United States v. Ganey ( 1950 )

HOLMES, 'Circuit Judge.

This appeal is from the district court’s refusal to order a forfeiture of an automobile used to violate the Internal Revenue Laws in the sale of tax-paid whiskey without the required retail liquor dealer’s license. The undisputed facts are as follows:

James T. Ganey operated a place of business in Leon County, Florida, where it was unlawful to sell intoxicating liquors of any kind. An employee of the State Beverage Department bought tax-paid whiskey from him on six different occasions. On the last of these occasions, a representative of the federal government was with the state employee, and witnessed the sale. The whiskey was stored in the trunk of Ganey’s automobile, which was parked in the rear of the premises, where he carried on his lawful business as a retail dealer in beer. On each of the occasions, the whiskey sold was taken from the back of this automobile. After the last sale had" been made, Ganey was called upon to produce his federal retail liquor dealer’s license. He admitted that he had not yet obtained the license, giving as his reason the fact that he did not have the money with which to purchase it.

Ganey was arrested, and charged in a six-count indictment with unlawfully carrying on the business of a retail liquor dealer, without the procurement of the retail liquor dealer’s license required by Section 3250(b) (1), 26 U.S.C.A. The indictment charged a violation of 26 U.S.C.A. § 3253. Ganey entered pleas of nolo contendere on each of the six counts, and was adjudged guilty. At the time ef said arrest, the automobile, out of the back of which the whiskey was sold, and a quantity of tax-paid whiskey, were seized, and a libel of information was filed for their confiscation. The libel of information was filed under Sections 3116 and 3321 of Title 26 U.S.C.A. On November 10, 1949, the lower court rendered a final judgment forfeiting to the libelant the spirits seized, but denying forfeiture of the automobile. The question presented is whether the car was subject to forfeiture under the provisions of Sections 3116 or 3321 of Title 26 U.S.C.A., and whether a prosecution of the retailer under 26 U.S. C.A. § 3253, for violation of Section 3250, is a bar to the forfeiture of such automobile.

Although the indictment against the owner of this car, and the forfeiture proceeding, arose from the same transaction, they are completely independent of each other, and-should not be confused. Ganey was indicted under 26 U.S.C.A. § 3253, for a violation of Section 3250(b) (1), and on pleas of nolo contendere to each of the six counts was adjudged guilty. The libel of information was filed under 26 U.S.C.A. §§ 3116 and 3321, and is an entirely independent proceeding from the one under which the indictment was drawn. For this reason, we need only to decide whether or not the government is restricted to the forfeiture provisions of Section 3253, under which the indictment was drawn, or whether it may resort to the other forfeiture statutes under which the libel of information was filed.

It seems clear to us that Congress, in enacting Section 3116, intended to aid enforcement of revenue laws relating to intoxicating liguors by providing for forfeiture in any case of intended violation of those laws. A construction of Section 3116 which would preclude its application to a case in which some other forfeiture provision might conceivably be invoked would tend to nullify its effectiveness, as a revenue enforcing measure, and would thwart the plain purpose of Congress in enacting it. This section provides for the forfeiture of property used in any violation of the internal revenue laws.

We are of the opinion now, and -have so held in at least two prior decisions, that Sections 3116 and 3321 disclose a clear intent of Congress to forfeit to the government automobiles used in violation- of internal revenue laws with intent to defraud the United States, regardless of penalties imposed in other sections of the Code. See Kent v. United States, 5 Cir., 157 F.2d 1, certiorari denied 329 U.S. 785, 67 S.Ct. 297, 91 L.Ed. 673; One Ford Tudor Automobile v. United States, 5 Cir., 164 F.2d 1020. This automobile, which was used to carry on the business of a retail liquor dealer, who had not paid the required tax, is subject to such a forfeiture under Sections 3116 and 3321 of 26 U.S.C.A. even though the dealer was found guilty of a violation of Section 3253, 26 U.S.C.A.

For the reasons above stated, the judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed.