United States v. 246 1/2 Pounds of Tobacco

• Decision Date: 14 August 1900
• Citation: 103 F. 791
• Court: United States District Court, District of Washington, Northern Division
• Parties: UNITED STATES v. 246 1/2 POUNDS OF TOBACCO (BARTO, Intervener).

103 F. 791

UNITED STATES v. 246 1/2 POUNDS OF TOBACCO (BARTO, Intervener).

United States District Court, D. Washington, Northern Division.

August 14, 1900

E. E Cushman, Asst. U.S. Atty., for the United States.

Tucker & Hyland and J. J. McCafferty, for intervener.

HANFORD District Judge.

This is a proceeding upon an information filed by the United States district attorney to condemn certain tobacco and other property as forfeited to the United States by force of section 3400, Rev. St. U.S. The information charges that all of said property was seized by a deputy collector of internal revenue, because found in the possession of one J. C. Zonig who theretofore was engaged in the business of manufacturing cigars without having paid the special tax as a cigar manufacturer, and without having given bond as such. The intervener claims a lien upon all of said property by virtue of a chattel mortgage given to her by Zonig to secure a loan of money made to him before the infraction of any law in connection with his business as a cigar manufacturer. In her complaint the intervener alleges that the mortgage was taken in good faith for an actual loan of money, and that she was not at any time cognizant of any neglect on the part of Zonig to conform to the requirements of the statutes in the conduct of his business. The United States attorney has filed exceptions to the claim set forth in the intervener's complaint, and the case has been argued and submitted upon the question raised by said exceptions whether the lien created by the mortgage has been extinguished by the forfeiture.

The material part of the statute upon which this proceeding is founded, reads as follows:

'Sec. 3400. Every manufacturer of cigars who removes or sells any cigars without payment of the special tax as a cigar-manufacturer, or without having given bond as such, * * * shall, in addition to the penalties elsewhere provided in this title for such offenses, forfeit to the United States all raw material and manufactured or partly manufactured tobacco and cigars, and all machinery, tools, implements, apparatus, fixtures, boxes, barrels, and all other materials which shall be found in his possession, or in his manufactory, and used in his business as such manufacturer, together with his estate or interest in the building or factory, and the lot or tract of ground on which such building or manufactory is located, and all appurtenances thereunto belonging.'

Consistently with the purpose indicated by the words of the act, to punish the offending manufacturer by forfeiture of property, the law should not be extended so as to affect the property or rights of innocent persons. According to the statute, the manufacturer must forfeit, and manifestly he can only forfeit, property which he owns, or his right to the possession or use of property. U.S. v. 398 Barrels of Distilled Spirits, Fed. Cas. No. 16,504; U.S. v. 372 Pipes Distilled Spirits, Id. 16,505. On the other hand, a literal reading of the statute indicates a purpose to discriminate so as to make the forfeiture of personal property absolute, the mere possession of such property by the offender, or the use of it in connection with his business, being sufficient to close any controversy as to the ownership, or as to rights of everybody respecting the same but real estate, including the building or factory, to be subjected only to forfeiture of the offender's estate or interest therein. The purpose first suggested, in so far as it restricts the forfeiture of personal property, is incompatible with the second; therefore it is obvious that, to interpret the law according to the true intent of congress, the general spirit and policy of the internal revenue statutes and the rules for interpretation of ambiguous statutes must be taken into consideration. The laws providing for forfeiture by violators of revenue laws are not to be governed by the rule of strict construction applied to penal statutes in general, but are to have a reasonable construction; and the difficulty here is to be overcome by giving ...