United States v. 21 POUNDS, 8 OUNCES, OF PLATINUM, 5265.

• Decision Date: 03 January 1945
• Docket Number: No. 5265.,5265.
• Citation: 147 F.2d 78
• Parties: UNITED STATES et al. v. 21 POUNDS, 8 OUNCES, OF PLATINUM.
• Court: U.S. Court of Appeals — Fourth Circuit

147 F.2d 78 (1945)

UNITED STATES et al. v. 21 POUNDS, 8 OUNCES, OF PLATINUM.

No. 5265.

Circuit Court of Appeals, Fourth Circuit.

January 3, 1945.

Allan B. Lutz, Atty., Department of Justice, of Washington, D. C. (Francis M. Shea, Asst. Atty. Gen., J. Frank Staley, of Washington, D. C., and Bernard J. Flynn, of Baltimore, Md., on the brief), for appellants.

William Curran, of Baltimore, Md., for appellee.

Before PARKER and SOPER, Circuit Judges, and HARRY E. WATKINS, District Judge.

SOPER, Circuit Judge.

This suit concerns the validity of a seizure by the Collector of Customs of Baltimore, Maryland, of 21 lbs. 8 oz. more or less of platinum which certain persons had conspired and attempted to export unlawfully from the United States to Spain. Agents of the Federal Bureau of Investigation, who had been informed of the conspiracy seized the platinum on board a ship in the Baltimore harbor on October 6, 1942 and retained it as evidence of violation of the Export Control Law of 1940, § 6 of the War Powers Act of July 2, 1940, Ch. 508, 54 Stat. 714, as amended by the Act of June 30, 1942, Ch. 461, 56 Stat. 463, 50 U.S.C.A. Appendix 701. The statute and the regulations issued thereunder^* prohibit the exportation of platinum unless a license authorizing the exportation shall have been issued. Violation of the regulations is punishable by fine not exceeding $10,000 and imprisonment not exceeding two years or both. In this case the offenders were indicted for attempting to export the platinum without a license, pleaded guilty to the charge on July 7, 1943 and were fined in various amounts on July 8, 1943.

On July 9, 1943 Juan Tomas Bareno, one of the offenders who had been fined $8,000, made demand upon the United States Attorney for the return of the platinum. On July 26, 1943 the Collector of Customs at Baltimore, acting under the provisions of the Espionage Act of June 15, 1917, Title VI, Ch. 30, 40 Stat. 223, 22 U.S.C.A. §§ 401 to 407, seized the platinum by taking it into custody from the agents of the F.B. I. and on July 30, 1943 the Collector of Customs applied to the District Court for a warrant to justify the further detention of the seized property until such time as it might be ordered to be restored to the owner or otherwise disposed of according to law. On the same day the warrant was issued. Thereafter, on August 10, 1943 a petition for restoration was filed in the District Court by Bareno and after hearing in which the facts above recited were shown, the District Judge passed the order appealed from directing the delivery of the platinum to Bareno.

The propriety of this order depends upon the interpretation of §§ 1 and 2 of the Espionage Act, Tit. 6, 22 U.S.C.A. §§ 401 and 402. Section 401 provides that whenever an attempt "is made to export" from the United States any articles in violation of law, or whenever there shall be cause to believe that any such articles "are being or are intended to be exported" in violation of law, "the several collectors, comptrollers of customs, surveyors, inspectors of customs, and marshals, and deputy marshals of the United States, and every other person duly authorized for the purpose by the President," may seize and detain any articles "about to be exported" in violation of law and retain possession thereof until released or disposed of as directed in the succeeding sections of the Act. If, upon inquiry as provided in such sections, the property seized shall appear "to have been about to be so unlawfully exported", the same shall be forfeited to the United States.

Under § 402 of the statute it is made the duty of the person making the seizure to apply with due diligence to the Judge of the District Court which has jurisdiction over the place of seizure for a warrant to justify the detention of the property. The judge may grant the warrant only on oath or affidavit that there is known or probable cause to believe "that the property seized is being or is intended to be exported" in violation of the law. If the person making the seizure fails to make application for the warrant within a reasonable time not exceeding ten days after the seizure, or if the judge refuses to issue the warrant, the property shall forthwith be restored to the owner or person from whom seized. If the judge is satisfied that the seizure was justified under the Act and issues the warrant, the property shall be detained by the person seizing it until the President orders it restored to the owner or claimant or until it is discharged in due course of law on petition of the claimant or on trial of condemnation proceedings.

Section 403 provides that the owner or claimant may at any time before condemnation proceedings have been instituted under succeeding sections of the Act file a petition for restoration in the District Court whereupon the court, after notice to the United States Attorney and the person making the seizure, shall hear and decide whether the property seized shall be restored to the petitioner or forfeited to the United States.

Section 404 of the Act provides for condemnation proceedings by libel if the owner or claimant fails to file a petition for restoration within thirty days after seizure or if upon hearing a petition for restoration is denied; and § 405 provides that the proceedings on the trial of a petition for restoration or a libel for condemnation shall conform to proceedings in admiralty except that either party may have a trial by jury of any issue of fact.

The reasons given by the District Judge in his opinion for ordering the restoration of the platinum to the owner may be summarized as follows: The agents of the Federal Bureau of Investigation should be treated within the category of persons authorized to make seizure under § 401 of the Act because they were acting as agents of the customs officials or were "other persons" impliedly, if not expressly authorized, for the purpose by the President. The seizure by these agents on October 6, 1942 in the present case is the only seizure that comes within the contemplation of the Espionage Act for after that time the platinum was in the custody of the Government and was not intended to be taken out of the country. Thereafter, no exportation was contemplated. But the United States is not entitled to judgment of condemnation because, after making the seizure, it did not apply to the judge for a warrant of detention within ten days, as required by § 402 of the statute. The property, therefore, should have been returned forthwith to the owner. Since this was not done the court was obliged by § 403 to grant the owner's petition for restoration which was filed, as provided in § 402, before condemnation proceedings were instituted. The fact that the platinum was held as evidence in the criminal case against the owner and his co-defendants did not satisfy the requirements of the statute. The petition for the warrant of detention filed by the Collector of Customs on July 30, 1943, nearly ten months after the seizure by the agents of the F.B.I., came too late, and the warrant should not have been issued. On this account the provision for condemnation proceedings in § 404 of the Act has no application. The mere fact that the owner did not file the petition for restoration within thirty days after the seizure, as required by § 404, is immaterial. It is no answer to this line of reasoning that an anomalous situation has arisen in that one who has violated the Export Control Law and rendered his property liable to forfeiture under the Espionage Act is nevertheless permitted to recover possession of the property. An owner may not be divested of his property without the authority of statute; and the procedural provisions of such a statute are mandatory and must be strictly construed. See United States v. Two Hundred and Sixty-Seven Twenty-Dollar Gold Pieces, D.C.W.D. Wash., 255 F. 217. The only statute on which the United States can rely in this case is the Espionage Act and the conditions thereof have not been met. In this connection the court said 53 F.Supp. 971, 975:

"* * * unless we are to ignore the mandatory requirement of Sections 401, 402, with respect to the time after the seizure within which the warrant shall be applied for, it matters not what theory be adopted; that is, whether, as the Government contends, the original seizure was abandoned and therefore need not be considered, or whether it be treated as, in fact, the only seizure within contemplation of the law, unless we are prepared to say that the mere interdepartmental transfer of the platinum from the Federal Bureau of Investigation to the Customs officials, was a `seizure', — a theory the mere statement of which we believe is obviously so fanciful as to amount to its own refutation.

"To summarize, we conclude that the Government's inadvertence in not adhering strictly to the requirements of Section 402 with respect to the time within which application should have been made for a warrant, that is, within ten days after the seizure of the platinum by the agents of the Federal Bureau of Investigation, leaves the Government, in the present proceeding, without remedy. The fact that the platinum was, after the seizure, held for the purpose of being used, if and when necessary, as evidence in the trial of the criminal charge against the claimant and codefendants, does not cure the situation, for the seized property was not actually in custodia legis, and the statutory requirement must still be met."

Our examination of the Espionage Act leads us to the conclusion that its dominant purposes are twofold: (1) To accomplish the forfeiture of property which has been the subject of an attempted exportation in violation of law; and (2) to protect innocent owners and claimants of seized property from unwarranted seizure and detention thereof. Not only does § 410 make the unlawful exportation a criminal offense, punishable by fine and imprisonment, but § 401 declares...