United States v. One 1936 Model Ford V-8 De Luxe Coach, Commercial Credit Co.

307 U.S. 219, 59 S. Ct. 861, 83 L. Ed. 1249, 1939 U.S. LEXIS 1070, 1 C.B. 381, 22 A.F.T.R. (P-H) 870
CourtSupreme Court of the United States
DecidedMay 22, 1939
Docket10
StatusPublished
Cited by307 cases

This text of 307 U.S. 219 (United States v. One 1936 Model Ford V-8 De Luxe Coach, Commercial Credit Co.) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. One 1936 Model Ford V-8 De Luxe Coach, Commercial Credit Co., 307 U.S. 219, 59 S. Ct. 861, 83 L. Ed. 1249, 1939 U.S. LEXIS 1070, 1 C.B. 381, 22 A.F.T.R. (P-H) 870 (1939).

Opinions

Mr. Justice McReynolds

delivered the opinion of the Court.

In each of these causes the District Court, proceeding under the “Liquor Law Repeal and Enforcement Act” [221]*221of August 27, 1935 (c. 740, 49 Stat. 872, 878, Title 27 U. S. C. § 40a), mitigated the forfeiture of an automobile seized for unlawful transportation of distilled spirits upon, which the federal tax had not been paid. (One was seized December 3, 1936; the other, March 15, 1937.) The forfeiture was decreed in a proceeding based upon § 3450 R. S. (Title 26 U. S. C., § 1441). The Circuit Courts of Appeals rightly approved and their judgmehts must be affirmed.

The facts, undisputed, are essentially alike, in both causes. The points of law are the same. A statement based on Record No. 10 will suffice.

The Repeal Enforcement Act provides—

“Sec. 204. (a) Whenever, in any proceeding in court for the forfeiture, under the internal-revenue laws, of any vehicle or aircraft seized for a violation of the internal-revenue laws relating to liquors such forfeiture is decreed, the court shall have exclusive jurisdiction to remit or mitigate the forfeiture.

“(b) In any such proceeding the court shall not allow the claim of any claimant for remission or mitigation unless and until he proves (1) that he has an interest in such vehicle or aircraft, as owner or otherwise, which he acquired in good faith, (2) that he had at no time any knowledge or reason to believe that it was being or would be used in the violation of laws of the United States or of any State relating to liquor, and (3) if it appears that the interest asserted by the claimant arises out of or is in any way subject to any contract or agreement under which any person having a record or reputation for violating laws of the United States or of any State relating to liquor has a right with respect to such vehicle or aircraft, that, before such claimant acquired his interest, or such other person acquired his right under such contract or agreement, which ever occurred later, the claimant, his officer or agent, was informed in answer to his inquiry, at the [222]*222headquarters of the sheriff, chief of police, principal Federal internal-revenue officer engaged in the enforcement of the liquor laws, or other principal local or Federal law-enforcement officer of the locality in which such other person acquired his right under such contract or agreement,. of the locality in which such other person then resided, and of each locality in which the claimant has made any other inquiry as to the character or financial standing of such other person, that such other person had no such record or reputation.”

The following findings by the District Court, it is agreed, correctly set out “the facts in this case”—

The Ford automobile in question was sold-by the Greenville Auto Sales, Incorporated (the dealer) October 3, 1936, through its agent, Elrod, to Guy Walker, who in part payment exchanged an old car paid for by him, but registered in, his wife’s name. He was given terms for payment under a conditional sales contract, drawn by an agent of the dealer, in the name • of his brother, Paul Walker, who formally executed the agreement. Guy Walker had the conditional sales contract drawn and executed in the name of his brother in order to place the title' “where his wife could not reach it.” Paul Walker had -no interest in the transaction except to comply with his brother’s request. Guy Walker made the’ transaction with the dealer. He selected the car, made the agreement and handled the transaction himself. Paul Walker drove the ‘car from the dealer’s place of business. Guy Walker at the time, and for two or three weeks after the purchase, was living at his brother’s house. Only one payment was made on the conditional sales contract before the seizure, and that by Guy Walker to the dealer.

It was admitted that Guy Walker had a previous record and reputation for violating both state and federal laws relating to liquor. Paul Walker was convicted of violating the National Prohibition Act in 1929, and was duly [223]*223sentenced therefor, but his record and reputation since serving the sentence were good.

On the date when the sale was consummated the dealer submitted the contract to the Commercial Credit Company, the claimant here, who accepted by telephone, and subsequently on October 5th, in the usual course of business the dealer assigned the contract'to the claimant and received a check therefor.

The claimant before accepting assignment of the sales contraet made an investigation of Paul Walker by inquiring at the headquarters of the Sheriff of Greenville County, and at the headquarters of the Chief of Police of Greenville, the County and City where the interest was acquired and the locality where Paul Walker resided, as to his record and reputation for violation of the liquor law. Information was received from these offices that he had no such record or reputation. Information was given, however, from the Sheriff’s office that Guy Walker had both record and reputation as violator of state and federal laws relating to liquor. No inquiry or investigation was made at the headquarters of the principal federal internal-revenue officer engaged in the enforcement of the liquor laws in that locality, or at the headquarters of any other principal local or federal law enforcement officer of the locality as to Paul' Walker, and no inquiry or investigation whatsoever was made of Guy Walker, the admitted real owner and purchaser of the automobile.

The claimant had Paul Walker investigated.in August, 1936, by the Business Service Bureau of Greenville, South Carolina, in connection with the purchase of a 'refrigerator. No investigation at that time was made as to his reputation or record for violating the liquor laws; the investigation did disclose that he had a good reputation in the community where he lived, and this was the reputation given him by his employer at that time.

The claimant purchased the, conditional .sales contract in good faith, believing thát Paúl Walker was the pur[224]*224chaser and owner of the automobile. It had no knowledge, information or suspicion of the true facts until after the automobile had been seized by federal officers.

Petitioner challenges the judgment below because of claimant’s failure, to establish compliance with' the conditions imposed by sub-section (b) § 204. Especially because claimant failed to' show that it had no reason to believe the automobile was being used or would be used to violate the liquor laws; also because it made no adequate inquiry concerning the' record and reputation of the real purchaser — Guy Walker.

Respondent’s interest in the automobile is not questioned. It “purchased the conditional sales contract in good faith, believing that Paul Walker was the purchaser and owner of the automobile. It had no knowledge, information or suspicion of the true facts until after the automobile had been seized.” This is enough to show compliance with sub-section • (b) (1). There was an interest acquired in good faith.

After investigation of the record and reputation of Paul Walker, followed by favorable reports, and believing him to be purchaser and owner of the automobile, claimant in good faith acquired the sales contract. It had no knowledge, information or suspicion that Paul Walker was only a “straw” purchaser.

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307 U.S. 219, 59 S. Ct. 861, 83 L. Ed. 1249, 1939 U.S. LEXIS 1070, 1 C.B. 381, 22 A.F.T.R. (P-H) 870, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-one-1936-model-ford-v-8-de-luxe-coach-commercial-credit-scotus-1939.