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United States v. Ray

decided: March 31, 1975.


Appeal from the United States District Court for the Southern District of Illinois, Southern Division - Nos. 73-17-CR-S and 73-36-CR-S Omer Poos, Judge.

Fairchild, Chief Judge, Solomon, Senior District Judge,*fn* and Swygert, Circuit Judge.

Author: Fairchild

FAIRCHILD, Chief Judge.

Defendants John Ray, Ronald Jackson, and James Barbee were each found guilty on counts charging them with receiving, concealing, and retaining (or with concealing and retaining) property of the United States with intent to convert it to his own use, knowing it to have been stolen. So described the offense was a violation of the second paragraph of 18 U.S.C. § 641.*fn1 On appeal defendants claim that they were convicted of offenses not charged in the indictments and also urge that other prejudicial errors occurred in the course of their prosecution.


The gist of the government proof was that butter, while the property of Commodity Credit Corporation, -- an agency of the United States, 15 U.S.C. § 714, -- was stolen from certain freight cars, and that defendants later possessed such butter with knowledge of its having been stolen and sold it for gain. Defendants argue that because the butter was the property of the Commodity Credit Corporation any offense proved against them was an offense under 15 U.S.C. § 714m(c) and accordingly that § 714m(e) rendered 18 U.S.C. § 641 inapplicable to their conduct. Defendants argue that dismissal would be appropriate. At the least, because of different provisions as to penalty, with a different pecuniary value controlling the grading of penalty, an adjustment of sentences would be necessary.*fn2

15 U.S.C. § 714m(e) provides:

"All the general penal statutes relating to crimes and offenses against the United States shall apply with respect to the Corporation, its property, money, contracts and agreements, employees, and operations: Provided, That such general penal statutes shall not apply to the extent that they relate to crimes and offenses punishable under subsections (a), (b), (c), and (d) of this section: Provided further, That sections 431 and 432 of Title 18 shall not apply to contracts or agreements of a kind which the Corporation may enter into with farmers participating in a program of the Corporation."

The question thus becomes whether the defendants' conduct was punishable under one of the subsections of § 714m. Subsection (c) provides:

Whoever shall willfully steal, conceal, remove, 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, or any property mortgaged or pledged as security for any promissory note, or other evidence of indebtedness, which the Corporation has guaranteed or is obligated to purchase upon tender, shall, upon conviction thereof, if such property be of an amount or value in excess of $500, be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both, and, if such property be of an amount or value of $500 or less, be punished by a fine of not more than $1,000 or by imprisonment for not more than one year, or both.

Focusing on this subsection's plain meaning, its language is sufficiently broad to encompass the acts which the jury must have concluded the defendants had performed. At common law conversion was defined as any act of dominion wrongfully exerted over another's personal property inconsistent with, in derogation of, or in defiance of the other's title or rights. 18 Am. Jur. 2d Conversion § 1 at 158. The law, moreover, views the receipt of stolen goods as an act of conversion.*fn3 Absent a reasonable limiting construction, therefore, the knowing receipt and retention of Commodity Credit Corporation butter with intent to convert would be a willful conversion of the Corporation's property.

The government argues, however, that § 714m(c) is basically a larceny statute and that the scope of the statute is confined to those conversions resembling larceny. Contending that larceny and the receipt of stolen property have been traditionally treated as distinct offenses, the government concludes that the statute's prohibition of conversion does not apply to the receipt, concealment, and retention of stolen property and therefore that § 714m(e) does not preclude the defendants' indictment and conviction under 18 U.S.C. § 641.

At first glance the government's position is supported by reference to § 641. Like § 714m(c), § 641 prohibits conversion; but unlike § 714m(c), it goes on to prohibit the receipt, concealment and retention of stolen property. Following this analysis, Congress felt that § 641's proscription of conversion did not reach the crime of receipt of stolen property. This argument though ignores the genesis of § 641. That statute codified four previous statutes, one of which prohibited the receipt of stolen property. The term conversion was first introduced at the time of this codification to reach conduct that theretofore had not been prohibited but was offensive; namely, the misuse of property after its lawful procurement. Morissette v. United States, 342 U.S. 246, 271-72, 96 L. Ed. 288, 72 S. Ct. 240 (1952). Historically, the prohibition of the receipt of stolen property was thus not introduced into § 641 because the latter prohibition against conversion was thought not to reach such conduct.

The genesis of § 714m(c), on the other hand, while not unambiguous, does not suggest that conversion, as used in that statute, excludes the receipt and retention of stolen property. Congress intended § 714m(c) to apply to all property "whether in the possession of the Corporation or not." 2 U.S. Code Congressional Service, 80th Cong., 2d Sess. (1948), p. 2154. Clearly Congress was not concerned with possession and how possession is achieved. More likely, its central concern was that Commodity Credit Corporation property should not be ...

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