Downing v. United States

• Citation: 35 F.2d 454
• Decision Date: 30 October 1929
• Docket Number: No. 5891.,5891.
• Parties: DOWNING et al. v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

35 F.2d 454 (1929)

DOWNING et al. v. UNITED STATES.

No. 5891.

Circuit Court of Appeals, Ninth Circuit.

October 30, 1929.

A. E. Downing, W. C. Gunther, and E. R. Anderson were convicted of using the mails to defraud, and they appeal. Affirmed as to Downing and Anderson, and reversed with directions as to Gunther.

Elton Watkins, Johnston Wilson, and H. P. Arnest, all of Portland, Or., for appellant Downing.

Joseph O. Stearns, Jr., of Portland, Or., for appellant Anderson.

Collier, Collier & Bernard, of Portland, Or., for appellant Gunther.

George Neuner, U. S. Atty., and Francis E. Marsh, Asst. U. S. Atty., both of Portland, Or.

Before DIETRICH and WILBUR, Circuit Judges, and LOUDERBACK, District Judge.

DIETRICH, Circuit Judge.

In the first five counts of the indictment, the appellants, Downing, Anderson, and Gunther, and their codefendant, Collins, were charged with using the mails to defraud, under section 215 of the Penal Code (18 USCA § 338), and in the sixth, with a conspiracy to commit such offenses. Upon the first five counts all were convicted but upon the sixth they were acquitted. From the judgment entered upon the verdict all but Collins prosecute appeals.

The several counts relate to the same enterprise and in form are substantially identical; their sufficiency is not challenged. Appellants reside and resided in or near Portland, Or. Downing was a mining engineer, Gunther a retail merchant, and Anderson a bond and stockbroker. The enterprise involved had to do with the development and operation of some old mining properties near Las Cruces, N. M., known as the Bennett-Stevenson Group. At the time the enterprise was set on foot, no one of the appellants had ever seen the mine or had any personal knowledge in respect to it. Directly or indirectly the properties were brought to their attention through the representations of their codefendant, Collins, who held a contract for their purchase and professed to know personally that they were of great value.

As already stated, Downing was a mining engineer, but Gunther had had no experience in such matters; Anderson had dealt in mining stocks and securities and in a general way was familiar with mines. Having themselves become interested, the appellants entered upon an organized effort to procure from the public a part of the funds needed for the development and operation of the properties. In such effort the government contends they made false representations and used the mails for the purpose of carrying forward the alleged scheme to defraud. The period covered by the charges was about a year and a half prior and down to May 1, 1928. The organization was known as the Southwestern Silver Lead Association, and at first was in the nature of a common-law trust, but later became a corporation, of 1,000,000 shares of the par value of $1 per share. And these shares, except such part thereof as were held by the defendants and perhaps a few other persons initially interested with them in the enterprise, it was planned to sell to the public. The company took over Collins' option for the purchase of the properties from the then owners.

Specifically it is charged that the sale of the stock to the public was to be and was effected by making false representations touching the qualifications, standing, and experience of Collins as a mining engineer, and the standing of the other trustees of the company as men of high character and business experience, and by "lurid advertising" and false representations and promises touching the history and condition of the properties, their value, and the prospects of great profits from the operation thereof. Such advertising and representations are set forth specifically and in great detail, and the particular respects in which they are claimed to have been false are alleged. It is then charged, in the first count, that on October 15, 1926, defendants caused to be mailed to a named person one of the circulars got out for the company and designed to promote such sales; in the second, third, and fourth counts, that on the same day copies of such circular addressed to three different named persons were mailed; and in the fifth count it is alleged that on December 10, 1926, defendants caused to be mailed a personal letter to one George F. Heusner who, it may be said, was first approached by Collins in Portland and who introduced him to Downing, this letter being over the signature of defendant Collins.

Without specifying any particular count, the judgment imposes a fine and imprisonment upon each defendant and runs against all of them for the costs of the prosecution, taxed at $2,279.

After the evidence was all in, its sufficiency to take the case to the jury was in no wise challenged in the court below, and hence no such question is before us.

Each of the three appellants took a separate appeal and, in the main, the assignments relied upon by each are distinct. Of all the appellants it may be fairly said they do not question that the mails were used as specifically charged in the several counts, and concede that at least some of the material representations alleged were made to the public in promoting the sale of stock and were, in fact, false and misleading. In substance, the defense of each is that he himself was deceived and misled, particularly by the representations of Collins, and that in so far as any one of the appellants had any connection with what was done or represented to the public, he was acting honestly and in good faith. It will be necessary to consider each appeal separately.

As to Downing: The first specification of this defendant relates to the action of the court in respect to certain letters grouped together and offered in evidence by him as a single exhibit. An objection to their reception was sustained. Upon the following day, however, in view of some new aspect of the evidence, the court advised counsel that he would be permitted to again offer the letters. As to what followed, the record is far from being clear but admittedly only certain of the letters included in the group were then offered. Apparently some of these were admitted and some excluded, but just what ones the record does not disclose. Seemingly all were letters written by Heusner to Downing or other parties after the alleged false representations were made to the public. Heusner is not a defendant, and the letters were not offered to impeach him as a witness, or at least no foundation was laid for their introduction for that purpose. The main object of the offer, in so far as we can discern, was to show that Heusner had some confidence in Downing and in the property, but we are unable to perceive how that would be material. Admittedly the property does not measure up to the representations made by Downing and his codefendants, and hence his defense must be that he, not Heusner, reasonably believed them to be true.

The next specification relates to certain instructions requested and the instructions given by the court on the subject of the weight to be given to the testimony of accomplices. It may be doubted whether the exceptions reserved were sufficient, but we consider the specification upon its merits. We need not set out the requests in full, for it is familiar law that a court is under no duty to instruct in any specific form. Of the two requests it may be said generally that without otherwise defining what is meant by the term "accomplice," the first would naturally convey the impression to the jury that any witness who had in any way had anything to do with the enterprise covered by the indictment is necessarily to be considered an accomplice (manifestly an erroneous view), and the second expressly referred to only "confessed" accomplices, and no witness so ...