Braatelien v. United States

• Decision Date: 16 May 1945
• Docket Number: No. 12841.,12841.
• Citation: 147 F.2d 888
• Parties: BRAATELIEN et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

147 F.2d 888 (1945)

BRAATELIEN et al. v. UNITED STATES.

No. 12841.

Circuit Court of Appeals, Eighth Circuit.

March 8, 1945.

Rehearing Denied May 16, 1945.

COPYRIGHT MATERIAL OMITTED

Francis Murphy, of Fargo, N. D., for appellants Olaf Braatelien and Sam Semingsen.

Halvor L. Halvorson, of Minot, N. D., for appellant Olaf Braatelien.

P. W. Lanier, U. S. Atty., of Fargo, N. D. (Joseph P. Stevens, Asst. U. S. Atty., of Towner, N. D., on the brief), for appellee.

Before GARDNER, WOODROUGH, and THOMAS, Circuit Judges.

THOMAS, Circuit Judge.

Olaf Braatelien, O. W. Bergen, James Van Berkom, Sam Semingsen, Martin Fossom, Leo Mahoney, and G. Bailard were indicted for conspiring in violation of section 88, Title 18, U.S.C.A. to defraud the United States by corruptly administering and procuring the corrupt administration of the Act of Congress approved June 22, 1938, as amended March 4, 1940, 11 U.S.C.A. §§ 201 to 203, inclusive), commonly called the Frazier Lemke Act, being an amendment to the National Bankruptcy Act of 1898. Because of his absence, Bergen was not tried; the charge was dismissed against Van Berkom; Fossom, Mahoney, and Bailard were acquitted by the jury; Braatelien and Semingsen were convicted and sentenced, and they appeal.

During the course of the proceeding the court overruled a motion to quash the indictment, a demurrer to the indictment, a demand for a bill of particulars, motions for a directed verdict, a motion in arrest of judgment, a motion for a new trial, and objections to certain evidence introduced by the government. No rulings of the court other than those here enumerated are assigned as error.

The grounds on which the judgments are assailed on appeal are summarized by counsel substantially as follows:

(1) The indictment was bad because it is too general, vague and confusing.

(2) The appellants were entitled to a bill of particulars.

(3) The court abused its discretion in permitting the government to introduce a large volume of testimony concerning the acts and declarations of Bergen, the absent conspirator.

(4) The evidence was insufficient to support the verdict; and counsel for Braatelien make a further contention.

(5) That he, Braatelien, is a judicial officer and is not subject to criminal prosecution for acts committed by him in connection with the administration of the Frazier Lemke Act.

The venue was laid, the indictment was returned, and the case was tried in the district of North Dakota, Northwestern Division. The indictment charged that the conspiracy began in the late summer or early fall of 1941 and continued thereafter until the date the indictment was returned, January 14, 1944.

The record shows that Northwestern North Dakota is an agricultural region, and that for ten to twelve years prior to 1941 a continuous drought had resulted in poor crops throughout the district. The farmers received little or no income from their land during that period and many of them had incurred debts which they were unable to pay. In at least some cases farms were encumbered by mortgages and delinquent taxes for more than their market value. The drought abated in 1941, and since then the financial condition of farmers has improved.

The indictment cannot rightly be condemned as too general, vague and confusing. After charging that the appellants and others unlawfully conspired to defraud the United States by corruptly administering and procuring the corrupt administration of the Frazier Lemke Act, the provisions of that Act are summarized, the part which appellants had in administering it are stated, and the wrongful acts of the conspirators are described.

The indictment charges that the Frazier Lemke Act was passed by Congress for the purpose of enabling financially distressed farmers to rehabilitate themselves in the manner provided therein. The Act authorizes the appointment by the District Court of a Conciliation Commissioner in each county of the district. A farmer desiring to take advantage of the law initiates the proceeding by filing with the clerk or leaving with the commissioner a petition stating that he is unable to pay his debts as they mature and that it is desirable to effect a composition with his creditors or an extension of time for payment of his debts. The petition must be accompanied with schedules and thereafter an inventory must be filed. The petitioner may then make a proposal of composition or extension, which, if accepted and confirmed by the court, becomes binding. If not accepted, a second form of relief is provided. The farmer may then amend his petition and ask to be adjudicated a bankrupt.

Upon the filing of the petition the farmer and all his property, wherever located, become for the purposes of the Act subject to the jurisdiction of the court.

When the petitioner is adjudicated a bankrupt the conciliation commissioner acts as referee. At the first meeting of his creditors the farmer debtor may ask that his property be appraised, whereupon the commissioner shall appoint disinterested appraisers. The duty of such appraisers is to appraise all of the debtor's property at its then fair and reasonable market value. When the conditions of the Act have been complied with the court may stay all judicial proceedings in any court against the farmer or his property for a period of three years, during which time the farmer may retain possession of any or all of his property under the supervision of the court by paying a reasonable rental therefor.

Persons filing petitions under the Act are required to pay to the clerk of the court a fee of $10 which is covered into the treasury of the United States. In each case the commissioner is paid for his services a fee of $25 out of the treasury of the United States, and when acting as referee he is allowed a further fee of $35 to be paid out of the bankrupt's estate. The Act further provides that the commissioner upon request shall assist any farmer in preparing and filing a petition, and in all proceedings following the farmer debtor shall not be required to be represented by an attorney.

During the period covered by the conspiracy Braatelien was the duly qualified Conciliation Commissioner for Divide County, North Dakota, and Semingsen and other of the defendants were appointed by him to appraise the property of farmer debtors adjudged bankrupts. At that time large numbers of the farmers in Divide and surrounding counties of North Dakota were indebted to the Federal Land Bank of Saint Paul and to the United States through its agencies, the Farm Credit Administration and the Farm Security Administration, for money loaned to aid them in the operation of their farming interests.

The indictment further charges that the object of the conspiracy was to promote a large volume of business for Braatelien as conciliation commissioner and for the financial gain and profit of all the conspirators; that to accomplish this purpose the conspirators planned to take advantage of the large number of farmers in North Dakota, particularly in Divide County, who were indebted to the Federal Land Bank of Saint Paul and to the United States through its said agencies; that they would and did solicit, counsel, induce, and procure many farmers, irrespective of whether they were insolvent and unable to meet their debts as they matured, to file petitions under the Act, by representing to the farmers that their debts to said agencies would either be wiped out or greatly reduced; by misrepresenting the purpose, scope and benefits lawfully to be derived from said Act; and that they would and did aid, abet, advise and procure many farmers in anticipation of filing under the Act to prefer creditors, to omit and conceal property from their schedules, to undervalue their property, and to transfer their property to relatives, to the end that in many instances the only indebtedness scheduled by the farmers was that due the Federal Land Bank of St. Paul and the United States. The conspirators further planned and did represent to the farmers that they, the conspirators, would control the appointment of appraisers and the appraisal of their property; that their property would be and it was appraised at valuations lower than its then fair market value, and that they were advised by the conspirators that they could buy back their property for less than its then market value.

A further charge is that the conspirators would and did represent to the farmers that in order to obtain the benefits of the Act they would be required to pay the conspirators for their assistance, and for the assistance of an attorney designated by them, various sums of money over and above the fees provided for by the Act; they did not advise the farmers that it was unnecessary under the Act to be represented by an attorney; and they did demand and collect from the persons so solicited sums of money, thus depleting the assets of the farmers and resulting in financial gain to the conspirators and loss to the farmers and to their creditors.

It is further charged that in accordance with the plan Semingsen and other of the conspirators were thereafter appointed appraisers of the property of persons solicited and induced to file petitions under the Act; that such appraisers did appraise the property of farmers adjudged bankrupt for less than its then market value; and that Braatelien, as commissioner, confirmed such false appraisals, and thus, contrary to his oath of office, failed to administer the Act according to law and in obedience to his oath of office.

Five overt acts are enumerated and described. No particular complaint is made in regard either to their sufficiency or to their clarity.

The contention of the appellants is that by the terms of the indictment it is uncertain whether the fraud charged consisted of a dishonest manipulation of the law because it operated to divest certain named creditors or the United States of property.

The appellants were entitled to be...