Alford v. United States, 6028.

• Decision Date: 26 June 1930
• Docket Number: No. 6028.,6028.
• Citation: 41 F.2d 157
• Parties: ALFORD v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

41 F.2d 157 (1930)

ALFORD v. UNITED STATES.

No. 6028.

Circuit Court of Appeals, Ninth Circuit.

May 26, 1930.

Rehearing Denied June 26, 1930.

Leo R. Friedman, of San Francisco, Cal., for appellant.

Samuel W. McNabb, U. S. Atty., and P. V. Davis and Gwyn S. Redwine, Asst. U. S. Attys., all of Los Angeles, Cal.

Before RUDKIN, DIETRICH, and WILBUR, Circuit Judges.

WILBUR, Circuit Judge.

The appellant was convicted of using the mails to execute a scheme to defraud in violation of 18 USCA § 338, Criminal Code, § 215. Appellant claims that one of the essential elements of the scheme alleged in the indictment was not proved, and that therefore he was convicted of a different scheme than that alleged in the indictment, and that thus his conviction is in violation of the Fifth Amendment of the Constitution (article 5), requiring that prosecutions be instituted by indictment. To understand this contention the allegations of the indictment which are rather lengthy will be summarized. The alleged scheme was to secure money from the victims by representing to them that the appellant was drilling and would continue to drill a development well upon a large tract of potential oil land in Cimarron county, Okl., of about 30,000 acres at a cost of $300,000; that the purchaser of such land from the appellant would secure by his grant deed to be executed when payment was completed a fee-simple title to the acre or more described in the contract of sale therefor which was to be executed by the appellant upon part payment of the purchase price. It is alleged that appellant did not have title to the land sold and that he had no intention of securing title; that he did not intend to execute a deed; that the appellant was not drilling an oil well thereon as stated and he made the promise to continue to drill the development well without any intention of doing so. That is to say, he was to secure money by a fraudulent promise to convey land which he had no intention of conveying and by a fraudulent promise to drill a well he had no intention of drilling, and by a false representation that he was in fact then drilling such a development well which he was not drilling. The misstatement as to actual drilling was capable of direct contradiction and was so contradicted. The fraudulent intent with which the promise to convey title, and to continue to drill a development well, were made was necessarily to be proved by circumstantial evidence. Many of the allegations of the indictment are statements of the evidence tending to prove that these promises were made fraudulently with no intention to perform the same. These other evidentiary features of the alleged scheme or plan, it will be observed, set forth a plan not intended to be disclosed to the public. Along this line it is alleged that on January 17, 1927, the appellant secured an option on said 30,000 acres of land, which he had no intention of exercising; that the option required the payment of $25,200 in thirty-one days on February 18, 1927, whereupon a deed was to be given for 1,680 acres. That another payment of $32,400 for 2,160 acres of the land was to be made by April 17, 1927, which he did not intend to make and which he did not and could not make. The evidence shows without any conflict that the appellant made the false representation that he was actually drilling a well. The jury were justified from the evidence in concluding that the appellant never intended to drill the well. They were also justified in concluding from the evidence that the appellant did not intend to convey the land he agreed to sell. On this subject the evidence showed that the appellant merely had the option upon the land and that in order to perfect title to the acreage he sold it was essential that he make a payment by April 17, 1927, for which he had made no preparation and had no reasonable expectation of paying. It is true that the land he was to purchase at $15 an acre he was selling for $100 an acre by the false pretenses above mentioned, but the contracts were executed with a preliminary payment of 40 per cent. down and of this 62½ per cent. was paid for commission, leaving no substantial part of the payments to be applied to the next installment upon the option contract which was so soon to be due. This, and other evidence which need not be stated, justified the finding of the jury as to fraudulent intent of the appellant in making the representations that he would convey fee-simple title to the land in question. This agreement to convey the land so that upon payment of the purchase price the purchaser would have had the advantage of whatever speculative value the land might have and also the actual value, whatever it might be, was an essential part of the scheme to procure money from the intended victims. The appellant's main contention is not that the evidence is insufficient to show that the appellant procured the money by fraudulent representations alleged in the indictment, although it is contended that the evidence is insufficient to establish the fraudulent intent with which the promises were made, but is based upon the fact that certain allegations are made in the indictment concerning the plan or scheme of the appellant to take care of the dissatisfied victims upon their ascertaining that they could not obtain the land which the appellant had agreed to convey to them. This scheme or plan, it was alleged, was that after the appellant had secured from his victims the partial or complete payments for the units, or acres, sold to them at the rate of $100 per acre he was to inform them that the oil prospects upon which they had been induced to purchase the land were not as bright as had been anticipated; that they were thereupon to be invited to join a new scheme wherein their interest in the original plan and scheme was to be exchanged for an interest in the new project which was called the "Ten-Way-To-Win-Syndicate"; that it was to be represented to these victims that this new scheme involved giving them an interest in each of ten different tracts of land widely separated in prospective oil territory, in each of which a well was to be drilled by a contractor who already promised to drill to a depth of 4,500 feet without requiring payments until that depth had been reached and without obligation on the part of the victim who was thus assured of ten chances to win in lieu of the bargain he had theretofore made. Proof was offered to support this allegation to the effect that immediately upon default upon the second installment of the option for the 30,000 acres which terminated the appellant's interest in a control over that acreage, this plan was at once broached.

In the absence of an affirmative proof that this plan had been conceived prior to or as a part of the original scheme of the sale of land in the 30,000-acre tract, the court granted defendant's motion to strike the evidence out, thus leaving the prosecution without any evidence to support these allegations in the indictment. While such evidence was clearly admissible to show that there was never any intent to complete the purchase of 30,000 acres, nevertheless, having been stricken out, it cannot be considered. It will be observed that at the time the "Ten-Way-To-Win-Syndicate" plan was advanced by the appellant, the fraud upon the victims had been fully perpetrated. In so far as it was a part of the original scheme it had no connection with the plan to defraud the proposed victim other than a method or means whereby the appellant secretly planned a device and method for his own protection against the obvious results of making such contracts of sale without any means of complying with them. While this plan of escape was alleged to be a part of the original plan, the question is whether upon a complete failure to prove this portion of the plan the verdict of the jury can be sustained. We see no difficulty in upholding the verdict of the jury, for the simple reason that the scheme to defraud found by the jury from the evidence was in essence and substance the scheme to defraud alleged in the indictment and the same scheme which was submitted to the...