Source: https://www.legalcrystal.com/case/98034/blumenthal-vs-united-states
Timestamp: 2019-04-25 14:37:34+00:00

Document:
1. Under the trial court's rulings on admissibility and instructions that the jury must determine the guilt or innocence of each defendant separately and must not take into consideration the admissions of the owner and sales manager in determining the guilt of the salesmen, the admissions were adequately excluded from consideration on the question of the salesmen's guilt. Pp. 332 U. S. 550 -553, 332 U. S. 559 -560.
2. With the admissions of the owner and sales manager thus excluded, the evidence summarized in the opinion was sufficient to show that the five defendants joined in a single conspiracy to sell the whiskey at over-ceiling prices in the guise of legal sales. Pp. 332 U. S. 542 -545, 332 U. S. 553 -556.
3. Although, in a hypertechnical aspect, the case might be regarded as showing two agreements, one among the owner of the business, the sales manager, and the undisclosed owner of the whiskey, and the other among the five defendants, the unique facts of this case revealed a single over-all conspiracy of which both agreements were essential and integral steps. Pp. 332 U. S. 553 -559.
4. Kotteakos v. United States, 328 U. S. 750 , distinguished. Pp. 332 U. S. 558 -559.
5. The reception in evidence of the admissions made by the owner and the sales manager, under the trial court's careful instructions that the jury must determine the guilt or innocence of each defendant separately and must not take those admissions into consideration in determining the guilt of the salesmen, was not prejudicial error as to the latter. Pp. 332 U. S. 550 -553, 332 U. S. 559 -560.
Petitioners were convicted under § 37 of the Criminal Code for conspiring to violate the Emergency Price Control Act. The Circuit Court of Appeals affirmed, 158 F.2d 883, and denied rehearing, one judge dissenting. 158 F.2d 762. This Court granted certiorari. 331 U.S. 799. Affirmed, p. 332 U. S. 560 .
The four petitioners and Abel, another defendant, were convicted of conspiring to sell whiskey at prices above the ceiling set by regulations of the Office of Price Administration, in violation of the Emergency Price Control Act. 50 U.S.C. §§ 902(a), 904(a) and 925(b). The charge was made pursuant to the general conspiracy statute, § 37 of the Criminal Code. The convictions were affirmed by the Circuit Court of Appeals, one judge dissenting. 158 F.2d 883, dissenting opinion at 158 F.2d 762. Abel has not sought review in this Court. Certiorari was granted, 331 U.S. 799, as to the other four defendants because we thought important questions were presented concerning the applicability of our recent decision in Kotteakos v. United States, 328 U. S. 750 .
The evidence showed that, on arrival of the whiskey in San Francisco, legal title was taken in Francisco's name, in which the shipping documents were made out; that it honored sight drafts for both shipments, upon Goldsmith's directions to Francisco's bank to pay them out of Francisco's account; that some of the whiskey was delivered ex car directly to tavernkeepers who previously had arranged for purchases in lots varying from 25 to 200 cases; that the remainder was placed in storage with the San Francisco Warehouse Company, pursuant to arrangements made by Weiss, and thereafter was delivered by the warehouse to various purchasers holding invoices issued by Francisco [ Footnote 1 ] on orders given by Weiss. The ex car deliveries also were made pursuant to similar invoices and orders.
If further appeared that the cost of the whiskey to Francisco was $21.97 a case, [ Footnote 2 ] the wholesale ceiling price was $25.27, and Francisco received, by check of the purchasing tavernkeepers, $24.50 for each case sold. There was thus left to it a margin above cost of $2.53 on each case, out of which were to come storage charges, if any, and legitimate net profit.
In some instances, the identity of the person arranging the transaction for the seller and receiving the cash payment was not established or known to the witness testifying to the sale and its details. In others, however, Blumenthal, Feigenbaum, or Abel was identified as the salesman or intermediary. It was not brought out with what person or persons Abel, Feigenbaum, Blumenthal, or the other salesmen dealt in securing the whiskey from Francisco. [ Footnote 3 ] In two sales, Figone, a tavernkeeper of El Cerrito, testified he arranged for the purchases in Francisco's offices, but could not identify the person with whom he dealt.
Later conferences held separately with Goldsmith and Weiss simply confirmed the substance of the first to the effect that Francisco was not the actual owner, but that Goldsmith and Weiss were acting for an unidentified person in handling the shipments in Francisco's name. [ Footnote 4 ] The identity of the owner was not established. But Goldsmith added the admission that he wrote most of the invoices.
under the ruling in Berger v. United States, 295 U. S. 78 , the variance was, at the most, harmless error, a contention we rejected. Here, the situation is the reverse. The Government has conceded, in effect, that prejudice has resulted if more than one conspiracy has been proved. [ Footnote 5 ] But it insists that the evidence establishes a single conspiracy, and no more, an issue not presented or determined in the Kotteakos case.
The inference that the unknown owner was giving away the liquor is scarcely conceivable. The most likely inferences to be drawn were two -- namely, that the owner was selling for a legal margin of not more than 77˘, or that he was selling at over-ceiling prices. The first inference is hardly tenable, especially in view of the prevailing and widespread shortage and demand, with accompanying black market activity, of which the most meticulous wholesale liquor dealer hardly could have been ignorant. The inference was not only justified, it was almost inescapable, that Goldsmith and Weiss knew of the owner's intent and purpose to sell above the lawful price, as well as most of the detail of his plan for doing so. With that knowledge, their active aid toward executing his design made them coconspirators with him, and he with them, toward accomplishing it.
direction was a total exclusion, not simply a partial one, as the Government's argument seems to imply. [ Footnote 12 ] The court might have been more emphatic. But we cannot say its unambiguous direction was inadequate. Nor can we assume that the jury misunderstood or disobeyed it.
to show clearly the essence of the scheme and the identity of a number participating, the identity and the fact of participation of others remain undiscovered and undiscoverable. Secrecy and concealment are essential features of successful conspiracy. The more completely they are achieved, the more successful the crime. Hence, the law rightly gives room for allowing the conviction of those discovered upon showing sufficiently the essential nature of the plan and their connections with it, without requiring evidence of knowledge of all its details or of the participation of others. [ Footnote 17 ] Otherwise, the difficulties not only of discovery, but of certainty in proof and of correlating proof with pleading, would become insuperable, and conspirators would go free by their very ingenuity.
Consisting of $19.24 per case to the distiller, 81˘ for freight, and $1.92 for state taxes.
The $24.50 price was at the most 53˘ above the actual cost of the whiskey, see note 2 plus the $2.00 fee paid Francisco for the use of its books. There is no evidence that the unknown owner received any portion of this 53˘ margin. Since the record shows that Francisco was billed by the warehouse company for the storage of the liquor, the inference was fully justified that the 53˘ margin was largely dissipated by the storage charges and other overhead costs attributable to the sale of the whiskey, and that the remaining sum, if any, was retained by Francisco.
". . . you must disregard entirely any testimony stricken out by the Court, or any testimony to which an objection has been sustained. . . . Testimony which has been admitted only to apply as to a specified defendant may only be considered by you as to that defendant and none other. "
" In that connection, you will recall that I advised you during the trial of the case that the statements made by the defendants Goldsmith and Weiss to the witness Harkins could only be considered by you as against those two named defendants."
This view, though apparently differing from the Government's, see note 12 is reinforced by the further instruction, immediately following the one last quoted in note 10 to the effect that admissions of a conspirator not made in execution of the common design are not evidence against any of the parties other than the one making them. The admissions here fell clearly in that category, some of them because made after termination of the conspiracy, others because they had no effect to forward its object. None was made in furtherance of the conspiracy's object. Cf. Fiswick v. united States, 329 U. S. 211 .
The case would stand little better for Goldsmith and Weiss upon an inference that they sold to some other person, who in turn resold to the tavernkeepers through the salesmen. For then, the 77˘ legal margin would remain, now for the intervening purchaser, together with the use of Francisco's books and records to conceal his existence and part in the transactions and the allowable inferences from those facts.
The basis for imputing such knowledge to Goldsmith and Weiss becomes not so compelling as with the admissions included, but nevertheless remains adequate. However the case is viewed, apart from the admissions, they knew the margin of legal profit left, whether for themselves or for others, after deducting the $24.50 per case, was only 77˘. If they actually owned and sold the whiskey, why sell below the ceiling in the face of the shortage and demand, when selling costs, including the salesmen's compensation, still were to be paid? If they did not own or sell at the $24.50 figure, then why the checks and false invoices in that amount? The inference is justified that either they or someone else to their knowledge was receiving more than the lawful price.

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