203 F.2d 248 (1953), rev'd, 347 U.S. 909 (1954)
The United States Court of Appeals for the Tenth Circuit considered separate appeals from judgments of convictions and sentences on an information containing four counts.1
Three counts charged violations of Section 601 of the Defense Production Act of 1950 and Regulation W regarding installment sales of sewing machines designed for household use.2 The fourth count charged a conspiracy to violate the same provisions.3 Appellants Gordon and Tempkin operated as partners under the name National Stores selling new and used sewing machines on the installment basis.4 They maintained a store in Salt Lake City, Utah, after first opening a store in Los Angeles, California.5
The charges centered on two specific sales made in Salt Lake City.6 In support of counts one and two, a Mr. Tempkin sold Buean E. Colley a sewing machine for a total sale price of $149.95.7 The conditional sales agreement signed on the date of the sale showed a down payment of $38.95.8 But the Colleys actually paid Tempkin the sum of $1.00 to hold the machine until the next pay day.9 At which time Mr. Colley paid the sum of $15.00 and the machine was delivered to him.10 A total of $22.95 was paid on the down payment.11 He received dunning notices from the National Stores showing the balances due on the down payment and soliciting additional payments.12
In support of count three, a salesman for the National Stores sold Evelyn Allen a sewing machine for $149.95.13 Upon delivery of the machine the salesman was paid the sum of $13.00 on the required down payment of $38.95.14 At the same time Evelyn Allen signed three I.O.U's each promising to pay $6.50.15 Three American Express Company checks made payable to the salesman or to the National Stores were mailed in the company envelopes left with her for that purpose.16
One salesman testified that he made about fifty sales and that in about 80% of them he took I.O.U's for the down payment.17 These I.O.U's were turned into the company office and treated as cash as far as the company was concerned.18 He was paid the full amount of his commissions irrespective of the down payments.19 Appellant Deverich was at one time manager of the Salt Lake City store.20 A Burt D. sold a sewing machine to Mrs. Elda Evans for which less than the required down payment was received.21 Appellant Stone was at one time manager of the Salt Lake City store.22 While acting as such manager he attempted to enforce the collection of the balance of a down payment on a sewing machine sold to a Mrs. Thelma C. Maxwell.23 The information does not charge a sale of a sewing machine to either Evans or Maxwell.24
Appellant Gordon lived in Los Angeles, California and came to Salt Lake City two or three times to attend sales meetings and to make sales talks. Appellant Eli Tempkin was never identified as the Tempkin who sold the machine to Mrs. Colley.25 There were two Tempkins connected with the organization.26 The sales contracts introduced in evidence show the receipt of the full amount of the required down payment and the duplicate deposit slips showed that the amount of the down payment had been deposited in a Salt Lake City bank.27 Similar contracts, duplicate bank deposit slips, and evidence of like transactions all showing the full payment of the down payments and their deposit in a Salt Lake City bank were mailed daily to the Los Angeles store for records there.28 There is no explanation for the irreconcilable inconsistencies between the evidence of numerous sales where the required down payment was not collected and the records showing the collection and deposit of the down payment.29 The case was tried and submitted to the jury on the theory that knowledge of one partner regarding the transactions was imputable, attributable and chargeable to the other and that the knowledge and acts of the salesmen who made the sales and kept the records while acting in the course of their employment were imputable and chargeable to their employers Gordon and Tempkin.30 The judgment as to Deverich and Stone is reversed. In all other respects it is affirmed.31
Whether the conspiracy count in the information adequately alleged an overt act?32
A conspiracy charge restricted to a specific sale necessarily alleges that sale as the overt act when the information identifies the particular transaction and the court instructs the jury accordingly.33
Yes. The fourth count charged the appellants with conspiring to violate the Act and Regulation by making the installment sale of the sewing machine to Evelyn Allen as alleged in count three of the information.34 That sale itself constituted the overt act.35 The court accordingly instructed the jury and we think correctly so.36
The conspiracy count sufficiently alleged the overt act and the district court correctly instructed the jury on that element.37
Whether the district court erred in instructing the jury that the knowledge and acts of employees and one partner could be imputed to the partner defendants Gordon and Tempkin?38
Criminal guilt is personal to the accused and wilfulness is an essential element of the offense under Section 601 of the Defense Production Act.39 Respondeat superior does not generally apply to impute an agent's acts to the principal in criminal cases requiring scienter.40 In regulatory contexts the employer may be charged with constructive knowledge of records and acts performed through agents when the statute places the duty of compliance on the registrant.41
No. The district court did not err.42 The partners Gordon and Tempkin operated National Stores as registrants under Regulation W.43 The salesmen acting in the course of employment made the Colley and Allen sales without collecting the full twenty-five percent down payment.44 They treated I.O.U's as cash.45
They maintained records showing full payments that were mailed daily to the Los Angeles office.46 The instruction properly allowed the jury to consider this course of conduct as supplying the wilfulness element through imputed knowledge of the agents who handled the transactions and records.47 We do not think the instructions of the court fall short of the traditional standards for guilt.48
The district court correctly instructed the jury on imputation of knowledge and acts to the partner defendants Gordon and Tempkin.49
Related opinions on this issue
Circuit Judge Huxman dissented.50 He concluded that the instruction improperly applied the civil doctrine of respondeat superior to a criminal prosecution where wilfulness is an essential element.51 The court told the jury that the act of an agent within the scope of employment is the act of the employer.52
The knowledge of an agent is chargeable to the employer.53 This was done without requiring proof that the partners directed the violations or had actual guilty knowledge.54 The partners denied knowledge or intent.55
The evidence showed only that they had reason to know of violations.56 Due process required the jury to be instructed they were not criminally liable for employee acts unless they participated or acquiesced with guilty knowledge.57 The subsequent general instruction on inferences did not cure the error.58
The case was submitted on the theory of imputable knowledge alone.59
Whether the evidence supported the convictions of appellants Deverich and Stone?60
A conviction cannot stand where the record contains no evidence that the defendants were connected with the company, participated in the charged sales, or had knowledge of those specific transactions at the time they occurred.61
No. The evidence failed to support the convictions because although Deverich was at one time manager of the Salt Lake City store and Stone was another former manager, neither was shown to be manager when the Colley or Allen sales occurred.62 There is nothing in the record tending to show that either Deverich or Stone was manager of the store when either of the sales laid in the information was made.63 The information does not charge a sale of a sewing machine to either Evans or Maxwell. It follows that the judgment of the court as to those appellants must be reversed.64
The evidence was insufficient to support the convictions of appellants Deverich and Stone.65
Whether the evidence was sufficient to support the verdicts of guilty against Gordon and Tempkin on the substantive and conspiracy counts?66
Evidence is sufficient to support a verdict when it permits a reasonable inference of wilfulness through a course of conduct involving numerous sales where required down payments were not collected and records were manipulated to conceal the violations.67
Yes. One salesman testified that he made about fifty sales and that in about 80% of them he took I.O.U's for the down payment. These I.O.U's were turned into the company office and treated as cash as far as the company was concerned. He was paid the full amount of his commissions irrespective of the down payments.
The sales contracts introduced in evidence show the receipt of the full amount of the required down payment and the duplicate deposit slips showed that the amount of the down payment had been deposited in a Salt Lake City bank. There is no explanation for the irreconcilable inconsistencies between the evidence of numerous sales where the required down payment was not collected and the records showing the collection and deposit of the down payment. If the testimony of the salesmen and the customers is to be credited it is a permissible inference that the records of the company were manipulated to cover up the unlawful transactions.68
The evidence was sufficient to support the verdicts of guilty against Gordon and Tempkin on the substantive and conspiracy counts.69