Cohen v. United States

• Decision Date: 07 November 1907
• Docket Number: 63.
• Citation: 157 F. 651
• Parties: COHEN et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

157 F. 651

COHEN et al. v. UNITED STATES.

No. 63.

United States Court of Appeals, Second Circuit.

November 7, 1907

Marx &amp Byrne (M. Feltenstein, on the brief), for plaintiffs in error.

Henry L. Stimson, U.S. Atty., and G. W. Bristol, Asst. U.S. Atty (Julius Henry Cohen, of counsel), for defendant in error.

Before LACOMBE, COXE, and NOYES, Circuit Judges.

NOYES Circuit Judge.

The indictment embraced three counts; but, as the defendants were convicted upon the first count only, it is unnecessary to examine particularly the other counts. This count charged the said defendants, together with Albert Friedman (against whom the indictment was dismissed), with conspiring to commit an offense against the United States, in and by corruptly and fraudulently agreeing together in anticipation of the involuntary bankruptcy of the 'American Wire & Steel Bed Company,' a domestic corporation, to be brought about and accomplished by the said Simon L. Simpson, with the knowledge and connivance of the said other conspirators, to conceal from the trustee in bankruptcy of the said corporation to be thereafter appointed certain property hereinafter mentioned belonging to the estate in bankruptcy of the said 'American Wire & Steel Bed Company.' ' It is then alleged that, as a part of the scheme and conspiracy, it was the purpose of the conspirators to cause said corporation, of which defendant Simpson was president, general manager, and majority stockholder, to commit acts of bankruptcy in order to force the filing of a petition in bankruptcy against it and then to make no opposition to the petition and consent to an adjudication in bankruptcy; that a petition in involuntary bankruptcy was duly filed upon the ground that the corporation was insolvent and had fraudulently concealed its property of the value of $7,000; that defendant Simpson, as president and manager and stockholder of said corporation consented to the appointment of a receiver, and at his instance said corporation was adjudged a bankrupt, and that afterwards a trustee in bankruptcy was appointed. It is further alleged that, to effect the object of said conspiracy, defendant Simpson caused the removal and concealment of certain horses and wagons belonging to the corporation, that he omitted said property from the bankruptcy schedules of said corporation signed by him as its president, and that said property was never turned over to the trustee when appointed, but was concealed from him by the procurement of the defendant Simpson, with the knowledge, consent, and connivance of the other conspirators. To this first count a demurrer was interposed which was overruled by the trial judge, and the first point in the appellant's brief raises the question whether there was error in such action.

The defendants contend that this count charges no offense against the laws of the United States for two reasons: (1) The defendants could not have committed the offense prohibited by the bankruptcy act, and therefore could not be found guilty of conspiracy to commit it. (2) The defendants are charged with conspiring to conceal property in contemplation of bankruptcy, which latter act is not an offense; combining to do an act which is not criminal is not a criminal conspiracy.

Section 5440 of the Revised Statutes as amended by Act May 17, 1879, c. 8, 21 Stat. 4 (U.S. Comp. St. 1901, p. 3676), under which this indictment was found, reads as follows:

'If two or more persons conspire either to commit any offense against the United States or to defraud the United States in any manner or for any purpose, and one or more of such parties do any act to effect the object of the conspiracy all the parties to such conspiracy shall be liable to a penalty of not more than ten thousand dollars or to imprisonment for not more than two years or to both fine and imprisonment in the discretion of the court.'

Subdivision 'B' of section 29 of the bankruptcy act of July 1, 1898 (30 Stat. 554, c. 541 (U.S. Comp. St. 1901, p. 3433)), which the defendants are charged with conspiring to violate, reads as follows:

'A person shall be punished by imprisonment for a period not to exceed two years, upon conviction of the offense of having knowingly and fraudulently concealed while a bankrupt, or after his discharge, from his trustee, any of the property belonging to his estate in bankruptcy.'

The defendants' first contention is that, as no one of them was the bankrupt, no one of them could have violated this provision of the act, and that, if they could not have committed the principal offense, they could not conspire to commit it. In support of this contention they cite the cases of Field v. United States, 137 F. 6, 69 C.C.A. 568 and United States v. Lake (D.C.) 129 F. 499. In the Field Case the Circuit Court of Appeals for the Eighth Circuit held that an officer of a bankrupt corporation was not liable to punishment under section 29b of the bankruptcy law for having fraudulently concealed the property of a corporation from its trustee-- that the present or past bankruptcy of the person accused was an indispensable element of the offense. In the Lake Case the District Court for the Eastern District of Arkansas held that this section of the bankruptcy act must be strictly construed, and does not include officers of a corporation declared a bankrupt. The defendants also cite United States v. Britton, 108 U.S. 192, 2 Sup.Ct. 525, 27 L.Ed. 703, which held that where an act, if committed, would not amount to a crime under some law of the United States, an agreement to perpetrate it could not be punished under the conspiracy section. We are not called upon to dispute the legal principles laid down in these decisions. The difficulty with them in the present case is that they are not applicable. The defendants are not charged with concealing assets as officers of a bankrupt corporation. They are not charged with conspiring that the officers of a bankrupt corporation should conceal its assets. They are charged with conspiring that a bankrupt corporation should conceal its assets. These propositions show the sufficiency of this charge: (1) The corporation-- the bankrupt-- could violate the provision against fraudulently concealing its assets. Its act would be criminal notwithstanding its corporate character would prevent its punishment. See United States v. Van Schaick (C.C.) 134 F. 592. (2) Even if the corporation alone could violate the bankruptcy act, the defendants could conspire that the corporation should violate it, and so be guilty of conspiracy. Although a bankrupt alone can be indicted for violating the bankruptcy act, persons combining with him to violate it may be guilty of conspiracy. United States v. Bayer, 4, Dill. 407, Fed. Cas. No. 14,547. It is immaterial that the corporation was not indicted for conspiracy, or whether it could be indicted. Failure to prosecute all conspirators does not prevent the prosecution of a part of them. United States v. Miller, 3 Hughes, 553, Fed. Cas. No. 15,774; People v. Richards, 67 Cal. 412, 7 P. 828, 56 Am.Rep. 716; People v. Mather, 4 Wend. (N.Y.) 229, 21 Am.Dec. 122. ...