Enterprise Sav Ass'n v. Zumstein

• Decision Date: 10 November 1894
• Parties: ENTERPRISE SAV. ASS'N v. ZUMSTEIN, Postmaster.
• Court: U.S. District Court — Southern District of Ohio

64 F. 837

ENTERPRISE SAV. ASS'N v. ZUMSTEIN, Postmaster.

United States Circuit Court, S.D. Ohio, Western Division.

November 10, 1894

Chas W. Baker and Michael G. Heintz, for complainant.

Harlow Cleveland, U.S. Atty., for defendant.

SAGE District Judge.

The bill sets forth the articles of incorporation, by-laws, and plan of business of the complainant, which issues certificates 'in blocks of three,' the purchaser paying for each certificate, in cash, the sum of $15,-- that is to say, $5 for each certificate,-- at the time of their issuance and delivery to him. By the terms of the contract of the certificate, it is paid up in full by monthly payments in 5 years and 5 months from its date, the full amount being $100. Thereupon the holder receives a paid-up certificate in lieu of the original contract certificate, and is released from any further payments, the association agreeing to redeem the same not later than 120 months from the date of the original contract certificate. The holder meantime is to receive interest at 6 per cent. per annum, and finally the principal, together with his share of such profits as in the meantime have been made by the association. The initial payment of $5 on each certificate, or $15 on each block of certificates, is applied to the establishment and support of agencies and of canvassing, and the payment of incidental expenses. Of the $1.50 required to be paid each month succeeding the first month, $1 is paid into what is known as the 'maturity fund,' out of which the certificates maturing are paid. Twenty-five cents goes to the maintenance of the general expenses of the company, and the other twenty-five cents to the reserve fund. This is, in short, the published scheme of the company. A maturity table is prepared and employed, which begins with the certificates, which are numbered, with the lowest numbered certificates then in force, beginning with number 1, and proceeding by multiples of three of the live certificates. The bill sets forth that since the complainant began doing business, which was shortly after its incorporation, on the 26th day of April, 1894, it has issued 1,524 certificates. On the last day of July, 1894 there were 995 certificates not lapsed, matured, or forfeited while up to that time 1,500 certificates had been issued. The complainant was created and organized under the laws of the state of West Virginia. It opened an office in the city of Cincinnati almost immediately after its incorporation, and has maintained it ever since.

The complaint of the bill is that the defendant, being postmaster of the city of Cincinnati, arbitrarily, illegally, and without right, has undertaken to interfere with, stop, and prevent the employment and the use by the complainant of the mails and the registry department of the post-office department of the post office of the city of Cincinnati, and that the defendant bases his action in such interference and denial to complainant of the postal facilities of the post office of the city of Cincinnati, upon an order received by him from the postmaster general of the United States, under date March 31, 1894, which the defendant has exhibited to the complainant, and which the defendant makes as his excuse for his action aforesaid. The order is as follows:

'Order No. 100.

'It having been made to appear to the satisfaction of the postmaster general that the Enterprise Savings Association, S. A. Stevens, Pres., J. C. Groene, Vice Pres., W. R. Sypher, Treas., C. K. Ebann, Sec., J. S. Munsell, Genl. Manager at No. 610 Neave Building, Cincinnati, O., are engaged in conducting a lottery or similar enterprise for the distribution of money or personal property by lot or chance through the mails, in violation of the provisions of section 3894, Revised Statutes of the United States, as amended:

'Now, therefore, by authority vested in the postmaster general by sections 3929 and 4041, Revised Statutes of the United States, and by act approved Sept. 19, 1890, I do forbid the payment by the postmaster at Cincinnati, O., of any postal order drawn to the order of said company and its officers aforesaid, and that the said postmaster is hereby directed to inform the remitter of said postal money order that payment thereof has been forbidden, and that the sum of said money order will be returned upon presentation of a duplicate money order applied for and obtained under the regulations of the department.

'And, upon the same evidence, the postmaster at Cincinnati, O., aforesaid, is hereby instructed to return all registered letters which shall arrive at his office, directed to the said company and its officers aforesaid, to the postmasters at the offices at which they were originally mailed, with the word 'Fraudulent' plainly written or stamped upon the outside of such letters.

'(Signed)

W. S. Bissell, Postmaster General.

'To Postmaster, Cincinnati, O.'

The bill then specifies instances of the defendant's refusal to recognize or pay postal money orders in favor of and presented by the complainant, and instances of his refusal to deliver registered letters received in said post office, addressed to the complainant, charging that said letters were stamped with the word 'Fraudulent' across the envelopes, and returned to the post offices from which they were sent. The prayer is for an injunction prohibiting the defendant from interfering with the employment of the post office of Cincinnati in the conduct of complainant's business, and from withholding registered letters received and addressed and directed to the defendant, and from withholding payment of money orders addressed to and received by him. The defendant has filed a general demurrer for insufficiency.

Section 396 of the Revised Statutes makes it the duty of the postmaster general to instruct all persons in the postal service with...