The plaintiffs are therefore entitled to a temporary injunction against the seizure and forfeiture of the cocaine in their possession but in no other respect. Phila Co. v. Stimson (223 U. S., 605, 619, 620); School of Magnetic Healing v. McAnnulty (187 U. S., 94, 108, 110); Magruder v. Belle Fourche Valley Water Users' Assn. (219 Fed., 72, 78, 79, C. C. A., 8). The motion to dismiss is overruled. If the Government elects to waive its claimed right to a seizure and forfeiture of the drug, the motion will be sustained and the bill dismissed. Following the announcement of the above opinion, the district attorney and the collector of internal revenue stated in open court that the latter had not been instructed to seize and forfeit the cocaine or preparation in the possession of the plaintiffs and had at no time had and does not now have an intention to do so. For this reason, the motion to dismiss is sustained and the bill is dismissed. (T. D. 2273.) Drawback on exported tobacco, snuff, and cigars. Satisfactory evidence required as to destruction of tax-paid stamps at time articles are entered for export. TREASURY DEpartment, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 21, 1915. To collectors in charge of exports and others concerned: Section 3386 of the Revised Statutes, authorizing an allowance of drawback on tax-paid tobacco, snuff, and cigars when exported from the United States, provides That no claim for an allowance of drawback shall be entered or allowed until a certificate from the collector of customs at the port from which the goods have been exported, or other evidence satisfactory to the Commissioner of Internal Revenue has been furnished that the stamps affixed to the tobacco, snuff, or cigars entered and cleared for export to a foreign country were totally destroyed before such clearance * * * Article 166 of Regulations No. 29 requires the internal-revenue officer detailed for the purpose to examine the stamps in such cases, to satisfy himself of their genuineness, and to destroy the same in the presence of the customs officer detailed to lade the goods on the exporting vessel. To facilitate the work of the officer, where large quantities of cigars or cigarettes are entered for export, the use of coal oil and lampblack, caustic soda, or other indelible fluids in destroying such stamps has been authorized. Upon investigation, however, it is found that in some instances the stamps which should be destroyed by the officer have been, or reported to have been, removed by the manufacturer or exporter prior to the arrival of the officers referred to, and that the destruction of the stamps has been certified by the internal-revenue officer, who, it appears, has inspected a small portion only of the unstamped goods on which drawback is claimed. Such a procedure is wholly illegal and affords opportunity for the grossest fraud. Such action therefore on the part of the exporter and the officer will not only vitiate the drawback claimed, but will subject the officer assigned to immediate dismissal from the service. Collectors in charge of exports will at once furnish all division deputies and all exporters of this class of articles with a copy of this notice. G. E. FLETCHER, Acting Commissioner of Internal Revenue. (T. D. 2274.) Income tax. Revision of T. D. 2163 of February 18, 1915, defining the taxable status of stock dividends paid on the capital stock from the current net earnings or established surplus created from the net earnings of corporations, jointstock companies or associations, and insurance companies taxable upon their net income. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 22, 1915. To collectors of internal revenue: Cash dividends or their equivalent paid from the net earnings or the established surplus or undivided profits of corporations, jointstock companies or associations, and insurance companies, if declared and paid on or after March 1, 1913, constitute taxable income in the hands of shareholders or beneficiaries when received, and should be returned when the total net income of any individual is in excess of $20,000, inclusive of such dividends, and the additional tax should be paid thereon as on income for the year in which such dividends were received, without regard to the period in which the profits or surplus were earned or the period during which they were carried as surplus or undivided profits in the treasury or on the books of the corporations, etc. Stock dividends paid from the net earnings or the established surplus or undivided profits of corporations, joint-stock companies or associations, and insurance companies, are held to be the equivalent of cash, and to constitute taxable income under the same conditions as cash dividends. T. D. 2163 of February 18, 1915, is hereby revised, and all rulings or parts of rulings heretofore made which are in conflict herewith are hereby revoked. Approved: W. H. OSBORN, Commissioner of Internal Revenue. W. G. McADOO, Secretary of the Treasury. (T. D. 2275.) Emergency revenue law. Ruling regarding the proper method of affixing documentary stamps upon the transfer of certificates of. stock. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 30, 1915. GENTLEMEN: Answering your communication of the 21st instant, in which you request to be advised as to the proper method of affixing documentary stamps upon certificates of stock transferred, you are informed that under Schedule A, act of October 22, 1914, in case of a sale of certificates of stock where the evidence of transfer is shown only by the books of the company, the requisite stamps should be affixed to the books; where the change of ownership is evidenced by the indorsement of the certificate of stock from the seller to the purchaser, the requisite stamps should be affixed upon the certificate indorsed, and not upon the new certificate issued to the purchaser by the transfer agent in exchange for the old certificate; and in case of an agreement to sell certificates of stock, or where the transfer is by delivery of the certificates indorsed in blank, there is required to be made and delivered by the seller to the buyer a bill or memorandum of such sale, to which the requisite stamps shall be affixed. Respectfully, Messrs. DAVID A. GATES, Acting Commissioner of Internal Revenue. (T. D. 2276.) Narcotic law-Conspiracy case-Charge of court. Court charged jury that defendants entered a conspiracy to defeat the intents and purposes of the act of December 17, 1914. Defendants convicted under each count submitted and sentenced. TREASURY DEPARTMENT, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington, D. C., December 31, 1915. The appended charge of Judge Meek to the jury in the District Court of the United States for the Northern District of Texas, in the case of the United States v. C. G. Wallace et al., is published for the information of internal-revenue officers and others concerned. G. E. FLETCHER, Acting Commissioner of Internal Revenue. DISTRICT COURT OF THE UNITED STATES, NORTHERN DISTRICT OF TEXAS, AT FORT WORTH. United States v. C. G. Wallace et al. GENTLEMEN OF THE JURY: In the case now on trial you have given patient attention to the reading of the several counts contained in the indictment, to the evidence adduced before you, and to the arguments of counsel. As the case stands for your consideration and determination under the evidence and the law as I will now give it you, the defendants Clarence G. Wallace, Phillip Bryan, Charlie Hollingsworth, Joe Meadows, Joe Lane, and Tood Wallace are on trial before you under the third, fourth, and sixth counts of the indictment; Clarence G. Wallace and Phillip Bryan under the ninth count thereof. Each of the various counts of the indictment numerically indicated above charge separate and distinct offenses against the defendants named therein. The third count of the indictment charges that the defendants named therein unlawfully, knowingly, and willfully conspired, confederated, and agreed together and among themselves to commit an offense against the United States, which was to sell, barter, and exchange a certain salt and derivative of opium, to wit, morphine, and a certain salt and derivative of coca leaves, to wit, cocaine, to persons whose names were unknown to the grand jury, without having first registered and without having first paid the special tax as required by the act of Congress approved December 17, 1914, and generally known as the Harrison antinarcotic act. It is charged that in furtherance of this conspiracy and agreement, and to effect the object of same, Clarence G. Wallace bought and had in his possession for the purpose of selling and distributing as aforesaid about 1 ounce of morphine, and that Charlie Hollingsworth had in his possession and under his control about 10 grains of morphine for the purpose of selling and delivering same to one Dan Waggoner. It is also charged that Phillip Bryan sold to one Farris Herring about 5 grains of morphine. To the charge of conspiracy as contained in the third count of the indictment and as I have substantially reviewed it to you, each of the defendants, Clarence G. Wallace, Bryan, Meadows, Lane, and Tood Wallace, has entered his plea of not guilty. The defendant Charlie Hollingsworth has entered his plea of guilty, and as to him it becomes your duty to find him guilty on his plea under this count. Section 1 of the act of Congress which the third count of the indictment charges the defendants with having conspired to violate, provides among other things that every person who sells or barters any salt or derivative of opium, or any salt or derivative of coca leaves, shall register with the collector of internal revenue of the district his name or style, place of business, and place or places of business where such business is to be carried on. It also provides that every person so engaging in such business shall pay to said collector a special tax. It is also provided in this connection that it shall be unlawful for any person required so to register to deal in or sell any of the above-named drugs without having first registered and paid the special tax. It is further provided by section 1 that the word " person as used in the act shall be construed to mean and include a partnership or association of persons as well as a natural person. Section 37 of the criminal code provides in part that if two or more persons conspire to commit any offense against the United States, and if one or more of such parties do any act to effect the object of the conspiracy, each of the parties to such conspiracy shall be punished, as is provided under the terms of the law. A conspiracy is formed when two or more persons agree to do an unlawful act-in other words, when they combine to accomplish, by their united action, a crime or unlawful purpose and the statutory offense is consummated when such agreement is made and such combination is entered into and one or more of the parties do any act to effect the object of such conspiracy * * It is not necessary, to constitute a conspiracy, that two or more persons should meet together and enter into an explicit or formal agreement for the unlawful scheme, or that they should directly, by words or in writing, state what the unlawful scheme is to be and the details of the plans or means by which the unlawful combination is to be made effective. It is sufficient if two or more persons, in any manner, or through any contrivance, positively or tacitly, come to a mutual understanding to accomplish a common and unlawful design. Of course, a mere discussion between parties about entering into a conspiracy, or as to the means to be adopted, for the performance of an unlawful act, does not constitute a conspiracy, unless the scheme, or some proposed scheme, is in fact assented to-concurred in by the parties in some manner, so that their minds meet for the accomplishment of the proposed unlawful act. United States v. Goldberg (12 Meyer, Fed. Dec., 41, 42; Fed. Cas. No. 15, 233). A mere agreement or combination to effect an unlawful purpose, not followed by any acts done by either of the parties to carry into execution the object of the conspiracy, does not constitute the offense. There must be both the unlawful agreement or combination, and an act or acts done by one or more of the parties to effect the illegal object or design agreed upon, to make the punishable offense under the statute. Where there is an attempted attainment of an unlawful end by two or more persons, who are actuated by a common design of accomplishing that end, and who in any way, and from any motive, or upon any consideration, work together in furtherance of the unlawful scheme, each one of the persons becomes a member of the conspiracy. To establish the guilt of the defendants on trial and charged in count 3 of conspiracy you must be satisfied from the testimony that the conspiracy was formed and entered into by them as alleged, to sell and barter a certain salt and derivative of coca leaves--that is, cocaine-to divers and sundry persons without first having registered and without having first paid the special tax as required by the act of Congress approved December 17, 1914, and you must further believe from the testimony that to effect the object of the conspiracy the defendant Clarence G. Wallace bought and had in his possession for the purpose of selling and distributing the same as aforesaid about 1 ounce of morphine, or that Charlie Hollingsworth had in his possession and under his control about 10 grains of morphine for the purpose of selling and delivering to one Dan Waggoner, or that Phillip Bryan sold to one Farris Herring about 5 grains of morphine. * * * To establish a conspiracy it is not, as has been said, necessary that there should be an explicit and formal agreement for an unlawful scheme between the parties; nor is it essential that direct proof be made of an express agreement to do the act forbidden by the law. It is as competent to prove an alleged conspiracy by circumstances as by direct evidence. In prosecutions of criminal conspiracies the proof of the combination charged must almost always be extracted from the circumstances connected with the transaction which forms the subject of the accusation. * The acts of the parties in the particular case, the nature of the acts, * * and the character of the transactions or series of transactions, with the accompanying circumstances, as the evidence may disclose them, should be investigated and considered as sources from which evidence may be derived of the existence or nonexistence of an agreement, which may be expressed or implied, to do the alleged unlawful act. The testimony adduced reveals that Phillip Bryan had registered and paid the special tax to sell and barter these drugs under style of East Side Pharmacy for the period covered by count 3 of the indictment charging conspiracy on the part of the defendants named. Such registration and the payment of the special tax authorized and entitled him to sell and barter the salts and derivatives of opium and coca leaves in his personal and individual capacity under the style of East Side Pharmacy in conformity with the provisions and limita |