Frieden v. United States

• Decision Date: 14 April 1925
• Docket Number: No. 2317.,2317.
• Citation: 5 F.2d 556
• Parties: FRIEDEN et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

5 F.2d 556 (1925)

FRIEDEN et al. v. UNITED STATES.

No. 2317.

Circuit Court of Appeals, Fourth Circuit.

April 14, 1925.

Tazewell Taylor, of Norfolk, Va., Robert H. Talley, of Richmond, Va., and S. M. Brandt, of Norfolk, Va. (Ernest S. Merrill and H. A. Sacks, both of Norfolk, Va., on the brief), for plaintiffs in error.

L. S. Parsons, Asst. U. S. Atty., of Norfolk, Va. (Paul W. Kear, U. S. Atty., and Alvah H. Martin, Asst. U. S. Atty., both of Norfolk, Va., on the brief), for the United States.

Before WOODS and WADDILL, Circuit Judges, and McDOWELL, District Judge.

WOODS, Circuit Judge.

The defendants, Harry Frieden, Samuel Frieden, Louis Frieden, Ellis Frieden, and Charles Scher, were convicted on all of the counts of two indictments which were consolidated on trial. Hyman Frieden, indicted with them, was acquitted. One indictment charged the partners Harry Frieden, Samuel Frieden, and Louis Frieden with conspiracy to conceal the assets of a partnership known as the Frieden Company, adjudicated bankrupt on December 17, 1923. Ellis Frieden and Charles Scher, two employees of the copartnership, were charged with aiding and abetting the conspiracy. The first count set out a conspiracy in anticipation of bankruptcy; the second count laid the charge after bankruptcy.

Both counts of the other indictment charged the members of the partnership with concealment of assets after bankruptcy, and the other defendants with aiding and abetting the crime.

There was no error in consolidating the indictments: They related to the same transactions; the evidence was practically the same; and separate trials would have been a waste of time. Showalter v. United States, 260 F. 719, 171 C. C. A. 457.

The motion to direct a verdict of acquittal for lack of evidence was without foundation. The evidence of guilt of all the convicted defendants was strong.

On or about April 1, 1923, Harry Frieden, Samuel Frieden, and Louis Frieden, three brothers, formed a copartnership under the name of the Frieden Company. Harry and Samuel Frieden had been associated for some years before that date as partners in the manufacturing business in Waynesboro, Pa., under the firm name of "Cumberland Valley Shirt Manufacturing Company." The ostensible plan of the new partnership was to continue the manufacturing business in Waynesboro and to operate a system of chain stores handling men's furnishing goods in the cities of Norfolk, Richmond, and Roanoke, Va. Ellis Frieden, a son of Louis Frieden, was employed in the firm's Roanoke store, and Charles Scher was manager of one of the Richmond stores. The net worth of the new firm at the commencement of business, according to its statement to a commercial credit agency, was $174,185.52. At first all obligations were paid promptly by the Frieden Company, and thus high credit rating was established. Later, long terms of credit were secured on large orders of goods, and after a while creditors were unable to obtain payment for large bills overdue. In this situation the copartnership and the individuals composing it were thrown into bankruptcy. When a receiver was appointed, he had difficulty in getting the books and records of the bankrupts, and finally was furnished with an incomplete set.

The trustee, Alfred Anderson, testified that after making every fair allowance, which he fully explained to the jury, in favor of the defendants and crediting them with goods on hand at cost prices, the assets appearing from the books and vouchers unaccounted for amounted to $242,660.61. There was no evidence of extraordinary disaster attending the business; none of the defendants charged the others with conversion or breach of trust against the copartnership; nor was there any evidence that any of them made a complaint to the others that the business was going wrong. The inference might well have been drawn by the jury that the partners had failed to show where this very large deficiency of assets had gone, that $242,000 had not been lost in the business, which lasted only 8½ months, that its disappearance was not satisfactorily explained, and that the defendants had by agreement concealed it for their own benefit. This would have been sufficient basis for the conviction of all the copartners without other testimony. But there was much more.

Louis Frieden and Ellis Frieden, his son, were in charge of the Roanoke store. Sallis, an employee of the Roanoke store, testified that large quantities of goods were shipped from that store under fictitious names, and to fictitious consignees, and that the bills of lading were in the handwriting of Ellis Frieden. B. Miller testified...