Source: https://supreme.justia.com/cases/federal/us/272/321/case.html
Timestamp: 2017-09-19 13:40:05
Document Index: 766918259

Matched Legal Cases: ['§ 3450', '§ 3450', '§ 3450', '§ 26', '§ 5', '§ 3450', '§ 3450', '§ 3450', '§ 3450', '§ 26', '§ 3450', '§ 3450', '§ 26', '§ 3248', '§ 600', '§ 600', '§ 3450', '§ 26', '§ 3450', '§ 5', '§ 26', '§ 3450', '§ 26', '§ 3450', '§ 26', '§ 26', '§ 3450', '§ 26', '§ 3450', '§ 26', '§ 3450', '§ 26', '§ 26', '§ 26', '§ 3450', '§ 26', '§ 3450', '§ 3450', '§ 26', '§ 600', '§ 29', '§ 35', '§ 600', '§ 3450']

United States v. One Ford Coupe Automobile (full text) :: 272 U.S. 321 (1926) :: Justia US Supreme Court Center
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272 U.S. 321 (1926)
United States v. One Ford Coupe Automobile, 272 U.S. 321 (1926)
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.
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.
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.
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
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,
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 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.
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.
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.
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.
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
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):
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
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
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 $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.
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.
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.
United States v. Ford. (Tenn. 1925). Not reported. Libel under § 3450 dismissed.