Appellees Brief — Calero-Toledo v. Pearson Yacht Leasing Co.

Of Counsel:

In the MICHAEL ROBAK, J

Supreme Court of the United States

Octoser TERM, 1973

No. 73-157

ASTOL CALERO-TOLEDO, Superintenvent or Potice,

EDGAR R. BALZAC, ApmrnisTaaToR oF THE GENERAL

Services ADMINISTRATION OF THE COMMONWEALTH

or Pverto Rico,

APPELLANTS,

v.

PEARSON YACHT LEASING CO., a Drviston oF

Grumman ALLiEp InpvustriEs, Inc.,

APPELLEE.

. ON APPEAL FROM

THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

APPELLEE'S BRIEF

Gustavo A. Geri

~ P.O. Box 2407

Old San Juan

Puerto Rico 00903

NacuMan, Feipstern & Geri

—_—_—_—_—_ Eo ———SSS_—_

\ Blanchard Press. Inc.. Boston. Mass. — Law Printers

ies

TABLE OF CONTENTS

Page

Gels: TR oon cicacs cast a 1

os ences do rks va ced 2

Constitutional Amendments and Statutes Involved .. 2

Eee ovina es vis 2

oe cis elena cbs sas ea See ee 3

BIRR, Fi. cs « 656555 Gn ES eee 4

I. The Forfeiture Provision of the Controlled

Substances Act of Puerto Rico Operates to

Deprive Innocent Owners of Their Conveyances

Without Due Process of Law and Without Com-

mae os ooo eens cena cases ers 4

A. Forfeiture Without Culpability Constitutes

a Taking of Property Without Just Com-

DIN. nck. cas Oo us che eee +

B. Seizure Without Prior Hearing Is a Viola-

tem of be POONER i. kok ccs date 7

C. Seizure Without Prior Determination of

Probable Cause Is Violative of the Fourth

DE os is oc ce a 11

II. There Is No Evidence on the Record Upon

Which to Consider on Appeal Defenses Not

ME UN og kik 6 oi ae se 13

Ce. ko a i ek a es 16

MR Bn 6 ow ohn Ka i ee 18

Tas.e or CrraTions

Cases

Armstrong v. Monzo, 380 U.S. 545 (1965) .......... 8, 9

Burge v. United States, 342 F.2d 408 (9 Cir. 1965) .. 10

Carrol v. United States, 267 U.S. 132, 153 (1925) .... 12

Chambers v. Maroney, 399 U.S. 42 (1970) .......... 9, 10

Chimel v. California, 395 U.S. 752, 763 (1969) ...... 12

Commonwealth v. Superior Court, 94 P.R.R. 687

ii Table of Contents

Page

Coolidge v. New Hampshire, 403 U.S. 443, /

ae oi ees. \'1l, 12

Downs v. Porrato, 76 P.R.R. 572 (1954) .......... ee

England v. Louisiana State Board of Medical Exam-

| ee ee 7

Estate of Donelly, 397 U.S. 286, 295, n. 5 (1970) ... 16

Fornais v. Ridge Tool Co., 400 U.S. 41 (1970) ...... 7

Fuentes v. Shevin, 407 U.S. 67 (1972) .......... 8, 9, 10

Goldberg v. Kelly, 397 U.S. 254 (1970) .°............ 9

Harman v. Forsseneius, 380 U.S. 528 (1964) ........ 7

Hormel v. Helvering, 312 U.S. 552 (1941) ........... 15

Katz v. United States, 389 U.S. 347, 357 (1967) ..... 11

Legarreta v. Treasurer, 55 P.R.R. 20, 23 (1939) ..... 6

McDonald v. United States, 335 U.S. 451, 456 (1948) . 11

Metro Taxi Cabs, Inc. v. Treasurer, 73 P.R.R. 164

a 5

Ochoteco v. Superior Court, 88 P.R.R. 500 (1963) .. 5

Preston v. United States, 376 U.S. 364, 367 (1964) .. 12

Railroad Commission of Texas v. Pullman, 312 US.

ais ees anc be 7

United States v. New York Telephone Co., 326 U.S.

ee I Os oo oe i wes 16

United States v. Troiano, 365 F.2d, 416 (3 Cir. 1966) . 10

United States v. United States Coin and Currency,

Me ee SO icy ee 4, 5, 6

Vazquez v. Font, 53 P.R.R. 252, 255 (1938) ......... 6

Statutes

21 U.S.C. §881(a), subparagraphs (A) and (B) ...... 5

Controlled Substances Act of Puerto Rico, 24 L.P.R.A.

eee Cee Bere? Lc. cols sim... 4, 6

24 L.P.R.A. (2512 (a)(4) and (b) (Supp. 1972) .. 2, 3,4

Uniform Vehicle, Mount, Vessel and Plane Seizure

Act, 34, L.P.R.A. §1721 and §1722 ............... 4

NI Ns on ese chain eae es 2, 3, 4

In the

Supreme Court of the United States

Ocroser Term, 1973

No. 73-157

ASTOL CALERO-TOLEDO, Svurerrntenpent or Pottce,

EDGAR R. BALZAC, Apministrator oF THE GENERAL

Services ADMINISTRATION OF THE COMMONWEALTH

or Puerto Rico,

APPELLANTS,

Vv.

PEARSON YACHT LEASING CO., a Drviston or

GrumMMAN ALLIED INpustaigs, INc.,

APPELLEE.

ON APPEAL FROM

THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

APPELLEE'S BRIEF

Opinion Below

This is an appeal from the Memorandum Opinion and

Order of the United States District Court for the District

2

of Puerto Rico, sitting as a three-judge court, entered on

March 29, 1973. The opinion of the court below, at 363

F. Supp. 1337, is printed in the Record Appendix at

pages 29-40. Judgment was entered on June 15, 1973 and

is also printed in the Record Appendix at pages 44-45,

Jurisdiction

Jurisdiction of this Court to review the decision of

the district court is not contested.

Constitutional Amendments and

Statutes Involved

The Fourth and Fifth Amendment of the United States

Constitution, 24 LPRA Sees. 2512 (a) (4) and (b) (Supp.

1972) and 34 LPRA Sees. 1722 (a) to (e) are set forth in

Appendix I hereto.

Questions Presented

1. Whether appellants are precluded from asserting on

appeal defenses and points which were neither pleaded nor

raised in the court below.

2. Whether seizure and forfeiture under state law of an

innocent man’s property without notice and prior hearing,

and without judicial determination of culpability, is a vio-

lation of the due process requirement of the Constitution

of the United States.

3. Whether forfeiture of property according to state

law can constitutionally be upheld in the case where its.

owner is absolutely innocent and had no knowledge whatso-

ever that its property would be used in connection with an

illegal activity. y

3

Statement

This action was filed by Pearson Yacht Leasing Co., a

division of Grumman Allied Industries Inc., hereinafter

referred to as “‘Pearson’’, to seek redress for deprivation

under color of state law, of rights secured by the Consti-

tution of the United States. (R.A. p. 1-6) The purpose

pursued was to recover possession of a vessel which had

been leased to Donovan and Lorreta Olsen pursuant to a

bareboat charter (R.A. p. 23-24, paragraph 7) and which

had been seized by appellants some time before pursuant to

the forfeiture provisions of the Controlled Substances Act

of Puerto Rico, 24 LPRA Sees. 2102 to 2607. (R.A. p. 23).

Since appellants had acted in accordance with State law,

24 LPRA Sec. 2512(a) (4) & (b) and 34 LPRA See. 1722,

Appendix I, infra, injunctive as well as declaratory relief

were requested.

A three-judge court was convened upon appellee’s appli-

cation (R.A. p. 20). Appellants had originally opposed said

motion (R.A. p. 20) but after a hearing thereon (R.A.

p. 21-22), withdrew their opposition and consented to the

convening of such three-judge court. (R.A. p. 26 and p. 30).

Since the parties had stipulated those facts necessary for

consideration of the constitutionality of the statutes, a

hearing was held for the purpose of allowing the parties

opportunity to present oral argument in support of their

respective contentions. Upon conclusion of argument, the

case was submitted to the consideration of the three-judge

court.

The record is clear in that appellants did not contest

below the substantiality of appellee’s claim of its right to

recover the yacht should it prevail. Nor did they bring to

the district court’s attention defenses, which they now claim

should have been considered below. (Infra, p. —, Argu-

ment: Part II). Now, they hope to defeat their own consent

4

to the district court’s consideration of the constitutional

issues by urging their consideration on appeal.

Because of the foregoing, appellee takes issue with

appellants’ assertion that ‘In effect, then Pearson sold

the yacht to its ‘lessee’, retaining title until it had received

full payment’’. (Appellants’ Brief p. 4) This is a conclu-

sionary statement which might have been drawn by the

court below had it been timely raised.

Other than the above explanatory note no issue is taken

with appellants’ statement of chronological events below.

Argument

I. Tue Forrerrure Provision OF THE ConTROLLED Svus-

stances Act or Puerto Rico OPERATES To DeEprivE

Innocent Owners or THEIR CONVEYANCES Wirnovut Dug

Process of Law anp WirHout CoMPENSATION.

A. Foreiture Without Culpability Constitutes A Tak-

ing Of Property Without Just Compensation.

The Controlled Substances Act of Puerto Rico, 24 LPRA

Secs. 2101-2607, provides that ‘‘All conveyances yi toete

which are used, or are intended for use ***in proscribed

transportation are “subject to forfeiture”. 24 LPRA Sec.

2512 (a) (4). The statute incorporates the procedure estab-

lished by the Uniform Vehicle, Mount, Vessel and Plane

Seizure Act, 34 LPRA Secs. 1721 and 1722. 24 LPRA

Sec. 2512(b). Neither of said statutes requires any proof

or finding of culpability on the part of the owner of the

forfeited property, nor is any provision made for com-

pensation.

This Honorable Court in United States v. United States

Coin And Currency, 401 U.S. 715 (1971) said:

5

‘‘When the forfeiture statutes are viewed in their

entirety, it is manifest that they are intended to

impose a penalty only upon those who are signifi-

cantly involved in a criminal enterprise.’’ 401 US.

at 721-722.

That such intention is required to meet constitutional

norms is manifest from the earlier statement in the same

opinion ‘‘ ** * this Court in the past has recognized the

difficulty of reconciling the broad scope of traditional for-

feiture doctrine with the requirements of the Fifth Amend-

ment.’’ 401 U.S. at 721. ’

In United States v. United States Coin And Currency,

supra, the issue was not directly resolved due to “ igi

terms of the other statutes which regulate forfeiture pro-

ceedings’’, 401 U.S. at 721, and which provided for return

of seized property to innocent petitioners. No such saving

provision is included in the pertinent statutes of Puerto

Rico.

The statutes here in question are facially unlimited. The

only exceptions to their broad sweep have been judicially

engrafted to protect the owner of property unlawfully de-

prived of its possession, Ochoteco v. Superior Court, 88

P.R. 500 (1963), and the owners of property used as @

common carrier, Metro Taxi Cabs, Inc. v. Treasurer, 73

P.R.R. 164 (1952).1 The innocent lessor of property

used in proscribed activities, such as appellee herein, is

subjected to the forfeiture provisions by express mandate

of the highest judicial authority of Puerto Rico. Common-

wealth v. Superior Court, 94 P.R.R. 687 (1967). The lack

of significant involvement in a criminal enterprise is

irrelevant in the forfeiture procedure of Puerto Kico, as

interpreted and applied.

1 These are the same exceptions included in the analogous federal

statute. 21 USC Sec. 881(a) and (b).

6

In an effort to validate an apparently unconstitutional

standard, appellants offer the hope of a limiting interpre-

tation by the Supreme Court of Puerto Rico. In view of

the legislative and judicial history of the statutes in ques-

tion, such hope is not justified. The Uniform Vehicle,

Mount, Vessel and Plane Seizure Act was enacted in Puerto

Rico as Act No. 39 of June 4, 1960. 34 LPRA Secs. 1721

and 1722. This statute provides the procedural mechanism

for forfeiture. In Commonwealth v. Superior Court, supra,

the dissent questioned the constitutionality of that pro-

cedure. 94 P.R.R. at 695-773. On April 5, 1971, this Court

rendered its decision in United States v. United States Coin

And Currency, supra. Nevertheless, on June 21, 1971, the

legislature of Puerto Rico enacted the Controlled Sub-

stances Act, 24 LPRA Secs. 2101-2607, and specifically

incorporated the pre-existing procedure. As in the case of

re-enactment or adoption of a statute, that incorporation

is presumed to have included the prior judicial interpre-

tations of the statute. Vazquez v. Font, 53 P.R.R. 252, 255

(1938) ; Legarreta v. Treasurer, 55 P.R.R. 20, 23 (1939).

The legislature thus manifested its intent to include in

the sweep of the statute the property of innocent lessor-

owners. It is presumptuous to anticipate that the Supreme

Court of Puerto Rico will now not only overrule its own

decision, but will nullify the legislature’s ratification of an

authoritative interpretation of its intent. The constitu-

tional protection of appellee, an admittedly innocent party,

should not depend upon so tenuous a possibility.

Appellant’s suggestion that the district court ‘‘elected

not to abstain”’ in this case, Appellant’s Brief at pp. 19-20,

misinterprets the record. As indicated below, appellants

consented to the convening of a three-judge court, R.A. 26,

and did not invoke the doctrine of abstention as a defense

in their answer, R.A. 27-29. Abstention would have been

improper in the circumstances since the statutes in question

7

had already been authoritatively interpreted by the highest

judicial authority of the Commonwealth. Wisconsin v.

Constantineau, 400 U.S. 433 (1970); Fornaris v. Ridge

Tool Co., 400 U.S. 41 (1970); Harman v. Forssenetus, 380

U.S. 528 (1964) ; Railroad Commission of Texas v. Pullman,

312 U.S. 496 (1941). Even had the defense of abstention

been raised below, appellee could not be forced to litigate

federal constitutional issues in the Commonwealth courts.

England v. Louisiana State Board of Medical Examiners,

375 U.S. 411 (1964).

The district court was bound by the interpretation of the

statutes by the highest Commonwealth court. Since the

statutes as so interpreted do not meet federal constitutional

norms, there was no alternative to the invalidation of those

statutes.

B. Seizure Without Prior Hearing Is A Violation Of

Due Process.

In their effort to cure an additional infirmity of the

statutes in question, appellants are forced to tortured

interpretation both of the statutes and of decisions of this

Court. Relying on Downs v. Porrato, 76 P.R.R. 572 (1954),

- appellants start with the premise that the ‘‘seizure’’ does

not become a ‘‘forfeiture’’ until after a hearing, and then

continue with the premise that there can be no ‘‘depriva-

tion’’ until there is a ‘‘forfeiture’’. Thus they reach the

conclusion that no hearing is required prior to seizure.

Downs v. Porrato, supra, restec. on an interpretation of

an analogous statute? at variance with the interpretation

given to the statutes in question here by the same Supreme

Court of Puerto Rico. In Downs it was said:

2 Weapons Act of Puerto Rico, as amended by Act No. 397 of

May 10, 1951. ‘

8

‘In the second case (that of a lawful instrument

employed in unlawful pursuits) the confiscation has to

be made by judicial declaration after proving (1) the

unlawful use of a thing and (2) the knowledge of the

interested parties of such unlawful use. The title does

not pass to the State or to the persoa who acquires

it in the judicial sale until there is a judicial decla-

ration and the public auction has been accomplished.”’

76 P.R.R. at 578-579.

That statute, unlike the act here under consideration, per-

mitted the defense of innocence of interested parties, The

hearing in such case is meaningful. Armstrong v. Monzo,

380 U.S. 545 (1965) ; Fuentes v. Shevin, 407 U.S. 67 (1972).

The district court in this case noted as ‘‘most compelling

*** the fact that under the statutory scheme, the available

procedure precludes plaintiff from challenging the forfei-

ture in the state courts.’’ R.A. 31-32. The reason given by

the court below is the fact that appellee was time barred.

R.A. 32, n. 4. An equally valid reason, as noted above,

is that appellee’s innocence would not constitute a defense

as the statute has been interpreted and applied by the state

courts.

Appellants also give an interpretation to the term

‘deprivation’? different from that given by this Court.

The argument is embodied in the statement:

‘And it is therefore impossible for the seizure of

the yacht to have violated Pearson’s rights under the

due process clause.’’

Appellants’ Brief, p. 11. (emphasis in original).

The contention is that the district court’s finding of depri-

vation from the date of seizure is erroneous. Appellants’

Brief, P. 10. This contention is based on an interpretation

9

of ‘‘deprivation’’ as equivalent to ‘‘permanent taking’’.

That interpretation was specifically rejected in Fuentes v.

Shevin, supra.

‘‘While the length and consequent severity of a

deprivation may be another factor to weigh in de-

termining the appropriate form of hearing, it is not

decisive of the basic right to a prior hearing of some

kind.’’ 407 U.S. at

The possibility of recovery through a post-seizure hear-

ing has not saved similar procedures in cases before this

Court. Fuentes v. Shevin, 407 U.S. 67 (1972) ; Goldberg v.

Kelly, 397 U.S. 254 (1970) ; Armstrong v. Monzo, 380 U.S.

545 (1965). Even that possibility did not exist here since

appellee simply was accorded no defense to seizure and

forfeiture.

The attempt to defend the statutory scheme by equating

the seizure in the forfeiture proceeding to seizure under

a search warrant is treated below. However, the suggestion

that seizure without notice is essential to law enforcement

requires analysis. As the court below pointed out, the

seizure of the yacht in this case took place on July 11, 1972,

while the act for which it was forfeited took place on

May 6, 1972. R.A. p. 38. The relationship between the

seizure and law enforcement is difficult to understand in

these circumstances. This is not the case of a search and

seizure immediately contemporaneous with an arrest, as in

Chambers v. Maroney, 399 U.S. 42 (1970). As the Court

stated the norm there:

~~

‘‘For constitutional purposes, we see no difference

between on the one hand seizing and holding a car

before presenting the probable cause issue to a magis-

trate and on the other hand carrying out an immediate

19

search without a warrant. Given probable cause to

search, either course is reasonable under the Fourth

Amendment.”’ 399 U.S. at 52.

In the case at bar, neither alternative was followed since

the seizure was not incidental to a search based on probable

cause for the purpose of uncovering evidence. The ‘‘exigent

circumstances’’ which might serve as a sufficient authoriz-

ation for a search based on the judgment of the police as to

probable cause, Chambers v. Maroney, supra, 399 U.S. at

51, did not exist on July 11, 1972, when seizure was effected.

The purpose of seizure here was solely for forfeiture at

the time it was effected, and no law enforcement objective

existed.

In neither United States v. Troiano, 365 F.2d 416 (3 Cir.

1966), certiorari denied 385 U.S. 958 (1966); nor in Burge

v. United States, 342 U.S..408 (9 Cir. 1965), certiorart

denied 382 U.S. 829 (1965), cited by appellants, was the

issue of seizure and forfeiture the point of decision. In both

cases objection was raised to admission of the fruits of a

search in the criminal trial of the defendant. In both cases

the seizure was contemporaneous with the arrest. While

it is true that in Burge, supra, the search occurred some

seven days after the seizure, the Court of Appeals found

the search reasonable since the vehicle was in the lawful

custody of the United States from the time of seizure until

the search. 342 F.2d at 414.

The issue here is whether the seizure was permissible.

The probable cause requirement plays no part in that

determination in the circumstances of this case since none

of the justifying conditions for action without a warrant

or other legal process existed. Chambers v. Maroney, supra,

399 U.S. at 51. Nor was this one of the truly unusual

situations in which this Court has allowed outright seizure

without opportunity for a prior hearing. Fuentes v. Shevin,

supra, 407 U.S. at 90-92.

11

C. Seizure Without Prior Determination Of Probable

Cause Is Violative Of The Fourth Amendment.

In their attempt to avoid the requirement of a prior

hearing, appellants argue that the ‘‘probable cause’’ re-

quirement of the Fourth Amendment is applicable to

seizures in forfeiture proceedings. Appellants’ Brief, p. 12.

This contention was neither raised nor considered in the

court below, and therefore should not be considered on

appeal. Point II, infra. The factual record is insufficient

to show that the Fourth Amendment standards which they

contend are controlling were in fact met in this case by

appellants. The burden is on those who seek exemption

from the constitutional mandate to show that the exigencies

of the situation made the course followed imperative.

McDonald v. United States, 335 U.S. 451, 456 (1948).

The argument fails on this’ record. The reasoning is

based on the assumption that once an officer of the law has

‘probable cause’’, arrest, seizure and search follow without

more. That is not the rule as formulated by this Court.

Appellants have not met the standard which they now

set for themselves. Assuming that the ‘‘probable cause’’

requirement for seizure is the same as for search, ‘‘ * * ®

searches conducted outside the judicial process, without

prior approval by judge or magistrate, are per se unreason-

able under the Fourth Amendment—subject only to a few

specifically established and well-delineated exceptions.”’

Katz v. United States, 389 U.S. 347, 357 (1967). There is

no suggestion of approval by a judge or magistrate in this

case, and the statutes in question provide for none. The

‘thigh government official’ (Appellants’ Brief, p. 12) who

authorized seizure was the Police Superintendent. R.A. 23.

The procedure is fundamentally indistinguishable from

that found constitutionally inadequate in Coolidge v. New

Hampshire, 403 U.S. 443, 450 (1971).

12

A search without a warrant can be justified as an incident

of an arrest, but such search can extend only to the

arrestee’s person and the area within his immediate control

—construing that phrase to mean the area from within

which he might gain possession of a weapon or destructible

evidence. Chimel v. California, 395 U.S. 752, 763 (1969).

The justifications for the rule allowing contemporaneous

searches are absent where the search is remote in time

or place from the arrest. Preston v. United States, 376 U.S.

364, 367 (1964). The ‘‘plain view’’ doctrine which permits

a warrantless seizure is limited to cases where it is imme-

diately apparent to the police that they have evidence

before them. "be doctrine may not be used to extend a

general exploratory search (and seizure) from one object

to another until something incriminating at last emerges,

and is grounded on an otherwise lawful search in progress.

Coolidge v. New Hampshire, supra, 403 U.S. at 466-467.

It is true that a search of a ship, motor boat, wagon, or

automobile for contraband goods is permitted where it is

not practicable to secure a warrant, because the vehicle can

be quickly moved out of the locality or jurisdiction in which

the warrant must be sought. Carroll v. United States, 267

U.S. 132, 153 (1925). However, the record here is barren

of any indication of such purpose, and on the contrary,

indicatgs the seizure was for the purpose of forfeiture alone.

This Court has recently reaffirmed the principle that no

amount of probable cause can justify a warrantless search

or seizure absent ‘‘exigent cireumstances.’’ Coolidge v.

New Hampshire, supra, 403 U.S. at 468. Appellants argue

that the ‘‘probable cause’’ doctrine is applicable to the

present seizure. The burden is upon them to establish the

exigent circumstances constituting an exception to the

general principle. No effort to discharge that burden was

made in the court below, appellants having rested there on

the facial constitutionality of the statutes under consider-

13

ation. The statutes do not require, and the Supreme Court

of Puerto Rico has not imposed, a requirement of probable

cause as mandated by the Fourth Amendment. The determi-

nation by officers other than judges or magistrates, even if

made, is constitutionally inadequate. Under the interpre-

tation most favorable to them, appellants cannot legalize

the present seizure. Since this seizure is permitted by

statute, the statutes are overly broad and invalid.’

The result is the same whether the Fourth Amendment

or the Fifth Amendment is applied, and the holding of the

court below was correct.

II. Tuere Is No Eviwence On Tue Recorp Upon Wuaicu

To ConstperR On AppeaL Derenses Nort Rarsep Be-

LOW.

Appellants assert on appeal certain defenses and issues

, which were never pleaded or raised in the court below.

Error is charged by them on the grounds that the district

court should have considered such defenses and issues in

order to avoid reaching the constitutional issues. The mat-

ters now asserted are: |

(a) That the ‘‘probable cause’’ requirement of the

Fourth Amendment rather than the prior hearing

requirement of the due process clause is applic-

able to seizures in forfeiture proceedings: (Ap-

pellants’ Brief, p. 12). ,

3 The record of this case, contrary to appellants’ footnote 4 at

page 12 of their brief, establishes only that the lessee of the seized

yacht was accused of using the yacht some two months prior to

seizure for conveying, transporting, carrying and transferring a

narcotic drug known as “marijuana”, R.A. 25. There is no evidence

on the record of such use, or any other unlawful use on the date of

seizure which would justify a finding of probable cause. The mari-

huana was discovered on the yacht on May 6, 1972, and the record

discloses no violation other than possession. Appellants’ Brief, p. 4.

14

(b) That Pearson lacked ‘‘standing’’ to complain

because under Section 1722 it is time barred.

(Appellants’ Brief, p. 14-15).

(c) That Pearson suffered no injury or loss which

must be compensated. (Appellants’ Brief, p.

20). .

(d) That Pearson hasjsuffered no loss because there

might be hull insurance covering the loss. (Ap-

pellants’ Brief, p. 20). .

(e) That Pearson is limited to seeking only those re-

medies afforded under contract. (Appellants’

Brief, p. 21). .

(f) That Pearson’s loss was due to its negligenee

in failing to register its title with the Ports Au-

thority of Puerto Rico. (Appellants’ Brief, p.

21).

Except for the first point listed, which involves a ques-

tion of law and is discussed in Part I (C) of appellee’s

Argument, supra, p. 11, 12; the matters involved de-

pend on facts and circumstances not before this Court.

No presentation was made or attempted of those facts in the

court below. This absence of facts and evidence necessary

for judicial adjudication of the issues is due solely and ex-

clusively to appellants’ failure to timely raise the points

and make such offer of proof as may have been required.

This failure prevented the district court from consider-

ing the points now urged on appeal and from making ade-

quate findings of fact and conclusions based thereon, so

essential to their consideration on \appeal. The record on

appeal, therefore, lacks the elements needed by this Court

in order to examine the error alleged, particularly those in

15

parts II (A) and (D) of appellants’ argument. a: eae

Brief pp. 14-15 and 20-22.

Sufficient opportunity existed below to preserve those

matters for appeal by means of an adequate record. Ap-

pellants do not contend having been denied that oppor-

tunity. Neither do they claim to have been prevented from

presenting those points by arbitrary, capricious or impro-

per conduct of the trial judges. The record only discloses

that the points and issues were simply not raised below

nor relied on.

The assertions of these defenses for the first time on

appeal comes as a complete surprise to appellee. Assum-

ing, arguendo, their merit; at this stage, it is not possible

for this Court to adjudicate those issues without a full

evidentiary hearing in which evidence may be adduced by

the parties in support of their respective contentions. Ap-

pellants’ argument takes for granted, by assumption na-

turally, that the record includes the evidence and findings

and conclusion of a trial court necessary for consideration

of the point urged on appeal. It would indeed be disadvan-

tageous to the appellee if this court were to consider those

points, without affording an opportunity to explain or re-

but by proof or otherwise, such things as the fact that an

injury and loss occurred, that hull insurance does not cover

forfeitures, that no adequate contractual remedy exists,

especially since the primary security was the vessel itself, or

that the failure to register was not negligence in this eee

because of the customs and usages of maritime commerce

of not registering bareboat charters such as this one. Trial

by argument on appeal is not a substitute for trial on the

merits in the fact finding tribunal.

This Court, in Hormel v. Helvering, 312 U.S. 552, (1941),

16

expressed the rule as to review of issues not raised be-

low:

‘‘Ordinarily an appellate court does not give con-

sideration to issues not raised below. For our proce-

dural scheme contemplates that parties shall come to

issue in the trial forum vested with authority to deter-

mine questions of fact. This is essential in order that

parties may have the opportunity to offer all evidence

they believe relevant to the issues which the trial tri-

bunal is alone competent to decide; it is equally es-

sential in order that litigants may not be surprised on

appeal by final decisions there of issues upon which

they have had no opportunity to introduce evidence’’.

312 U.S. at 556.

This rule has been subsequently applied in United States v.

New York Telephone Co., 326 U.S. 638, 650-651, n. 18

(1946) ; Estate of Donelly, 397 U.S. 286, 295, n. 5 (1970).

The principle is of even greater applicability in a case

such as this where governmental action has deprived an

individual of property whose value has been stipulated to be

$19,800. The reasonableness, if any, of appellants’ action

depends on the facts, and it was precisely the position ad-

opted by appellants in the fact finding forum that pre-

cluded introduction of evidence and findings of fact on

which to base their untimely arguments here.

Appellants may not now blame the district court for

their own failure.

Conclusion

The constitutionality of the statutes involved was cor-

rectly decided by the district court according to the prin-

ciples underlying the decisions of United States v. United

17

States Coin and Currency, supra, and Fuentes v. She-

vin, supra. The decision of the court below should, there-

fore, be affirmed.

Respectfully submitted,

Gustavo A. GELPI

P.O. Box 2407

Old San Juan,

Puerto Rico 00903

Of Counsel:

NacHMaAN, FELpstein & GELPI

P. O. Box 2407

Old San Juan, Puerto Rico 00903

18

APPENDIX I

United States Constitution

AMENDMENT IV—SEARCHES AND SEIZURES

The right of the people to be secure in their persons,

houses, papers, and effects, against unreasonable searches

and seizures, shall not be violated, and no Warrants shall

issue, but upon probable cause, supported by Oath or af-

firmation, and particularly deseribing the place to be

searched, and the persons or things to be seized.

AMENDMENT V—CapiTAL Crimes; DouBLE J EOPAR-

py; SELF-INCRIMINATION ; DuE Process; JUST

ComMPENSATION For PROPERTY

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indictment

of a Grand Jury, except in cases arising in the land or na-

val forces, or in the Militia, when in actual service in time

of War or public danger; nor shall any person be subject

for the same offence to be twice put in jeopardy of life or

limb; nor shall be compelled in any criminal case to be a

witness against himself, nor be deprived of life, liberty, or

property, without due process of law; nor shall private

property be taken for public use, without just compen-

sation,

24 L.P.R.A. § 2512. Forfeitures

(a) The following shall be subject to forfeiture to the

Commonwealth of Puerto Rico:

(4) All conveyances, including aircraft, vehicles,

mount or vessels, which are used, or are intended for

use, to transport, or in any manner to facilitate the

transportation, sale, receipt, possession, or conceal-

ment of property described in clauses (1) and (2)

of this subsection;

19

(b) Any property subject to forfeiture under clause (4)

of subsection (a) of this section shall be seized by pro-

cess issued pursuant to Act No. 39, of June 4, 1960, as

amended, known as the Uniform Vehicle, Mount, Vessel and

Plane Seizure Act, sections 1721 and 1722 of Title 34.

34 L.P.R.A. § 1721. Short title

This chapter shall be known as the ‘‘Uniform Vehicle,

Mount, Vessel and Plane Seizure Act.’’—June 4, 1960,

No. 39, p. 66, § 1, eff. June 4, 1960.

§ 1722. Procedure

Whenever any vehicle, mount, or other vessel or plane is

seized pursuant to the provisions of Act No. 6 of June

30, 1936, Act No. 220 of May 15, 1948, Act No. 17 of

January 19, 1951, Act No. 48 of June 18, 1959 and/or Act

No. 2 of January 20, 1956, such seizure shall be conducted

as follows:

(a) -The proceedings shall be begun by the seizure of

the property by the Secretary of Justice, the Secretary of

the Treasury or the Police Superintendent, through their

delegates, policemen or other peace officers. The officer

under whose authority the action is taken shall serve notice

on the owner of the property seized or the person in charge

thereof or any person having any known right or interest

therein, of the seizure and of the appraisal of the proper-

ties so seized, said notice to be served in an authentic man-

ner, within ten (10) days following such seizure and such

notice shall be understood to have been served upon the

mailing thereof with return receipt requested. The owners,

persons in charge, and other persons having a known in-

terest in the property so seized may challenge the confis-

cation within the fifteen (15) days following the service of

the notice on them, through a complaint against the officer

under whose authority the confiscation has been made, on

20

whom notice shall be served, and which complaint shall

be filed in the Part of the Superior Court corresponding

to the place where the seizure was made and shall be heard

without subjection to docket. All questions that may arise

shall be decided and all other proceedings shall be conducted

as in an ordinary civil action. Against the judgment entered

no remedy shall lie other than a certiorari before the Sup-

reme Court, limited to’ issues of law. The filing of such

complaint within the period herein established shall be

considered a jurisdictional prerequisite for the availing of

the action herein authorized.

(b) Every vehicle, mount, or any vessel or plane so

seized shall be appraised as soon as taken possession of

by the officer under whose authority the seizure took place,

or by his delegate, with the exception of motor vehicles,

which shall be placed under the custody of the Office of

Transportation of the Commonwealth of Puerto Rico, which

shall appraise same immediately upon receipt thereof.

In the event of a judicial challenge of the seizure, the

court shall, upon request of the plaintiff and after hearing

the parties, determine the reasonableness of the appraisal

as an incident of the challenge.

Within ten (10) days after the filing of the challenge,

the plaintiff shall have the right to give bond in favor of

the Commonwealth of Puerto Rico before the pertinent

court’s clerk to the satisfaction of the court, for the amount

of the assessed value of the seized property, which bond

may be in legal tender, by certified check, hypothecary de-

bentures, or by insurance companies. Upon the acceptance

of the bond, the court shall direct that the property be

returned to the owner thereof. In such case, the provisions

of the following paragraphs (c), (d) and (e) shall not ap-

ply.

When bond is accepted the subsequent substitution of

Ww

21

the seized property in lieu of the bond shall not be permit-

ted, said bond to answer for the seizure if the lawful-

ness of the latter is upheld, and the court shall provide in

the resolution issued to that effect, for the summary forfei-

ture execution of said bond by the clerk of the court and

for the covering of such bond into the general funds of

the Government of Puerto Rico in case it may be in legal

tender or by certified check; the hypothecary debentures or

debentures of insurance companies shall be transmitted by

the pertinent clerk of the court to the Secretary of Justice

for execution.

(c) After fifteen (15) days have elapsed since service

of notice of the seizure without the person or persons with

interest in the property. seized have filed the correspond-

ing challenge, or after twenty-five (25) days have elapsed

since service of notice of the seizure without the court’s

having directed that the seized property be returned on

account of the bond to that effect having been given, the of-

ficer under whose authority the seizure took place, the

delegate thereof, or the Office of Transportation, as the case

may be, may provide for the sale at auction of the seized

property, or may set the same aside for official use of the

Government of Puerto Rico. In case the seized property

cannot be sold at auction or set aside for official use of

the Government, the property may be destroyed by the offi-

cer in charge, setting forth in a minute which he shall draw

up for the purpose, the description of the property, the

reasons for its destruction and the date and place where

it is destroyed, and he shall serve notice with a copy thereof

on the Secretary of Justice.

(d) In case the vehicle, mount, or vessel or plane is sold

at auction, the proceeds from the sale shall be covered into

the general fund of the Government of Puerto Rico, after

deducting and reimbursing expenses incurred.

(e) If the seizure is judicially challenged and the court

22

declares same illegal, the Secretary of the Treasury of

Puerto Rico shall, upon presentation of a certified copy

of the final decision or judgment of the court, pay to the

challenger the amount of the appraisal or the proceeds

from the public auction sale of such property, whichever

sum is the highest, plus interest thereon at the rate of

6% per annum, counting from the date of the seizure.—

June 4, 1960, No. 39, p. 66, § 2; Sept. 1, 1961, No. 10, P.

348, § 1, eff. Sept. 1, 1961.

me