256 F.2d 549, *; 1958 U.S. App. LEXIS 5172, **;
42
L.R.R.M. 2342; 35 Lab. Cas. (CCH) P71,630
Wadelmiro ARROYO, Defendant, Appellant, v. UNITED STATES of
America, Appellee
No. 5261
UNITED STATES COURT OF APPEALS FIRST CIRCUIT
256 F.2d 549; 1958 U.S. App. LEXIS 5172; 42 L.R.R.M. 2342; 35
Lab. Cas. (CCH) P71,630
February 7, 1958, Heard
June 25, 1958, Decided
CORE TERMS: thing of value, collective bargaining
agreement, deposited, personal expenses, legislative history, circumvention,
atmosphere, convicted, friendly, wished, gift, collective bargaining, personal
benefit, administered, withdrawals, possessed, devious, juror, guilt, array
COUNSEL: [**1] 1292 *1
Rafael V. Perez-Marchand, Rio
Piedras, P.R., with whom Carlos A. Romero Barcelo and Miguel E. Herrero Frank,
Rio Piedras, P.R., were on the brief, for appellant.
Ruben Rodriguez
Antongiorgi, U.S. Atty., San Juan, P.R., with whom John M. Gallagher, Atty.,
Dept. of Justice, Washington, D.C., was on the brief, for appellee.
JUDGES: Before MAGRUDER, Chief
Judge, and WOODBURY and STALEY, Circuit Judges.
OPINIONBY: WOODBURY
OPINION: [*550]
The appellant was indicted, tried by jury on his plea of not
guilty, convicted and sentenced in the court below for receiving money from an
employer in violation of § 302(b) and (d) of the Labor Management Relations Act,
1947, 61 Stat. 157, 29
U.S.C.A. § 186(b) and (d) quoted in the margin, n1 with so much of
subsection (c) as has any application here.
The Government introduced
evidence at the trial to show that on February 21, 1953, Central Mercedita,
Inc., and Puerto Rican Sugar Refinery, Inc., allied corporations engaged in
Puerto Rico in the production of sugar for movement in interstate commerce,
executed a collective bargaining agreement for the years 1953 through 1955 with
the Union de Tradajadores [**2] de Factoria,
Refineria y Ramos Anexas de 1292 *2 la Industrial Azucarera, Local 1781,
Afiliada a la International Longshoremen's Association (hereinafter for brevity
referred to as the Union), as the duly certified representative of appropriate
units of their employees and that the agreement was negotiated and executed on
behalf of the Union by the appellant as the Union's president and principal
negotiator. Article 6 of the agreement provided that the employers would
contribute equally to a welfare fund of $ 15,000 to be used to furnish medical
aid, hospitalization, etc., for the employees of the employers and their
families and dependents which was to be administered by a committee to be
appointed by agreement [*551] of the parties.
On the day the agreement was signed, or the day following, the evidence is
conflicting, each employer gave the appellant its check in the amount of $ 7,500
payable to the Union, each check having a voucher attached showing that it
covered the employer's contribution to the welfare fund established under the
collective bargaining agreement.
On February 24, the appellant, instead
of depositing the checks in the Banco de Ponce to the credit [**3] of the Union's welfare fund to be withdrawn by
checks 1292 *3 signed by him and counter signed by a representative of the
employers, as had been the practice with respect to previous similar funds, used
the checks endorsed by himself and the Union's secretary to open a new account
in the name of the Union's welfare fund in the Ponce branch of the National City
Bank. A week or so later the appellant gave the bank what purported to be a
resolution of the Union giving him authority to draw against this account over
his signature only, and subsequently, beginning on March 6, he made withdrawals
from the account for his personal benefit, as for the purchase of an automobile.
The employers protested as soon as they discovered what was afoot and on March
26, 1953, the bank closed out the account by giving the appellant a manager's
check for the balance remaining on deposit of $ 9,812.89. The appellant
deposited this check to the Union's general account in the Banco de Ponce, on
which he was the only person authorized to draw, and he drew against it for his
personal use and general purposes of the Union. There is no evidence that any
part of either account was used for the welfare [**4] purposes specified in Article 6 of the collective
bargaining agreement. 1292 *4
There can be no doubt that the two
corporations involved, Central Mercedita, Inc., and Puerto Rican Sugar Refinery,
Inc., are 'employers' within the meaning of the statute. Nor can there be any
doubt that the appellant was a 'representative' of the employees of those
employers as that term is defined in United
States v. Ryan, 1956, 350 U.S. 299, 76 S.Ct. 400, 100 L.Ed. 335. The basic
question presented is whether the appellant can stand convicted on the facts
outlined above.
The appellant contends that having accepted checks from
the employers payable to the Union's welfare fund, and having deposited those
checks in a bank to the credit of that fund, he cannot in reason be said to have
'received' himself any 'money or other thing of value' from the employers. He
concedes that through the personal control he possessed over the welfare fund he
not only could but did use it for his own personal expenses, but he says that
while he may thereby have violated the local criminal law, the monies he
received came from the Union, not from the employers. Thus he contended
throughout the trial [**5] and contends here that
the evidence of his misappropriations was not only irrelevant but also highly
1292 *5 prejudicial and should have been excluded. The Government on the other
hand contends, and the court below adopting the contention so charged the jury,
that even though the checks were made payable to the Union's welfare fund and
were so deposited, nevertheless, if by collusion with other Union officials or
by more devious means, the appellant in fact possessed complete and sole control
over the fund so that he might use all or part of it for his own personal
benefit in violation of the collective bargaining agreement and the law, he
'received' money from the employers in violation of the statute. We agree with
the view of the Government and of the District Court.
One obvious
purpose of subsection (b) of the statute is to discourage by the imposition of
criminal sanctions representatives of employees from shaking down employers. But
this is not its only purpose. The statute is not limited in its thrust to cases
of extortion. By subsection (b), read with subsection (a) which imposes similar
sanctions upon employers for paying or delivering, or agreeing to pay or deliver
[**6] any money or other thing of value to any
representative of his employees, Congress, in the words [*552] 1292 *6 of Chief Judge Learned Hand dissenting in
United
States v. Ryan, 2 Cir., 1955, 225 F.2d 417, 426, 'wished to prevent
employers from tampering with the loyalty of union officials, and disloyal union
officials from levying tribute upon employers.' This, however, is not all, for
the statute read literally prevents even the creation of a relaxed and friendly
atmosphere for collective bargaining by the device of gifts or presents passing
from employers to the representatives of their employees. From its use of
language it seems evident that Congress wished to assure collective bargaining
at arms length except, of course, for a possible friendly atmosphere born of
mutual trust and confidence.
To achieve this purpose subsections (a) and
(b) of § 302 read broadly to make it illegal, with the five exceptions listed in
subsection (c), 'for any employer to offer, or any representative to accept,
money or other thing of value.' United
States v. Ryan, 1956, 350 U.S. 299, 303, 76 S.Ct. 400, 404, 100 L.Ed. 335.
'As the statute reads, it appears [**7] to be a
criminal provision, malum prohibitum, which outlaws all payments, with stated
exceptions, between employer and representative.' Id.,
350 U.S. 305, 1292 *7 76
S.Ct. 404. We may safely assume that Congress spoke in sweeping terms
designedly in order to prevent circumvention of the statute by subtle and
devious devices. And one of the devices for circumvention in the mind of
Congress when it enacted the section was the creation of spurious union welfare
funds. The legislative history clearly shows that 'In 1946 Congress was
disturbed by demands of certain unions that the employers contribute to 'welfare
funds' which were in the sole control of the union or its officers and could be
used as the individual officers saw fit.' United
States v. Ryan, supra, 350 U.S. 304, 76 S.Ct. 404. See, also, the
legislative history cited and quoted at length in the same case in the Court of
Appeals,
2 Cir., 1955, 225 F.2d 417, 422 et seq., and in United
Marine Division, etc. v. Essex Transportation Co., 3 Cir., 1954, 216 F.2d 410,
412.
Moreover, the statute does not require mutuality of guilt for
the conviction of either [**8] the employer or
the representative of employees. An employer would be guilty under subsection
(a) if he paid or delivered any money or other thing of value to a
representative of employees even though the latter repudiated the gift 1292 *8
by returning the money or thing tendered. Likewise a representative of employees
would be guilty under subsection (b) if he received money or other thing of
value from an employer unless the receipt were covered in the exceptions stated
in subsection (c). Thus we are not here concerned with the employers' guilt.
There is no occasion to express any opinion on their conduct. The question is
whether the appellant 'received' the checks on behalf of the Union for its
welfare fund to be administered according to the terms of the collective
bargaining agreement, or whether he accepted the checks for a bogus welfare
fund, i.e. one over which he in fact had complete and sole control in violation
of the collective bargaining agreement, for in that event he did not 'receive'
them under any of the circumstances permitted by subsection(c) of § 302 of the
statute.
The jury answered this question in favor of the Government, as
it might well have done [**9] on the basis of the
evidence of the appellant's conduct in obtaining sole personal control over the
fund and then in withdrawing from it for his own personal expenses soon after he
deposited the checks in the Ponce branch of the National City Bank. 1292 *9 The
competency of the evidence of his withdrawals from the fund for his personal
expenses to show his complete and sole control over the fund is too obvious to
call for demonstration or the citation of authorities.
The appellant's
challenge to the array of jurors on the ground that not a single prospective
juror was a daily wage earner or member of the working class was properly denied
because it came too late, and also because it was not in proper form and did not
challenge the whole array but only the 56 persons drawn from it to serve as
prospective jurors.
[*553] The
appellant's other objections, insofar as not covered by what has already been
said, have on consideration been found too insubstantial to call for discussion.
Judgment will be entered affirming the judgment of the District Court.
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - -
- - - - - - -
n1. '(b) It shall be unlawful for any representative of
any employees who are employed in an industry affecting commerce to receive or
accept, or to agree to receive or accept, from the employer of such employees
any money or other thing of value.
'(c) The provisions of this section
shall not be applicable * * * (5) with respect to money or other thing of value
paid to a trust fund established by such representative, for the sole and
exclusive benefit of the employees of such employer, and their families and
dependents (or of such employees, families, and dependents jointly with the
employees of other employers making similar payments, and their families and
dependents): * * *
'(d) Any person who willfully violates any of the
provisions of this section shall, upon conviction thereof, be guilty of a
misdemeanor and be subject to a fine of not more than $ 10,000 or to
imprisonment for not more than one year, or both.'
- - - - - - -
- - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**10] 1292 *10