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June 6, 1958

Isidore B. RUTSTEIN, Defendant

The opinion of the court was delivered by: BRYAN

Defendant Rutstein and Schuster were charged in a three count indictment with conspiracy to violate the Oleomargarine Act of 1950, 21 U.S.C.A. §§ 331(m), 333(b) and 347(b), and with two substantive violations of that statute. Defendant Schuster pleaded guilty to the conspiracy count and there was a severance as to him. The case was tried before me without a jury against the remaining defendant Rutstein.

The Oleomargarine Act of 1950, in so far as relevant here, forbids the sale or offer for sale of colored oleomargarine unless it is packaged and labeled in accordance with the requirements of the Act. The full text of the relevant Section 347(b) appears in the margin. *fn1"

 The question presented here is whether the labeling requirements of the statute apply only to packages of one pound or less sold in retail establishments, or also to sales at wholesale to jobbers or wholesalers in large sixty-four pound cubes.

 No reported cases have been cited to me which have construed these statutory provisions and research has failed to disclose any. The question appears to be one of first impression.

 Count I of the indictment charges that the defendants Rutstein and Schuster, and Abramson and Alpert, named as coconspirators but not defendants, conspired to violate 21 U.S.C.A. § 331(m). Counts II and III charge that on September 18, 1951 and September 25, 1951 respectively, the defendants Rutstein and Schuster, with intent to defraud and mislead, unlawfully sold and caused to be sold to H. Wool & Sons, Inc., a number of cartons containing colored oleomargarine on which the word 'oleomargarine' or 'margarine' or a statement of the ingredients contained therein did not appear on the label in violation of 21 U.S.C.A. §§ 331(m), 333(b), 347(b)(3), and 18 U.S.C. § 2.

 Count II of the indictment was dismissed during the course of the trial on the Government's own motion. At the close of all the evidence decision was reserved on a motion by defendant for a judgment of acquittal on the remaining two counts.

 The Government's version of the facts, as adduced at the trial, is as follows:

 In November 1950 Abramson visited Alpert at his place of business, The Temptee Butter and Egg Company, 514 Westchester Avenue, Bronx. Alpert told Abramson that he needed capital to finance his business operations and Abramson indicated that he knew of someone who could provide the necessary funds.

 Abramson then went to see defendant Rutstein at his place of business, the Exchange Place Realty Company, 35 Montgomery Street, Jersey City, and talked to him about financing Alpert's business. Rutstein indicated that he was interested and inspected the premises at 514 Westchester Avenue, together with Schuster. Several more meetings between the defendant, Alpert, Schuster and Abramson were held at the Jersey City and Bronx premises, with the result that defendant Rutstein decided that Exchange Place Realty would invest $ 12,000 in Alpert's business.

 At one of the meetings between defendant Rutstein and the alleged co-conspirators, he is said to have stated that it was impossible to make a profit by selling butter and eggs and that they should produce a mixture of oleomargarine and butter which would be sold as butter. The others agreed, and it was decided that a corporation would be formed for that purpose.

 The group met at the offices of Alpert's attorneys, and a corporation, Temptee Food Co., Inc., was organized. Alpert was named president, and Schuster secretary-treasurer.

 A bank account was opened at the Modern Industrial Bank, in the Bronx, and the plan was put into effect. The four met regularly at the Westchester Avenue premises for the purpose of blending butter with oleo. A Hobart mixer was used for the blending process, salt and artificial coloring were added, and the resulting substance was then placed in the freezer. Defendant Rutstein was present at most of these sessions, gave instructions as to how the mixing should be accomplished and was the one in charge of the operations.

 The actual sale of the product was handled by Abramson. The mixture, in bulk sixty-four pound cubes, was sold to H. Wool & Sons, Inc., a wholesaler or jobber of dairy products.

 Each sixty-four pound cube was wrapped in parchment and placed in a separate carton. The word 'margarine' or 'oleomargarine' did not appear on the cartons or the parchment wrappings and ...

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