Opposition Brief — Shannon v. United States

INDEX

Opinion below ..

Jurisdiction

Questions presented

Statutes involved

Statement

Argument

Conelusion

CITATIONS

Cases:

Crumpton v. United States, 138 U.S. 361

Dawson v. United States, 203 F. 2d 201

Jarvis v. United States, 90 F. 2d 243, certiorari denied,

Kansas Flour Mills vy. Board of Commissioners, 124

302 U.S. 705

Kan. 312, 259 Pae. 795

Kotteakos yv. United States, 228 U.S. 750

Lutwak v. United States, 344 U.S. 604

Morissette v. United States, 342 U.S. 246

Stricklin v. Rice, 141 S.W. 2d 748 (Tex. Civ. App.)

United States v. Socony-Vacuum Oil Company, 310 U.S.

150

Statutes and Rules:

Section 15(e) of the Commodity Credit Corporation

Charter Act, Public Law 806, 80th Cong., 62 Stat.

1070, 15 U.S.C. [1946 ed., Supp. VJ, 714m(e)

Volume 16, Vernon’s Civil Statutes of Texas:

Article 5644, subsection 4

Artiele 5645

F. R. Crim. P.:

Rule 30

Rule 52(a)

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Guthe Supreme Court of the Bnited States

OcToBER TERM, 1953

No. 613

O. L. SHANNON, PETITIONER

Ss

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF Ci. 2TIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE FIFTH

CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the Court of Appeals (S. R. 21-

27) ' is not yet reported.

JURISDICTION

The judgment of the Court of Appeals was en-

tered on January 15, 1954 (S. R. 27), and a petition

for a rehearing was denied on February 3, 1954

(S. R. 28-26). The petition for a writ of certiorari

was filed on March 2, 1954. The jurisdiction of this

1“S.R.” refers to Volume II, the supplemental transcript of

record. “R.” will refer to Volume I of the record.

(1)

VO EY

2

Court is invoked under 28 U. S. C. 1254(1). See

also Rules 37(b)(2) and 45(a), F. R. Crim. P.

QUESTIONS PRESENTED

1. Whether the evidence proved petitioner’s

criminal intent to steal and convert grain of the

Commodity Credit Corporation stored in his ware-

house.

2. Whether the storage agreement made peti-

tioner a bailee, rather than the owner, of the grain

stored by the Commodity Credit Corporation, so

that petitioner could be convicted for the theft and

conversion of Commodity’s grain.

3. Whether certain remarks in the prosecutor’s

closing argument required reversal of the convic-

tion.

STATUTES INVOLVED

Section 15(¢) of the Commodity Credit Corpora-

tion Charter Act, Public Law 806, 80th Cong., 62

Stat. 1070, 15 U.S. C. (1946 ed., Supp. V), 714m(c)

provides:

Whoever shall wilfully steal, conceal, re-

move, dispose of, or convert to his own use or to

that of another any property owned or held by,

or mortgaged or pledged to, the Corporation,

shall, upon conviction thereof, be punished by

a fine of not more than $10,000 or by imprison-

ment for not more than five years, or both.

Volume 16, Vernon’s Civil Statutes of Texas,

Article 5645, provides:

If goods are of a perishable nature, or by

keeping will deteriorate greatly in value, or

3

by their odor, leakage, inflammability, or ex-

plosive nature, will be liable to injure other

property, the warehouseman may give such

notice to the owner, or to the person in whose

name the goods are stored, as is reasonable and

possible under the circumstances, to satisfy the

lien upon such goods, and to remove them from

the warehouse, and in the event of the failure

of such person to satisfy the lien and to remove

the goods within the time so specified, the ware-

houseman may sell the goods at public or pri-

vate sale without advertising. If the ware-

houseman after a reasonable effort is unable to

sell such goods, he may dispose of them in any

lawful manner, and shall ineur no liability by

reason thereof. The proceeds of any sale made

upon the terms of this article shall be disposed

of in the same way as the proceeds of sales

made under the terms of Article 5644.

Volume 16, Vernon’s Civil Statutes of Texas,

Article 5644, subsection 4, provides:

* * * From the proceeds of such sale, the

warehouseman shall satisfy his hen * * *.

The balance, if any, of such proceeds shall be

deposited with the county clerk of the county

in which the warehouse is located and shall be

delivered, on demand, to the person to whom

the warehouseman would have been bound to

deliver, or justified in delivering the goods, for

which the receipt was issued. * * *

STATEMENT

Petitioner was charged in an indictment of 47

counts in the United States District Court for the

pits ce — SRI ERE RENEE RRNERReE eR taRcreRES

A De ee eo Tate eke

4

Northern District of Texas with violations of See-

sion 15(¢) of the Commodity Credit Corporation

Charter Act (supra, p. 2), in that on certain days

in May, June and July 1951 he did knowingly and

wilfully steal and convert to his own use large

amounts of grain sorghum and wheat,? which were

the property of the Commodity Credit Corpora-

tion, an agency of the United States within the De-

partment of Agriculture (R. 1-22). Six counts

were dismissed by the Government at the start of

the trial (R. 53-54), and the jury found petitioner

guilty on the remaining counts (R. 574). He was

given concurrent sentences of five years on each

of 88 counts. On three other counts he was given

sentences of two years to run concurrently with

each other, and he was fined $5,000 on each such

count. The execution of the two-year sentences was

suspended and he was placed on probation as to

these sentences under certain conditions, the pro-

bation to begin after completion of the concurrent

five-year sentences. (R. 578.) On appeal (R. 38-

40), the conviction was unanimously affirmed

(S. R. 27).

The evidence may be summarized as follows:

Petitioner was a warehouseman who operated

under the name of Shannon Elevator in Sudan.

Texas; well over 90% of the grain warehoused in

his facilities was stored for the Commodity Credit

Corporation (hereafter called Commodity). He

entered into Uniform Grain Storage Agreements

with Commodity (Gov. Ex. 1, 2, 3), dated June 1.

* Only counts 46 and 47 dealt with wheat (R. 22).

eee: Roce

5

1949, July 1, 1949 and June 1, 1950 respectively.

(S. R. 3-19, R. 57-58.) The last of these contracts

(S. R. 11-19) provided in paragraph 6 for the com-

mingling of the grain stored in the warehouse; in

paragraph 7(a) it provided that ‘‘With respect to

the grain stored commingled, the warehouseman

shall at all times maintain in the warehouse indi-

‘ated on the warehouse receipts and in which the

grain was originally deposited for storage a stock

of grain of the quantity, class, grade, and quality

which he is obligated to deliver under the ware-

‘and in paragraph 11(a) it pro-

vided further that the wareliouseman ‘shall upon

surrender of warehouse receipts representing the

house receipts ;’

grain stored in such elevator(s) or warehouse(s),

when so requested by Commodity, deliver the

grain.”’

Witness Weaver, a Department of Agriculture

accountant, testified as to the total quantities of

undelivered grain sorghum or wheat represented

by warehouse receipts issued by petitioner and ac-

quired by Commodity through matured loans, direct

purchases or otherwise, as of the particular date in

‘ach count of the indietment (R. 87-91). He also

testified that the total quantities of grain sorghum

and wheat, represented by warehouse receipts is-

sued by petitioner and acquired by Commodity,

upon which delivery had not been made, were 30,-

631,405 pounds and 37,676.95 bushels, respectively

(R. 96).

The Government proved with respect to each of

the undismissed counts specific shipments of grain

SACRE NERS fe Phy alana tem eae vena Nae

6

by petitioner from Sudan, Texas, to N. K. Parrish,

Uhlmann Elevators Company, Transit Grain Com

pany, and Roek Island Grain Company CR. 103.

128). Commodity did not at any time issue the re-

quired order to load out any of these shipments to

eee LD Ded

the parties named (R. 198-197),

John Bachmann, a Department of Agriculture

accountint who examined petitioner’s books and

records, testified that a fter October 15, THY, peti

lioner was vever ina ‘long’ position, sinee from

that date on his grain inventories were less than his

obligations to deliver (RL MAS, 152-158). Bach

mann also testified, as of the date of each of the

vudismissed counts, regarding petitioner's short

ages, Showing what percentage of grain sorghum

or wheat stored in petitioner's warehouse belonged

to Commodity on each date Cin all instances over

He) and applying these percentages to the ship

ments proved to NOK. Parrish, Uhlmann Eleva

tors Company, Transit Grain Company, and Rock

Island Grain Company, he stated the amount of

grain in each such shipment whieh was owned by

Commodity. CR. 158-170.)

In an invoice covering the period from January

1, 1991, through June 30, 1951 (Gov, Ey, 82), peti

tioner made a claim against Commodity for S41,

VLA in storage charges (RL 889-294, 485). On

August 18, 19511. W. Mize.a Department of Agri

culture auditor, went to petitioner's warehouse

to measure the quantity of his grain to see if there

was enough on hand te cover his outstanding ster

age commitments, Mize testified that on August

20 petitioner told him that “he was short of grain

Sete»

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and that he wondered if it wouldn't be possible for

me to forget about measuring his inventory at that

time,” but Mize replied that he could not, and pro-

ceeded to ascertain. petitioner's grain shortage.

CR. 0.) About August 22 Commodity or-

dered petitioner not toe lead out any more grain

except to it CR. SH6-347). Meanwhile, however, on

Sunday might, August 19, petitioner had succeeded

in delivering a hurge shipment of grain tea Sudan

feed company CR. O47, 473, 478). Petitioner's

business went into receivership on November 24,

Lb CR. OO),

Petitioner testitied that in the spring of 1951 he

knew of his grain shortage, and that he could not

till the Commodity orders after he ran out of grain

CR. S86). He at tirst denied, but lated contirmed,

that he had signed a written statement dated Au-

gust 27, 1991, admitting that he had seld Com-

modity grain to a designated list of persons and

converus CR. S86-3388, 886, 399-400),

AROQUMENT

1. There is no merit in petitioner's contention

that under Article 5649 of Vernon's Civil Statutes

of Texas (spray pp. 233) he could take steps to sell

grain te prevent damage or spoilage, and = that,

therefore, he could not have intended to steal or

convert the grain stered with him by Commodity

(Pet. He20)8 There was no showing that peti-

tioner complied with Article 5645 or had any idea

*Tt should be remembered that petitioner was not convieted

of stealing or converting any of the relatively small amounts

of grain damaged or spoiled while in storage at his warehouse.

See Ro 76,

8

that he was doing so. That article requires the

warehouseman to give reasonable notice to the

owner of the property to satisfy the lien upon the

stored perishable or dangerous goods and to remove

them from the warehouse. It provides that if the

owner does not do so, the warehouseman may sell

‘ the goods at public or private sale and apply the

proceeds in accordance with Article 5644 (supra,

p. 3), which provides in subsection 4 that out of

the proceeds the warehouseman shall satisfy his |

lien and expenses and deposit the balance with

the county clerk for delivery to the person to whom

the warehouseman would have been bound to de-

liver the goods. Here, however, petitioner did not

give notice to Commodity to satisfy his lien upon

the grain and to remove it from the warehouse, nor

was an attempt made to turn over a cash balance

to Commodity after the satisfaction of any ware-

houseman’s lien. *

a ae

The court’s instruction clearly required crim-

inal intent on the part of petitioner before he

could be convicted (R. 567). See Morissette v.

United States, 342 U.S. 246. Such intent was in-

ferable from his continuous large-scale sales of

Commodity’s grain at a time when he was cogni-

zant of a serious shortage in his inventory. As the

* The letter petitioner claims he wrote to Commodity notify-

ing it of damage to the stored grain by a flood in June 1951

(R. 349, 182) was not compliance with Article 5645, and did

not mention enforcement of a warehouseman’s lien. Petitioner,

moreover, did not have a copy of this alleged letter, and the

jury, in determining his credibility, may well have disbelieved

that there was such a letter.

ES AAR AT SN Os EYEE INR OES Dm ERNE NR Et PRS att PONG I RC ROSEN i RUIN SENT AS SEE NMN ON oe

Baie an

9

trial court aptly stated before pronouncing sen-

tence (R. 577-578) :

‘*{ Petitioner] had denied criminal intent, and

yet at the very time the inspector for Commodity

Credit Corporation was out there on the grounds

in August of 1951, he was hurriedly, and as I would

confidently suppose, at night moving large quan-

tities of grain, and abnormal quantities of grain,

out of those facilities. No wonder the jury took

no stock in the disclaimer of any criminal intent.”’

2. Petitioner contends that under the Uniform

Grain Storage Agreement of June 1, 1950 (S. R.

11-19) he was the owner, not the bailee, of Com-

modity’s stored grain, with the consequence that

he could not be convicted for wilful conversion or

theft (Pet. 20-39). He invokes in this connection

cases involving contracts under which a warehouse-

man has a clear option either to return the goods

stored, or to deliver other merchantable goods to-

gether with a payment of any difference in value.”

But the argument is without substance, and the

cases petitioner cites are irrelevant, since the con-

tract involved here gave him no such option.

A reading of the contract makes it clear that peti-

tioner did not become the owner of Commodity’s

stored grain, but merely a warehouseman bailee for

hire. The title of the agreement shows that it is

for ‘‘storage.’’ Paragraph 3 recites that Com-

moditv desires that the storage facilities, which

> E.G., Stricklin v. Rice, 141 8. W. 2d 748 (Tex. Civ. App.);

Kansas Flour Mills v. Board of Commissioners, 124 Kan. 312,

259 Pac. 795.

os ae Tee ae cee ne eT ee ee

ST I GORE EB LR ap

10

the warehouseman represents he has in paragraph

2, be made available with respect to grain ‘‘owned

by’? Commodity. Paragraph 5 provides that the

grain stored by the warehouseman shall be ‘‘loaded

out and shipped as requested by the owner [plainly

Commodity and not petitioner, who is described in

the same paragraph as ‘‘the warehouseman’’]

* * * in accordance with the provisions of this

agreement.’’ (Emphasis added.) Paragraph 7

(a) provides that ‘With respect to the grain stored

commingled, the warehouseman shall at all times

maintain in the warehouse indicated on the ware-

house receipts and in which the grain was origin-

ally deposited for storage a stock of grain of the

quantity, class, grade and quality which he is

obliged to deliver under the warehouse receipts.”

Paragraph 11(a) provides that the Warehouseman

‘*shall upon surrender of warehouse receipts repre-

senting the grain stored in such elevator(s) or

warehouse(s), when so requested by Commodity,

deliver the grain.” Paragraphs 17 and 18 provide

for a schedule of applicable rates and the payment

of charges by Commodity to the warehouseman,

showing further that the latter was not the owner

of the stored goods under the contract.®

* Paragraphs 11 and 13 of the contract, upon which peti-

tioner relies, do not give rise to an option on his part. Under

paragraph 11 the warehouseman’s primary duty is to “load

out” the stored grain upon Commodity’s request, and only

after the loading and inspection does the question arise as to

a settlement between the warehouseman and Commodity re-

garding quality deficiencies. Paragraph 11(b) (ii) refers to

paragraph 13, which shows that whatever option is provided

for is given to Commodity. Section 13(a) (ii) provides that

“Commodity shall have the election to reject grain not meeting

11

Dawson v. United States, 203 F. 2d 201 (C. A.

)), upon which the court below relied, is directly in

point; it involved the same type of conviction and

a contract apparently identical to the one in the

instant case. In Dawson the court, interpreting

the contract, held (203 F. 2d at 203) that the con-

victed defendant clearly ‘‘was not making an agree-

ment for the storage of grain to be purchased by

him, and that he only held the grain in trust as

bailee for the holders of the warehouse receipts.’’*

3. Finally, petitioner complains that certain al-

legedly pre} ‘dicial Sede the prosecutor in his

closing argument constitute reversible error (Pet.

39-43). In the first incident the prosecutor called

upon the jury to decide wheter petitioner stole

the applicable requirements of section 11, but the warehouse-

man shall pay Commodity the value of the grain which should

have been delivered rather than replacing such rejected

grain.” Consequently, before the warehouseman is to pay

Commodity any money, Commodity must exercise its election

to accept or reject the tendered grain. In the event of rejec-

tion, the obligation (not the privilege or right) of the ware-

houseman arises to pay the value.

It should be noted that the two purchases of grain by peti-

tioner, from Commodity on March 24 and 29, 1951, for which

he paid $106,032.52 and $27,269.01, respectively (R. 244, 245,

247), were not settlements for deficiencies in quality or quan-

tity of grain in deliveries pursuant to loading orders under

paragraphs 11 and 13. These were transactions in which Com-

oe made direct sales to petitioner of grain in “flat storage”

(R. 270).

*The anomaly of petitioner’s asserting ownership of the

grain stored by Commodity, and at the same time claiming

$41,111.17 in storage charges from Commodity (R. 389-394,

435), is at once apparent. That petitioner was aware that he

was not the owner of the stored goods is shown by his testi-

mony (R. 332): “Q. Isn’t it your understanding of the con-

tract that all they required for you to do was to give them

back what they stored with you and paid storage charges on?

A. That’s right.”

12

the grain ‘‘bought by his government, paid for by

you.’’ Petitioner objected to the remark as in-

flammatory, the court in effect sustained the ob-

jection by directing the prosecutor to cast his argu-

ment differently, and the prosecutor acquiesced.

(R. 516.) In the second instance the prosecutor,

in referring to the facility with which character

witnesses may be obtained, stated: ‘‘Judas Iscariot

had a very good reputation before he sold his Lord.

Alger Hiss had some awful good character wit-

nesses, some of the best.’’? Petitioner’s objection to

this statement was sustained and his counsel was

apparently satisfied with the ruling. (R. 521.)

In the last incident, the prosecutor inadvertently

referred to the fact that Mr. Bowlin, one of peti-

tioner’s attorneys, had stated in his argument that

the Government must show a criminal intent at the

time petitioner ‘‘stole’’ the grain, whereas Bowlin

had actually used the word ‘sold’? (R. 550-551,

527).° This remark apparently seemed so trivial

at the time, however, that no objection was made,

and the point was raised for the first time on

appeal.

Petitioner now argues that the judge should have

gone beyond sustaining the objections which were

made and should have instructed the jury to dis-

regard the remarks, including the one not objected

8 Cf. Jarvis v. United States, 90 F. 2d 243, 246 (C. A. 1), cer-

tiorari denied, 302 U. S. 705: “In long and complicated trials

it is not uncommon for counsel arguing to the jury to make

unintentional misstatements of fact. When this oecurs it is

the duty of opposing counsel to call attention to the misstate-

ment and request the court to instruct the jury to disregard it.”

13

to. But since counsel seemed content with the rul-

ing at the time, the argument comes too late on

appeal. Rule 30, F. R. Crim. P.; cf. Crumpton v.

United States, 1388 U. S. 361, 364; United States

v. Socony-Vacuum Oil Company, 310 U. S. 150,

238-239. In any event, as the court below held

(R. 26-27), petitioner’s guilt was so overwhelm-

ingly shown by the evidence that these minor in-

cidents are clearly not substantial error. <Kot-

teakos v. United States, 328 U.S. 750, 764; Lutwak

v. United States, 344 U. S. 604, 619-620; Rule 52

(a), F. R. Crim. P.

CONCLUSION

The case was correctly decided in accordance

with established legal principles, and there is no

question warranting further review by this Court.

It is therefore respectfully submitted that the peti-

tion for a writ of certiorari should be denied.

Simon E. SoBeE.orr,

Solicitor General.

WarRREN OLney III,

Assistant Attorney General.

BEATRICE ROSENBERG,

Ropert G. Maysack,

Attorneys.

Apri 1954,

wv U. S. GOVERNMENT PRINTING OFFICE: 1954 294062 26