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UNITED STATES v. SCHENLEY DISTILLERS CORP.

July 19, 1945

UNITED STATES
v.
SCHENLEY DISTILLERS CORPORATION et al.



The opinion of the court was delivered by: MEANEY

Defendant, with other persons and corporations, was indicted on April 28, 1944, under Title 18, section 88 of the United States Code Annotated, for wilfully, knowingly and feloniously conspiring to commit offenses against the United States. The indictment charged the defendants with conspiring to engage in the business of wholesale liquor dealers and with offering to sell distilled spirits in quantities of five wine gallons and more, to the same person at the same time, and to make false entries in the records of the distilled spirits received and disposed of, in violation of the regulations promulgated by the Collector of Internal Revenue.

The second offense charged is conspiracy by the defendants to sell distilled domestic spirits, in violation of section 4(a) of the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 904(a), and the regulations issued by the Administrator of the Office of Price Administration, in cases of pints, quarts, and four-fifths of whiskey at prices that were in excess of maximum prices as authorized by the provisions of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq., and the provisions of the Maximum Price Regulation 193, section 1420.13, and Maximum Price Regulation 445, section 5.4.

 This matter is now before the Court on defendant's application for leave to file a complaint in the Emergency Court of Appeals against the Administrator, setting forth objections to the validity of regulations under the Emergency Price Control Act.

 The application is made by the defendant under the provisions of section 204(e) of the Act as amended by the Stabilization Extension Act of 1944, 50 U.S.C.A.Appendix, § 924(e), the pertinent parts of which are here set forth:

 'Section 204(e)(1) Within thirty days after arraignment, or such additional time as the court may allow for good cause shown, in any criminal proceeding, and within five days after judgment in any civil or criminal proceeding, brought pursuant to section 205 involving alleged violation of any provision of any regulation or order issued under section 2 or of any price schedule effective in accordance with the provisions of section 206, the defendant may apply to the court in which the proceeding is pending for leave to file in the Emergency Court of Appeals a complaint against the Administrator setting forth objections to the validity of any provision which the defendant is alleged to have violated. The court in which the proceeding is pending shall grant such leave with respect to any objection which it finds is made in good faith and with respect to which it finds there is reasonable and substantial excuse for the defendant's failure to present such objection in a protest filed in accordance with section 203(a).'

 The portion of the section above quoted provides that application for leave to file a complaint may, under certain conditions, be made in a proceeding brought pursuant to section 205 involving alleged violation of any provision of any regulation or order issued under section 2 or of any of the provisions of section 206.

 The indictment in this case charges the defendants with conspiracy under Title 18 U.S.C.A. § 88 to violate section 2857 of the Internal Revenue Code, 26 U.S.C.A.Int.Rev.Code, § 2857, and section 4(a) of the Emergency Price Control Act. The precise question presented is whether a conspiracy having for its object the commission of an offense prohibited by the Emergency Price Control Act is in itself an offense arising under that act and 'brought pursuant to section 205' within the meaning of section 204(e) thereof.

 It has consistently been held by the United States Supreme Court that a prosecution for conspiracy is not a prosecution under the statute whose violation is in its object. Thus, in United States v. Rabinowich, 238 U.S. 78, at page 85, 35 S. Ct. 682, 683, 59 L. Ed. 1211, that court stated:

 'It * * * has been repeatedly declared in decisions of this court, that a conspiracy to commit a crime is a different offense from the crime that is the object of the conspiracy.'

 And further, quoting from an earlier opinion in United States v. Hirsch, 100 U.S. 33, 25 L. Ed. 539, the court in the Rabinowich case stated:

 The Supreme Court in the recent case of Braverman v. United States, 317 U.S. 49, at page 54, 63 S. Ct. 99, 102, 87 L. Ed. 23, reiterated its earlier decisions in stating that:

 'A conspiracy is not the commission of the crime which it contemplates, and neither violates nor 'arises under' the statute whose violation is its object.'

 It is the most reasonable interpretation that criminal proceedings 'brought pursuant to section 205 involving alleged violation of any provision of any regulation or order issued' under the Emergency Price Control Act are limited to offenses created by that Act. For as stated by the Court in the Rabinowich ...


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