Court Opinion

ID: 9443682
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:27:18.656601+00
Date Added: 2024-06-11T17:29:34.185657
License: Public Domain

HUXMAN, Circuit Judge
(dissenting).
As stated in the majority opinion, wilfulness is an element of the offense under the applicable statute and regulations promulgated thereunder. Counts one and three charged that the two partners and two of their employees wilfully violated the statute and regulations by making two sales on credit and receiving less than the mandatory twenty-five per cent down payment. Count two charged a wilful failure to keep correct records. Count two is so described by the trial court in its instructions, although in a subsequent instruction the court informed the jury that “those first three counts, in brief, charge that the defendants extended a greater amount of credit on the installment sale of a sewing machine than was permitted under the Defense Production Act.”
While counts one and three charged the partners, Gordon and Tempkin,' together with two employees, with having made the sale set out therein, no attempt was made to prove and there is no evidence in the record that the partners actively participated in the sales. The Government’s entire effort was directed to establishing that they had guilty knowledge of the unlawful activities and acquiesced therein. If the only question before us was a sufficiency of the evidence to sustain the verdict and judgment of guilt based thereon, the answer would be simple. The evidence is sufficient to sustain a conclusion that the partners had reason to know that the regulations were, being violated by their employees. But while it is important that the guilty be brought to trial and speedily *255punished, it is even more important to the preservation of our institutions that due process be observed in bringing that about. Due process means that the trial must be conducted according to recognized principles of law and procedure. It requires an impartial trial. It is necessary that only competent evidence be received and that the jury be correctly instructed as to the basic principles of law, guiding it in its deliberations and considerations of the evidence in the case. The partners denied intent to violate the law or any knowledge that their employees were violating it. They were entitled to have their testimony weighed and evaluated under proper instructions by the court together with all other relevant evidence. They were entitled to have the jury told that they were not criminally liable for the acts of their employees, although committed within the scope of their employment, unless they directed such activities or had guilty knowledge thereof. It is a principle embedded in the English law from time immemorial that the sins of the father shall not be visited upon the son merely because the father is the agent of the son and his unlawful acts were committed within the scope of his employment, under a criminal statute making wilfulness an element of the offense when the son had no knowledge of or part in such violations.
It would be an onerous burden to cite, let alone analyze, all the cases that have announced and adhered without deviation to this basic principle of law. Reference will be made only to some of the cases which have held that a partner is not liable for the criminal acts of another partner or of an employee in which he has not participated or of which he had no guilty knowledge. A good statement of the law is found in United States v. Cohn, C.C., 128 F. 615, 623, as follows: “It is a rule in criminal cases that a partner is not charged by the criminal acts of his copartners, or others acting in behalf of the firm, unless he has knowledge thereof. The law in relation to partnership is that the partner agrees to be bound for all acts done in obedience to the law, to which there are attached certain civil liabilities for fraudulent acts or representations done or made by a partner or an agent for the purpose of affecting the firm’s business. It is not considered that, in the absence of some special statute bearing upon the particular acts of a firm, whereby each partner is made the subject of punishment, one partner can be found guilty of a crime because his partner or agent has done acts that would justify his or their punishment.”1
Strong reliance is placed upon Inland Freight Lines v. United States, 191 F.2d 313, by this court. But that case is clearly distinguishable. There the sole defendant was the corporation charged with keeping false records and it was held that the knowledge of its agents was the knowledge of the corporation. That is the well established principle of criminal law as applied in the case of a corporation. It is, as the law recognizes, the only way a corporation can be held criminally responsible for violations of penal statutes. While a corporation is recognized as a separate legal entity, such separate entity is a pure fiction of the law. As a separate entity and aside from its agents and employees a corporation can do nothing. It has no conscience, will, or power of thought. It acts only through its agents. Their acts are the only acts it can commit and their knowledge of necessity is the only knowledge it can have.2
The only cases in which a principal without actual intent or knowledge of criminal acts of wrong-doing by his employees has been held criminally responsible for such acts arose under welfare statutes such as the Pure Food and Drug Laws, Liquor Laws and Weight and Measure Acts. But under all of these acts where a principal *256was held guilty because of the acts of his agents without knowledge or intent on his part wilfulness was not an element of the offense and the statute made the doing of the act the offense.3
Instead of telling the jury that the partner appellants would be liable for the acts of their agents committed within the scope of their employment only if they directed the same or had guilty knowledge thereof and consented thereto, the court instructed the jury that it was sufficient to establish the guilt of the partners that the agents committed these unlawful acts in the course of their employment because such acts by the agents would be the acts of the principal. In calling the jury’s attention to the charge in count one, the court told the jury “Now if an agent or employee of Mr. Gordon or Mr. Tempkin, as I have said to you, acting within the course of his employment, makes an installment sale of a sewing machine, the act of that agent is the act of the master and of the employer.” It also told the jury that “the knowledge of a partner is chargeable to the other partner, and the knowledge of an agent or a servant is chargeable to the employer.”
“Now that is true, ladies and gentlemen of the jury, only if the agents or employees are engaged in the course of and within the scope of their employment, and only if the knowledge comes to them while they are so engaged, but if they obtain knowledge while they are engaged in the course of the business working for their employer, that kind of knowledge is imputable, — attributable and chargeable to the employer.” The court thus applied the civil rule of liability in a criminal case. I can find no case which has applied this rule to criminal prosecutions.
This error was in my opinion not overcome by the court’s subsequent statement that “it is not necessary to have direct evidence of knowledge, or direct evidence of wilfulness, or direct evidence of any of the acts in this Information charged. You are instructed that you may find the elements of these offenses, if you so find, upon inferences, upon conclusions, upon presumptions which under the facts and circumstances of the case, and all of them, are reasonably to be drawn.” In addition to the two partner defendants, two employees also were defendants. As to them it was equally necessary to prove the elements of wilfulness and intent to commit the unlawful acts charged against them. Having previously • and in unmistakable language told the jury that it was not necessary to find knowledge or. intent on the part of the partners if the acts of these other two defendants were committed in the course of their employment, the jury of necessity must have been led to conclude that this instruction related to the burden of proof of the element of knowledge and intent on the part of the two employees. This was the theory upon which the case was tried. The jury was not asked to determine, or was not told, that it was necessary to find that the partners had knowledge or intent that the law was being violated. As stated in the majority opinion, as to them the case was tried and submitted upon the theory of imputable knowledge, that is, if the acts of the agent were committed in the course of their employment, the partners would be guilty without actual knowledge or intent on their part to violate the law.
Appellants excepted to the challenged instructions in the following language:
“Except to the court’s instructions as to the knowledge of the defendants through employees, the knowledge of a partner being charged to the other partner if the knowledge is obtained while the employee is engaged in the scope of his employment, or to similar effect.”
“Further object and except to the instruction with respect to the act of an agent being the act of the employer as being sufficient to supply the necessary scienter and knowledge required in a criminal case.”
This could leave no doubt in the minds of anyone as to the particular instructions *257which were being challenged or as to the objection with respect thereto.
For the above reasons I find myself unable to concur in the conclusions of my Associates and would reverse the judgment.

. Burdick, Law of Crime, Sections 175, 178 and 179; Bishop, New Criminal Law, Section 417; Kunz v. Lowden, 10 Cir., 124 F.2d 911; Haverty Furniture Co. v. Foust, 174 Tenn. 203, 124 S.W.2d 694, 695.

. Ex parte Casperson, 69 Cal. App.2d 441, 159 P.2d 88; Ex parte Marley, 29 Cal.2d 525, 175 P.2d 832.