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State v. Goodman

Decided: May 26, 1952.


On appeal from the Essex County Court, Law Division.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Burling, Jacobs and Brennan. For reversal -- Justice Wachenfeld. The opinion of the court was delivered by Jacobs, J.


This is an appeal, certified to this court on its own motion, from judgments of conviction for conspiracy to extort, entered in the Essex County Court.

The defendant Ira Goodman is Deputy Director of the Department of Public Affairs of the City of Newark. The Newark Department of Health is within the jurisdiction of the Department of Public Affairs and Goodman has exercised supervisory power over it since his appointment in May, 1949. The defendant Richard F. Powell is a sanitary inspector in the Food and Drug Division of the Department of Health which is entrusted, among other matters, with the enforcement of regulations governing the importation and distribution of milk in Newark. The defendant Isadore Eisenstein, a friend of Powell, is in the milk business and the defendant Edward T. Miller, a friend of Eisenstein, is an attorney with law offices in Newark. On Friday, May 26, 1950, a letter was sent by the Department of Health to Schoharie County Coop. Dairies, Inc., advising that, pursuant to hearing, it was being removed from the list of milk

companies approved for shipment of milk to Newark. On Monday, May 29, 1950, representatives of Schoharie, on recommendation by Eisenstein, visited Miller's office, retained him to represent Schoharie and paid him a fee of $7,500, of which he later remitted $7,000 to Eisenstein. On that day and following a call from Miller, Goodman ordered that Schoharie's approval be reinstated and called Powell to advise Schoharie of the reinstatement. On June 7, 1950, a letter was sent to Queensboro Farm Products, Inc., advising that, pursuant to hearing, its Steamburg plant was being removed from the approved list. On June 8, 1950, representatives of Queensboro visited Miller's office, retained him to represent Queensboro's Steamburg, Canton, and Brier Hill plants and paid him $5,000 on an agreed $10,000 fee. Miller called Goodman and Queensboro was reinstated. Queensboro paid the additional $5,000 to Miller on June 13 and Miller remitted $9,075 from the $10,000 to Eisenstein. On June 20, 1950, a hearing was held with respect to Cooperdale Dairy Company and it was announced that the company's approval would be withdrawn. After the hearing a representative of the company retained Miller and paid him $7,500 of which he expected to remit about $7,000 to Eisenstein. No written communication advising Cooperdale of its removal from the approved list was ever sent by the Department of Health.

During the summer of 1950 the Essex County Prosecutor conducted an investigation to determine whether any crimes had been committed in connection with the aforementioned payments by the milk dealers and in the course thereof Goodman, Powell, Eisenstein and Miller gave voluntary testimony. See State v. Eisenstein, 16 N.J. Super. 8 (App. Div. 1951), affirmed 9 N.J. 347 (1952). The payments to Miller and his remissions to Eisenstein were not disputed but there were denials that Goodman and Powell or either of them received or were to receive any part thereof. However, in March, 1951, the Essex County grand jury returned an indictment in three counts against Goodman, Powell,

Eisenstein and Miller which charged, in count two, that they had conspired to commit statutory extortion (R.S. 2:127-1; R.S. 2:119-1) in that they had corruptly agreed that sums of money would be obtained from milk dealers for reinstatement of their approvals as dealers, and that Miller and Eisenstein would take and receive a portion thereof and Goodman and Powell would take and receive a portion thereof. After a lengthy trial all of the defendants were convicted under count two and they have duly appealed. Their main contention is that the State's evidence was insufficient to sustain the judgments of conviction and that their motions for acquittal at the close of the State's case should have been granted by the trial court. This necessitates a summary of pertinent evidence introduced and relied upon by the State and which the jury was at liberty to accept as credible. See State v. Fox, 12 N.J. Super. 132, 135 (App. Div. 1951).

When Goodman was first designated as deputy director, Dr. Charles V. Craster was health officer in charge of the Department of Health, Joseph E. Connolly was assistant health officer in charge of the Food and Drug Division, and David E. Morgan was acting chief inspector in the Food and Drug Division. Morgan generally assisted Connolly and was superior in authority to the inspectors in the Division including Inspector Powell. In January, 1950, Goodman advised Connolly that thereafter all new applications for approval were to be sent to the office of the Director of the Department of Public Affairs and later that month Goodman told Connolly that Powell was to become a free agent and be permitted to go and come as he pleased. In the meantime and thereafter Goodman and Powell had many conferences together. In January, 1950, Eisenstein called Morgan and invited him to his home, saying that Powell would be there; Morgan declined the invitation. In March, 1950, Goodman called Morgan, who was then at home recuperating from illness, inquired about his health, and asked him to telephone when he returned to work. On March 20, 1950, Morgan

returned to work, telephoned Goodman and they had lunch together. Morgan testified that at that time Goodman asked him "how can we get some money" and when Morgan inquired as to what he meant he said "how about the inspectors that go out and inspect the milk plants and the dairies putting pressure on some." Morgan told him it was a "crazy idea" and he "wouldn't do it." During the conversation Goodman asked Morgan who Powell was and whether he knew him. Morgan testified further that after the March 20 luncheon Connolly told him that Goodman had called saying that Powell "was going to take over and advise him" and thereafter he was no longer consulted by Connolly as to matters involving the assignment of inspectors and the exclusion of milk concerns from the lists of approved companies. Connolly testified that in March, 1950, Powell told him that there had been a meeting during which the feeling was expressed that there should be more rigid inspection schedules and he would be Connolly's "adviser and consultant" and that Goodman told him he was to get "tougher" on the matter of cleanliness in milk dairies and "work with Mr. Powell on it." At about that time Goodman gave Connolly a slip bearing the names of four milk companies and told him to take it up with Powell -- "he knows what to do with it." Later Powell gave him another list bearing the names of 18 companies including Schoharie, Queensboro and Cooperdale, telling him to keep it in his pocket "so that nobody would know where it was." This list bore, alongside each company's name, the names of its owners and purchasers, the number of dairy farms it controlled and, along the margin in Powell's handwriting, the name of the person who was to inspect the company. Ten companies were to be inspected by Powell, six by Inspector Roman and two by Inspector Manning; at later dates most of these companies were excluded from the approved lists.

Schoharie is a cooperative organization which sells its entire output, as do Bovina Center Creamery and Guernsey Breeders Association, to Middletown Milk & Cream Co.

Schoharie was inspected by Roman from May 11 to May 16 and on May 22 Connolly notified Schoharie that a hearing would be held on May 24. Notices of hearing were also sent to Bovina and Guernsey. Middletown retained David T. Wilentz, an attorney-at-law with offices at Perth Amboy, to represent Schoharie, Bovina and Guernsey. Mr. Wilentz telephoned the Director of the Department of Public Affairs for an adjournment and was referred to Goodman. There was some difficulty about an adjournment and Mr. Wilentz told Goodman he would stop in his office on his way to the hearing. He did so and at that time he asked Goodman to see if decision could not be reserved "until I see what there is to it and perhaps I can adjust it." Goodman said he would try to have decision reserved and he did tell Connolly to hold his decision in abeyance. At the hearing Dr. Shaul of Schoharie pointed out that his organization had been approved for approximately ten years and was ready to meet all regulations of the Department. Mr. Wilentz expressed the view that there was not "anything too serious here that couldn't be corrected" and Connolly said "In most instances that is true." Roman agreed that "in a short period of time" the company could get the objectionable items corrected. At the close of the hearing Connolly said, "I'll hold the decision for a while -- then contact you." Mr. Wilentz again stopped in at Goodman's office and said, "I would like to get a chance to straighten this out and before there is any official action taken I would like to be notified and give me an opportunity." Nevertheless, Goodman directed Connolly to exclude Schoharie, on May 26 a letter of exclusion was mailed, and on the same day Middletown was advised of the exclusion by telephone.

Prior to Schoharie's exclusion Eisenstein called Mr. Mather, president of Middletown and they made an appointment to meet on the morning of Friday, May 26. They met at Eisenstein's office and Eisenstein told him that "You are in trouble at Newark." Eisenstein had photostatic copies of sediment tests and what Mather understood to be a transcript

of the Schoharie hearing held on May 24. Eisenstein suggested that a new attorney be retained and indicated that he would recommend one after thinking it over during the weekend. Eisenstein requested that Mr. Mather keep this conversation to himself. Early Monday morning, May 29, Eisenstein called, told Mr. Mather that he had found Miller, an attorney in Newark, to be very satisfactory and that the fee for Schoharie would be $7,500 and for Bovina $3,500. Bovina decided not to participate but Schoharie agreed to the fee and Mr. Mather so advised Eisenstein. That afternoon Dr. Shaul of Schoharie went to Miller's office. He testified that he made an effort to tell Miller what had taken place "but he didn't appear to be very much interested and asked me if I brought the check for $7,500." Dr. Shaul delivered the check for $7,500 to Miller and obtained his receipt. After Dr. Shaul left, Miller called Goodman on his unlisted telephone at home and Goodman said he would reinstate Schoharie. That evening Goodman called Powell and told him to notify Schoharie that it had been reinstated. Powell immediately called Dr. Shaul, was unable to reach him, but did reach Mr. Mather and notified him of the reinstatement. Mr. Mather testified that when Powell called him he said he was calling "at the direction of Assistant Health Commissioner Connolly." Connolly testified that when he returned to his office on May 31 Powell told him that Schoharie had been reinstated, that he was to send a letter of reinstatement pending reinspection, and he did so immediately.

In his testimony before trial, Miller, who had no prior connection with the milk business, admitted that Eisenstein called him on Friday, May 26, about Schoharie; that Eisenstein had told him to call Goodman; and that on May 30, after Goodman had reinstated Schoharie, Eisenstein prepared and gave him a typed memorandum on the Schoharie matter which he later left at Goodman's office. The State contends, with basis, that examination of this short memorandum discloses that it involved no significant research or other work

and was merely prepared for purposes of the record. On June 1 Eisenstein billed Miller for "consultations, inspection work and briefs Schoharie County Co-op, Cobbleskill, New York" in the sum of $7,000 and Miller paid that sum to Eisenstein by check dated June 5. On June 7 Eisenstein drew checks aggregating $4,300 to various dairy companies, endorsed their names without their knowledge, and cashed the checks.

Queensboro is a New York corporation which operates plants at Steamburg, Canton and Brier Hill. In May, 1950, the Canton and Brier Hill plants were excluded and Queensboro retained Mr. Kapelsohn, an attorney and member of a Newark law firm. He conferred on several occasions with Goodman seeking to have the plant reinspected. On May 25, 1950, notice was sent to Queensboro that a hearing would be held on May 31, 1950, with respect to its most important plant at Steamburg. Queensboro notified Mr. Kapelsohn who in turn called Goodman and spoke to him again following the hearing on May 31, 1950. At that time he told Goodman that he had been advised that the plants were in sanitary condition and sought their reinspection. However, on instruction from Goodman, a letter was sent under date of June 7, 1950, notifying Queensboro that it was being removed from the approved list "until such time as it meets our State and City requirements; is reinspected and found in a satisfactory condition by a representative of our Department and reinstated." In the meantime Eisenstein had told Mr. Tolins, who was in the dairy equipment business, that Miller would handle Queensboro's matters before the Newark Department of Health for $10,000. When Mr. Tolins reported this to Queensboro's representatives he was told "to forget it." The treasurer of Queensboro testified that when they left the hearing on May 31 they were not concerned because Inspector Manning, who had made the inspection, had not recommended exclusion; however, they became "quite concerned and alarmed" when they received notification of the exclusion on June 8 and called Mr. Mather who gave

them the name of the defendant Miller. They visited Miller's office that afternoon and were told that the fee would be $10,000 for the Steamburg, Canton and Brier Hill matters. During the course of the discussion Miller said that the fee was "supposed to be $5,000 a plant. Ordinarily that would be $15,000 but we will throw Brier Hill into the bargain and we will only charge you $10,000." When asked to lower the fee Miller said, "I would like to do something for you but I can't. I am only an errand boy." Miller, in his testimony before trial, admitted that Eisenstein had told him in advance that the fee was to be $10,000 and that during his conference with Queensboro's representatives he made no notes and received no papers. Following the conference Miller called Goodman and Goodman instructed Connolly to notify Queensboro that it was reinstated, and that was done by telegram on the morning following the conference, namely, June 9. Thereafter a short memorandum was prepared and delivered by Miller to Goodman. Queensboro paid $5,000 to Miller at the conference of June 8 and paid the additional $5,000 to Miller on June 13. On June 12 Eisenstein sent Miller a bill for $4,500 which was paid by Miller's check and later sent another bill for $4,575 which was likewise paid by Miller's check. These checks from Miller were deposited by Eisenstein and on subsequent dates Eisenstein drew checks to named payees, endorsed the names of the payees without their knowledge, and cashed the checks.

Cooperdale is a New York company with plants at Skaneateles and Onatavia, New York. It received notice that a hearing would be held on June 20, 1950, and its secretary Mr. Blum telephoned the defendant Miller several days prior thereto. Miller did not attend the hearing and, at its close, exclusion of Cooperdale was announced. Immediately thereafter Mr. Blum met Miller who told him the fee would be $7,500. Miller admitted in his testimony before trial that Eisenstein had fixed this fee at $7,500 and that he expected Eisenstein would receive "probably $7,000" of it. Blum paid the fee to Miller and no official communication was thereafter

sent to Cooperdale. Blum testified that when he pressed Miller for action some time after the hearing Miller said, "It is going to take a little longer; things are getting hot -- we can't do it as ...

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