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United States v. Max

decided.: May 22, 1946.


Author: Mclaughlin

Before BIGGS, MARIS, and McLAUGHLIN, Circuit Judges.

McLAUGHLIN, Circuit Judge.

The indictment in this case contains nine counts. The first count charges the defendants with unlawful possession of gasoline ration coupons. The second, third and fourth charge them with unlawfully transferring gasoline. The fifth to ninth inclusive charge possession of gasoline ration documents. The pertinent language of these last counts is generally the same. In count five it reads:

"* * * knowingly, wilfully and unlawfully use and transfer the said B ration documents containing the said 383 likenesses of Class A-11 gasoline ration coupons the same having been theretofore counterfeited and forged in the manner following:

"* * * all in violation of General Ration Order 8 as issued by the Office of Price Administration, contrary to the form of the statute in such case made and provided and against the peace and dignity of the United States."

The defendants were convicted on all counts. Max, the individual defendant, was sentenced to one year on each of the first seven counts with the terms to run consecutively and to one year on each of the eighth and ninth counts with those terms to run concurrently with the sentence on the first count. The corporate defendant was fined $5,000 on each of the nine counts.

Appellants' first point questions the sufficiency of the last five counts of the indictment.*fn1 These counts are founded on Section 2.5 of General Ration Order 8 of the Office of Price Administration of March 25, 1943 as amended February 1, 1944 which reads:

"Sec. 2.5. Acquisition, use, transfer or possession of counterfeited or forged ration document. (a) No person shall acquire, use, permit the use of, transfer, possess or control any counterfeited or forged ration document under circumstances which would be in violation of section 2.6 if the document were genuine or if he knows or has reason to believe that it is counterfeited or forged."*fn2

As seen the section is in two parts. The first prohibits the use of counterfeit ration documents in the same particulars as Section 2.6 prohibits the use of genuine ration documents.*fn3 The second part forbids the use of a counterfeit ration document if the possessor or user has knowledge that it is counterfeit or believes it to be such. Two distinct offenses are stated in the section. The indictment clearly indicates that its last five counts come under the second division of the section. No element of illegal possession or use under the referred to Section 2.6 is charged. The offense alleged is possession of counterfeit documents and "knowingly, wilfully and unlawfully" using and transferring them "the same having been theretofore counterfeited and forged in the following respects: * * *" In other words, the knowledge attributed to the defendants is connected entirely with the use of and transfer of the sheets of coupons. There is nothing in any of the five counts alleging that the defendants knew the documents were counterfeit. It is that knowledge or belief which creates an offense under the second part of Section 2.5 and without it, no crime is charged.Care is taken in the indictment to point out the manner in which the documents were counterfeited but there is not a word that the defendants had knowledge of their falsity.

In United States v. Tobin, 7 Cir., 149 F.2d 534 relied upon by the Government to sustain the questioned counts, the first part of Section 2.5 was involved. The Court rightly held that under that branch of the section, knowledge that the documents were counterfeit was not a prerequisite to conviction. The knowledge attributed to the defendants in that case was that the coupons were unlawfully acquired and that they were transferred for a purpose not authorized by the regulations. These are violations described in Section 2.6. Such violations are directly covered by Section 2.6 if the ration documents are genuine and by the first part of Section 2.5 if they are counterfeit. No such crimes are described in counts five to nine. The Tobin decision shows the differentiation between the two divisions of Section 2.5 and as to the second part says, page 536 of 149 F.2d:

"The second situation provided for in Sec. 2.5 requires that the use or possession be with knowledge that the coupons are counterfeited or forged. It is not difficult to visualize that such forged coupons might be legally acquired in the ordinary course of business. Under such circumstances, it would be necessary to allege and prove that their use and possession by one who had thus lawfully acquired them was with knowledge that they were counterfeited or forged."

The Government argument proceeds on the theory that such knowledge was unnecessary and makes no claim that these counts charge it. But we are here dealing with the second part of 2.5 where knowledge of the falsity of the ration instruments is vital. The Trial Judge appreciated this for in his charge he instructed the jury that before the defendants can be "convicted concerning the forged coupons, it must be proven beyond a reasonable doubt not only that the coupons were counterfeit; but also that the defendant or someone responsible to the Power-Ol Refining Company at the time of the transaction had received or had coupons and believed these coupons were counterfeit." Crank v. United States, supra, presents a like situation both as to knowledge and wording of the indictment with the Court there saying at page 622 of 61 F.2d:

"The crime denounced by the statute is not merely that of receiving and concealing merchandise which had been theretofore unlawfully imported, but receiving and concealing the same knowing that it had been unlawfully imported.

"The indictment, in our opinion, is fatally defective in failing to charge one of the essential ...

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