Samuel v. United States

• Decision Date: 08 October 1948
• Docket Number: No. 11402.,11402.
• Parties: SAMUEL et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

169 F.2d 787 (1948)

SAMUEL et al. v. UNITED STATES.

No. 11402.

Circuit Court of Appeals, Ninth Circuit.

August 24, 1948.

Rehearing Denied October 8, 1948.

Leo R. Friedman, of San Francisco, Cal., for appellant Schutz.

Melvin M. Belli and Guernsey Carson, both of San Francisco, Cal., for appellants Samuel, Samuel, and Brown.

Frank J. Hennessy, U. S. Atty., and Reynold H. Colvin, Asst. U. S. Atty., both of San Francisco, Cal., for appellee.

Before GARRECHT, DENMAN, MATHEWS, STEPHENS, HEALY, BONE, and ORR, Circuit Judges.

STEPHENS, Circuit Judge.

This case was heretofore argued and submitted to a panel of this court, and thereafter was re-argued and re-submitted to the court sitting en banc.

All points on appeal herein, based upon motions, objections and proffers of instructions to the jury made primarily on behalf of defendant-Schutz, were made to apply to all defendant-appellants by stipulation in the trial court.

Saul Samuel, Walter Samuel, Sam Brown, Murray Schutz and E. D. Hoffman were indicted in March, 1946, for conspiracy, 18 U.S.C.A. § 88,¹ by a United States Grand Jury sitting in San Francisco, California. After several motions had been made and denied, all pleaded not guilty, and they went to trial before a judge and jury. At the close of the government's case, motions for acquittal were granted as to Hoffman and denied as to the others. Similar motions were denied the others at the conclusion of evidence taking. All four were convicted and sentenced, and they appeal.

The indictment charges an unlawful agreement to violate the provisions of the law that have to do with two tax statutes (27 U.S.C.A. § 203, to engage in the business of purchasing distilled spirits for resale at wholesale without having secured a basic permit from the Secretary of Treasury; and 26 U.S.C.A.Int.Rev.Code, § 3253, to carry on the business of a wholesale liquor business without having paid a specially required tax) and to violate the Emergency Price Control Act, 50 U.S.C.A.Appendix, §§ 902, 904(a) and 925(b), Office of Price Administration Regulations, Maximum Price Regulations 193 and 445, by selling distilled spirits at prices in excess of the fixed maximum prices.

In the month of August, 1943, there was a distinct shortage of whiskey in the San Francisco market. A Mr. Charles W. Saunders appears to have "had dealings", as he puts it, with a Mr. Marcus concerning a carload shipment (1850 cases) of what was termed "Old Marshall Straight Rye Whiskey." At about the same time, Saunders saw Mr. Muray Schutz, and shortly thereafter the whiskey was warehoused to the latter. According to Saunders, he had nothing further to do with Mr. Schutz or with the shipment of whiskey, except that the two did meet after the indictment in this case was filed, and Schutz requested Saunders to to give him an affidavit to the effect that Saunders had directed Schutz as a licensed manufacturer's agent to ship the "Old Marshall" to various retailers, and Saunders refused to comply with the request. A witness testified that Saunders appeared at the Samuel's Liquor Store, when matters pertaining to the whiskey were under discussion and was paid "finder's" fees. Schutz, on the witness stand, confirmed his receipt of the shipment of whiskey and testified that Saunders came to his place of business with a proposal to take the whiskey off his hands, and later Saunders reported "* * * he had approached some retailers and they would take the entire car." According to Schutz, there was no discussion as to price between them.

On the 18th or 19th of August, Schutz says, Saunders reported that the purchasers had arranged a loan from Morris Plan Bank, and upon his presenting a warehouse receipt, the purchase money would be paid. Schutz had fixed his price at $23.85 per case, an O.P.A. price as he figured it, plus $1.92 for State Tax, or a total to him of $25.77. Later, upon Schutz presenting his warehouse receipt, Morris Plan Bank would lend only $27,000, whereas the full car lot of whiskey would amount to more than that. A proportional amount of the whiskey was released. Later more was released upon a further payment, and, in all, money received from the bank covered the Schutz' price for 1275 cases. Out of the 1850 cases, 575 were left on Schutz' hands. The evidence is to the effect that Schutz originally had 1970 cases of Old Marshall Straight Rye Whiskey, 150 cases more than the shipment mentioned by Saunders. The nominal, if not the actual, borrower of money to put into a deal concerning the whiskey was Walter Samuel, who owned "Samuel's Liquor Store" of San Francisco. Sam Brown, father-in-law of Walter Samuel was actively engaged in the conduct of the store, while Walter was working long hours in shipyards. Walter Samuel claims to have had little information of the whiskey deal. Saul Samuel testified that he had nothing to do with the deal as a principal but that he was an independent liquor salesman and knew that Brown was involved in the deal; that he put no money into purchase of the Old Marshall Whiskey, though he let his son have some money as a loan, as he occasionally did. He had nothing to do with the borrowing of the money, but as a wholesale salesman (not dealer) on his own account, he made inquiries and took orders from part of the group of retailers who later had business with Sam Brown and Samuel's Liquor Store regarding the whiskey. Brown testified that Saul Samuel represented Samuel's Liquor Store, which in turn were "selling agents for Distillers Distributors Schutz". Brown claims that the whole deal was that the Samuel's retail liquor store needed whiskey, and upon hearing of the Old Marshall shipment to Schutz, that he arranged to raise money through the Bank to pay for the shipment. Samuel's Liquor Store bought outright for their store trade some 300 cases of the whiskey, and Brown acted as agent for Schutz in the sale of the rest of the whiskey obtained from Schutz. Neither of the Samuels nor Brown had a wholesaler's basic permit, nor had they paid the required special liquor tax. Saul Samuel and Schutz both testified that Saul offered to sell the whiskey left on Schutz' hands and that Schutz agreed. Schutz says he thought Saul "a free lance salesman." Saul Samuel sold some of the 1850 cases of whiskey, which had not been paid for by Samuel's Liquor Store. These sales were for the additional figure of around $50.00 per case. Saul Samuel's testimony is that the money received by him for such sales was turned over to Mr. Brown, and that the invoice price was to be paid to Schutz. There is in evidence nine of Schutz' bank deposit slips, each exactly divisible by $25.77, dated at about the time these sales took place, which would seem to indicate the sale by Schutz of 550 cases of whiskey at that price per case and the overplus appears to have gone to others.

A large part of the whiskey covered by the Morris Plan money was eventually sold in various quantities prior to August 30, 1943, to tavern keepers and other retailers at enhanced prices, ranging mostly around $50 per case. Brown was active in bargaining with the retailers for the whiskey.

Much of the whiskey was billed directly to the retail purchasers from Schutz or in his trade name at $25.77 per case, and generally that sum was paid for by check. The balance was paid in cash. The government claims Schutz profited by receiving a division of the cash payments, but Schutz claims he never received any remuneration except his set case price as quoted to Samuel's Liquor Store. It is claimed by Brown that a large sum of money was paid Saunders and another by the name of Corrigan as "finders." A "finder" appears to be a person who can give information as to where the commodity can be purchased. The details of his operations are not in the evidence.

Schutz stated on the stand that he had met Saul Samuel once sometime before they met at the Morris Plan Bank, but that he had not known Brown or Walter Samuel. Schutz testified: "So far as I knew the names that Mr. Saul Samuel brought me and which were not accompanied by money representing $25.77 a case were those that had gone in with him to buy the whiskey."

Schutz' bookkeeper testified to the effect that Schutz admitted that he knew neither the Samuels nor Brown had a wholesaler's license, but this Schutz denies. He testified, however, to the direct question as to his knowledge on the subject: "I didn't believe they were wholesalers," and later he said that he knew Walter Samuel had no license.

On February 4, 1946, taxes were paid the government for and by Walter Samuel, a wholesale liquor dealer, from July, 1943, to June 30, 1944, and all the special taxes of Walter Samuel were paid on that date.

There is more evidence, but what we have related fairly outlines the general situation. The government claims that appellants schemed together to profit by selling the whiskey above the O. P. A. ceiling price. Schutz claims there was nothing to the transaction but a straight sale from him to Samuel. Saul Samuel claims he acted only as a free lance liquor salesman for the whiskey owners. Walter Samuel claims he was ignorant of what was going on. Brown claims the sales to tavern owners were made by him and Samuel's Liquor Store as selling agents for Schutz.

It is not to be denied that each of these theories was arguable to the jury. The government claims that the transaction was no more nor less than a scheme to defeat all ceiling price regulations. The evidence is clear that the retailer, after paying the Schutz' invoice price by check, paid almost as much more in money. Who got the extra money, is in dispute.

There are points on appeal upon claims that evidence was improperly admitted, and that evidence admitted could not apply to one or the other of the defendants. There are instances in which argument on such points could fairly be made, but we have noticed no instance wherein the wrongful admission of evidence would...