Commercial Credit Co. v. United States

Background

The United States sued to forfeit a Ford coupe that a customs inspector said was being used to distribute Canadian liquor in Seattle. A man named Campbell, who had bought the car under a conditional sale, was stopped, searched, and found with thirteen quarts of foreign whiskey and gin without tax stamps. Campbell was arrested and prosecuted under the National Prohibition Act; he pleaded guilty to unlawful possession. The Commercial Credit Company intervened, claiming ownership of the car and saying it did not know the car would be used illegally. The District Court condemned the car, and the Court of Appeals affirmed. The only question before the Supreme Court was whether the Government, after prosecuting under the Prohibition Act, could also pursue forfeiture under the separate tax-forfeiture law, section 3450.

Reasoning

The Court asked whether a conviction for possession incidental to transportation requires that the car be dealt with under section 26 of the Prohibition Act instead of under section 3450. The Court concluded that Campbell’s possession was part of the act of transportation and that section 26 mandates how the vehicle must be handled after conviction. Because the Prohibition Act’s required disposition conflicts with the tax-forfeiture process in section 3450, the Government’s prosecution under the Prohibition Act prevented the use of the separate tax-forfeiture provision.

Real world impact

The Court reversed the Court of Appeals and ordered the libel dismissed. The decision means that when a person is discovered transporting liquor and is convicted under the Prohibition Act for that transportation or the possession tied to it, the vehicle must be disposed of under the Prohibition Act’s rules, not seized under the tax-forfeiture statute. The opinion does not decide what happens if there is no conviction or if facts differ.