U.S. Supreme Court UNITED STATES v. RIZZO, 297 U.S. 530 (1936)

[Page 297 U.S. 530, 532]

a rehearing, later denied, was pending, that court ordered, upon application by Rizzo for sale of the alcohol, that it be sold, 'free and clear of all claims of any kind or character'; that the proceeds be deposited in the registry; and that they 'be substituted in the place and stead of said 146,157 gallons of alcohol, and that all further proceedings herein shall be against said proceeds of sale.'

The marshal sold the alcohol for $1.85 per wine gallon. In confirming the sale, the court ordered (1) that the alcohol be delivered to the purchaser free of all government taxes or tax liens and customs duties; (2) that it 'shall be treated by the United States Government and any of its departments as tax paid, irrespective of the lack of any stamp or tax certificate affixed thereto on the respective containers in which said alcohol may be deposited or contained'; and (3) that the proceeds of sale be paid into the registry of the court. We denied a writ of certiorari, sought on the ground that the Circuit Court of Appeals lacked authority to include the provision regarding taxes in its order of confirmation. 294 U.S. 709, 55 S.Ct. 406

Thereupon the United States filed in the Circuit Court of Appeals a petition asking that the proceeds of the sale be paid into the Treasury of the United States in satisfaction of the lien for taxes due on the alcohol; made proof that the taxes exceeded the proceeds of the sale; and filed with the clerk notices of levy and warrant for distraint. The court ruled that the petition could not be entertained, because the government had failed to raise the question of taxes when it filed it libel, but had waited until after denial of certiorari to seek such relief. Accordingly, the Court directed that the proceeds be paid to he claimant or his assigns. [Footnote 1] To review this order we granted certiorari; a misconstruction of the statutes

[Page 297 U.S. 530, 537]

v. Miller, 252 U.S. 364, 370, 371 S., 40 S.Ct. 347; In re Farmers' Loan & Trust Co., Petitioner, , 9 S.Ct. 265.

The order is reversed, with direction to the Circuit Court of Appeals to pay to the United States the proceeds of the sale now in the registry after deducting the usual court charges.

Reversed. Footnotes

Footnote 1 Rizzo had filed with the clerk notices of assignment of the proceeds in amounts aggregating nearly the whole of the deposit.