Opinion
No. 636.
March 23, 1929. On Further Hearing, April 8, 1929.
Anthony Savage, U.S. Atty., and Paul D. Coles and Tom De Wolfe, Asst. U.S. Attys., all of Seattle, Wash.
George F. Vanderveer, of Seattle, Wash., for defendants.
In Equity. Suit by the United States against the Butler Hotel Company, Inc., and others. Decree for the United States.
In the main there is not very much dispute in the testimony in this case. It is clearly shown that the Butler Hotel is one of the prominent hotels in the city, having been operated under the present management since 1918, and the ownership was acquired by the management in 1926. In connection with the hotel is operated a dining room, called by the witnesses "the Rose Room," where meals are served and where many citizens lunch at noon and dine at intervals during the usual dinner hours, ending at 9 o'clock. Meals are served on special order or to parties after the usual dinner hours. An orchestra performs and parties engage in dancing after 9 o'clock. During the luncheon and dinner hours the usual charges are made for the service. After 9 o'clock cover charges are made: For Saturday nights, $1.25; Thursday nights, $1; and other nights, 75 cents. Many people attend, especially on Thursday and Saturday nights.
On one of the nights in question, many University students, boys and girls, attended, and many young people, some married and many not married, and some older people attended. On Saturday nights sometimes as many as 400 to 450 people are present after 11 o'clock and until closing time. Many of the attendants are attired in formal evening dress. Many tables are on the open floor of the room, on three sides of a dancing reserve in front of the orchestra, about 20 to 22 feet wide and about 50 feet long, and many others in booths, where greater seclusion is afforded to parties. A check room is provided for the accommodation of the guests, and a dressing room where a wardrobe, or lockers, for the waiters is placed.
Four raids appear in the evidence as having been made: In March and in November, 1927, and in June and December, 1928. The first two were made by the Seattle police department; in June, 1928, by the federal officers in conjunction with the police; and in December, 1928, under the direction of the undersheriff of King county. Eighteen police officers of the city of Seattle, 5 deputy sheriffs of King county, and 15 prohibition agents have testified, together with 3 or 4 other witnesses for the plaintiff, and 44 for the defendants. Sixty-five liquor bottles were taken and produced upon this trial, some full, others partly full, and a few empty, consisting of many quart, pint, and half-pint bottles. It is testified that many bottles were taken from the tops and from under the tables and elsewhere about the room and furnishings. These bottles are labeled, "whisky," "Scotch whisky," and "gin," etc., and, the evidence shows, are fit for beverage purposes and have the prohibited alcoholic content. One of the bottles was purchased from a bell boy of the hotel. Two under cover agents went into the dining room, seated themselves at the table, ordered cracked ice, and ginger ale, and called the head waiter and introduced themselves as from San Francisco, and presented fictitious cards of introduction, and asked the waiter whether he could furnish them some whisky, and he said he could not, but that a bell boy might help them out. One of the men saw the bell boy, and a bottle of liquor was delivered in the room by a taxi driver, for which the agent paid $10. All liquor purchased by the agents during the time covered by the testimony was obtained either through bell boys and delivered by them, or by a taxi driver, except one bottle, which the agent went outside the room and purchased, and brought it into the room, where it was delivered to the host of a party which the agent on request had joined, and was served by the host to the other members of the party, by pouring it into glasses with cracked ice and ginger ale or "white rock" served by the waiters.
On one raid two bottles were taken out of the cupboard in the dining room, two from the cashier's desk, and one from a waiter's coat in the closet. During the special nights particularly emphasized the agents saw, on all of the tables where guests were seated, ginger ale or "white rock" and glasses with cracked ice served. Guests then poured from bottles or flasks an amber fluid or a colorless liquid into the glasses, and some ginger ale or "white rock." Some of these bottles sat upon the table and were poured openly, while others were under the table and poured by holding the glasses on the side and below the top of the table, and the flasks were taken from the pockets of patrons at the table. One "large silver pocket flash" was upon the table. A number of persons on these occasions were under the influence of liquor, both men and women. Two young women at one table were intoxicated and lay over on the table, their heads resting upon their arms, and went asleep. Another was assisted from the room by two young men.
One waiter, when asked where a corkscrew could be obtained, took a corkscrew from his pocket, pulled the cork, and then placed the bottle on the table, removed the cork, and placed it on the open neck of the bottle, and then told the agent that it would be better to keep the bottle between his feet under the table, or on the chair, so that, "if there is a raid, you can kick or throw the bottle out on the floor, and it will not be found in your possession." Agents for the government testified that they saw waiters carry empty liquor bottles from the dining room on trays.
One agent during the evening asked the assistant manager, who was standing on the platform having a view of the dining room, whether he was not afraid of getting into trouble, or words to that effect; he remarked that the parties brought the liquor themselves, and he had nothing to do with it. The witnesses on the part of the defense testified that they had been present on occasions, and that the place was orderly, and that they saw no one intoxicated; some may have been drinking, but were not drunk. Most of the witnesses on the part of the defense, however, said they were there only during the regular dinner hours, and nearly all of them not frequently — three or four times during a year, some oftener. Several witnesses testified they were employed by the management on several occasions to see that no intoxicated person entered the room, and on these occasions they refused to permit any person to enter who was under the influence of liquor, and that they saw no intoxicated person in the room. One testified, on cross-examination, he considered a person intoxicated when he fell down, or could not walk, or went asleep, or words to that effect. Others for the defense testified that, while they saw no intoxication, they were not there to observe what was transpiring, but merely to watch the dancing, and some were there to accompany members of their family who enjoyed dancing, and "occupied a front seat."
The policeman on the beat said he usually passed through the room twice during the night, and that he observed no unusual hilarity or disturbance, but on one occasion he was sent for by the management and requested to remove two drunken men. One waiter testified it to be the duty of the head waiter to have intoxicated persons leave the room, and that he had on many occasions called his attention to intoxicated persons in the room, or persons having intoxicating liquor, and presumed that the party or liquor was removed, as it was against the orders of the management to have intoxicated persons present or liquor exposed.
There is no evidence that liquor was sold by the management of the hotel. There is evidence that bell boys did sell liquor, and on one occasion a bell boy, with the consent of a guest, placed a bag with 18 bottles of liquor in the trunk of the guest in the guest's room (401) in the hotel. This bell boy was arrested, and was discharged by the hotel. The defendant testified that all employees found with or selling liquor were discharged.
The evidence is practically conclusive that the general reputation of this dining room is that it is a place where intoxicating liquors may be taken and consumed. Practically all witnesses on both sides, of whom inquiry was made, have so stated; but there is not such a reputation that it can be bought from the management, but rather that it cannot be bought from the management. A witness for the defense, a manufacturer, on cross-examination, stated that he took a party of salesmen from out of town, who wanted a good time, to this place. The party took their whisky, ordered ginger ale and cracked ice and glasses, and then poured the ale in glasses and filled the glasses with whisky by holding the bottles beside and below the top of the table. He also saw others doing likewise. Other witnesses, who testified that liquor could not be purchased from the hotel, on cross-examination, said they were members of a party, and that the party furnished its whisky, and it was served by the host and consumed by the parties in "the Rose Room," being served with cracked ice and ginger ale, or "white rock," but that there was no intoxication. That practically no food was seen on the tables is stated by plaintiff's witnesses. During the luncheon and regular. dinner hours, nothing objectionable appears in the evidence.
The government contends that the general and habitual custom of guests to bring liquor and the permissible consumption thereof in this room, is violative of the National Prohibition Act, whether it is kept by the management or on its behalf. The defendant asserts that, to be violative of the act, it must be kept for sale or barter, etc., by the management, or on its behalf.
This is an action in rem. The purpose of the Eighteenth Amendment is to prevent the use of intoxicating liquor as a beverage. It is not self-executing, but is given vitality by the National Prohibition Act. The provisions of this act are to be liberally construed, "to the end that the use of intoxicating liquor as a beverage may be prevented." Section 12, 27 USCA. The possession of liquor by a person not legally permitted to have it is prima facie evidence that such liquor is kept for sale or barter. Section 50, 27 USCA. There is no contention that any of the liquor in issue in the possession of patrons or the bottles in the cupboard and the cashier's desk in this room, or waiters' closet, was lawfully possessed.
"Any room * * * where intoxicating liquor is * * * sold, kept, or bartered * * * is * * * a common nuisance." Section 33, title 27 USCA. And upon proof sustaining the charge the court must abate it, and may order the room closed for one year. Section 34, 27 USCA. Did the customary and habitual transportation of liquor to the dining room, and the consumption thereof in the room by the persons who possessed it, and by those to whom it was furnished by them, and the bottles of liquor in the cupboard and in the cashier's desk, and one bottle in the waiters' coat in the waiters' dressing room, constitute a keeping, within the provisions of section 33, supra, and the Rose Room a nuisance?
The contention of the defendant that the room was patronized by "high-class" and "some of the best people in the city" is immaterial. The law is no respecter of persons. It is immaterial whether liquor was taken there "in large silver flasks" by men in full dress, or in bottles by men wearing corduroys, or carried in demijohns by men wearing overalls, or vice versa. Clothes and containers, or social status, are immaterial.
It may be concluded from the evidence that the management of the hotel endeavored to conduct a "high-class" place for entertainment, where intoxicating liquor possessed by persons could be brought and by them "furnished" to others for consumption in the Rose Room, and that it did exercise diligence on special occasions in keeping intoxicated persons therefrom. The recognized necessity for employing detectives or guards at the entrances to keep out intoxicated persons strongly emphasizes the notoriety the room enjoyed after the regular dinner hour.
"Kept" (imp. and p.p. of "keep," Webster's Int. Dict.), as used, is significant. The section does not require the management to keep the liquor, but if it was "kept" by any person in this room, in violation of the section, supra, the room offended. Nor is knowledge of the owner necessary. United States v. Studio Club (D.C.) 12 F.2d 462; United States v. Auto City Brewing Co. et al. (D.C.) 5 F.2d 362; United States v. Boynton (D.C.) 297 F. 261; United States v. Marhold (D.C.) 18 F.2d 779; Farrell v. United States (C.C.A.) 21 F.2d 318; Engler v. United States (C.C.A.) 25 F.2d 37. But in this case knowledge is apparent. It is shown beyond question that liquor was possessed in this room by numerous patrons, and four bottles found in the cupboard and desk in the room, and one bottle in the waiters' room off the Rose Room, and that patrons habitually brought liquor to this room, and it was kept by such persons by permission of the management, or at least such conduct as gave the place a general reputation as a place where intoxicating liquor could be taken and consumed, and be "furnished" for immediate consumption to members of parties who were entertained.
The evidence discloses that by conduct the management and patrons created a pecuniary beneficial and profitable relation having a commercial aspect as to the hotel, and convenience and pleasure to the patrons and friends, who desired to consume liquor. One thing was given for another, as in barter, or a privilege was granted for money, as in sale. The hotel had the room and "furnishings," etc. The patrons had, or purchased, the liquor, and had friends they desired to serve. By general repute there was open invitation that intoxicating liquor might be brought and kept by the patrons in this room to be consumed, and "furnished" to guests for consumption in the room by paying a "cover charge" of $1.25 on Saturday nights, $1 on Thursday nights, and 75 cents on other nights, in addition to paying for service of ginger ale, "white rock," etc., and cracked ice. There was a pecuniary benefit, and, no doubt, profit to the hotel, in the payments made, and a satisfaction to the patrons for permission to keep liquor for immediate consumption, and "furnish" liquor to guests in this room for like purpose.
The hotel company, to rebut the element of profit from liquid sale and ice, presents a statement of income from sales of food and fountain (liquids) for three months for 1925, 1927, 1928, and four months for 1926, totaling $153,852.21 for food, and $30,307.85 for fountain. The per cent. for food, 83.52; and fountain, 16.48. The evidence of the plaintiff's witnesses, however, was limited to after 11 o'clock p.m., when the service was nearly exclusively cracked ice and ginger ale, etc., and little, if any, food served. The statement includes luncheon and dinner for the full days, and the evidence shows that many are served in this dining room during the lunch and dinner hours with food, but the ginger ale, etc., and cracked ice, was not in demand until after the dinner hour, when it was almost exclusively served. The statement is therefore of no service.
The keeping of the liquor in the room for the disclosed purposes was unlawful, and the possession prima facie evidence that it was kept for sale, and some of it was delivered to others. May the delivery under the disclosures in the record be conclusive of sale as a consummation of the purpose for which it was kept, in the absence of evidence to the contrary, under the liberal interpretation required by the Congress? But whether so considered or not, and though kept for a brief time extending from less than one hour to two or three hours, the transaction has a commercial aspect, and liquor kept as disclosed, in this room, is denounced by section 33, supra.
In Street v. Lincoln Safe-Dep. Co., 254 U.S. 88, 41 S. Ct. 31, 65 L. Ed. 151, 10 A.L.R. 1548, the liquor was lawfully possessed, and that the conclusion there reached has no application to the facts as here disclosed, is clearly indicated by the refusal of the Supreme Court to review Fritzel v. United States, 275 U.S. 532, 48 S. Ct. 29, 72 L. Ed. 411.
"Kept," in its relation here, does not imply time, as contended by the defense. Time is not essence of the offense. It may emphasize the act. The disclosed possession is keeping for the purpose of delivering it to others for consumption, for which a pecuniary consideration is paid to the management as "cover charge," and service of cracked ice in glasses, for which payment is made, is no doubt clearly within the inhibition, and was so held in Fritzel v. United States (C.C.A.) 17 F.2d 965, and this holding was approved by the Supreme Court in 275 U.S. 532, 48 S. Ct. 29, 72 L. Ed. 411. See, also, Rossi v. United States (C.C.A.) 16 F.2d 712; United States v. Budar (D.C.) 9 F.2d 126; United States v. General Amusement Co. (D.C.) 19 F.2d 630; United States v. Kelly (D.C.) 24 F.2d 133. The legal relation and application of the word "kept" in these cases is not differentiated from the facts in this case. The conduct of the patrons may have been more flagrant in some of those cases, but that does not change the legal aspect of "kept" in the relation used.
The management of the hotel was a participant in the relation by its conduct, and had actual knowledge of the conduct of the patrons, and did exert itself in excluding from the room objectionable characters so that the guests would be of a more "select type." Many prominent professional and business men were examined by the defense, but nearly all of them patronized the Rose Room for luncheon and for dinner only, and many departed before or soon after the regular dinner hour.
It is also obvious that keeping the bottles in the cupboard and desk in this room, under all the circumstances, in connection with the liquor found in the room, the empty bottles removed by some of the waiters, and the conduct of the waiters and bell boys in co-operation with patrons of the room, as testified by some of the agents, had only one purpose, and the irresistible conclusion is that the liquor was kept for sale. The room had acquired a reputation as a place where liquor could be taken and consumed, and it would naturally attract persons having and desiring to imbibe liquor with others, and some seeking to acquire it for the same purpose, and to supply such demand these bottles, and the bottle in the waiters' room, were no doubt "kept." See Gentili v. United States (C.C.A.) 22 F.2d 67. The "Rose Room" is a nuisance, under the circumstances. Singer v. United States (C.C.A.) 288 F. 695, supports, rather than controverts, this conclusion.
The manager testified that when he took charge in 1918 (the act was approved October 28, 1919) the place was "quite bad," but he had frequently discharged employees, and had given strict orders against use of liquor in the "Rose Room," and had been doing his utmost to overcome this condition, and he thought that he had done so; but the evidence is to the contrary, and it is a matter of regret that he has not succeeded, and viewing the statute as not in any sense a proceeding in personam, but solely in rem to prevent continuance or recurrence of a public nuisance, and the manager having stated that he had been doing his utmost to overcome the situation, and the evidence showing that he has failed, under these circumstances, an order to restrain for one year further operation of this room in the manner in which it has been conducted must be entered, to accomplish an effectual abatement of the existing nuisance.
While this room is a nuisance within the provisions of the law, there is no evidence which reflects discreditably upon the hotel as a hotel. The transgressing bell boys were immediately discharged, and there is no evidence connecting the management of the hotel with selling or possessing liquor in this hotel. The conduct in the Rose Room, so far as disclosed, appears regular prior to the end of the dinner hour, 9 o'clock p.m.
Shall the court direct the marshal to padlock the entrances to the dining room, or shall the room be permitted to remain open until the end of the dinner hour, under bond of the management, conditioned as provided by law, that liquor will not be sold, kept, bartered, or consumed on the premises, and the room be closed at 9 o'clock p.m. of each day for one year? To this end the cause will be assigned for hearing on April 1, 1929, at 2 o'clock p.m.
On Further Hearing.
This is the way the matter presents itself to me. The Rose Room, at the issuance of the restraining order by Judge Norcross, July 6, 1928, it is established, was a nuisance. There is no evidence of change, but the contrary is established. The management has not shown its ability or disposition to remedy it.
The nuisance must be effectually abated by padlocking its entrances for one year. The public purpose of the National Prohibition Act is to give vitality to the Eighteenth Amendment, by carrying forward the express wish of the Legislatures of 46 states in adopting it, and the conviction of millions of United States citizens in what is conceived to be for the public good, and a denial of the execution of this law is of itself irreparable injury, as was said by Circuit Judge Hand from the Second Circuit.
The closing of the dining room will no doubt create a definite financial loss to the defendants, if there is any profit in its operation, and its close have influence upon the hotel, by destroying facility for the accommodation of its patrons at meals. This loss is irreparable, but the loss attributable to lawful enterprise would be practically all because of the close prior to 9 o'clock p.m. Material profit, mingled with gain from prohibited unlawful conduct, within the provisions of sections 33 and 34, 27 USCA, may not outweigh public moral welfare and civic righteousness.
It seems to me that the injury may be obviated, within the discretion given the court by section 34, title 27, USCA, by permitting the dining room to be open for luncheon and dinner (no breakfast, it is shown, being served), and used by the owner until the close of the dinner hour. The contention of the government that the room must be closed or open, and, being a nuisance, it must be closed, I think, is too restrictive. There is no evidence that any liquor was used or consumed, or circumstances of sale, service of cracked ice, ginger ale, or "white rock," etc., until after the dinner hour, 9 o'clock. The presumption is that, having found liquor in the room, it was "kept," etc., in this room, and that it was "kept" the whole day; but the intent of the Congress in lodging discretion in the court was to remedy an existing evil in the most practical way, by the application of common sense and good conscience. The chancellor undoubtedly has power, in the interest of justice and right, to exercise discretion, to the end that the nuisance be abated with the least injury to the defendants.
The room being decreed a nuisance, and a decree for injunctive relief not being suspended by allowance of appeal (Slaughter-House Cases, 10 Wall. 273, 19 L. Ed. 915), and the court having the power, it, said Justice Bradley, in Hovey v. McDonald, 109 U.S. 150, at page 161, 3 S. Ct. 136, 143 ( 27 L. Ed. 888), "should always be exercised when any irremediable injury may result from the effect of the decree as rendered; but it is a discretionary power. * * *"
A formal decree may be prepared and served on opposing counsel, containing the usual provisions in such cases, and that the room shall not be occupied or used for one year from the date of the decree, but that the defendants may, by filing a bond in the sum of $1,000 fixed by statute, with the usual conditions, and that the Rose Room will be closed from 9 o'clock p.m. to 9 o'clock a.m., or the decree is superseded by the Circuit Court of Appeals, or a judge thereof, on or before April 22, 1929, the marshal shall padlock the entrances of the Rose Room in issue for one year — the decree to be presented to the court for entry at 10 o'clock a.m. on the 15th day of April, 1929, or as soon thereafter as it can be considered by the court.