1. Where property declared by a federal statute to be forfeited
because used in violation of federal law is seized by one having no
authority to do so, the United States may adopt the seizure with
the same effect as if it had originally been made by one duly
authorized. P.
272 U. S.
325.
2. An automobile, seized while being used for the purpose of
depositing or concealing tax unpaid illicit liquors with intent to
defraud the United States of the taxes imposed thereon, is
forfeitable under Rev.Stats. § 3450, and the interests of innocent
persons in the vehicle are thereby divested. P.
272 U. S.
325.
3. Intoxicating liquor, though made for beverage purposes in
violation of the National Prohibition Act, is subject to tax.
Supplementary Prohibition Act of Nov. 23, 1921, considered, and
Revenue Act of 1921. P.
272 U. S.
326.
Page 272 U. S. 322
4. The basic tax of $2.20 per gallon imposed by the Revenue Acts
on liquor illegally produced is not to be treated as a penalty, but
is a tax within the meaning of Rev.Stats. § 3450, and, being
unpaid, makes that section applicable even if the additional
amounts imposed by the Acts were deemed penalties. P.
272 U. S.
328.
5. There is no constitutional objection to enforcing a penalty
by forfeiture of an offending article. P.
272 U. S.
329.
6. In a forfeiture proceeding, on certiorari to a judgment
quashing the libel on motion of a claimant, the allegations in the
claim will not be considered. The allegations of the libel are
accepted as true. P.
272 U. S.
329.
7. Under Rev.Stats. § 3450, if the intent to defraud the United
States of the tax is established by any competent evidence, a use
of the vehicle for the purpose of concealing the liquor suffices,
even if the offender obtained it not from a distillery, bonded
warehouse, or importer, but from a stranger. P.
272 U. S.
329.
8. Rev.Stats. § 3450, providing that
"Whenever any goods . . . in respect whereof any tax is or shall
be imposed . . . are removed, or are deposited or concealed in any
place, with intent to defraud the United States of such tax. . . ,
[every] . . . conveyance whatsoever, . . . used in the removal or
for the deposit or concealment thereof, respectively, shall be
forfeited,"
is not in conflict with or superseded by § 26 of Title II of the
National Prohibition Act, which provides for the seizure and
forfeiture, in certain cases, of vehicles used in illegally
transporting intoxicating liquors, but saves the interests of
innocent persons. P.
272 U. S.
330.
9. In view of § 5 of the Supplemental Prohibition Act, an
implied repeal by that Act or the National Prohibition Act of
Rev.Stats. § 3450, could not result from mere inconsistency, but
must rest upon a direct conflict. P.
272 U. S.
331.
10. Section 26, Title II, of the National Prohibition Act, in
its relation to the forfeiture of vehicles, applies only to cases
incident to the prosecution of persons transporting liquor in
violation of that Act, and does not protect innocent persons whose
vehicles are forfeited under Rev.Stats. § 3450. P.
272 U. S.
332.
11. Section 26,
supra, applies only where a person is
discovered in the act of transporting intoxicating liquor in
violation of law. P.
272 U. S.
333.
4 F.2d 528 reversed.
Libel to forfeit an automobile under Rev.Stats. § 345 on the
ground of use with intent to defraud the United
Page 272 U. S. 323
states of the tax on distilled spirits found therein, by
depositing and concealing the liquor. The Garth Motor Company
intervened as claimant. A judgment of the district court quashing
the libel was affirmed by the circuit court of appeals. Certiorari
was granted, 268 U.S. 687.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
This is a proceeding commenced in the Federal Court for Northern
Alabama, under Revised Statutes of the United States § 3450, to
forfeit an automobile "said to belong to Garth Motor Company" on
the ground that it was being used with intent to defraud the United
States of the tax on distilled spirits found therein by depositing
and concealing the liquor. [
Footnote 1] The libel, which was filed in September, 1923,
recites that it is "a case of seizure on land under the internal
revenue laws of the United States." The company intervened as
claimant and moved to quash the libel. It also filed a claim by
which it asserted title to the automobile and denied
Page 272 U. S. 324
knowledge or notice, prior to seizure, that the automobile was
being used or was to be used in any illegal manner. No action was
ever taken on the claim. The motion to quash was allowed, and upon
that motion alone the district court entered judgment dismissing
the libel. The judgment was affirmed by the Circuit Court of
Appeals for the Fifth Circuit. 4 F.2d 528. The case is here on writ
of certiorari. 268 U.S. 687.
The libel alleges that, on August 11, 1923, the federal
prohibition director for Alabama had seized the automobile in the
possession of one Killian being used by him "for the purpose of
depositing and concealing certain illicit distilled spirits" on
which "the taxes imposed by law had not been paid" with "intent . .
. to defraud the United States of such taxes," alleges that the
automobile is forfeit under § 3450, and prays relief thereunder. To
the libel is attached, and made part thereof, a complaint, dated
August 13, 1923, by a federal prohibition agent. In that complaint,
the affiant charged, with specification, only that Killian
unlawfully had there in his possession 27 quarts of rye whisky, in
violation of § 29 of Title II of the National Prohibition Act, Oct.
28, 1919, c. 85, 41 Stat. 305, 316, and he prayed that Killian "may
be apprehended and further dealt with according to law." The
complaint made no reference to removal or transportation of liquor,
nor to the use of a vehicle for such purpose, nor to any seizure,
nor to § 26 of the Prohibition Act. It did not even mention an
automobile or other vehicle. Nor did the libel state that a warrant
issued on the complaint, or that Killian had been arrested or in
any way prosecuted for any alleged violation of the Prohibition
Act, or that his whereabouts was known.
The sole question for decision is whether an automobile, which
was seized by a prohibition agent, may be forfeited under § 3450 if
it was being used for the purpose
Page 272 U. S. 325
of depositing or concealing tax unpaid illicit liquors with the
intent to defraud the United States of the taxes imposed thereon.
Obviously the mere fact that the seizure of the automobile had been
made by the prohibition director (instead of by an internal revenue
officer) does not preclude the possibility of a proceeding to
forfeit under § 3450. It is settled that, where property declared
by a federal statute to be forfeited because used in violation of
federal law is seized by one having no authority to do so, the
United States may adopt the seizure with the same effect as if it
had originally been made by one duly authorized.
The
Caledonian, 4 Wheat. 99,
17 U. S. 101;
Taylor v. United
States, 3 How. 197,
44 U. S. 205.
See United States v. One Studebaker Seven-Passenger Sedan,
4 F.2d 534.
The serious question presented is whether there is such a direct
conflict between the National Prohibition Act, and particularly §
26 of Title II thereof, and § 3450 of the Revised Statutes as to
render the latter section inoperative and unavailable to the
government where the vehicle was being used for the purpose of
depositing and concealing illicitly distilled liquors under the
circumstances set forth in the libel. On this question, there has
been much difference of opinion in the lower courts. [
Footnote 2] If a forfeiture may be had under
§ 3450 for such use of a vehicle to evade a tax on illicitly
distilled liquor, the interests of innocent persons in the vehicle
are not saved. If § 26 is the only applicable provision for
forfeiture of the car, the interests of those who are innocent are
not forfeited. The claimant contends, on several grounds,
Page 272 U. S. 326
that § 3450 was not applicable, and that the libel was properly
dismissed.
First. The claimant contends that, at the time of the
seizure, the law did not impose any tax upon liquor illicitly made.
Congress has power to tax such liquor.
United States v.
Yuginovich, 256 U. S. 450,
256 U. S. 462;
United States v. Stafoff, 260 U.
S. 477,
260 U. S. 480.
By Rev.Stats. § 3248 the tax attaches to distilled spirits "as soon
as it is in existence as such,"
United States Fidelity &
Guaranty Co. v. United States, 220 F. 592, and, upon its
production, the tax becomes a first lien thereon,
United States
v. Ulrici, 111 U. S. 38,
111 U. S. 42.
The Revenue Act of 1918, Feb. 24, 1919, c. 18 § 600, 40 Stat. 1057,
1105, lays the tax "on all distilled spirits now in bond or that
have been or that may be hereafter produced in or imported into the
United States." The provision in § 600b of the Act concerning
liquor which could not during the period of war prohibition be
lawfully sold or removed did not remit the tax; it merely deferred
the time for payment. It is clear that, before the enactment of the
National Prohibition Act, it imposed the basic production tax upon
all distilled spirits, although illicitly made. [
Footnote 3]
The continued existence of taxes upon illicit liquor is
indicated in § 35 of the National Prohibition Act (p. 317), which
provides: "This act shall not relieve anyone from paying any taxes
or other charges imposed upon the manufacture or traffic in such
liquor." That Congress, in enacting that law, would intentionally
have exempted illicit liquor from taxation is not likely. Moreover,
we are not dealing with the construction of the law as enacted in
1919. The Willis-Campbell Act, Nov. 23, 1921, c. 134, § 5, 42
state, 222, 223, supplemental
Page 272 U. S. 327
thereto, continued in force or reenacted, by express provision,
all laws in regard to the taxation of intoxicating liquor not
directly in conflict with the prohibitory legislation. Furthermore,
the Revenue Act of 1921, Nov. 23, 1921, c. 136 § 600, 42 Stat. 227,
285, enacted on the same day, shows that Congress had no intention
then of relieving liquor from taxation merely because illegally
dealt with, for it provided specifically that, if distilled
spirits, tax paid for nonbeverage purposes, be diverted to beverage
purposes, an additional tax of $4.20 per gallon must be paid,
although, under the law, such diversion could not be made
legally.
The claimant argues that it could not have been the intention of
Congress to impose the tax, because it had become very difficult,
if not impossible, to pay the tax. The claimant points to the fact
that the payment of the tax contemplated by the revenue laws
existing at the time of the passage of the National Prohibition Act
was by means of tax paid stamps, to be affixed when liquor was
withdrawn from the distillery or bonded warehouse after complying
with the minutely prescribed proceedings incident to its
manufacture and custody set forth in
Taney v. Penn Nat.
Bank, 232 U. S. 174,
232 U. S.
181-184; that, since the National Prohibition Act, there
has been no way in which the tax could be so paid on intoxicating
liquor made for beverage purposes; that stamps are no longer
obtainable, and no officer is authorized to receive payment. These
supervening obstacles to paying the tax do not, however, establish
that the intention was not to continue it in force. A law which
imposes a tax on intoxicating liquor, whether legally, or illegally
made, is not in conflict with another law which prohibits the
making of any such liquor.
Compare United States v.
Stafoff, 260 U. S. 477;
Vigliotti v. Pennsylvania, 258 U.
S. 403. There is no direct conflict between any
provision of the prohibitory legislation and the imposition of the
tax here in question.
Page 272 U. S. 328
Second. The claimant contends that the so-called tax on
illicitly distilled spirits theretofore imposed ceased to be a tax,
and became in law a penalty, when the enactment of the National
Prohibition Act changed the purpose of the tax from raising revenue
to preventing manufacture, sale, and transportation, and that to
enforce such penalty by forfeiture of the property rights of
innocent third partied would be a denial of due process of law. It
is true that the use of the word "tax" in imposing a financial
burden does not prove conclusively that the burden imposed is a
tax, and that, when it appears from its very nature that the
imposition prescribed is a penalty solely, it must be treated in
law as such. But the imposition here in question is not of that
character. A tax on intoxicating liquor does not cease to be such
because the sovereign has declared that none shall be manufactured
and because the main purpose in retaining the tax is to make law
breaking less profitable. What was sought to be enforced and held
to be a penalty in
Lipke v. Lederer, 259 U.
S. 557,
259 U. S. 561,
was the so-called double tax. Here, we are dealing with the basic
production tax.
With respect to the character of the impositions called taxes,
there is nothing in either the Revenue Acts or the Prohibition Act
which makes any distinction between the product of legal and
illegal distillation. The Acts left in effect the basic tax of
$2.20 per gallon, which was and is a true tax on the product,
whether legally or illegally distilled, and added to it the
additional amounts in case of illegal distillation or diversion to
illegal uses. These additional amounts also are called taxes by
Congress, and were understood by it to be such. Whether they were
intrinsically penalties, and should be treated as such, we need not
determine. The basic tax of $2.20 a gallon on liquor illegally
produced is not imposed because of illegality, but despite of it.
It is a tax within the meaning of § 3450, and, being unpaid, makes
that
Page 272 U. S. 329
section applicable even if the additional amounts imposed by the
acts be deemed penalties. Moreover, there is no constitutional
objection to enforcing a penalty by forfeiture of an offending
article.
Lipke v. Lederer holds merely that the
enforcement of a penalty by an administrative official, without
giving notice and an opportunity to defend, is a denial of due
process. A proceeding under § 3450 is a judicial proceeding, in
which the claimant is accorded fully the right to litigate. A claim
was filed in this case, but that is not now before us. Instead of
asking for a hearing thereon, the claimant chose to move to quash
the libel. If the judgment dismissing the libel is set aside, a
hearing on the merits of the libel and of the claim may still be
had. But we may not consider now allegations in the claim.
Third. The claimant contends that a proceeding under §
3450 will not lie to forfeit a vehicle unless it was being used to
remove the tax unpaid article from the place where the tax was
required by law to be paid -- that is, the place of manufacture or
of importation or a bonded warehouse. This narrow meaning of the
word "remove" is urged upon us as contrasted with the broad term
"transport" employed in § 26. We have no occasion to determine the
exact scope, in this connection, of the term "remove." The libel
makes no reference to removal. It charges only that the automobile
was being used to deposit or conceal.
Under § 3450, it is not essential that the offender must have
been either the manufacturer or importer of the liquor or a person
directly associated with him. The government may look for payment
also to the liquor itself, and to whoever has possession of it. Nor
does the language of § 3450 or its history indicate that Congress
intended to limit the proceeding under that section to cases where
the vehicle was used for deposit or concealment as part of the
illegal act of removal, or to make it
Page 272 U. S. 330
applicable only where the article concealed had been unlawfully
removed from the place where the tax should have been paid. If the
intent to defraud the United States of the tax is established by
any competent evidence, a use of the vehicle for the purpose of
concealment satisfies the requirement of § 3450, even if it appears
that the offender obtained it not from a distillery, bonded
warehouse, or importer, but from a stranger.
It is argued that Killian's purpose cannot have been to evade
the tax; that it was only to violate the Prohibition Act. The place
from which the removal is made and the special relation to the
manufacturer or importer of him who used the vehicle are of
evidential significance only. Knowledge that liquor was illicitly
distilled may tend to prove knowledge that it was tax unpaid.
Removal or concealment of the liquor with such knowledge may tend
to prove an intention to deprive the United States of the tax due
thereon. But with these questions we have no concern now. The case
is here on review of a judgment of dismissal upon a motion to
quash. Therefore we must accept as true the allegations of the
libel.
Fourth. The claimant contends that § 3450, insofar as
it applied to intoxicating liquor, was superseded by § 26 of the
National Prohibition Act. There was no repeal in terms. There
cannot be held to have been a repeal by implication, unless § 3450
is in direct conflict with some provision of the National
Prohibition Act or of the supplemental act. For Congress has
declared in § 5 of the Willis-Campbell Act that, in ascertaining
its intention in this connection, the standard of mere
inconsistency, which had been applied in
United States v.
Yuginovich, 256 U. S. 450,
shall not prevail.
The two statutes cover different ground. Different purposes
underlay their enactment. Section 3450, extending to every taxed
article, seeks to enforce the obligation
Page 272 U. S. 331
to pay the tax by subjecting to forfeiture also articles used in
the attempt to evade such payment. The purpose of § 26 is to
prevent the manufacture, sale, or transportation of intoxicating
liquor.
Carroll v. United States, 267 U.
S. 132,
267 U. S.
154-155,
267 U. S. 157.
It is true that many acts punishable under § 3450 are punishable
also under § 26. But many are not. Thus, § 3450 applies to a
vehicle, whether used for removal, deposit, or concealment, and
even although the vehicle is not in motion and movement was never
contemplated; § 26 applies only to a vehicle used in transporting
contrary to law. Section 3450 may apply although a permit was
obtained to transport the liquor; § 26 cannot. On the other hand, §
3450 as applied to liquor relates only to that on which taxes have
not been paid; § 26 applies whether taxes have been paid or not. It
is clear that the mere existence of two provisions penalizing acts
which are part of the same transaction does not prove direct
conflict between them. Nor does the difference in purpose which
underlay their enactment.
In the absence of conflict resulting from differences in the
scope and purposes of the statutes, the claim of implied repeal
must rest upon essential conflict incident to the prescribed
methods of their operation. None such has been shown. Direct
conflict is not established by showing merely differences in
details of procedure. That some other mode of disposition must now
take the place of the requirements in § 3450 for the sale of the
seized liquor is not sufficient to establish a conflict of the
provisions as applied to a seized vehicle. To establish an implied
repeal, there must, under the legislative mandate, be shown some
necessary contradiction so extreme as to justify this Court in
finding it impossible to permit the government the choice between
the two remedies where the facts bring the offense within the
provisions of both statutes. Such a contradiction is said to exist
because,
Page 272 U. S. 332
under § 3450, the vehicle is the offender, and must be forfeited
if there is a guilty intent on the part of him who used it,
whereas, under § 26, a person is the offender, and the forfeiture
of the vehicle extends only to the interests of those who share in
his guilt by having notice that it was to be used for the illegal
purpose; that, under § 3450, the vehicle may be forfeited although
no person is convicted of the offense involved or is even
prosecuted, whereas, under § 26, there can be no forfeiture unless
there has been a conviction of one discovered in the act of
transportation in violation of law. But it is not true that these
differences show direct conflict. The provisions for forfeiture of
the vehicle and for arrest of the transporter are both incidental
to the main purpose of § 26 of reaching and destroying the
forbidden liquor in process of transportation.
Carroll v.
United States, 267 U. S. 132,
267 U. S. 155.
The contradiction urged relates only to the nature of the
incidental penalty and the effect of its imposition. It is clearly
possible to apply to a particular state of facts either one or the
other remedy, and to give to the government the choice. To hold
that, where the tax unpaid spirits were illegally distilled, there
could be forfeiture of the vehicle only under § 26, while, in case
of tax unpaid legally distilled liquor, the vehicle could be
forfeited under § 3450 would involve holding that, where the crime
of tax evasion is preceded by the offense of illegal distillation,
a less severe forfeiture is inflicted than if tax evasion alone
were involved.
Fifth. The claimant contends that § 26 has modified §
3450, as applied to intoxicating liquors, so as to deny a
forfeiture of the interest in the vehicle of one who had no guilty
knowledge that it was to be used for an illegal purpose. That there
was no such protection of the innocent interest prior to the
National Prohibition Act is conceded.
Goldsmith, Jr.-Grant Co.
v. United States, 254 U. S. 505.
That, since the Willis-Campbell Act, Congress
Page 272 U. S. 333
has not intended to restrict any remedy theretofore given in aid
of the revenue laws is clear. The argument that, by § 26, Congress
manifested the intention to protect generally innocent interests is
unfounded. The section is narrow in scope. The protection accorded
is stated explicitly. It does not apply generally to violations of
the Prohibition Act, nor to the violation of any provision of the
revenue laws. It applies solely to cases of forfeiture incident to
the prosecution, as therein provided, of a person transporting
liquor by a vehicle in violation of the Prohibition Act.
The suggestion is made that, in this view of § 3450, there may
be a forfeiture where a stranger has surreptitiously deposited or
concealed the liquor in the vehicle while in the possession and use
of the owner, or has obtained possession of the vehicle by theft
and then made such use of it. But we are not here concerned with
such a state of facts, and therefore may dismiss the suggestion by
repeating what was said of like possibilities pressed on our
attention in the
Goldsmith, Jr.-Grant Co. case (p.
254 U. S.
512):
"Whether the indicated possibilities under the law are justified
we are not called upon to consider. It has been in existence since
1866, and has not yet received such amplitude of application. When
such application shall be made it will be time enough to pronounce
upon it, and we also reserve opinion as to whether the section can
be extended to property stolen from the owner or otherwise taken
from him without his privity or consent."
Sixth. The claimant contends that, as applied to
intoxicating liquors, § 3450 and § 26 are alternative remedies, and
may not be employed cumulatively. Section 26 commands that, when a
person is discovered in the act of transporting, by means of a
vehicle, intoxicating liquors in violation of the law, the officer
shall take possession of the vehicle and shall arrest the person in
charge thereof; that the person shall be proceeded against for
Page 272 U. S. 334
the violation; that, pending the proceeding against him, the
vehicle shall be surrendered to the owner upon giving bond to
return it to the custody of the officer on the day of the trial to
abide the judgment of the court; that, in case of conviction of the
person, the vehicle shall be sold under conditions and in a manner
prescribed; that the proceeds remaining after paying the expenses
shall be paid over to lienors innocent of wrongdoing, and that,
unless and except so far as there are such lienors or others
entitled thereto, the net proceeds shall be paid into the Treasury
of the United States. The claimant insists not only that the
government must elect between § 26 and § 3450, but that the
commencement of proceedings under § 26 bars a resort to § 3450.
The case at bar does not present any conceivable question of
cumulative remedies or of election. While the second sentence in §
26 uses the words "transported or possessed," the context makes it
very plain that the possession intended is possession in
transportation. [
Footnote 4]
Hence, that section is applicable only if a person is discovered in
the act of transporting intoxicating liquor in violation of law.
There is no allegation in the libel that the automobile had been so
discovered, or was being so used. There is no allegation that
Killian, who had possession of the automobile, has ever been
prosecuted. It appears that a complaint was made, but not that a
warrant issued, or that he was arrested, or even that he was found.
The
Page 272 U. S. 335
motion to quash must be determined on the showing in the
libel.
Reversed.
[
Footnote 1]
"Whenever any goods . . . in respect whereof any tax is or shall
be imposed . . . are removed, or are deposited or concealed in any
place with intent to defraud the United States of such tax, . . .
[every] conveyance whatsoever . . . used in the removal or for the
deposit or concealment thereof, respectively, shall be
forfeited."
[
Footnote 2]
See Commercial Credit Co. v. United States, 5 F.2d 1,
and cases there cited;
also United States v. Milstone, 6
F.2d 481;
United States v. One Reo Truck Automobile, 9
F.2d 529;
National Bond & Investment Co. v. United
States, 8 F.2d 942;
United States v. One Marmon
Automobile, 5 F.2d 113;
United States v. One Ford
Automobile, (U.S.D.C.E. and W.D.Tenn.) Feb. 27, 1925 (no
opinion).
[
Footnote 3]
See also Rev.Stat. § 3251, Act March 3, 1875, c. 127, §
1, 18 Stat. 339; Act Aug. 27, 1894, c. 348, § 48, 28 Stat. 509,
563; Act Oct. 3, 1917, c. 63, § 300, 40 Stat. 300, 308.
[
Footnote 4]
The words of the section are:
"Sec. 26. When the commissioner, his assistants, inspectors, or
any officer of the law shall discover any person in the
act of
transporting in violation of the law intoxicating liquors
in any wagon, buggy, automobile, water or air craft, or other
vehicle, it shall be his duty to seize any and all
intoxicating liquors found therein
being transported
contrary to law. Whenever intoxicating liquors
transported or
possessed illegally shall be seized by an officer, he shall
take possession of the vehicle and team or automobile, boat,
air or water craft, or any other conveyance, and shall arrest
any person in charge thereof."
(Italics ours.)
MR. JUSTICE STONE (concurring).
I agree that the Willis-Campbell Act requires § 3450 of the
Revised Statutes and § 26 of the National Prohibition law to be so
construed as to stand together insofar as they are not in direct
conflict. I agree also that there conceivably may be a deposit or
concealment of illicit liquor in an automobile with intent to
defraud the United States of the tax upon it, which is not
transportation within the meaning of § 26, and, to that extent, the
two sections are not in conflict. But I cannot subscribe to those
expressions in the opinion which seem to suggest that the two
sections are not in direct conflict in a case where there is
transportation of liquor in a vehicle in violation of the National
Prohibition law with intent to defraud the United States of the
tax. In that case, § 26, it seems to me, plainly directs that the
seizure shall be made and proceedings for forfeiture of the seized
vehicle had under that section. In that event § 26 saves the
interest of the innocent owner or lienor from the forfeiture
required by § 3450. It appears to me that the conflict in such a
case is direct, and that § 26, by its terms, is controlling.
MR. JUSTICE BUTLER, dissenting.
1. No tax, as distinguished from penalty, is imposed on the
manufacture, sale, or transportation of intoxicating liquor for
beverage purposes.
The Eighteenth Amendment, by its own force, invalidated all laws
which in any manner sanctioned the manufacture, sale, or
transportation of such liquor.
National Prohibition Cases,
253 U. S. 350,
253 U. S. 386.
And it empowered Congress to pass appropriate legislation to
enforce the prohibition. The manufacture of intoxicating liquor
Page 272 U. S. 336
for medicinal or other nonbeverage purposes may be authorized or
encouraged, but an attempt so to deal with liquor for beverage
purposes would be a plain violation of the amendment.
If Congress has any power to impose a tax, as distinguished from
a penalty, on the production of beverage liquor forbidden by the
Constitution, its purpose so to do must be disclosed unmistakably
by language that is not susceptible of any other meaning. All
exactions now imposed on such manufacture should be held to be
penalties to enforce prohibition. The question whether the
exactions called taxes were in fact penalties was not involved in
United States v. Yuginovich, 256 U.
S. 450,
256 U. S. 462,
or in
United States v. Stafoff, 260 U.
S. 477. When reading and applying the legislation here
in question, it should be borne in mind that it is the duty of
Congress to impose penalties to enforce the prohibition of beverage
liquor, and that Congress has undertaken vigorously to discharge
that duty.
The libel for condemnation of the automobile does not refer to
the statute under which the so-called tax is claimed, and does not
state the amount demanded. But the government relies on § 600(a) of
the Revenue Act of 1918, approved February 24, 1919. 40 Stat. 1057,
1105, c. 18. This provision was enacted before the War Prohibition
Act, the Eighteenth Amendment, and the National Prohibition Act
took effect. The language is:
"That there shall be levied and collected on all distilled
spirits now in bond or that have been or that may be hereafter
produced in or imported into the United States, . . . in lieu of
the internal revenue taxes now imposed thereon by law, a tax of
$2.20 (or, if withdrawn for beverage purposes or for use in the
manufacture or production of any article used or intended for use
as a beverage, a tax of $6.40) on each proof gallon, . . . to be
paid by the distiller or importer
when withdrawn, and
collected under the provisions of existing law. "
Page 272 U. S. 337
And, after National Prohibition became effective, that provision
was amended by § 600 of the Revenue Act of 1921, 42 Stat. 227, 285,
c. 121, which added:
"Provided, that, on all distilled spirits on which tax is paid
at the
nonbeverage rate of $2.20 per proof gallon and
which are
diverted to beverage purposes . . . there shall
be levied and collected
an additional tax of $4.20 on each
proof gallon, . . . to be paid by the person responsible for such
diversion."
The government contends that, within the meaning of § 3450,
$2.20 per gallon is a true tax on all liquor, whether legally or
illegally distilled. And, as to the imposition made by § 600 of the
Act of 1921, it rightly says that the so-called additional tax of
$4.20 on each proof gallon diverted to beverage purposes is a
penalty. Clearly it is an imposition by way of punishment to
enforce prohibition.
The $6.40 exaction per gallon specified in § 600(a) of the Act
of 1918 cannot be claimed, as the liquor was not "withdrawn" for
beverage or at all. That exaction was imposed before National
Prohibition. It applied to all distilled spirits then in bond or
that had been or thereafter might be produced or imported into the
United States, with exceptions not here material. But, when the
Eighteenth Amendment and the National Prohibition Act became
effective, the production of beverage liquor was prohibited.
Intoxicating liquors cannot be "withdrawn for beverage purposes."
The whole charge of $6.40 per gallon was held to be a penalty, and
not a tax, in
Regal Drug Co. v. Wardell, 260 U.
S. 386,
260 U. S. 289,
260 U. S.
392.
But it is said that the continued existence of taxes, as
distinguished from penalties, on liquor for beverage purposes is
indicated by § 35 of the National Prohibition Act. The meaning of
the sentence on which the majority relies will be more clear when
other provisions there found are called to attention. The section
provides:
Page 272 U. S. 338
"All provisions of law that are inconsistent with this act are
repealed only to the extent of such inconsistency and the
regulations herein provided for the
manufacture or traffic
in intoxicating liquor shall be construed as in addition to
existing laws."
Manifestly, these "regulations" apply only to nonbeverage
liquor, because the manufacture, sale, or transportation of
beverage liquor is forbidden by the Constitution. The section
proceeds: "This act shall not relieve any one from paying any taxes
or other charges imposed upon the manufacture or traffic in such
liquor." This is the sentence relied on. That the "taxes" there
mentioned relate to nonbeverage liquor is apparent from the
sentence immediately following:
"No liquor revenue stamps or tax receipts for any illegal
manufacture or sale shall be issued in advance, but upon evidence
of such illegal manufacture or sale, a
tax shall be
assessed against, and collected from, the
person
responsible for such illegal manufacture or sale in double the
amount now provided by law [meaning that imposed on liquor lawfully
made] with an
additional penalty of $500 on retail dealers
and $1,000 on manufacturers. The payment of such
tax or
penalty shall give no right to engage in the manufacture
of sale of such liquor or relieve anyone from criminal liability,
nor shall this Act relieve any person from any liability, civil or
criminal, heretofore or hereafter incurred under existing
laws."
As to nonbeverage liquor legally made, the tax is upon
production. That is the only "tax." The further exaction
is a special imposition to enforce prohibition. As to beverage
liquor, the so-called double tax together with the
additional
penalty of $500 or $1,000, as the case may be, is upon the
person responsible. It is a punishment by penalty in a sum
equal to double the tax plus the specified "additional penalties."
The amount cannot be paid as a tax. The liability attaches only on
commission of crime -- "illegal manufacture or sale."
Page 272 U. S. 339
In
Lipke v. Lederer, 259 U. S. 557, it
was held that these exactions are penalties. The Court said (pp.
259 U. S.
561-562):
"The mere use of the word 'tax' in an act primarily designed to
define and suppress crime is not enough to show that within the
true intendment of the term a tax was laid.
Child Labor Tax
Case, 259 U. S. 20. When, by its very
nature, the imposition is a penalty, it must be so regarded.
Helwig v. United States, 188 U. S. 605,
188 U. S.
613. Evidence of crime (§ 29) is essential to assessment
under § 35. It lacks all the ordinary characteristics of a tax,
whose primary function 'is to provide for the support of the
government' and clearly involves the idea of punishment for
infraction of the law -- the definite function of a penalty,
O'Sullivan v. Felix, 233 U. S. 318,
233 U. S.
324."
Again, after the effective date of the Eighteenth Amendment, a
collector of internal revenue levied under § 600(a) of the Revenue
Act of 1918 a "so-called assessment or tax at the rate of $6.40 per
gallon" on distilled liquors withdrawn from bonded warehouses
between October, 1918, and June, 1920. This Court reiterated what
it had said in
Lipke v. Lederer, and held that the sums so
imposed were penalties, not taxes.
Regal Drug Co. v. Wardell,
supra, pp.
260 U. S. 389,
260 U. S. 392.
The exaction of $6.40 per gallon there claimed included the $2.20
per gallon for which the automobile in this case is held subject to
confiscation.
Section 5 of the Willis-Campbell Act of November 23, 1921, c.
134, 42 Stat. 222, 223, is also relied on. The purpose of that
section is clear when regard is had to the scope of the Act of
which it is a part. That is "An Act supplemental to the National
Prohibition Act." It was passed to aid enforcement of prohibition,
and not to raise revenue. It authorizes and purports to regulate
the prescribing of liquors for medicinal purposes, prohibits
importation and manufacture until the supply then in
distilleries
Page 272 U. S. 340
and other bonded warehouses shall be reduced to an amount not
sufficient for nonbeverage purposes, permits spirits produced in
this country and exported to be returned for redeposit in bonded
warehouses from which originally taken, extends the National
Prohibition Act to all the territory of the United States, and
makes all violators liable to the penalties provided for in the
original Act.
The words upon which the majority relies are these:
"That all laws in regard to the manufacture and taxation of and
traffic in intoxicating liquor, and all penalties for violations of
such laws that were in force when the National Prohibition Act was
enacted, shall be and continue in force, as to both beverage and
nonbeverage liquor, except such provisions of such laws as are
directly in conflict with any provision of the National Prohibition
Act or of this Act; but if any act is a violation of any of such
laws and also of the National Prohibition Act or of this Act, a
conviction for such act or offense under one shall be a bar to
prosecution therefor under the other. All taxes and tax penalties
provided for in § 35 of Title II of the National Prohibition Act
shall be assessed and collected in the same manner and by the same
procedure as other taxes on the manufacture of or traffic in
liquor."
Then follows a provision exempting from taxation spirits lost by
theft from distilleries or other bonded warehouses without
negligence or collusion, and the Act provides punishment for
certain misconduct of government enforcement officers and
others.
Theat Act does not make a "tax" out of what was, before its
passage, a "penalty." It does not change the classification of
exactions declared in
Lipke v. Lederer and
Regal Drug
Co. v. Wardell. The Constitution forbids, and the National
Prohibition Act denounces as crime, the manufacture, sale, and
transportation of intoxicating liquor for beverage purposes. The
exactions in respect
Page 272 U. S. 341
of such liquor were properly to be considered to enforce
prohibition and to punish violations of law. The Willis-Campbell
Act expressly saved all measures for enforcement. The exaction
still depends on the commission of crime. The government's argument
that the total charge of $6.40 per gallon is to be divided, so that
$4,20 of that amount may be regarded as penalty aimed at beverage
liquor, and $2.20 as a tax imposed on all liquor, is without
support in the language used, and is contrary to the decisions of
this Court. It was beverage liquor that Killian had in the
automobile. The nonbeverage rate does not apply.
2. There is direct conflict between § 26 and § 3450 in respect
of the disposition of vehicles seized. The facts disclosed by the
record bring the case under § 26.
Section 3450 relates to all
goods and commodities on
which taxes are imposed. And it provides that, whenever any such
things
"are removed or are deposited or concealed in any place
with
intent to defraud the United States of such tax, . . . all
such goods and commodities . . . shall be forfeited, and in every
such case . . . , every . . . carriage, or other conveyance
whatsoever, . . . and all things used in the removal or for the
deposit or concealment thereof, respectively, shall be
forfeited."
Section 26 of the National Prohibition Act lays down the course
to be followed by the enforcing officers. They are given no
discretion. It provides:
"When the commissioner, his assistants, inspectors, or any
officer of the law shall discover any person in the act of
transporting in violation of the law, intoxicating liquors in any .
. . automobile, . . . or other vehicle, it shall be his duty to
seize any and all intoxicating liquors found therein being
transported contrary to law. Whenever intoxicating liquors
transported or possessed illegally shall be seized by an officer,
he shall take possession of the vehicle . . . and shall arrest any
person in charge
Page 272 U. S. 342
thereof. Such officer shall at once proceed against the person
arrested
under the provisions of this title . . . , but
the said vehicle . . . shall be returned to the owner"
upon giving a bond conditioned to return the vehicle to the
officer on the day of the trial to abide the judgment of the court.
Upon conviction of the person arrested, the court is required to
order the liquor destroyed, "and, unless good cause to the contrary
is shown by the owner, shall order a sale by public auction" of the
vehicle, and the officer making the sale, after deducting expenses,
the fee for seizure and costs of sale shall pay all liens according
to their priorities which are established at the hearing
"as being
bona fide and as having been created without
the lienor having any notice that the carrying vehicle was being
used or was to be used for illegal transportation of liquor, and
shall pay the balance of the proceeds into the Treasury. . . ."
All liens are transferred from the property to the proceeds. If
no one shall be found claiming the vehicle notice by publication is
required,
"and if no claimant shall appear within ten days . . . , the
property shall be sold and the proceeds after deducting the
expenses and costs shall be paid into the Treasury. . . ."
Section 3450 forfeits the vehicle of an innocent owner or
lienor. Section 26 expressly protects his property. The conflict as
to the disposition of the automobile is direct, and that is the
matter in controversy.
The great weight of judicial opinion is that illicit whisky is
not subject to a tax, as distinguished from a penalty. This is held
in the Second, Sixth, and Eighth Circuits, and in the Court of
Appeals of the District of Columbia. No circuit court of appeals
has held directly that such a tax is imposed, and the decisions of
the lower courts are overwhelmingly to the effect that § 26,
National Prohibition Act, and Rev.Stat. § 3450, are in direct
conflict. It is so held by the Circuit Courts of
Page 272 U. S. 343
Appeals of the Second, Fifth, Sixth, and Eighth Circuits, and
the Court of Appeals of the District of Columbia. The Ninth Circuit
has certified the question here in
Port Gardner Investment Co.
v. United States, post, p.
272 U. S. 564.
There is shown in the margin substantially in chronological
order the reported decisions since National Prohibition in the
circuit courts of appeals and district courts bearing on the
application of § 3450 in respect of intoxicating liquors.
*
Page 272 U. S. 344
3. The opinion proceeds on the theory that transportation of
whisky in the automobile is not shown outside the claim of the
Garth Motor Company. And it is held
Page 272 U. S. 345
that, the dismissal being set aside, hearing on the question
whether Killian was transporting the whisky may be had in the lower
court. It seems to me the litigation need not be so delayed, and
that the important question
Page 272 U. S. 346
pressing for decision should be decided now. It is true that the
allegations of the company's claim are not to be considered on the
motion to quash the libel, but, quite
Page 272 U. S. 347
independently of the company's allegations, the court would be
fully warranted in holding that Killian was found offending against
§ 26. The government does not
Page 272 U. S. 348
here contend that he was not taken while violating that section;
it does not attempt to avoid decision on the merits. On the other
hand, it urges that, where one is taken in the act of transporting
whisky in the automobile of another, the vehicle may be forfeited
notwithstanding the owner appears and shows that he was innocent.
It insists that, in case of conviction of the driver for
transportation, the interest of the guilty may be forfeited, and,
if the tax is not paid on the illicit beverage, the interest of the
innocent owner may be confiscated. The claimant challenges that
position squarely.
The information filed by the United States on September 18,
1923, states that this is a "case of seizure on land under the
internal revenue laws of the United States;" there is attached and
made a part of the information an affidavit and sworn complaint by
R. A. Smith, a federal prohibition agent, which charges that
Killian, on or about August 11, 1923, unlawfully had in his
possession 27 quarts of whisky for beverage purposes, otherwise
than as authorized by the National Prohibition Act, and the
information alleges that Edgar N. Read, acting prohibition
director, seized the automobile described, "which said automobile
was then and there in the possession of one Ed L. Killian and being
used by him for the purpose of depositing and concealing" the 27
quarts of whisky, that the automobile was said to belong to the
Garth Motor Company, and that Read "now has the same in his
custody." It states that the automobile was being used by Killian
with intent to defraud the United States of taxes on the whisky,
and that the automobile "then and there contained" the whisky.
The information -- with apparent purpose -- avoids the use of
the word "removal," found in § 3450; it does not allege that the
whisky had been "withdrawn," and so was subject to the $2.20 tax
specified in § 600(a), and it also avoids the word "transporting,"
used in § 26. It
Page 272 U. S. 349
does not show whether the automobile was moving or standing
still when discovered and seized by the prohibition officers. If
transportation in the automobile had been alleged, the owner would
have opportunity to show his innocence under § 26. The purpose of
the pleader in avoiding the use of the word "transporting" was to
forfeit the automobile of an innocent owner, on the theory that §
3450 would then apply, and that § 26 need not be followed.
When the information was filed, the court issued a writ of
attachment, commanding the marshal to attach the automobile "which
is now being held by Edgar N. Read, acting prohibition director,"
to detain it until the further order of the court, and to give
notice to the claimant. The marshal made his return that he had
executed the writ by handing a copy to Acting Director Read and by
seizing the automobile. December 6, 1923, the claimant filed a
motion to quash the libel. April 14, 1924, it filed its claim,
alleging that the title to the automobile which was seized while
being used by Killian "in and about the unlawful transportation of
intoxicating liquors" was in the company, subject to a conditional
sales contract, and gave the bond provided for in § 26, which was
approved by the district judge. The motion to quash was sustained,
and the libel was dismissed. The district judge filed no opinion.
The circuit court of appeals affirmed the judgment. 4 F.2d 528. In
its opinion, that court said:
"The position now taken by the government in this case is that
the interest of an innocent owner or lienholder may be forfeited if
the automobile is standing still, but that such interest is
protected if the automobile is in motion. That view could easily
result in manifest injustice, for, under it, as an illustration,
the interest of an innocent holder of a lien on an automobile could
be forfeited upon proof that, while it was parked on a public
street, liquor was concealed in it
Page 272 U. S. 350
by some one who had the intent to defraud the government of its
internal revenue tax."
And the court held that § 3450 is superseded by § 26 insofar as
there is conflict between them. It dealt with the case as one
involving a violation of § 26.
I think that court's interpretation of the record was right. The
prohibition agent discovered Killian in possession of an automobile
containing 27 quarts of illicit whisky in violation of the National
Prohibition Act. The agent seized the vehicle, and, as it was his
duty so to do, it must be found that he also seized the whisky. The
prosecution of Killian was commenced by filing complaint charging
him with the crime of illegal possession in violation of that Act.
The facts stated make out "transportation." The use of automobiles
for transportation of, and in the furtherance of traffic in,
intoxicating liquors for beverage purposes is so notorious that,
when Killian was found unlawfully possessing illicit whisky in the
automobile, he reasonably may be held to have been transporting,
even though the vehicle happened to be standing still at the moment
the prohibition agent discovered the crime and made the seizure.
The facts alleged in the libel and complaint attached to it justify
a finding that he was using the automobile for transportation of
the whisky. On proof of such facts, a denial of transportation by
Killian would not be entitled to respectful attention. Moreover,
when these facts are considered in the light of what everyone
knows, they utterly fail to support the allegation that Killian had
the illicit whisky concealed in the automobile
with intent to
defraud the United States of a tax on that whisky. Indeed, the
facts alleged negative that purpose. The attempt to make out a case
against the revenues has no foundation in fact. It was impossible
to pay the so-called tax. Crime had to be committed before
liability for the imposition arose. Taxes are not so
conditioned.
Page 272 U. S. 351
I am of opinion that the decree should be affirmed:
1. Section 3450 does not apply. There was no tax, as
distinguished from penalty, imposed upon the whisky that Killian
had in the automobile when discovered by the prohibition agent.
2. Section 26 directs the proceedings to be taken in respect of
the vehicle "whenever intoxicating liquors transported or possessed
illegally shall be seized by an officer." The libel brings the case
within the words and meaning of the clause just quoted.
I am authorized to say that MR. JUSTICE McREYNOLDS and MR.
JUSTICE SUTHERLAND concur in this opinion.
*
United States v. One Essex (D.C.N.D.Ga. 1920), 266 F.
138. Libel under § 3450. It did not appear that the liquor was for
beverage purposes.
Held, lawful to make nonbeverage
liquor; United States may elect to proceed under § 3450 or §
26.
United States v. Haynes (S.D. Fla., 1920), 268 F. 1003.
Held, § 26 covers every case of illegal transportation of
liquor, and § 3450 inconsistent with it.
Affirmed, 1921,
by C.C.A. 5th Cir., 274 F. 926.
Reed v. Thurmond (C.C.A.4th Cir., 1920), 269 F. 252,
reversing conviction in W.D.S.C. under R.S. § 3296, removing
distilled liquor from warehouse without paying tax.
Held,
National Prohibition Act inconsistent with scheme of revenue
protection embodied in Revised Statutes.
Ketchum v. United States (C.C.A. 8th Cir., 1921) 270 F.
416, reversing E.D.Ark. Indictment and conviction under R.S. §§
3242, 3257, 3260 and 3279, all relating to distilling.
Held, provisions directed to secure revenue from
manufacture and sale of intoxicating liquors inconsistent with and
repealed by law absolutely prohibiting such manufacture and
sale.
United States v. One Cole Automobile (D.C. Mont.,
1921), 273 F. 934. Demurrer to libel under § 3459 overruled.
Held, § 26, National Prohibition Act not inconsistent with
it. Assumed taxability, and dealt only with the remedy.
The Tuscan (D.C.S.D.Ala. 1921), 276 F. 55. Libel of
vessel under § 3450 sustained on ground taxes were still
imposed.
Payne v. United States (C.C.A. 5th Cir., 1922), 279 F.
112,
aff'g N.D.Ga. Libel under § 3450 sustained.
Transportation occurred in January, 1920, a few days after National
Prohibition Act took effect; nothing to indicate spirits were not
in existence then and subject to tax.
Held, § 3450 is not
repealed, but is superseded only where facts of particular case
show matters charged to violate it arise solely under National
Prohibition Act, as in
Haynes case,
supra.
Reo Co. v. Stern (D.C.N.D.Ga. 1922), 279 F. 422. Suit
by vendor under conditional sale contract to recover car forfeited
under § 3450 and sold to defendant. Subsequently drivers convicted
under National Prohibition Act for transporting. Court directed
verdict for defendant.
Held, § 3450 repealed, so far as
transporting was concerned, but still effective for deposit and
concealment; presumption of validity of judgment not overcome.
Lewis v. United States (C.C.A. 6th Cir., 1922), 280 F.
5, reversing judgment of forfeiture under § 3450, in E.D.Tenn.
Held, § 3450 repealed to extent of inconsistency with
National Prohibition Act. Taxes on liquor no longer payable, and
hence there can be no intent to defraud in not paying them.
United States v. Buick (Mont., 1922), 280 F. 517. Libel
under § 3450 sustained. Earlier opinion in
United States v. One
Cole Automobile, 273 F. 934,
held strengthened by
Willis-Campbell Act.
United States v. Packard (E.D. Mich. 1922), 284 F. 394.
Forfeiture under customs laws. Petition for return granted.
Held, that forfeiture provisions were without application
because National Prohibition Act made importation unlawful. It
appeared that driver escaped, and no forfeiture could be had under
§ 26.
Ford v. United States (C.C.A. 8th Cir., 1922), 284 F.
823, reversing E.D.Ark. Judgment of forfeiture under § 3450
reversed.
Held, § 3450 not applicable (no question of
repeal); there is no tax shown to be due United States; § 26
applies.
McDowell v. United States (C.C.A. 9th Cir., 1923), 286
F. 521, reversing D. Mont.
Held, § 3450 repealed by
National Prohibition Act in case of transportation of liquor on
which taxes have not been paid.
Studebaker v. United States (C.C.A. 9th Cir., 1923),
289 F. 256, reversing D.Mont. Per curiam on authority of
McDowell case.
United States v. Torres (D.C.Md.1923), 291 F. 138.
Held, § 3450 not repealed, but, after conviction,
forfeiture proceedings must be under § 26.
United States v. Essex (Mont., 1923), 291 F. 479.
Libels under § 3450 sustained.
Held, if any doubt as to
matter, it had been settled by Wills-Campbell Act.
The Cherokee (S.D.Tex. 1923), 292 F. 212. Libel of
vessel under § 3450 for carrying liquor on which tax had not been
paid.
Held, § 3450 has not been repealed by National
Prohibition Act in view of Willis-Campbell Act.
United States v. Cadillac (E.D.Ill., 1923), 292 F. 773.
Libel under § 3450 of auto carrying distilled liquor bearing export
stamps, but not bound for any port. Had no other stamps.
Held, presumption of intent to defraud United States.
Section 3450, if repealed, had been restored by Willis-Campbell
Act.
United States v. Buick, (S.D.Cal.1924), 360 F. 584.
Three libels under § 3450. In two cases, moonshine was being
transported within state. In other, whisky came from Mexico. First
two dismissed.
Held, § 3450 has no application to mere
transportation of illicit liquor in violation of National
Prohibition Act. Must be fair presumption of intent to defraud
United States of tax. But libel as to Mexican whisky sustained
because of intent to defraud of customs duties.
United States v. Ford (E.D.Tenn. 1924), 1 F.2d 654.
Held, § 3450 not in direct conflict with § 26, and
reenacted by Willis-Campbell Act.
United States v. Bay State Roadster (Conn. 1924), 2
F.2d 616. Libel under § 3450. Motion to dismiss denied.
Held that, if repealed, § 3450 reenacted by
Willis-Campbell Act. It applies only where offense charged is
defrauding United States of tax, and not in case of mere
transportation. Burden of showing intent to defraud on United
States. This burden sustained because allegations of libel were
admitted by motion.
United States v. Ford (W.D.Tenn. 1924), 2 F.2d 882.
Libel under § 3450 sustained. Auto found abandoned containing
nontax paid liquor.
Held, § 3450 reenacted by
Willis-Campbell Act.
United States v. Ford Coupe (W.D.La. 1924),
3 F.2d 64.
Libel under § 3450 sustained. Man arrested on road for
transporting.
Held, whatever basis for holding § 3450
repealed removed by Willis-Campbell Act.
United States v. White Truck (W.D.Wash. 1925),
4 F.2d 413.
Decree of forfeiture under § 3450 of car containing imported
liquors.
Held, § 3450 reenacted by Willis-Campbell
Act.
United States v. Garth Motor Co. (C.C.A. 5th Cir.,
1925), 4 F.2d 528,
aff'g N.D.Ala. No. 115 -- this
case.
United States v. Chevrolet (W.D.Wash. 1925), 4 F.2d
612. Libel under § 3450 of truck containing whisky run over border.
Driver and others indicted for conspiracy to violate National
Prohibition Act. Decree of forfeiture.
Held, § 3450
applies when taxes are due and unpaid as an illegally imported
liquors. case not affected by indictment; car is held for different
offense.
United States v. Mack (C.C.A.2d. Cir., 1925), 4 F.2d
923,
aff'g S.D.N.Y. Dismissed libel under § 3062,
condemning vessel containing illegally imported merchandise.
Offense was in April, 1921.
Held, that section not then in
force. Carriage of illegally imported liquors is within the terms
of § 3062 and § 26, so later and milder provision prevails.
Commercial Credit Co. v. United States (C.C.A. 6th Cir.
1925), 5 F.2d 1,
rev'g N.D. Ohio. Libel under § 3450. Car
used for removal of liquor. Seizure under § 26 and those in charge
convicted thereunder. Forfeiture reversed.
Held, there is
direct conflict. Liquor not subject to tax, for § 600 does not
apply, and § 35 forbids issuance of stamps. Section 3450, repealed
by inconsistency with National Prohibition Act; not within terms of
Willis-Campbell Act. Section 26 protects property of innocent
owners; § 3450 forfeits it, and this is a conflict.
United States v. Marmon (N.D.Ga. 1925), 5 F.2d 113.
Judgment of forfeiture under § 3450.
Held, United States
must show specific intent to defraud; that is done by showing any
one has possession of liquor on which no tax has been paid, and has
no intention of paying it.
United States v. Milstone (Ct.App.D.C.1925), 6 F.2d
481,
aff'g Municipal Court, D.C. Dismissal of libel under
§ 3450 affirmed. Car containing moonshine abandoned by driver, who
was not apprehended. Seized "on behalf of" collector of internal
revenue.
Held, § 3450 has no application. No tax can be
paid on such liquor, for issuance of stamps forbidden. Failure to
pay tax mere incident of illegal possession and transportation,
unlawful in any event. Unless two statutes distinguished, § 26 dead
letter.
United States v. Deutsch (N.J.), 8 F.2d 54. Deutsch
convicted of violation of National Prohibition Act. Owner of car in
which he was transporting, and which he had rented, gave bond for
its release and moves to discharge bond. Granted.
Held, §
26, and not § 3450, applies; owner of auto being innocent, there
can be no forfeiture.
United States v. Ford. (Tenn. 1925). Not reported.
Libel under § 3450 dismissed.
National Bond & Investment Co. v. United States
(C.C.A. 7th Cir., 1925), 8 F.2d 942,
rev'g E.D.Ill. Libel
under § 3450 of car seized in 1924 for transporting. Driver pleaded
guilty to violation of National Prohibition Act. Libel set forth
that liquor came from Canada, and was brought in without payment of
customs duties. No averment this car brought it in. Decree of
forfeiture reversed.
Held, since passage of
Willis-Campbell Act, it cannot be held that § 3450 was repealed by
National Prohibition Act. Must show intent to defraud by
establishing that car was used in smuggling; no such averment
here.
United States v. Reo (C.C.A.2d Cir. 1925), 9 F.2d 529,
aff'g E.D.N.Y. Two libels of auto truck. One under § 26,
for transportation of whisky without permit; other under § 3450
charging removal and concealment to avoid tax. Truck stopped on
Long Island carrying whisky. No conviction of driver;
bona
fide claimant. District court dismissed both libels.
Held, when vehicle is used in transporting, conviction of
offender is essential to its forfeiture, at least when there is
bona fide lienor. Under such circumstances, direct
conflict between § 26 and § 3450, and latter does not apply at all.
No decision as to whether same is true, if there be no such
lien.
United States v. Chevrolet (E.D. Mo. 1925), 9 F.2d 85.
Libel under § 3450 dismissed. Driver arrested while transporting
illicit liquor; not yet tried.
Held, no tax, as
distinguished from penalty, on manufacture of illicit liquor; on
these facts, irreconcilable conflict between § 3450 and § 26, and
latter applies.
United States v. Three Quarts Whisky (S.D.N.Y.1925), 9
F.2d 208. Libel of automobile under § 3450 dismissed on ground that
§ 26 had superseded § 3450.
Compare The Ella (S.D. Fla., 1925), 9 F.2d 411;
United States v. Lincoln (D.C.N.D.N.Y.1925),
11 F.2d
551;
The Squanto (C.C.A.2d Cir. 1926), 13 F.2d 548;
United States v. Chevrolet (W.D.Wash. 1926), 13 F.2d 948;
Weeks v. United States (C.C.A. 8th Cir. 1926), 14 F.2d
398.