Opinion · Court of Appeals for the Second Circuit

Elsinore Perfume Co. v. Campbell

Elsinore Perfume Co. v. Campbell, 31 F.2d 235 (2d Cir. 1929)

Type: Opinion
Court: Court of Appeals for the Second Circuit
Jurisdiction: Federal
Date: 1929-03-11
Topic: general

CHASE, Circuit Judge (after stating the facts as above). The trial court was lim ited to a review of the proceedings before the Commissioner. National Prohibition Act, tit. 2, § 9 (27 USCA § 21). Unless error in law was found, or the action of the Commissioner was wholly unsupported by the evidence, or arbitrary or capricious, the revocation should not have been disturbed. Qualtop Beverages, Inc., v.

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UpLaw has not yet analyzed Elsinore Perfume Co. v. Campbell. The absence of a flag is not a finding that it is good law.

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Cited by: 4 opinions

ELSINORE PERFUME CO. v. CAMPBELL,31 F.2d 235(2nd Cir. 1929)

ELSINORE PERFUME CO., Inc., v. CAMPBELL, Federal Prohibition

Administrator, et al.^fn*

No. 214.

Circuit Court of Appeals, Second Circuit.

March 11, 1929.

Appeal from the District Court of the United States for the Eastern District of New York.

Action in equity by the Elsinore Perfume Company, Inc., against Maurice Campbell, Federal Prohibition Administrator for the Second District of New York, and others, to review proceedings which resulted in revocation of a permit by the plaintiff to withdraw specially denatured alcohol. From a decree for plaintiff, setting aside the revocation, reinstating the permit, and restraining defendants from interfering with withdrawals thereunder [26 F.2d 745], defendants appeal. Decree reversed.

The evidence upon which the Commissioner acted showed that on December 2, 1927, the appellee received, under a permit to withdraw which it then held, 10 barrels of denatured alcohol, formula 39 B; that on December 5, following, two sedans stopped near the elevator entrance of the appellee's premises, where a number of 5-gallon cans were unloaded and taken into the building; that these cans, in bundles of from 9 to 12, were easily carried by a man using only one hand to a bundle; that a little later 20 of the same size cans were brought out of the premises and placed in the sedans; that the premises occupied by appellee were lighted while this was being done; that the cans brought out were seized by the officers, and that one officer immediately went up to the appellee's premises and found them locked and dark, with apparently nobody inside; that the cans seized contained denatured alcohol, formula 39 B; that such alcohol is readily made potable; that the appellee was the only occupant of the building who lawfully possessed such alcohol; that it was unable to account on the following morning for all of the alcohol which had been taken from the barrels it received December 2; that after the shortage was discovered certain containers were measured again in the afternoon of the same day, and found to have been increased in content between the first and second examinations; that this increase could not be explained in any other way than that the permittee had surreptitiously increased the content to cover up the shortage, except on the theory that the method of measurement did not show the exact amount; that the same method of measurement had been used both times in measuring the contents of the same containers, and that a comparison of results showed the increase.

William A. De Groot, U.S. Atty., of Brooklyn, N.Y. (Herbert H. Kellogg, Asst. U.S. Atty., of Brooklyn, N.Y., and John E. O'Neill, of New York City, of counsel), for appellants.

Lewis Landes, of New York City, for appellee.

Before MANTON, SWAN, and CHASE, Circuit Judges.

CHASE, Circuit Judge (after stating the facts as above).

The trial court was limited to a review of the proceedings before the Commissioner. National Prohibition Act, tit. 2, § 9 (27 USCA § 21). Unless error in law was found, or the action of the Commissioner was wholly unsupported by the evidence, or arbitrary or capricious, the revocation should not have been disturbed. Qualtop Beverages, Inc., v. Campbell,31 F.2d 260.Page 236

While the evidence of unlawful diversion of the alcohol was entirely circumstantial, it was sufficient to support the decision revoking the permit, as it tended to show that permittee had not in good faith conformed to the law and conditions of the permit, and the extent of its probative force was to be determined by the Commissioner. Ma-King Products Co. v. Blair,271 U.S. 479-483, 46 S. Ct. 544 (70 L. Ed. 1046); Remick Products v. Mills (C.C.A.)22 F.2d 477; Qualtop Beverages, Inc., v. Campbell, supra.

It is claimed, however, that the National Prohibition Act does not apply to denatured alcohol, on the ground that it is not a beverage, and, that, after it is manufactured and prepared for the market, it is excepted from the provisions of the act in express terms to be found in title 2, § 4 (27 USCA § 13). The case of Higgins v. Foster (C.C.A.)12 F.2d 646, is relied on in support of this position.

It is true that denatured alcohol "produced and used as provided by laws and regulations now or hereafter in force" (title 2, § 4) is not affected by the provisions of title 2 of the act. The Higgins Case does hold that section 6 of title 2 (27 USCA § 16), which provides for certain permits, does not apply to denatured alcohol. It nevertheless recognizes the fact that the use of denatured alcohol is regulated by the act, and that a permit for its lawful use is authorized, and holds expressly that the provisions of title 2, § 9, relate to the revocation of permits covering denatured alcohol. The authority for such permits is found in title 3, § 13, of the act (27 USCA § 83).

Although the statute does not itself require a permit to make the use of denatured alcohol lawful, it does authorize the Commissioner to issue regulations to the end, among others, that the diversion of denatured alcohol to illegal uses may be prevented. The regulations so promulgated thereunder do require a permit. Rock v. Blair (D.C.) 13 F.2d 1004. When the permit is issued, the right of the permittee to continue to enjoy the privileges granted is to be tested by the provisions of title 2, § 9. Higgins v. Foster, supra. See, also, United States v. Anas Chemical Co. (D.C.)25 F.2d 491; Fox v. Mills (C.C.A.)22 F.2d 891; Remick Products v. Mills, supra; Selzman v. United States,268 U.S. 466, 45 S. Ct. 574, 69 L. Ed. 1054.

It is apparent that there was intent to provide for the use of denatured alcohol in industry and art, unhampered by unnecessary restrictions, and perhaps the ease with which it could be used as a source of supply for the alcoholic content of illegal beverages was not fully appreciated; but we are quite unable to agree that, when denatured alcohol is once lawfully manufactured and sold, it may be used or misused with impunity, regardless of the National Prohibition Act.

Decree reversed.

Certiorari denied 49 S. Ct. 512, 73 L. Ed. ___. ↩