Brown v. United States

• Decision Date: 24 April 1906
• Docket Number: 2,310.
• Citation: 146 F. 219
• Parties: BROWN v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

146 F. 219

BROWN v. UNITED STATES.

No. 2,310.

United States Court of Appeals, Eighth Circuit.

April 24, 1906

W.F Riggs, for plaintiff in error.

A.S Van Valkenburgh (Leslie J. Lyons, on the brief), for defendant in error.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

ADAMS Circuit Judge.

The plaintiff in error was indicted and convicted for depositing a letter in the Kansas City post office in execution of a scheme to defraud in violation of section 5480 of the Revised Statutes (U.S.Comp. St. 1901, p. 3696). The scheme alleged in the indictment to have been devised by him is substantially this: that he would insert in a newspaper called the 'Kansas City Packer,' the following advertisement 'How to speculate on Board of Trade. Sent free by J.L Brown & Co., Gibraltar Bldg., Kansas City, Mo. Grain, Stocks, and Provisions. Ref.Am.Nat'l.Bank,' for the purpose of inducing the public through correspondence conducted by mail to purchase through him under the name of 'J.L. Brown & Co.' commodities on some board of trade, and for the purpose of enabling him so to do to send him money pretended by him to be necessary either in paying for the same or in making deposits of margins on futures bought by him for account of his customers on such boards, whereas it was not his intention to use such money for either of these purposes, but on the contrary, to convert the same to his own use. This is not a complicated scheme. It consists in the one alleged false pretension that defendant would make use of such money as might be intrusted with him in making purchases or sales of commodities, or futures in the same, on some board of trade for account of his customers. The purpose of requiring a description of the scheme to defraud in the indictment is to definitely and clearly inform the accused of the scheme charged against him so as to enable him to make his defense. Brooks v. United States (C.C.A.) 146 F. 223, decided at this term, and not yet officially reported; Stewart v. United States, 55 C.C.A. 641, 119 F. 89, 94; United States v, Hess, 124 U.S. 483, 486, 8 Sup.Ct. 571, 31 L.Ed. 516.

It follows that one must be convicted, if at all, on the scheme as alleged, and if the scheme as alleged is not substantially established by the proof he cannot be convicted. In the view we take of this case it is necessary to refer to the proof with some particularity. One Hardwick, a resident of Oklahoma, saw a copy of the Kansas City Packer, published January 4, 1904, containing the business card of J.L. Brown & Co., in the language already set out. Without any preliminary correspondence or other communication between him and Brown & Co., he transmitted by wire to the latter company, on February 7, 1902, $1,000, as he says in his evidence, 'to buy options on July pork. ' Brown & Co. received the money, and on the same day (February 7th), acknowledged its receipt and disposition in a letter written and sent to Hardwick in the following words: 'We have your telegram to buy 1,000 barrels Chgo. July Pork and on receipt of telegram from Bank, we executed your order for same as per inclosed contract. We thank you very much, etc.'

The contract inclosed, so far as necessary for our present purpose, is in the following words:

'J.L. Brown & Co. Grain, Provisions and Stocks. Gibraltar Building, Kansas City, Mo., 2/7/02. E.F. Hardwick: You have this day bought from us at regular commission less than the prices named in the memo. One thousand (1,000) barrels of Chicago pork at $16.05 per bbl. for delivery in July. Margins deposited with us $1,000. Notice. All contracts made with us for the purchase or sale of grain, provisions or stocks made with us or through us are subject to the rules and regulations of the board of trade or stock exchange in the city where delivery is to be made. * * * '

There was also an inclosure in this letter of a pamphlet entitled 'How to speculate.' In this, among other things unnecessary for our present purposes, the following clearly appears:

'In buying and selling grain and provisions upon a margin, our customers can take advantage of the different fluctuations of the market by buying or selling on every decline or advance.'

Towards the latter part of February, Brown & Co. wired Hardwick, calling for more margins, whereupon, without complaint, $500 were sent by telegraph to Brown & Co. On March 3d, Hardwick testifies that thinking 'that pork would be a pretty good proposition,' he sent Brown & Co. $500 more, with directions 'to buy 500 barrels more of pork. ' This telegram was answered by a letter, written and mailed by Brown & Co., March 4, 1902, in part as follows:

'Mr. E. F. Hardwick, Alva, Okla.-- Dear Sir: On receipt of telegram from Exchange National Bank of your City, we executed an order for 500 barrels of Chicago July Pork at 15.52, as per contract inclosed. We thank you very much for the order, etc.'

The contract inclosed bears the same date, March 4th, and reads as follows:

'E. H. Hardwick, You have this day bought from us at the regular commission less than the prices named in this memo. 500 Barrels Chicago Pork at $15.52 per barrel for

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