United States v. Armour & Co.

Decision Date26 April 1948
Docket NumberNo. 9349.,9349.
Citation168 F.2d 342
PartiesUNITED STATES v. ARMOUR & CO.
CourtU.S. Court of Appeals — Third Circuit

Charles E. Kenworthey, of Philadelphia, Pa. (Schnader, Kenworthey, Segal & Lewis, of Philadelphia, Pa., on the brief), for appellant.

Walter A. Gay, Jr., Asst. U. S. Atty., of Philadelphia, Pa. (Gerald A. Gleeson, U. S. Atty., of Philadelphia, on the brief), for appellee.

Before GOODRICH, McLAUGHLIN and O'CONNELL, Circuit Judges.

McLAUGHLIN, Circuit Judge.

Appellant was convicted on seventeen counts of an indictment which charged it with violating regulations issued pursuant to the Emergency Price Control Act of 1942, 56 Stat. 23, 50 U.S.C.A.Appendix, § 901 et seq., prohibiting tie-in sales.

The violations occurred at three of appellant's branch houses, two in Philadelphia and one in Norristown. All three branch houses were supervised by a district manager and there was no evidence that he had any knowledge of the offenses. There was some evidence that the assistant manager of the Philadelphia, Noble Street, branch ratified a salesman's violation of the particular regulation. There was evidence that a salesman had stated to a customer that he had received orders from the office in Chicago to make named tie-in sales. There was evidence that the manager at Norristown himself committed the offenses involving that house. There was evidence on behalf of the appellant that the home office of the appellant sent out written instructions to its managers not to force the customers to buy one product in order to obtain another product and that it repeated these in substance on at least three other occasions. Also there was evidence that at meetings of defendant's employees, held in the branch houses, there were full discussions of price control regulations, pursuant to directions of the home office and that the salesmen were instructed in the various regulations and the interpretations thereof with particular reference to tie-in sales. Appellant concedes for the purposes of this appeal that the evidence was sufficient to support a finding on each of the seventeen counts that one of its salesmen required a customer to purchase one commodity as a condition to the sale of another commodity. The district judge sitting without a jury found as facts that:

"(1) defendant, in good faith, instructed all its district managers, branch house managers and assistant branch house managers, never to make or permit to be made any tie-in sales.

"(2) defendant, in good faith, instructed all its salesmen never to make any tie-in sales."

Following conviction appellant moved for a judgment of acquittal which the trial court denied.

On this state of facts appellant argues that it should not be held responsible for the offenses committed by its employees. It stresses that the violations in question involved the element of wilfulness, that the Price Control Act does not specifically provide that an employer shall be guilty of the employee's offense and that there was no evidence of participation in or knowledge by an officer or high ranking agent of the corporation.

All of the evidence as to the violations by the employees of appellant showed that the offenses were committed deliberately and with knowledge of the pertinent regulations prohibiting such tie-in sales. Appellant's proofs, as indicated, went to considerable lengths in establishing the care it took to familiarize its branch house people with those particular price regulations, among others.

Though the Price Control Act does not expressly state that a corporate employer shall be responsible for an offense under the statute by its employee1 it is too late in the day to say that such offense, within the scope of the employee's authority, cannot be brought home to the corporation. United States v. Van Riper, 3 Cir., 154 F. 2d 492; In re Mifflin Chemical Corporation, 3 Cir., 123 F.2d 311, 315; Restatement, Agency, Section 165; ibid. Section 282, Comment (b). The Norristown manager, the Noble Street assistant manager, the various salesmen at the three branch houses, had all been entrusted with authority to act in connection with sales of appellant's products and there is evidence that while so functioning they violated the direct prohibition of the regulations respecting tie-in transactions. It appears that appellant's main office had repeatedly cautioned against such conduct, but this corporation, one extremely large in the vital food industry, cannot evade its responsibility by referring to its elaborate inter-branch correspondence and its instruction meetings. Seventeen violations of the tie-in sales prohibition in three out of a total of five branch houses in the Philadelphia area point to a condition prevailing of which it was the employer's duty to be aware. The checking and elimination of such obviously illegal practices is not shown to have been any more difficult than other details of a nation-wide industry. The employer "does not rid himself of that duty because the extent of the business may preclude his personal supervision, and compel reliance on subordinates. He must then stand or fall with those whom he selects to act for him. He is in the same plight, if they are delinquent, as if he had failed to abate a nuisance on his land. * * * It is not an instance of respondeat superior. It is the case of the non-performance of a nondelegable duty." (Emphasis ours). Chief Judge Cardozo for the Court in People v. Sheffield Farms-Slawson-Decker Co., 225 N.Y. 25, 121 N.E. 474, 476. "It is the function delegated to the corporate officer or agent which determines his power to engage the corporation in a criminal transaction." C.I.T. Corporation v. United States, 9 Cir., 150 F.2d 85, 89.2 A branch manager was the individual employee involved in that case. In Zito et al. v. United States, 7...

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26 cases
  • Com. v. Beneficial Finance Co.
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 4 Noviembre 1971
    ...328 U.S. 869, 66 S.Ct. 1377, 90 L.Ed. 1639 (salesman--knowing violation of Emergency Price Control Act of 1942); United States v. Armour & Co., 168 F.2d 342, 343--344 (3d Cir.) (salesmen at 3 Pennsylvania branches, branch manager at Norristown, and assistant manager at Noble Street, Philade......
  • United States v. Mongol Nation
    • United States
    • U.S. District Court — Central District of California
    • 28 Febrero 2019
    ..., 212 U.S. at 493, 29 S.Ct. 304 ; Standard Oil Co. v. United States , 307 F.2d 120, 127–28 (5th Cir. 1962) ; United States v. Armour & Co. , 168 F.2d 342, 343–44 (3d Cir. 1947) ; Egan v. United States , 137 F.2d 369 (8th Cir. 1943) ). Actual authority can be either express or implied. Resta......
  • United States v. Uniroyal, Inc.
    • United States
    • U.S. District Court — Southern District of New York
    • 5 Mayo 1969
    ...lengths to furnish the salesmen and branch managers with guidelines of the applicable legal requirements. United States v. Armour & Co., 168 F.2d 342, 343-344 (3d Cir. 1948). The salient fact is that there has been at least one incident of unlawful resale price maintenance or conduct in aid......
  • Standard Oil Company of Texas v. United States
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 15 Agosto 1962
    ...would shield the corporation from criminal responsibility for actions which its agents have taken for it. United States v. Armour & Co., 3 Cir., 1947, 168 F.2d 342, 344; People on Complaint of Price v. Sheffield Farms-Slawson-Decher Co., 225 N.Y. 25, 121 N.E. 474; United States v. E. Brooke......
  • Request a trial to view additional results
2 books & journal articles
  • Punishing Corporations: the Food-chain Schizophrenia in Punitive Damages and Criminal Law
    • United States
    • University of Nebraska - Lincoln Nebraska Law Review No. 87, 2021
    • Invalid date
    ...endorsed Hilton's rejection of a due diligence defense to corporate criminal liability. Gruner also cites United States v. Armour and Co., 168 F.2d 342 (3d Cir. 1948), which states plainly, "No distinctions are made in these cases [considering corporate criminal liability] between officers ......
  • 5.62 - I. As Applied In New York And Other Jurisdictions
    • United States
    • New York State Bar Association NY Criminal Practice Chapter 5 Grand Jury Proceedings
    • Invalid date
    ...aff’d, 926 F.2d 227 (2d Cir. 1991); United States v. Milton Marks Corp., 240 F.2d 838 (3d Cir. 1957).[994] . United States v. Armour Co., 168 F.2d 342 (3d Cir. 1948). [995] . Cont’l Baking Co. v. United States, 281 F.2d 137, 150 (6th Cir. 1960).[996] . Lawrence N. Gray, Criminal and Civil C......

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