UNITED STATES of America, Appellee, v. William P. GREGORY and Albert Sumpter, Defendants-Appellants.
No. 41, Docket 27533.
United States Court of Appeals Second Circuit.
Decided Oct. 29, 1962.
Argued Oct. 3, 1962. See also 204 F.Supp. 884.
The cases are remanded to the Tax Court for proceedings not inconsistent with the foregoing opinion.
$5 and all other shares of this stock acquired by Mel Dar on June 1 and June 5, 1950, were carried on its books at that value. Petitioners have failed to prove any higher figure, thus the unencumbered value of the mortgaged shares was only about one-half of the indebtedness. In addition, the dividends on this mortgaged stock were payable to the Jameson Corporation; thus, Mel Dar received neither a valuable equity nor property productive of income.
“Mel Dar next contends that the businеss purpose for its acquisition of the stock was to acquire control of Cement. But the purpose of the Jameson loan when originally made in 1934 was to assure continued control of Cement by Burnett, and this was effectively accomplished at that time. In June 1950 Mel Dar acquired 106,724 of the 188,164 outstanding shares of Cement. It purchased in addition 212 shares, 806 shares and 2,326 shares in its fiscal years 1951, 1952, and 1953, thus, absent the 16,208 mortgaged shares, it would never have owned a full 50 per cent of the outstanding shares. But we cannot simply assume that 50 per cent ownership or any other given percentage was necessary to control. Petitioners have failed to show that a loss of 16,208 shares would in fact spell the end of control over Cement by the Burnett interests. There is no showing that de facto control of Cement required an actual majority of outstanding shares, or that the Burnetts, individually, did not hold sufficient shares in Cement to offset any loss of control resulting from loss of the 16,208 shares in question.
“In summary, we hold that respondent did not err in excluding the Jameson note.”
Joseph I. Stone аnd Rudolph L. Zalo-witz, Elizabeth, N. J., for defendant-appellant Albert Sumpter.
Robert J. Geniesse, Asst. U. S. Atty., Southern District of New York, New York City (Vincent L. Broderick, U. S. Atty., and Arthur I. Rosett, Asst. U. S. Atty., on the brief), for appellee.
Before LUMBARD, Chief Judge, and FRIENDLY and KAUFMAN, Circuit Judges.
LUMBARD, Chief Judge.
William P. Gregory and Albert Sumpter appeal from their convictions by Judge Cashin, sitting without a jury, in the District Court for the Southern District of New York, for violation of the narcotics laws,
The government presented evidence that at about 2:30 A.M. on December 5, 1961, Gregory drove himself and Sumpter in Gregory‘s 1961 Oldsmobile convertible to thе Kimberly Hotel on West 74th Street in New York City. Gregory parked the car across the street from the hotel marquee which was lit. While being watched from a distance by several federal narcotics agents, Gregory got out of the car and entered the hotel, leaving Sumpter in the vehicle. Ten minutes later, Gregory came out of the hotel, carrying a brown papеr bag. He reentered the car and, at the same time, the agents approached to make the arrest. One of the agents, Ward, was known to Sumpter,1 and, when Ward came into view, the window on Sumpter‘s side of the car opened, an arm, holding the bag, slid “surreptitiously” out of the window, and the bag was dropped in the gutter.
The agents arrested Gregory and Sumpter, testеd the contents of the bag disposed of through the window, finding heroin, and searched defendants and the automobile. No other bag was found.
There was ample evidence to sustain a finding that Gregory actually possessed the brown bag and carried it from the hotel to the car. Further, since no other bag was found at the scene, it was reasonable to infer that the bаg Gregory carried was the same as the one containing heroin which was dropped from the car seconds later. Since the possession proved was reasonably related to the ultimate fact sought to be presumed—transportation of narcotics known to be unlawfully imported, United States v. Santore, 290 F.2d 51, 64, 79 (2 Cir., 1960)—the brevity of the possession is irrelevant. See United States v. Barrington, 291 F.2d 481 (2 Cir., 1961).
There was ample evidence that Sumptеr held the bag and dropped it out of the car window into the gutter. Sumpter argues, however, that his possession, like that of Narducci in United States v. Santore, supra, did not involve that type of control from which it could reasonably be inferred “that the possessor was going to commit one or more of the specified acts which have been declared criminal.” 290 F.2d at 64. We disagree.
We do not understand Judge Kaufman‘s suggestion that Sumpter might have disposed of the narcotics on Gregory‘s order without knowing what they were. Since the attempt to dispose of the narcotics was made in full view of agents Bailey and Carrozo, who were approaching the car from the rear, it is most reasonable to suppose that they had not been seen by the defendants and that
Narducci‘s possession, in the Santore case, supra, never beсame effective; before he had an opportunity to do anything with the narcotics, he relinquished his grasp, and the narcotics stayed where they were. Sumpter‘s possession, although also brief, was more complete. As indicated above, it is reasonable to infer from the evidence that he took possession for the purpose of attempting tо conceal the narcotics and that he accomplished his purpose, although the attempt failed. The distinction is not, as our dissenting brother argues, merely between “putting back” and “throwing out,” but rather between a grasp so fleeting that nothing is or is attempted to be accomplished and a possession which enables the possessor to do, for aught that appears, everything which he intended to do when he took possession. In these circumstances, we think the statutory presumption is applicable.
Affirmed.
KAUFMAN, Circuit Judge (concurring and dissenting).
I agree with my brothers in affirming the conviction of Gregory, but for the reasons I shall set forth I find it necessary to dissent from the affirmance of Sumpter‘s conviction.
I shall accept the evidence offered by the Gоvernment which may be summed up in this fashion. At approximately 2:30 of the morning in question, both defendants were in a car which pulled up opposite the Kimberly Hotel, at which Gregory had been living. Gregory was driving and Sumpter was seated next to him. Gregory entered the hotel and emerged approximately ten minutes later carrying a brown paper bag. Agents Ward and Ripa aрproached the car from the front. Sumpter knew Ward. He rolled down the right window and surreptitiously lowered a paper bag, apparently handed him by Gregory, and caused it to fall to the ground. It was agreed that Sumpter‘s participation lasted “only a matter of seconds.”
Sumpter‘s case presents a difficult problem for me. Since there was no indepеndent proof of his knowledge of the contents of the paper bag or of any conscious implication in a narcotics conspiracy, the problem we have to decide is whether the statutory presumption of
That notorious irritant Mr. Narducci of United States v. Santore, 290 F.2d 51 (2 Cir., 1960), cert. denied 365 U.S. 834, 81 S.Ct. 745, 5 L.Ed.2d 743 (1961), seems naturally to provide the focus of our analysis. This Court, speaking of defendant Narducci, stated:
“In order to make the statutory presumption cоntained in that section meet the test of validity we
must define ‘possession’ as used therein so as to include only that type of control from which it could not unreasonably be inferred that the possessor was going to commit one or more of the specified acts which have been declared criminal.” (290 F.2d p. 64)
The statutory presumption is merely a rule of evidencе which shifts the burden to the defendant of explaining his possession of the narcotics. It is usually reasonable to assume that one having possession of narcotics—in the sense of ability to control—knows that he has narcotics and knows that they were procured illegally. Since it is reasonable to deduce the presumed fact from the proven fact of ability to control, the shift of the burden to the defendant is appropriate. It is reinforced by the policy reason that it is easier for the defendant to prove what was going on in his mind, by way of excuse, than it is for the Government to prove that the defendant indeed did have knowledge of illegal importation. Where the possession is so fleeting and where the ability to control is so tenuous that it is unreasonable to deduce knowledge therefrom, then the shifting of the burden of proof to the defendant is improper. In Yee Hem v. United States, 268 U.S. 178, 45 S.Ct. 470, 69 L.Ed. 904 (1925), the Supreme Court held that a statutory presumption is valid only where there is a rational and not unreasonable connection between the ultimate fact to be presumed and the fact рroved.
The majority has summarily distinguished the Narducci episode, but I am convinced that the case before us is an even stronger one for reversal of the conviction than was Narducci‘s, and the attempted distinction does not stand up. Narducci opened a car trunk and was allegedly in the process of removing a package of narcotics when, manifestly in fear of federal narcotic agents nearby, he returned it to the trunk after having it in his possession for “less than half a minute.” His furtive actions revealed a sense of guilt and of knowledge of the contents of the package. By replacing it in the car trunk, he concealed or secreted the package just about as securely as anyone can. Sumpter, in our case, might well have been told on the spot by Gregory to dispose of the bag, although Sumpter had no knowledge of its contents. He was sitting in someone else‘s car, which, unlike the Narducci situation, is hardly probative of his knowledge of the contents of the package. He tried to dispose of the bag, but did a pretty poor job of “concealing” or “secreting” it, since he dropped it right outside the car in view of the agents. It is true that there was evidence that he knew agent Ward and that his conduct might thus have reflected a sense of guilt and knowledge of the contents of the bag. But this alone, especially in view of Narducci‘s case, should be inadequate evidence upon which to found a conviction.
If “ability to control” is the crucial factor, Narducci had a greater ability to control the narcotics than did Sumpter—federal agents were not closing in, he could have thrown the narcotics on the ground, hidden them carefully in the trunk, put them in his pocket and driven away, etc. Sumpter had few of these choices—his receipt of the package frоm Gregory was much more reflexive, the disposal might have been done pursuant to Gregory‘s order, and it did not result in anywhere near as effective a “concealment” as in the case of Narducci.
It has been urged, in an attempt to distinguish the circumstances relating to Narducci, that Narducci performed the negative act of returning the package оf narcotics to its original hiding place whereas here, Sumpter committed a more “positive, affirmative” act when he lowered the brown paper bag out of the car window. I must admit that I am at somewhat of a loss to see the relevance to “ability to control” of the physical dichotomy of “putting back” and “throwing out.” What would the result have been in Nаrducci‘s case had he put the narcotics in a different section of the
The majority opinion cites United States v. Barrington, 291 F.2d 481 (2 Cir., 1960). There, the defendant took two packages out of a lockеr in an airlines terminal, and took only four steps before he was intercepted by narcotics agents. Despite his short period of possession, the statutory presumption was held properly invoked. But, would Barrington‘s ability to control the narcotics have been absent if he took one or two steps away from the locker in which the narcotics were hiddеn and then turned around and replaced the package in his locker? I cannot comprehend how the precise physical placement of the narcotics bears upon the ability to control. If, indeed, it has no bearing, then I believe that it is unreasonable to presume that the fleeting possession of the paper bag in the case befоre us, for but a few seconds, without any evidence that Sumpter knew what was in it, or that he knew that Gregory was engaged in a transaction involving narcotics, warrants an inference of facts requisite to conviction—knowledge of the illegal contents of the package and of their illegal importation, and specific intent to violate the statute.
It is a source of concern to me that my brothers are willing to distinguish so summarily the precedent offered us by the Narducci episode, which this Court sitting in banc—my brothers among that number—so clearly thought warranted reversal of the conviction. The in banc Court in Santore was overwhelmingly influenced by the fact that Narducci‘s grasp was but “momentary.” Surely Sumpter‘s grasp of “only a matter of seconds” ranks as “momentary“, if Narducci‘s grasp of roughly half a minute does. My brothers’ use of such phrases as “effective” possession and “complete” possession, in an effort to distinguish Narducci, somewhat mystifies me. Our only concern is whether the application of the statutory presumption is a reasonable one, and to hold that it is here would, in the words of my brother Friendly, “give the act of touching an unwarranted talismanic effect.” United States v. Santore, supra, at 82 of 290 F. 2d. It is likewise a source of concern to me that the Government is content to rest its case upon such flimsy evidence, especially when the consequence can only be the imposition of a severe minimum sentence of five years’ imprisonment. There is no doubt in my mind that such penalties are nеcessary to stamp out the invidious traffic in narcotics; but they should also serve as a reminder that the Government‘s zeal should not overcome good sense. “Our concern for efficiency must not outweigh our concern for individual rights * * *. Once we embark upon shortcuts by creating a category of the ‘obviously guilty’ whose rights are denied, we run the risk that the circle
I would reverse Sumpter‘s conviction and dismiss the indictment.2
UNITED STATES of America, Plaintiff-Appellee, v. Alfred Edward SAILER, Defendant-Appellant.
No. 14832.
United States Court of Appeals Sixth Circuit.
Oct. 31, 1962.
Pierce E. Cunningham, Hamilton, Ohio (Fiehrer, Fiehrer & Cunningham, Hamilton, Ohio, on the brief), for appellant.
Robert A. Bell, Asst. U. S. Atty., Columbus, Ohio (Joseph P. Kinneary, U. S. Atty., Columbus, Ohio, on the brief), for appellee.
Before MILLER, Circuit Judge, and BOYD and McNAMEE, District Judges.
PER CURIAM.
Appellant upon trial by jury was found guilty of transporting a stolen vehicle in interstate commerce in violation of