A-37711, SEPTEMBER 3, 1931, 11 COMP. GEN. 97

A-37711: Sep 3, 1931

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PROHIBITION ENFORCEMENT - SEIZED AUTOMOBILES - LIENS WHERE AN AUTOMOBILE IS SEIZED BY PROHIBITION OFFICERS IN CONNECTION WITH THE ILLEGAL TRANSPORTATION OF INTOXICATING LIQUOR PURSUANT TO SECTION 26 OF THE NATIONAL PROHIBITION ACT OF OCTOBER 28. SAID AUTOMOBILE IS SOLD UNDER THE ADMINISTRATIVE SALE PROVISIONS OF THE ACT AND THE NET PROCEEDS OF SALE COVERED INTO THE TREASURY AS "MISCELLANEOUS RECEIPTS. " THERE IS NO AUTHORITY TO PAY THE AMOUNT OF A SUBSEQUENTLY ALLEGED LIEN ON SAID AUTOMOBILE WHICH HAS NOT BEEN JUDICIALLY DETERMINED TO BE A PROPER CHARGE AGAINST THE PROCEEDS OF SALE. THERE IS NO BASIS. PARTICULARLY IN THE ABSENCE OF A SHOWING THAT THE ADMINISTRATIVE ACTION WAS IRREGULAR OR OTHERWISE THAN REQUIRED BY THE STATUTE.

A-37711, SEPTEMBER 3, 1931, 11 COMP. GEN. 97

PROHIBITION ENFORCEMENT - SEIZED AUTOMOBILES - LIENS WHERE AN AUTOMOBILE IS SEIZED BY PROHIBITION OFFICERS IN CONNECTION WITH THE ILLEGAL TRANSPORTATION OF INTOXICATING LIQUOR PURSUANT TO SECTION 26 OF THE NATIONAL PROHIBITION ACT OF OCTOBER 28, 1919, 41 STAT. 315, AND AFTER DUE ADVERTISING, NO CLAIMANT HAVING APPEARED, SAID AUTOMOBILE IS SOLD UNDER THE ADMINISTRATIVE SALE PROVISIONS OF THE ACT AND THE NET PROCEEDS OF SALE COVERED INTO THE TREASURY AS "MISCELLANEOUS RECEIPTS," THERE IS NO AUTHORITY TO PAY THE AMOUNT OF A SUBSEQUENTLY ALLEGED LIEN ON SAID AUTOMOBILE WHICH HAS NOT BEEN JUDICIALLY DETERMINED TO BE A PROPER CHARGE AGAINST THE PROCEEDS OF SALE, AS CONTEMPLATED BY SAID SECTION. THERE IS NO BASIS, IN SUCH CASES, FOR REPORTING THE MATTER TO THE CONGRESS AS AN EQUITABLE CLAIM PURSUANT TO THE ACT OF APRIL 10, 1928, 45 STAT. 413, PARTICULARLY IN THE ABSENCE OF A SHOWING THAT THE ADMINISTRATIVE ACTION WAS IRREGULAR OR OTHERWISE THAN REQUIRED BY THE STATUTE.

DECISION BY COMPTROLLER GENERAL MCCARL, SEPTEMBER 3, 1931:

THERE IS BEFORE THIS OFFICE FOR SETTLEMENT THE CLAIM OF COMMERCIAL CREDIT CO. FOR $209 ON ACCOUNT OF ITS ALLEGED LIEN UNDER A CHATTEL MORTGAGE GIVEN BY ONE PATRICK HOGAN MAY 21, 1928, AT CLEVELAND, OHIO, ON BUICK COUPE, MOTOR NO. 1643525, SERIAL NO. 1637440, WHICH WAS SEIZED BY PROHIBITION OFFICERS JANUARY 2, 1929, AND LATER SOLD UNDER THE PROVISIONS OF SECTION 26 OF THE NATIONAL PROHIBITION ACT OF OCTOBER 28, 1919, 41 STAT. 315.

FROM A REPORT RELATIVE TO THE MATTER BY THE DIRECTOR OF PROHIBITION ADDRESS TO THIS OFFICE UNDER DATE OF MAY 21, 1931, IT APPEARS THAT THE CAR WAS SEIZED IN PITTSBURGH, PA., IN CONNECTION WITH THE ILLEGAL TRANSPORTATION OF LIQUOR AND THAT THE DRIVER RAN AND WAS NEVER APPREHENDED. THE REPORT FURTHER STATES:

* * * THE CAR BORE AN OHIO LICENSE, AND, UPON INQUIRY, IT WAS LEARNED THAT THE CAR WAS LICENSED UNDER THE NAME OF THE OWNER AS PATRICK HOGAN, CHESTER HOTEL, CLEVELAND, OHIO. A REGISTERED LETTER, UNDER DATE OF JANUARY 11, 1929, TO THE ALLEGED OWNER AT THE ABOVE ADDRESS, REQUESTING HIM TO CALL AT THE PROHIBITION OFFICE IN PITTSBURGH IN REGARD TO THE CAR, WAS RETURNED UNCLAIMED.

IT FURTHER APPEARS THAT ON FEBRUARY 9 AND 16, 1929, NOTICE OF THE SEIZURE AND CONTEMPLATED SALE OF THE SEIZED AUTOMOBILE WAS ADVERTISED IN THE PITTSBURGH POST GAZETTE, AND BY HAND BILLS POSTED IN PUBLIC PLACES, AND THAT ON FEBRUARY 28, 1929, NO CLAIMANT HAVING APPEARED, THE AUTOMOBILE WAS SOLD UNDER THE ADMINISTRATIVE SALE PROVISIONS OF THE SAID ACT OF OCTOBER 28, 1919, AND THE NET PROCEEDS OF SALE (AFTER DEDUCTING EXPENSES) AMOUNTING TO $256.36, WERE DEPOSITED MARCH 19, 1929, TO THE CREDIT OF THE TREASURER OF THE UNITED STATES AND COVERED INTO THE TREASURY AS ,MISCELLANEOUS RECEIPTS," AS EXPRESSLY DIRECTED BY THE STATUTE.

THE CLAIMANT URGES THAT IT DID NOT LEARN OF THE SEIZURE AND SALE OF THE AUTOMOBILE UNTIL NOVEMBER 15, 1929, AND STATES THAT---

IN VIEW OF THE FACT THAT WE HOLD A RECORDED INCUMBRANCE AGAINST THIS AUTOMOBILE AND THE FURTHER FACT THAT WE WERE NOT NOTIFIED OF THESE HAPPENINGS IN ACCORDANCE WITH AND WHAT IS REQUIRED BY THE AFORESAID ACT, WE BELIEVE THE UNITED STATES GOVERNMENT SHOULD PAY OVER TO US OUR BALANCE OUTSTANDING ON THIS ACCOUNT, NAMELY $209, OR AT LEAST FORWARD TO US THE PROCEEDS FROM THE SALE OF THIS AUTOMOBILE.

THE CLAIMANT SUGGESTS FURTHER THAT IF THERE IS NO APPROPRIATION AVAILABLE TO PAY THE CLAIM, THAT IT BE REPORTED TO THE CONGRESS AS AN EQUITABLE CLAIM PURSUANT TO THE ACT OF APRIL 10, 1928, 45 STAT. 413.

SECTION OF THE NATIONAL PROHIBITION ACT, 41 STAT. 315, UNDER THE PROVISIONS OF WHICH THE SEIZURE AND SALE OF THE AUTOMOBILE WERE MADE, IS AS FOLLOWS:

WHEN THE COMMISSIONER, HIS ASSISTANTS, INSPECTORS, OR ANY OFFICER OF THE LAW SHALL DISCOVER ANY PERSON IN THE ACT OF TRANSPORTING IN VIOLATION OF THE LAW, INTOXICATING LIQUORS IN ANY WAGON, BUGGY, AUTOMOBILE, WATER OR AIRCRAFT, OR OTHER VEHICLE, IT SHALL BE HIS DUTY TO SEIZE ANY AND ALL INTOXICATING LIQUORS FOUND THEREIN BEING TRANSPORTED CONTRARY TO LAW. WHENEVER INTOXICATING LIQUORS TRANSPORTED OR POSSESSED ILLEGALLY SHALL BE SEIZED BY AN OFFICER HE SHALL TAKE POSSESSION OF THE VEHICLE AND TEAM OR AUTOMOBILE, BOAT, AIR OR WATER CRAFT, OR ANY OTHER CONVEYANCE, AND SHALL ARREST ANY PERSONS IN CHARGE THEREOF. SUCH OFFICER SHALL AT ONCE PROCEED AGAINST THE PERSON ARRESTED UNDER THE PROVISIONS OF THIS TITLE IN ANY COURT HAVING COMPETENT JURISDICTION; BUT THE SAID VEHICLE OR CONVEYANCE SHALL BE RETURNED TO THE OWNER UPON EXECUTION BY HIM OF A GOOD AND VALID BOND, WITH SUFFICIENT SURETIES, IN A SUM DOUBLE THE VALUE OF THE PROPERTY, WHICH SAID BOND SHALL BE APPROVED BY SAID OFFICER AND SHALL BE CONDITIONED TO RETURN SAID PROPERTY TO THE CUSTODY OF SAID OFFICER ON THE DAY TRIAL TO ABIDE THE JUDGMENT OF THE COURT. THE COURT, UPON CONVICTION OF THE PERSON SO ARRESTED, SHALL ORDER THE LIQUOR DESTROYED, AND UNLESS GOOD CAUSE TO THE CONTRARY IS SHOWN BY THE OWNER, SHALL ORDER A SALE BY PUBLIC AUCTION OF THE PROPERTY SEIZED, AND THE OFFICER MAKING THE SALE, AFTER DEDUCTING THE EXPENSES OF KEEPING THE PROPERTY, THE FEE FOR THE SEIZURE, AND THE COST OF THE SALE, SHALL PAY ALL LIENS, ACCORDING TO THEIR PRIORITIES WHICH ARE ESTABLISHED, BY INTERVENTION OR OTHERWISE AT SAID HEARING OR IN OTHER PROCEEDING BROUGHT FOR SAID PURPOSE, AS BEING BONA FIDE AND AS HAVING BEEN CREATED WITHOUT THE LIENOR HAVING ANY NOTICE THAT THE CARRYING VEHICLE WAS BEING USE OR WAS TO BE USED FOR ILLEGAL TRANSPORTATION OF LIQUOR, AND SHALL PAY THE BALANCE OF THE PROCEEDS INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS. ALL LIENS AGAINST PROPERTY SOLD UNDER THE PROVISIONS OF THIS SECTION SHALL BE TRANSFERRED FROM THE PROPERTY TO THE PROCEEDS OF THE SALE OF THE PROPERTY. IF, HOWEVER, NO ONE SHALL BE FOUND CLAIMING THE TEAM, VEHICLE, WATER OR AIR CRAFT, OR AUTOMOBILE, THE TAKING OF THE SAME, WITH A DESCRIPTION THEROF, SHALL BE ADVERTISED IN SOME NEWSPAPER PUBLISHED IN THE CITY OR COUNTY WHERE TAKEN, OR IF THERE BE NO NEWSPAPER PUBLISHED IN SUCH CITY OR COUNTY, IN A NEWSPAPER HAVING CIRCULATION IN THE COUNTY, ONCE A WEEK FOR TWO WEEKS AND BY HANDBILLS POSTED IN THREE PUBLIC PLACES NEAR THE PLACE OF SEIZURE, AND IF NO CLAIMANT SHALL APPEAR WITHIN TEN DAYS AFTER THE LAST PUBLICATION OF THE ADVERTISEMENT, THE PROPERTY SHALL BE SOLD AND THE PROCEEDS, AFTER DEDUCTING THE EXPENSES AND COSTS, SHALL BE PAID INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS.

WHILE THE STATUTE EXPRESSLY PROVIDES THAT ALL LIENS AGAINST PROPERTY SOLD UNDER THE PROVISIONS OF THIS SECTION SHALL BE TRANSFERRED FROM THE PROPERTY TO THE PROCEEDS OF THE SALE OF THE PROPERTY, IT DIRECTS THE PAYMENT FROM SUCH PROCEEDS ONLY OF LIENS "WHICH ARE ESTABLISHED, BY INTERVENTION OR OTHERWISE AT SAID HEARING OR IN OTHER PROCEEDINGS BROUGHT FOR SAID PURPOSE, AS BEING BONA FIDE AND AS HAVING BEEN CREATED WITHOUT THE LIENOR HAVING ANY NOTICE THAT THE CARRYING VEHICLE WAS BEING USED OR WAS TO BE USED FOR ILLEGAL TRANSPORTATION OF LIQUOR.' THE STATUTE IS PLAIN THAT ONLY LIENS WHICH ARE JUDICIALLY DETERMINED BY PROPER COURT PROCEEDINGS TO COME WITHIN THE SPECIFIED CONDITIONS SHALL BE PAID FROM THE PROCEEDS OF THE SALE OF THE SEIZED PROPERTY, SEE UNITED STATES V. MASTERS, 264 FED.REP. 250, AND IN THE ABSENCE OF A SHOWING THAT THE ALLEGED LIEN HERE IN QUESTION HAS BEEN JUDICIALLY ESTABLISHED AS A PROPER CHARGE AGAINST THE PROCEEDS OF THE SALE, THERE IS NO AUTHORITY OF LAW FOR THE PAYMENT OF THE CLAIM. COMPARE 7 COMP. GEN. 706; A-21326, FEBRUARY 10, 1928.

WITH REFERENCE TO THE REQUEST THAT THE MATTER BE REPORTED TO THE CONGRESS AS AN EQUITABLE CLAIM PURSUANT TO THE ACT OF APRIL 10, 1928, IT DOES NOT APPEAR THAT THE ADMINISTRATIVE ACTION TAKEN IN CONNECTION WITH THE SEIZURE, ADVERTISEMENT, AND SALE OF THE PROPERTY WAS OTHERWISE THAN REQUIRED BY THE STATUTE OR THAT SUCH ACTION DISREGARDED ANY RIGHTS OF THE CLAIMANT. THE CLAIMANTS' FAILURE TO TAKE NOTICE OF THE ADVERTISED SEIZURE AND CONTEMPLATED SALE AND TO PURSUE THE REMEDY FOR THE PROTECTION OF ITS LIEN EXPRESSLY AUTHORIZED BY THE STATUTE, OR THEREAFTER TO SECURE A JUDICIAL DETERMINATION OF THE VALIDITY OF THE LIEN AS CONTEMPLATED BY THE STATUTE TO CONSTITUTE IT A PROPER CHARGE AGAINST THE PROCEEDS OF THE SALE, MAY HAVE CAUSED IT SOME LOSS, BUT IN THIS THE GOVERNMENT WAS NOT AT FAULT AND SUCH CIRCUMSTANCES MAY NOT BE CONSIDERED AS CREATING EQUITIES IN FAVOR OF THE CLAIMANT MAKING THE CLAIM ONE TO BE REPORTED PURSUANT TO THE ACT OF APRIL 10, 1928, AS DESERVING THE CONSIDERATION OF THE CONGRESS. IN THIS CONNECTION SEE HORD V. UNITED STATES, 67 CT.CLS. 582, 589, WHERE THE COURT SAID:

BUT HOWEVER THIS MAY BE, BOTH THE NATIONAL PROHIBITION ACT AND THE TARIFF ACT, IN THE MATTER OF SALES AND FORFEITURES OF PROPERTY SEIZED, PROVIDE THE DETAILED PROCEDURE AND A SPECIFIED FORUM FOR DETERMINING QUESTIONS ARISING OUT OF THE SALE AND FOR THE PROTECTION OF THOSE CLAIMING ON INTEREST. * * * UNDER EITHER OF THE ACTS HE HAD A REMEDY AND FORUM, AND IT WAS THERE THAT HE SHOULD HAVE SOUGHT THE NEEDED RELIEF.

AND SEE, ALSO, GENERAL MOTORS ACCEPTANCE CORPORATION V. UNITED STATES, 23 FED.REP./2D) 799.

ACCORDINGLY, THE CLAIM MUST BE AND IS DISALLOWED AND THE REQUEST THAT THE CLAIM BE REPORTED TO THE CONGRESS PURSUANT TO THE ACT OF APRIL 10, 1928, DENIED.