United States v. Hare, 8873-8875.

• Decision Date: 29 April 1946
• Docket Number: No. 8873-8875.,8873-8875.
• Citation: 153 F.2d 816
• Parties: UNITED STATES v. HARE (three cases).
• Court: U.S. Court of Appeals — Seventh Circuit

153 F.2d 816 (1946)

UNITED STATES v. HARE (three cases).

Nos. 8873-8875.

Circuit Court of Appeals, Seventh Circuit.

February 8, 1946.

Rehearing Denied February 25, 1946.

Writ of Certiorari Denied April 29, 1946.

Herman W. Kothe and Silas C. Kivett, both of Indianapolis, Ind., Daniel S. Ring, of Washington, D. C., and Kothe & Shotwell and Kivett, Chambers, Vernon & Kivett, all of Indianapolis, Ind. (Grier M. Shotwell, of Indianapolis, Ind., of counsel), for appellants.

B. Howard Caughran, U. S. Atty., and Paul A. Ffister, Asst. U. S. Atty., both of Indianapolis, Ind., for appellee.

Before EVANS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

Writ of Certiorari Denied April 29, 1946. See 66 S.Ct. 983.

EVANS, Circuit Judge.

This appeal reviews a sentence on conviction under the Emergency Price Control Act. 50 U.S.C.A.Appendix, §§ 901-946. Appellants are officers of J. C. Perry Company, and along with said company and a salesman named Rozelle, were charged in one indictment containing six counts, with the sale of liquor at wholesale in excess of ceiling prices in five counts, and in the sixth count, they were charged with conspiracy. Rozelle pleaded guilty; the Perry Company was found not guilty, and the appellants were, by a jury, found guilty on all six counts. The court imposed sentences as follows: Robert Hare, a total of three years and $25,000 fine; Clinton Hare, one year and a day, and $25,000; John Hare, two years and $25,000.¹

The evidence came from a salesman, Rozelle, from one Clark, from the purchasers of liquor, and from the appellants. Large quantities of whiskey were sold at prices in excess of the duly established ceiling price, the excess being usually paid in cash at the time of the negotiation of the sale, and the ceiling price being paid at the time of the delivery of the merchandise, or within the period of extended credit. In other words, payment of the ceiling price was by check; excesses were generally paid in cash. Rozelle, the salesman, when on sales trips, often took a friend, one D. Jones, along, and represented to the customers that the liquor belonged to Jones. The premium (excess over ceiling price) was paid to Jones, who later turned it over to Rozelle, Jones had no interest in the whiskey or in the transaction.

The appellants, Robert, Clinton, and John Hare, were respectively, secretary, treasurer, and president of the Perry Company. This Company was also engaged in the wholesale grocery business with its offices at Indianapolis.

Appellants' version of the facts is that Perry Company found itself possessed of several hundred barrels of whiskey which it had purchased for a dollar a gallon more than the ceiling price, which was thereafter placed on it by the Government. They first decided to take a loss in order to liquidate the stock and "get out." Rozelle told Robert Hare, who was the chief movant among the brothers, that he could find purchasers for the liquor, and was told to go ahead. In Ohio, a man named Clark was a liquor purchaser for a pool of tavern keepers who were very desirous of obtaining liquor. The word "desirous" inadequately describes the mental state of the tavern keepers, for the evidence showed the Ohio tavern keepers were willing to pay, and did pay, approximately $342,000 for whiskey which had a ceiling price value of $96,000. He and Rozelle negotiated the price, and Clark collected funds to pay in advance the overceiling amount, which it was appellants' understanding was a "finder's fee," i.e., paid by the buyers to the agent who was able to buy liquor for them. On one occasion Clark brought $92,000 in cash to Rozelle's home, but Mrs. Rozelle demurred to keeping that much money in her home over night. Rozelle then phoned Robert to come and get it, but he wasn't home, so he phoned John Hare, who came and took it away, without knowing, so he said, what he was taking as the money was wrapped in paper.

The total sums received from the sales to, or through, Clark in Ohio, in excess of the ceiling price and expenses, totaled $168,000, which sum was divided between the appellants and Rozelle. The three brothers were under the impression, so they said, that they were receiving a distributive share of the finder's fee paid by Clark to Rozelle. Each received approximately $42,000, subject to a deduction of the amount which he had previously borrowed against this fund.

John testified that he inquired of his brother Robert and of Rozelle whether a finder's fee was a legal transaction and was assured it was.

The Perry Company's books reflect simply the receipt of the ceiling price of the liquor sold. None of the other stockholders (members of the Hare family) received any of these funds. All the liquor sold was evidently the Company's property.

The Government, on the other hand, produced evidence to the effect that Clark was an agent of the Perry Company, as disclosed by a letter written by Perry Co., delivered in September, but dated in May of 1943, wherein it was stated that he was a salesman of the Perry Co. As such salesman he could not be the payor of a "finder's fee" to his principal.

Robert Hare and Rozelle conferred with Clark at Dayton, Ohio, about three times, in reference to the sale of liquor. Sales to Clark by Perry Co. totalled $342,944.16 for which the ceiling price was $96,680.57.

As to the sales in Indiana, which were covered by the first five counts of the indictment, the sales price was $58,224.74, which was $20,944.27 in excess of the ceiling price.

Appellants challenge the existence of any evidence to connect them with the Indiana sales. To answer this challenge, the Government points to the testimony of the agent, Rozelle. He testified that "The over-ceiling portion of the money collected on the Indiana sales was taken down to the J. C. Perry & Company * * *," where "Mr. Hare told him to handle it, and he, the witness, put it in envelopes and handed it to the cashier to put in the vault; and when I got ready I...