United States v. ONE 1939 MODEL DE SOTO COUPE, ETC.

• Decision Date: 28 May 1941
• Docket Number: No. 2172.,2172.
• Citation: 119 F.2d 516
• Parties: UNITED STATES v. ONE 1939 MODEL DE SOTO COUPE, MOTOR NO. S6-27,687, et al.
• Court: U.S. Court of Appeals — Tenth Circuit

119 F.2d 516 (1941)

UNITED STATES v. ONE 1939 MODEL DE SOTO COUPE, MOTOR NO. S6-27,687, et al.

No. 2172.

Circuit Court of Appeals, Tenth Circuit.

March 18, 1941.

Rehearing Denied May 28, 1941.

Joe W. Howard, Asst. U. S. Atty., of Tulsa, Okl. (Whit Y. Mauzy, U. S. Atty., of Tulsa, Okl., on the brief), for appellant.

F. J. Lucas, of Tulsa, Okl., for appellees.

Before PHILLIPS, MURRAH, and WILLIAMS, Circuit Judges.

MURRAH, Circuit Judge.

The United States brought this action under Title 27 U.S.C.A. § 224, for the forfeiture of one 1939 model DeSoto automobile, which one D. A. (Dan) Myers purchased from the Carriger Motor Company at Tulsa, Oklahoma. The Commercial Investment Trust Corporation, claimant and appellee herein, is the purchaser of the conditional sales contract on which there was a balance due of $635.12, when the car was seized by the government on the 29th day of January, 1940. The claimant sought remission of the forfeiture under Title 27 U.S.C.A. § 40a. The trial court granted remission conditioned upon the payment of a specified sum to cover storage and other expenses incurred by the government. The United States has appealed.

The question presented requires the construction of Section 40a (b) (3) of Title 27 U.S.C.A.

The stipulated facts reveal that when the claimant purchased the conditional sales contract from the Carriger Motor Company, the vendor, it relied upon a previous satisfactory credit experience with the purchaser, Myers, which involved the purchase of a refrigerator, and upon the further credit report furnished to the claimant by the Retail Merchants Association of Tulsa where Myers lived, which gave the occupation of Myers as a "lease broker." Myers did not have a criminal record of any nature, but was arrested in the Eastern Judicial District of Oklahoma in 1937, and charged with the violation of the importation laws (Liquor Enforcement Act of 1936, Title 27 U.S.C.A. § 223). The case was dismissed because the court held the act then not applicable to Oklahoma. See Dunn v. United States, 10 Cir., 98 F.2d 119, 117 A.L.R. 1302. A record of his arrest was thereafter kept on file at the office of the Investigators in charge of the Alcohol Tax Unit of the Bureau of Internal Revenue in Oklahoma City, and the Investigators of the Alcohol Tax Unit at Tulsa, Oklahoma, had knowledge of such arrest, and, prior to the purchase of the automobile by Myers from the Carriger Motor Company, and the contract by the claimant, the Alcohol Tax Unit and enforcement officers had again commenced the enforcement of Sec. 223, Title 27, U.S.C.A., and Myers had been on their list as a suspect for violation of this law. Hayes et al. v. United States, 10 Cir., 112 F.2d 417.

On January 29, 1940, Myers was apprehended within the Northern District of Oklahoma, while operating the automobile in question, containing sixty-three gallons of assorted tax-paid liquors, which on that date had been transported from Joplin, Missouri, to the point where Myers was apprehended. After Myers was apprehended and the automobile seized, but not before, the claimant made inquiry of the Chief of Police of the City of Tulsa, and the Sheriff of Tulsa County, and ascertained that Myers had no record or reputation with them for violating the state or federal liquor laws.

The Carriger Motor Company, or the salesmen who sold the car, had no knowledge or information which would lead them to believe that Myers would use the car for other than lawful purposes. The trial court specifically found that said Myers did not have such reputation for unlawfully dealing in intoxicating liquors as would require further inquiry and investigation by the claimant.

On these facts we are asked to decide whether the claimant satisfied the requirements of the act which authorizes the remission and mitigation of forfeitures, Title 27 U.S.C.A. § 40a (b), and particularly subsection (b) (3). Admittedly the claimant has satisfied subsections (b) (1) and (2), and it remains only to determine whether he has met the requirements of subdivision (3), and precisely the question of what constitutes a reputation within the meaning and context of subsection (b) (3).

The difficult phrasing of subsection (b) (3) has produced divergent views concerning its meaning. In United States v. One 1936 Model Ford V-8 DeLuxe Coach, 307 U.S. 219, 59 S.Ct. 861, 868, 83 L.Ed. 1249, the Supreme Court abridged and simplified the abstruse language employed in subsection (b) (3) as follows: "The court shall not allow the (request) — claim — of any claimant for remission or mitigation, if it appears that the interest asserted by (him) — the claimant — arises out of or is in any way subject to any contract or agreement under which any person having a record or reputation for violating laws of the United States or of any State relating to liquor has a right with respect to such vehicle or aircraft, unless and until he (the claimant) proves that before (he) — such claimant — acquired his interest, or such other person acquired his right under such contract or agreement, whichever occurred later, (he) — the claimant — his officer or agent, was informed in answer to his inquiry, at (certain headquarters specified in the alternative) as to the character or financial standing of such other person, that such other person had no such record or reputation."

The purpose of this legislation was remedial and enacted for the benefit of those positioned like the claimant here. Upon its enactment, for the first time the power of remission or mitigation was vested in the courts, but jurisdiction to remit or mitigate was clearly conditioned upon compliance with the requirements of the statute.¹

In United States v. One Hudson Coupe, 4 Cir., 110 F.2d 300, 302, it is stated "* * * it should by now be an elementary proposition that subsection (d) of this statute grants to the trial court discretion to refuse or grant remission or mitigation only when the statutory conditions have been fulfilled." It must be conceded that if Myers had a reputation within the meaning and context of (b) (3), the trial court was powerless to mitigate. The automobile was purchased, and the contract of sale consummated in Tulsa County. Myers lived in Tulsa County. The claimant had a previous credit experience with Myers. The experience was favorable. It concluded that he was a good credit risk financially. It investigated his financial credit standing through the Retail Merchants Association in Tulsa. It ascertained that his occupation was a lease broker. It had no reason to believe that the automobile would be used to violate the Internal Revenue laws. The public generally did not know that Myers had been apprehended for transporting whiskey in violation of the law, or that the Alcohol Tax Unit, charged with the responsibility of enforcing the liquor importation laws, had listed him as a suspect.

The investigators of the Alcohol Tax Unit at Tulsa, Oklahoma, knew that Myers had been apprehended and he was listed in their records as a suspect for the violation of the liquor laws. Therefore, with the investigators of the Alcohol Tax Unit, he had a "reputation for violating the laws of the United States or of any state relating to liquor." Is this the reputation of which subsection (b) (3) speaks by the use of the language "if it appears"? If it is, the claimant cannot prevail, because it did not make inquiry of some one of the officers enumerated in subsection (b) (3) until after the seizure.

A rational analysis of the act leads us to the conclusion that "reputation" within the context and meaning of subsection (b) (3) has reference to the "reputation" which the purchaser of the automobile bears with any one of the law enforcement officers enumerated in the act. In United States v. Federal Credit Co., 5 Cir., 117 F.2d 341, 343, decided January 29, 1941, Judge Holmes stated: "To manifest its innocence and vigilance, the interested party is required to make the investigation fixed by statute. If he wishes to take the risk of forfeiture, he may decline to make any investigation; in any case, he may make that investigation that he considers the nature of the risk to require * * * but to exonerate himself entirely from any possible liability in event of forfeiture each of the conditions precedent must be complied with by him."

The law does not require one to do a useless thing. Therefore, if, in the instant case, the claimant failed to make inquiry of one of the several officers mentioned in the act, and a forfeiture was had and a mitigation sought, and the government failed to prove that inquiry from any of the officers mentioned in the act would have revealed a "record or reputation," the claimant would be entitled to mitigation or remission because further inquiry would not have revealed any record or reputation. In that event, the claimant would have taken the risk but averted the penalty imposed because compliance would have been useless.

In United States v. One Hudson Coupe, 4 Cir., 110 F.2d 300, 303, the court, speaking through Judge Dobie, states: "Concerning the requisite generality of `reputation', as broadly defined, there is no question. See United States v. C. I. T. Corporation, 2 Cir., 1937, 93 F.2d 469, 471. However, it may be observed that there is a difference between a person's liquor-peddling reputation and his debt-paying and his church-going reputations, and these, we trust, will be generally known by different people. The statute, subsection (b) (3), requires that inquiry as to a person's liquor reputation be made of a specified group, who would be most likely to know it. The inquirer can then insist that he be informed of the general reputation and not of chance reports to the informant. We do not think it was the intendment of this subsection to impose the duty of inquiry only when the person's reputation for illicit dealing in unlawful liquor transactions had achieved such a notoriety that it...