breach of the customs and navigation laws, a claim of the

    United States for internal revenue taxes on the alcohol,

    being a non-maritime claim, cannot be set up in the libel;

    and to defer the presentation of such claim until after the

    final decree adjudicating the right to the property, is

    therefore not dilatory conduct. P. 533.

2.  The basic tax imposed upon distilled spirits is not a

    penalty; it is imposed irrespective of the legality of their

    origin; the lien attaches when the spirits as such come into

    existence, continues until the tax is paid, and is valid

    against all transferees, without assessment, distraint, or

    other administrative proceedings. P. 533.

3.  One who claims that alcohol, admittedly not imported, is not

    subject to tax, must prove payment of the tax. P. 533.

4.  The United States, by seeking a forfeiture of distilled

    spirits for violation of the customs and navigation laws, is

    not estopped, through election of remedies, from claiming the

    tax imposed upon the spirits by the internal revenue laws. P.

    534.

5.  An agreement by the United States, in a proceeding by libel

    to forfeit distilled spirits, for a judicial sale of the

    spirits "free and clear of all claims of any kind or

    character," and transfer of all existing liens from property

    to proceeds, does not waive a lien on the proceeds for

    internal revenue taxes. P. 534.

6.  The Circuit Court of Appeals, sitting in admiralty in a

    proceeding to forfeit distilled spirits under the customs and

    navigation laws, having sold the spirits free of liens and

    transferred existing

Page 531

    liens to the proceeds of sale, has jurisdiction to entertain

    a petition of the Government for satisfaction out of such

    money in custodia legis of its lien for internal revenue

    taxes on the spirits. P. 535.

7.  Denial of a claim by the United States for payment of

    internal revenue taxes on distilled spirits out of the

    proceeds of their sale in a proceeding by libel for breach of

    the customs and navigation laws, held a final judgment for

    the purposes of review in this Court, — cases denying review

    of merely administrative proceedings under a decree are

    inapplicable.

    P. 536.

petition by the United States that moneys in the custody of the

court below, proceeding from a judicial sale of alcohol in a

forfeiture suit, be paid into the Treasury in satisfaction of

Reed, Assistant Attorney General Morris, and Mr. George F.

and Coast Guard officials acting together; and the United States

filed, in the federal court for New Jersey, a libel in admiralty

praying forfeiture for violation of the customs and navigation

laws. Rizzo, as claimant, filed an answer. A decree of forfeiture

was entered on the ground that the cargo was carried on a vessel

employed in a trade other than that for which she was licensed.

The Court of Appeals reversed, citing United States v.

Chambers, 291 U.S. 217. While the Government's petition for

Page 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

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

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 its libel but

had waited until after denial of certiorari to seek such relief.

Accordingly, the Court directed that the proceeds be paid to the

claimant or his assigns.[fn1] To review this order we granted

certiorari, a misconstruction of the statutes

Page 533

concerning tax liens and a departure from the usual course of

the ground stated by the Court of Appeals. Nor could he well do

so. The claim for taxes, being non-maritime, could not have been

set forth in the libel. Compare The Steamboat Orleans v.

Phoebus, 11 Pet. 175, 182. To defer presenting the claims for

taxes until after the final decree adjudicating the right to the

property was not dilatory conduct. Obviously, there would have

been no occasion to proceed against the property for collection

of the tax if the alcohol had been declared forfeit to the United

is a penalty imposed for violation of the National Prohibition

Act; hence uncollectible, because of the repeal of the Eighteenth

Amendment. United States v. Chambers, 291 U.S. 217. But this

tax is not a penalty. It is the basic tax upon distilled spirits

irrespective of their legal or illegal origin. United States v.

One Ford Coupe, 272 U.S. 321, 328; Various Items of Personal

Property v. United States, 282 U.S. 577, 579. A lien attaches

to alcohol "as soon as it is in existence as such" and continues

until the tax is paid. Rev. Stat. §§ 3248, 3251; Thompson v.

United States, 142 U.S. 471, 474. That lien is valid against

all transferees, without assessment, distraint or other

administrative proceedings. Alkan v. Bean, 1 Fed. Cas. No.

202, p. 418; United States v. Turner, 28 Fed. Cas. No.

been of domestic manufacture. His answer in the District Court

stated that it was not imported; and there is no showing that it

was. As the alcohol was subject to the tax, the burden rested

upon him to prove payment. Rev. Stat. § 3333, as amended. No

evidence to that effect was introduced. The contrary was

established.

from collecting the tax, because it elected to seek forfeiture

for violation of the National Prohibition Act. But the Government

made no such attempt. The libel sought forfeiture on four

grounds. Three of them were for violation of provisions in the

Tariff Act of 1930, June 17, 1930, c. 497, 46 Stat. 590. The

fourth was for violation of the navigation laws. Rev. Stat. §

4377. The District Court decreed forfeiture on the fourth ground,

without passing on the other three. The petition presented to the

Circuit Court of Appeals has no relation to navigation or customs

laws. It states a claim based solely upon the internal revenue

laws. The present proceeding is thus founded on a right distinct

from, and entirely consistent with, the rights theretofore

asserted. Compare United States v. One Ford Coupe, 272 U.S. 321,

327, 333-334. No reference was made in the libel, and no

evidence was introduced in the District Court, with respect to

the tax due upon the domestic production of alcohol. There is no

basis for the contention that the United States is estopped by an

election of remedies. Compare Southern Pacific Co. v. Bogert,

because its counsel agreed, when the terms of sale were framed,

that the proceeds should be answerable only to the causes of

forfeiture set forth in the libel and that any tax lien should be

waived. There was no such agreement. The notice of the "terms and

conditions under which the sale will be conducted" (to which

counsel for the Government is alleged to have consented) recited:

"3. The cargo of alcohol which is being sold is to be sold free

and clear of all claims of any kind or character." The order of

sale had provided that "all further proceedings herein shall be

against said proceeds of sale." Thus it was in the common form

authorized by Admiralty Rule 40, which is interpreted as

transferring all existing liens

Page 535

from property to proceeds. Compare The Lottawanna, 20 Wall.

201, 211, 221; Schuchardt v. Ship Angelique, 19 How. 239,

241. Since counsel did not agree to waive the tax lien on the

proceeds, and since the Court of Appeals made no finding of such

a waiver, we need not consider whether a United States Attorney

had authority to waive the Government's right. Compare Utah v.

sitting in admiralty lacks jurisdiction to enforce the lien for

taxes. The argument is that collection of internal revenue taxes

must be effected in accordance with prescribed statutory methods;

and that the Act of February 26, 1926, c. 27, § 1115,

44 Stat. 117, and Rev. Stat. § 838 provide specifically for collection by

the Collector of Internal Revenue through proceedings specified.

But compare Rev. Stat. § 3213. The order of the appellate court

confirming the sale deprived the Government of two of the

statutory methods. First, the right to forfeit the alcohol even

after it had been transferred to a bona fide purchaser while in a

container not properly stamped. Act of January 11, 1934, c. 1,

Title II, § 206, 48 Stat. 317. Second, the right to collect the

taxes from the purchaser under the court's order, Rev. Stat. §

3334, as amended by Act of March 1, 1879, c. 125, § 5,

20 Stat. 340. But in ordering sale of the alcohol free of liens, the Court

of Appeals in effect provided, in accord with the common

practice, that existing liens should attach to the proceeds.

Compare Terre Haute & L. Ry. v. Harrison, 96 F. 907, 911.

These being in custodia legis, it was proper to petition that

they be applied towards satisfaction of the tax. Compare

Marshall v. New York, 254 U.S. 380, 384-385; In re Tyler,

149 U.S. 164, 182-183, 187. The practice prevails in admiralty as

in other courts. In Schuchardt v. Ship Angelique, 19 How.

239, 241, where proceeds of the sale of a mortgaged ship had been

paid into the registry,

Page 536

the Court, refusing to entertain a "libel simply to foreclose a

mortgage, or to enforce the payment of a mortgage," said: "As the

fund is in the custody of the admiralty, the application must

necessarily be made to that court by any person setting up an

interest in it. This application by petition is frequently

entertained for proceeds in the registry, in cases where a suit

in the admiralty would be wholly inadmissible." Admiralty

Rule 42; compare The Lottawanna, 21 Wall. 558, 582-583; The J.E.

Rumbell, 148 U.S. 1, 15. The practice prevails in appellate

courts as well as in courts of original jurisdiction. Compare In

jurisdiction because the order appealed from does no more than

carry out another order not here for review. This is not true.

The United States seeks to enforce against property in the

possession of the Circuit Court of Appeals a right which had not

theretofore been litigated, and which was not barred by earlier

proceedings. If the Government had been a stranger to the

litigation it would have been entitled to intervene; compare

Savannah v. Jesup, 106 U.S. 563, 564-565; Krippendorf v.

Hyde, 110 U.S. 276, 282-283; Gumbel v. Pitkin, 113 U.S. 545,

547-548; 124 U.S. 131; and a denial of intervention would

have been reviewable as a final judgment; compare Central Trust

Co. v. Grant Locomotive Works, 135 U.S. 207, 224-225; Credits

Commutation Co. v. United States, 177 U.S. 311, 315-316;

Clark v. Williard, 292 U.S. 112, 117-119. Its right to have

the new issue adjudicated is not to be denied because it was

already a party to the suit. Compare In the Matters of Howard,

9 Wall. 175, 183. The cases which hold that merely administrative

proceedings under a decree may not be brought here for review

have no application. See Wynkoop, H., C. Co. v. Gaines,

227 U.S. 4. Compare Collins

Page 537

v. Miller, 252 U.S. 364, 370-371; Farmers' Loan & Trust Co.,