United States v. Garth Motor Co.

• Decision Date: 27 February 1925
• Docket Number: No. 4372.,4372.
• Citation: 4 F.2d 528
• Parties: UNITED STATES v. GARTH MOTOR CO.
• Court: U.S. Court of Appeals — Fifth Circuit

4 F.2d 528 (1925)

UNITED STATES v. GARTH MOTOR CO.^*

No. 4372.

Circuit Court of Appeals, Fifth Circuit.

February 27, 1925.

C. B. Kennamer, U. S. Atty., of Guntersville, Ala., and Jim C. Smith, Asst. U. S. Atty., of Birmingham, Ala.

Wm. S. Pritchard and John D. Higgins, both of Birmingham, Ala., for appellee.

Before WALKER and BRYAN, Circuit Judges, and ESTES, District Judge.

BRYAN, Circuit Judge.

This is a libel of information under R. S. § 3450 (Comp. St. § 6352), for the forfeiture of an automobile. The facts relied on by the government are that one Killian had the automobile in his possession, and was using it for the purpose of depositing or concealing therein liquor which had been illicitly distilled, with the intent to defraud the United States of its internal revenue tax. The claimant, Garth Motor Company, had sold the automobile, but had retained title until the purchase price should be paid, of which, at the time the libel was filed, there was an unpaid balance of $125. It had no knowledge or cause to suspect that Killian was violating any law, or would do so. Indeed, the sale was innocently made to another person. The District Court dismissed the libel.

The case is one at law, and should have been brought here for review by writ of error, instead of by appeal, as was done; but that is unimportant, and we proceed to the merits. Act Sept. 6, 1916, § 4, 39 Stat. 727 (Comp. St. § 1649a).

Counsel for the government make an elaborate and exhaustive argument to establish the proposition that the tax on intoxicating liquors, although the manufacture thereof is prohibited by the National Prohibition Act, has never been repealed, or, if so, that it has been reinstated by section 5 of the Act of November 23, 1921, 42 Stat. 223 (Comp. St. Ann. Supp. 1923, § 10138 4/5c), which provides "that all laws in regard to the manufacture and taxation of and traffic in intoxicating liquor, and all penalties for violations of such laws that were 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," etc. The proposition contended for finds support in the cases of United States v. Yuginovich, 250 U. S. 450, 41 S. Ct. 551, 65 L. Ed. 1043, and United States v. Statoff, 260 U. S. 477, 43 S. Ct. 197, 57 L. Ed. 358, and may be conceded.

It is also contended that an automobile may be forfeited, according to the provisions of section 3450, when used for the deposit or concealment of liquor illicitly distilled and intended for use as a beverage, with intent to defraud the United States of the tax thereon, and that section 26, title 2, of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138½mm), is not in conflict, because it only applies to an automobile used in the removal or transportation of liquor. Where a forfeiture occurs under R. S. § 3450, the interest of an innocent owner or lienholder is lost (United States v. Mincey, 254 F. 287, 165 C. C. A. 575, 5 A. L. R. 211; Logan v. United States, 260 F. 746, 171 C. C. A. 484; Goldsmith, Jr. Grant Co. v. United States, 254 U. S. 505, 41 S. Ct. 189, 65 L. Ed. 376); whereas, in cases falling under section 26 of the National Prohibition Act the rights of innocent owners or lienholders are preserved. The position now taken by the government in this case is that the interest of an innocent owner or lienholder may be forfeited if the automobile is standing still, but that such interest is protected if the automobile is in motion. That view could easily result in manifest injustice; for under it, as an illustration, the interest of an innocent holder of a lien on an automobile could be forfeited upon proof that while it was parked on a public street liquor was concealed in it by some one who had the intent to defraud the...