Blumenthal v. United States

• Decision Date: 28 February 1947
• Docket Number: No. 11232.,11232.
• Citation: 158 F.2d 883
• Parties: BLUMENTHAL et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

158 F.2d 883 (1946)

BLUMENTHAL et al. v. UNITED STATES.

No. 11232.

Circuit Court of Appeals, Ninth Circuit.

December 16, 1946.

Rehearing Denied February 28, 1947.

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Morris Oppenheim, of San Francisco, Cal., for appellant Blumenthal.

George Olshausen, of San Francisco, Cal., for appellant Abel.

Arthur B. Dunne and Walter H. Duane, both of San Francisco, Cal., for appellant Goldsmith.

Samuel S. Weiss, in pro. per.

Leo R. Friedman, of San Francisco, Cal., for appellant Feigenbaum.

Frank J. Hennessy, U. S. Atty., and Reynold H. Colvin, Asst. U. S. Atty., both of San Francisco, Cal., for appellee.

Before DENMAN, HEALY, and BONE, Circuit Judges.

Rehearing Denied February 28, 1947. See 158 F.2d 762.

BONE, Circuit Judge.

Appellants appeal from a conviction before a jury upon an indictment charging them, in one count, with the crime of conspiring to violate the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq., and Regulations by wilfully selling whisky at over-ceiling prices. Omitting formalities, the indictment reads as follows:

"That Harry Blumenthal, Louis Abel, Lawrence B. Goldsmith, Samuel S. Weiss, and Albert Feigenbaum, (hereinafter called `said defendants') at a time and place to said Grand Jurors unknown, did knowingly, wilfully, unlawfully, corruptly, and feloniously conspire, combine, confederate, arrange, and agree together and with divers other persons, whose names are to the Grand Jurors unknown, to commit offenses against the United States of America and the laws thereof, the offenses being to knowingly, wilfully and unlawfully sell at wholesale certain distilled spirits, to-wit, Old Mr. Boston Rocking Chair Whiskey, in excess of and higher than the maximum price established by law, said maximum price at wholesale then and there being not in excess of $25.27 per case of twelve bottles, each of said twelve bottles containing one-fifth of one gallon of said Old Mr. Boston Rocking Chair Whiskey, in violation of Section 902(a), 904(a), and 925(b) of Title 50 U.S.C.A.Appendix, and Office of Price Administration Regulations: Maximum Price Regulation 193 and Maximum Price Regulation 445.

"And the said Grand Jurors, upon their oaths aforesaid, do further charge and present: That in pursuance of, and in furtherance of, in execution of, and for the purpose of carrying out, and to effect the object and design and purposes of said conspiracy, combination, confederation, and agreement aforesaid, the hereinafter named defendants did, at the times hereinafter set forth, commit the following overt acts within the Southern Division of the Northern District of California and within the jurisdiction of this Court: followed by a recital of alleged overt acts."

Appellants assail this indictment on the ground that a conspiracy or agreement to violate a regulation of the Price Administration is specially punishable under the provisions of the Emergency Price Control Act itself as a misdemeanor and therefore cannot be punished as a felony under the general conspiracy statute. They argue that when Congress provided that it should be unlawful to agree to sell or deliver any commodity in violation of any regulation imposed by the Price Administrator, it thereby made a conspiracy to violate a price regulation punishable specially and exclusively as provided in Section 925(b) of the Price Control Act and, therefore, no prosecution would lie under the general conspiracy statute, Title 18 U.S.C.A. § 88. It is contended that it was the purpose of Congress to do away, in prosecutions under the Price Control Act, with the harsh rule that a conspiracy to commit a misdemeanor is a felony.

The contention lacks merit. The manifest purpose of Congress in enacting the Emergency Price Control Act was to compel compliance with price regulations authorized under the statute. As pointed out in Kraus & Bros. v. United States, 327 U.S. 614, 620, 621, 66 S.Ct. 705, criminal liability attaches to any one who wilfully sells commodities in violation of a regulation or order of the Price Administrator establishing maximum prices. Congress forbade and made punishable an agreement to violate the act, and from this appellants conclude that the conspiracy statute (Title 18 U.S.C.A. § 88) was impliedly repealed or superseded by Congress to the extent that it does not apply to conspiracies to violate the Emergency Price Control Act and regulations promulgated thereunder.

We do not agree with this contention. The conspiracy statute includes as a necessary element the commission of an overt act. There is no mention of the overt act in pursuance of the agreement alluded to in the Emergency Price Control Act and we conclude that there is a clear and striking distinction between the mere agreement punishable as a misdemeanor, and the agreement plus an overt act within the purview of the felony statute.

Prosecutions based upon indictments for conspiracies to violate the Emergency Price Control Act have been upheld in Newman v. United States, 9 Cir., 156 F.2d 8; Old Monastery Co. v. United States, 4 Cir., 147 F.2d 905; United States v. Renken, D.C.S.C., 1944, 55 F.Supp. 1; United States v. Krupnick, D.C.N.J., 1943, 51 F.Supp. 982; United States v. Armour & Co. of Delaware, D.C.Mass., 1943, 50 F.Supp. 347. Furthermore, there has been a long and consistent recognition that the commission of the substantive offense and a conspiracy to commit it are separate and distinct offenses, and the power of Congress to separate the two and to affix to each a different penalty is well established. A conspiracy to commit a crime is a different offense from the crime that is the object of the conspiracy. See Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180; American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125. See also Old Monastery Co. v. United States, supra.

On principle and from these authorities, we hold that a conspiracy to violate the Emergency Price Control Act and regulations promulgated thereunder is indictable as a separate and distinct offense.

There was evidence in this case from which the jury could properly have inferred beyond a reasonable doubt: — That Goldsmith operated a wholesale liquor business in San Francisco, California known as the Francisco Distributing Company (hereafter called Francisco) and Weiss was his sales manager; that in December of 1943, two carloads of whisky (the whisky referred to in the indictment) were received and recorded as purchased by Francisco though exactly who owned the whisky was not established; that this whisky was cased in cases of twelve bottles, each bottle containing one-fifth gallon; that during the months of December of 1943 and January of 1944, and while this whisky was held by Francisco, Abel, Blumenthal and Feigenbaum personally made sales therefrom of cases of whisky at wholesale to various persons, such sales being in lots of from 25 to 200 cases; that when such sales were made, the facilities of Francisco were thereupon used by them for the purpose of clearing such sales through the books of Francisco with the knowledge and cooperation of Goldsmith and Weiss; that for this particular service Goldsmith and Weiss received two dollars per case which they divided between themselves; that upon the making of such sales by Abel, Blumenthal and Feigenbaum, the whisky was invoiced and billed to each of their customers by Francisco and delivery effected to these customers through Francisco; that such invoices were required by state law to be issued from a legitimate wholesale liquor firm so that their records, as purchasers of whisky, could be properly kept to comply with this law; that Abel, Blumenthal and Feigenbaum were not engaged in business as wholesale liquor dealers and none of them held a basic permit as a wholesaler of liquor; that, Abel, Blumenthal and Feigenbaum shared in a common access to the stock or "pool" of whisky so held by Francisco, and each of them was free to and did make sales therefrom to liquor vendors and the liquor so sold by them was thereafter delivered to their customers through Francisco; that in each of these sales the liquor was billed to customers of Abel, Blumenthal and Feigenbaum by Francisco at $24.50 per case, and checks for this amount were given to Francisco; that in each sale so made by Abel, Blumenthal and Feigenbaum, each of them demanded and received a side-money payment from the customer to whom they sold whisky, which side-money payment, when added to the ostensible sale price of $24.50 per case, brought the price to these customers of Abel, Blumenthal and Feigenbaum within the range $55-$65 per case; that when the checks to Francisco were cleared through its books and the side-money payments collected by Abel, Blumenthal and Feigenbaum, the whisky was delivered by Francisco to these purchasers; that under the Emergency Price Control Act and applicable regulations the authorized wholesale ceiling price on this whisky was $25.27 per case at the time these sales were made in the months of December of 1943 and January of 1944.

Appellants vigorously contend that while certain overt acts were shown by the evidence, which might have indicated isolated offenses by individual appellants and punishable as such under the Price Control Act the evidence was insufficient to show a conspiracy on the part of appellants to commit such offenses. They argue that even though the evidence may have established to the satisfaction of the jury, beyond a reasonable doubt, the truth of the facts as outlined above, nevertheless this proof falls short of creating the necessary inference of guilt legally sufficient to link appellants together as conspirators who had agreed together on a common plan or purpose to do the things shown by the evidence and thereafter engaged in acts designed and intended to carry this plan into execution; that this evidence failed to show (except in some instances) that appellants were acquainted...