People v. One 1959 MG Sport Coupé License Number Seg 469

The State appeals from that portion of a judgment releasing a 1959 MG Sport Coupé to the legal owner, Citizens National Bank, respondent herein; the interest of the registered owner was forfeited to the state under section 11610,

The State contends that the claims of all legal owners of vehicles seized prior to September 18, 1959, are governed by section 11620, Health and Safety Code. It advances the position that the repeal of section 11620 and the several amendments of other sections of the Code effected a substantive, not a procedural, change in the law, thus requiring the court to give it a prospective operation; and that for a legal owner to protect his lien a reasonable investigation must have been made on automobiles seized before September 18, 1959.

June 3, 1959, was the date on which the vehicle was seized and impounded by the State; September 18, 1959, was the effective date of the Legislative amendments to the Health and Safety Code (Cal. Const., Art. IV, § I); and September 29, 1959, was the date of the trial herein. Various sections of the Health and Safety Code amended by the 1959 session of the Legislature are here pertinent.

On June 3, 1959, section 11619 read: “At the hearing, any owner who has a verified answer on file may show by competent evidence that the vehicle was not used to transport narcotics or to facilitate the unlawful transportation of narcotics, or that narcotics were not unlawfully possessed by an occupant of the vehicle or that the vehicle was not used to facilitate the unlawful possession of narcotics by an occupant thereof.” On September 29, 1959, section 11619 provided: “At the hearing, any owner who has a verified answer on file may show by competent evidence that the vehicle was not used to transport narcotics, or that narcotics were not unlawfully possessed by an occupant of the vehicle, and any legal owner holding a bona fide lien, mortgage or conditional sales contract may show that he acquired his interest without actual knowledge that the vehicle was to be used for the purposes referred to in Section 11610.” (The italicized portion of the statute was added in 1959, effective September 18,1959.)

On June 3, 1959, section 11620 read in pertinent part: “. . . The claimant of any right, title or interest in the vehicle may prove his lien, mortgage or conditional sales contract to be bona fide and that his right, title or interest was created after a reasonable investigation of the moral responsibility, character, and reputation of the purchaser, and without any knowledge that the vehicle was being, or was to be, used for the purpose charged but, in any case, a reasonable investigation

Section 11622, on June 3, 1959, provided: “In the event of such proof, the court shall order the vehicle released to the bona fide or innocent holder, lien holder, mortgagee, or vendor if the amount due him is equal to, or in excess of, the value of the vehicle as of the date of seizure, it being the intention of this section to forfeit only the right, title, or interest of the purchaser.” Effective September 18, 1959, section 11622 was amended as follows: “If the court finds that the vehicle was not used for any purposes referred to in Section 11610 and that no narcotic was unlawfully possessed by any occupant thereof, the court shall order the vehicle released to the person entitled thereto. If the court does not so find but does find that the legal owner holding a bona fide lien, mortgage, or conditional sales contract acquired his interest without actual knowledge that the vehicle was to be used for the purposes referred to in Section 11610 and if the amount due him is equal to, or in excess of, the appraised value of the vehicle, the court shall order the vehicle released to such legal owner...”

Prior to the 1959 amendments thereto, the automobile forfeiture provisions of the Health and Safety Code did not place an affirmative duty to make an investigation upon a lien claimant, and it was not necessary that he make one; however, if he wanted to protect his interest in a vehicle against possible forfeiture in the future he then, and only then, became obliged to conduct an inquiry (People v. One 1941 Chevrolet Coupé, 113 Cal.App.2d 578 [ 248 P.2d 786 ]). The obvious purpose of section 11620 was to relieve the holder of a legitimate lien from the effect of forfeiture provisions where he assumed the burden of making an investigation of the kind and to the extent required thereunder before the creation of the lien (People v. One 1950 Pontiac Sedan, 153 Cal.App.2d 15 [ 313 P.2d 863 ] ; People v. One 1957 Ford 2-Door Sedan, 160 Cal.App.2d 797 [ 325 P.2d 676 ]); and it became well established in our law that before such a lienholder could defend against the forfeiture of his interest (People v. One 1952 Ford Sedan, 146 Cal.App.2d 183 [ 303 P.2d 832 ] ; People v. One 1940 Buick 8 Sedan, 70 Cal.App.2d 542 [ 161 P.2d 264 ]; People v. One 1937 Plymouth 6, 37 Cal.App.2d 65 [ 98 P.2d 750 ]), he had to

Having construed the change in the law to have the effect of broadening the defense of a bona fide lienholder by eliminating the burden of prior investigation we do not find the several cases relied upon by respondent Bank relating to the abolition of penalties and forfeitures, including Department of Social Welfare v. Wingo, 77 Cal.App.2d 316 [ 175 P.2d 262 ], and Lemon v. Los Angeles Terminal Ry. Co., 38 Cal.App.2d 659 [ 102 P.2d 387 ], to be applicable. In the case of automobile forfeitures under the Health and Safety Code, prior to the amendments and repeal at bar, automobiles were subject to forfeiture for illegal use; after the change in the law they are still subject to forfeiture, no forfeiture having in fact been abolished. It is true that in Lemon v. Los Angeles Terminal Ry. Co., 38 Cal.App.2d 659 [ 102 P.2d 387 ], it is suggested that forfeitures, being disfavored and strictly construed, are repealed as if they are procedural laws; but this was predicated on the fact that a forfeiture was actually being abolished— the forfeiture involving a railroad. However, it is the position

This seems to be the interpretation given by the courts in the past to various amendments to this same section. In People v. One 1955 Chevrolet Bel Air (1958), 157 Cal.App.2d 851 [ 321 P.2d 870 ], the state appealed from a judgment forfeiting a car to the state subject to the bank’s lien. The state contended the trial court was in error as a matter of law in finding the investigation was reasonable. The bank acquired

The courts in these cases, applying the statute as it stood at the time the “action arose,” obviously construed the change in the law to be substantive and not procedural. The fact that the last amendment constituted an entire repeal of the section did not seem to change the accepted construction (People v. One 1953 Mercury (November, 1959), 174 Cal.App. 2d 435 [ 344 P.2d 637 ]). The courts’ interpretation of these changes adverse to that suggested in the Lemon case and their failure to apply its rule to amendments and repeals in the field of automobile forfeitures, are, no doubt, in part due to the theory that the forfeiture statutes set up in the Health and Safety Code are aimed at controlling the narcotics menace. The automobile is an important facility to the pusher and the addict, and serves as “an operating tool of the dope peddler’s trade” (People v. One 1952 Mercury 2-Door Sedan, 176 Cal. App.2d 220 , 226 [ 1 Cal.Rptr. 245 ]). Forfeiture is another method of law enforcement, which goes to the very root of narcotic activities, which probably accounts for various expressions in the cases favoring a liberal interpretation of the car forfeiture laws in the Health and Safety Code (People v. One 1949 Ford Tudor Sedan, 115 Cal.App.2d 157 , 170 [ 251 P.2d 776 ] ; People v. One 1952 Mercury 2-Door Sedan, 176 Cal.App.2d 220 , 226-227 [ 1 Cal.Rptr. 245 ]), and such construction of rules of evidence as to aid in their enforcement. (People v. One 1948 Chevrolet Conv. Coupé, 45 Cal.2d 613 [ 290 P.2d 538 , 55 A.L.R.2d 1272 ].)

Having held that the change in the law is a substantive one with prospective operation which requires a reversal of the judgment, we deem it necessary that respondent bank be given the opportunity to establish in the lower court a reasonable investigation under section 11620 as it stood prior to the 1959 amendment. Although we do not rule the state now to be in

The record shoAvs that after the state and the registered owner rested, Mr. Merton, counsel for the respondent bank, and the deputy attorney general stipulated “that the bank had no knowledge and acted in good faith”; whereupon the court stated, “You can rest right now, Mr. Merton, on that stipulation.” After some discussion between the deputy attorney general and the trial judge, the court again said: “You can rest right now, if you want to, Mr. Merton, on that stipulation.” ObAdously being dissatisfied with the state of the record, again Mr. Merton attempted to offer proof of an investigation and the court advised, “That is all you need.” After further colloquy between the deputy and the trial judge, Mr. Merton then said: “I understand the ruling of the Court is that the stipulation having been made, it is out of order for us to even put on evidence?” The court responded “It is not out of order if you want to put it on. I think you have gone far enough. If you feel you Avant to put on some evidence as to your investigation, go ahead and do it.” However, at that time the deputy strongly interjected “I think it is moot. There is no reason for putting it on . . . Your ruling is that it makes no difference whether there is a reasonable investigation or not, so why put on any evidence?” And again: “Why have him put any evidence in?”-—— “He doesn’t need any evidence. ’ ’

For the foregoing reasons the judgment is reversed with directions to the lower court to permit respondent herein to offer proof of a reasonable investigation under section 11620 as it stood prior to the 1959 amendment.

Wood, P. J., and Fourt, J., concurred.