source: Caselaw Access Project

author: MORRIS, District Judge.

license: Public Domain

text:
    THE BEST FOODS, Inc., v. HEMPHILL PACKING CO.
    (District Court, D. Delaware.
    March 25, 1925.)
    No. 527.
    1. Trade-marks and trade-names and unfair competition <@=>21 — Right to trade-mark for nut margarine not measured by such use or commencement thereof, in view of prior use for hard vegetable butter.
    Neither use by complainant of trade-mark on nut margarine, nor the time for the beginning of such use, is the criterion by which the scope of complainant’s rights with respect to such trade-mark under Trade-mark Act 1905, § 16 (Comp. St. § 9501), are to be meas-, ured, where complainant for a long time prior thereto used such trade-mark for hard vegetable butter, made from coeoanut oil.
    2. Trade-marks and trade-names and unfair-competition <@=>70(I) — Trade-mark ofianother may not be affixed to goods intimately connected with article that has borne mark.
    Under Trade-Mark Act 1905, § 16 (Comp. St. § 9501), the trade-mark of another may not be affixed to goods'that are in some manner so intimately connected with the article that has borne the mark as to make not unreasonable a supposition or belief on the part of the purchasing public that the same person or company, or affiliated persons or companies, are the manufacturers or vendors of both.
    3. Trade-marks and trade-names and unfair competition <©=>70(3) — Trade-mark “Nucoa” on vegetable butter held infringed by use of “Milcoa” for nut margarine.
    Trade-mark “Nucoa” for hard vegetable butter helé infringed by use of trade-mark “Milcoa” on nut margarine; the syllable “coa” being appropriable and not descriptive of cocoanut.
    4. Trade-marks and trade-names and unfair competition <@=>93(3) — Evidence held insufficient to prove abandonment of trade-mark.
    Evidence of use by others of somewhat similar trade-marks helé insufficient to prove abandonment of trade-mark “Nucoa” as trademark for nut margarine.
    5. Trade-marks and trade-names and unfair competition <@=>32 — Actual intent to abandon, essential to “abandonment” of trademark.
    To establish defense of abandonment of trade-mark, it is necessary to show not only acts indicating a practical abandonment, but an actual intent to abandon.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Abandon-Abandonment. ]
    6. Trade-marks and trade-names and unfair competition <@=>75 — Proof of actual instances in which purchasers had been misled, not essential to proof of infringement. ’
    In suit for infringement of trade-mark, complainant need not prove actual instances in which purchasers had been misled, the question being whether the similarity is so great that ordinary purchasers buying with ordinary caution are likely to be misled.
    7. Trade-marks and trade-names and unfair competition <@=>70 (3) — Test of “colorable imitation,” stated.
    The test of “colorable imitation” is, not whether a difference may be recognized between the names of two ■ competing articles when placed side by side, but whether the difference will be recognized by the purchaser with no opportunity for comparison.
    [Ed. Note. — For other definitions, see Words and Phrases, Second Series, Colorable Imitation.]
    8. Trade-piarks and trade-names and unfair competition <@=>86 — Right to accounting, but not right to injunctive relief, held barred by laches.
    Three-year delay in commencement of suit to enjoin infringement of trade-mark, delay in notifying defendant’s predecessor, the bona fide transfer for a valuable consideration of predecessor’s business and good will to defendant, and continued efforts to build up sale of product under infringing trade-mark, did not bar right to injunctive relief, but did bar right to an accounting.
    In Equity. Suit by The Best Eoods, Incorporated, against the Hemphill Packing Company. Decree for complainant.
    See, also, 295 E. 425; 300 E. 642.
    Charles E. Curley, of Wilmington, Del., and George M. Wolfson, of New York City, for plaintiff.
    Walter L. Sheppard, of Philadelphia, Pa., Abram B. Stratton, of Chicago, Ill., Henry D. M. Sherrerd, of Philadelphia, Pa., and Andrew C. Gray, of Wilmington, Del., for defendant.
   MORRIS, District Judge.

The complainant, The Best Eoods, Inc., owner and user of the registered trade-mark “Nucoa” for vegetable butter, charges thej defendant, Hemphill Packing Company, with infringement of that mark by the use of the latter’s. registered trade-mark “Milcoa” on its nut margarine and with unfair competition, and prays for the usual equitable relief. The defenses are: (1) Noninfringment; (2) no unfair .competition; and (3) laches. The cause is on final hearing.

The plaintiff was organized in 1903 under the name of The Nucoa Butter Company. It retained that name until June of 1923. It was then changed to The Best Eoods, Inc. About the time of its organization, it acquired by assignment the trade-mark rights in “Nucoa” of its predecessor, Loders & Nu-coline, Limited. Thereafter, on July 25, 1905, it caused the trade-mark to be registered, No. 44779. Therein it is stated that the class of merchandise to which the trademark is appropriated is butter, and the particular description of goods comprised in the class upon which the trade-mark is used is vegetable butter. Until 1915 the plaintiff used “Nueoa” as a trade-mark for hard vegetable butter only. That butter is obtained from coeoanut oils by pressure, is employed in the confectionery, baker, and cracker trades, and is neither used nor adapted for use as a table butter or “spread for bread.” It is made in large, compact masses, and is packed and distributed for sale in boxes or tubs. During the year 1915, the plaintiff began the manufacture and sale of a nut margarine produced by churning vegetable oil, mainly coeoanut oil, in animal milk. Its main use is as a butter substitute or “spread for bread”; but, like the hard vegetable butter, it may also be used as a vegetable shortening, a frying fat, and as an ingredient of cakes and icings. This product is packed and sold in pound cartons. Though the plaintiff placed conspicuously thereon .its name “The Nueoa Butter Company,” it did not use the word “Nueoa” as a trade-mark therefor until December of 1917.

In the year 1916 a third person began using the word “Troco” as a trade-mark for its nut margarine and caused the same to be registered. It has since continued the use of that mark. This fact the defendant seeks to use in derogation of plaintiff’s rights to the trade-mark “Nueoa” and in support of the defenses of noninfringement and no unfair competition. But, in'view of the long prior use and registration by the plaintiff of “Nueoa” as a trade-mark for vegetable butter, neither the use by the plaintiff of that mark upon nut margarine nor the time of the beginning of such use is the criterion by which the scope of plaintiff’s rights with respect to “Nueoa” are to be measured. It is provided by statute that the trade-mark rights of a person enable the .owner to prevent the use by another of that mark, a counterfeit, copy, or colorable imitation thereof not only upon merchandise identical in all particulars with that upon which the mark has been used, but, as well, upon merchandise having substantially the same descriptive properties. Section 16 of TradeMark Act of 1905 (Comp. St. § 9501). The trade-mark of another may not be affixed to goods that are in some manner so intimately connected with the article that has borne the mark as to make not unreasonable a supposition or belief on the part of the purchasing public that the same person or company or affiliated persons or companies are the manufacturers or vendors of both. Aunt Jemima Mills Co. v. Rigney & Co., 247 F. 407, 159 C. C. A. 461, L. R. A. 1918C, 1039 (C. C. A. 2); Anheuser-Busch v. Budweiser Malt Products Corp., 295 F. 308 (C. C. A. 2); Akron-Overland Tire Co. v. Willys-Overland Co., 273 F. 674 (C. C. A. 3).

The hard vegetable butter and the nut margarine are each derived mainly from the cocoanut. They are both food products. Each is a vegetable butter. In my opinion they have the same descriptive properties and are, likewise, so related in their uses as to bar the defendant from affixing any mark upon its nut margarine that is a colorable imitation of “Nueoa,” the trade-mark for plaintiff’s hard vegetable butter. An unavoidable corollary of this conclusion is that the use of “Troco” as a trade-mark for nut margarine by a third person for more than a year before plaintiff used “Nueoa” as a trade-mark for its nut margarine is a fact that is without pertinence to the issues of this cause, save to the extent that that fact may be evidence of an abandonment by the plaintiff of its rights. This the defendant urges. It asserts that the use of the suffix “coa,” “eo,” and “ko” by other margarine manufacturers has been so persistent, continued, and adverse that the plaintiff must be held to have abandoned any exclusive right to the use of the word or syllable “coa.” In support of this position the defendant has produced evidence showing the use and registration of trade-marks containing one of those syllables. That evidence reveals the use of “coa” as a suffix in three instances — in “Nueoa” by the plaintiff, in “Peeoa” by Wilson & Co., and in “Mileoa” by the defendant. In a suit instituted by the plaintiff a preliminary injunction was granted enjoining the use of “Peeoa.” Upon an appeal that order was affirmed. Wilson & Co. v. The Best Foods, Inc. (C. C. A.) 300 F. 484. Registrations by others of marks containing the syllable “eo” or “ko” are “Troco” in November of 1916, “Vegaeo” in September of 1917, “Aleo” in January of 1918, “Eeonut” in August of 1918, “Deeonut” in July of 1919, and “Keyko” in October of 1920. There is evidence of the adoption by third persons, without registration, of “Kokohart” late in 1917, “Kokobrand” in 1918, and “Tropieonut” in 1919. The quantity of nut margarine upon which the marks containing the syllables “eo” and “ko” were affixed is not shown to have been great.

If it be assumed (though it is not here decided) that every use of “eo” or “ko” in the marks of others is pertinent evidence upon the question of abandonment by the plaintiff of “coa,” yet, in my opinion, that evidence is wholly inadequate to establish abandonment. .To .establish a defense of abandonment it is necessary to show not only acts indicating a practical abandonment, but an actual intent to abandon. Saxlehner v. Eisner & Mendelson Co., 179 U. S. 19, 21 S. Ct. 7, 45 L. Ed. 60. Actiengesellschaft, etc., v. Amberg, 109 F. 151, 48 C. C. A. 264; Taylor v. Carpenter, Fed. Cas. No. 13,784. I think the evidence discloses neither.

The defendant likewise seeks to make use of the words that have been employed as nut margarine trade-marks and of the duplicated sound of “eoa” in “cocoa” or “coeoanut” to establish that' “coa” is descriptive and indicates the coeoanut. It would then apply the rule that where a trade-mark consists of a word one part of which is descriptive and not subject to exclusive appropriation, while the other is purely arbitrary, the appropriation by anóther of the descriptive part only is not an infringment. Feil v. Robbins Co., 220 F. 650, 136 C. C. A. 258; Valvoline Oil Co. v. Havoline Oil Co. (D. C.) 211 F. 189. It is not shown, however, that the dictionaries or other books of reference anywhere define “eoa” as meaning or describing the coeoanut. Moreover, it would seem, upon principle, that “coa” is no more descriptive of “coeoanut,” the large, hard-shelled nut of the coeoanut palm, than it is of “cocoa,” made from the seeds of the chocolate tree. The arbitrary words containing the syllable “coa,” “eo,” or “ko” adopted as trade-marks for nut margarine are not, I think, by reason of their spelling, sound, or pronunciation, sufficient of themselves, or when considered in the light of the spelling or pronunciation of “coeoanut,” to establish that “eoa” as used by the- plaintiff in “Nueoa” is descriptive and, consequently, appropriable by the defendant.

The defendant next asserts that there is no infringement by it unless the resemblance of “Mileoa” to “Nueoa” is sufficient to convey a false impression to the public mind and is of a character to mislead and deceive the ordinary purchaser in the exercise of ordinary care and caution in such matters; that the mark “Mileoa” has been extensively used since the fall of 1920; that there is no evidence whatever, that any person has been so deceived or' purchased “Mileoa” supposing it to be “Nueoa”; and that, consequently, the court should not now determine abstractly whether the similarity is such as is calculated to deceive.' The question thereby raised is, however, not new. It is expressly dealt with in Nims on Unfair Competition and Trade-Marks, pp. 601, 602. It is there said: “The fact that no actual eases of confusion are proved is not conclusive on the court. Regardless of proof of this sort it must decide on the facts as to the marks used by the parties and on the evidence of the market conditions surrounding the everyday use of the marks whether or not the defendant’s acts will be likely to cause confusion.” I do not find that this statement of the law has been at any time successfully challenged. Hence, we must now pass to the solving of the problem of whether or not the degree of resemblance of “Mileoa” to “Nu-eoa” is such that the ordinary purchasers of nut margarine buying with ordinary caution are likely to be misled; that is, whether or not “Mileoa” is a colorable imitation of “Nu-eoa.”

This is a question of fact to be determined with regard to the circumstances of the particular ease. Payton & Co. v. Snelling, Lampard & Co. (1901) App. Cas. 308-310. Nut margarine is sold in small or pound cartons. It is a butter substitute. The retail prices disclosed by the record have been 25-28 cents. In Wirtz v. Eagle Bottling Co., 50 N. J. Eq. 164, 169, 24 A. 658, the New Jersey Court of Chancery held it to be a matter of common knowledge that the ordinary buyer does not, as a general rule, exercise as much caution in buying an article for which he pays a few pennies as he does in purchasing a more valuable thing. Moreover, the test of colorable imitation is, not whether a difference may be recognized between the marks of two competing articles when placed side by side, but whether the difference will be recognized by the purchaser when not having the opportunity for comparison. McDonald v. Mueller, 183 F. 972, 106 C. C. A. 312. The similarity is deceptive when it is such that the average buyer, in the exercise of ordinary care and caution in the purchase of such an article, is’unable to distinguish the defendant’s name or mark from his mental picture or recollection of plaintiff’s mark. The test is not visual comparison, but is memory comparison. Nims on Unfair Competition and Trade-Marks, pp. 583 and 588, 589. It has been held that confusion would result from the use of “celluloid” and “cellonite,” Celluloid Mfg. Co. v. Cellonite Mfg. Co. (C. C.) 32 F. 94; from “chatter book” and “chatter box,” Estes v. Leslie (C. C.) 29 F. 91; from “roof leak” and “never leak,” Elliott Varnish Co. v. Sears, Roebuck & Co. (D. C.) 221 F. 797; from “ramopa” and “maropa,” Ramo-pa Co. v. A. Gastun Co., Inc. (D. C.) 278 F. 557.

At tbe suit of- tbe plaintiff tbe federal District Court in Nevada granted a preliminary injunction enjoining tbe use of tbe mark “Peeoa.” Tbe Court of Appeals beldthat tbe discretion of the trial judge bad not been abused. Wilson & Co. v. The Best Foods, Inc. (C. C. A.) 300 F. 484. I think “Mileoa” is neither less nor more confusing than “Peeoa,” but independently of tbe “Peeoa” decision I think “Mileoa” is, in legal contemplation, a colorable imitation of “Nueoa” and, consequently, an infringement.

Tbe plaintiff charges that tbe defendant and its predecessor in title have been guilty of acts of unfair competition other than simulating plaintiff’s trade-mark. It asserts that tbe order cards of tbe plaintiff have been copied literally. Such cards are used, however, not by tbe ultimate consumer, but by -the dealers. They know tbe names of tbe persons with whom they deal and tbe trade-marks of tbe goods which they sell or desire to sell, and are not so apt to be confused. Moreover, I am not convinced by tbe evidence that tbe order cards sent out by tbe plaintiff and defendant alike were other than of a standard design.

I do not find that tbe charge of hnlawful and fraudulent imitation of plaintiff’s slogans or advertising has been sustained:

Plaintiff likewise charges that defendant’s carton or dress was similar to that of tbe plaintiff and that it is calculated to deceive. With this contention I am wholly unable to agree. I see no similarity whatever save in shape and size, but with respect t’o these plaintiff has no monopoly.

I find no unlawful act in tbe conduct of tbe defendant or of its predecessor save in tbe incorporation in their trade-mark of tbe syllable “coa.” It may be that tbe defendant and its predecessor truly believed that “coa” was descriptive, and that, consequently, neither was guilty of any fraudulent intent in the use of “Mileoa.” But, as said by tbe Irish Master of tbe Rolls in De Kuyper & Son v. Baird, 20 R. P. C. 581, “The effort of an honest man, anxious to commend bis own goods on the ground of quality or cheapness, or both, ought to be to brand them with a mark as unlike.as possible to other brands, which have their own value, instead of trying to go as close as be can with legal impunity in tbe way of imitating them.” Unfortunately, tbe defendant and its predecessor did not brand their goods with a mark wholly unlike that of tbe plaintiff. While I am not convinced that tbe similarity of “Mileoa” to “Nueoa” was tbe result of an actual fraudulent intent, it was nevertheless a trespass upon plaintiff’s rights. I do not find that plaintiff’s right to injunc-tive relief is barred by laches. But tbe plaintiff’s delay in notifying defendant’s predecessor, tbe bona fide transfer for a valuable consideration of tbe business and good will of defendant’s predecessor to tbe defendant, tbe continued efforts to build up tbe business of tbe sale of defendant’s nut margarine under tbe name “Mileoa,” and tbe failure to bring this suit until tbe 17th day of September, 1923, although tbe use of “Mileoa” as a trademark for nut margarine bad been begun in tbe fall of 1920, are sufficient, I think, to bar tbe plaintiff’s right to an accounting. Nims on Unfair Competition and TradeMarks, pp. 703, 704.

An injunction to prevent the further deceptive use by tbe defendant of “coa” on its nut margarine must be decreed.


author: KERRIGAN, District Judge.

text:
    GEORGE A. MOORE & CO. v. EAGLE STAR & BRITISH DOMINIONS INS. CO., Limited, et al. THE C. S. HOLMES.
    (District Court, N. D. California, S. D.
    March 18, 1925.)
    No. 18068.
    1. Judgment @=>715(3) — Shipping @=>121 (I)— Judgment finding want of due diligence not conclusive.
    There is a difference in the maritime law between failure of an owner to exercise due diligence to make his ship seaworthy, which requires him to see that those employed by him for the purpose exercise due diligence, and his actual fault and privity in her unseaworthiness, of which he is not chargeable if he employs competent men, and judgment finding want of due diligence is not conclusive in action on insurance policy of actual fault and privity.
    2. Insurance @=3273 — Marine policy insuring against liability for loss or damage to cargo held not to imply warranty of seaworthiness.
    A policy, insuring a shipowner in respect to any liability incurred for “loss or damage to any goods which may arise from any cause whatever,” does not imply a warranty of seaworthiness of the ship, which would practically make such provision ineffective.
    3. Insurance @=>262 — Where insurance was effected before, loss policy is effective, though not issued until after loss.
    Where a contract of insurance was made and the insured was notified that the insur-anee was effected before a loss, the policy is effective, though not issued until after the loss, and the insured was under no duty to notify the insurer of the loss before issuance of the policy.
    In Admiralty. Suit by George A. Moore & Co., a corporation, against the Eagle Star & British Dominions Insurance Company, Limited, and others, on insurance policies covering the schooner C. S. Holmes. Decree for lihelant.
    Derby & Single, S. Hasket Derby, and Carroll Single, all of San Francisco, Cal., for libelant.
    Pillshury, Madison & Sutro, of San Francisco, Cal., for respondents.
   KERRIGAN, District Judge.

This is a libel in personam by G. A. Moore & Co. against certain insurance companies upon three insurance policies, one issued by each respondent. The policies covered protection and indemnity against certain losses and liabilities incident to shipping on the schooner C. S. Holmes. In 1920 the Holmes was libeled at New Plymouth, New Zealand, for damages done to a cargo of benzine which had been shipped from San Francisco to New Zealand. The cargo owner secured a judgment against the ship in the New Zea-land court, which judgment is made the basis for the present libel against the insurance companies.

The facts surrounding this shipment are very fully presented in the opinion of the New Zealand court. It appears that the benzine was stowed in a deck house which had been built upon the upper deck of the Holmes. When the cargo was unloaded at New Zealand, it was found that the ease oil had suffered severe loss. An examination disclosed the presence of sea water in the deck house, which, of course, accounted for the rusted and damaged condition of the cases containing the benzine. This water had entered the deck house at some time during the voyage, and the water marks on the cases indicated that it had risen at times to the level of the second or third tier of cases. As the questions presented herein turn more or less on the drainage system which had been provided to carry off whatever sea water might enter the deck house, I will quote from that part of the opinion of the New Zealand court wherein these drains are described. “There are four of these (scupper drains), two on each side of the deck house. The design of each scupper drain is this: A hole is made in the main deck and another is made below the main deck in the inner skin of the ship. A pipe is then, placed so as to connect the two. . This is necessarily a curved pipe bending a little after leaving the main deck towards the ship’s side. Water poured into the deck house would enter the orifice, and if unobstructed would at once flow down between the outer planking and the inner skin into the bilge and there be pumped out in the ordinary way. If everything was in working order, the exit of the water would be rapid and it could not rise high in the deck house.” After discussing the' evidence of the marine surveyors who examined the cargo on its arrival at New Zea-land, as well as the evidence of the marine surveyors who had issued certificates of seaworthiness at San Francisco, the court stated: “The only conclusion that I can draw, from the evidence as a whole is that the scuppers as a system proved .inadequate. « * * seilppers were designed to meet a certain amount of accidental obstruction, but they proved inadequate to meet what came.”

A proper determination of this ease may be had on a consideration of two of the questions presented by counsel. One of these,. a question of law, is: “Is there an implied warranty of seaworthiness in a so-called P. & I. policy, such as is here sued on, and the second, a question of fact, is, “Was the Holmes unseaworthy with the actual fault and privity of the libelant.” In passing, it may be said in connection with this latter point, that the libelant concedes that it cannot recover herein if the unseaworthiness was its actual fault and privity.

I shall discuss these questions inversely to the order in which they have just been stated. The respondent insurance companies contend the New Zealand court expressly-found that the Holmes was unseaworthy, and that the judgment embodies and rests upon an indispensably necessary finding that such unseaworthiness was with the actual fault and privity of libelant. They invoke the well-established principle that a valid judgment is conclusive between the parties and their privies, as to all questions of fact adjudicated. Unquestionably the New Zealand, court found- that the ship was unseaworthy when she left San Francisco, but I am of the opinion that it did not find that such unseaworthiness was with the actual fault and privity of the libelant, and that, further, such a finding was not necessary to support the judgment.

The shipowner had relieved itself of the •absolute obligation to furnish a seaworthy ship by inserting the rather common provision in the bill of lading that — “The shipowner shall be responsible for loss or damage arising from any unfit state of the vessel when she sails on the voyage; but any latent defect in hull, machinery, equipment, or fittings shall not be considered unfitness or unseaworthiness; provided the.same do not result from want of due diligence ,of the shipowner or of the ship’s husband or manager.” It is thus seen that the libelant would not have been liable to the cargo owner, unless it had failed to exercise due diligence to make the ship seaworthy. On familiar principles of law, it must be assumed, therefore, that the New Zealand court found that the unseaworthiness of the Holmes to carry the cargo of benzine arose either from obvious defects or from defects which libelant could have found and corrected by exercising due diligence. Practically these two propositions amount to the same thing, so we may say that a finding that the libelant had failed to exercise due diligence was absolutely necessary to support the judgment of the New Zealand court. But a shipowner may furnish an unseaworthy ship and not be charged with actual fault and privity of 'the unseaworthiness, even though he may have failed to exercise that due diligence which would relieve him from the obligation of furnishing a seaworthy ship. That is, there is a distinction between the terms “due diligence” and “aetual fault and privity” as used in admiralty law. These terms have received judicial interpretation in connection with the Harter Act (27 Stats, at Large, 445' [Comp. St. §§ 8029-8035]) and the Limited Liability Acts (sections 4283-4286, R. S. [Comp. St. §§ 8021-8024]). Section 3 of the Harter Act provides: “That if the owner of any vessel * * * shall exercise due diligence to make the said vessel in all respects seaworthy * * * neither the vessel, her owner * * * shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel.” (Comp. St. § 8031.)

The clause of the bill of lading above quoted is sanctioned by section two of the Har-ter Act, which provides that it shall not be lawful for the owner to insert a provision in the bill of lading by which its obligation to exercise due diligence is in any wise lessened, weakened, or avoided. Obviously the term “due diligence” is used synonymously in these two sections of the act. It has been held, where the owner sought to avail himself of the benefits of section 3 of the Harter Act, that a shipowner does not exercise due diligence by merely furnishing proper structure and equipment, for the diligence required is diligence to make the ship in all respects seaworthy, and that means due diligence on the part of all the owners’ servants in the use of the equipme'nt until the voyage is commenced. In other words, the owners must show that those whom they employed to act actually used due diligence. International Navigation Co. v. Farr & Bailey Manufacturing Co., 181 U. S. 218, 21 S. Ct. 591, 45 L. Ed. 830. On the other hand, the phrase “aetual fault and privity” has been judicially defined in connection with the limited liability acts, which allow limitation of liability to the value of the offending ship for certain losses where the fault which gave rise to the liability was without the owners’ privity or knowledge. In decisions construing these statutes, it has been held that an owner is without actual fault and privity where he has engaged competent men to inspect or supervise certain work, and a loss occurs through the negligence of such employees. The Anna Faxon, 75 F. 312, 21 C. C. A. 366.

Applying these .principles to the instant case, we find that if the unseaworthiness arose from the negligence of those in aetual charge of the ship (i. e., by failing to properly clean the deck of debris before storing the oil, etc.), or from the negligence or inefficiency of those intrusted with the work of constructing the deck house and installing the scupper drains, the shipowner would be liable to the cargo owner, notwithstanding the due diligence clause of the bill of lading. And, further, if the unseaworthiness arose from any of the causes just stated, the shipowner would not necessarily be charged with ae-tual fault and privity. Certainly, under the Faxon Case, supra, he would not be so charged, where he had engaged experienced and competent men to do the specified work. A finding that the ship was unseaworthy with the actual fault and privity of the libelant was, therefore, not necessary to support the judgment of the New Zealand court, and as there is nothing in the opinion intimating that the court believed such to be the fact, I see ño reason for implying such a finding into the judgment. The libelant’s manager did not personally inspect or supervise the construction of the deck house, or the loading of the ship, so the ease does not fall within the doctrine of The Republic, 61 F. 112, 9 C. C. A. 386. His testimony was that he believed the ship was seaworthy, but such belief was undoubtedly founded on the reports which he had received from the captain, who supervised the construction of the deck house, as well as the marine surveyors who examined the ship. These men believed that the ship was seaworthy. There is no showing that the libelant’s manager possessed the necessary experience which would enable him to determine whether or not the ship was seaworthy to carry benzine, and unquestionably it would require a skilled person to determine this question. I believe that under all the circumstances the reports of the men who supervised the construction of the deek house, as well as the certificates of the marine surveyors who examined the ship, are sufficient to disprove actual fault and privity of the libelant, even though such certificates would not be conclusive if the question was whether or not due diligence had been used to make the ship seaworthy. Compagnie Maritime Francaise v. Meyer, 248 F. 881, 160 C. C. A. 639; The Abbazia (D. C.) 127 F. 495. These cases hold that the due diligence required is due diligence to make the ship seaworthy, not due diligence in securing surveyors’ certificates. But these certificates and reports are certainly evidence that the libel-ant’s manager did not rely upon his own judgment as to the seaworthiness of the ship.

The respondents contracted to insure, protect, and indemnify, “if the assured shall .become liable to pay and shall pay any sum or sums in respect .of any responsibility claim, demand, damages and/or expenses, or shall incur any other loss.” The enumerated perils include, “loss or damage to any goods which may arise from any cause whatever.” Without going into the origin and purpose of P. & I. coverage, and avoiding any elaborate comparison of such a policy with an ordinary marine insurance policy, I think that for the purpose of this decision it is sufficient to point out that if a warranty of seaworthiness was implied into this policy, it would mean that in practically every instance the insurance company had assumed no risk, because, generally speaking, a ship is not liable to the cargo unless it is unseaworthy. Under the Harter Act, the ship is not liable to the cargo unless (1) it fails in proper loading, stowage, custody, or care of cargo; or (2) unless it is unseaworthy. Cargo improperly loaded, stowed, or ventilated, as a matter of law, renders the vessel unseaworthy. Obviously such a construction is to be avoided; otherwise, libelant would have paid premiums to no avail. Even if it be true that cargo claims form but a small part of a P. & I. coverage, the same reasoning applies, because it must be assumed that a proportionate part of the premium is paid to cover each specified risk. We should go far to avoid a construction which would render this particular clause meaningless. The English case of The Argo (Carmichael v. Liverpool Sailing Shipowners’ Mutual Indemnity Association, VI Asp. Mar. Cas. p. 130) supports this view. In that case the port through which the cargo was taken on board was not closed tightly, and as the port was below the water line, some water leaked in. The defect in the joint was due to the negligence on the part of persons employed by the ship. The water which thus leaked in damaged part of the cargo in the lower hold, and the ship in consequence became liable to. pay compensation to the cargo in respect to the damage. The shipowner, a member of the Association of Shipowners, sued the association on the articles of association by which the members agreed to indemnify each other against losses, damages, and expenses arising from or occasioned by any loss or damage of or to any goods or merchandise caused by “improper navigation of the ship carrying the goods for which any member might be liable.” The court held that the loss occurred through improper navigation and allowed recovery to the shipowner. It has been held that commencing a voyage with a port hole opened, or improperly caulked, not only renders the ship unseaworthy, but also amounts to a failure to exercise due diligence to. make .the ship seaworthy. International Navigation Co. v. Farr, supra; Dobell & Co. v. Steamship Rossmore Co., 2 Q. B. 408. The Argo being as matter of law un-seaworthy when she commenced her voyage, and the articles of the shipowners’ association being analogous to a protection and indemnity policy, this case is authority for the view that there is no warranty of seaworthiness in a protection and indemnity policy.

All the policies here sued on were actually issued after the loss had occurred and one of them was issued after libelant had received notice in San Francisco that the Holmes had been libelled for cargo damage. The policies, however, were antedated to a date prior to the loss, and on the record as here made it may be fairly assumed that the insurance was effected as of the earlier date. If the usual practice of issuing coverage slips was followed, undoubtedly such was the fact. In any event, I am of the opinion that the facts of this case bring it within the language of the court in El Dia Insurance Co. v. Sinclair, 228 F. 833, 143 C. C. A. 231, where it is said: “The policy in the case at bar is not shown to be in any way affected by fraud. Neither the insured nor the insurer’s broker have practiced any fraud whatever Upon the insurer or its agents. It is true that after the fire occurred and prior to the issuance of the policy the insured gave no notice of the loss. But the failure to do so is explained. The general manager of the insured said that prior to the fire he had been informed by his brokers that the insurance had been secured, and that he was waiting to get the policy, which had not been issued. Surely, under the circumstances, he was not called upon to say anything. In Joyce on Insurance, vol. 1, § 108 (1897), it is said that: ‘There is no legal nor moral obligation resting on the assured to voluntarily notify the company of a loss occurring after the risk has attached, although the policy has not been delivered nor the premium paid.’ ” Here the brokers informed the libelant’s manager, before the Holmes arrived in New Zealand, that the insurance had been effected.

For the reasons above indicated, let a decree be entered for the libelant for the sum of $4,790.87, with interest thereon from the dates of payment of the several items thereof, and costs.


author: TUTTLE, District Judge.

text:
    UNITED STATES v. AUTO CITY BREWING CO. et al.
    (District Court, E. D. Michigan, S. D.
    April 13, 1925.)
    No. 793.
    1. Intoxicating liquors <§=278 — Property of in- ■ nocent owner may be taken or destroyed, where reasonably necessary to abate nuisance under National Prohibition Act.
    Under National Prohibition Act (Comp. St. Ann. Supp. 1923, § 1013814 et seq.), whatever means are reasonably necessary to abate nuisance may be adopted, without infringing constitutional rights, though property of innocent owner is taken or destroyed.
    2. Intoxicating liquors <§=260 — Provision of National Prohibition Act providing for destruction of property held applicable to machinery and equipment used in manufacture of liquor.
    National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138%m), providing for destruction of liquor and “all property designed for the unlawful manufacture of liquor,” held! applicable to brewery machinery and appliances used in the illegal manufacture of liquor, and not merely to movable chattels.
    3. Intoxicating liquors <§=260 — Possession of beer in brewery after revocation of-permit unlawful and a nuisance, so as to authorize destruction of equipment.
    Possession of beer found on brewery premises after revocation of dealcoholizing permit was unlawful, and in itself constituted a common nuisance, in violation of National Prohibition Act, tit. 2, § 21 (Comp. St. Ann. Supp. 1923, § 10138%jj), and also violated section 3 (Comp. St. Ann. Supp. 1923, § 10138%aa) in view of section 33 (Comp. St. Ann. Supp. 1923, § 10138%t), so as to authorize destruction of manufacturing equipment found on premises.
    In Equity. Bill by the United States against the Auto City Brewing Company and another to abate'a nuisance under the National Prohibition Act. Decree for complainant.
    See, also, 279 E. 132.
    Delos G. Smith, U. S. Atty., and David Polasky, Asst. U. S. Atty., both of Detroit, Mich.
    Henry Wunseh and Edward E. Wunseh, and Leonard S. Coyne, all of Detroit, Mich., for defendants.
   TUTTLE, District Judge.

This is a bill to abate a nuisance under the National Prohibition Act. The cause is before the court for decision-on final pleadings and proofs.

The defendant Auto City Brewing Company is the owner of the brewery premises alleged to constitute the nuisance complained of. Said defendant was restrained in 1922 from maintaining such nuisance on said premises. In October, 1923, the defendant Star Products Company obtained from the other defendant the right to occupy the premises and obtained from the government a permit to operate a dealcoholizing plant on the premises in accordance with the provisions of the National Prohibition Act, which permit was subsequently, in May, 1924, revoked. In the latter part of July and in the early part of August, 1924, the premises were raided by prohibition officers and a large quantity of beer was found stored in vats in the brewery and several carloads of beer were found on a railroad siding near said brewery. The beer so found was later destroyed under an order of this court. There is no direct evidence that any of such beer was manufactured after the revocation of the' permit referred to. At the time when this beer was so found, the brewery was equipped with various machinery, materials and paraphernalia obviously designed for the manufacture of beer and used for the manufacture of the beer in question, either before or after the revocation of the permit mentioned.

The- government has filed its bill charging that the defendants have been maintaining an unlawful nuisance by the use of these brewery premises for the purpose of manufacturing, selling, keeping, and bartering in-toxieating liquor, in violation of the National Prohibition Act. In addition to the usual prayers for the injunctive relief expressly prescribed by the statutory provisions applicable to such eases, the government asks that the machinery, materials, paraphernalia, and equipment already referred to be destroyed; it being alleged in the bill that this property (consisting of compressors, pumps, tanks, hoppers, piping, receptacles* utensils, hops, malt, syrups, and other similar machinery and equipment fully described and itemized in the bill) is being kept and used in the illegal manufacture of intoxicating liquor and in the maintaining of a common nuisance on the premises involved as aforesaid.

The evidence fairly shows that the defendants have maintained a nuisance on the premises mentioned (and fully described in the bill of complaint), and it is clear that all of the injunctive relief prayed should be granted. This does not even seem to be seriously disputed by the defendants themselves. With respect, however, to the destruction of the property in question, the parties are in sharp dispute.

I. The government prays in its bill and urges in its brief that the articles, equipment, appliances, and other property above referred to should be decreed to be a part of the nuisance charged, and therefore be ordered destroyed as a part of the remedy of abatement prayed. There can be no doubt that, as said by this court in its opinion in United States v. Boynton, 297 F. 261, “Whatever means are reasonably necessary to abate such a nuisance, even to the extent of taking or destroying the property of an innocent owner, may be adopted without infringing any constitutional rights.” In the application of this rule to the present case, there is much force in the argument that, at least under the circumstances here presented, the destruction of the property involved is reasonably appropriate, if not necessary, to an adequate abatement of the nuisance, which the defendants have been maintaining by the operation of this brewery.

2. Plaintiff further insists that the power and duty of the court to destroy this property are indicated by the following language of section 25 of title 2 of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138%m;.

“It shall be unlawful to have or possess any liquor or property designed for the manufacture of liquor intended for use in violating this title or which has been so used, and no property rights shall exist in any such liquor or property. A search warrant may issue as provided in title XI of public law numbered 24 of the Sixty-Fifth Congress, approved June 15, 1917, and such liquor, the containers thereof, and such property so seized shall be subject to such disposition as the court may make thereof. If it is found that' such liquor or property was so unlawfully held or possessed, or had been so unlawfully used, the liquor, and all property designed for the unlawful manufacture of liquor, shall be destroyed, unless the court shall otherwise order.”

Defendants contend that this section refers and applies only to movable chattels “such as hops, malt, sugar or other materials entering into the manufacture, rather than the machinery, equipment, etc., used in the process of manufacture”; that the quoted reference to the issuance of a search warrant “indicates the delivery of'the property seized to the court issuing the warrant”; and that a further provision in said section, not quoted above, forbidding the taking of any property seized under such a warrant from the officer on any writ of replevin or like process, “would indicate clearly that the seizure is limited only to movable personal property, as a wrjt of replevin may only be issued for the recovery of such property.” I cannot agree with this contention. The provisions relative to search warrants and writs of replevin are entirely independent of the other statutory provisions of the section just quoted. Congress has broadly and unambiguously used the word, “property” instead of words indicating a particular kind of property (which it could readily have done), and the term employed has a well defined and easily understood legal meaning. The language of section 25, just quoted, must be construed to apply to the kind of property here involved.

It is further urged by defendants that although the testimony showed that “there was a great quantity of beer on hand in the brewery at the time of the revocation of the permit,” yet “there was no evidence to indicate that any beer was illegally manufactured in the brewery subsequent to the revor cation of the permit,” and that, therefore, “it must be -presumed that it was manufactured and held according to law and * * * there could be no basis for the seizure of it or of the utensils or equipment used in its manufacture.” This argument also is without merit. It is clear that, -aside from any other question, the possession of this beer in the brewery after tbe revocation of the permit referred to was unlawful, not only because its possession, “kept” in the brewery as it was, itself constituted a common nuisance in violation of section 21 of title 2 (Comp. St. Ann. Supp. 1923, § 10138% jj), but also because such possession violated section 3, tit. 2 (Comp. St. Ann. Supp. 1923, § 10138%aa) read in connection with section 33, tit. 2, of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138%t). The property, therefore, sought to be destroyed was “property designed for the manufacture of liquor * * * which has been * * * used” in violating the act, within the meaning of section 25 under consideration. It was, therefore, unlawful, under the terms of said section, for the defendants to “have or possess” such property, “no property rights * * * exist in any such property,” and “such property” is “subject to such disposition as the court may make thereof.” A decree will be entered in accordance with the terms of this opinion, granting all of the relief prayed in the bill of complaint.


author: BREWSTER, District Judge.

text:
    UNITED STATES v. SELTZER.
    (District Court, D. Massachusetts.
    April 9, 1925.)
    No. 5845.
    1. Criminal law <§=394 — Ground for exclusion of evidence obtained by unlawful search and seizure, stated.
    The ground upon which evidence obtained by unlawful search and seizure is excluded is that knowledge gained by government as result of its own wrongful acts ought not to be used against party wronged.
    2. Arrest <§=>71 — Officer making lawful arrest may search for and seize evidences of crime.
    Officer making lawful arrest without warrant may search for instrument, fruits, and evidences of the crime, even to the extent of searching the building in which the crime was committed, so far as controlled by the offender, and seize evidence of crime or instrumentalities used.
    3. Criminal law <§=395 — Counterfeit stamps seized on- arrest for sale of liquor could be used as evidence in prosecution for possession of such stamps.
    Counterfeit bond strip label stamps seized by federal agents following lawful arrest of defendant for unlawful sale of intoxicating liquors, in violation of National Prohibition Act, tit. 2, § 3 (Comp. St. Ann.- Supp. 1923, § 10138%aa), could be used as evidence, notwithstanding Const. Amends. 4 and -5, in prosecution for having possession of such stamps in violation of Act March 3, 1897, § 7 (Comp. St. § 6076), since government was in possession rightfully.
    Henry L. Seltzer was indicted for having possession of counterfeit bond strip label stamps, and be moves to suppress evidence.
    Motion overruled.
    Harold P. Williams, U. S. Atty., and George E. Farnum, Asst. U. S. Atty., both of Boston, Mass.
    Wm. H. Lewis and M. L. McGrath, both of Boston, Mass., for defendant.
   BREWSTER, District Judge.

The defendant has been indicted for having in his possession counterfeit bond strip label stamps in violation of the provisions of the Act of March 3, 1897, chapter 379, § 7 (29 Stat. 628 [Comp. St. § 6076]).

Before trial, defendant filed a “motion to suppress the evidence obtained by federal agents who seized a quantity of these stamps at the place of business of the defendant. The material facts upon which the motion is based may be briefly stated as follows:

Mulcahy, a federal prohibition agent, purchased a small quantity of intoxicating liquor 'from defendant. The liquor was delivered to the agent in the rear room of the defendant’s drug store, but the sale was consummated by the payment of the purchase price in the front room of the store. Two -other federal agents, Sullivan and Hall, standing outside in front of the store, saw Mulcahy pay for the liquor. Thereupon, upon signal from Mulcahy, Hall and Sullivan entered the store, and Sullivan placed the defendant under arrest. The defendant requested the agents to step into the back'room to avoid publicity. While there, Sullivan saw fully exposed to his view bottles containing what looked to be “bootleg liquor,” as he defined it. He asked the defendant if he had any more bootleg liquor. Defendant said that he had and pointed to a box near Agent Hall. Hall examined the contents of the box and found a quantity of such contraband liquor and 60,0 more or less of counterfeit strip label stamps, which were seized, and are now held by the government. The arrest of the defendant and the seizure of his property were both made without a warrant. . Subsequently two indictments were returned against the defendant; one charging illegal sale and possession of intoxicating liquor; the other, the indictment above referred to.

The defendant had been arrested for violating the National Prohibition Act. A misdemeanor had been committed in the presence of the arresting officers, viz., the unlawful sale of intoxicating liquors contrary to the provisions of section 3, title 2, of the National Prohibition Act (41 Stat. 305 [Comp. St.- Ann. Supp. 1923, § 10138%aa]), and the agents, having found in the control of the defendant a quantity of contraband liquor and stamps which they had good grounds to believe were being used by the defendant in violating the act, were justified in seizing both the liquor and stamps and holding them as evidence in the prosecution which might result respecting the crime for which the defendant was unlawfully arrested.

I have no hesitation in holding the seizure to be reasonable so far as the evidence obtained as a result of it is to be used at the trial on the indictment charging violation of the National Prohibition Act. But that question is not presented on this motion. The defendant now seeks to prevent its use in the trial on an indictment charging, not an offense against the Prohibition Law for which he was arrested, but charging him with the crime set out in the Act of March 3, 1897, chapter 379, § 7 (29 Stat. 628 [Comp. St. § 6076]), which provides that one who “with intent to defraud, falsely makes, forges, alters, or counterfeits any stamp made or used under any provision of this act, or who uses, sells, or has in his possession any such forged, altered, or counterfeited stamp * ® shall on conviction be punished by a fine not exceeding one thousand dollars and by imprisonment at hard labor not exceeding five years.” It appears, therefore, that the crime for which the defendant will be brought to trial under this indictment is a much more serious offense than the one for which he was arrested and in connection with which the seizure was made.

The prosecuting officer admits that it is the purpose of the government to offer in evidence the seized stamps at the trial upon the indictment. If such action will constitute an invasion of the rights guaranteed to the defendant under the Fourth and Fifth Amendments of the Constitution, the defendant’s motion should be granted.

In order to dispose of the motion, it becomes necessary to determine whether outlawed property found in the possession of the defendant when lawfully under arrest for one offense, and seized then and there by federal agents, may be used against him when on trial for another and more serious offense.

The ground upon which evidence obtained by unlawful search and seizure is excluded is that knowledge gained by the government as a result of its own wrongful acts ought not to be used against the party wronged. Silverthorne v. U. S., 251 U. S. 385, 40 S. Ct. 182, 64 L. Ed. 319; Weeks v. U. S., 232 U. S. 383, 34 S. Ct. 341, 58 L. Ed. 652, L. R. A. 1915B, 834, Ann. Cas. 1915C, 1177.

When there has been a lawful arrest without a warrant, the officer making the arrest' has certain well-recognized rights and duties respecting a search of defendant’s person and property and a seizure of property in his possession. He may search for the “instruments, fruits, and evidences of the crime” (Sayers v. U. S. [C. C. A.] 2 F.[2d] 146; U. S. v. Welsh [D. C.] 247 F. 239), even to the extent of searching the building in which the crime was committed so far as controlled by the offender (Sayers v. U. S., supra).

If the evidences of the crime or instrumentalities used in the commission of it are found as a result of the search, it is not only the right but the duty of the officer to seize such evidences and instrumentalities. Carroll et al. v. U. S. (March 2, 1925) 45 S. Ct. 280, 69 L. Ed. -; Adams v. N. Y., 192 U. S. 585, 24 S. Ct. 372, 48 L. Ed. 575; Garske v. U. S. (C. C. A.) 1 F.(2d) 620; U. S. v. Chin On (D. C.) 297 F. 531; U. S. v. Camarota (D. C.) 278 F. 388. And if the property seized be outlawed or forfeited property, such as burglars’ tools, counterfeit coin, lottery tickets, eta., the person from whose possession they are taken can claim no rights in them. They are rightfully subject to seizure on behalf of the government. The government is entitled to the possession of them. Boyd v. U. S., 116 U. S. 616, 6 S. Ct. 524, 29 L. Ed. 746; U. S. v. Welsh, supra; Milam v. U. S. (C. C. A.) 296 F. 629.

Applying these principles to the facts appearing in the ease at bar, it follows that inasmuch as the stamps were counterfeit and thus fell into the category of outlawed and forfeited property, and since the possession of them must of necessity constitute a crime, the government is now in possession of them rightfully and not as the result of any wrongful act of its agents.

There would seem, therefore, to be no justification for invoking the federal rule that evidence obtained as a result of an unreasonable search and seizure must be excluded from the trial of the person whose constitutional rights had been thus invaded. Here the search and seizure were not unreasonable. The defendant’s rights secured under both the Fourth and Fifth Amendments have not been violated. U. S. v. Welsh, supra.

I have reached the conclusion that the government may use at the trial, on the indictment for the possession of counterfeit strip label stamps, the evidence obtained by the government agents so far as such evidence is based on the discovery of the stamps.

The case of U. S. v. Boyd (D. C.) 1 F.(2d) 1019, to which my attention has been called, is easily distinguishable. There the search was in a dwelling house and intoxicating liquors were found which well might have been lawfully possessed by the defendant.

Defendant’s motion to exclude the evidence is overruled.


text:
    GERAGHTY v. POTTER.
    (District Court, D. Massachusetts.
    March 9, 1925.)
    No. 2899.
    1. Intoxicating liquors (@=256 — Liquor taken from near-beer saloon under illegal warrant returnable, notwithstanding termination of criminal proceedings against proprietor.
    Despite National Prohibition Act, tit. 2, § 33 (Comp. St. Ann. Supp. 1923, § 10138%t), intoxicating liquors seized in near-beer saloon under an illegal search warrant will be returned to proprietor, though criminal proceedings against him have been terminated, where the only evidence that the liquor was contraband when seized, and will be, if returned, unlawfully possessed, under title 2, §§ 3, 25 (Comp. St. Ann. Supp. 1923, §§ 10138%aa, 10138y2m), is that illegally obtained in violation of Const. Amend. 4.
    2. Constitutional law @=48 — Statutes ought not to be given unconstitutional construction or application.
    A statute ought not to given an unconstitutional construction or application.
    Petition by James Geraghty against Elmer C. Potter to recover possession of liquor. Petition granted.
    David H. Keedy and Brooks, Kirby, Kee-dy & Brooks, all of Springfield, Mass., for plaintiff.
    Harold P. Williams, U. S. Atty., Elihu D. Stone, Sp. Asst. U. S. Atty., both of Boston, Mass., for defendant.
   BREWSTER, District Judge.

This is a petition brought by James Geraghty, at one time owner and proprietor of a near-beer saloon in Holyoke, Mass., to recover possession of a quantity of liquor taken from his saloon by federal prohibition agents, who acted under a search warrant which was subsequently declared illegal.

Geraghty was indicted for the illegal possession of this liquor. Before trial the search warrant was quashed and the indictment was nol prossed. Thereafter these proceedings were instituted.

Petitioner’s counsel cites a long array of eases in support of the general proposition that property unlawfully seized by federal authority should be returned.

The leading cases in the United States Supreme Court are Weeks v. United States, 232 U. S. 383, 34 S. Ct. 341, 58 L. Ed. 652, L. R. A. 1915B, 834, Ann. Cas. 1915C, 1177, and Amos v. United States, 255 U. S. 313, 41 S. Ct. 266, 65 L. Ed. 654.

In this circuit the right to a return has been recognized in Giles v. United States (C. C. A.) 284 F. 208; Francis Drug Co. v. Potter (D. C.) 275 F. 615; Godat v. McCarthy (D. C.) 283 F. 689; Keefe v. Clark (D. C.) 287 F. 372; United States v. Vigneaux (D. C.) 288 F. 977; Margie v. Potter (D. C.) 291 F. 285; United States v. Desey (D. C.) 284 F. 724; United States v. Madden (D. C.) 297 F. 679; United States v. Intoxicating Liquors (D. C. N. H.) 290 F. 824; United States v. Intoxicating Liquors (D. C. Mass.) 289 F. 278. Numerous decisions in other jurisdictions are cited to the same effect.

Notwithstanding this somewhat imposing array of authorities, the government has argued, and with considerable force, that the petition should not be granted. I have, therefore, deemed it advisable to review somewhat at length the pertinent cases an,d to consider the issues involved as though the questions were still open in this jurisdiction.

It should be noted at the outset thah we are not now dealing with a ease where property was taken from a dwelling house. This fact clearly distinguishes the case at -bar from eases like United States v. Vigneaux) supra, and United States v. Descy, supra. Section 33 of the act expressly declares that it shall not be unlawful to possess liquor in one’s private dwelling, and to throw the burden of proving that such possession is lawful comes near depriving the possessor of his presumption of innocence, but possession elsewhere is, under the act, deemed to be prima facie unlawful. The issue here presented is whether intoxicating liquor, taken from a place other than a dwelling house, should be returned.

In cases where, as in Weeks v. United States, supra, and United States v. Madden, supra, a motion for a return was presented before trial, the return may well be ordered upon tbe theory that such course was necessary to prevent improper use of the property in evidence. The petitioner here cannot-ask for a return on any such grounds. The criminal proceedings against him have been fully terminated, and a return of the liquor is not necessary to prevent an unlawful use of it as evidence.

In the eases of Francis Drug Co. v. Potter, supra, Godat v. McCarthy, supra, Keefe v. Clark, supra, and Margie v. Potter, supra, the question of improper use of property as evidence was not presented; but with the possible exception of Godat v. McCarthy, supra, these eases are not decisive.

In Francis Drug Co. v. Potter, supra, Judge Morton expressly found that the possession by the drug company of the liquor was not unlawful. In Keefe v. Clark, supra, it appears that liquor was taken from a private storehouse, which constituted a part of Keefe’s private dwelling., So, also, in United States v. Intoxicating Liquors, supra (Massachusetts ease), the liquor was seized in private dwellings. In Margie v. Potter, supra, petitioner had lawfully acquired the champagne and had -been acquitted of the crime of illegal transportation. In United States v. Intoxicating Liquors, supra (New Hampshire case), Judge Morris finds that the liquor brought by the claimant into New Hampshire from Canada was not, under the circumstances, contraband in the United States.

It is difficult to distinguish Godat v. McCarthy, supra, on the facts, and the language of Judge Morton in the opinion has a strong tendency to support the contention of the petitioner in the present case. Notwithstanding Godat v. McCarthy, supra, the government has seen fit to resist Geraghty’s petition and has filed an elaborate brief in support of its contention that unless and until the petitioner can prove that he was lawfully in possession of the intoxicating liquors, unlawfully seized, he is not entitled to a return.

The government’s line of argument, as I understand it, is that title 2, § 3, of the Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138%aa), makes it unlawful to possess intoxicating liquors except as authorized by the act, and that there is nothing in the act that authorized the proprietor of a near-beer saloon to possess such liquors; that title 2, § 25 (section 10138%m), of the act again provides that it shall be unlawful to possess such liquor intended for use in violating the act, and that no property rights shall exist in such liquor; that title 2, § 33 (section 10138%t), provides that after February 1, 1920, the possession of liquor by any person not legally permitted under the act shall be prima facie evidence that such liquor is kept for the purpose of being sold or otherwise disposed of in violation of the provisions of the act, and that the burden of proof shall be upon the possessor in any action concerning the same to prove that such liquor was lawfully acquired, possessed, and used; that this is a proceeding concerning such liquor; and that unless petitioner can allege and show affirmatively that he lawfully acquired, possessed, and used the liquor he is not entitled to maintain this petition. This line of argument is not altogether novel. It has been repudiated in this district, not only in Godat v. McCarthy, supra, but in United States v. Intoxicating Liquors, supra (Massachusetts ease), and in United States v. Vigneaux, supra. In other jurisdictions it has failed to win approval. See New Jersey Wholesale Drug Co. v. Brown (D. C.) 289 F. 108; United States v. Kelih (D. C.) 272 F. 484.

On the other hand, the government has cited a number of eases from other jurisdictions where a return of the liquor has been denied and, after a careful consideration of these cases, I find only two that can be regarded as supporting the contention of the government.

In O’Connor v. United States (D. C.) 281 F. 396, and in Rose v. United States (C. C. A.) 274 F. 245, the seizures were held valid. In United States v. O’Dowd (D. C.) 273 F. 600, the seizure was by state officers and, moreover, the court found that application for redelivery had been delayed for an unreasonable time. In United States v. Alexander (D. C.) 278 F. 308, and in United States v. Dziadus (D. C.) 289 F. 837, the court seems to have refused a return as a matter of course without discussing the powers and duties of the court in the .premises. But over against these cases can be set a number of cases where the courts have equally, as a matter of course, and without discussion, ordered a return of liquor. ‘ See United States v. Donnelly (D. C.) 288 F. 982; United States v. Harnich (D. C.) 289 F. 256; Lipschutz v. Davis (D. C.) 288 F. 974; United States v. Boasberg (D. C.) 283 F. 305; United States v. Ray & Schultz (D. C.) 275 F. 1004.

In United States v. Rykowski (D. C.) 267 F. 866, and in United States v. Kaplan (D. C.) 286 F. 963, the court has refused, to return the liquor notwithstanding the invalidity of the search and seizure, and in these eases the return"’ has heen denied upon a judicial determination that the liquor was contraband. It was said in United States v. Kaplan, supra, that—

“There is no law requiring or justifying the return of property to any one whose possession of it will constitute a crime, or whose use of it can be only for committing a crime.”

This is a plausible and attractive statement, but I have difficulty in reconciling it with my views respecting other important fundamental rights.

In the ease now before me it is true that on the facts, as we now know them, the liquor is liquor outlawed by the act, and that it was contraband when seized and will be, if returned, intoxicating liquors unlawfully possessed.

It seems to me, however, that the government’s line of reasoning leads up to constitutional barriers which cannot lightly be set aside. How can it be judicially declared that the liquor is outlawed without taking advantage of evidence obtained in violation of constitutional rights? Although section 33 creates a presumption that liquor in a place other than a dwelling house is unlawfully possessed, before a forfeiture could be worked it still would be necessary to show where the liquor was possessed; that it contained more than one-half of 1 per cent, by volume of alcohol; and that it was fit for beverage purposes. None of these facts could be established without resorting to testimony unlawfully - obtained. See United States v. Slusser (D. C.) 270 F. 818; United States v. Mattingly, 285 F. 922, 52 App. D. C. 188. The government may not take advantage of its own wrong. Silverthorne Lumber Co. v. United States, 251 U. S. 385, 40 S. Ct. 182, 64 L. Ed. 319.

It is pretty well settled by the authorities that evidence obtained in violation of the guaranties of the Fourth Amendment cannot be used in forfeiture proceedings. Boyd v. United States, 116 U. S. 616, 6 S. Ct. 524, 29 L. Ed. 746; United States v. Zucker, 161 U. S. 475, 16 S. Ct. 641, 40 L. Ed. 777; United States v. Intoxicating Liquors, supra (Massachusetts ease); United States v. Vigneaux, supra.

Not only does it appear that evidence thus obtained cannot be used in forfeiture proceedings, but it Also may be observed that an acquittal of a crime on information was a good plea in bar to a civil information for the forfeiture of goods arising upon tha same acts. Coffey v. United States, 116 U. S. 436, 6 S. Ct. 432, 29 L. Ed. 681.

In Boyd v. United States, supra, the court said:

“As showing the close relation between the civil and criminal proceedings on the same statute in such eases, we may refer to the recent ease of Coffey v. United States [116 U. S. 436, 443], in which we. decided that an acquittal on a criminal information was a good plea in bar to a civil information for the forfeiture of goods, arising upon the same acts. As, therefore, suits for penalties and forfeitures incurred by the commission of offenses against the' law, are of this quasi criminal nature, we think that they are within the reason of criminal proceedings for all the purposes of the Fourth Amendment of the Constitution, and of that portion of the Fifth Amendment which declares that no person shall be compelled in any criminal case to be a witness against himself.”

The court, therefore, being without authority to order a disposition of the liquor without invading the constitutional rights of the person from whose possession it was unlawfully taken, the question comes down to this: Shall these constitutional rights be overridden in order to prevent an obvious violation of the Prohibition Act, or shall the government be required to do what it eaif to restore the situation existing at the time of the unlawful search and seizure regardless of consequences? The decisions in this district tend to support the latter view. In Godat v. McCarthy, supra, Judge Morton said:

“Godat’s acquisition of the liquor and his possession of it at his garage were unlawful under the National Prohibition Act (41 Stat. 305). But these facts seem to me immaterial, and T may add relatively insignificant, as compared to the violation of his constitutional rights. He should be put in statu quo, as was ordered in the Amos Case, supra, where the liquor was 'moonshine’ which had been illegally seized, and was contraband under the internal revenue statutes.”

Judge Peters, in United States v. Intoxicating Liquors, supra (Massachusetts case), makes this observation:

“The jurisdiction of the court to condemn depends upon the statute. The res in this case not being properly before the court, and that fact being brought to the attention of the court, it can proceed no farther; but it can and should remedy the wrong done, so far as possible, by restoring the status quo ante, and this regardless as to whether or not the articles unlawfully seized were to be in evidence against the person from whom taken.”

I find nothing in the decisions in this district which conflicts with, or tends to impair the force of, the statements of law as set forth above, and I feel constrained to follow and apply these principles in the pending ease. I do this the more readily because I am satisfied in my own mind that the above quotations correctly state the applicable law and are based on sound reasoning. It is pointed out by the government that in Weeks v. United States, supra, and in many of the eases which have followed, the property returned was property which one might lawfully possess, and that Amos v. United States, supra, was decided before the enactment of the National Prohibition Act. Therefore, it is urged that these eases are distinguishable from the ease at bar and should not be accepted as authorities on the issues here presented. The government cites United States v. Welsh (D. C.) 247 F. 239, where a letter which was the corpus delicti was retained by the government after seizure. But in urging this distinction the government apparently overlooks the fact that even under the National Prohibition Act all liquors are not outlawed. The provisions of that act do not place liquor in the same category with counterfeit money or burglars’ tools, which under no circumstances could be lawfully possessed. Certain conditions must exist before liquor can be deemed to be contraband, and in the case of Amos v. United States, supra, those conditions appeared to exist just as clearly as they do in this case. To determine whether the liquor seized is or is not contraband requires a determination of a question of fact, and as this cannot be determined without infringing constitutional rights, the court would not be justified in declaring the liquor contraband. The court cannot proceed upon probabilities or inferences. As was stated by Mr. Justice Clarke in Street v. Lincoln Safe Deposit Co. et al., 254 U. S. 88, 41 S. Ct. 31, 65 L. Ed. 151, 10 A. L. R. 1548:

“Am intention to confiscate private prop-' erty, even in intoxicating liquors, will not be raised by inference and construction from provisions of law which have ample field for other operation in effecting a purpose clearly indicated and declared.”

But it may be urged that this result does not give full effect to the last sentence of section 33, which provides that the burden of proof shall be upon the possessor in any action concerning the same to prove that such liquor, was lawfully acquired, possessed, and used.

If, by virtue of this provision, the burden of proof rests upon the petitioner to show that he is lawfully in possession, the situation will be that the government has on hand a quantity of liquor over which it has no power of disposal. It is inconceivable that Congress contemplated any such a situation. If the provisions of section 33 apply to proceedings of this kind, which I very much doubt, and are in apparent conflict with the obvious duty of the court to respect rights guaranteed by the Constitution, it is-clear that the provisions must give way in favor of the larger and more important considerations. A statute ought not to be given an unconstitutional construction or application. Moreover, it should always be kept-in mind, as has been observed in this court, and in other jurisdictions, that the court in. proceedings of this kind is not called upon to determine title to or. legal rights in the-property unlawfully seized. United States v. Mattingly, supra; Margie v. Potter, supra; United States v. Intoxicating Liquors, supra (Massachusetts ease).

As a result of much deliberation and a careful examination of the authorities, I have reached the conclusion that it is the duty of the government to return liquor in its possession as a result of an unlawful search and seizure made by representatives of the government, whether taken from a dwelling house or otherwise, in cases where the government has no evidence other than that secured by the unlawful search and seizure.

In view of this conclusion, the petitioner is entitled to a return of the liquor, and I so order.


author: THOMPSON, District Judge.

text:
    MEYER v. HURWITZ.
    (District Court, E. D. Pennsylvania.
    May 15, 1925.)
    No. 3321.
    1. Literary property <@=5 — Copying of uncopy-righted post cards cannot be restrained.
    Defendant’s copying of uncopyrighted picture post cards, which plaintiff was distributing to the public, unassociated with other acts, cannot be restrained. v
    2. Trade-marks and trade-names and unfair competition <@=68 — Manufacturer cannot be restrained from selling vending machines and post cards in competition with similar business of plaintiff.
    Manufacturer of picture post cards cannot be restrained from selling coin-operated vending machines and post cards in competition with plaintiff’s long-established business of same kind.
    3. Trade-marks and trade-names and unfair competition <@=77 — Appropriation of plaintiff’s business of selling picture post cards through coin-vending machines restrained.
    Where manufacturer of picture post cards built up business of selling uneopyrighted picture post cards through coin-operated vending machines, defendant could not appropriate to himself such organization by selling similar cards at lower prices to dealers to be sold through plaintiff’s machines, notwithstanding dealers who purchased machines did not contract to use plaintiff’s cards exclusively.
    In Equity. Suit by J. Frank Meyer, trading as the Exhibit Supply Company, against Louis Hurwitz, trading ás the United Post Card Supply Company. On plaintiff’s motion for preliminary injunction.
    Motion granted.
    Howson & Howson, Kenneth N. Ware, and Robert T. McCracken, all of Philadelphia, Pa., for plaintiff.
    Maxwell. Shapiro, of New York City, and Henry B. Friedman, of Philadelphia, Pa., for defendant.
   THOMPSON, District Judge.

From the verified bill of eomplaint and the affidavits in support of the motion for preliminary injunction and the verified answer, the following facts are found for the purposes of the motion: The plaintiff, under the name of the Exhibit Supply Company, has, for more than 20 years, been in the business of the manufacture and sale of picture post cards representing stage and motion picture celebrities in character roles, boxers, wrestlers, baseball players, cowboys, and the like. A new series of these cards are issued every 60 days, publishing rights being procured from the subjects of the photographs.

In order to create and maintain a demand and large sales for the post cards, which are sold at retail for one cent apiece, the plaintiff designed a coin-operated vending machine, especially adapted to dispense his cards, which he has been selling and distributing for about 20 years. ' This machine has no other utility except for the purpose indicated. The plaintiff sells his machines substantially at cost to individuals in various cities in this country and Canada and sells his cards at a low price so that they may be sold from the coin-operated Vending machine at ■one cent apiece at a profit to the retail vendor. The plaintiff’s cards are sold exclusively to the purchasers of the vending machines and by them dispensed through the machines.

For some years past these machines have borne a notice in ornamental form on the front, consisting of the words “Man’f’d by Exhibit Supply Co. not Inc. Chicago, Ill.” Some of the distributors have bought a large number of these machines, and, in one instance, as appears by affidavits; approximately 250 are owned and operated by one customer. The machines are sold frequently upon credit, the profit derived by the distributor from the retail sales enabling him to pay the purchase price of the machine.

A few weeks prior to the filing of the bill, the plaintiff caused to be placed upon the front of the machines the following sign, “Exhibit Supply Co.’s Cards,” and also a prominently displayed card bearing the words, “This machine vends cards made exclusively by Exhibit Supply Co., Chicago.”

Late in 1923, and some months prior to the placing upon the machines of 'the notices above referred to, the defendant, Louis Hur-witz, purchased on credit from the plaintiff 50 of the machines and an appropriate supply of cards. He failed to complete the payments on the machines and subsequently disposed of them, and then began the manufacture and sale of cards substantially similar in subject-matter and in many eases identical with the pictures theretofore and then sold by the plaintiff and so designed as to permit .of their being dispensed by the machines in the hands of the plaintiff’s distributors; it being necessary in the use of the cards in the machines that they be of precisely the correct length, breadth, and thickness.

The defendant, at first, adopted as his trade-name the title “Eastern Exhibit Supply Company,” which, upon protest from the plaintiff, he afterwards changed to “United Post Card Supply Company.” The defendant, through negotiations by correspondence and visits, has sold cards of his own manufacture to the distributors of the plaintiff’s cards and has induced them and attempted to induce them- to sell his cards, without regard to the notices upon the plaintiff’s machine, at lower prices than those of the plaintiff. The plaintiff has, through the sales by Hurwitz to its customers, lost a substantial part of its business and profits. Moreover, it appears in some instances that cards furnished by Hurwitz have, through lack of thickness identical with that of the plaintiff’s cards, caused the machine to fail to function as the plaintiff’s cards cause it to do, whereby the intended purchaser, who has deposited his coin, has failed to receive the expected card.

So far as the defendant’s dealings with the plaintiff’s distributors are concerned, it is apparent that the facts above stated do not constitute a case of unfair competition under the rule as to passing off, because he has not attempted to represent to the plaintiff’s customers that his cards were those of the plaintiff, and hence, in so far as his dealings with the plaintiff’s customers are concerned, he cannot be held- to have passed off his cards as those of the plaintiff. The plaintiff’s machines are not sold under a contract to use exclusively the plaintiff’s cards and the cards are not protected by a copyright. The defendant, nevertheless, is, contrary to equity and good conscience, appropriating to himself the system and organization which the plaintiff, through many years of expenditure of effort and money has built up. His copying of the plaintiff’s uneopyrighted cards, unassoeiated with other acts, cannot be restrained. Bamforth v. Douglass Post Card & Machine Co. (C. C.) 158 F. 355. Neither can he be restrained from competing with the plaintiff in the business of selling coin-operated machines and cards for the purpose of carrying on the same business which is now being carried on by the plaintiff. But after the plaintiff has, through years of effort and expenditure, built up a system and organized a business, the defendant may not, by associating therewith a right which is not denied him, that of imitating the plaintiff’s uncopyrighted cards, appropriate to himself the plaintiff’s system and organization for the purpose of underselling him and appropriating to himself profits to which the plaintiff through his efforts, expenditures, and industry is entitled.

Without going into a general discussion of the authorities, I think this conclusion is supported by a line of eases which, while distinguishing a situation like the one before us from the ordinary unfair competition ease where the element of passing off is present, yet maintain the power of a court of equity to restrain such unfair practices. Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 25 S. Ct. 637, 49 L. Ed. 1031; Fonotipia v. Bradley (C. C.) 171 F. 951; National Tel. News Co. et al. v. Western Union Tel. Co., 119 F. 294, 56 C. C. A. 198, 60 L. R. A. 805; Illinois Commission Co. et al. v. Cleveland Tel. Co. et al., 119 F. 301, 56 C. C. A. 205; Bitterman v. Louisville & Nashville Railroad Co., 207 U. S. 205, 28 S. Ct. 91, 52 L. Ed. 171, 12 Ann. Cas. 693.

A preliminary injunction may issue.


text:
    UNITED STATES v. ONE REO SPEED WAGON.
    (District Court, D. Massachusetts.
    April 9, 1925.)
    No. 2790.
    1. Customs duties <$=>130 — Property of innocent owner may be forfeited for use in conveyance of smuggled merchandise.
    The property of an entirely innocent owner may be forfeited under Rev. St. § 3062 (Comp. St. § 5764), providing for forfeiture of vehicles used in conveying smuggled merchandise, but court will be reluctant to extend statute to a vehicle taken from an innocent owner without his privity or consent.
    2. Customs duties <$=>133 — Liquor not presumed to have been smuggled merely because foreign.
    In proceeding by government for forfeiture of truck for use in transportation of smuggled merchandise under Rev. St. § 3062 (Comp. St. § 5764), liquor will not be presumed to have been unlawfully imported merely because foreign liquor.
    3. Customs duties <$=>130 — Truck used for transportation of smuggled liquor without privity or consent of owner held not subject to forfeiture.
    Where owner of truck sent his son with truck load of fish to certain city with instructions to return with truck after delivery of fish, but son permitted third person to use truck for transportation of smuggled liquor, the truck was not subject to forfeiture under Rev. St. § 3062 (Comp. St. § 5764), since truck was not used for such purpose with privity or consent of owner.
    Forfeiture libel. Proceeding by the United States to forfeit one Reo speed wagon.
    Forfeiture denied.
    Harold P. Williams, U. S. Atty., and Laurence Curtis, Asst. U. S. Atty., both, of Boston, Mass.
    Bernard E. Corbin, of Boston, Mass., for claimant.
   BREWSTER, District Judge.

This proceeding is brought by the United States to enforce the forfeiture of a Reo truck owned by the claimant, John Almeida. The circumstances are these:

On August 25, 1924, one James Russo was discovered by a state officer in the act of transporting a quantity of alcohol in the truck which he had borrowed for the purpose. He was arrested and with the truck and alcohol turned over to a United States customs agent. Russo was later indicted for a violation of the Tariff Act of 1922 (42 Stat. 982) and was fined on a plea of guilty. After the arrest and seizure, these proceedings were brought under R. S. § 3062 (14 Stat. 178 [Comp. St. § 5764]) for the forfeiture of the truck.

It appeared that the claimant, a fisherman, on August 25, 1924, sent his son with a load of fish from Dennis to New Bedford, both in the district of Massachusetts, with instructions to deliver the fish in New Bedford and return to,Dennis with the truck. While in New Bedford the son, at the request of Russo, let him take the truck for the purpose, as the son testified, of moving some furniture for a short distance.

It may be that the son was not entirely ignorant of the purpose for which Russo took the truck, but I am satisfied from the evidence that the claimant had no knowledge whatever that the truck was going to be used by Russo for any purpose and was entirely innocent in the transaction.

R. S. § 3062, provides in substance that every vehicle used in conveying smuggled merchandise shall be subject to seizure and forfeiture.-

It has long been settled law that the property of an entirely innocent owner may be forfeited under this section. See U. S. v. One Black Horse (D. C.) 129 F. 167; Goldsmith, Jr.-Grant Co. v. U. S., 254 U. S. 505, 41 S. Ct. 189, 65 L. Ed. 376.

In Goldsmith, Jr.-Grant Co. v. U. S., supra, Mr. Justice McKenna delivers an interesting opinion in which he states that “in breaches of revenue provisions, some forms of properly are facilities, and therefore it may be said that Congress interposes the care and responsibility of their owners in aid of the prohibitions of the law and its punitive provisions by ascribing to the property a certain personality, a power of complicity and guilt in the wrong.”

Analogies are drawn from very ancient laws based more or less on superstitions of the times, such as the law of deodands, the Mosaical Law, and the law of the Athenians where punishment was visited upon property and beasts causing the death of human beings. Blackstone advances a more reasonable ground when he says “that such misfortunes are in part owing to the negligence of the owner, and therefore he is properly punishable by' such forfeiture.”

But in Goldsmith, Jr.-Grant Co. v. U. S., supra, the court saw fit to make an express reservation when it said, referring to a statute of like purport and effect:

“We also reserve opinion as to whether the section can be extended to property stolen from the owner or otherwise taken from him without his privity or consent.”

The fair inference is that while the terms of the statute may be broad enough to include it, the court would be reluctant to extend the statute to a vehicle taken from an innocent owner without his privity or consent.

This reluctance to thus extend the operation of R. S. § 3062, is all the more justifiable when we reflect that Congress has recently seen fit to enact in the so-called National Prohibition Act (41 Stat. 305 [Comp. St. Ann. Supp. 1923, § 1013814 et seq.]) a comprehensive code for the regulation of liquor traffic and for the punishment of violators, including forfeiture of instrumental-ities employed in the violation.

Russo’s offense was obviously the illegal transportation of intoxicating liquor. A violation of customs laws was much less obvious. I entertain some doubts whether the government has shown that probable cause which the provisions of section 615 of the Tariff Act of 1922 (Comp. St. Ann. Supp. 1923, § 5841h35) require as a prerequisite to forfeiture proceedings.

There was evidence that some of the packages containing the alcohol found on the truck bore the name at some time of a foreign dealer, or manufacturer; but there was no evidence whatever tending to show when, where, how, or by whom the alcohol had been smuggled, if indeed it had been smuggled, or that the truck had been used in connection with any unlawful importation.

Inasmuch as we are dealing with a proceeding under a statute by virtue of which property of an innocent owner may be forfeited, it would seem as if a proper solicitude for the rights of such innocent party ought to demand something more than slight evidence, or suspicion, or speculation as a ground for probable cause. As was said in U. S. v. One Ford Auto (D. C. Tex.) 292 F. 207: “No presumption could be indulged, from the mere fact of the liquors being foreign liquors, that they had been unlawfully imported.” In the ease at bar, we do not even know that the alcohol was foreign liquor. All we know is that it was contained in cases which at one time bore the name of a foreign dealer. So far as disclosed by the evidence before me, this was the only knowledge within the possession of the customs officer at the time of the seizure.

It might also be suggested that the search and seizure of the truck by the state officer cannot be justified by any provision of the ancient statute invoked by the government. Whether the government can adopt this unlawful act as a basis for lawful forfeiture proceedings is a question upon which the authorities are not in accord.

See United States v. Loomis (C. C. A. Wash.) 297 F. 359; United States v. Story (C. C. A. Tex.) 294 F. 517; Gelston v. Hoyt, 3 Wheat, 246, 310, 4 L. Ed. 381.

But I do not rest my decision in the ease at bar on any want of probable cause or on any illegal seizure but rather upon the construction of section 3062, which excludes from its terms vehicles used without the consent or privity of an innocent owner. This question is therefore presented: Whether, on the facts of this ease, it can be held that the truck was taken from the owner with his privity or consent. The claimant had intrusted the truck to his son, and if the son had been found transporting smuggled liquors, the truck would undoubtedly have been subject to forfeiture, but on the evidence before me I am not able to find that the claimant intrusted the truck to Russo, or that he authorized his son to so intrust it. The act of the son in loaning the ear could not be found to be within the scope of his express or implied authority as agent for his father.

I am consequently of the opinion that the facts fail to bring the Reo truck within the condemnation of the section under which these proceedings are instituted. The government’s prayer for forfeiture of the truck is denied, and as the claimant has given bond and is now in possession of the truck, appropriate orders may be entered discharging the principal and sureties from further liability on the bond.