Burns v. United States

• Decision Date: 08 April 1922
• Docket Number: 5775.
• Citation: 279 F. 982
• Parties: BURNS v. UNITED STATES. [1]
• Court: U.S. Court of Appeals — Eighth Circuit

279 F. 982

BURNS v. UNITED STATES. ^[1]

No. 5775.

United States Court of Appeals, Eighth Circuit.

April 8, 1922

W. P McGinnis, of Muskogee, Okl. (Cliff V. Peery, of Muskogee Okl., on the brief), for plaintiff in error.

John T Harley, Asst. U.S. Atty., of Coalgate, Okl. (Frank Lee, U.S Atty., of Muskogee, Okl., on the brief), for the United States.

Before SANBORN, STONE, and LEWIS, Circuit Judges.

LEWIS Circuit Judge.

Plaintiff in error, Howard Banks, and S. E. Edwards, Jr., were jointly indicted, tried, convicted and sentenced on the charge of having conspired (Criminal Code, Sec. 37 (Comp. St. Sec. 10201)) to commit an offense against the United States, to-wit, to violate section 215 of that Code (Comp. St. Sec. 10385), and that certain alleged overt acts were done by some of them to effect the conspiracy. The fraudulent scheme set up in the indictment was that the defendants falsely represented that they were associated together and engaged in the business of buying cattle and hogs and shipping and selling them at Kansas City, Chicago, St. Louis, Wichita, and other cities, that they were realizing and expected to continue to realize large profits by reason of certain understandings and agreements had by them with the National Live Stock Exchange of Kansas City, Armour & Co., and Swift & Co., that large profits would be returned to all those who intrusted to them money to be invested by them in the said business of buying and selling cattle and hogs, and that the use of the U.S. Postal service was contemplated to carry out the scheme. It was charged that the conspiracy had existed at all times from May, 1917, to April 24, 1919. The defendants all resided at Muskogee, Okla. Burns is a white man and a lawyer; Banks and Edwards are negroes. Banks conducted a restaurant, grocery, and meat market at Muskogee, and beginning in 1912 or 1913 borrowed from time to time small sums from Burns, which he repaid. He testified that Burns disclosed to him about 1917 a plan for the organization and financing of a corporation to engage in the cattle business, that Burns wanted him to solicit and raise from colored people money to be turned over to Burns to put into the company, that when it was first suggested he did not think much of it, but that later he took it up and, acting on Burns' suggestion, induced a great many negroes to turn their money over to him on the representation that he and Burns were buying and selling cattle and hogs at large profits through their arrangement with the National Live Stock Exchange, Armour & Co., and Swift & Co., that they were making large profits for themselves and would make large profits for those who saw fit to invest, and that he turned over to Burns the money which he received from negroes, to a total amount of from $40,000 to $50,000. Some of the money thus obtained was repaid in part in small amounts to the contributors from time to time by Banks, on the statement that they were dividends on their investments. Several negroes who were induced to give their money to Banks appeared as witnesses, and from their testimony, corroborated by canceled checks, they paid over in some instances as much as $5,000 or $6,000, and many contributed less sums. Edwards wrote, signed and mailed letters in 1918 and 1919 in which he solicited money for the scheme. Banks also wrote and mailed some letters. These letters were set up as overt acts. Edwards, in the early part of 1919, went to Kansas City and sent telegrams, some to Banks and some to Burns, which he signed in the name of the National Live Stock Exchange, a fictitious concern, in which it was falsely represented that a large number of cattle were then in the yards at Kansas City, shipped there by Banks, and that large amounts would be shortly remitted therefor. On April 19, 1919, he wired to Burns as follows:

'Buy heavy in hogs and cattle. Market is good and indications are it will be even better for several months to come.'

As a matter of fact, no cattle or hogs were shipped to market by any of the defendants. Banks testified that these communications were understood by Burns and that they were for the purpose of misleading the officers of certain banks from which Burns and Banks together had obtained large sums then unpaid. Banks fled in the latter part of April, but was arrested and brought back. At the time he left he and Burns were indebted to the First National Bank of Muskogee on notes which they had signed for about $16,000. They had also dealt with the Central State Bank of Muskogee and had given that bank their joint notes for large amounts, but owed it nothing when the exposure came. There can be no doubt of the existence of the fraudulent scheme as charged and the use of the postoffice in aid of its accomplishment; but Burns' defense and his insistence here is that he also was deceived and misled by Banks, that although he knew that Banks claimed to be engaged in buying and selling cattle and hogs, and although he had signed notes with Banks in order that he might obtain funds for that purpose, yet he had no knowledge that Banks' representations in that regard were false but believed that they were true, and that he also sustained substantial losses on account of having signed these notes. He testified however, that Banks was to divide with him the profits which were made on the cattle and hogs; that was to be the consideration to him for signing the notes. He denied that he requested Banks to obtain money for him to be used for the purpose of organizing and promoting a company to deal in live stock. Burns owned 80 acres of land not far from Muskogee, and when Banks fled there were about 100 hogs there which had been bought by Banks. Burns had fenced it for that purpose. Banks testified that Burns advised him to leave the country and gave him $275 for that purpose. Burns denied this. Banks was sick and confined to his home for several weeks in January and February, 1919. Burns went to see him many times while he was sick. On some days he made two or three visits. Banks testified that he and Burns each had a book that were just alike, which showed the contributions obtained by him from colored people, the amounts given by each, and the amounts that had been paid back to them in pretended dividends, that Burns made up both books, and he kept one in his possession at his store and Burns kept the other. Burns denied this. Banks testified that when Burns talked to him about getting up his company in 1917 he told Banks they would need $150,000, and that if he could raise it among his people Banks would get 30 per cent. of the stock in the company. Burns denied all these statements. The Muskogee bank evidently became suspicious early in April, 1919. It heard that Banks was buying cattle and hogs around Vinita, and it asked Burns to go there and find out about the situation. He took a cashier's check from the Muskogee bank for $9,800 and deposited it in the Vinita bank to his credit. He then rode out in the country with Banks and a man who lived in that vicinity and had cattle, for the purpose of seeing the cattle and hogs that Banks said he intended to buy. When they came back Burns gave Banks a check on the Vinita bank for $5,000, which Banks said was to pay for hogs over at Bushyhead. Burns signed other checks payable to Banks but left the amounts blank, and returned to Muskogee. Banks testified that Burns told him when they returned to Vinita from the country that they were not ready to buy at that place. Banks then shifted the deposits at Vinita through checks for various amounts to other banks, except some small amounts that were otherwise utilized, but none of it was used to buy cattle or hogs. Banks, however, had added to Burns' account in the Vinita bank by putting in a check for $2,500 given by Berry Bailey, a negro who had been induced by the fraudulent representations of Banks to invest. He also made an $80 deposit in that account. That $2,500 and the $80, as well as the first deposit of $9,800 made by Burns there in his own name, all went out on checks drawn by Burns. The account was opened with the Vinita bank April 3, 1919. and closed on the 14th of that month. Banks took away from that bank in currency on checks that had been signed by Burns $4,880. That bank also wired to the Kansas National Bank of Wichita $5,000 out of the amount in Burns' account, to be credited to Banks by the Wichita bank. Banks then went to Wichita, and with the amount wired from the Vinita bank and the cash that he took he opened up an account there of $10,000, which was shortly remitted to the Central State Bank at Muskogee. In the preceding month he...