May v. United States

WILLARD, District Judge.

[1] Plaintiffs in error, Ered D. May, Thomas B. May, William M. Johnson, and E. W. Bailey, were convicted under the second count of an indictmenf which charged a violation of section 4 of the Oleomargarine Act of August 2, 1886, c. 840, 24 Stat. 209 (U S. Comp. St. 1901, p. 2229). This section punishes one who carries on the business of manufacturing oleomargarine without having paid the special tax therefor. They were also convicted under the third count, which charged a violation of section 17 of the same act. No objection to the sufficiency of the second count is here urged. It is claimed, however, that the third count is insufficient. This point was raised in the court below by a demurrer.

The third count is as follows:

“That Fred D. May, Thomas B. May, William M.. Johnson, and E. W. Bailey, whose Christian name is to the grand jurors aforesaid unknown, heretofore, to wit, on or about the 29th day of November, 1910, within the division and district aforesaid, and within the jurisdiction of the court aforesaid, at No. 3536 Morgan street, in the city of St. Louis, state of Missouri, they, the said'Fred D. May, Thomas B. May, William M. Johnson, and E. W. Bailey, whose Christian name is to the grand jurors aforesaid unknown, being then and there persons engaged in carrying on the business of a manufacturer of colored oleomargarine at said No. 3536 Morgan street, in the city of St. Louis, state of Missouri, under the name of the Clayton'Creamery, ■did then and there knowingly, willfully, fraudulently, and feloniously attempt to defraud the United States of the tax imposed by law upon colored ■oleomargarine of ten (10) cents per pound on each pound of colored oleomargarine so manufactured, to wit: Ten (10) cents per pound on one hundred and twenty (120) pounds of colored- oleomargarine then and there produced by them, the said Fred D. May, Thomas B. May, William M. Johnson, and E. W. Bailey, whose Christian name is to the grand jurors aforesaid unknown.”

Section 17 is as follows:

“That whenever any person engaged in carrying on the business of manufacturing oleomargarine defrauds, or attempts to defraud, the United States of the tax on the oleomargarine produced by him, or any part thereof, he *45shall forfeit the factory and manufacturing apparatus used by him, and all oleomargarine and all raw material for the production of oleomargarine found in the factory and on the factory premises, and shall be lined not less than live hundred dollars nor more than live thousand dollars, and be imprisoned not less than six months nor more than three years.”

The essential elements oí the offense defined in section 17 are: (1) That the defendant is engaged in carrying on the business of manufacturing oleomargarine. (2) That he has produced oleomargarine. (3) That he has attempted to defraud the United States. All of these are found in the third count. The claim of the defendants, however, is that before the offense can be committed the oleomargarine produced must have become subject to the tax. They call attention to section 8 of the act, which provides that “upon oleomargarine which shall be manufactured and sold, or removed for consumption or use,” there shall be assessed a tax, and they say that the indictment should have alleged that the defendants had attempted either to sell it, or to remove it for consumption, or to remove it for use; and they insist that an allegation of this kind was an essential part of the indictment.

Whatever may be said of this claim when the charge is that the defendant has defrauded the United States, it cannot be sustained when the charge is that the defendant has attempted to defraud the United States. Conclusive evidence might be produced to the effect that a defendant had made plans to construct and operate an illegal factory for the manufacture of oleomargarine, to manufacture it, and to sell it without payment of the tax. It might also be further shown conclusively that, in pursuance of this illegal plan, he had erected a factory and had commenced to manufacture and had actually manufactured oleomargarine with the intent of selling it without paying the tax, but that before he had sold or removed, or attempted to sell or remove, any part of it, his operations were interfered with by the authorities. Can it be said in such a case that he has not attempted to defraud the United States? At least, when a defendant’s operations have proceeded so far as to show conclusively that he has produced oleomargarine with the intent to defraud the government out of the tax thereon, there is an attempt to defraud such as is mentioned in section 17, although he has neither sold nor removed nor attempted to sell or remove any of the product.

[2] It is further said with reference to this count that it does not advise the defendant of the manner in which he attempted to commit the fraud, so as to enable him to prepare his defense. It is to be noted that section 17 does not declare it an offense to commit the fraud in any particular way. If it did, then it would be necessary to allege the manner in which the act was done. But as the section stands, it is an offense if the government is defrauded by any means or method. As was said in United States v. Simmons, 96 U. S. 360, on page 364, 24 L. Ed. 819:

“The intent to defraud tbe United States is of the very essence of the offense; and its existence, in connection with the business of distilling being distinctly charged, must be established by satisfactory evidence. Such in*46tent may, however, be manifested by so many acts upon tbe part of the accused, covering such a long period of time, as to render it difficult, if not wholly impracticable, to aver, with any degree of certainty, all the essential facts from which it may be fairly inferred.”

To have alleged in this indictment how the defendants attempted to defraud the United States would have required a statement of much of the evidence presented at the trial. The count, as it appears, advises the defendants of the time when the act was committed, namely, on November 29, 1910. It advises them where it was committed, namely, at 3536 Morgan street, in the city of St. Louis, Mo. It advises them of the name under which it is claimed they were doing business, namely the Clayton Creamery. It advises them of the amount of oleomargarine produced, namely, 120 pounds.

As to the sufficiency of this count the case is, we think, covered by the case of Armour Packing Company v. United States, 153 Fed. 1, on page 16, 82 C. C. A. 135, on page 150 (14 L. R. A. [N. S.] 400). This court there said:

“It is conceded that, where a crime is a statutory one, the indictment must set forth with clearness and certainty every essential element of which it is composed. It must portray the facts which the pleader claims constitute the alleged transgression so distinctly as to advise the accused of the charge which he has to meet and to give him a fair opportunity to prepare his defense, so particularly as to enable him to avail himself of a conviction or an acquittal in defense of another prosecution for the same offense, and so clearly that the court may be able to determine whether or not the facts there stated are sufficient to support a conviction. (Citing eases.) The indictment in this case pleads the names of the carriers that transported the property, the date and place of the delivery of the goods to the initial carrier and of the receipt of the concession by the shipper, a description of the specific articles shipped, the filed and published rate, the less rate at which the goods were transported, and the amount of the concession, the place of shipment, and t)ie point of destination of the property, and the route over which it was transported. Here were averments of facts sufficient to clearly advise the defendant of the offense with which it was charged, to give it ample opportunity to prepare its defense, to enable it to avail itself of a conviction or an acquittal in the case of another prosecution for the same crime, and to qualify the court to determine whether the facts stated constituted an offense. The particular device by which the concession and transportation were obtained was not an essential ingredient of the offense charged, because the latter might well exist, whatever the device, and whether or not there was one, and hence the indictment portrayed every material element of the crime without an averment of this device. U. S. v. Tozer (D. O.) 37 Fed. (¡35, 637. The substance of the crime of receiving a rebate or concession under the Elkins act is the solicitation, acceptance, or receipt thereof, whereby property in interstate or foreign commerce is transported at less than the regular rate. The device whereby tbe receipt and transportation are obtained is not an essential element of the crime, and it is unnecessary to plead it in the indictment.”

[3] It is to be observed that the law there under consideration provided that it should be unlawful for any person to receive any rebate or concession, whereby property should, “by any device whatever,” be transported at a less rate than that named in the published tariffs, yet the indictment there under consideration did not allege whát the device was by which the rebate had been secured. The judgment' of this court in that case was affirmed by

*47the Supreme Court, and the decision of that court is reported in 209 U. S. 56, on page 83, 2,8 Sup. Ct. 428, on page 436 (52 L. Ed. 681), under the name of Armour Packing Company v. United States. It was there said;

“It is alleged that the indictment is insufficient, in that it fails to set out the kind of device by which traffic was obtained, and of what the concession consisted, and how it was granted, Authorities are cited to the proposition that In statutory offenses every element must be distinctly charged and alleged. This court has frequently had occasion to hold that the accused is entitled to know the nature and cause of the accusation against him, and that a charge must be sufficiently definite to enable him to make his defense and avail himself of the record of convietiou or acquittal for his protection against further prosecutions and to inform the court of the fads charged, so that it may decide as to their sufficiency in law to support a conviction, if one be had and the elements of the offense nmst be set forth in the indictment with reasonable particularity of time, ifiace, and circumstances. And it is true it is not always sufficient to charge statutory offenses in the language of the statutes, and where the offense includes generic terms it is not sufficient that the indictment charge the offense in the same generic terms, but it must state the particulars. United States v. Hess, 124 U. S. 482, 8 Sup. Ct. 571, ill L. Ed. 516; Evans v. United States, 15Ü U. S. 584, 14 Sup. Ct. 1)34, 38 L. lid. 830. But an indictment which distinctly and clearly charges each and every element of the offense intended to be charged, and distinctly advises the defendant of what he is to meet at the trial, is sufficient.
"And in Ledbetter v. United States, 170 U. S. 600, 612, 18 Sup. Ct. 774, 776 (42 L. Ed. 1162), Mr. Justice Brown, speaking for the court, said; ‘Notwithstanding the cases above cited from our reports, the general rule still holds good that upon an indictment for a statutory offense the offense may be described in the words of the statute, and it is for the defendant to show that greater particularity is required by reason of the omission from the statute of some element of the offense.’ ”

Indictments in some respects similar to this one have been under consideration in the cases of Hardesty v. United States, 168 Fed. 25, 93 C. C. A. 417; Fuders v. United States, 187 Fed. 754, 109 C. C. A. 502. The demurrer to the third count was properly overruled.

[4] The evidence at the trial did not show that the defendants manufactured white oleomargarine; they therefore did not come within the definition of a manufacturer contained in the original act. It was proven that they mixed white oleomargarine with artificial coloration, so that it looked like butter. This brought them within the definition oí a manufacturer found in the amendment of May 9, 1902, c. 784, 32 Stat. 194 (U. S. Comp. St. Supp. 1911, p. 969). It is claimed by the defendants, inasmuch as when section 17 was enacted the only manufacturer was a person who made white oleomargarine, that that section cannot apply to these defendants who became manufacturers by an act subsequent thereto. There is nothing in this contention. If it were sustained, it would not be necessary for persons who mixed coloring matter with white oleomargarine to pay a license tax of $600 a year. Nor would any of the other sections of the original law, which refer to manufacturers, apply to those who became such under the act of 1902. In order to make such sections applicable, it was not necessary to re-enact them. There is no difficulty in applying the forfeiture provision in section 17 to such a condition as is found in this casq. *48These defendants had a factory and a manufacturing apparatus, such as it was. They had the raw materials for the manufacture of the new product, namely, white oleomargarine and the coloring matter.

[5] It is further claimed by the defendants that section 17 applies only to persons who have received a license to manufacture oleomargarine, and that these defendants, never having taken out such license, cannot be convicted. To so construe the section would be to add thereto the word "licensed,” so that it would read “whenever a licensed person,” or to add other words indicating that it was limited to persons who had received such a license as has been mentioned.

if it clearly appeared that it was the intention of Congress to so limit that section, possibly authorities might be found which would support such an interlineation. But a moment’s reflection will show that such never could have been the intention of the Legislature. If such were the law, a person who -intended to violate section 17 would purposely fail to take out a license as a manufacturer, for in such a case he could not be imprisoned in the penitentiary; he could only be punished for a violation of section 4, the penalty for which is a fine. In Vermont v. United States, 174 Fed. 792, on page 794, 98 C. C. A. 500, on page 502, this court said:

“The temptation, to make the additional profit which would result by evading the payment of the tax of 10 cents- a pound imposed by law upon colored oleomargarine naturally appeals more strongly to tbe dishonest and irresponsible than to the legitimate dealer; and the former would likely be the class Congress was most solicitous to regulate. It must be admitted that it is possible and well within the power of any and all persons to resort to tbe business of coloring oleomargarine to make it look like butter; and, in view of this possibility, tbe words ‘any person’ under consideration were doubtless employed by Congress. They.are broad and comprehensive and easily embrace any and all persons whether licenced wholesale or retail dealers or otherwise; and by a familiar rule of construction they should be given full force and effect, to the end that the legislative purpose may be subserved.”

[6] The evidence was sufficient to convict all of the defendants.

The government’s witnesses testified that Thomas B. May, one of the plaintiffs in error, had obtained about a month prior to and possessed on November 29, 1910, a special tax stamp as a retail dealer in colored oleomargarine for the premises 3536 Morgan street in the city of St. Louis; that the business at these premises was conducted under the name of the Clayton Creamery. They further testify that they watched these premises for a period of a week before breaking in on the 29th day of November, 1910; that, at the time they broke in, they had to break down several doors, and when they finally reached the second story of the premises, they there found three of the plaintiffs in error, to wit, Fred D. May, William M. Johnson, and E. W. Bailey. They found on the premises a gasoline stove, around which were piled a number of tubs of oleomargarine in a soft and oily condition. They found oleomargarine in tubs, stored in an ice box. They found a printing table, such as is usually used in preparing butter or oleomargarine in shaping the same in prints from its original contents in firkins. They found paddles, some *49galvanized iron tubs, in which colored oleomargarine was found sticking to the sides. They also found, under a trapdoor in the 'floor, a lot. of oleomargarine streaked with coloring matter, and under this same trapdoor they also found an empty can which bore a label upon which was the inscription, ‘‘Butter Color, Heller & Merz Co., Alder-nay Butter Color, New York, N. Y.,” and also another empty can of the same character thrown on top of the ice box.

The testimony of these witnesses further shows that plaintiff in error '.Pom May, the proprietor, had been seen around said premises at various times for a considerable period, and had been there on every day during the week immediately preceding the raid, but was not, and had not been, there on the morning of the raid; that plaintiff in error Fred D. May usually arrived at said premises about 6 or 6:15 in the morning; that he had been around there every day during the week immediately preceding the raid, and had also been around there frequently for a period of about two years immediately preceding said time; that plaintiff in error Johnson was observed there three different times during the week immediately preceding the breaking in; that lie arrived about 7:15 in the morning and would leave about 10:30 or 11 the same morning, and that he had been observed around there on other occasions prior to this time; that Bailey was around there every morning during the week immediately preceding the breaking in, and also during a considerable period preceding this time; that he liad been observed taking care of the horses and wagons that were kept on the premises.

It required from 20 to 25 minutes to break into the room upstairs. The demand for admission before breaking in was made in so loud a voice that it attracted the attention of the neighbors in the house next door. While the officers were attempting to force an entrance, the defendants who were inside the building neither said nor did anything. During the time that the officers were watching the' premises they observed a number of drivers come in the early morning and depart in wagons loaded with goods.

The facts above stated, with other evidence to which attention has not been called, were sufficient to convict all of the defendants both of the offense of engaging in the manufacture of oleomargarine without paying the tax of $600, and also of the offense punished by section 17.

It seems to be the claim of the defendants that they cannot be convicted unless some witness saw each defendant in the act of mixing coloring matter with white oleomargarine. Buc.h proof was not required. The evidence shows that this unlawful business of coloring oleomargarine was being carried on at this place with intent to sell the product and to defraud the government, and that each one of the defendants knowingly assisted therein. Vermont v. United States, 174 Fed. 792, 795, 98 C. C. A. 500._

The judgment of the court below is affirmed.