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United States v. Peach Mountain Coal Min. Co.

April 18, 1947


Author: Chase

Before SWAN, CHASE, and CLARK, Circuit Judges.

CHASE, Circuit Judge.

The appellants are a Pennsylvania corporation which had its principal place of business at Pottsville, in the County of Schuylkill, in that state and was during all the time here relevant a wholesaler of anthracite coal, and its secretary, Ben Stein, who acted for it in making carload shipments of that commodity to a retail dealer in such coal in Brooklyn, N.Y., named Galumbeck, who did business under the trade name of Flatbush Coal and Oil Company.

They were convicted and sentenced in the District Court for the Eastern District of New York after trial by court, a jury having been waived, on all but one count, of an indictment in 69 counts, each of which charged the unlawful sale and delivery to Galumbeck of a carload of anthracite coal in violation of the provisions of the Act of June 28, 1940, 54 Stat. 676, as amended by the Act of May 31, 1941, 55 Stat. 236, as amended by the Second War Powers Act, 50 U.S.C.A.Appendix, § 633; and in violation of Regulation No. 28 promulgated by the Solid Fuels Administration for War under the authority conferred upon the President by the above statutes and duly delegated by him to the SFAW which will be used herein to designate the Solid Fuels Administration for War. The trial on this information was consolidated with that on an information filed against Galumbeck charging him with unlawfully receiving the coal and he was also convicted and sentenced but has not appealed.

The appellants demurred to the information on the grounds that each count was insufficient to state a crime; that the statutes above mentioned were unconstitutional; and that the Reg. No. 28 was arbitrary, confiscatory and void. The overruling of their demurrer is now relied on for the reversal of the judgment and that part of the appeal will be disposed of first.

We have already decided that the delegation of power to the President under the Second War Powers Act was lawful. United States v. Randall, 2 Cir., 140 F.2d 70. The subsequent delegation of power by the President to SFAW was equally so and the promulgation of Reg. 28 was, beyond any fair doubt, a proper exercise of that delegated power in form and scope. See, Gallagher's Steak House v. Bowles, 2 Cir., 142 F.2d 530; L. P. Steuart & Bros. v. Bowles, 322 U.S. 398, 64 S. Ct. 1097, 88 L. Ed. 1350.

Each count of the information, as amended (and the amendment to allege that the coal was produced in Pennsylvania was properly allowed under Rule 7(e) of the Federal Rules of Criminal Procedure, 18 U.S.C.A. following section 687), gave the appellants to understand with reasonable certainty just what they had done which was alleged to be unlawful and that complied with Rule 7(c) of the above. They could have moved under Rule 7(f) for a bill of particulars had they been in doubt. See United States v. Wodiska, 2 Cir., 147 F.2d 38; United States v. Achtner, 2 Cir., 144 F.2d 49; United States v. Hess, 124 U.S. 483, 8 S. Ct. 571, 31 L. Ed. 516.

The contention that the information was bad because it did not allege negatively that certain exceptions in the regulations were not pertinent is also without merit since those exceptions play no part in defining the offense. United States v. Cook, 17 Wall. 168, 84 U.S. 168, 21 L. Ed. 538; Anderson v. United States, 2 Cir., 294 F. 593.

However the record shows that evidence persistently offered by the appellant to prove the circumstances under which they sold and delivered the coal was excluded by the court and that was reversible error since it prevented them from showing, as they insisted they could, that their conduct was not in violation of Regulation No. 28 because it was authorized by § 602.761 thereof.

Sec. 602.761, in so far as it is presently pertinent provides that "(a) * * * each wholesaler, shall, to the maximum extent practicable, arrange with another wholesaler of his own selection * * * for regular distribution each month of all his excess tonnage to or for the account of such wholesaler or wholesalers.* * *" To understand the applicability of the above quotation it is necessary to know something of the way the trial was conducted and something about the history of Regulation No. 28.

There was a pre-trial conference at which the trial judge and attorneys for the parties came to some understanding as to the issues and the facts which were conceded but the record fails to show clearly just what agreement was reached and at the subsequent trial there was some confusion on that score. The government called no witness before it rested upon the concession of the appellants, as stated by the court, that, "We have it now stipulated that the coal mentioned in the information was shipped on the cars numbered and that the shipments were from Pennsylvania to New Youk by the Peach Mountain Coal Mining Company and Ben Stein acting in their behalf in making the shipments, and the shipments were made to defendant Galumbeck," and upon the further concession "that Bennie Galumbeck, doing business as the Flatbush Coal and Oil Company, did not have an established base period tonnage with Peach Mountain Coal Mining Company and Ben Stein" which was made by the attorney for the appellants, "Only with this reservation. The reservation is that the coal charged in this information was not sent on Peach Mountain's base period * * *." After all the motions previously made had been renewed and overruled together with a motion for acquittal, the government was permitted to reopen its case and prove by one witness that in the anthracite coal business the terms "nut" and "chestnut" are synonymous.

The appellants and Galumbeck then introduced some evidence to show the circumstances under which the coal was shipped to the latter. Just what that was need not be stated more in detail than that it was a part of the appellants' attempt to prove that the Peach Mountain Coal Mining Company had available coal in excess of it requirements to satisfy its obligations under Reg. 28 to its own base period customers and had arranged in accordance with § 602.761 with two other wholesalers, viz.: McCann Coal Company and Louis Gulotta & Company, each of which did have a base period experience with Galumbeck and were short of coal to distribute to him, to ship the coal covered by the information to Galumbeck for the account of those two wholesalers. The substance of what was excluded is sufficiently shown by the following offers of proof made by the attorney for the appellants as follows:

"Here is what I offer to prove: that this wholesaler, the McCann Company, having a base period with the Flatbush Coal & Oil Company, were authorized under that base period to send him 80 per cent of the coal they had delivered during the base period. Now, when that particular wholesaler did not have sufficient coal to supply the retailer in Flatbush, he transferred, or permitted Ben Stein, the other wholesaler, to ship on his base period, to supply on his base period to the retailer the coal that he is deficient on. It is a perfectly legal transaction. Nobody is getting more coal. Nobody is overcharging and it is a shipment on a base period substituting one period - no, that is an inept expression - it is a loan of the coal by Peach Mountain to McCann and shipped under McCann's name and under Gulotta's name on their base periods." After the offer was excluded the attorney added, "I have in addition to the McCann Coal Company, Gulotta of the Louis Gulotta Coal Company, and I offer to prove by him that he authorized Ben Stein to ship, as the railroad man testified, to ship in his name, the coal to the Flatbush on Gulotta's base period, the same as McCann did." This was then excluded and the ruling was adhered to throughout the remainder of the trial.

The relevancy of the offered evidence and the seriousness of the error in its exclusion becomes apparent when the purpose and background of § 602.761 is understood. Regulation 28 as a whole had been promulgated by the SFAW after it had been duly established that a shortage of anthracite coal required the enforcement of a regulated method of distribution to insure, so far as possible, an equitable allocation of what remained after governmental requirements were satisfied. It was the successor of both SFAW revised Regulation No. 2 which expired on March 31, 1944 and had provided for the distribution by SFAW itself of what was known as excess tonnage after it had been reported by wholesalers having an excess of coal; and of SFAW Regulation No. 18 which had somewhat altered the method for making excess tonnage available for civilian use, following the expiration of Regulation No. 2. Regulation No. 18 had provided that producers and wholesalers should, "to the maximum extent practicable, arrange with another producer or wholesaler of his own selection * * * for regular shipment each month to or for the account of such producer or wholesaler of all anthracite which exceeds the tonnage actually shipped or scheduled for shipment during the month * * *." ...

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