A-90331, FEBRUARY 28, 1938, 17 COMP. GEN. 690

A-90331: Feb 28, 1938

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THE DISPOSITION OF THE FORFEITED MERCHANDISE BY THE SECRETARY WAS NOT MADE UNTIL AFTER THE AMENDMENT. THE INFORMER'S AWARD IS FOR DETERMINATION UNDER THE ACT PRIOR TO AMENDMENT AND MAY PROPERLY BE BASED ON THE FULL VALUE OF ALL THE LIQUORS SEIZED AND FORFEITED. NOTWITHSTANDING THE LIQUORS WERE NOT SOLD BUT HELD FOR OFFICIAL USE AND A PORTION THEREOF SUBSEQUENTLY DESTROYED. 1938: REFERENCE IS MADE TO THE CLAIM OF THOMAS JOHNSON FOR $4. WHICH CLAIM WAS TRANSMITTED HERE FOR DIRECT SETTLEMENT BY LETTER OF JULY 2. SEC. 1619) AUTHORIZES PAYMENT OF AWARD OF COMPENSATION FOR INFORMATION LEADING TO THE FORFEITURE UNDER THE CUSTOMS AND NAVIGATION LAWS OF MERCHANDISE WHICH IS THEREAFTER. 697 PRESENTS THE QUESTION AS TO WHETHER AN AWARD MAY BE MADE WHERE THE DECREE OF FORFEITURE FOR VIOLATION OF THE CUSTOMS LAWS WAS HANDED DOWN PRIOR TO THE DATE OF PASSAGE OF THE ANTI-SMUGGLING ACT.

A-90331, FEBRUARY 28, 1938, 17 COMP. GEN. 690

CUSTOMS SERVICE - REWARDS TO INFORMERS - STATUTORY AMENDMENT AFTER DECREE OF PROPERTY FORFEITURE WHERE THE GIVING OF INFORMATION LEADING TO A FORFEITURE UNDER THE CUSTOMS LAWS; THE FORFEITURE; AND THE DELIVERY OF THE LIQUORS INVOLVED TO THE SECRETARY OF THE TREASURY, AROSE PRIOR TO THE AMENDMENT OF SECTION 619 OF THE TARIFF ACT OF 1930 BY THE ACT OF AUGUST 5, 1935, 49 STAT. 527, BUT THE DISPOSITION OF THE FORFEITED MERCHANDISE BY THE SECRETARY WAS NOT MADE UNTIL AFTER THE AMENDMENT, THE INFORMER'S AWARD IS FOR DETERMINATION UNDER THE ACT PRIOR TO AMENDMENT AND MAY PROPERLY BE BASED ON THE FULL VALUE OF ALL THE LIQUORS SEIZED AND FORFEITED, NOTWITHSTANDING THE LIQUORS WERE NOT SOLD BUT HELD FOR OFFICIAL USE AND A PORTION THEREOF SUBSEQUENTLY DESTROYED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, FEBRUARY 28, 1938:

REFERENCE IS MADE TO THE CLAIM OF THOMAS JOHNSON FOR $4,697 AS AN AWARD OF COMPENSATION FOR FURNISHING INFORMATION LEADING TO A FORFEITURE UNDER THE CUSTOMS LAWS, WHICH CLAIM WAS TRANSMITTED HERE FOR DIRECT SETTLEMENT BY LETTER OF JULY 2, 1937, FROM THE COMMISSIONER OF CUSTOMS AS OLLOWS:

SECTION 619 OF THE TARIFF ACT OF 1930, AS AMENDED BY SECTION 305 OF THE ANTI-SMUGGLING ACT (U.S.C. (1934 ED., SUPP. II), TITLE 19, SEC. 1619) AUTHORIZES PAYMENT OF AWARD OF COMPENSATION FOR INFORMATION LEADING TO THE FORFEITURE UNDER THE CUSTOMS AND NAVIGATION LAWS OF MERCHANDISE WHICH IS THEREAFTER, IN LIEU OF SALE, DESTROYED OR DELIVERED TO ANY GOVERNMENTAL AGENCY FOR OFFICIAL USE.

THE ACCOMPANYING VOUCHER IN FAVOR OF THOMAS JOHNSON IN THE SUM OF $4,697 PRESENTS THE QUESTION AS TO WHETHER AN AWARD MAY BE MADE WHERE THE DECREE OF FORFEITURE FOR VIOLATION OF THE CUSTOMS LAWS WAS HANDED DOWN PRIOR TO THE DATE OF PASSAGE OF THE ANTI-SMUGGLING ACT, AUGUST 5, 1935, BUT DISPOSITION OF THE FORFEITED MERCHANDISE WAS NOT MADE UNTIL AFTER THAT DATE. A PORTION OF THE LIQUORS WAS TRANSFERRED TO THE GOVERNMENT FOR OFFICIAL USE AND THE BALANCE WAS DESTROYED. THE ACCOUNT THEREFOR IS TRANSMITTED TO YOUR OFFICE FOR DIRECT SETTLEMENT UNDER THE PROVISIONS OF SECTION 236 OF THE REVISED STATUTES, AS AMENDED BY THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1021 (U.S.C., TITLE 31, SEC. 71).

AT THE TIME FORFEITURE WAS DECREED, JULY 24, 1934, THE INFORMER WAS ENTITLED TO COMPENSATION IN THE EVENT THE LIQUOR WAS EITHER SOLD OR AWARDED FOR OFFICIAL USE. ON AUGUST 5, 1935, THE ANTI-SMUGGLING ACT WAS PASSED, AUTHORIZING THE PAYMENT OF COMPENSATION ON THE BASIS OF THE APPRAISED VALUE OF MERCHANDISE DESTROYED, AND ON AUGUST 29, 1935, THE FEDERAL ALCOHOL ADMINISTRATION ACT (U.S.C. (1934 ED., SUPP. II), TITLE 27, SEC. 201) WAS PASSED, PROHIBITING THE FURTHER SALE OF ALCOHOLIC LIQUORS.

A PORTION OF THE LIQUOR WAS AWARDED AND TRANSFERRED FOR OFFICIAL USE AND ON NOVEMBER 7, 1936, THE BALANCE OF THE LIQUOR WAS DESTROYED. THE CLAIM COVERS THE NET APPRAISED VALUE OF THE LIQUORS AWARDED FOR OFFICIAL USE AND DESTROYED.

YOU ARE INFORMED THAT FROM THE RECORD BEFORE IT, THE DEPARTMENT IS SATISFIED INFORMATION FURNISHED BY INFORMER THOMAS JOHNSON RESULTED IN THE SEIZURE OF THE LIQUORS IN QUESTION.

THERE ARE INCLOSED, FOR YOUR CONSIDERATION IN CONNECTION WITH THE CLAIM, A COPY OF THE LIBEL AND DECREE OF FORFEITURE HANDED DOWN BY THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA. THERE ARE ALSO INCLOSED A COPY OF A COMMUNICATION FROM THE COLLECTOR OF CUSTOMS AT TAMPA, FLORIDA, DATED MARCH 17, 1937, AND A COPY OF AN INFORMAL MEMORANDUM PREPARED IN THE BUREAU, IN WHICH THE LEGAL PHASE OF THE CASE IS DISCUSSED.

THE BUREAU RECOMMENDS THAT THE INFORMER'S CLAIM BE ALLOWED IF LEGALLY POSSIBLE. IT WOULD BE APPRECIATED IF A COPY OF YOUR DECISION IS FURNISHED IN ORDER THAT THE BUREAU'S FILE ON THE CASE MAY BE COMPLETE.

THE FACTS SHOWN BY THE RECORD ARE THAT ON FEBRUARY 16, 1934, THE BRITISH VESSEL MIDINETTE AND HER CARGO, INCLUDING 988 SACKS AND 243 DEMIJOHNS OF SPIRITS, WINES, AND OTHER ALCOHOLIC BEVERAGES WERE SEIZED IN DADE COUNTY, FLA., FOR VIOLATION OF CERTAIN PROVISIONS OF THE CUSTOMS LAWS AS CONTAINED IN THE TARIFF ACT OF 1930, 46 STAT. 590; THAT THEREAFTER A LIBEL WAS FILED AGAINST THE VESSEL, HER CARGO, AND MERCHANDISE IN THE UNITED STATES DISTRICT COURT IN AND FOR THE SOUTHERN DISTRICT OF FLORIDA AND ON JULY 25, 1934, A DECREE WAS ENTERED BY THAT COURT WHEREBY THE VESSEL AND THE 988 SACKS AND 243 DEMIJOHNS OF SPIRITS, WINES, AND OTHER ALCOHOLIC BEVERAGES WERE FORFEITED TO THE UNITED STATES, THE DECREE FURTHER PROVIDING THAT THE LIQUORS BE DELIVERED BY THE UNITED STATES MARSHAL TO THE SECRETARY OF THE TREASURY THROUGH THE COLLECTOR OF CUSTOMS FOR THE 18TH CUSTOMS COLLECTION DISTRICT. THE DELIVERY OF THE LIQUORS TO THE SECRETARY OF THE TREASURY THROUGH THE COLLECTOR OF CUSTOMS FOR THE 18TH CUSTOMS COLLECTION DISTRICT. THE DELIVERY OF THE LIQUORS TO THE SECRETARY OF THE TREASURY WAS UNDER THE PROVISIONS OF SECTION 611 OF THE TARIFF ACT OF 1930, 46 STAT. 755, WHICH PROVIDED, AMONG OTHER THINGS, THAT:

* * * UPON THE REQUEST OF THE SECRETARY OF THE TREASURY, ANY COURT MAY, IN PROCEEDINGS FOR THE FORFEITURE OF ANY VESSEL, VEHICLE, MERCHANDISE, OR BAGGAGE UNDER THE CUSTOMS LAWS, PROVIDE IN ITS DECREE OF FORFEITURE THAT THE VESSEL, VEHICLE, MERCHANDISE, OR BAGGAGE, SO FORFEITED, SHALL BE DELIVERED TO THE SECRETARY OF THE TREASURY FOR DISPOSITION IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION. * * *

WITH RESPECT TO DISPOSITION OF ANY SUCH FORFEITED MERCHANDISE THE SALE OF WHICH, AS IN THIS CASE, WAS PROHIBITED UNDER THE LAWS OF THE STATE IN WHICH SEIZED, THE SAID SECTION AUTHORIZED THE SECRETARY OF THE TREASURY TO ORDER IT (1) TO BE TRANSFERRED FOR SALE IN ANY CUSTOMS DISTRICT IN WHICH THE SALE THEREOF MAY BE PERMITTED; (2) TO BE MANUFACTURED INTO AN ARTICLE THAT IS NOT PROHIBITED, THE RESULTING ARTICLE TO BE DISPOSED OF TO THE PROFIT OF THE UNITED STATES ONLY; OR (3) TO BE DESTROYED.

IT APPEARS FROM THE ABOVE-QUOTED LETTER THAT A PART OF THE FORFEITED LIQUORS WAS TRANSFERRED FOR OFFICIAL USES AND THAT ON NOVEMBER 7, 1936, OVER 2 YEARS AFTER THE FORFEITURE, THE BALANCE THEREOF WAS DESTROYED. THE VALUE OF THE LIQUORS TRANSFERRED FOR OFFICIAL USES APPEARS TO HAVE BEEN $12,918 AND OF THAT DESTROYED $5,873.62. THE CLAIM IS FOR AN AMOUNT EQUAL TO 25 PERCENT OF THE TOTAL VALUE OF THE LIQUORS FORFEITED, INCLUDING THOSE TRANSFERRED FOR OFFICIAL USE AND THOSE DESTROYED, AND HAS BEEN ADMINISTRATIVELY APPROVED IN THE AMOUNT OF $4,697.

THE QUESTION IS SUGGESTED IN THE ABOVE-QUOTED LETTER WHETHER, SINCE THE SEIZURE AND THE FORFEITURE OF THE LIQUORS OCCURRED PRIOR TO THE AMENDMENT OF SECTION 619 OF THE TARIFF ACT OF 1930 BY SECTION 305 OF THE ACT OF AUGUST 5, 1935, 49 STAT. 527, AND THE DISPOSITION OF THE LIQUORS WAS NOT MADE UNTIL AFTER THE AMENDMENT, ACTION WITH RESPECT TO THE CLAIM SHOULD BE UNDER SAID SECTION 619 AS IT EXISTED PRIOR TO THE AMENDMENT OR UNDER THE AMENDMENT.

SECTION 619 OF THE TARIFF ACT OF 1930, 46 STAT. 758, PROVIDED:

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 ANY APPROPRIATIONS AVAILABLE FOR THE COLLECTION OF THE REVENUE FROM CUSTOMS. FOR THE PURPOSES OF THIS SECTION, AN AMOUNT RECOVERED UNDER A BAIL BOND SHALL BE DEEMED A RECOVERY OF A FINE INCURRED.

SECTION 305 OF THE ACT OF AUGUST 5, 1935, 49 STAT. 527, AMENDED SAID SECTION 619 BY INSERTING AFTER THE WORDS "CUSTOMS LAWS" WHEREVER THEY APPEARED IN THE SECTION, THE WORDS "OR THE NAVIGATION LAWS" AND BY ADDING THERETO THE FOLLOWING:

IF ANY VESSEL, VEHICLE, MERCHANDISE, OR BAGGAGE IS FORFEITED TO THE UNITED STATES, AND IS THEREAFTER, IN LIEU OF SALE, DESTROYED UNDER THE CUSTOMS OR NAVIGATION LAWS OR DELIVERED TO ANY GOVERNMENTAL AGENCY FOR OFFICIAL USE, COMPENSATION OF 25 PERCENTUM OF THE APPRAISED VALUE THEREOF MAY BE AWARDED AND PAID BY THE SECRETARY OF THE TREASURY UNDER THE PROVISIONS OF THIS SECTION, BUT NOT TO EXCEED $50,000 IN ANY CASE.

IT HAS BEEN HELD THAT, UNDER WELL-ESTABLISHED RULES OF STATUTORY CONSTRUCTION, THE AMENDMENT IS PROSPECTIVE AND NOT RETROACTIVE. 16 COMP. GEN. 1051. OBVIOUSLY, THEREFORE, WHILE A CLAIMANT IS NOT ENTITLED AS A MATTER OF RIGHT TO AN AWARD UNDER THE STATUTE BUT THE MAKING OF AN AWARD THEREUNDER IS A MATTER WITHIN THE DISCRETION OF THE SECRETARY OF THE TREASURY UPON A PROPER SHOWING OF THE FACTS REQUIRED BY THE STATUTE AS A BASIS THEREFOR, THE AMENDMENT IS NOT FOR CONSIDERATION IN THIS CASE SINCE THE FACTS UPON WHICH THE CLAIM IS BASED--- THE GIVING OF THE INFORMATION, THE FORFEITURE AND THE DELIVERY OF THE LIQUORS TO THE SECRETARY OF THE TREASURY--- AROSE PRIOR TO THE AMENDMENT.

HOWEVER, THE CLAIM IN THIS PARTICULAR CASE APPEARS PROPER FOR ALLOWANCE UNDER SAID SECTION 619 OF THE TARIFF ACT OF 1930 WITHOUT REFERENCE TO THE AMENDMENT. SAID SECTION 619 PROVIDES THAT IN CASE OF THE RECOVERY OF ANY DUTIES WITHHELD, OR OF ANY FINE, PENALTY, OR FORFEITURE INCURRED, THE AWARD MAY BE 25 PERCENT OF THE "NET AMOUNT RECOVERED," NOT EXCEEDING $50,000. AS STATED, THERE WAS A DECREE OF FORFEITURE OF ALL THE LIQUORS SEIZED, THE DECREE PROVIDING THAT THEY BE DELIVERED TO THE SECRETARY OF THE TREASURY UNDER THE PROVISIONS OF SECTION 611 OF THE TARIFF ACT OF 1930. THE LIQUORS THEREUPON BECAME THE PROPERTY OF THE UNITED STATES. THEY HAD A SALE VALUE AND AT THAT TIME--- IN JULY 1934--- THEY LEGALLY COULD HAVE BEEN SOLD IN MANY STATES. HENCE, THERE WAS A ,RECOVERY" WITHIN THE MEANING OF SAID SECTION 619 OF THE TARIFF ACT OF 1930. SEE 6 COMP. GEN. 169. THE FACT THAT THE SECRETARY OF THE TREASURY, RATHER THAN TRANSFER THE LIQUORS TO SOME OTHER DISTRICT AND SELL THEM, ELECTED TO HOLD THEM FOR OTHER DISPOSITION AND CONTINUED TO HOLD A PART OF THEM UNTIL AFTER THE ENACTMENT OF SECTION 9 OF THE ACT OF AUGUST 29, 1935, 49 STAT. 987, PROHIBITING SUCH SALES, SHOULD NOT OPERATE TO DEPRIVE THE CLAIMANT OF AN AWARD IF OTHERWISE ALLOWABLE, EVEN THOUGH PART OF THE LIQUORS WERE EVENTUALLY DESTROYED AFTER THEIR DELIVERY TO THE SECRETARY OF THE TREASURY PURSUANT TO THE DECREE OF FORFEITURE.

ACCORDINGLY, THE AMOUNT OF THE AWARD OF $4,697 WILL BE CERTIFIED FOR PAYMENT TO THE CLAIMANT.