Commercial Credit Company v. United States/Opinion of the Court

This is a libel brought by the United States in November, 1925, in the federal court for the Western District of Washington, under section 3450 of the Revised Statutes, to forfeit a Ford coupe upon the ground that it had been used in the removal, deposit, and concealment of intoxicating liquor, with intent to defraud the United States of the tax thereon. The Commercial Credit Company intervened as claimant, asserting title to the car and alleging that it had no knowledge that the car was used or intended to be used in violation of law.

By stipulation of the parties the case was heard by the District Judge without the intervention of a jury. The evidence showed that in October a customs inspector who, in consequence of reports that this car was being used to distribute Canadian liquor about the city of Seattle, had watched its movements for some days, discovered one Campbell-who had purchased the car under a conditional sale-in the act of backing the car out of an alley in the rear of his house, stopped the car, searched it, found that it contained thirteen quarts of whisky and gin, arrested Campbell, and seized the car. The liquor bore labels indicating that it was of foreign manufacture, and there were no stamps on the bottles showing the payment of duty or internal revenue taxes. It was also stipulated at the hearing that Campbell was prosecuted in the District Court under the National Prohibition Act on the charges of 'unlawful possession and transportation of liquor and plead guilty to unlawful possession, whereupon the government dismissed as to the transportation, and that covers the identical transaction here involved.' Thereafter the government brought the libel to forfeit the car. At the close of the evidence the claimant moved to dismiss the libel, on the ground, among others, that the United States had elected to proceed under the National Prohibition Act and was barred from proceeding under section 3450. The District Judge denied this motion, and entered a decree condemning and forfeiting the car to the United States. This was affirmed by the Circuit Court of Appeals, which held that, as Campbell's conviction of unlawfully possessing intoxicating liquor was under section 3 of title 2 of the Prohibition Act (27 USCA § 12), and did not entail a disposition of the car under section 26 of that title (27 USCA § 40), the government was at liberty to proceed under section 3450 for the forfeiture of the car. 17 F.(2d) 902.

The petition for the writ of certiorari was based solely on the ground that under section 26 of the Prohibition Act the government was barred from proceeding to forfeit the car under section 3450; and no other question will be considered. Alice State Bank v. Houston Pasture Co., 247 U.S. 240, 242, 38 S.C.t. 496, 62 L. Ed. 1096; Webster Co. v. Splitdorf Co., 264 U.S. 463, 464, 44 S.C.t. 342, 68 L. Ed. 792; Steele, Executor, v. Drummond, No. 60, 275 U.S. 199, 48 S.C.t. 53, 72 L. Ed. 238, Nov. 21, 1927.

'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 shall arrest any      person in charge thereof. Such officer shall at once proceed     against the person arrested under the provisions of this      title in any court having competent jurisdiction; but the      said vehicle or conveyance shall be returned to the owner      upon execution by him of a good and valid bond *  *  * approved      by said officer and *  *  * conditioned to return said property      to the custody of said officer on the day of trial to abide      the judgment of the court. The court upon conviction of the     person so arrested *  *  * unless good cause to the contrary is      shown by the owner, shall order a sale by public auction of      the property seized, and the officer making the sale, after      deducting the expenses of keeping the property, the fee for      the seizure, and the cost of the sale, shall pay all liens,      according to their priorities, which are established, by      intervention or otherwise at said hearing or in other      proceeding brought for said purpose, 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 of the United      States as miscellaneous receipts.' The essential distinction between section 26 and section 3450, in so far as relates to the forfeiture of a vehicle, is that, where section 26 is the only applicable provision for its forfeiture, the interests of innocent owners and lienors are not forfeited, but, where it may be forfeited under section 3450 by reason of its use to evade the payment of a tax, the interests of those who are innocent are not saved. United States v. One Ford Coupe, 272 U.S. 321, 325, 47 S.C.t. 154, 71 L. Ed. 279, 47 A. L. R. 1025.

In Port Gardner Co. v. United States, 272 U.S. 564, 566, 47 S.C.t. 165, 71 L. Ed. 412, which came to this court on a certificate of the Circuit Court of Appeals, the driver of an automobile seized by prohibition agents had been charged with possession and transportation of intoxicating liquor in violation of the Prohibition Act, and had pleaded guilty to both charges and been sentenced. In answering one of the questions presented by the certificate we held that the 'prosecution with effect' of the driver of a car under the National Prohibition Act constituted 'an election by the government to proceed under section 26 of that act,' and thereby prevented the forfeiture of the car under section 3450. As to this we said:

'The disposition of the automobile prescribed in section 26     became mandatory after' the driver's 'conviction, and being      inconsistent with the disposition under section 3450      necessarily precluded resort to proceedings under the latter      section.'

The claimant states that the question here presented is that which was referred to in a concurring opinion in the Port Gardner Co. Case, 567 (47 S.C.t. 166), namely, 'whether the prohibition officer discovering one in the act of transportation may disregard the plain and direct commands of section 26 to proceed against the vehicle as there directed'; and on that assumption the arguments have been largely directed to the question whether, whenever an officer discovers a person in the act of transporting intoxicating liquor in a vehicle, the provisions of section 26 become mandatory in such sense as to furnish the exclusive remedy for the forfeiture of the vehicle. But, since it appears that the officer in fact seized the vehicle and arrested Campbell, who was in fact proceeded against under the Prohibition Act, the question of the officer's duty to proceed under section 26 is not here involved.

In this case Campbell was prosecuted both for the unlawful possession and the unlawful transportation of the intoxicating liquors. These are made criminal offenses by section 3 of title 2 of the Prohibition Act, and are punishable under section 29 of that title (27 USCA § 46). Section 26-although not in itself making either of these acts a criminal offense-provides that, when an officer discovers a person in the act of unlawfully transporting intoxicating liquor in a vehicle, he shall seize both the vehicle and the intoxicating liquors 'transported or possessed illegally,' arrest such person. and proceed against him under the Prohibition Act; and that, if such person is convicted, the vehicle shall be disposed of as therein prescribed.

The stipulations in this case, read in thelight of the evidence, show that the unlawful possession for which Campbell was prosecuted, and of which he pleaded guilty, was not a separate possession antecedent to and independent of the transportation-which would not have entailed a forfeiture of the car under section 26-but was the possession involved in and incidental to the transportation itself; that is, the 'possession in transportation' referred to in United States v. One Ford Coupe, supra, 334 (47 S.C.t. 154).

Campbell's conviction on the charge of such possession, following his arrest when discovered in the act of transportation, required, we think, a disposition of the car under the provisions of section 26. That section, read in its entirety, governs the disposition of the car where the person in charge of the vehicle is convicted of the unlawful possession incidental to the transportation, as well as where he is convicted of the unlawful transportation itself. Therefore, under the doctrine of the Port Gardner Co. Case, the disposition of the car under section 26 becoming mandatory after Campbell's conviction, 'and being inconsistent with the disposition under section 3450, necessarily precluded resort to proceedings under the latter section.'

This renders it unnecessary to consider whether, if Campbell had not been convicted of the unlawful possession, the government's voluntary dismissal of the charge of unlawful transportation, before trial, would likewise have precluded a resort to section 3450.

The decree of the Circuit Court of Appeals is reversed; and the cause will be remanded to the District Court, with instructions to dismiss the libel.

Reversed.

Mr. Justice STONE did not sit in this case.