United States v. One Saxon Auto.

• Decision Date: 07 January 1919
• Docket Number: 1661.
• Citation: 257 F. 251
• Parties: UNITED STATES v. ONE SAXON AUTOMOBILE et al.
• Court: U.S. Court of Appeals — Fourth Circuit

257 F. 251

UNITED STATES v. ONE SAXON AUTOMOBILE et al.

No. 1661.

United States Court of Appeals, Fourth Circuit.

January 7, 1919

R. E Byrd, U.S. Atty., of Richmond, Va.

G. A Wingfield, of Roanoke, Va. (H. T. Hall, of Roanoke, Va., on the brief), for defendant in error.

Before KNAPP and WOODS, Circuit Judges, and ROSE, District Judge.

WOODS Circuit Judge.

The collector of internal revenue, on January 19, 1918, seized one Saxon automobile in which Sandy Hairston was transporting spirituous liquors on which the tax had not been paid. Thereafter forfeiture proceedings were instituted under the following provision of R.S. Sec. 3450 (Comp. St. Sec. 6352):

'Whenever any goods or commodities for or in respect whereof any tax is or shall be imposed, or any materials, utensils, or vessels proper or intended to be made use of for or in the making of such goods or commodities are removed, or are deposited or concealed in any place, with intent to defraud the United States of such tax, or any part thereof, all such goods and commodities, and all such materials utensils, and vessels, respectively, shall be forfeited; and in every such case all the casks, vessels, cases, or other packages whatsoever. containing, or which shall have contained, such goods or commodities, respectively, and every vessel, boat, cart, carriage, or other conveyance whatsoever, and all horses or other animals, and all things used in the removal or for the deposit or concealment thereof, respectively, shall be forfeited.'

W. P. Mundy, the holder of notes secured by a deed of trust on the automobile, intervened, claiming that the proceeds of sale should be applied first to the satisfaction of his debt, thus raising the question whether the forfeiture displaced his lien or interest in the property. The facts were agreed on:

W. P. Mundy, a dealer, on August 10, 1917, sold the automobile to Luther A. Moore for $450, taking for the unpaid portion of the purchase money, payable in monthly installments, 13 notes, secured by a deed of trust covering the property, recorded August 20, 1917. At the time of seizure by the collector, there was unpaid on the notes $190, of which $80 was overdue. By the terms of the deed of trust and under the laws of Virginia, Mundy had the right to require the trustee to seize the property and sell it in satisfaction of his debt. Hairston had borrowed the automobile from Moore, and was using it for the transportation of contraband liquor when it was seized. Mundy had not at any time information of the use of the automobile to carry contraband liquor, or of any intention so to use it. No claim was made by the purchaser, Moore.

The District Court held that the rights of Mundy under the deed of trust were unaffected by the forfeiture, and that the proceeds of sale should be first applied in satisfaction of his debt, and only the balance paid into the treasury.

No doubt has ever existed of the power of Congress to impose the penalty of forfeiture on property used to defeat the revenue laws, without respect to the guilt of the owner or his knowledge of the unlawful use. Such a statute for the raising of revenue, even when containing provisions of a highly penal nature, is still to be construed as a whole, and in a fair and reasonable manner, and not strictly in favor of a claimant. United States v. Sugar, 7 Pet. 453, 8 L.Ed. 745; United States v. Stowell, 133 U.S. 1, 10 Sup.Ct. 244, 33 L.Ed. 555; United States v. Graf Distilling Co., 208 U.S. 198, 28 Sup.Ct. 264, 52 L.Ed. 452. A strong consideration against any forced construction of the statute to meet the hardship of a particular case is that the law provides for relief from the forfeiture in proper cases by an executive official, and courts should always indulge the presumption that his discretion will be wisely and justly exercised. Nevertheless, if the inference of intention to exempt from forfeiture the property of an innocent owner can be drawn by any reasonable and fair construction of the language of the statute, that construction will be adopted.

This rule of construction has been extended without dissent to protect the innocent owner of property from forfeiture, even when provided by a statute which expresses no limitation or exemption of any kind, where the property has been taken by a trespasser or a thief, or the owner has been deprived of the possession by forces of nature beyond his control. This is for the reason that no right of possession or custody can be acquired by or from a trespasser or thief, or by virtue of the forces of nature against the will of the owner. In such case, the owner of the property has never in a legal sense parted with any right of custody or possession, and hence no statute can operate against his title by reason of the use or custody or possession of the thief or trespasser, or his deprivation of it by the forces of nature. This reasoning obviously does not apply when the owner voluntarily parts with his possession and intrusts his ship or vehicle to another, for in that case the owner is charged with knowledge that the person to whom he has relinquished possession, or some one acquiring the possession from him, may so use the property as to defeat the collection of the revenue, and thus bring it under the condemnation of forfeiture. While the principle is not elaborated, this we think was the distinction in the mind of Chief Justice Marshall in Peisch v. Ware, 4 Cranch, 347, 2 L.Ed.

643. The principle was applied in holding that all previous liens on vessels are overridden by forfeiture in prize cases; the court saying, if it were otherwise, shipowners could in all cases defeat forfeiture by giving mortgages on their ships. The Hampton, 5 Wall. 372, 18 L.Ed. 659; The Battle, 6 Wall. 498, 18 L.Ed. 933; The Siren, 7 Wall. 152, 19 L.Ed. 129.

The same practical considerations apply with force to the use of automobiles in violation of the statute now before us. The enforcement of the revenue statute concerning transportation of liquor is difficult, because of the facility with which automobiles may be used for that purpose without detection. If one thus engaged in illicit transportation could protect his automobile from forfeiture on proof that the legal title was in some one else, or that some one else had a mortgage on it, the difficulty of enforcing the law would be greatly increased, and the penalty of forfeiture almost always evaded.

It seems to us the statute requiring forfeiture is explicit leaving no room for construction. It is...