Brief in Opposition — Dovberg v. Dow Chemical Co.

“2 ‘

IN THE

Supreme Court of the United States.

October Term, 1965

axe \} No. 1085

IKE DOVBERG anp MAURICE DOVBERG, Iwprvipvattx

axp 1/a PASTE COMPANY OF AMERICA, .

Petitioners,

c™ ‘ Vv, | /

PENNSYLVANIA PASTE COMPANY; ann SAMUEL

SCHULTZ, ADA SCHULTZ, MARVIN L. SPIRO

anp ISADORE KAPLAN, Inprvipvatiy anp Trapine

as SAMUEL SCHULTZ & CO., a Parrnensurr,

Respondents.

BRIEF FOR RESPONDENT SAMUEL SCHULTZ & CO.

IN OPPOSITION TO PETITION FOR

mie WRIT OF CERTIORARI.

OPINIONS BELOW.

The trial judge’s Order and Direction for Judgment,

filed November 7, 1962, which sets forth in detail his rea-

sons for granting judgment under Fed. R. Civ. P. 50(b),

was*not reported, and was not printed or wtherwise repro-

duced by the petitioners. For the convenience of the Court

*: it is printed at the end of this Brief in Opposition as an

Appendix. °

The opinion of mm Court of icici is reported at 353

F. 2d 963.

"1. The caption of the case my, we F on the Petitidn for a Writ

of Certiorari is inaccurate. Dow pepe 5, | not 2 nartv

in the Court of Appeals and is not a party rt. The only

remaining parties respondent are those indicated ia the caption

herein. However, since P Paste Company was put out

of business by the destruction credit when judgment was en-

tered against it, Schutz & Co, actually the enly respondent in the

case.

¢

WABI EWR nga ee BK eye

e

2 Brief for Respondent in Opposition

JURISDICTION.

The judgment of the Court of Appeals was entered

on December 3, 1965. Jurisdiction of this Court is based

on 62 Stat. 928, c. 646, 28 U.S. C. § 1254(1).

QUESTIONS PRESENTED.

1. Where the evidence discloses only that a retailer

ceased to deal with the petitioners, who were manufac-

turers, and dealt instead, on better terms, with another

manufacturer who. was in competition with them, did peti-

tioners’ evidence of their threats to hold the retailer respon-

sible for harm to them which might arise from his ‘‘joining

an effort’’ to hurt their business support an inference that,

solely by virtue of*such threats, the retailer’s cessation of

dealings with petitioners was transformed into a conspiracy

in violation of Section 1 of the Sherman Act?

2. May the value of a business be shown by the answer

to a hypothetical question relating to a theoretical busi-

ness which assumes a volume of production beyond the

capacity of the particular business to create and a market

for such a volume which does not exist?

STATUTES INVOLVED.

Section 1 of the Sherman Act, c. 647, 26 Stat. 209, 15

U. 8. C. $1, in relevant part provides:

**Eivery contract, combination in the form of trust

or otherwise, or conspiracy, in restraint of trade or

commerce among the several States, or with foreign

nations, is declared to be illegal. . . .”’

Section 4 of the Clayton pie c. 323 3/ 38 Stat. 731, 15

U.S. C. § 15, provides:

‘* Any person who shall be inj ed in his business

or property by reason of anything forbidden in the

Brief C Respondent in Opposition *- g

antitrust laws\may sue therefor in any district court

of the United States in the district in which the de-

fendant resides or is found or has an agent, without

respect to the amount in controversy, and shall recover

threefold the damages by him sustained, and the cost

of suit, including a reasonable attorney’s fee.’’

Section 4B of the Clayton Act, ec. 283, 69 Stat. 283, 15

U. S. C. § 15b, provides:

‘‘Any action to enforce any cause of action under

sections 15 or 15a of this title shall be forever barred

unless commenced within four years after the cause of

action accrued. No cause of action barred under

existing law on the effective date ois section and

sections 15a and 16 of this title shall be revive by said

sections.’’ :

,4 Brief for Respondent in Opposition

STATEMENT OF THE CASE.

On September 28, 1958, petitioners brought suit under

the Sherman Act, and claimed that Dow Chemical Company

and eighteen other defendants, individuals, firms and corpo-

rations, had conspired together to put petitioners out of

business. As discovery progressed petitioners gradually

dropped their claims against all defendants except Dow

Chemical Company; Pennsylvania Paste Company; Samuel

Schultz, Ada Schultz, Marvin Spiro and Isadore Kaplan,

individually and trading as Samuel Schultz & Co.; Reba

Spivak, individually and trading as Atlas Wallpaper &

Paint Co.; and Samuel Milkis, individually and trading as

Empire Wallpaper & Paint Co. The trial judge dismissed

the claim against Empire, and the jury exonerated the

Dow Chemical Company and Atlas. Only Sanfflel Schultz

& Co. (Schultz) and Pennsylvania Paste Company (Papco)

remained, and the verdict was against thenY alone.

After a painstaking review of the record the trial

judge determined that thee wa no probative evidence

linking Schultz conspiratorily with Papco and that, what-

ever petitioners’ competitor Papco may have done, Schultz

was not shown to have had any part in it. He accordingly

entered judgment for the defendants n.o.v. for the reasons

stated in his opinion? (3b), but in addition alternatively

granted a new trial because of the deliberately false testi-

mony and intentional confusion which characterized the

petitioners’ case (4b).®

2. The opinion of the trial judge, which was called “Order and

Direction for Judgment,” was not included in petitioners’ appendix

nor was it even referred to in the section of the petition entitled

“Opinions Below” (Petition, page 2). It has, however, been printed

as an appendix to this brief.

3. Cf. pages 31-2 of petitioners’ brief where they say:

“There was evidence (N. T. 303, 933-940, 2491, 2582, 4040,

4062) that the Schultz firm, like Papco and other retailers to

whom Papco sold 1 wie blatantly represented the product .

as being Nix-Size, or being the same thing as Nix-Size, when it

was resold to the public, but that this practice was not character-

Brief for Respondent in Opposition 5

Petitioners offered no evidence of any conversations or

meetings between the respondents or of any agreement or

understanding indicating a purpose to injure petitioners’

business.* Each of the respondents categorically denied

any such conduct or any purpose to put petitioners out. of

business, and respondent Schultz, as a retailer, had no

possible reason to seek to ‘destroy an alternate ce of

his own supply for the benefit of another, and competing,

manufacturer. Actually the amount of business done by

Schultz with petitioners was so s if could only be a

matter of complete indifference to Achultz whether peti-

tioners were in business or net. ~ zs

Petitioners’ case is based wholly upon the theory that

a violation of section 1 of the Sherman Act may be in-

ferred from the fact that in 1951 Schiltz believed that

istic of those who marketed other products which competed

with Nix-Size.” -

N. T. 303 relates to what Philadelphia Wallpaper Co. did in

December, 1950; N: T. 933-40 relates to what the proprietor of the

Germantown Wallpaper Company said about Papco nay ye 28, 1954 -

and what the proprietor of the Brenner Wallpaper Co. said about

Papco‘on June 11, 1952 and March 11, 1955; N. T. 2491 relates to

the wording of the label used by Papco; N. T. 2582 relates to what

_ Papco did. In none of them is there any reference to Schultz. N. T.

4040, if it refers to a man named Levy, relates to what some one told

- Levy in November, 1956 (N. T. 4035), several months after -peti-

tioners had ceased to make Nix-Size (Exs. P-234, P-238). If it refers

to a man named Applebaum it relates to what Applebaum did on

March 24, 1958 (N. T. 4046), more than a year after petitioners

were out of business (N. T. 1155) and when there was no longer

any demand for their _— (N. T. 1160). In none of the cita-

tions was there any reference to any practice of those who marketed

other products which competed with Nix-Size. a,

4. Thus during the course of Dovberg’s deposition, a portion of

which was read into the record as a part of the evidence offered by

Dow, but not transcribed, counsel for the petitioners said (Dep. T.

such. All we can do is draw our conclusions.”

imaa™ ee — am not = I—I feel there is

~~ 5

ANS

6 Brief for Respondent in Opposition

petitioners’ competitor, Papco, had the capacity to put

them out of business; that in 1952, after having been told

by petitioners that Papco was trying to put them out of

business, Schultz stopped buying Nix-Size, a pr@@uct manu-

factured by petitioners and, even after being threatened by

petitioners if he did so, bought instead a substitute made

and sold more cheaply by Papco; and because of events

which took place after petitioners stopped manufacturing

Nix-Size and after they were out of business.

Schultz, whose major business was the sale of wall-

paper; incidentally sold a small amount of allied products

such as paste and wall size eliminator, and was a customer,

not a competitor, of petitioners. He bought some samples

of wet paste from petitioners for $30.40 (N. T. 474-5) in

1950.5 Thereafter he bought none from either petitioners

or Papco (N. T. 3095-6; P. T.* B-23) and continued to buy

wet paste from Pennock (P. T. B-23) and dry paste from

Hoyt (P. T. B-66), both of them being competitors both

of petitioners and of Papco. In November, 1951/ Schultz

told petitioners that Papco could put them out of the wet

paste business (N. T. 475-6, 480-1). Petitioners had stopped

manufacturing wet paste in the spring of 1951 (N. T. 1045,

1098),” but there was no evidence that Schultz knew why or

that he had ever had any other connection with petitioners’ —

or Papco’s activities in wet paste.

A year later, in March, 1952 Schultz stopped buying

Nix-Size, a wall size eliminator made by petitioners, be-

cause petitioners were slow in deliveries, made split deli-

veries, had raised their price above that of‘alike product

made by Papco (P. T. B-35-41,-58,-63, D-115; N. T. 423-4,

9. This was supposed to have made Papco “gunning mad” (N. T.

475), not “ ‘gunning’ for” as state at page 31 of the petition. .

6. “P. T.” designates the portion of the record contained in the ©

“Partial Transcripts.” }

7. The petition suggests, page 44, “that the campaign was pressed

because petitioners continued to manufacture some wet paste.” See

also Petition, pages 46-7. However, petitioner Maurice Dovber

testified that he “couldn’t continue.to take those losses” (N. T. 238)

(

6,

“Fy

Brief for Respondent in Opposition + — 7

574, 2844-5, 3009), and refused to package it under Schultz’s -

trade name (P. T. B-43, -120) as Papco had agreed to do. .

Petitioner Maurice Dovberg claims that he then told Schultz

on March 13, 1952 that he would hold him responsible if

he ‘‘did anything in joining an effort, combined, to hurt our

business’’ (N. T. 550). On the same day he wrote -a com-

plaining letter to Schultz in which, however, there was

no reference to any alleged purpose to put petitioners out

of business (Ex. P-106; N. T. 552-4) ; nor was there in a

like letter dated June 29, 1953 (Ex. P-110; N. T. 575-8)..-

There was~no suggestion of a conspiracy or of any

agreement or understanding between either of the respond-

ents that led Schultz to stop buying from petitioners and

buy instead from.Papco, with which he was also in competi-

tion in the sale of paste (P. T. B-66). He didn’t know

(P. T. B-67) and had no possible way of knowing if Papco

was selling at a profit or a loss, or if Papco was selling

“‘solely to hurt petitioners’’ or “solely to destroy peti-

tioners’ business;’’* and-there was no evidence that the

change was made by Schu}tz for any other than the purely

business reasons of better deliveries, lower price and brand

label packaging (N. T. 423-4, 574,:2844-5, 3009, P. T. B-36-

41,-58,-63): and petitioners’ eccentric behavior (P. T. B-57,

-. E30).

The only other evidence from which the petitioners

suggest that a conspiracy between Schultz and Papco might

be inferred is some testimony of events which transpired

in 1956, which was the last year that, according to peti-

tioners’ Eixs. P-56 and P-429, Nix-Size was sold, and events

transpiring in 1957 when Nix-Size was no longer being -

made, and. in 1958 when it had ‘been off the market’ for at

and discontinued sales of wet paste in 1951 (N. T. 1045) ; that there

“might have been occasions . . . where possibly as an 4ccommodation I °

might have filled some small orders but we were actually out of the

wet paste business . . . since the spring of 1951” (N. T. 1098).

Thereafter they sold it only on request “as an accommodation for a

while” (N. T. 2427-8). | r

_ 8. Petition, pages 30 and 39,

| ,

8 Brief for Respondent in Opposition -

least a year. Certain of Dovberg’s relatives made sample

purchases sometime in June of 1956 (P. T. 4197, 4213, 4355,

4358), in-1957 (P. T. 4173), and in the fall of 1958 (P. T.

3454-6), of which petitioners complain. On March 24,

1958 fifteen stores were visited (P. T. 4046, 4053). Since

_ 1958 was a year after petitioners were completely out of

business, and 1957 and June of 1956 were both after

petitioners had stopped trying to manufacture Nix-Size,

nothing done then could have harmed petitioners or helped

to put them out of business. They were already out of

business when these events are supposed to have oecurred.

- Petitioners’ bank credit was gone (N.“T. 1005-6), they

were ‘‘on the brink of collapse’’ (N. T. 446) and hopelessly

insolvent in 1955 (P-317), and could not even then-accept

orders unless they received cash with the order (Plain-

tiffs’ Pretrial Statement of Contentions, p. 12; Exs. P-170,

P-175, P-176, P-181, P-184). This continued into 1956 (Exs.

P-212, P-219, P-224, P-231, P-232, P-233, P-234, P-238),

the last year Nix-Size was sold (Exs. P-56, P-429). Early. = -

in 1957 petitioner stopped all pretense of being in business

(N. T. 773, 998, 1155). :

The volume of business alleged to have been lost by

Schultz’s cond is insignia. The Nix-Size purchased

by Schultz from petitioners averaged a little over $100

a month (Exs. P-100, D-278 Schultz). When Schultz bought

Papco’s product it amounted to about $1200 in 1952 and

thereafter averaged slightly over $50 fa month (D-278 .

Schultz). It was these trifling purchases that Paes

petitioners’ evidence of injury by the respondents that

- claim may be interpreted as indicating &@ purpose to ne

them out of business.® However, in the autumn of 1952

Schultz gWwas still advertising petitioners’ Nix-Size (Ex.

_P-99, N. T. 562, 564) and while Schultz was supposed to be

~

, . 9. Petitioners professed to find a like ulterior motive in def

ant Atlas’ termination ‘of purchases from them in 1953 even though i

resultant dealings with its supposed co-conspirator, Papco, amounted

to only $32.40 (Ex. D-244 Atlas). '

2)

2

| Brief for Respondent in Opposition 9

conspiring to put petitioners out of business he was_paying ys

‘their bills immediately upon receipt and substantially be-

fore they were due so as to give petitioners the cash they

_ 80 badly needed (Ex. D-129 Schultz,‘N. T. 3137-41). This

_ seemed even to petitioners to be ah effort on the part of

Schultz to help them (N. T. 3142). ¢ :

Petitioners’ contentions cannot be viewed in their true

light without some understanding of the nature of peti-

tioners’ operations.

The petitioner, Ike Dovberg was a paperhanger with-

out education or business experience. His son, Maurice,

finished the eleventh grade but his business experience

didn’t include manufacturing or having anything to do

with running a business (N. T. 1214-39), and his ideas of

‘eredit were gained from lending the price ‘of admission-to

~ mavie patrons where he worked (N. T. 1231-2). In total

ignorance of the problems attending running a manu-

facturing business (N. T. 1593-5) Maurice got a cousin

to finance them with $15,000 * (N. T. 68-7 1, 1121-2), bought

a small building at 728 S. Marshall Street, Philadelphia, _

- and called it a factory, got some machinery and started to

manufacture 1 paper paste and Nix-Size, a wall size

eliminator. er spending $4,000 for a building (N. T.

78) and $5,000 for sugar (N. T. 2086), in addition to other

initial expenditures, they never had enough cash to operate °

with ahd were in trouble from the very beginning (N. T.

1024, 2206), They were ‘‘in dire need of money”? as early

as 1951 (N. T. 1804-8, 3454-2, 3454-17), had to borrow even

then (N. T. 3454-4, 3454-5, 4171-2, 4201), sought to make

all their purchases on credit (N. T. 734-7, 1546-9, 1557,

1586-92, 1627-31, 1747-9, 2246-51; Exs. P-164, P,281,. P-281a,

10. It was impossible to determine ow much money was ever

put in the business because of the inaccurate records kept by peti-

tioners. The ledger, Ex. P-243, did not accurately show the condition

of the business. Many loans made to it were never recorded and

items were given different values at different times throughout the ~

trial (Ex. P-24, N, T. 118-9, 1121-6, 1130-1, 1141, 1146-7, 1282-97,

1990-1, 2225-6, 3454-4, 3454-5, 4172-2, 4201).

*

ae

10 Brief fat Res ondent in Opposition

P-289), tried to get credit from their principal supplier,

The Dow Chemicak Co., in an amount twice their original

capital and more than the aggregate of all loans obtained

from The Broad Street Trust Co. in four years (N. =

1830-3; Ex: P-188), but gave bad checks to Dow (N. T

1024-7, 1808-13) and to their distributor, Hoyt (N. T. 870).

Having no experience in determining costs they had no

idea what it actually cost to produce the products they °

were selling. They didn’t even know tife nature of their

competitors’ products (N. T. 603-4, 1437-9, 1520-31, 1537-8,

1919a, 1980, 2140-2, 2214-5, 2266-8, 4675-88) or whether their

own costs were prohibitive in competition with other prod-

ucts on the market. They begarf to lose business as early as

1950 (N. T. 268-9, 1397, 1435), sold at a loss, had ‘‘no ©

money”? (N. T.4201, 204) and were in financial difficulty in

1952 .(Ex. D-Dow 1; N. T.’4524, 456, 1172-5, 1991-2), ©

pledgéd themselves to lose money (N. T. 553, 1454-7) and ©

did so consistently (N. T. 1789-94, 1839-40, 1983), cutting

their own prices to meet their competitors’ irrespective of

. their economic ability to do so (N. T. 718-20, 728-30, 1018-9,

1456, 1983, 2121-2, 2202-15, 2277-80, 3558-63). -They gave

their customers unlimited credit (N. T, 1587-92, 3148), Ps

knew nothing of their own capital requirements (N. T

1593-5, 3548-63). They sold below cost as early as 1952

(Ex. D-Dow 1; N. T. 1352-9, 3558-63) and even said that

this was done in an effort to increase their volume in the

-hope that this would enable them to - credit (N. T. 1091,

4574, 4667).

* There was no evidence that they ever made any money

from any sales, they kept no production tecords (N. T.

3242) and did not know how to take a year-end inventory ©

(N. T. 3615). Petitioners’ hopeless financial status appears ©

clearly from a:series of exhibits (Exs. D-Dow 6 to 77; N. T.

1663-1808). Although they wanted to buy on credit their

financial condition was so bad they would not give Dun &

Bradstreet any data and refused the numerous requests -

from their distributor, Hoyt, for financial information after

giving him an inaccurate financial statement as of Decem-

YS

-

Brief for Respondent in Opposition 11

f 1781-3, 2017-8; Exs. D-Dow 6 and 66). ,

: Until 1954 petitioners were able to obtain some modest

\ bank credit from the Broad Street Trust Co. (Ex. P-188; _-

N. T. 907-9, 1005) by giving a false statement of asséts,

wi ~and a small amount from Central-Penn National Bank

> (Ex. P-189; N. T. 910°3), Jakewise’ by giving a false income

‘ Statement (N. T. 3607-9)/ When this was withdrawn they

borrowed all they could get from other members of the

‘family (N. T.°2225-6) and when this was gine they went

out of business, blaming their difficulties on’ the refusal of .

Dow and Hoyt to extend them eredit (Exs. P-158, P-175,

D-Dow 78, 272, 273, 210; and 211; N. T. 879, 880, 957, 961,

. .. 983-4, 1007-8, 2121-2, 2194-5, 2200), not on anything Schultz

' had done. Petitioners’ ‘business was beset with trouble

right from the start’? (N. T. 2226) and its collapse was

Inevitable because petitioners were without knowledge of _

even the most elementary and fundamental principles of

business operation. There was no evidence that the peti-

tioners ever did ‘or ever could have run a successful

business. _ ee : eae

4

ber.31, 1951 (N. T. 887-8, 1598-1604, 166.9, 1676-80, 1773-4, a:

+0 .

12 Brief for Respondent in Opposition

ARGUMENT.

The only question presented in this case is whether the

District judge was justified in finding and correctly found ©

that the evidence in the case did not establish a proper

basis for a finding\of conspiracy under the Sherman Act.

The decision of this question turns on the particular facts

involved. No general principle is in controversy; the dis-

puted issue relates merely to the application of well settled

rules to the circumstances of this particular case. No mat-

ter of general importance is involved, nor is a review re-

quired in order to secure uniformity of decision. The case

is accordingly not one appropriate for review by this Court

even if the decision below were wrong. Houston Oil Co. v.

Goodrich, 245 U. S. 440 (1918); Rice v. Sioux City Ceme- .:

tery, 349 U.S. 70, 74, 79, n. 2 seit Actually, however, it

was correct.

There Was No Evidence of a Conspiracy)

Essentially, all that petitioners’ argument amounts to

is that a competitor, Papco, was trying to put them out

of business, that Schultz had known a year or two before

that Papco had wanted to put petitioners out of the wet

paste business and knew that petitioners were claiming

that it was trying to put them out of business generally, and

accordingly that Schultz was obliged to continue to deal

with petitioners to the exclusion of Papco and could not

buy from Papco without becoming a conspirator with it.

‘Having threatened to hold Schultz responsible if he pre- .

sumed to stop buying petitioners’: product and bought

Papco’s product instead, petitioners now claim that the

jury should be permitted to find that Schultz’s refusal to

boycott Papco at petitioners’ tequest constituted evidence of

a conspiracy under the Sherman Act to harm petitioners.

‘This in effect is a claim that a customer of a manufacturer

who is engaged in a price war with a competitor may buy

from the competitor only at the peril of being held a

conspirator.

&

Brief for Respondent in Opposition ° 13

His careful re-readirig of the record (1b, 3b) made clear

to Judge Leahy that the bulk of the great mass of evidence

related to parties who were no longer in the case and that

an analysis of the deliberately false and confusing testi-

mony offered by the petitioners (4b)° showed that there was

. no probative evidence supporting petitioners’ claim,”

merely the fanciful suspicions of the proprietors of an un-

successful business, who were seeking an excuse for their

failure other than their own inexperience and poor business

judgment. :

Nowhere is there any suggestion of when the supposed

conspiracy began. All that happened in 1950 was Schultz

failing to sell Nix-Size at the fair trade price and in 1951

rebottling Nix-Size and selling it under his own brand name

and telling petitioners that Papco could put them out of the

wet paste business. All that happened in 1952 was peti-

tioners’ threatening Schultz that if he stopped buying from

them and bought from Papco iristead they would hold him

responsible, and Schultz ignoring the threat and buying a

cheaper competitive product from Papco because peti-

tioners made slow and split deliveries, had raised their

prices, refused to package.under Schultz’s brand name and

behaved in an odd manner. Papco’s prices were lower,

they used Schultz’s brand name and made unit deliveries.

However, all that may have occurred in 1950, 1951 and 1952

was more than four years before the suit was brought in

1958. What happened in 1956, 1957 and 1958, while. within’

the statutory period, was all after petitioners had ceased

to make Nix-Size. They were for all practical purposes out

of business in 1956 (N. T. 1838-9), and in 1957 and 1958

actually so, and thus the events complained of during those

years could not possibly have harmed them.

11. The petition, page 36, s ial j i

reasons for his final te a e~ nally Poe pico eT

What petitioner states to be “The second reason” (Petition, page 37)

is actually the second and third (3b), and although the quotation is

ascribed to “App. 17a” nothing like it 4: _on that page. Even

the dissenting opinion below misstated (16a-174) the basis for the

judgment n.o.v. (3b-4b). :

%

$

14 Brief for Respondent in Opposition

In their argument petitioners emphasize the activities

of Papco to which they objected,” ignoring the fact that it

was a competitor of theirs, selling both paste and a wall size

eliminator. - However, the efforts to connect Schultz im-

properly with any of Papco’s activities likewise ignores

petitioners’ inability either to help or to harm Schultz and

thus the absence of any possible gain to Schultz from peti-

tioners’ disappearance," petitioners’ unsatisfactory de-

liveries and price increases and Papco’s willingness to sell.

at a lower price and under Schultz’s brand name. It also

ignores, as does the dissenting opinion below, the time when

the early events complained of occurred, and the obvious

- impossibility of events occurring in 1956, 1957 and 1958 hav-~ °

ing any adverse effect whatever on petitioners.

Petitioners also complain (Petition, pages 54, 55), as

does the dissenting opinion (35a), that Judge Leahy

changed his mind after the verdict. This he was certainly

entitled to do and it became obvious to him that he should

when his prolonged study of the record made it possible to

relate significant events to one another in their prdper

chronological sequence. This showed -that as of the time

the various events complained of py the petitioners took

place they could not have been the basis for any legitimate

inference, of conspiracy. It, showed that Schultz had noth-

ing to do with the fuss about wet paste in 1950 and 1951 and

that he continued to buy all his wet and dry paste from

ennock and Hoyt, who were competitors of Papco. It

showed that any supposed price cutting or rebottling in

"1951 was not related in any way to Papco and that in spite

of their contentions, petitioners continued to sell to Schultz

as if nothing had happened (N. T. 3099-3100). It showed

that petitioners claim to have made a case for themselves

by telling Schultz that Papco was trying to put them out

12. These were of no interest whatever to Schultz.

13. The statement (Petition, Page 29) that “Samuel Schultz

had become disenchanted and angry with petitioners” is pure inven-

tion, as is the statement (Petition, page 58) that “Schultz wished to

hurt petitioners.”

d

Brief for Respondent in Opposition 15

. of business and that if Schultz dared to stop buying Nix-

. Size from petitioners and bought instead from Papco, that

would be joining in a conspiracy with Papco to harm peti-

tioners. It showed that the only acts complained of that

occurred:within four years of the suit were after petitioners

had become ‘‘unable to meet current orders,’’ * had stopped

making Nix-Size or had actually closed their business, and

therefore that they could not possibly have done petitioners

any harm. It showed that the dollar volume of Schulty’s

business lost by petitioners to Papco averaged slightly over

$50 per month. It showed that at the time of their failure -

petitioners blamed it on their distributor Hoyt and Dow

Chemical Company® because they had i to extend

petitioners any more credit. It showed th e keystone of

petitioners’ case was their demand in 1952\ffat Schuftz re-

fuse, to buy from Papco (N. T. 550) and ‘their two letters

(N. T. 552-4 and 575-8) ; and that all other complaints relat-

ing to Schultz were both secondary and unsubstantial. And

it also showed that placing events in their proper relative

positions in terms of time and mutual relationships, and so

to be able properly to evaluate their significance; had been

made most difficult by the studied effort of the petitioners

thrd@ghout the trial to confuse and deceive (4b, 5b-8b, 9b,

-12b). .

The false testimony and confusion, that a@ded enor-

mously to the length of the trial and the size of the record,

and the time intervals between the receipt of the various

bits and pieces of evidence, made it impossible even for the

frial judge to unscramble them and put them in proper

perspective in the time available to him at the end of the

' plaintiffs’ case (102a). The prolonged and careful analysis

that he gave the whole record after the case was over, how-

ever, led him inevitably to revise the initial impressions set

forth in his interlocutory opinion ( 37a) and to state hisfinal

14, Plaintiffs’ Pretrial Statement of Contentions p. 12.

I5. Indeed Dow was the petitioners’ principal throughout

16 Brief for Respondent in Opposition

conclusions in the order of November 7 (1b). Instead of

relying on the record or on Judge Leahy’s opinion enter-

ing judgment n.o.v., which they;failed to print, petitioners

base their statements now primarily on Judge Leahy’s pre-

liminary and interlocutory review of the evidence, which he

was compelled to revise after his final review of the entire

record. | ,

There Was No Competent Evidence of Damage.

The only evidence of damage offered by petitioners as

a measure of their loss was the testimony of C. H. Darby,

an engineer, who was called to give an expert opinion of

value. On the basis of the assumptions which he was asked

_ to make by petitioners’ counsel (P. T. L-128), and on which

he relied exclusively (P. T. L-120-1,-163), he concluded that

the petitioners had a business which, at the end of 1954, ©

was worth between $75,000 and $100,000 (P. T. L-70):. How-

ever, Darby’s testimony makes it quite clear that this valua-

tion was not of petitioners’ business, The Paste Company

of America (P. T. L-100), operated by the Dovbergs (P. T.

L-289), but of a purely hypothetical business that had gross

annual sales of the product manufactured, whatever it was

(P. T. L-136); of $150,000,'a gross income before taxes of

$15,000 and a net income after taxes of $10,000 (P. T. L-71-2,

‘ 2103,-106,-206). He merely assumed, because he was asked

to do so, that the imagined business made a hypothetical

10% profit (P. T. L-93), but this was wholly unrelated to*

the petitioners’ capacity to produce a like amount (P. T.

L-102-3) or to any profit that they had ever made or could

ever make. :

_. Darby’s opinion of value also presupposed that the

business would start right off making $150,000 in the year

1955 (P. T. L-125), but at the same time he admitted that

if gross annual sales were qnly $17,000 instead of $150,000,

the business would be worth\only the value of its net assets,

whatever they were (P. T. L-86-7,-237-8).. Actually he con-

' ceded that on the financial facts developed by the peti-

r

»

~~

Brief for Réspondent in Opposition 17

tioners’ evidencé the petitioners’ business was insolvent as

early as 1950 and continued so (P. T. L-233-236). See also

Exs. P-242 and 242A and P. T. L-282.

Petitioners’ business never made as much as $17,000

in any year of its existence (Ex. P-56) and in 1954 its

gross business amounted to $11,000. The theoretical $150,-

- 000 was a gross that petitioners could never have obtained.

It was arrived at by assuming a capacity to produce sixty-.

five gross of pints of Nix-Size a week for fifty-two weeks of

every year (P. T. L-51) and to sell the entire production

_ at $48 per gross (P. T. L-54), neither of which assumptions

was justified by the record. There was no evidence in the

case to suggest that there was a market in which anyone

could introduce and sell 65 gross of pints of Nix-Size every

_ week, or even that that much was consumed in the entire

United States. The largest amount ever sold by petitioners

in.a year was $13,028.58 (P-56; N. T. 397) and by its com-

petitor, Papco, $7,332.82 (N. T. 397-8). .

Hypothetical questions must be based upon facts ap-

pearing in the record. ' This is true in both state and fed-

eral courts: Kale v. Douthitt,\274 F. 2d 476, 482, 483 (4th

Cir. 1960); Rennekamp v. Bla 75 Pa. 626; 54).

The answer to the hypothetical questidnwhich was-Asked

Darby should accordingly not have been allowed (P. T.

L-57-69) or should have been stricken (P. T. L-290-1).

Darby’s opinion is simply meaningless, and since this is

all that the petitioners offered to show their measpre of

damage, and since they conceded that there was nothing

.else available, the judgment n.o.v. was proper for a reason

in addition to those given by the court below. Flintkote

Company v. Lysfjord, 246 F. 2d 368 (9th Cir. 1957), cert.

denied 355 U. &. 835; Wolf v. National Lead Co.,.225 F. 2d

427, 430-2.(9th Cir. 1955), cert. denied 350 U. S. 915; Emich

Motors Corp. v. General Motors Corporation, 181 F» 2d

70, 83-4 (7th Cir. 1950).

18 Brief for Respondent in Opposition

CONCLUSION.

Respondent Schultz accordingly submits that the peti-

tion for writ of certiorari should be denied.

Respectfully submitted,

Puiu Price,

Wim L. Mxf,

Attorneys for Respondent,

Samuel Schultz &-Co.

Of Counsel:

Decuert, Price & Rxuoaps,

Zoos, Conan & Martz.

Y

March 31, 1966.

+ | a eNO EPROP ONE I 2 PN AMA A DRE A TN St

——

f

RESPONDENTS’ APPENDIX.

ORDER AND DIRECTION FOR JUDGMENT

Sur Motions Under FR 50(b) and for a New Trial.

Anp Now, to wit, this 7th day of November, 1962, upon

consideration of defendants’ [Samuel Schultz & Co. and

Pennsylvania Paste Company] motions to vacate and set

aside judgment in favor of plaintiff, for judgment notwith-

standing the verdict, in accordance with defendants’ mo-

tions for a directed verdict pursuant to FR 50(b) of the

Federal Rules of Civil Procedure, and, in the alternative, ©

r a new trial; and upon consideration of plaintiffs’ con-

itional motion for a new trial as to defendant, Dow Chem-

cal Company, in the event a New Trial is accorded to

defendants Pennsylvani# Paste Company and Samuel

chultz & Co.; briefs submitted and oral argument had

thereon on September 17, 1962, with leave to the parties

who so requested to file supplemental and answering briefs,

which were actually filed; NOW, upon a careful review and

study of the entire record, it APPEARs:

Plaintiffs charged each of five defendants with viola-

tions of §§ 1 and 2 of the Sherman Act,’ and §§ 2, 3 and 4 >

of the Clayton Act,? as amended by the Robinson Patman

Act;* the trial of this cause.commenced on November 28,

1961 and the Jury returned its verdict on March 29, 1962;

plaintiffs’ case in chief took over 41 trial days, over 5,000

‘pages of transcript, and in excess of 426 exhibits; and

after presentation of plaintiffs’ case, motions were made

by defendants under FR 50 and FR41(b) of the Federal

Rules of Civil Procedure for directed verdicts and dis-

missal; after full and complete argumént by counsel for

all parties, said motions were granted as defendant

Empire Wallpaper & Paint Company, and denied as to

the other four defendants, the Court filing its Memoran-

dum Opinion with the Clerk of the Court on February 21,

Norte: Because of the length of the footnotes they have been printed

» at the end of this order, see page 5b, infra.

L (1b)

2b Order and Direction for Judgment

1962 [the said Opinion consists of 75 typescript pages,

discusses the evidence in detail, pointing out ‘‘The whole

area of plaintiffs’ case is pretty thin, but not enough for

me to hear the ice cracking’’] which noted that the plain-

tiffs having rested their case in chief it was no time then

to weigh and evaluate the disputed evidence because it was

not the judge’s function in so determining a motion for a

directed verdict or for a dismissal; thereafter, defendants’

case took over 20 trial days, over 1700 pages of printed

transcript, and in excess of 277 exhibits; after rebuttal

testimony and‘the Court’s Charge to the Jury (39 typescript

pages), the Jury returned its verdict’ and found defendants

Pennsylvania Paste Company and Samuel Schultz & Co.

guilty of violations of §1 of the Sherman Act, but found

defendants Dow Chemical Company and :Atlas Wallpaper

Company not guilty of violation of § 1 of the Sherman Act,

and Pennsylvania Paste Comany not guilty of the separate

charge against it of violation of §2 of the Sherman Act;

$22,000 in damages were awarded as against datindente

Pennsylvania Paste Company Samuel Schultz & Co. for

violation of §1 of the Sherman: Act; and subsequently

such award was trebled by the Court pursuant to the

statute he motions of the defendants herein, and plain-

tiffs in support of their conditional motion for a new trial,

assign several grounds of alleged errors of law on the part

of the Trial Judge in the admission or rejection of evidence,

and in the Charge to the Jury; each.and every item of

alleged error has been critically analyzed and evaluated

and after a close review of the testimony, exhibits, the

briefs of counsel, the Court concludes there was no

prejudicial error in the admission of testimony, rejection,

of testimony, or manner of submission of the issues in the

case to the Jury, or in the Charge of the Court, when ora

in’full context, for it was an accurate presentation of the

law; and, NOW, .it Furruer Appears:

: As pointed out in the Court’s Memorandum Opinion

on defendants’ motions for directed verdict ase for dis- —

< .

Order and Direction for Judgment 3b

a

missal at the cldse of plaintiffs’ case in chief,.- plaintiffs’

case was _ ut now, in evaluating all of the plaintiffs’

proofs in j osition to the evidence adduced by. defend-

ants and in approaching and evaluating the present mo-

tions, the nisi prius Judge is in a position to consider such

post verdict motions under FR 50(b) of the Federal Rules

of Civil Procedure in the light of all the evidence adduced

at trial, and he carf’set the verdict aside, if he thinks it

improper, and grant a new trial, or ram judgment not-

withstanding the verdict;

And the Court having stated in its Rulings Sur Mo-

tions for Directed Verdict and Dismissal that the Motions

as to Samuel Schultz & Co. were denied because *‘evidence

has been aduced that Schultz knew of Pennsylvania Paste’s

illegal aim . . . [and] that Schultz acted in furtherance

of it by selling the wall size eliminator purchased from

Pennsylvania Paste as being or being the same thing as,

Nix-Size’’;* and the Court having had the additional bene- ©

fit of hearing all the testimony and repeating all the evi-

dence, now concludes that:

1. All testimony concerning alleged ios iil of

~ Samuel Schultz & Co. of Pennsylvania Paste’s allegedly

conspiratorial aim relates to communications between

plaintiffs and Samuel Schultz & Co. in or before 1952,5-

and .

2. All testimony concerning acts of Sainnel Schultz

& Co. for 1952-56 period: indicates it did nothing more

than purchase wall size eliminator from Pennsylvania

Paste and end‘purchases from plaintiffs, and

3. All testimony of alleged sales of Pennsylvania

Paste-manufactured wall sizé eliminator ‘‘as being ‘or

_ being the same thing as’’ plaintiffs’ wie-tine relates to,

acts in 1956 and 1958,° and

4. No evidence has been adduced in ting any

plausible or rational motive for Samuel Schultz & Go. |

RS fa.

——h}—_ @

.. to have entered into a conspiracy in the 1952-56 period,.. __

4b- Order and Direction for Judgment ,

or in any other period alleged by plaintiffi, to force

plaintiffs out of business, and

5. No other probative evidence has been inks

duced linking Samuel. Schultz & Co. conspiratorially

' with Pennsylvania Paste, and

6. Pennsylvania -Paste is legally unable to con-

spire with itself and therefore violate § 1 of the Sher-

man Act (15 USC §1),7 and

7. There has thus been total failure and lack of

evidence to prove the essential elements of plaintiffs’

_ ease ® relating to guilt of Samuel Schyltz & Co.

AND it further appearing that such substantial por-

tions of the testimony of plaintiff Maurice Dovberg [on the

stand over 6 weeks and over 4200 transcript pages] ranged

from deliberate obfuscation * to deliberate fabrication,” and ~~

from fantasy ™ to the bizarre,” and that said testimony, on

the whole, cannot be granted much credence, the Court thus:

concludes that the jury verdict 1 is against the weight of the

credible evidence.

- Therefore, it is Cenidinn: Sein and Dercreep that

motions of Samuel Schultz & Co. and Pennsylvania Paste

Company to vacate and set aside the judgment in favor

of the plaintiffs for judgment notwithstanding the verdict

pursuant to the provisions of FR 50(b) of the Federal Rules

of Civil Procedure be andthe same are granted ; and it is

ordered that judgment is hereby granted in favor of said

‘defendants; and it is further @

Oxpanap, Apgupcep and, Decreep that should the de-

cision herein contained, granting judgment notwithstanding

the verdict to defendants, be reversed by an appellate court,

this Court. alternatively” grants defendants’ motion for a

new trial; and in addition denies plaintiffs’ conditional mo- .

. tion for a new trial — defendant, Dow Chemical

Company.

Pav. Lzany,

Senior District Judge.

Order and Direction for Judgment — 7

- FOOTNOTES

1. is Use #41 ccl2

2. 15 USE §§-13, 14 and 15.

3: The general nature of this litigation ‘was discussed in- the

“denial of defendants’ motions for summary pegness. D.C. E.D

Pa, 195 F. Supp. 337:

Oe

4. Rulings, p. 71. vs = ate

5. For-samples, see-Tr. pp. 475, 548, 549, 550, 552, 553

“6. Testimony of R. Goldberg, Tr. p. 3454-6; téstimony of ;

Levy, Tr. p.4014 through 4016; vel es of R.A lebaum, ee

4049; testimony of B.° J. Dovberg, Tr. p. 4176, 4177; testimony of

i Dovberg, Tr. p. 4198; ‘testimony “ N. Dovberg, Tr. p. 4215,

4220 through 4226. . .

7. Union Pacific Coal Co. v. United ‘Sites, 173 F. 737’; Lawlor

v. Loewe, 209 F. 721, aff'd 235 U. S. 522; United States v. "Reading

Co., 183 F, 427, modified on other grounds, 226 U. S. 324; United

States Vv. American Naval Stores Co., 172 F. 455. .Cf. Paramount ‘

Pictures v. United Motion Picture Theatre Owners, 3 Cir., 93 F..

2d 714. .

8. See, Morris Brothers Lumber Co. v. Eakin, (CA 3) 262

F, 2d 259, 263. :

9. The following colloquy is selected actly as a sample:

Q: Your closing inventory in 1950 by your: return was $630, .

wasn’t it?

A. That’s what thé accountant showed.

QO. Q: By) your return, isn’t that right? -

\ rs And your testimony as I recall it vas “tient the reason

* you have $630 there is because that’s what 7 accountant told °‘

you to put in; is that right?

A. That’s what the accountant put in.

Q. Right. And your opening ny for _* ‘was pit

-* was it not?

A. Yes, * :

. oe ee

'Q. What was your closing inventoty at the end of 1951 as

you estimated it? -. -

A. en I took an actual inventory? ,

\Q. Yes. You said you didn’t take an actual i

what Pa closing inventory at ‘the -end of 19. nts

A. I didn't take an inventory at the end of as

Q. beter tsar toad uncdhsusepcucl od

@ ES

# . Footnote 9, continued

A. About the same, or ea.

Q. What was it as you estimated it?

A. Let me see that returm .

Q. Of course. Take all of them.. :

ae »L would have gstimated that my inventory was some-

0. \ What was, it as you estimated it, Mr. Dovberg? .

A. ‘About——

|.Mr. MontEverDE: When 7 say “estimated,” you

ean on the income tax returns?

what |

~ Mr. Matz: No, he gave an estimate.” He told us that

he had an estimate of his closing figures as of-the end of 1951

and I am asking him what it was.

Mr. Monteverve: You are talking about 1950? ~

Mr. Mazz: I am talking’about 1951.

A. I estimated I had about $500 worth of inventory less

than what I had previous. ,

Q. Would you please tell us what was your estimate of your

closing inventory as of the end of 1951?

’ * = *”

Q. I will ask the witness again, what was your closing in-

ventory as you estimated it as of the end of 1951?

A. The over-all inventory as to what it actually was?* I did

| not take an inventory.

" Q. I ask you again what did you estimate to be your closing

¢ inventory as of the end of 1951.

ry : wo accountant et Pata

you again, what did you estithate to be your closi

inventory as of the end of 1951? ” 7

3. oe $500 or ° ge tien what it was the year before.

. you name the ef

A. $630.

* .Q. Would you e the figure that you estimated to be

your closing invento as of the end of 1951? ate Se 4

\ . Mr. Monteverde: 1951.

~~ \ | Mm, Marz: That’s what I said. T have been saying it

Z| for the last ten minutes.

7 ~™ A, $100.

By, Mr. Matz+—

Q. Now, you tell us now that you estimated your invento

at the end of 1951 to be $100; is that right? . =

A..No, I didn’t estimate it. The accountant showed $100

because I told him that I estimated that my inventory might be

about $500 or so less than what it es previous ‘year, and.so

" put $100 down there,

; our | 7

6b’ _ Order and Dixection for Judgment ate |

¢°

y

Order and Direction for Judgment 7b

Footnote 9, continued -

Q. And so he put $100 down there. And I come back to

you had estion again, what was the inventory that you estimated

you had on hand at the end of 1951?

. I didn’t estimate the total inventory that I actually had

ia tous T estimated that I had about $500 less than T had the

previous y

QO. Well, "how could you do that without knowing what you

" had on hand?

A. Because that’s what I estimated that I:had less. I had

made Will ve during that year.

of ul answer my question ?

% And had replenished——

Mr. Monteverde: Just a moment, please, Mr. Dov-

berg, we want to get this over promptly and he is entitled

to a responsive answer. That can be answered very shortly

Now, would you read the question back?

[The question was read.]

A. Then I don’t know.

oe

A. Well, the accountant asked me, “Do you have more or

less inventory than——”

By Mr. Re sae

ill you answer my question, please

re I didn’t—— .

Q. How would youknow that you had about $500 less

without checking your inventory? <

A. I didn’t know but I estimated, sir.

% oe ce Tet fel fet TI hed le by ibly bout

° use t that ess inventory possibly a

$500. I knew we had.a comparable irtventory.

Q. Mr. Dovberg, I have now asked several times, how

- did you know you had $500 less at the of the year?

A. That was an estimate. =

0. How did you arrive at that estimate?

The accountant asked me and that’s what I said. I said,

“We have about $500 less inventory than what we had——”

2. How did you arrive at that figure of $500?

It was just an estimate.

tel fave ben How did make that estimate? Couldn’t it just as

or $200?

yore ‘

sigh Tien why did you make it $500 if it could have been

A. That’s what I told the accountant and on the basis of

‘that he down $100. .

n other words, are us now this had

isa fact? you. telling $500 no

pie es |

8b Order and Direction for Judgment

Footnote 9, continued

A. No; I told the accountant that I believed that I had less

inventory by about $500.

And now we come back to the question again.

And this was—that’s what I assumed.

es accountant asked me and that’s what I told him..

didn’t ask you how you arrived at telling the account- ,

Q.

A.

2. And how did you arrive at that figure of $500?

Q. I

3a

asked you how you arrived at that figure of $500. :

A. I guessed.

eee, Tete

[Tr. pp. 3283-3289]

10. Another example refers to partnership tax returns filed by

; apse and utilized by them in making PX 242A (Tr. p. 1103) :

Q. Now, I show you your 1951 partnership return. _ You

have already testified that the/opening inventory in that return

is we haven’t you?

- the closing inventory correct? -

o.

What is wrong with the closing oo ?

It is incorrect.

Well,.what is wrong with it? i

I had a much more substantial inventory.

When ?

I had—in—by the end of 7951.

Did you take inventory at\that time?

. No, I did not.

Q. Then why did you put in $100 as closing inventory if

as ar now state you had much more inventory ?

. The accountant used that as a figure.

. You mean he put the figure in and you had nothing to

do with it? .

A. The accountant put in that figure. I revealed to him

that I had not taken inventory, that my time was too consuming, —

that it was an enormous job for me to suddenly- stop and spend

several days just taking inventory to come up with an honest and

accurate figure, and I told him that I had not taken inventory

and on the basis of that the accountant used $100.

. You knew it was more than that?

I did.

. Did you know how much more?

No, I did not.

opopopopororé

sat

* * *

Q. So”you now state that you knowingly filed an improper

return for 1951. Is that right ? er

A. As far as the inventory is concerned, Mr. Matz, yes.

e > oe Both opening and closing. Is that right?

)

| _ Order and Direction for —— 9b

Footnote 10, continued

Q. Now, let us go to 1952. Look at that one. Is that

opening inventory correct? :

A. No. :

' Q. Is the closing inventory correct? ;

A. No. 2

Q. Did you know it to be incorrect when 7 oer that

_ return?

<i ;

* * *

"Q. Why didn't you tell your attorney that they were in-

correct ?

Mr. MonTEvERDE: Well, I object to that as sicigeies

tive and also embodying two questions in one.

THE Court: Please reframe the question.

Mr. MontTeEvERDE: I think you should first ask whether

he told his attorney..

Mr. Matz: Did he?

Mr. MonreEvERDE:. He certainly did.

Mr. Mazz: At the time they were offered in evidence ?

Mr. MontTeverpe: Certainly.

oe ee

Q. Did you know they were incorrect when they were

offered in evidence?

A., Yes.

QO. When you gave these. returns to your attorney, did you

tell ‘him they were incorrect? d

. Yes. Nott

QO. When was that? t

A. When I gave my attorney the returns.

oo Se re

Q. Now, do you know what the opening inventory should

have been as of January 1, 1953?

A. No, if I do, I would have put it down there, Mr. ‘Matz

* * *

Q? What i is it on there?

A. It says $561.

“

Q. That was the closing inventory in your tax statement; ;

is that right?

A, t’s the figure the accountant used, yes.

Q. Now, where did he get that figure?

A. He just put it down.

Q. You mean he pulled these figures out of the air and then

you signed the return?

NG

10b Order and Direction for Judgment7

Footnote 10, continued

im } prior to filing the income tax return, I discussed

this with my ee and I explained to him that I had not

taken an inventory and that I did not know a figure, an actual

figure, for inventory. and the accountant said to me, “Well, we

will use that figure,” and that’s what he did.

Q. You mean he just came up out of the air and gave you

o~. $561, is that it, as dn inventory figure?

A. He seemed ‘to give me the impression that there was

) nothing wrong, that generally this is done ._..--

é ! £8 é

[Tr. pp. 3053-3057 ; 3070-3071 }

's~ 11. Another example: rd %

Q. Well, now,;-did-you have a party by the name of P. Davis

in charge of your research division ! 7

A. I had an associate at one time who came into the factory

and worked from my factory, J. Davis.

QO. f Davis is it?

A. Yes. pas

Q. And he worked for gi ated

A. No, he didn’t work for me. It was an acquaintance that

° I had made, and this fellow used to come into the factory and

use my office facilities, and I considered him an associate but he

had nothing to do with the business.

a

Q. Did he ever sign any letters for you as Mr. Monteverde

just told gh °

9 oa 3 though dh

. Now, t you said he just an acquaintance

of ygurs, that he had nothing to do with the Siniaies,.”

? A. He had nothing to do with the business.

. . Didn’t he transact business for you?

. You mean as far as signing letters?

th

: a signed letters for you?

. Yes.

. Why did he sign letters for ?

| A. Because I-had him sign ers.

OPO PO

Q. Did he write the letters, dictate-them? ;

A. No. I wrote the letters. -

Q. You wrote the letters? |

0. Da him? :

a? you

A. No. oo

AD eB oe

f 2. When was Mr. Davis associated go company ?

From the beginning of the business untii the end of the

Order and Direction for Judgment 1lb

Footnote 11, neuiiail,

Q. And by the beginning when do you mean?

A. From the very inception ‘of that business until o busi-

ness ended.

* * *

[Counsel thereupon showed Mr. Dovberg letters from

Dovberg’s corporation, signed J. Davis, and Mr. ee

stated be had signed them himself. }

N arer-@

Q. Why would you put J. Davis, and why would you sign

his name to that letter?

A. Because I was J. Davis.

se ag ap lg body else so that we know? °

A. No. see, Mr. , | am-under oath. You are

asking me ques So, I am telling you J. Davis was asso-

; with me j business from the very i ion to the very

onl, sal whe wrote as of J. Davis I sign J.

decided I didn’t t to use my name I used J. Davis’ name. If

there is an with that you tell me and I am willing

to suffer the penalty. I was J. Davis in this instarice. . . .

* *

a

Q. Did you in the course of your business from 1950 through

1957 wee any other name beside J. ‘ciate

erome Davis.

9. a used Jerome Davis? \

A. Yi

¥0. Yo Sie eink enillas dat vteint *

Q. Why? ©

A. If T ever wrote a letter and I decided not to use, my

name I used Jerome Davis, J. Davis.

QO. hija a ynenighih sod ge oe whe ht aurea gua

taining to your own business, Mr. Dov

A. In instances where I felt that I , PeRagas eae

myself with the business.

Q. Well, why 7 agers you want to identify yourself with

your own

‘A. That is the only thing I can tell you, Mr. Obert. That

is the only answer. oe

8 a

nat Bee ae eS ro

A. cerdasses sf except that I already gave you that if I

ose my name I didn’t use my name, or decided not to

sae I signed it J. Davis.

But you can give no more specific reason w would

sisi Vek tate ater tear pe coe aber eb Sa can to

ae ee Is

re

12b Ro - Order and Direction for Judgment

Footnote 11, continued

A. That’s correct. ‘ ‘

Q. Where does J. Davis live?

- A. I will retract that statement. ‘There was no J. Davis.

Q. You mean there was no Mr. J. Davis that ever was

associated with you?

A. No.

Q. And you told this Court under oath less than ten min-

utes ago to the contrary ?

A. I corrected my statement, and I said that under oath

’ I signed J. Davis.

Q. And didrft you say Mr. J. Davis used to come there and

— ez ou from 1950 ihecdek 1956?

ents vis was associated with my business from the in-

tion until the end because I made it so. That is what I said.

Q. You mean J. 2 ye in your mind as a reality?

‘ Nor (*

12. Another example:

Q. I show you Exhibit D-148 that hes a similat type of

designation after the number. In this instance “L” appears be-

fore : and the numeral “66” is typed after it. What does that

mean

+ * *

ee [Tr. pp..2305-2314]

>

$

a.

pf

ua gin cxesemeamatained

is it put there if it has no significance ?

use I just put it there when I typed the invoice.

at file erome Davis?

— have been.

now, you told us about Jerome Davis eventually.

us why you put “66” after the number.

no significance. nabes

, | show you the next one, D-154,and that = ys

“QO” after it. Why is that?

has no significance.

wotall are numerous invoices here, all sania

©;

—

-

“a

(

orforfororer

g oh 5 Ss

atte F

Ep

And they have no significance? Pi

. Absolutely no significance.

coulda | stand for ledger, could it? Sateen

rsrerort

Mss Fg

. No.

. Did you have a ledger of your accounts?

No. jae,

&

Order and Direction for Judgment ~ 13b

Footnote 12, continued ©

Q. Do you swear under oath you never kept a ledger?

A. I swear under oath I never kept a ledger. My uncle’s

name was Louis.

Q. You ‘swear your uncle’s name was Louis? What has

that to do with it?

A. My uncle’s name was Louis and my uncle had passed

_ and I preceded the invoice numbers with the letter gg

or Louis. 3

Q. In memoriam of Louis? ,

A. Well, yes. Otherwise they had no significance.

Q. Did you memorialize Louis in any othe way, so that

we know for the purpose of this case?

A. No, not yet.. — |

Q. When had Uncle Louis passed away ?

A. By the end of 1951.

When? :

j en

A. By the end of 1951.

Q. And you never used the designation “L” to memoriakze

your uncle before 1951 then; is that your eae 2

‘A. To the best of my recollection. /

Q. Then what were the numbers after? Why did you put

the numefals 66 arid 99 and so forth after it?

A. They didn’t mean a thing.

Q. Well, you first told us the “L” meant nothing. Then

you told us the “L”——.

A. Well, it had no relationship to this case and so for that

matter it would be insignificant, Mr. Obert.

i [Tr. pp. 4878-4881. ]