Carter v. United States

• Decision Date: 07 May 1927
• Docket Number: No. 7618.,7618.
• Citation: 19 F.2d 431
• Parties: CARTER v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

19 F.2d 431 (1927)

CARTER v. UNITED STATES.

No. 7618.

Circuit Court of Appeals, Eighth Circuit.

May 7, 1927.

George W. Carter was convicted of conspiracy to conceal property from trustee in bankruptcy, and he brings error. Affirmed.

Bart M. Lockwood, of St. Joseph, Mo. (Eastin & McNeely, of St. Joseph, Mo., on the brief), for plaintiff in error.

William L. Vandeventer, Asst. U. S. Atty., of Kansas City, Mo. (Roscoe C. Patterson, U. S. Atty., of Kansas City, Mo., on the brief), for the United States.

Before BOOTH, Circuit Judge, and FARIS and DAVIS, District Judges.

DAVIS, District Judge.

The grand jury of the Western division of the Western district of Missouri returned an indictment on May 1, 1925, which was transferred and filed in the St. Joseph division of the said district on June 8, 1925. This indictment charged the Carter-Williams Grain & Coal Company, a corporation, George W. Carter, F. R. Mann, and Hester Murray with conspiracy to violate section 29b of the Bankruptcy Act (Comp. St. § 9613). The indictment was in three counts, and at the opening of the trial the government elected to proceed upon the first count.

The jury returned a verdict of not guilty as to defendant Mann, and a verdict of guilty as to defendants Carter and Murray. There was no verdict as to the corporate defendant. Defendant Carter was sentenced to a year and a day imprisonment and to pay a fine of $2,000. Defendant Murray was sentenced to pay a fine of $25. The defendant George W. Carter brings the case here on writ of error. (The parties are herein designated as in the court below.)

The Carter-Williams Grain & Coal Company was incorporated June 10, 1921. Defendants Hester M. Murray, George W. Carter, and one Louis J. Komer were the original stockholders. An involuntary petition in bankruptcy was filed on April 13, 1922, and on September 22, 1922, the company filed an answer, confessing bankruptcy, whereupon the adjudication followed on the same day. The trustee was selected and qualified on September 2, 1922. The trustee received no property from any of the defendants.

The defendant Carter was president, treasurer, and the active manager of the company. L. J. Komer was vice president, and defendant Hester M. Murray was secretary. Mildred De Buff, a stenographer in the office of the company, testified that on Saturday, March 18, 1922, she was excused for the afternoon, upon being informed by Carter that a directors' meeting was to be held for the purpose of transferring an Iowa farm belonging to Carter to the Carter-Williams Grain & Coal Company. The farm in Iowa contained 73 acres and was reasonably worth $9,490. It was incumbered by two mortgages, aggregating $8,500, so the equity was worth about $990. Creditors at that time were pressing the company. There was evidence that the directors' meeting was attended by Komer and defendants Carter and Murray. Mr. Komer testified, however, that he was not present at the meeting. The company executed a check to defendant Murray on the same day. On Monday following the meeting the stenographer, at the direction of Carter, drew a check of the company for $4,000, payable to cash. A similar check was drawn for $550 on April 5th, and another for $1,500 on April 11th. The stub book carried the notation in connection with each of the checks, "On the farm." The first two checks were indorsed "G. W. Carter." The third check seems to have been cashed without indorsement.

On the same day the above check for $4,000 was issued it was presented by defendant Carter to the Empire Trust Company, and was exchanged for four certificates of deposit, for $1,000 each, payable to M. L. Wince. Defendant Mann testified that Carter told him that M. L. Wince was his (Carter's) sister. Three of these certificates were paid July 8, 1922, having been deposited in the Tootle-Lacy National Bank by F. R. Mann at the request of defendant Carter. Before depositing these certificates, Mann gave Carter a check for $3,020, being approximately the amount of the three certificates, with interest. This check was exchanged by Carter at the Tootle-Lacy National Bank for four cashier's checks, for $500 each, payable to F. R. Mann, and $1,020 in cash. On August 28, 1922, two of these cashier's checks were cashed by F. R. Mann, and on July 10, 1922, one by defendant Murray, and one by defendant Carter. Defendants Mann and Murray testified in the case, but the defendant Carter was not called as a witness.

I. It is asserted that the indictment is insufficient, and that the demurrer thereto should have been sustained. When the demurrer was filed, there were three counts in the indictment. Some of the grounds of the demurrer were then probably well taken, but cannot now be important, because the prosecution was required to elect, and the trial proceeded upon only one count of the indictment. So we pass over those objections to that portion of the indictment which was eliminated from the case. There remains the complaint that the alleged conspiracy was not sufficiently described.

The indictment charged the defendants under section 37 of the Penal Code (section 10201, Comp. Stat.) with conspiracy to conceal certain property of a prospective bankrupt. Section 29b of the Bankruptcy Act, as it then read, in part provided that "a person shall be punished, by imprisonment for a period not to exceed two years, upon conviction of the offense of having knowingly and fraudulently concealed, while a bankrupt, ar after his discharge, from his trustee any of the property belonging to his estate in bankruptcy."

The substance of the indictment was that the defendants, anticipating the bankruptcy of the Carter-Williams Grain & Coal Company and the selection of a trustee of the bankrupt estate, on March 20, 1922, and continuing until after bankruptcy, at St. Joseph, Mo., unlawfully conspired to conceal from the trustee three described certificates of deposit, purchased with the funds, and therefore the property, of the said company, and that certain acts were done by the defendants in the execution of the plan. The gist of the offense is the conspiracy, not the concealment of property. An indictment which describes the offense with sufficient certainty to identify it meets the requirements of the law. Here the defendants are informed of the time, place, and the parties to the unlawful agreement. The purpose of the undertaking is made clear. The indictment identifies the offense, so that it could be pleaded in bar of another prosecution, and plainly informed the defendants the nature of the charge that they were called upon to meet. It is not necessary that the indictment set out with particularity the elements of the offense of concealing property from a trustee in bankruptcy as though the prosecution were for that crime. Williamson v. U. S., 207 U. S. 425, 28 S. Ct. 163, 52 L. Ed. 278; Rulovitch v. U. S. (C. C. A.) 286 F. 315; Anderson v. U. S. (8th Cir.) 260 F. 557; Kolbrenner et al. v. U. S. (C. C. A.) 11 F.(2d) 754; Jollit v. U. S. (C. C. A.) 285 F. 209; Baker v. U. S. (C. C. A.) 285 F. 15; Israel v. U. S. (C. C. A.) 3 F.(2d) 743. It seems that, without resorting to the allegation of the overt acts, which as we understand the law are not to be considered in this connection, the indictment in this case was sufficient. Paszkiewicz et al. v. U. S. (C. C. A.) 3 F.(2d) 272.

II. Another assignment of error is the refusal of the court to sustain defendants' demurrer to the evidence. In considering this complaint there are a few propositions that can be laid aside with a mere statement. Persons who are not bankrupts may be guilty of conspiracy to conceal property from the trustee. Israel v. U. S. (C. C. A.) 3 F.(2d) 743; Jollit v. U. S. (C. C. A.) 285 F. 209. The three-year statute of limitations (section 1708, Comp. Stat.), and not the limitation provided in section 29d of the Bankruptcy Act, governs this case. U. S. v. Rabinowich, 238 U. S. 78, 35 S. Ct. 682, 59 L. Ed. 1211. The offense may be committed prior to bankruptcy, and the existence of the conspiracy may be shown by inference. Greenspahn v. U. S. (C. C. A.) 298 F. 736.

It is claimed that there was a variance, in that it was charged that the purpose of the conspiracy was to conceal certificates of deposit, and the evidence indicated, if anything, an effort to conceal money. If the company's funds were wrongfully used in the purchase of certificates of deposit, and the evidence so indicated, they became upon issuance the property of the bankrupt. Silsbury v. McCoon, 3 N. Y. 379, 53 Am. Dec. 307. The property was in the form of certificates of deposit on the day it is charged that the conspiracy was entered into, March 20, 1922. It was in this form when the petition in...