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25 F.(2d) 49

Nos. 7708-7710.

1. Conspiracy 23-Conspiracy to commit a crime is distinct offense from the crime itself.

ence to the injunctive orders of the court, pro- GERSON v. UNITED STATES (three cases). ceedings were being conducted to ascertain Circuit Court of Appeals, Eighth Circuit. who was entitled to them, and during this March 14, 1928. time Mrs. Forstmann manifestly could not pay the taxes on them. They were income accumulated for the benefit of some person, yet unascertained. The government was entitled to receive the taxes for the years when the dividends were declared, but there was no one who could safely pay them, except this fiduciary company. It might have been negligent in making its returns, but that did not relieve it of its statutory duty, and it was "better late than never."

The action in these cases is akin to an equitable garnishment or equitable trustee process under statute. Phoenix Insurance Co. v. Abbott, 127 Mass. 558; Pendleton v. Perkins, 49 Mo. 565; Westwater v. Ferguson 22 Pa. County Ct. 582. The company holding the dividends was an equitable garnishee. Such a proceeding in form is an action at law, but in substance is an action in equity, to determine the ownership of property in dispute, and in some states is called a "trustee process." As the relation of debtor and creditor exists between the garnishee and his original debtor, so the relation of debtor and creditor existed between the company and Mrs. Forstmann, although another creditor stepped in and claimed the hitherto undisturbed right of the original creditor.

The Alien Property. Custodian, in bringing these suits and obtaining these injunctions, was employing substantially equitable processes to establish his equitable rights, alleging that one block of the stock belonged to the company (of which he was a stockholder), because purchased with its money, and the other block, on being seized, belonged to him. Under the injunctive orders, the company was required to hold both of these until the rightful owner was ascertained.

These proceedings were clothed with the characteristics of a trust within the provision of section 219 (a) of the Revenue Acts of 1918 and 1921. Accordingly it seems to us that the dividends in question constitute income accumulated "for the benefit of unascertained persons," the tax on which it was the duty of the company as "fiduciary"

to pay.

This conclusion renders it unnecessary to consider the second question, as to whether or not, if the dividends were taxable to the plaintiff, the taxes should be paid as of the years when declared by the company, or the year when received by the plaintiff.

The judgment is affirmed.

25 F. (2d)-4

A conspiracy to commit a crime is a distinct offense from the crime, which is stated as the object of the conspiracy.

2. Conspiracy 43(10)-Indictment charging conspiracy against government by fraudulently concealing assets from trustee in bankruptcy held sufficient (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

Indictment under Criminal Code, § 37 (18 USCA § 88), and Bankruptcy Act, § 29b (11 USCA § 52), charging defendants with conspiracy to conceal from trustee in bankruptcy of one of their number "certain merchandise belonging to the estate" of A. G., bankrupt, of stated value, "and the cash received from the sale thereof by the said A. G. which said property belonged to the said A. G. at the time of his adjudication in bankruptcy," held sufficient to United States by fraudulent concealment of charge conspiracy to commit offense against the bankrupt's property; identification of the property being sufficient to enable the defendants to know what they were charged with. 3. Criminal law 295-Resort may be had to parol testimony to establish identity of offense in subsequent prosecution.

In the event of subsequent prosecution for same offense, resort may be had to parol testimony to establish the identity of the offense. 4. Conspiracy 43(12)-Indictment alleging conspiracy to conceal bankrupt's merchandise and cash received from sale thereof held not to limit proof of concealment of cash to that received from concealed merchandise (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit offense against the United States by violation of Bankruptcy Act, § 29b (11 USCA § 52), relative to fraudulent concealment of bankrupt's property, indictment alleging conspiracy to conceal "merchandise of the value of $15,945.45, and the cash received from the sale thereof, which said property belonged" to bankrupt, permitted proof of the concealment of moneys realized from prior sales of merchandise, irrespective of whether merchandise sold was concealed.

5. Criminal law 805(1)-Court need not in its charge adopt exact language of indictment.

Courts are thoroughly competent to make more concise and clear the extended statements of an indictment, and are not compelled to submit to jury the exact language of the indictment. 6. Conspiracy 48-Failure to list merchan

dise and cash in schedules, alleged in indictment for conspiracy to conceal bankrupt's assets, held sufficiently covered in instructions (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit of

fense against United States by violation of Bankruptcy Act, § 29b (11 USCA § 52), overt act charged in indictment, as alleged failure to schedule merchandise and cash of bankrupt estate were sufficiently covered by court's instructions relative to concealment of cash received for merchandise, in view of entire charge.

7. Conspiracy 27-Intentional concealment of property belonging to bankrupt estate, continued after trustee's appointment, held overt act (Bankr. Act, § 29b [11 USCA § 52]).

Continuous and intended concealment from trustee of property belonging to estate of bankrupt, even though actual concealment took place before appointment of trustee, was sufficient as overt act under Bankruptcy Act, § 29b (11 USCA § 52), denouncing concealment from trustee of property belonging to bankrupt estate. 8. Conspiracy 27-Alleged purchase and resale by codefendant of bankrupt's stock constituted act done to effect conspiracy to conceal bankrupt's assets, notwithstanding dismissal of conspiracy charge as to such codefendant (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

Alleged purchase and resale by codefendant of bankrupt stock constituted act done to effect object of conspiracy in prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to violate Bankruptcy Act, § 29b (11 USCA § 52), by concealing bankrupt's assets, notwithstanding indictment was dismissed as to such codefendant.

9. Criminal law 530-Affidavit signed by defendant, who declined to make any additional statements when given opportunity, held voluntary and admissible in conspiracy prosecution (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit of. fense against the United States by violation of Bankruptcy Act, § 29b (11 USCA § 52), affidavit obtained from one of defendants by Department of Justice was admissible as voluntarily made, where affiant was asked if he wanted to make any statement and declined.

In

10. Criminal law 393 (2)-Admission prosecution for conspiracy to violate Bankruptcy Act of check obtained in depositions taken under order of referee, held not to vio. late defendant's constitutional rights (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit offense against United States for violation of Bankruptcy Act, § 29b (11 USCA § 52), relating to concealment of bankrupt's assets, check given for stock of merchandise, obtained in depositions taken under order of referee in bankruptcy, held admissible, without violating defendant's constitutional rights.

11. Criminal law 432-Failure to produce copy of letter requesting financial statement, held not to render statement inadmissible (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit of

fense against the United States by violation of Bankruptcy Act, § 29b (11 USCA § 52), admissibility of evidence of financial statement made by bankrupt was not affected by fact that copy of letter in which witness testified statement was requested was not produced.

12. Criminal law 423 (1)-Acts of one conspirator, to be admissible as against all, must be done while conspiracy is pending and in furtherance of its object.

Acts of person committed prior to formation of conspiracy are not admissible against his subsequent coconspirator, but acts, to be admissible against all, must be done while conspiracy is pending and in furtherance of its object.

13. Indictment and information 176-Exact date of offense need not be proved as alleged, provided offense preceded indictment and was within statute.

Exact date of offense need not be proved as alleged in indictment, provided it is shown that offense was committed prior to indictment and within the statute of limitations.

14. Criminal law 422 (3)—Bankrupt's financial statement, if given before alleged conspiracy to violate Bankruptcy Act, was not admissible as against bankrupt's codefendants (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

Financial statement made by bankrupt merchant to clothing company was not admissible in prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to violate Bankruptcy Act, § 29b (11 USCA § 52), as against codefendants of bankrupt, unless statement was made after conspiracy was formed.

15. Conspiracy 47-Conspiracy may be proved by circumstantial evidence.

Plan or agreement between conspirators may be proved by circumstantial evidence by natural inferences arising from circumstances showing an agreed concert of action in the commission of the unlawful offense.

16. Conspiracy 47-Government In prosecution for conspiracy to violate Bankruptcy Act had burden to show facts and circumstances excluding every other hypothesis than that of guilt (Cr. Code, § 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit an offense against the United States by violation of Bankruptcy Act, § 29b (11 USCA § 52), relating to concealment of bankrupt's property, government had burden to show facts and circumstances in proof of the alleged conspiracy which excluded every other hypothesis than that of guilt, and mere suspicion was insufficient as

basis for conviction.

17. Conspiracy 47-Bank's purchase of merchandise alleged to have been fraudulently concealed was not shown in prosecution for conspiracy by affidavit of correctness of claims filed in bankruptcy proceeding (Cr. Code, $ 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit of

25 F.(2d) 49

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18. Criminal law 552(1)-Inferences arising from circumstances cannot be substituted for circumstances to prove guilt.

While natural inferences can be drawn from circumstances to prove guilt, such inferences cannot be substituted for the circumstances themselves.

19. Conspiracy 47-Evidence held Insufficlent to sustain conviction for conspiracy to conceal from trustee merchandise purchased by bankrupt and proceeds thereof (Cr. Code, & 37 [18 USCA § 88]; Bankr. Act, § 29b [11 USCA § 52]).

In prosecution under Criminal Code, § 37 (18 USCA § 88), for conspiracy to commit offense against the United States, by violation of Bankruptcy Act, § 29b (11 USCA § 52), on account of concealment of merchandise purchased

by bankrupt, and of proceeds therefrom, evidence which failed to show any substantial quantities of merchandise had been purchased held insufficient to sustain conviction.

In Error to the District Court of the United States for the Western District of Oklahoma; John H. Cotteral, Judge.

Abraham Gerson, Nathan Gerson, and Ike Gerson were convicted of a conspiracy to fraudulently conceal the property of a bankrupt, and they bring error. Reversed and remanded.

I. J. Ringolsky, of Kansas City, Mo. (McLaury & Hopps and H. F. Tripp, all of Oklahoma City, Okl., and Ringolsky, Friedman & Boatright, M. L. Friedman, and William G. Boatright, all of Kansas City, Mo., on the brief), for plaintiffs in error.

Leslie E. Salter, Asst. U. S. Atty., of Oklahoma City, Okl. (Roy St. Lewis, U. S. Atty., and Fred A. Wagoner, Asst. U. S. Atty., both of Oklahoma City, Okl., on the brief), for the United States.

Before KENYON and BOOTH, Circuit Judges, and MUNGER, District Judge.

KENYON, Circuit Judge. Plaintiffs in error, Abraham, Nathan, and Ike Gerson, hereafter designated as defendants, were tried and convicted upon an indictment charging them and others with conspiracy to commit an offense against the United States by concealing from the trustee in bankruptcy certain merchandise and cash of the estate of Abraham Gerson. Sentences of two years in

the penitentiary and a $1,000 fine were imposed as to each. The case was dismissed as to defendants John R. Snyder and Joseph Broida.

The indictment was seasonably attacked by demurrer and motion to quash, both of which were overruled. At the close of the evidence of the government, demurrers were filed to the evidence on behalf of each of the defendants, on the ground that the same was insufficient to prove the guilt of any of them of the crime charged in the indictment, and it was moved to direct the jury to return verdicts of not guilty. The demurrers and motions were overruled. Defendants elected to

stand on the demurrers and introduced no evidence. The jury found a verdict of not guilty as to Phillip Gerson and Clara Gerson.

The facts present a tangled web not easily unraveled. As we must review them at length in our discussion of the sufficiency of the evidence, in the interest of brevity and to present duplication, we omit their presentation here further than to say that plaintiffs in error are brothers, Clara Gerson, one of the acquitted defendants is their mother, and Phillip Gerson, another acquitted defendant, is a brother. Abraham Gerson, commencing in 1923, operated a number of clothing stores at different times and at different places in Oklahoma, being assisted in the operation of some of them by Ike Gerson. Bankruptcy proceedings were commenced against Abraham Gerson in January, 1925, at which time he was operating stores at South Shidler and at Blackwell, Okl. He was duly adjudged a bankrupt.

It is contended that the indictment is insufficient, in that there is no sufficient description of the merchandise and money which it is alleged plaintiffs in error conspired to conceal, and that the indictment does not charge that the kind and character of the merchandise or cash were to the grand jury unknown. This indictment charges as follows:

"That on the 13th day of January, 1925, an involuntary petition in bankruptcy was filed in the United States court for the Western district of Oklahoma against the defendant Abraham Gerson; that thereafter, on the 11th day of February, 1925, said defendant was duly and lawfully adjudged a bankrupt by John J. Hildreth, referee in bankruptcy, to whom said involuntary petition had been referred; that thereafter, and in the regular proceedings of the administration of the said bankrupt estate, one A. L. Smith was duly and legally appointed trustee in bankruptcy

for the estate of the said bankrupt, Abraham Gerson, on the 20th day of February, 1925, and he, the said A. L. Smith, so having been duly appointed, then and thereupon duly qualified as such trustee and entered into bond, which said qualification and bond was duly approved by John J. Hildreth, referee in bankruptcy as aforesaid for said district; that the adjudication of him, the said Abraham Gerson, to be a bankrupt, and the appointment and qualification of the said A. L. Smith as such trustee, aforesaid, was well known to him, the said Abraham Gerson, bankrupt; that shortly before the filing of said involuntary petition in bankruptcy, to wit, on or about 1st day of September, 1924, at Shidler, Okl., within the Western district of Oklahoma, the said defendants Abraham Gerson, Ike Gerson, Phillip Gerson, Nathan Gerson, Clara Gerson, John R. Snyder, and Joseph Broida, did unlawfully, willfully, knowingly, and feloniously conspire, combine, confederate, and agree together, and with each other to commit an offense against the United States, in and by corruptly and fraudulently agreeing together as aforesaid, in anticipation of the involuntary bankruptcy of the said Abraham Gerson, to be brought about and accomplished by the said Abraham Gerson, with the knowledge and connivance of the said other conspirators, unlawfully, willfully, knowingly, and fraudulently while the said Abraham Gerson was a bankrupt, to conceal from the trustee in bankruptcy of the said Abraham Gerson, to be thereafter appointed, certain merchandise belonging to the estate in bankruptcy of the said Abraham Gerson, to wit, merchandise of the value of $15,945.47, and the cash received from a sale thereof by the said Abraham Gerson, which said property belonged to the said Abraham Gerson at the time of his adjudication in bankruptcy."

The indictment further sets forth the exact method by which Abraham Gerson, with the knowledge and connivance of the other defendants, was to work out the proposed scheme, which was: To purchase merchandise on credit and hold sales to convert the same into cash, not paying creditors, and only paying such expenses as were absolutely necessary, the money received from the sales to be withheld from his bank account and placed in possession of the other conspirators; that the merchandise was to be removed from store to store and place to place; that no books of account were to be kept; that he should commit acts of bankruptcy to force the filing of a petition in bankruptcy against him; that he should conceal assets in the form

of merchandise and cash and omit the same from his schedule of assets filed in the bankrupt proceeding, and should continue to conceal said merchandise and cash from his trustee in bankruptcy; and that, after bankruptcy, a part of the money concealed from the trustee and placed in the hands of the coconspirators should be returned to Abraham Gerson and Ike Gerson and used in the purchase of Abraham Gerson's bankrupt stock.

Are there sufficient earmarks in this indictment to identify the particular crime charged, viz. a conspiracy under section 37 of the Criminal Code (Comp. Stat. § 10201 [18 USCA § 88]) to commit an offense against the United States by a violation of that part of section 29b of the Bankruptcy Act (11 USCA § 52), reading as follows:

"A person shall be punished, by imprisonment for a period not to exceed two years, upon conviction of the offense of having knowingly and fraudulently (1) concealed while a bankrupt, or after his discharge, from his trustee any of the property belonging to his estate in bankruptcy. [1-3] It is to be noted that the language of the indictment is substantially in the words of the statute. It is not questioned that the allegation of the conspiracy under section 37 of the Criminal Code is sufficient. Of course a conspiracy to commit a crime is a distinct offense from the crime stated as its object. This court said, in Anderson v. United States, 260 F. 557, 558:

"As the conspiracy is the gist of the offense, it is undoubtedly true that the offense which it is charged the defendant conspired to commit need not be stated with that particularity that would be required in an indictment charging the offense itself."

The offense here is the conspiring to fraudulently conceal from the trustee any of the property belonging to the bankrupt's estate, and is an offense against the duty of the bankrupt to turn over the entire estate to the trustee. The amount concealed is not important and does not affect the crime itself, though probably it would be considered by the court in passing sentence as bearing on the moral turpitude involved in the offense. There are difficulties involved by the very nature of the situation in attempting to describe concealed property. It is peculiarly within the knowledge of a defendant as to what property, if any, he has concealed. Here there is an allegation of concealment as to approximately $15,000 of merchandise and the cash received therefrom. The mer

25 F.(2d) 49

chandise and cash referred to are, of course, the merchandise and cash involved in the bankruptcy proceeding. The indictment charges Abraham Gerson was moving stocks of goods from one store to another. Those stocks of goods were his merchandise, and while the term "merchandise" is a comprehensive term, it is apparent that the merchandise referred to consisted of the things bought and sold in trade by him in the stores he was conducting. The bankruptcy proceeding as set forth in the indictment is certainly rather a large earmark, and is a circumstance tending to identify the particular offense charged. Bankruptcy proceedings, it is to be presumed, were not started against Abraham Gerson in other places.

In Kanner et al. v. United States (C. C. A.) 21 F.(2d) 285, 287, a somewhat similar indictment was sustained, the court there saying:

"The purpose of the rule being to enable the defendant to prepare his defense, it would seem that, if ever particularity may be dispensed with, it should be so in the crime of concealing assets. The crime is one which is peculiarly within the bankrupt's own knowledge, and one which may be committed under circumstances which render impossible a description of the assets concealed. Where the very essence of the crime is secreting property, how can it be necessary to allege knowledge of that of which the defendant's own acts prevent any knowledge? It is enough to excuse particularity of description of the manner of committing the offense for the grand jurors to allege that they do not know the details."

The only apparent difference between the indictment in that case and this is that the grand jury here did not allege that a more particular description of the property was to them unknown. In view of the conflicting decisions of this court on the subject, it is difficult to know just where the line should be drawn as to the particularity in an indictment in the description of the offense. This indictment is close to the line, but we think it discloses the essential elements of the offense charged, and that the property alleged to be concealed was sufficiently identified to enable accused to know exactly what he was charged with, and to properly make defense. As to the question of the judgment being a bar in any subsequent prosecution for the same offense, it is to be remembered that resort may be had to parol testimony to establish the identity of the offense. In Bartell v. United States, 227 U. S. 427, 433, 33 S. Ct. 383, 384 (57 L. Ed. 583), the court said:

"As to the objection that the charge was so indefinite that the accused could not plead the record and conviction in bar of another prosecution, it is sufficient to say that in such cases it is the right of the accused to resort to parol testimony to show the subject-matter of the former conviction, and such practice is not infrequently necessary."

See, also, Dunbar v. United States, 156 U. S. 185, 15 S. Ct. 325, 39 L. Ed. 390; Greenbaum v. United States (C. C. A.) 280 F. 474; Keslinsky v. United States (C. C. A.) 12 F.(2d) 767.

Of course, the right to a bill of particulars does not give validity to a void indictment, but this is a case where such bill of particulars might very properly have been asked if defendants did not understand the nature of the charge against them. As the case will have to be reversed on other grounds, defendants will be in position to apply for a bill of particulars, if desired, on a subsequent trial. [4] One of the errors urged is that the court submitted to the jury a different case from that stated in the indictment. It goes without saying that defendants in criminal cases cannot be tried and convicted for offenses not charged in the indictment. On this question the theories of the government and of defendants clash; defendants insisting that the indictment charges the object of the conspiracy was to have the bankrupt conceal from the trustee in bankruptcy certain "merchandise of the value of $15,945.47 and the cash received from a sale thereof," and that this means the cash concealed, if any, must be such as was realized from a sale of concealed merchandise, and that the court's charge permitted the jury to find a concealment of any cash in any amount realized from sales at any stores of Abraham Gerson at any time or any place. That the court took a different view from counsel for defendants of the indictment is apparent from the following excerpts from its instructions:

"This, then, is what the defendants are charged with conspiring to do that Abraham Gerson should knowingly and fraudulently conceal while a bankrupt the cash proceeds from sales of his merchandise. Understanding, then, what the offense is, you are prepared to take up the charge preferred against the defendants on trial-the alleged conspiracy and the requisite overt acts or act done to effect its object.

"You will bear in mind that the conspiracy you may find to be the offense is not the concealment of the merchandise of Abe Gerson, for, concededly, it was sold off before the

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