A-14152, JULY 15, 1926, 6 COMP. GEN. 38

A-14152: Jul 15, 1926

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HAD BEEN STOLEN FROM THE OWNER CREATES NO RIGHTS IN THE OWNER OR HIS TRANSFEREE TO THE PROCEEDS DERIVED FROM ITS SALE AND AN INSURANCE COMPANY WHICH REIMBURSED THE OWNER FOR THE THEFT OF THE CAR IS NOT ENTITLED TO ANY OF THE PROCEEDS. THE LAW TREATING THE THING AS THE OFFENDER WITHOUT REFERENCE TO HOW POSSESSION THEREOF WAS OBTAINED. IT IS ALLEGED BY CLAIMANT THAT THE AUTOMOBILE IN QUESTION WAS THE PROPERTY OF ONE RUFUS LANG AND THAT ON OCTOBER 22. IT WAS INSURED BY THE OWNER WITH THE CLAIMANT COMPANY AGAINST LOSS BY FIRE AND THEFT. IT WAS STOLEN BY PARTY OR PARTIES UNKNOWN TO CLAIMANT OR THE OWNER. THE AUTOMOBILE IN QUESTION WAS SEIZED BY PROHIBITION OFFICERS FOR VIOLATION OF SECTION 3450.

A-14152, JULY 15, 1926, 6 COMP. GEN. 38

SEIZURE OF VEHICLES UNDER SECTION 3450, REVISED STATUTES THE FACT THAT AN AUTOMOBILE SEIZED AND FORFEITED UNDER SECTION 3450, REVISED STATUTES, HAD BEEN STOLEN FROM THE OWNER CREATES NO RIGHTS IN THE OWNER OR HIS TRANSFEREE TO THE PROCEEDS DERIVED FROM ITS SALE AND AN INSURANCE COMPANY WHICH REIMBURSED THE OWNER FOR THE THEFT OF THE CAR IS NOT ENTITLED TO ANY OF THE PROCEEDS, THE LAW TREATING THE THING AS THE OFFENDER WITHOUT REFERENCE TO HOW POSSESSION THEREOF WAS OBTAINED.

DECISION BY COMPTROLLER GENERAL MCCARL, JULY 15, 1926:

THE HARTFORD INSURANCE CO. HAS REQUESTED REVIEW OF SETTLEMENT NO. 0113685 OF FEBRUARY 5, 1926, DISALLOWING ITS CLAIM FOR THE PROCEEDS FROM THE SALE OF ONE NASH ROADSTER AUTOMOBILE SEIZED DECEMBER 22, 1924, AND SOLD FEBRUARY 11, 1925, THE PROCEEDS OF THE SALE AMOUNTING TO $484.43.

IT IS ALLEGED BY CLAIMANT THAT THE AUTOMOBILE IN QUESTION WAS THE PROPERTY OF ONE RUFUS LANG AND THAT ON OCTOBER 22, 1924, IT WAS INSURED BY THE OWNER WITH THE CLAIMANT COMPANY AGAINST LOSS BY FIRE AND THEFT; THAT ON NOVEMBER 7, 1924, IT WAS STOLEN BY PARTY OR PARTIES UNKNOWN TO CLAIMANT OR THE OWNER; THAT ON DECEMBER 8, 1924, THE CLAIMANT PAID TO SAID LANG $742.50 TO COVER SUCH LOSS, RECEIVING FROM LANG A BILL OF SALE TO THE AUTOMOBILE; THAT ON DECEMBER 22, 1924, THE AUTOMOBILE IN QUESTION WAS SEIZED BY PROHIBITION OFFICERS FOR VIOLATION OF SECTION 3450, REVISED STATUTES, AND WAS SOLD FEBRUARY 11, 1925, TO ONE HOWARD PERRY.

THE CLAIM IS ASSERTED, UNDER SECTIONS 3460 AND 3461, REVISED STATUTES, AND THE PETITION OF THE CLAIMANT WAS "GRANTED" BY THE SECRETARY OF THE TREASURY OCTOBER 19, 1925, AS UNDER SECTION 3461, REVISED STATUTES, ALTHOUGH IT HAD BEEN PREVIOUSLY, ON OCTOBER 12, 1925, TRANSMITTED BY THE PROHIBITION COMMISSIONER TO THIS OFFICE FOR DIRECT SETTLEMENT AND "APPROPRIATE ACTION UNDER THE PROVISIONS OF SECTION 3689 OF THE REVISED STATUTES AUTHORIZING THE REFUND OF MONEY RECEIVED AND COVERED INTO THE TREASURY BEFORE THE PAYMENT OF LEGAL AND JUST CHARGES AGAINST THE SAME.'

SECTIONS 3460 AND 3461, REVISED STATUTES, HAVE NO APPLICATION TO FORFEITURE UNDER SECTION 3450. THE UNITED STATES SUPREME COURT, IN THE CASE OF GOLDSMITH-GRANT CO. V. UNITED STATES, 254 U.S. 505, WITH REFERENCE TO SAID SECTIONS, STATED: "THEY HAVE NO RELATION TO THE LATTER SECTION (3450), NOR IS THEIR REMEDY APPLICABLE TO CASES UNDER THAT SECTION.'

THE SEIZURE IS STATED TO HAVE BEEN MADE UNDER SECTION 3450, REVISED STATUTES, WHICH PROVIDES AS FOLLOWS:

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 * * *.

THE PROCEEDINGS UNDER THIS SECTION ARE PROCEEDINGS IN REM, THE STATUTE TREATING THE THING AS THE OFFENDER, AND IT IS NOW ESTABLISHED LAW THAT AN AUTOMOBILE IS SUBJECT TO LIBEL AND FORFEITURE UNDER THIS SECTION ALTHOUGH THE OWNER HAD NO NOTICE OF THE FORBIDDEN USE. GOLDSMITH-GRANT CO. V. UNITED STATES, 254 U.S. 505. THE INNOCENCE OF THE OWNER IS NO DEFENSE. UNITED STATES V. MINCEY, 254 FED.REP. 287; 5 COMP. GEN. 938.

THE CLAIMANT CONTENDS THAT THE SALE WAS IRREGULAR IN THAT THE AUTOMOBILE WAS ADVERTISED UNDER AN ERRONEOUS ENGINE NUMBER. SUCH FACT, HOWEVER, IS NOT MATERIAL AS THE FORFEITURE UNDER SECTION 3450, REVISED STATUTES, TAKES PLACE WHEN THE SEIZURE IS MADE AND NOT WHEN THE CAR SOLD. 2 COMP. GEN. 624.

CLAIMANT ALSO LAYS STRESS ON THE POINT THAT THIS CAR WAS STOLEN FROM THE OWNER. IT MAY BE NOTED, HOWEVER, THAT THE CLAIMANT WAS NOT THE OWNER OF THE CAR AT THE TIME OF THE THEFT BUT BECAME THE OWNER BY ASSIGNMENT OR TRANSFER OF THE LEGAL TITLE AFTER THE THEFT AND WITH KNOWLEDGE THEREOF. IT DOES NOT APPEAR THAT THE APPLICATION OF SECTION 3450, REVISED STATUTES, TO STOLEN PROPERTY HAS EVER BEEN DECIDED BY THE UNITED STATES SUPREME COURT, THAT COURT IN THE CASE OF GOLDSMITH GRANT CO. V. UNITED STATES, SUPRA, RESERVING OPINION WHETHER SAID SECTION COULD BE EXTENDED TO PROPERTY STOLEN FROM THE OWNER OR OTHERWISE TAKEN FROM HIM WITHOUT HIS PRIVITY OR CONSENT. THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA, IN THE CASE OF THE UNITED STATES V. ONE BUICK ROADSTER ET AL., 280 FED.REP. 517, REFUSED TO ORDER A FORFEITURE UNDER SAID SECTION 3450, REVISED STATUTES, AS AGAINST THE LEGAL OWNER, OF AN AUTOMOBILE WHICH HAD BEEN STOLEN BY THE WRONGFUL USER, WHO IT APPEARS HAD AGREED TO PURCHASE THE CAR AND HAD MADE PARTIAL PAYMENT THEREFOR, THE CAR AT THE TIME OF THE THEFT BEING IN THE POSSESSION OF A BAILEE FOR MINOR REPAIRS. THIS APPEARS TO BE THE ONLY REPORTED CASE UNDER SAID SECTION INVOLVING AN ACTUAL THEFT AND, BEING BASED UPON THE REASONING THAT SUCH A FORFEITURE WOULD CONTRAVENE THE DUE PROCESS CLAUSE OF THE CONSTITUTION, CANNOT BE ACCEPTED AS CONTROLLING IN VIEW OF THE DECISION OF THE UNITED STATES SUPREME COURT IN THE CASE OF GOLDSMITH-GRANT CO. V. UNITED STATES, SUPRA. FURTHERMORE, THE MONTANA CASE, BEING ONE FOR THE FORFEITURE OF THE AUTOMOBILE, IS DISTINGUISHABLE FROM THE PRESENT CLAIM WHICH IS FOR THE PROCEEDS OF THE CAR AFTER ITS FORFEITURE AND SALE, THE CAR ITSELF BEING IN THE POSSESSION OF THE PURCHASER WHOSE IDENTITY IS KNOWN TO CLAIMANT.

THERE IS IN SECTION 3450, REVISED STATUTES, NO LANGUAGE EXCEPTING FROM FORFEITURE THEREUNDER AN AUTOMOBILE OR OTHER PROPERTY WHICH HAD BEEN STOLEN FROM THE OWNER AND AS THE LAW TREATS THE THING AS THE OFFENDER RATHER THAN THE OWNER, THERE APPEARS NO SOUND REASON FOR NOT APPLYING ITS PROVISIONS IRRESPECTIVE OF HOW POSSESSION OF THE PROPERTY WAS OBTAINED BY THE WRONGDOER.

PROCEEDINGS UNDER SECTION 3450, REVISED STATUTES, ARE ENTIRELY SEPARATE AND DISTINCT FROM PROCEEDINGS UNDER THE NATIONAL PROHIBITION ACT, 4 COMP. GEN. 594. NEITHER WAS SAID SECTION REPEALED BY THE NATIONAL PROHIBITION ACT. UNITED STATES V. ONE BUICK ROADSTER, 280 FED.REP. 517. THE ASSERTION OF LIENS UNDER SECTION 613 OF THE TARIFF ACT OF SEPTEMBER 21, 1922, 42 STAT. 986, MAY BE RECOGNIZED ONLY WHEN FILED WITHIN THREE MONTHS AFTER THE DATE OF THE SALE, WHICH WAS NOT DONE IN THIS CASE--- FURTHERMORE, SAID SECTION RELATES SOLELY TO SEIZURES UNDER THAT ACT FOR VIOLATION OF THE CUSTOMS AND NAVIGATION LAWS AND HAS NO APPLICATION TO SEIZURES UNDER SECTION 3450, REVISED STATUTES, WHICH APPLIES TO VIOLATIONS OF INTERNAL REVENUE TAX LAWS, AND THERE APPEARS TO BE NO LAW AUTHORIZING THE RECOGNITION OF LIENS AGAINST VEHICLES SEIZED AND FORFEITED UNDER SAID SECTION.

THE FORFEITURE OF THE AUTOMOBILE UNDER SECTION 3450, REVISED STATUTES,DIVESTED THE CLAIMANT OF ANY RIGHT OR TITLE THEREIN OR TO THE PROCEEDS OF THE SALE THEREOF, AND THERE IS NO STATUTE UNDER WHICH RELIEF MAY BE AFFORDED IT AT THIS TIME. 2 COMP. GEN. 624; 5 ID. 938.