State v. Oscar Peterson and Fred Martin (Farmers Auto Company

• Decision Date: 06 November 1920
• Docket Number: 22,766
• Parties: THE STATE OF KANSAS, Appellee, v. OSCAR PETERSON and FRED MARTIN (FARMERS AUTO COMPANY, Appellant)
• Court: Kansas Supreme Court

193 P. 342

107 Kan. 641

THE STATE OF KANSAS, Appellee, v. OSCAR PETERSON and FRED MARTIN (FARMERS AUTO COMPANY, Appellant)

No. 22,766

Supreme Court of Kansas

November 6, 1920

Decided July, 1920

Appeal from Nemaha district court; WILLIAM I. STUART, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. INTOXICATING LIQUORS--Illegal Transportation--Forfeiture of Automobile--Rights of Mortgagee. The provisions of section 4 chapter 217, Laws of 1919, are considered together with the legislative history of the act, and held not to show an intent to protect from forfeiture the interest of a holder in good faith of a mortgage on an automobile used in the transportation of intoxicating liquors and which has been declared a common nuisance and ordered sold.

2. SAME -- Illegal Transportation -- Statute Forfeiting Automobile -- Within Police Power of State--Statute Constitutional--Rights of Mortgagee. It is within the police power of the state to provide for the forfeiture of property used in the violation of a criminal statute and to provide that the rights of an owner or mortgagee, however innocent of the intent or purpose for which the property is to be used, shall be forfeited. Notwithstanding the holder in good faith of a mortgage on an automobile is not entitled to have his lien satisfied out of the proceeds of a sale under the provisions of chapter 217, Laws of 1919, declaring an automobile used in the transportation of intoxicating liquors a common nuisance and providing for its forfeiture and sale, the act is not unconstitutional on the ground that it violates the fourteenth amendment by taking property without due process of law.

Clifford W. Baldwin, and Charles H. Herold, of Seneca, for the appellant.

Richard J. Hopkins, attorney-general, and Rufus M. Emery, jr., county attorney, for the appellee.

OPINION

PORTER, J.:

The sole question for determination in this appeal is whether the holder in good faith of a mortgage on an automobile is entitled to have his lien satisfied out of the proceeds of a sale under the provisions of chapter 217, Laws of 1919, declaring an automobile used in the transportation of intoxicating liquors a common nuisance and providing for its forfeiture and sale.

An information filed by the county attorney charged that Oscar Peterson and Fred Martin unlawfully and willfully used one Buick six roadster, 1917 model, in transporting intoxicating liquors from Brown county into Nemaha county, thereby rendering the automobile a common nuisance. Under a warrant issued upon the information the sheriff took possession of the machine. The Farmers Auto Company, the appellant, a Missouri corporation, filed its answer alleging that on April 28, 1919, at St. Joseph, Mo., one H. J. Bailey executed to the appellant his note and mortgage on the machine for $ 500, payable in four equal installments, the last of which was due August 28, 1919. The instrument, an ordinary chattel mortgage, was duly recorded in Buchanan county, Mo. The appellant alleged its ignorance and its innocence of any criminal intent on the part of Bailey or his employees to use the roadster for the purpose mentioned in the information or for any other criminal purpose, and alleged that the sale and mortgage were in good faith. The appellant asked that its mortgage be declared a prior lien, and that so much of the automobile as covered thereby be declared not a common nuisance as defined in the statute, and that out of the proceeds of the sale under the provisions of the law, the appellant recover the amount of its lien. On the trial the court gave judgment against the appellant, as intervener, and ordered the automobile sold as a common nuisance, free of any claim of the mortgagee. The court found, however, that the mortgagee had no knowledge of any intent on the part of the purchaser or other persons to use the car in transporting intoxicating liquors in Kansas and that the sale was made by the appellant in good faith. By the consent of the state and of the appellant the automobile was sold and the proceeds placed in the hands of the clerk of the court pending the determination of this appeal.

No question as to the validity of the law so far as it affects guilty parties is raised, but the contention is that the law is unconstitutional so far as it affects innocent parties in the situation of appellant. It is admitted that the automobile was being used by the original defendants in violation of the provisions of the statute.

1. Before questioning the constitutionality of the law, the appellant contends that the act shows a clear legislative intent to protect the rights of innocent parties, and in support of this calls attention to certain language in section 4 chapter 217, Laws of 1919, which reads:

"If the court shall find that such vehicles, automobiles or other property or any part thereof were at the time a common nuisance, as defined in section No. 1, it shall adjudge forfeited so much thereof as the court shall find was such common nuisance, and shall order the officer in whose custody it is to sell the same publicly . . ."

The appellant sees in this language an indication that the legislature realized the law as a harsh one which might in its operation work injustice to innocent persons, and it is argued that the language should be construed as attempting to cover a situation such as presented by the present case and to protect the rights of an innocent mortgagee by giving to the trial court discretion to make a finding that a part of a vehicle constituted a common nuisance, while another part did not constitute a nuisance and was not subject to forfeiture. We think that if the legislature had intended to protect the rights of an innocent mortgagee or other lien holder, it would have found appropriate language to express that intention clearly.

By reference to the senate and house journals it appears that the bill which afterwards became the law in question originated in the senate, and as first passed by the senate contained a section, numbered 6, which in express terms provided for the protection of one who held a mortgage or other lien in good faith on the property seized, giving him a right to go into court and have his lien determined, and providing that if on the final hearing the claim be adjudged to be a valid lien against the property and executed in good faith, without any knowledge that the property was to be used or was being used in a manner prohibited by the act, the court should determine the amount of the lien and determine that out of the proceeds of any sale there should be paid: first, the costs; second, the amount of such mortgage; and third, the balance into the county treasury for the benefit of the common schools. The bill went to the house where this section was stricken out and the bill passed as amended. It then went to conference. The report of the conference committee was that the senate concur in the house amendments by striking out section 6, which was done and the bill as it now reads was passed.

The history of the bill in the legislature shows that both houses had their attention challenged to the propriety of protecting the interest of an innocent holder of a...