes on over six thousand barrels of whisky manufactured by them between the dates mentioned in the declaration. Nearly this number was traced to consignees. By the canal certificates and railroad receipts the government had shown in that way a transportation from Tippecanoe of over two thousand barrels more. It was admitted that no charge was to be made to the defendants for any amount they had on hand in October, 1865, although the declaration charges the possession with the unlawful purpose to have been between February 1st, 1865, and September 1st, 1866. The defendants endeavored to show that they had on hand at that time between two and three thousand barrels, and for that purpose called in a large number of witnesses, neighbors, and others, who had visited the distillery during that period. The estimates of the amount by these witnesses differed materially, being made from recollection. The defendants were present at the trial, but were not called as witnesses. It was proved that they kept books, consisting of day-books, journals, and ledgers.

Now the court instructed the jury that it was a rule, without exception, that where a party has proof in his power which, if produced, would render material facts certain, the law presumes against him if he omits to produce it and authorizes a jury to resolve all doubts adversely to his defence; that although the case must be made out against the defendants beyond all reasonable doubt in this case as well as in criminal cases, yet the course of the defendants may have supplied in the presumptions of law all which this stringent rule demanded. "In determining, therefore, in the outset," said the court to the jury, "whether a case is established by the government, you will dismiss from your minds the perplexing question whether it is so made out beyond all doubt. It need not, in the exigencies of this case, be so proved in order to throw the burden of explanation upon the defendant, if from the facts you believe he has within his reach that power. In the end, all reasonable doubt must be removed, but here, at this stage, you need say only, is the case so far established as to call for explanation." ... "If, then, you conclude that, unexplained and uncontroverted by any testimony, the opening proof would enable you to find against the defendants for the claim of the government, or any material part of it, you will then take up their testimony in view of the principle" stated, that of presuming against a party who fails to produce proofs in his possession. And again, the court instructed the jury that the law presumed that the defendants kept the accounts usual and necessary for the correct understanding of their large business and an accurate accounting between the partners, and that the books were in existence and accessible to the defendants unless the contrary were shown, and then said to the jury, "If you believe the books were kept which contained the facts necessary to show the real amount of whisky in the hands of the defendants in October, 1865, and the amount which they had sold during the next ten months, or that the defendants, or either of them, could by their own oath resolve all doubts on this point; if you believe this, then the circumstances of this case seem to come fully within this most necessary and beneficent rule."

The purport of all this was to tell the jury that, although the defendants must be proved guilty beyond a reasonable doubt, yet if the government had made out a primâ facie case against them, not one free from all doubt, but one which disclosed circumstances requiring explanation, and the defendants did not explain, the perplexing question of their guilt need not disturb the minds of the jurors; their silence supplied in the presumptions of the law that full proof which should dispel all reasonable doubt. In other words, the court instructed the jury, in substance, that the government need only prove that the defendants were presumptively guilty, and the duty thereupon devolved upon them to establish their innocence, and if they did not they were guilty beyond a reasonable doubt.

We do not think it at all necessary to go into any argument to show the error of this instruction. The error is palpable on its statement. All the authorities condemn it.^[*] The case of Clifton v. United States, in 4 Howard, cited by the court below, was decided upon a statute which cast the burden of proof upon the claimant in seizure cases after probable cause was shown for the prosecution, and, therefore, has no application.^[*] The instruction sets at naught established principles, and justifies the criticism of counsel that it substantially withdrew from the defendants their constitutional right of trial by jury, and converted what at law was intended for their protection — the right to refuse to testify — into the machinery for their sure destruction.

JUDGMENT REVERSED, and the cause

REMANDED FOR A NEW TRIAL.

NOTES

[*] Entitled "An act to provide for the protection of the canals of the State of Ohio, the regulation of the navigation thereof, and for the collection of tolls;" approved March 28th, 1840.

[*] Page 326.

[†] Page 677.

[*] Pages 114, 145.

[†] Alfonso v. United States, 2 Story, 426.

[*] Doty v. State, 7 Blackford, 427; State v. Flye, 26 Maine, 312; Commonwealth v. McKie, 1 Gray, 61.

[*] 1 Stat. at Large, 678; Locke v. United States, 7 Cranch, 339.