U.S. Supreme Court Farrell v. United States, 99 U.S. 221 (1878)
Farrell v. United States
99 U.S. 221
ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE NORTHERN DISTRICT OF ILLINOIS
Debt on a bond given, under sec. 23 of the act of July 20, 1868, 15 Stat. 135, by a distiller with sureties, conditioned to be void if the obligors paid the taxes on the spirits deposited in the warehouse before their removal, and within one year from the date of the bond. Before the expiration of that time, the spirits, while in the bonded warehouse in charge of an internal revenue storekeeper, were destroyed by fire without any fault, negligence, or carelessness on the part of the distiller or of any person in charge of the distillery and warehouse who was in his employ. Held that the obligors are liable to pay the taxes.
This action was brought April 12, 1872, on a bond bearing date June 13, 1870, executed by De Witt C. Farrell as principal and Andrew W. Pinkney and John B. Smith as sureties to the United States in the penal sum of $33,000, with condition to be void if the obligors or either of them should well and truly pay or cause to be paid unto the Collector of Internal Revenue for the Fifth Collection District of Illinois the amount of taxes due and owing on the following-described distilled spirits, to-wit, four hundred and forty-nine barrels, numbered from 4,951 to 5,449, both numbers inclusive, containing 32,182 89/100 proof gallons, which were entered for deposit in the distillery warehouse No. 6 of D. C. Farrell at Peoria, in the Fifth Collection District of Illinois on the tenth day of June, 1870, before such spirits should be removed from such warehouse, and within one year from the date of the bond. The bond was taken pursuant to sec. 23 of the Act of July 20, 1868, entitled "An Act imposing taxes on distilled spirits and tobacco." 15 Stat. 135. The breach assigned was that the tax of $16,116.50, to which said spirits were subject, had never been paid.
The defendants pleaded non est factum, and that they did not owe any part of the sum demanded. It was stipulated that the defendants might give in evidence under those pleas any matter of defense. The court to which the issues were submitted for trial found them for the United States. Judgment was rendered against the defendants for the penalty of
the bond, to be discharged on the payment of $15,502.27 and costs of suit.
It appears from a bill of exceptions that the court found as a matter of fact that the spirits were destroyed by fire July 27, 1870, without any fault, negligence, or carelessness on the part of said Farrell, or any person in charge of said distillery and bonded warehouse in his employment; that the spirits were so destroyed while in the bonded warehouse connected with his distillery, and that said warehouse was in the charge of an internal revenue storekeeper.
The court ruled as matter of law that the defendants were liable for the tax.
The defendants, on the rendition of the judgment, sued out this writ. They assign for error that the court erred:
1. In holding that the plaintiffs in error were liable for the tax mentioned in the bond sued on notwithstanding the finding that, as matter of fact, the spirits upon which the tax was claimed were entirely destroyed by fire without any fault, negligence, or carelessness on the part of said Farrell or of any person in his employ in charge of the distillery and bonded warehouse in which they were stored.
2. In its application of the law to the facts in this, in holding the plaintiffs in error to be liable, it clearly appearing that without their fault or negligence, from a period prior to the expiration of one year from the date of the bond sued on, it had not been, and at the time of the commencement of this suit it was not, in the power of the United States to deliver said spirits.
3. In finding the issues for the United States.
MR. JUSTICE STRONG delivered the opinion of the Court.
The evidence given in the court below we cannot consider. It is improperly brought before us. The circuit court made no special finding of facts. All the finding it made was that the high wines or distilled spirits mentioned in the distiller's warehousing bond were entirely destroyed by fire without any fault, negligence, or carelessness on the part of the distiller or of any person in charge of the distillery and bonded warehouse in the employment of the distiller, that they were so destroyed while in the bonded warehouse connected with the distillery, and that the warehouse was in the charge of any internal revenue storekeeper. The single question, therefore, is whether these facts thus found relieve the obligors in the bond from liability to pay the government tax upon the liquors thus destroyed. We think they do not. The bond was dated on the 13th of June, 1870. It bound the obligors in a penal sum, conditioned to pay the taxes on the spirits deposited in the warehouse before their removal and within one year from the date thereof. The obligation was unconditional, and it was exactly that which the distiller and his sureties were by the act of Congress required to assume. Act of July 20, 1868, sec. 23; 16 Stat. 135, 136. Depositing distilled spirits in a government warehouse did not make them the property of the government or cause them to be held at the risk of the bailee. The property remained in the distiller, and the risk of loss by fire or any other casualty was consequently his. He and his sureties undertook to pay the government tax upon the spirits in the warehouse within one year, with no exception for any possible contingency. The judgment of the circuit court was therefore correct. The case of the distiller may be a hard one, but his misfortune is not the fault of the government. He might have protected himself by insurance, and possibly he did, or he might have obtained relief under the Act of Congress of May 27, 1872, 17 Stat. 162. By that act, Congress has provided a way in which a remission of the tax upon distilled liquors casually destroyed while in the custody of a revenue officer in a bonded warehouse may be obtained. The provision of such a mode of relief indicates a purpose to exclude any other.