On March 4, 1924, the government filed a libel against one Bay State roadster, in which it alleged, inter alia, that the motor vehicle described was “used for the purpose of carrying goods and commodities in respeet whereof a tax is imposed, under the internal revenue laws of the United States of America, said tax not having been paid on account of said goods and commodities,” and that said motor vehicle, as a conveyance, was “used * * * to convey * * * intoxicating spirits in respeet whereof a tax is imposed under the internal revenue laws of the United States, said tax not having been paid upon said goods, and said goods and commodities being then and there deposited in said Bay State roadster as a conveyance, with the intent to defraud the United States of said tax.”
The libelant alleges that, because of the above allegations, the automobile “is subject to a libel to seizure and forfeiture as provided in section 3450, Revised Statutes,” and prays that this court may “judge and decree that said automobile be seized and forfeited.”
On April 12, 1924, Conner and Haase, who, it is alleged, were driving the car at the time it was arrested, and one Kerner, the original vendee of the ear, filed answers, denying all of the allegations of the libel. On March 8, 1924, the receiver of the R. H. Long Company, duly appointed by the District Court of Massachusetts, filed his petition, praying for the delivery of the car to him as receiver, as the one entitled to its possession.
By a petition executed on March 14, 1924, the R. H. Long Company, the original vendor, after setting up the facts of the conditional sale and the amount of its interest in the car, prayed for its return, or that it be sold by order of court, and the proceeds, to the extent of its lien, be paid to the petitioner. This petition, which was apparently drawn to comply with the rules laid down in Sylvester v. United States (D. C.)
On May 3, 1924, the R. H. Long Company, by its attorney, filed exceptions to the libel and a motion to dismiss. As the receiver had previously been appointed, it is assumed that the exceptions and motion to dismiss were filed in behalf of the receiver.
Various allegations are made in the exceptions and motion as the basis for the dismissal, but they may be briefly epitomized as follows:
(1) Section 26 of the National Prohibition Act covers every illegal transportation of liquor, and provides for seizure and forfeiture of vehicles used in illegally transporting liquor, and the remedy and procedure herein provided is exclusive.
(2) The automobile in question is not subject to condemnation under section 3450 of the Revised Statutes, because said section was repealed by the National Prohibition Act, in so far as it authorized the seizure and forfeiture of vehicles used in illegally transporting liquor, and because section 26 of that act supersedes section 3450 of the Revised Statutes.
Other allegations appear, but it is unnecessary to discuss them, as they are not material to the question of law here presented. So the matter is now before the court on the exceptions and the motion to dismiss the libel.
Since the motion to dismiss the libel admits, as did demurrers under the former system of pleading, the allegations of fact well pleaded, it must necessarily follow that, if the libel is drawn in conformity with the provisions of section 3450, Revised Statutes (Comp. St. § 6352), and if that section is now in full force and effect, the exceptions must be overruled, and the motion to dismiss denied.
The pertinent parts of section 3450, Revised Statutes, provide as follows:
“Whenever any goods or commodities for or in respeet whereof any tax is or shall he
The government contends, for reasons which will hereafter appear, that, though section 3450 was, in effect, held to be repealed by the National Prohibition Act, in United States v. Yuginovich,
This contention is based upon three grounds:
(A) The provisions of section 3450 of the Revised Statutes;
(B) The Willis Campbell Act, entitled “An act supplemental to the Prohibition Act,” passed by the Congress and approved November 23, 1921; and
(C) The decisions of the Supreme Court of the United States, in Goldsmith-Grant Co. v. United States,
On the other hand the petitioner contends that while, prior to the enactment of the National Prohibition Act, an automobile used in the unlawful transportation of intoxicating liquor, on which the tax had not been paid, would have been subject to seizure and forfeiture under section 3450 of the Revised Statutes, that, since the passage of the National Prohibition Act, section 26 of title 2 of that act (Comp. St. Ann. Supp. 1923, § 10138½mm) provides for the seizure and forfeiture of vehicles used in the illegal transportation of liquor and that the remedy and procedure set forth in section 26 are exclusive.
In support of this contention the petitioner cites and relies upon a long line of decisions in the federal courts, and it must be noted that most of them were decided anterior to the passage of the Supplemental Act and the Stafoff decision. Some cases cited and relied upon by the petitioner were decided since the date of the passage of the act on November 23, 1921 (42 Stat. 222), but make no reference to that act; so I conclude that the Supplemental Act was not called to the attention of the courts when the question was presented. But at the expense of repeating, and in order that this question may be definitely settled, in this district at least, I deem it necessary to make reference to some of the cases relied upon by the petitioner, but, before doing so, a brief statement of the facts disclosed is necessary :
It appears from the record, and the facts are not disputed, that the Long Company was engaged in buying and selling automobiles, and was located in Framingham, Mass.; that on November 18, 1922, it sold to one Kerner the Bay State roadster here involved, on a conditional bill of sale; and that it has a bona fide lien on the ear for $695.42 and-that the ear is not worth that amount to-day. It also appears that the illegal use of the automobile was without knowledge of the company, or of any of its officers, nor did it or they have any notice or reason to suspect that it would be illegally used.
The automobile was seized while it was transporting liquors in violation of law, and was being operated at the time of the seizure by two men unknown to the petitioner, who, after trial in the state court, were acquitted, and have never been presented in this court, charged with a violation of law.
In United States v. One Haynes Automobile (D. C.)
“Section 35, tit. 2, of the Volstead Act, provides that all existing statutory provisions which are not inconsistent with the provisions of the Volstead Act are not to be held as repealed thereby, but to be additions to such act. Conversely, it follows that there is a repeal of all former existing laws when such former laws are inconsistent.”
Judge Neterer decided, in The Goodhope,
In United States v. Sylvester (D. C.)
On July 25, 1921, the Circuit Court of Appeals, Fifth Circuit, decided United States v. One Haynes Automobile,
United States v. Yuginovich was decided by the Supreme Court on June 1, 1921,
On April 14, 1922, the Circuit Court of Appeals for the Sixth Circuit decided Lewis v. United States,
In United States v. One Paige Automobile et al. (D. C.)
Counsel for petitioner cites Jackson v. United States (C. C. A.)
In Goldsmith-Grant Co. v. United States, supra, the Supreme Court holds that, even if. the innocent conditional vendor lacks knowledge of the wrongful act, there is nevertheless a complete forfeiture. It was there held that the statute treats the thing as the offender, and that section 3450 does not violate the Fifth Amendment to the Constitution of the United States. On page 511, Mr. Justice McKenna said:
“But whether the reason for section 3450 be artificial or real, it is too firmly fixed in the punitive and remedial jurisprudence of the country to be now displaced. Dobbins’ Distillery v. United States,
So the question now is: What bearing has the Supplemental Act to the case at bar, and what shall be the interpretation of the law in the light of the amendment passed November 23, 1921, together with the decisions of the Supreme Court in the Goldsmith-Grant Case, decided January 17, 1921, and the Stafoff Case, decided January 2, 1923?
Section 5 of the act supplemental to the National Prohibition Act (chapter 134, 42 Stat. 222, 223), provides as follows:
“All laws in regard to the manufacture and taxation of and traffic in intoxicating liquor, and all penalties for violations of such laws that ware 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.”
How does this Supplemental Act affect the seizure of vehicles and other carriers with respect to illegal transportation of prohibited liquors, and is section 3450 thereby revived, or is it inconsistent with the National Prohibition Act, within the meaning and intent of Congress, and thereby repealed?
The effect of the Supplemental Act has been judicially determined, in part at least, by the Supreme Court of the United States in the Stafoff Case, and its ruling is binding. Stafoff was indicted for having in his possession a still intended for the production of distilled beverages, without harang registered it in accordance with Revised Statutes, § 3258 (Comp. St. § 5994), and in a second count for having manufactured a mash fit for the production of whisky, contrary to section 3282 (Comp. St. § 6022). In the District Court of Missouri a demurrer to the indictment was sustained.
The decision of Judge Fails is predicated upon the well-established principle that, when a later statute, covering an offense punishable under an earlier law, provides another or lesser punishment for the same offense, it therefore impliedly repeals the earlier statute. Convincingly Judge Faris demonstrated that no person ought to be liable to punishment for the same act under two different criminal statutes, and that where such a situation arises the later statute enacted should govern. Prior to November 23, 1921, this was the prevailing rule.
When the Stafoff Case reached the Supreme Court, Mr. Justice Holmes, referring to the Supplemental Act, said on page 480 (
“The decision in United States v. Yuginovich must stand for the law before November 23, 1921. In that ease, besides what we have mentioned, it was held also that the penalty imposed by Rev. Stats. § 3257, on a distiller for defrauding the United States of the tax on the spirits distilled by him was repealed. So far as the liquor is for beverage purposes the same reasoning must apply to the penalty in section 3242 for carrying on the business of rectifier or wholesale or retail liquor dealer without having paid the special tax imposed by law. But the Supplemental Act that we have quoted puts a new face upon later déalings. From the time that it went into effect it had the same operation as if instead of saying that the laws referred to shall continue in force it
The conclusion there reached holds that the law in the Yuginovich Case, supra, is no longer applicable to acts committed subsequent to the enactment of the Supplemental Act. The laws that the National Prohibition Act repealed, expressly or impliedly, are held to be revived as to conduct subsequent to the enactment of it, if not inconsistent therewith. But the Stafoff Case does not specifically relate to section 3450, nor does it determine that this latter section is not inconsistent with the National Prohibition Aet, so that the Stafoff decision is helpful only in so far as it narrows the question to be decided to this: Is there an inconsistency between the provisions of the National Prohibition. Aet and section 3450 of the revenue laws, in so far as the forfeiture of the means of transportation is concerned? If there is, the provisions of the National Prohibition Act apply; otherwise, the old revenue laws are effective. In other words, the Stafoff decision does not interpret the effect of the Supplemental Act of November 23, 1921, upon the seizures provided for in section 3450, nor does it decide whether or not the National Prohibition Act sufficiently covers the situation with reference to seizures. Some decisions of the District Courts have been rendered subsequent to the Stafoff decision, and the reasoning adopted by these courts, to which reference will be made, seems sound, and should be adopted here and govern this as well as future cases until the question is settled by the Circuit Court of Appeals for this circuit, or by the Supreme Court of the United States.
In United States v. One Ford Automobile (D. C.)
“Examining the question here in the light of these rules, I think it must be conceded that the intention of Congress has now been plainly manifested to in no manner limit or affect the enforcement of any statutes applicable in their terms, whether passed under the theory of customs regulations, or internal revenue legislation, unless and except in the very precise point wherein these acts differ from the National Prohibition Act, and that it has clearly expressed its purpose to make effective all of the statutes not expressly repealed, where by their terms they are capable of being given effect.”
It should he noted, however, that Judge Hutcheson, on page 211, made the following observation:
“It is proper here to say that had the facts in this case shown mere unlawful transportation and possession, no presumption could bo indulged, from the mere fact of the liquors being foreign liquors, that they had been unlawfully imported, and the forfeiture would have had to be declared under the Prohibition Aet.”
In The Cherokee (D. C.)
“The passage of the Willis Campbell Act, making the intention of Congress plain that section 3450 is not repealed or superseded, and the definite and clear admissions of the stipulations in this case as to the fact of concealment in the vessel in order to avoid the tax, section 3450 is applicable to this ease, and that the Government is entitled to a forfeiture under it.”
He concludes as follows:
“I am of the opinion * • * that section 26 properly interpreted may be given application to those eases where the seizure is made because of the offense of transporting or possessing liquor, and that, where that is the only ground of the seizure alleged
It thus appears that the conclusion was reached respecting the decree of forfeiture because of the admission made by the petitioner “that the taxes due on the liquor were unpaid, and said cargo was being transported and concealed on said vessel to avoid payment of same.”
Therefore, as it appears to me, the real test and the deciding factor in each case will be whether or not the government brings the car within the provisions of section 3450. Were the goods liable to a tax? Were they removed, or deposited, or concealed with intent to defraud the United States of such tax within the purview of the provisions of section 3450 ? If the answer be in the affirmative, the vehicle is subject to forfeiture, as section 3450 applies in such a case, and if the answer be in the negative, and the charge is one of unlawful transportation, then section 3450 does not apply and the proceedings should be under the provisions of section 26 of the National Prohibition Act.
On May 9, 1923, Judge Dooling decided United States v. One Kissel Touring Automobile (D. C.)
To paraphrase what Judge Dooling said, it is fair here to say that the trouble arises from an endeavor to fit a law passed in 1866 to delinquencies created by the National Prohibition Act passed over 50 years later. Section 3450 sets forth words which clearly indicate its purpose when it provides: “Whenever any goods * * * in respect whereof any tax is * * * imposed * * * are removed, or are deposited or concealed * * * with intent to defraud the United States of such tax,” etc. The forfeiture penalty of the means of removal, deposit, or concealment was inserted so as to absolutely insure the revenue of the government, and make any attempt to avoid it punishable by the absolute forfeiture of the “vehicle” which is the means used for the purpose of evading the tax.
In the Kissel Car Case, supra, Judge Dooling cited United States v. One Ford Truck (D. C.)
“But it requires more to warrant the forfeiture of the automobile than the deposit or concealment of the drugs therein. They must be so deposited or concealed with intent to defraud the United States of the tax imposed on them, and the burden is upon the government to show that such was the intent.”
He shows clearly that possession of the prohibited articles was unlawful, and, if payment was offered to the tax department by disclosure of the contents of the vehicle, it would, of course, be refused, and the person offering would not be permitted to pay it, but would be arrested and the vehicle seized. The concealment was because of the knowledge of the unlawful business, and was not based upon any attempt to avoid payment of the tax. It seems clear, therefore, that section 3450 does not provide for a forfeiture of a vehicle used in transportation unless an intent is also shown to avoid the payment of the tax.
This ruling is in conformity with the decision of Judge Bindley in United States v. One Cadillac Automobile (D. C.)
If the seizure is made under section 3450, the burden of proof is upon the government, and it must be prepared to show that the liquor is being transported with intent to defraud the United States of a tax, and it is important that this burden be sufficiently discharged upon trial on the issues raised by the denial of the allegations of the libel. See Hester v. United States (C. C. A.)
In connection with the general subject-matter see United States v. 385 Barrels, etc., of Wine (D. C.)
“The provisions of Rev. St. § 3450 (Comp. St. § 6352), for forfeiture of conveyances used in the removal or for concealment of articles with intent to defraud tho United States of a tax due thereon, are applicable only where a taxable article is removed from one place to another, or concealed, for the purpose of evading payment of the tax, and cannot be applied to the mere transportation of illicit liquor in violation of the Prohibition Act, unless the circumstances warrant a fair and reasonable inference that there was also an intent to defraud the United States of the tax payable on such liquor by the manufacturer thereof.”
On page 588, Judge Bledsoe said:
“I am persuaded, therefore, from a careful consideration of the section, induced no less by a study of its terms than from a consideration of tho context and of the apparent intention of Congress in enacting it, that it was not intended, and may not be made, to apply to a mere transportation of liquor, made unlawful by the prohibitive provisions of the National Prohibition Law, unless there be also present in the circumstances connected with tho transaction that which could justify the court in indulging in the fair and reasonable inference that there was an intent to defraud the United States’ of the tax payable upon such liquor.”
The rule under section 3450 is harsh, but it is none the less the law, in view of the Act of Congress of November 23, 1921, and the Stafoff decision.
As to the instant case, it appears that the petitioner has filed exceptions to the allegations of the libel, a motion to dismiss, and a petition for the return of the car. But, as already noted, the exceptions and motion to dismiss admit the facts in the libel which are well pleaded, and have the same legal effect as a demurrer. The libel alleges all the facts required by section 3450 to be pleaded, to bring the case within its purview, and, the exceptions and motion to dismiss having admitted them, it follows that the exceptions must he overruled; the motion to dismiss and the petition for the return of the car must be denied. Answers denying all the allegations of the libel having been filed, the case is at issue.