U.S. v. Grissom
| Decision Date | 20 May 1981 |
| Docket Number | No. 80-3269,80-3269 |
| Citation | 645 F.2d 461 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Joe E. GRISSOM, Defendant-Appellant. . Unit A |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert L. Doyel (Court-appointed), University, Miss., Charles E. Ambrose, Jr., Law Student, Oxford, Miss., for defendant-appellant.
H. M. Ray, U. S. Atty., Alfred E. Moreton, III, Asst. U. S. Atty., Oxford, Miss., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Mississippi.
Before GOLDBERG, GARZA and TATE, Circuit Judges.
In our federalist system of government, pernicious conduct may be punishable under federal law, state law or both sets of laws simultaneously. The structure of our government imposes a duty upon the judiciary to decide not only whether a given course of conduct is illegal, but also, by which sovereign's commands such conduct has been outlawed. Before imposing punishment, a court must determine that conduct which may be universally condemned is, in fact, actually proscribed by the laws of the relevant jurisdiction.
The federal judiciary is thus charged with the responsibility of ensuring that an individual who violates state law is not subject to federal punishment for his wrongdoing, absent proper jury instructions and sufficient proof concerning the existence of each of the elements necessary to constitute a given federal offense. In the present case, we do not feel that the jury was properly instructed on each of the elements necessary to qualify the defendant's deceitful actions as the federal offense charged. Hence, the possibility exists that the defendant was convicted for conduct which, while clearly malevolent and perhaps illegal, did not violate federal law. The possible conversion of a state crime in this case a state misdemeanor into a federal felony offense mandates a reversal of the conviction.
In 1978, defendant Joe Grissom, a soybean farmer, secured four loans from the Farmers Home Administration ("FHA"). He signed a single security agreement for the four loans, which provided that Grissom's farm, equipment and crops would serve as collateral for the loan. The agreement further noted that Grissom would "not abandon the collateral or encumber, conceal, remove, sell or otherwise dispose of it ... without the prior written consent of the secured party."
As a means of repaying the loans, Grissom was required to have the checks received as payment from the sale of soybeans made payable jointly to the FHA and himself. To insure compliance with this requirement, the FHA circulated a list to grain elevators and other potential crop purchasers of all farmers whose crops were pledged as security to the FHA. This list provided notice to the grain dealers of the FHA's outstanding lien on such crops. Therefore, in order to avoid having to subsequently pay the FHA for the mortgaged crops and, thus, having to pay twice for the goods the grain dealers would automatically make their payment checks payable jointly to the farmer and the FHA. Since Joe Grissom, his son Danny, and their partnership Grissom Farms had signed as borrowers for the FHA loan, the FHA list circulated to grain purchasers in 1978 contained all three names.
Between October 21, 1978 and January 4, 1979, Joe Grissom made thirty sales of soybeans totalling over $80,000.00 in the name of his father, Grady Grissom. Since Grady Grissom had not signed as a borrower for any FHA loans, his name did not appear on the FHA list; therefore, the checks received as payment for the beans sold in the name of Grady Grissom were not made payable jointly to Grady Grissom and the FHA.
Although the FHA was quickly notified about the sales in Grady Grissom's name, the agency took no immediate action. The FHA County Supervisor, Woodrow Brown, was aware that Joe Grissom and his father had farmed together for several years and that the younger Grissom had set aside a portion of his farm for his father's support. Moreover, Joe Grissom had continued to repay his debt to the FHA during this period. The testimony at trial indicates that the agency believed it would be repaid in full despite the sale of beans in Grady Grissom's name. Therefore, as of March, 1979, the FHA did not plan to take any action against Joe Grissom. However, when the Grissom soybean cupboard became bare, forcing the defendant to default on his loan payments, the government instituted the criminal action at bar. Grissom was charged with thirty counts of disposing of property mortgaged to the FHA with intent to defraud.
In his discussions with the FHA prior to the filing of criminal charges, at trial, and on appeal, Grissom has openly admitted selling an unusually large quantity of beans in his father's name. 1 However, throughout this period, Grissom has consistently and vehemently maintained that he never intended to defraud the FHA. Grissom has argued that his sole motivation behind the contested sales was to "get even" with his landlord.
According to Grissom, his landlord Sullivan had previously agreed to extend Grissom's farm lease in exchange for the defendant's buying a bulldozer and clearing some land. After Grissom had cleared the land, Sullivan attempted to welch on his part of the bargain and to evict Grissom. After a lengthy and heated dispute, the two sides entered into a "settlement agreement" on October 18, 1978, which provided that Grissom would pay a crop rent equal to one quarter of the proceeds from the sale of beans or $62,500, whichever was greater.
Grissom claims that even after signing the settlement agreement, he felt cheated by Sullivan's prior deceit and decided to "turn the tables" on his landlord. Since the amount of crop rent he would be required to pay, pursuant to the settlement agreement, depended on his crop production, Grissom could greatly decrease his rent by selling large quantities of beans in his father's name. This procedure would ensure that the grain dealers would not, as a matter of course, subtract the crop rent from the proceeds of Grissom's sales. In addition, such sales would decrease the amount of sales attributed to Joe Grissom on the grain elevator records records which were regularly checked by Sullivan to keep track of his rents. Had Grissom's plan been successful, the crop rent payment to his landlord would literally not have amounted to a hill of beans.
Moreover, Grissom has consistently maintained that during the period he sold beans in his father's name, and notwithstanding such sales, he sincerely believed that he owned sufficient crops to satisfy the FHA obligation. The evidence at trial indicates that Grissom had in fact explained his plan for "getting even" with his landlord to the local grain elevator agent, Tom Green, who was a close friend of regional FHA Supervisor Brown. Grissom has consistently maintained, therefore, that he both expected to repay his loan despite the mislabelled sales, and believed that the FHA was informed of, and had no objection to, his mode of settling the dispute with Sullivan. For these reasons, Grissom has consistently asserted that his deceitful actions were not motivated by an intent to defraud the FHA.
The statute under which Grissom was convicted, 18 U.S.C.A. § 658 (West 1976), provides, in pertinent part:
Whoever, with intent to defraud, knowingly conceals, removes, disposes of, or converts to his own use or to that of another, any property mortgaged or pledged to, or held by, ... the Secretary of Agriculture acting through the Farmers' Home Administration ... shall be fined not more than $5,000 or imprisoned not more than five years, or both.
As outlined above, throughout the course of the investigation and litigation of this case, Grissom has openly admitted that he "knowingly disposed of ... property mortgaged ... to ... the Farmer's Home Administration." However, section 658 also requires that such actions be motivated by an "intent to defraud" in order to constitute a violation. At trial, Grissom's counsel argued that the statute's "intent" clause should be read to require proof that Grissom "intended to defraud the government." Thus, Grissom's counsel took the position that if the jury believed that Grissom had acted solely to deceive his landlord, they could not convict him of violating § 658. Both parties had introduced substantial evidence that Grissom's mislabelled sales were motivated by an "intent to defraud" landlord Sullivan; therefore, Grissom's counsel requested the district court to instruct the jury that they could not find a violation of § 658 unless they first found that Grissom intended to defraud the FHA. Grissom's counsel argued that without such an instruction, the jury would be able to conclude that the § 658's "intent to defraud" requirement had been satisfied purely by Grissom's intending to defraud his landlord. Hence, the failure to deliver the instruction would convert the heart of Grissom's defense that he never intended to defraud the FHA but was merely acting to defraud his landlord into the conclusive element of his conviction.
The district judge refused to deliver the requested instruction, choosing instead to charge that Grissom could be found guilty as long as he acted "with intent to defraud." The trial judge explained his decision by expressing his belief that the mere intent of a sharecropper to defraud his landlord, plus the use of crops mortgaged to the FHA to accomplish the wrongful deed, would constitute a federal offense under § 658:
I believe that if the jury believes beyond a reasonable doubt and to a moral certainty that Mr. Grissom converted this property with intent to defraud anyone that he would be guilty of a crime under this section, whether it be the Farmers Home Administration, or Mr. Sullivan (the...
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