A-20406, NOVEMBER 18, 1927, 7 COMP. GEN. 337

A-20406: Nov 18, 1927

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THE NATIONAL PROHIBITION ACT ARE NOT RECOVERIES UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619. 4377 OF THE REVISED STATUTES ARE NOT SUBJECT TO THE PROVISIONS OF SECTION 619 OF THE TARIFF ACT. 1927: I HAVE YOUR LETTER OF OCTOBER 26. WHICH WAS SEIZED AT JACKSONVILLE. WAS LIBELLED FOR VIOLATION OF SECTIONS 584 AND 593 OF THE TARIFF ACT OF 1922. THE DEPARTMENT REQUESTS YOUR DECISION AS TO WHETHER THE PROCEEDS OF THE SALE OF THE MANITO II ARE TO BE CONSIDERED A RECOVERY UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT. YOUR DECISION IS ALSO REQUESTED AS TO THE FOLLOWING RELATED MATTERS: WHETHER RECOVERIES FOR VIOLATION OF SECTIONS 4214. 4377 OF THE REVISED STATUTES ARE RECOVERIES UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT.

A-20406, NOVEMBER 18, 1927, 7 COMP. GEN. 337

REWARDS - INFORMERS - DISPOSITION OF RECOVERIES FOR VIOLATION OF NAVIGATION LAWS PROCEEDS DERIVED FROM THE SALE OF A VESSEL ORDERED FORFEITED BY A UNITED STATES COURT ON THE BASIS OF COMBINED ALLEGATIONS OF VIOLATION OF THE CUSTOMS LAWS, THE NAVIGATION LAWS, AND THE NATIONAL PROHIBITION ACT ARE NOT RECOVERIES UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619, ACT OF SEPTEMBER 21, 1922, 42 STAT. 988, PROVIDING FOR THE PAYMENT OF REWARDS TO INFORMERS OF VIOLATIONS OF THE CUSTOMS LAWS. RECOVERIES FOR VIOLATION OF SECTIONS 4214, 4337, 4371, AND 4377 OF THE REVISED STATUTES ARE NOT SUBJECT TO THE PROVISIONS OF SECTION 619 OF THE TARIFF ACT, NOT BEING FUNDS COLLECTED UNDER THE CUSTOMS LAWS AS CONTEMPLATED BY THAT SECTION. THE PROCEEDS DERIVED FROM THE SALE OF VESSELS UNDER SUCH SECTIONS SHOULD BE TREATED AND DEPOSITED AS COMMERCE RECEIPTS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, NOVEMBER 18, 1927:

I HAVE YOUR LETTER OF OCTOBER 26, 1927, AS FOLLOWS:

I AM TRANSMITTING HEREWITH THE DEPARTMENT'S FILE RELATIVE TO A CLAIM FOR COMPENSATION SUBMITTED BY W. H. DOWLING UNDER SECTION 619 OF THE TARIFF ACT AS INFORMER IN THE CASE OF THE AMERICAN GAS SCREW MANITO II, WHICH WAS SEIZED AT JACKSONVILLE, FLORIDA.

THE BOAT, IT APPEARS, WAS LIBELLED FOR VIOLATION OF SECTIONS 584 AND 593 OF THE TARIFF ACT OF 1922; SECTIONS 4214, 4371, AND 4377 OF THE REVISED STATUTES; AND FOR VIOLATION OF THE NATIONAL PROHIBITION ACT. THE COURT ORDERED THE BOAT FORFEITED AND SOLD ON THE BASIS OF THE COMBINED ALLEGATIONS. THE DEPARTMENT REQUESTS YOUR DECISION AS TO WHETHER THE PROCEEDS OF THE SALE OF THE MANITO II ARE TO BE CONSIDERED A RECOVERY UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT.

YOUR DECISION IS ALSO REQUESTED AS TO THE FOLLOWING RELATED MATTERS:

WHETHER RECOVERIES FOR VIOLATION OF SECTIONS 4214, 4337, 4371, AND 4377 OF THE REVISED STATUTES ARE RECOVERIES UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT, AND, SIMILARLY, WHETHER MONEYS RECEIVED FROM THE SALE OF VESSELS UNDER THESE SECTIONS OF THE REVISED STATUTES SHOULD BE TREATED AS TREASURY OR COMMERCE RECEIPTS.

PLEASE RETURN THE DEPARTMENT'S FILE WITH YOUR REPLY.

THE CLAIM FILED BY W. H. DOWLING, SHERIFF, JACKSONVILLE, FLA., IS FOR COMPENSATION AS INFORMER UNDER SECTION 619, TARIFF ACT OF 1922, 42 STAT. 988, FOR INFORMATION FURNISHED WITH RESPECT TO THE AMERICAN GAS SCREW MANITO II OF VIOLATION OF SECTIONS 584 AND 593, TARIFF ACT OF 1922; SECTIONS 4214 AND 4371, REVISED STATUTES, AND THE NATIONAL PROHIBITION ACT. IT IS STATED THAT THE VESSEL WAS CAPTURED BY CUSTOMS AUTHORITIES, AIDED BY THE INFORMER, IN ST. JOHNS RIVER, SOUTH OF JACKSONVILLE, ON FEBRUARY 4, 1924, AND THAT WHEN SEIZED THE VESSEL HAD CONTRABAND LIQUOR ABOARD. WITH RESPECT TO THE FORFEITURE AND SALE OF THE VESSEL AND DISPOSITION OF THE PROCEEDS THE COLLECTOR OF CUSTOMS AT TAMPA, IN LETTER DATED JUNE 9, 1927, STATED AS FOLLOWS:

IT APPEARS THAT THIS VESSEL WAS LIBELLED THROUGH THE COURTS AND THAT THE ORIGINAL REPORT TO THE UNITED STATES ATTORNEY ON WHICH THE LIBEL WAS BASED, REQUESTED THAT HE INSTITUTE THE PROPER PROCEEDINGS FOR THE RECOVERY OF THE PENALTY FOR VIOLATION OF SECTION 584 OF THE TARIFF ACT OF 1922 SINCE THE VESSEL DID NOT HAVE ON BOARD A MANIFEST AS REQUIRED BY SECTION 431 OF THE TARIFF ACT OF 1922; SECTION 4377 R.S. IN THAT THE VESSEL WAS ENGAGED IN A TRADE OTHER THAN THAT FOR WHICH SHE WAS LICENSED; AND SECTION 4214 R.S. AS AMENDED IN THAT THE VESSEL BEING LICENSED AS A YACHT WAS ENGAGED IN TRADE AND IN SUCH A WAY AS TO VIOLATE THE REVENUE LAWS OF THE UNITED STATES. ON THE BASIS OF THESE COMBINED ALLEGATIONS IN THE LIBEL THE BOAT WAS FORFEITED AND SOLD BY THE COURT, THE NET PROCEEDS AMOUNTING TO $561.71, WHICH WAS DEPOSITED MAR. 11, 1927, C.D. 220. JUST WHICH ONE OF THE ABOVE ENUMERATED SECTIONS THE VESSEL WAS FORFEITED UNDER DOES NOT APPEAR AND IT IS ONLY SAFE TO ASSUME THAT THE COURT DECREED THE FORFEITURE ON ALL OF THE ALLEGATIONS SET FORTH IN THE LIBEL.

SECTION 619 OF THE ACT OF SEPTEMBER 21, 1922, 42 STAT. 988, BEING THE SECTION OF THE TARIFF ACT REFERRED TO, PROVIDES:

AWARD OF COMPENSATION.--- ANY PERSON NOT AN OFFICER OF THE UNITED STATES WHO DETECTS AND SEIZES ANY VESSEL, VEHICLE, MERCHANDISE, OR BAGGAGE SUBJECT TO SEIZURE AND FORFEITURE UNDER THE CUSTOMS LAWS AND WHO REPORTS THE SAME TO AN OFFICER OF THE CUSTOMS, OR WHO FURNISHES TO A DISTRICT ATTORNEY, TO THE SECRETARY OF THE TREASURY, OR TO ANY CUSTOMS OFFICER ORIGINAL INFORMATION CONCERNING ANY FRAUD UPON THE CUSTOMS REVENUE, OR A VIOLATION OF THE CUSTOMS LAWS PERPETRATED OR CONTEMPLATED, WHICH DETECTION AND SEIZURE OR INFORMATION LEADS TO A RECOVERY OF ANY DUTIES WITHHELD, OR OF ANY FINE, PENALTY, OR FORFEITURE INCURRED, MAY BE AWARDED AND PAID BY THE SECRETARY OF THE TREASURY A COMPENSATION OF 25 PERCENTUM OF THE NET AMOUNT RECOVERED, BUT NOT TO EXCEED $50,000 IN ANY CASE, WHICH SHALL BE PAID OUT OF MONEYS APPROPRIATED FOR THAT PURPOSE. FOR THE PURPOSE OF THIS SECTION, AN AMOUNT RECOVERED UNDER A BAIL BOND SHALL BE DEEMED A RECOVERY OF A FINE INCURRED.

MONEYS AS AWARD OF COMPENSATION ARE PAYABLE UNDER THIS SECTION ONLY WHEN FUNDS ARE RECOVERED AS A RESULT OF WITHHELD CUSTOMS DUTIES, OR AS FINES, PENALTIES, AND FORFEITURES INCURRED UNDER THE CUSTOMS LAWS. THE AUTHORITY TO PAY COMPENSATION THEREUNDER DOES NOT EXTEND TO ALL RECOVERIES UNDER THE LAWS OF THE UNITED STATES MERELY BECAUSE THE CUSTOMS LAWS MAY ALSO BE EITHER DIRECTLY OR INDIRECTLY INVOLVED, OR BECAUSE THE SEIZURE WAS MADE BY AND THE PROCEEDINGS FOR FORFEITURE INSTITUTED AT THE INSTANCE OF THE COLLECTOR OF CUSTOMS WHO HAPPENS TO BE THE REPRESENTATIVE OF THE GOVERNMENT AT THE PORT WHERE THE VIOLATION OCCURS.

SECTIONS 4214, 4337, 4371, AND 4377, REVISED STATUTES, AS AMENDED, PROVIDE, RESPECTIVELY, AS FOLLOWS:

PLEASURE YACHTS; LICENSE; ENTRY AND CLEARANCE; RESTRICTIONS.--- THE SECRETARY OF COMMERCE MAY CAUSE YACHTS USED AND EMPLOYED EXCLUSIVELY AS PLEASURE VESSELS OR DESIGNED AS MODELS OF NAVAL ARCHITECTURE, IF BUILT AND OWNED SO AS TO BE ENTITLED TO REGISTRY AND THE BENEFITS THEREOF AS VESSELS OF THE UNITED STATES IF SUCH VESSELS WERE MERCHANT VESSELS, TO BE LICENSED ON TERMS WHICH WILL AUTHORIZE THEM TO PROCEED FROM PORT TO PORT OF THE UNITED STATES AND TO FOREIGN PORTS WITHOUT ENTERING OR CLEARING AT THE CUSTOMHOUSE; SUCH LICENSE SHALL BE IN SUCH FORM AS THE SECRETARY OF COMMERCE MAY PRESCRIBE. SUCH VESSELS, SO ENROLLED AND LICENSED, SHALL NOT BE ALLOWED TO TRANSPORT MERCHANDISE OR CARRY PASSENGERS FOR PAY. SUCH VESSELS SHALL HAVE THEIR NAME AND PORT PLACED ON SOME CONSPICUOUS PORTION OF THEIR HULLS. SUCH VESSELS SHALL, IN ALL RESPECTS, EXCEPT AS ABOVE, BE SUBJECT TO THE LAWS OF THE UNITED STATES, AND SHALL BE LIABLE TO SEIZURE AND FORFEITURE FOR ANY VIOLATION OF THE PROVISIONS OF THIS CHAPTER. (SECTION 103, TITLE 46, CODE OF LAWS OF THE UNITED STATES.)

PENALTY FOR UNLAWFULLY PROCEEDING ON FOREIGN VOYAGE.--- IF ANY VESSEL, ENROLLED OR LICENSED, SHALL PROCEED ON A FOREIGN VOYAGE, WITHOUT FIRST GIVING UP HER ENROLLMENT AND LICENSE TO THE COLLECTOR OF THE DISTRICT COMPREHENDING THE PORT FROM WHICH SHE IS ABOUT TO PROCEED ON SUCH VOYAGE, AND BEING DULY REGISTERED BY SUCH COLLECTOR, EVERY SUCH VESSEL, TOGETHER WITH HER TACKLE, APPAREL, AND FURNITURE, AND THE MERCHANDISE SO IMPORTED THEREIN, SHALL BE LIABLE TO SEIZURE AND FORFEITURE. (SECTION 278, TITLE 46, CODE OF LAWS OF THE UNITED STATES.)

TRADING WITHOUT LICENSE; FEES; FORFEITURE.--- EVERY VESSEL OF TWENTY TONS OR UPWARD, OTHER THAN REGISTERED VESSELS FOUND TRADING BETWEEN DISTRICT AND DISTRICT, OR BETWEEN DIFFERENT PLACES IN THE SAME DISTRICT, OR CARRYING ON THE FISHERY WITHOUT BEING ENROLLED AND LICENSED, OR IF LESS THAN TWENTY TONS AND NOT LESS THAN FIVE TONS, WITHOUT A LICENSE, IN THE MANNER PROVIDED BY THIS CHAPTER, IF LADEN WITH MERCHANDISE THE GROWTH OR MANUFACTURE OF THE UNITED STATES ONLY, OR IN BALLAST, SHALL PAY THE SAME FEES AND TONNAGE IN EVERY PORT OF THE UNITED STATES AT WHICH SHE MAY ARRIVE AS VESSELS NOT BELONGING TO ACITIZEN OF THE UNITED STATES; AND, IF SHE HAVE ON BOARD ANY ARTICLES OF FOREIGN GROWTH, OR MANUFACTURE OTHER THAN SEA STORES, SHE SHALL, TOGETHER WITH HER TACKLE, APPAREL, AND FURNITURE, AND THE LADING FOUND ON BOARD, BE FORFEITED. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO VESSELS ENTITLED TO BE DOCUMENTED AS VESSELS OF THE UNITED STATES. (SECTION 317, TITLE 46, CODE OF LAWS OF THE UNITED STATES.)

PENALTY FOR VIOLATION OF LICENSE.--- WHENEVER ANY LICENSED VESSEL IS TRANSFERRED, IN WHOLE OR IN PART, TO ANY PERSON WHO IS NOT AT THE TIME OF SUCH TRANSFER A CITIZEN OF AND RESIDENT WITHIN THE UNITED STATES, OR IS EMPLOYED IN ANY OTHER TRADE THAN THAT FOR WHICH SHE IS LICENSED, OR IS FOUND WITH A FORGED OR ALTERED LICENSE, OR ONE GRANTED FOR ANY OTHER VESSEL, SUCH VESSEL WITH HER TACKLE, APPAREL, AND FURNITURE, AND THE CARGO, FOUND ON BOARD HER, SHALL BE FORFEITED. BUT VESSELS WHICH MAY BE LICENSED FOR THE MACKEREL FISHERY SHALL NOT INCUR SUCH FORFEITURE BY ENGAGING IN CATCHING COD OR FISH OF ANY OTHER DESCRIPTION WHATEVER. (SECTION 325, TITLE 46, CODE OF LAWS OF THE UNITED STATES.)

IN THE CASE OF MAUL V. UNITED STATES DECIDED BY THE SUPREME COURT OF THE UNITED STATES, MAY 31, 1927, IT WAS HELD THAT SECTIONS 4337 AND 4377 OF THE REVISED STATUTES ARE DIRECTED TO THE PROTECTION OF THE REVENUE, AND THAT WHILE THEY ARE ALSO REGULATIONS OF COMMERCE BY VESSELS THEY ARE LAWS RESPECTING THE REVENUE WITHIN THE CONTEMPLATION OF SECTION 3072, REVISED STATUTES, IN WHICH IT IS PROVIDED THAT IT IS THE DUTY OF OFFICERS IN THE CUSTOMS TO SEIZE AND SECURE ANY VESSEL OR MERCHANDISE WHICH SHALL BECOME LIABLE TO SEIZURE BY VIRTUE OF ANY LAW RESPECTING THE REVENUE.

THE ISSUE IN THE MAUL CASE WAS AS TO THE LEGALITY OF THE SEIZURE OF AN AMERICAN VESSEL BY THE COAST GUARD ON THE HIGH SEAS FOR VIOLATION OF SECTIONS 4337 AND 4377, REVISED STATUTES, SUPRA, AND THE HOLDING THAT SUCH SECTIONS WERE LAWS RESPECTING THE REVENUE WITHIN THE MEANING OF SECTION 3072, REVISED STATUTES, CAN NOT BE ACCEPTED AS A DETERMINATION THAT THE SECTIONS ARE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT OF 1922, AND THAT ANY PART OF THE MONEYS COLLECTED IN CONSEQUENCE OF VIOLATIONS OF SUCH SECTIONS MAY BE PAID OUT TO AS REWARDS TO INFORMERS.

THE TWO SECTIONS IN QUESTION AS WELL AS SECTIONS 4214 AND 4371, REVISED STATUTES, SUPRA, ARE PRIMARILY NAVIGATION LAWS RELATING TO COMMERCE AND SHIPPING OF VESSELS OF AMERICAN ENROLLMENT AND REGISTRY. THEY MAY HAVE BEEN ENACTED FOR THE EXPRESS PURPOSE OF PROTECTING BOTH THE INTERNAL AND THE CUSTOMS REVENUE, AND TO THAT EXTENT MAY BE CONSIDERED LAWS RESPECTING THE REVENUE, BUT THEY ARE NOT AND CAN NOT BE CONSIDERED AS CUSTOMS LAWS WITHIN THE MEANING OF THE PROVISIONS OF SECTION 619 OF THE ACT OF SEPTEMBER 21, 1922, SUPRA, AND MONEYS RECOVERED AS A RESULT OF THE VIOLATION OF SUCH LAWS ARE NOT RECOVERED ON ACCOUNT OF WITHHELD CUSTOMS DUTIES, OR FINES, PENALTIES, OR FORFEITURES INCURRED UNDER THE CUSTOMS LAWS AS CONTEMPLATED BY THAT SECTION.

IN THE CASE PRESENTED BY YOU NOTHING HAS BEEN SHOWN TO THE EFFECT THAT THE FORFEITURE OF THE MANITO II WAS ORDERED BY THE COURT UNDER SECTION 584 OF THE ACT OF SEPTEMBER 21, 1922, 42 STAT. 980, PROVIDING FOR THE IMPOSITION OF A FINE UPON THE MASTER FOR IRREGULARITIES IN CONNECTION WITH THE SHIP'S MANIFEST AND/OR SECTION 593 OF THE SAME ACT, 42 STAT. 982, PROVIDING FOR THE FORFEITURE OF MERCHANDISE ILLEGALLY INTRODUCED INTO THE UNITED STATES AND SUBJECTING THE OFFENDER TO FINE OR IMPRISONMENT OR BOTH. IT IS NOTED IN CONNECTION WITH THOSE SECTIONS THAT THEY DO NOT PROVIDE FOR THE FORFEITURE OF THE VESSEL. SECTION 594 PROVIDES THAT THE VESSEL, IF NOT USED AS A COMMON CARRIER, MAY BE HELD ONLY FOR THE PAYMENT OF THE PENALTIES INCURRED ON ACCOUNT OF VIOLATIONS OF THE CUSTOMS LAWS, AND MAY BE PROCEEDED AGAINST SUMMARILY FOR THE COLLECTION OF THE SAME. THE FORFEITURE AND SALE OF THE VESSEL IN SUCH CASES IS PROVIDED BY LAW FOR THE PURPOSE OF ENFORCING A LIEN AGAINST THE VESSEL CREATED BY THE PENALTIES IMPOSED, THE SECTION EVIDENTLY PRESUPPOSING THAT PROPER PROCEEDINGS IN PERSONAM AGAINST THE OFFENDER HAD ESTABLISHED THE LIEN.

IN THE PRESENT CASE IT DOES NOT APPEAR THAT ANY PROCEEDINGS WERE HAD AGAINST THE OFFENDERS, THE RECORD BEING TO THE EFFECT THAT THE MATTER WAS PRESENTED TO THE COURT FOR FORFEITURE OF THE VESSEL UNDER ALLEGATIONS OF VIOLATIONS OF CUSTOMS LAWS WHICH DID NOT PROVIDE FOR SUCH FORFEITURE, AND ALSO OF VIOLATIONS OF NAVIGATION LAWS WHICH DO SO PROVIDE. THE OBVIOUS CONCLUSION UNDER SUCH CIRCUMSTANCES, IN THE ABSENCE OF ANY SHOWING TO THE CONTRARY, IS THAT THE COURT ORDERED THE FORFEITURE AND SALE OF THE MANITO II UNDER THE NAVIGATION LAWS, AND NOT UNDER THE CUSTOMS LAWS. THE PROCEEDS FROM THE SALE OF THE VESSEL ARE THEREFORE NOT FOR CONSIDERATION AS A RECOVERY UNDER SECTION 619 OF THE TARIFF ACT.

ANSWERING YOUR QUESTIONS SPECIFICALLY YOU ARE ADVISED AS FOLLOWS:

1. THE PROCEEDS OF THE SALE OF THE MANITO II ARE NOT TO BE CONSIDERED A RECOVERY UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT OF 1922.

2. RECOVERIES FOR VIOLATION OF SECTIONS 4214, 4337, 4371, AND 4377, REVISED STATUTES, AS AMENDED, ARE NOT RECOVERIES UNDER THE CUSTOMS LAWS WITHIN THE MEANING OF SECTION 619 OF THE TARIFF ACT. MONEYS RECEIVED FROM THE SALE OF VESSELS UNDER THESE SECTIONS OF THE REVISED STATUTES SHOULD BE TREATED AND DEPOSITED AS COMMERCE RECEIPTS AND NOT TREASURY RECEIPTS.