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United States v. One North American Airplane

filed.: June 18, 1952.

UNITED STATES
v.
ONE NORTH AMERICAN AIRPLANE ET AL.



Author: Stewart

Before KALODNER and STALEY, Circuit Judges, and STEWART, District Judge.

STEWART, District Judge.

This appeal is from a judgment of the District Court ordering the return to claimant of an airplane, type B-25J, which the United States seized and attempted to forfeit for violation of the export control laws and regulations. The forfeiture is sought under Title VI of the Espionage Act of June 15, 1917, 22 U.S.C.A. §§ 401-407, on the ground that the claimant had undertaken to export the plane upon an invalid exemption from the requirement of an export license, in violation of the munitions control provisions of the Neutrality Act of 1939, 22 U.S.C.A. § 452, and regulations promulgated pursuant thereto, 22 C.F.R., 1950 Supp., §§ 201.34 and 201.35.

The case was tried by the court below upon the libel of information and answer of the claimant, Terrell J. Murrell, without a jury. At the conclusion of the testimony, the court held that the Government had not proved by the preponderance of the evidence that the claimant had attempted to export the airplane in violation of the munitions control provisions of the Neutrality Act, dismissed the libel and after considering and denying a motion for rehearing, directed the return of the airplane to the claimant. The United States filed its appeal on July 24, 1951. A stay of execution of the order of restoration pending disposition of the appeal has been granted. On August 18, 1951, the trial court filed findings of fact and conclusions of law.

The pertinent facts as found by the Court below are in substance as follows: Terrell J. Murrell, the claimant purchased the airplane which is the subject of this action on December 10, 1948, and on the next day transferred title to Lawrence LaBeulla without consideration. LaBeulla was not the bona fide owner of the airplane but was paid by Murrell to hold title. On December 27, 1948 LaBeulla executed an affidavit in support of a claim for exemption from the requirement of an export license in which he represented that he was the owner of the plane and that the purpose of the contemplated temporary sojourn abroad was to have the aircraft converted for civilian use. The exemption was granted on December 27, 1948, and on the same day the plane took off from the Newark airport on the first leg of the flight to Europe, namely, Montreal, Canada. It was forced down at Albany, New York, by inclement weather, and on December 28, 1948 the customs officials there refused to clear the plane for travel outside the United States and it was returned to Newark. On arrival at Newark on December 28, 1948, LaBeulla executed a second affidavit in support of the claim for exemption, identical with the affidavit of December 27, 1948, except that the purpose of the temporary sojourn abroad was this time stated to be "personal business and pleasure visit Eastern Europe", whereas in the first affidavit the purpose was stated as "have aircraft coverted per CAA specifications in S.E.C.A. Paris or Ferens, Milan, Italy". Clearance was again granted but prior to take-off was withdrawn and subsequently the plane was flown to Teterboro Airport in Bergen County, New Jersey, where it was seized by customs officials on January 12, 1949. After the seizure, the United States timely filed its libel of information, and Murrell filed claim to the aircraft and an answer to the libel.

Two questions require determination by us. First, whether the series of events leading up to the attempts to export the plane constituted a violation of the law*fn1 (Neutrality Act of 1939), and, second, if the law as violated by the claimant, whether, under the circumstances, seizure and forfeiture of the plane are justified. The trial judge apparently determined that the Neutrality Law as implemented by the regulations was not violated because the Government had failed to establish that it was the intent of the claimant to dispose of the plane abroad (Appendix to Appellant's Brief, p. 68a), and for this reason never considered the question of the propriety of the seizure and forfeiture of the plane.

In order to regulate the exportation of arms, ammunition, and implements of war during periods of national emergency, Congress passed the Neutrality Act of 1939, 22 U.S.C.A. § 441 et seq., which among other things, established a Munitions Control Board. Section 12(a) of the Act, as amended, 22 U.S.C.A. § 452(a), provides that the National Munitions Control Board

"shall consist of the Secretary of State, who shall be chairman and executive officer of the Board, the Secretary of the Treasury, the Secretary of the Army, the Secretary of the Navy, and the Secretary of Commerce. Except as otherwise provided in this section, or by other law, the administration of this section is vested in the Secretary of State. The Secretary of State shall promulgate such rules and regulations with regard to the enforcement of this section as he may deem necessary to carry out its provisions. The Board shall be convened by the chairman and shall hold at least one meeting a year."

Section 12(d) of the Act, as amended, provides that

"It shall be unlawful for any person to export, or attempt to export, from the United States to any other state, any arms, ammunition or implements of war listed in a proclamation referred to in or issued under the authority of subsection (i) of this section, or to import, or attempt to import, to the United States from any other state, any of the arms, ammunition, or implements of war listed in any such proclamation, without first having submitted to the Secretary of State the name of the purchaser and the terms of sale and having obtained a license therefor."

Under section 12(i) of the Neutrality Act of 1939, the President of the United States is authorized "to proclaim * * * from time to time a list of articles which shall be considered arms, ammunition, and implements of war for the purposes of this section; * * *". Presidential Proclamation No. 2776 of March 26, 1948, 13 F.R. 1623, 62 Stat. 1495, 22 U.S.C.A. § 452 note, enumerated the arms, ammunition, and implements of war under authority of Section 12(i) and included therein the category of aircraft.

Pursuant to Section 12(a) of the Act, the Secretary of State promulgated various rules and regulations with regard to the enforcement of the munitions control provisions of the Neutrality Act of 1939.*fn2 Section 201.34 in effect exempts flights that fall under the category there described from the requirements of an export license, but it does not exempt such flights from all control under the Neutrality Act, as is evidenced by Section 201.35. That provision, i.e. Section 201.35, places the control in the hands of customs officials and provides that an airplane shall not be flown on a temporary sojourn until customs clearance has been obtained, and that evidence in support of a claim for exemption from the requirements of an export license shall be submitted to the appropriate collector of customs. On November 1, 1948, the Department of State issued Munitions Division Bulletin No. 5*fn3 which prescribed a procedure for the handling of claims for exemption from the requirement of an export license.

The procedure referred to in this bulletin was adopted by the customs officials in Newark, New Jersey, and the affidavits introduced in this case were ones similar to the affidavit attached to and recommended by Bulletin No. 5. Nothing in the regulations or in the Neutrality Act of 1939 or in the Espionage Act of 1917 expressly makes the filing of a false affidavit a violation of law. There may be doubt that the affidavit requirement is actually a regulation in view of the fact that it is in form a suggested procedure to the various customs officials. Regardless of whether the bulletin actually constituted or was equivalent to a regulation, we consider an attempt to export an airplane, without an export license, but under an exemption from that requirement based upon a false affidavit, a violation of law in the sense used in Section 1 of the Espionage Act. We do not hold, as urged by the Government, that the mere submission of a false affidavit in support of a claim for exemption is such a violation when nothing further exists. The effect of the submission of a false affidavit in support of a claim for exemption is to nullify the exemption if granted in reliance thereon and a subsequent attempt to export the airplane without an export license is in violation of law. Any other conclusion would render the operation of the Munitions Control provisions of the Neutrality Act completely ineffectual. It follows that the Government sufficiently established a violation of the law (Neutrality Act of 1939) and the holding of the court below to the contrary was incorrect.

The remaining question is whether, under the circumstances, seizure and forfeiture of the airplane are proper. Section 1 of the Espionage Act provides for seizure of arms or munitions of war about to be exported, in violation of law, and for the forfeiture of such articles "If upon due inquiry * * * the ...


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