United States v. Wilson, 59 F.2d 97 (W.D. Wash. 1932)
June 13, 1932
WILSON et al.
District Court, W. D. Washington, N. D.
*98 Anthony Savage, U. S. Atty., and Cameron Sherwood, Asst. U. S. Atty., both of Seattle, Wash.
John J. Sullivan, of Seattle, Wash., for defendants Cathro and Consumers' Compressed Yeast Co.
NETERER, District Judge (after stating the facts as above).
A partner or a principal is not liable for the criminal acts of his associates, or of the agent, unless within the scope of the business or employment (8 R. C. L. 27); nor does mere relation of principal and agent or partnership, of itself, make the partner or principal liable for the criminal act of the associate or agent (16 Corpus Juris, 23); but, where the agent is employed to sell a compound containing qualities and substances designed or intended for use in the manufacture of alcoholic liquors, or is popularly known to contain such qualities and is used for the purpose, the principal must see that such compound is sold by the agent in harmony with, and not antagonistic to, or against, the sovereign will. The sovereign will or national law enters into and becomes a part of the contract of agency and employment, and the principal is bound to know the properties and elements of the article sold, and that it is not sold for the purpose of transgressing the sovereign will.
The defendant knew the law, and it may not circumvent its liability by issuing rules of restricted conduct to its agents; that is not enough. And, if the agent is directed to sell a compound designed or intended for use in the manufacture of alcoholic liquors, and participates in the carrying forward of the unlawful purpose, the corporation is guilty, even though the commodity may be used in lawful enterprise as well. Danovitz v. United States, 281 U.S. 389, 50 S. Ct. 344, 345, 74 L. Ed. 923. Where a defendant has knowledge that another is promoting a violation of the prohibition law and in need of materials for furthering the enterprise, and such defendant, with such knowledge, furnishes the necessary materials for the purpose of forwarding the unlawful purpose, making it possible to accomplish the unlawful act, he is guilty. Pattis v. U. S., 17 F.(2d) 562 (9th C. C. A.); Justice Holmes, for the court, in Danovitz v. United States, supra, said: "As the purpose of the Prohibition Act was to `suppress the entire traffic' condemned by the act, United States v. Katz, 271 U.S. 354, 357, 46 S. Ct. 513, 70 L. Ed. 986; Donnelley v. United States, 276 U.S. 505, 513, 48 S. Ct. 400, 72 L. Ed. 676, it should be liberally construed to the end of this suppression. * * *"
In the instant case the defendant had, no doubt, knowledge of the sale and the purpose for which used, or at least such as to put a reasonable person on inquiry. Peterson v. U. S., 213 F. 920 (9th C. C. A.); State v. Louisville Railroad, 91 Tenn. 445, 19 S.W. 229; United States v. Brunett (D. C.) 53 F.(2d) 219.
Freedom of conduct is a primary right, but, when this conduct infringes the sovereign will, the immunity to conduct is supplanted by the limiting power of the Congress for the common good, and is condemned. Grenada Lumber Company v. State of Mississippi, *99 217 U.S. 433, 30 S. Ct. 535, 54 L. Ed. 826. And, when the acts of the agent are in furtherance of, and in the course of his employment he sells a specially prepared commodity in the manner and method for the purpose shown, the act becomes actionable, and the penalty of the law becomes fixed against the defendant corporation, as well as the agent. See Aikens v. Wisconsin, 195 U.S. 104, 25 S. Ct. 3, 49 L. Ed. 154; Swift & Co. v. United States, 196 U.S. 375, 25 S. Ct. 276, 49 L. Ed. 518. Fidelity & Deposit Co. of Maryland v. Commonwealth of Pennsylvania, 240 U.S. 319, 36 S. Ct. 298, 60 L. Ed. 664.
That the Consumers' Compressed Yeast Company may be pursued in any jurisdiction where it transacts business through its authorized agents, and where the law is violated, which brings it within the restrictions of the law, is stare decisis.