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UNITED STATES v. SENDROW

June 19, 1935

UNITED STATES
v.
SENDROW et al.



The opinion of the court was delivered by: AVIS

Defendant National Union Indemnity Company (hereinafter called company) moves to dismiss the complaint filed in this cause for the following reasons argued in brief of counsel:

(1) That the complaint is defective because it does not set forth a cause of action. The challenge on this ground is technical, and the reasons assigned are not sufficient to entitle the company to a dismissal.

 (2) That the bond upon which suit is brought is not set out in full in the body of the complaint or a copy annexed thereto and referred to as an exhibit.

 This does not appear to be a fatal defect. The complete copy may be produced on proper application therefor, and the company is in no way prejudiced by failure to set out a complete copy in the complaint. Sufficient reference is made therein to identify the bond to which reference is made.

 This objection is removed by the decision in the Circuit Court of Appeals for the Third Circuit in the case of Helvering v. Druggists' Specialties Co., 76 F.2d 743, page 745 (decided March 25, 1935), in which it was held that: "Title 3 of the National Prohibition Act is still in force and that sections 4 and 9 of title 2, not resting on constitutional authority for their enactment, are likewise in force if they relate to the regulation and collection of the government's revenue as well as, at one time, to the inhibitions of the Eighteenth Amendment."

 This decision, as I view it, makes the objection without force, and the complaint will not be dismissed on the ground that the repeal of the Eighteenth Amendment prevents the government from proceeding on a bond given by a permittee to secure the payment of taxes on ordinarily tax-free alcohol, diverted in violation of the statute.

 (4) That the complaint is not sufficiently specific in its allegations of diversion of alcohol.

 I am convinced that the statement in the complaint is sufficient to apprise company of the charge, and, if further and specific dates and amounts of diversion are desired, they may be obtained upon application for bill of particulars.

 Finally, counsel for company invokes the doctrine of laches and also the statute of limitations.

 It appears quite conclusively that laches in the commencement of an action cannot be invoked against the United States. See Chesapeake & Delaware Canal Co. v. United States, 250 U.S. 123, 39 S. Ct. 407, 63 L. Ed. 889; United States v. Winona & St. P.R. Co. (C.C.A. 8) 67 F. 948, 965.

 The limitation statute invoked is found in 26 USCA § 105, and reads as follows:

 "Except in the case of income, warprofits, excess-profits, estate, ...


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