Hamilton v. United States, 4987.

• Citation: 219 F.2d 364
• Decision Date: 04 February 1955
• Docket Number: No. 4987.,4987.
• Parties: Chester S. HAMILTON, Appellant, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

219 F.2d 364 (1955)

Chester S. HAMILTON, Appellant, v. UNITED STATES of America, Appellee.

No. 4987.

United States Court of Appeals, Tenth Circuit.

February 4, 1955.

John S. Boyden, Salt Lake City, Utah, for appellant.

A. Pratt Kesler, U. S. Atty., Salt Lake City, Utah, for appellee.

Before PHILLIPS, Chief Judge, BRATTON, Circuit Judge, and VAUGHT, District Judge.

VAUGHT, District Judge.

The sole question here is whether or not the trial judge abused his discretion in vacating the probation of appellant.

The appellant, Chester S. Hamilton, owned and operated a drugstore in Brigham City, Utah, and also owned a 51 per cent partnership interest with Glade R. Day in a drugstore known as the Clearfield Pharmacy, located approximately 35 miles from Brigham City. The Clearfield Pharmacy (hereinafter referred to as the Pharmacy), was managed entirely by Day. Hamilton made infrequent visits to the Pharmacy but aside from his ownership, he exercised no control over its management.

In November, 1949, grand jury indictments were returned against Hamilton and Day charging each with evading and attempting to defeat a large part of the income and victory taxes due and owing by them to the United States of America for the calendar year 1943. The indictment against Hamilton contained three counts. On the 29th of November, 1949, Hamilton entered a plea of guilty on counts two and three and a plea of not guilty on count one, and thereafter on December 23, 1949, it was ordered that Hamilton be placed on probation for a period of five years. On the 27th day of December, count one was dismissed.

Following their indictment, Hamilton and Day procured the services of a competent auditor who took charge of the bookkeeping in the Pharmacy and made monthly reports to Hamilton, and apparently all of the information Hamilton had regarding the financial conduct and management of the Pharmacy was through these reports.

On April 14, 1954, an information, Cr. 51-54, was filed in the United States District Court for the District of Utah, charging the Pharmacy with violation of Sections 331 and 333, U.S.Code, Title 21, in six counts, and charging Glade R. Day with violation of the same sections in five counts. All of said counts were based upon sales of drugs within the purview of said sections without a prescription therefor from a practitioner licensed to administer said drugs, which resulted in said drugs being misbranded while held for sale in violation of said sections. On April 30, 1954, Day entered a plea of guilty on behalf of the Pharmacy to the six counts of the information, and a plea of guilty on behalf of himself on five counts. Thereafter, on June 7, 1954, Day appeared in court with counsel and the Pharmacy was sentenced to pay a fine of $1,000.00 on each of six counts, or a total of $6,000.00, and Day was sentenced to one year on each count to run consecutively. Sentence was suspended and the defendant placed on probation for five years. In the criminal income tax case, No. 15913, Day's probation therein was revoked by reason of his violation of law in criminal case No. 51-54, and he was sentenced to serve two years imprisonment.

On June 24, 1954, the court on its own motion issued an order directed to appellant, requiring him to appear before the court at ten o'clock the next morning to show cause why his probation should not be revoked. Appellant appeared with his attorney who stated to the court that appellant had no knowledge of the violations of the Pharmacy; that the appellant managed another store at Brigham City; that Day managed the Pharmacy; that appellant was present at the Pharmacy very infrequently; that the profits were determined and divided by a certified public accountant and thereafter appellant received a check for his share of the profits.

On the same occasion the attorney for Day stated in open court:

"Mr. Day has indicated to me that he was fully responsible for the sale of the drugs; that Mr. Hamilton did not know of them; that he was the sole manager; that Mr. Hamilton received 51 percent of the profits. That was the practical extent of his activity in the store: He received 51 percent of the profits and he did make contact infrequently in connection with the operation of the store, but he does not feel that Mr. Hamilton had any knowledge or information concerning these matters * * *." (R. 16)

The resident inspector of the Pure Food and Drugs Administration at Salt Lake City, John C. Akers, informed the court that at the time of their investigation of the Pharmacy they also investigated appellant's store at Brigham City; that they were unsuccessful in making any purchases in Brigham City from Mr. Hamilton; and that they found no reason to charge him with the operation of the Pharmacy. (R. 17)

At the hearing when appellant was placed on probation, the court stated:

"* * * we will put these men on probation for five years, and if they violate the Federal income tax laws during that five years and are brought before the court again on charges of this nature, I will terminate the probation and commit them to a Federal penitentiary. * * * this probation to be five years unless sooner terminated by the court, as the circumstances may justify. * * * My idea in giving you a long probationary period is to provide that period of time during which you will have this additional incentive for complying with the provisions of the revenue laws. You understand that, both of you, do you? That is all." (R. 13-14)

Quoting from the hearing on June 25, 1954:

"Mr. Kesler (U. S. Attorney): The next matter on the calendar, your Honor, is that of Chester S. Hamilton. Mr. Hamilton is here with his counsel. It is an order to show cause why his term of probation should not be revoked.

"The Court: This fellow is a part of this Glade R. Day case. Bring Mr. Day forward too. What we have done is call this man in here because during the terms of his probation his drugstore in which he has 51 percent ownership stands convicted upon a plea of guilty of violation of the Drug Act of the United States.

"Mr. Boyden (attorney for Hamilton): Yes, sir.

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