People v. Glubo

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: CONWAY; FULD; DESMOND, DYE, FROESSEL and VAN VOORHIS, JJ., concur with CONWAY; FULD, J., dissents in an opinion in which BURKE
• Citation: People v. Glubo, 186 N.Y.S.2d 26, 5 N.Y.2d 461, 158 N.E.2d 699 (N.Y. 1959)
• Decision Date: 09 April 1959
• Parties: , 158 N.E.2d 699 PEOPLE of the State of New York, Respondent, v. Aaron GLUBO, Appellant. PEOPLE of the State of New York Respondent, v. Seymour EXELBERTH, Appellant. PEOPLE of the State of New York, Respondent, v. Robert B. EPSTEIN, Appellant. PEOPLE of the State of New York, Respondent, v. ATLANTIC SEWING STORES, INC., Appellant.

Page 26

186 N.Y.S.2d 26

5 N.Y.2d 461, 158 N.E.2d 699

PEOPLE of the State of New York, Respondent, v. Aaron GLUBO, Appellant.

PEOPLE of the State of New York Respondent, v. Seymour EXELBERTH, Appellant.

PEOPLE of the State of New York, Respondent, v. Robert B. EPSTEIN, Appellant.

PEOPLE of the State of New York, Respondent, v. ATLANTIC SEWING STORES, INC., Appellant.

Court of Appeals of New York.

April 9, 1959.

Edward H. Levine and Vernon C. Rossner, New York City, for appellants.

Edward S. Silver, Dist. Atty., Brooklyn (Aaron E. Koota, New York City, and William Sonenshine, Brooklyn, of counsel), for respondent.

CONWAY, Chief Judge.

Defendant stand convicted of the crime of conspiracy to commit false advertising over a radio station and in other ways in violation of section 421 of the Penal Law, Consol.Laws, c. 40.

The information filed against them contains two counts.

In the first count, defendants are accused of a conspiracy to commit the crime of violation of section 421 of the Penal Law in that, in the County of Kings, defendants continuously from June, 1953 to December, 1954, with intent to sell and dispose of merchandise, to wit, sewing machines and attachments and appurtenances thereto, offered by them for sale to the public corruptly conspired and agreed to disseminate and place before the public in this State over a radio station and in other ways, advertisements regarding such merchandise; that such advertisements contained assertions, representations and statements of fact which were untrue, deceptive and misleading, and that such advertisements over said radio station were intended to be, and were, heard by the public in Kings County.

As part of the first count, the information recites five overt acts committed by defendants in furtherance of the conspiracy: (1) that on December 7, 1953 defendants entered into a contract with television station WATV for the telecasting of a commercial advertisement prepared by defendants, (2) that in and about the month of November, 1953, defendants instructed an employee to enter fictitious sales in the books and records of defendant Atlantic Sewing Stores, Inc., at $23 a machine, (3) that in or about the month of May, 1954, defendant Glubo instructed a salesman for defendant Atlantic Sewing Stores, Inc., not to sell the sewing machine advertised, under any circumstances, at the advertised price of $29.50, (4) that in or about the month of May, 1954, defendants instructed a salesman in the method of rigging a $29.50 sewing machine so that it would not work for the customer when demonstrated for the purpose of discouraging said customer from purchasing the machine at the advertised price and (5) that in or about the month of July, 1954, defendants' salesman informed a prospective customer in Kings County that the advertised machine was made of cast iron and was cheap and advised said customer not to buy it.

In the second count defendants are accused of violating said section 421 in that defendants, in the same county, during the same period and with the same intent, in the form of a live commercial television announcement, over a television station, disseminated and placed before the public an advertisement regarding such sewing machines, and that such advertisement contained an assertion, representation, and statement of fact which was untrue, deceptive and misleading, in that it was falsely represented that defendants would sell a 'Queen Anne Console Magic Stitcher' sewing machine with a sewing chair for the price of $29.50, whereas in truth and in fact defendants did not intend to sell the article so advertised at the stated price.

The second count of the information, by which defendants were accused of the substantive crime of false advertising in violation of section 421 of the Penal Law, was dismissed at the end of the People's case upon motion of the defendants, the trial court stating that it was dismissing such count upon the ground that 'as a matter of law * * * no crime was committed in Kings County.' Thereafter, the court found defendants guilty of the first, or conspiracy, count. Each of the individuals was sentenced to a fine of $500 or 90 days, and 4 months in the city prison, the latter part of the sentence being suspended. The corporate defendant was fined $500.

The record discloses the following facts: At the time of the alleged crime, the defendants were engaged in the business of selling sewing machines throughout the metropolitan area. They operated under the firm name of Atlantic Sewing Stores, Inc. (the corporate defendant), and their place of business was located in Queens County. To obtain and increase the sale of their sewing machines, defendants determined to procure leads to prospective customers, in part by advertising over the medium of television. Shortly before December 10, 1953 defendants entered into an agreement to broadcast or telecast over station WATV, located in Newark, New Jersey, but received all over the metropolitan area, an advertisement which offered to sell 'for closeout price of just $29.50,' a 'beautiful Queen Anne console * * *, a fine sewing chair with large storage compartment' and a 'brand new 1954 model top quality sewing machine' with 'the sensational new, exclusive Magic Stitcher' which darms, mends, embroiders, monograms, sews on zippers, appliques, quilts, sews over pins and needles and sews forward and reverse all without additional attachments. The advertisement further offered to the first 50 persons to call the telephone numbers given by the announcer 'if you do decide to buy' a 'gorgeous 22 piece sewing kit, including a pair of pinking shears.'

It seems quite clear from the evidence that defendants agreed that they would systematically subvert the sale of the $29.50 machine by proving to prospective customers that the advertised machine was actually of inferior quality and could not function properly, with the intent and purpose of bringing about a 'step up' sale, i. e., a sale of a higher priced machine. The 'step up' scheme was to be operated as follows: In response to an inquiry for the $29.50 Magic Stitcher, defendants would first send to the prospective customer's home a so-called 'lead man' who would take the customer's order by accepting a deposit of as little as 25 cents on the $29.50 machine and who would then advise the customer that another man would deliver the machine and would instruct the customer in its operation. Thereafter, the second man, known as a 'BF' man, would visit the customer, demonstrate the $29.50 machine, undertake to prove it to be inoperable and point out that it was basically defective and inferior, and then attempt to persuade the customer to order a better sewing machine at a much higher price. Should the 'BF' man fail in his efforts to 'step up' the sale, he would leave with the $29.50 machine and the customer's deposit would subsequently be returned by mail. Commissions were earned on the sale of the higher priced machines only.

In pursuance of their agreement to 'kill' the sale of the advertised machine and to 'step up' the customer, defendants conducted instruction sessions or clinics for the salesmen. The sales pitch and selling methods used by the 'BF' men in attempting to switch the prospective customers from the advertised machine to the higher priced machine were numerous. For example, the advertised machine was rigged so that when it was demonstrated it would operate for the 'BF' salesman but would jam up for the customer. The customer would be told that his television set would have to be turned off when the advertised machine was demonstrated, otherwise the television tube or fuses would blow out. The customer would be told that the machine would have to be oiled every few minutes; that a five-pound can of grease would be needed to pack the bearings; that the the customer could lose an eye if the machine jammed and the needle broke; or that the customer had a heavy foot for sewing. The 'BF' men were specifically instructed that they could not sell the $29.50 advertised machine. As mentioned above, after the customer had been discouraged from purchasing the $29.50 machine, the 'BF' men would undertake to sell the higher priced machine.

Defendants maintain that they intended only to discourage the sale of the advertised $29.50 machine which, incidentally, cost the defendants $45, and that they always intended to sell the advertised product where the customer could not be 'switched.' They point to testimony of six witnesses who bought the advertised $29.50 machine and to the testimony of two others who purchased and received at the advertised price a 'Square Bond' machine which, according to defendants' witnesses, was the same basic machine as the Magic Stitcher but having a different casing. Defendants also point to the fact that their records of sales reveal that, for the period May 31, 1953 to December 31, 1954, 26 of the advertised machines were sold.

In our judgment the intent of defendants to sell the advertised product is hardly spelled out by company records of 26 sales of advertised machines, 3 of which were fictitious, as hereinafter indicated. We say this because, while the defendants' records of sales thus demonstrates that during the period May 31, 1953 to December 31, 1954 they sold 26 of the advertised machines, their records also reveal that during such period 10,951 customers entered into conditional sales contracts for the advertised machines. Between May of 1953 and December of 1953 there were 799 conditional sales contracts entered into for the advertised machine. Of these, only three were entered on the books as sold. These three sales were fictitious and were entered in the records so that an examination of the books and records would show that advertised machines were sold. From January 1, 1954 to June 30, 1954, 3,161 conditional sales contracts for the advertised machine were entered into, but only one...