Hamburg-American Steam Packet Co. v. United States

• Decision Date: 10 January 1918
• Docket Number: 27.
• Citation: 250 F. 747
• Parties: HAMBURG-AMERICAN STEAM PACKET CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

250 F. 747

HAMBURG-AMERICAN STEAM PACKET CO. v. UNITED STATES.

No. 27.

United States Court of Appeals, Second Circuit.

January 10, 1918

[Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted]

The plaintiffs in error are hereinafter referred to as defendants. Hamburg-Amerikanische-Packetfahrt-Acktiengesellschaft is a German corporation engaged in maintaining and operating steamship lines throughout the waters of the globe. At the time of the trial Karl Bunz was the managing director of the above company for the United States. Among other positions he has occupied he has been German consul in Chicago, and from 1899 until 1908 consul general in New York. He then became German minister to Mexico, and still later was one of the counsel for his government before the tribunal at the Hague in the Venezuela arbitration. And at one time he was one of the controllers of an international board which managed the finances of Turkey. George Kotter was superintending engineer of the Hamburg-American Line, had been employed by that company for 26 years, and has been a resident of the United States for 9 years. Adolph Hachmeister had been in the service of the same company since 1884, and during the last 15 years had been its purchasing agent. Joseph Poppenhouse, indicted as 'Walter' Poppenhouse, had been in the service of the company for 7 years and was a second officer of the Line, and engaged in the company's West India trade.

The defendants are all subjects of the German emperor. They are charged in two indictments with having conspired to defraud the United States. The gist of the offenses charged is that by false manifests, filed with the collectors of customs at various ports of the United States, they succeeded in having cleared from the ports where such false manifests were filed certain vessels laden with coal, engine room supplies, and provisions, which were to be transshipped at sea to German warships. It was charged, and so found by the jury, that the manifests were not complete, that they contained false points of destination, that it was never intended that the vessels should reach the points for which they respectively cleared, and that thereby, and by reason of the incomplete manifests, inaccurate and incomplete records were made by the collectors of customs at the ports from which said vessels sailed, and that a consequent fraud was committed upon the United States.

The jury returned a general verdict of guilty against each defendant. The Hamburg-American Company was sentenced to pay a fine of $1. Bunz, Kotter, and Hachmeister were sentenced to an imprisonment of one year and a half in the federal prison at Atlanta, Ga. Poppenhouse was sentenced to imprisonment in the same institution for one year and one day. From the judgment rendered, the defendants jointly and severally sued out writs of error, and the matter is thus in this court for review.

It appears that the German government and the Hamburg-American Line, considered by some to have been at that time the greatest ship line in the world, had an understanding some time in the winter of 1914 that the Hamburg-American Line would see that in case of war the German warships, which might be in the northern or southern part of the Atlantic, when in need of coal or provisions, would have them supplied in such quantities and at such times and places as should be indicated, and that the German government would communicate with Karl Bunz, one of the defendants, and the general representative of the Line in this country, with headquarters in New York City. On July 31, 1914, Bunz received a cable from his home office in Hamburg and at once conferred with Kotter, another defendant, as to securing neutral steamers to carry coal. Upon Kotter's suggestion it was agreed to call in one Gans, since deceased, who was asked whether he had any neutral steamers that would be available for their purposes, and he agreed to furnish nine such vessels, which Bunz agreed to charter. As he could not get from Gans all the steamers he needed, Bunz took three additional vessels from among those owned by the German-American Line. Gans brought the charter parties to Bunz, who signed them. In the case of one or two of the ships which Gans furnished the owners were fearful of war risks and wanted bonds of indemnity, and Bunz signed the bonds. He testified that he did this very unwillingly. 'I did it,' he said, 'very unwillingly. I did not like it at all, but I did it. I had to, because I had no other ships to take. ' The ships having been secured, it was necessary to load them with the coal and other supplies needed, and Bunz intrusted to Kotter the responsibility of obtaining and loading the coal. Hachmeister, another defendant, agreed to become responsible in like manner for necessary provisions and supplies. The German government from time to time cabled Bunz where his vessels could meet the German warships, and this information Bunz communicated to Kotter. Bunz testified that either Kotter or Gans called his attention to the fact that, in order to get the ships out of the harbor of New York and start them on their voyage, it would be necessary to have a port of destination agreed upon. They therefore got out their maps and found what was a convenient port of destination for those points on the Atlantic where the ships were to meet. 'So that,' as Bunz testified, 'the ships we sent out would be on their way to those ports when met, if they fortunately were, by the German ships out there at sea, to our best judgment. * * * I intended that they should land and dispose of their cargoes there (the designated ports of destination), unless in the meantime my government had requisitioned them upon the high seas. ' There was some talk as to clearing the ships, and when that question was raised Bunz said that 'it certainly ought not to be done by the Hamburg-American Line. ' He believed 'that, if we cleared the ships in our name, they would be captured or destroyed by our enemies, and that they would not get very far before they were captured or destroyed.'

On the cross-examination of Bunz questions were asked and answered as follows: 'Q. Mr. Bunz, as a matter of fact, you intended to send those boats loaded to meet the German warships, no matter what happened, didn't you? A. To meet the German warships or any merchant vessel that was in need of something of that kind. Q. It did not make any difference what happened, you wanted those boats to go there and reprovision and recoal those ships didn't you? A. That was my intention, if I could, to send them to those boats. ' He also testified that, having met and reprovisioned and recoaled the German vessels, it was his intention that the ships which had thus unloaded their cargoes should proceed empty to the ports of destination for which they were cleared.

The defendant Kotter testified that, when they sent the ships out, they did not send bills of lading for the cargo to any one in the ports designated in the clearance papers.

Hachmeister, another defendant, had been, as already stated, the purchasing agent of the Hamburg-American Line for 15 years, and when one of the ships of that Line was about to start on a voyage had ordered provisions and supplies needed for the voyage, sometimes amounting to $50,000 or $60,000 a ship. He admitted on the stand that on July 31, 1914, he had been summoned to Bunz's office, where he met Bunz and Kotter, and was 'told that war had been declared and that we were to perform certain duties. ' Bunz, he said, gave him a list of the provisions and engine room supplies, showing what each ship that was to be sent out would need, telling him 'to buy these articles for the ships as they would be sent. ' 'He (Bunz) told me the ships were going to take coal and provisions and supplies. ' Hachmeister admitted that he bought the provisions and supplies that were put on board the ships. He admitted that the provisions and supplies, amounting to $3,500 or $4,000, which were put on the Thor, did not appear in the shipper's manifest. His explanation of this omission was as follows: 'The brokers who were clearing did not ask me for a list of the provisions. No one told me that provisions had to be listed. I did not believe that it was my duty to give to the brokers who were clearing the ships a list of the provisions and supplies I was putting on board. The matter did not occur to me at all. ' He gave the same explanation concerning like omissions in the manifest of some of the other ships. But on August 7th in the case of the Heina he says he learned for the first time that it was necessary to furnish a list of supplies for the manifest, and that after that he always furnished a correct list. On cross-examination he admitted that he knew that manifests had to be made out for cargoes, and that he had known it for many years, and that he had known for years that every item of cargo had to be made out on a manifest and sent to the custom house; and he explained his earlier statements by saying that he had considered the provisions and supplies he had furnished and not listed as ship's stores, which do not have to be listed. He admitted that he knew from the beginning that what he bought was intended to be delivered to the German ships at sea. He was then asked, 'How could they be ship's stores?' and replied, 'Well, I never gave it a thought.'

Poppenhouse another of the defendants, took the stand in his own defense, and testified that Kotter informed him that he was to go as supercargo on the Berwind, and gave him a letter of introduction to the captain of that vessel, informing the latter that Poppenhouse was to take the vessel to a certain position, which was marked and was about 40 miles north of the...