Harris v. United States, 15222.

• Decision Date: 06 November 1958
• Docket Number: No. 15222.,15222.
• Citation: 261 F.2d 792
• Parties: Arthur L. HARRIS, Sr., et al., Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

261 F.2d 792 (1958)

Arthur L. HARRIS, Sr., et al., Appellants, v. UNITED STATES of America, Appellee.

No. 15222.

United States Court of Appeals Ninth Circuit.

June 24, 1958.

Rehearing Denied November 6, 1958.

COPYRIGHT MATERIAL OMITTED

Douglas Badt, Alden F. Houck, Wirin, Rissman & Okrand, Los Angeles, Cal., for appellants.

Laughlin E. Waters, U. S. Atty., Norman W. Neukom, Lloyd F. Dunn, Ray H. Kinnison, Asst. U. S. Attys., Los Angeles, Cal., for appellee.

Before FEE, CHAMBERS and HAMLIN, Circuit Judges.

JAMES ALGER FEE, Circuit Judge.

Sixty-seven counts, charging defendants therein named of devising a scheme to use the mail to defraud (18 U.S.C.A. § 1341), and the sixty-eighth count, charging conspiracy to accomplish the substantive offenses (18 U.S.C.A. § 371), were contained in one indictment. Defendants Arthur L. Harris, Sr., Arthur L. Harris, Jr., Charles W. Marshall and Ernest F. Lea have appealed from the judgment of conviction entered on the jury verdict of guilty of conspiracy and of such substantive counts which had not been abandoned and dismissed.

Defendants were charged with entering into a scheme and artifice to defraud persons who might be induced to purchase lots in a subdivision known as Rocket Town, which was located in the Mojave Desert not far from the Inyokern Naval Ordnance Test Station, and to use the mails in connection therewith. The allegations of false representations were specific and fell generally into seventeen classifications. The briefs in this case are voluminous and reflect the tremendous record.

One of the major specifications of error is that there was not sufficient competent and relevant evidence to establish the offenses charged in the indictment and to connect the appealing defendants therewith. Without a review of the complicated evidence and facts shown thereby, it may be said at the outset that proof was overwhelming that representations, pretenses and promises were made by means of oral statements, writings, circulars, letters, advertisements, bulletins and papers so constructed, worded and expressed as to deceive, and this was done with the intent to deceive and did deceive and defraud numerous people. From the early part of 1949 to October, 1954, there were contracts of sale entered for 2,769 lots. The representations envisioned an expansive building and development program. Up to date of trial not over seven houses had been built on the entire subdivision. The transcontinental highway, represented as under construction and running through Rocket Town, had not been built there or anywhere else.

But defendants do not mean by the specification that no such false representations were made. It would not be possible to maintain such a position in the face of the record. The lot purchasers in great number testified in minute detail in support of all the counts which were submitted to the jury. There was also sufficient evidence from which the jury could have found and did find a single all-inclusive scheme beginning in 1948 and continuing to 1955. The underlying purpose, according to the proof, was the acquisition of raw desert land near the United States Naval Ordnance Test Station and the subdivision thereof and the sales of the lots so produced by false and misleading statements. There was competent evidence that it was intended that the purchasers believe and they did believe that a well organized building campaign and development program was in the process of consummation. There was evidence that defendants organized this scheme with the intent to sell lots and that their interest went no further and that the design was fraudulent from the inception to the end. There was substantial evidence that the mails were used to carry out the criminal designs.

The objection is here made that the salesmen were not called as witnesses, but only the purchasers, who testified to what the salesmen, not defendants, represented.

The Court recognizes that defendants cannot be held simply because of the pattern or similarity of the representations of individual salesmen. The jury might have found that the government had established no connection with defendants because of such parallelism in the sales talk of various individuals. But the writings, literature, lead cards and lulling letters sent out by or under the direction of some of defendants and the manner of usage thereof were such that the jury had a right to consider these as evidence of bad faith and fraudulent intent upon the part of all defendants. All these were questions of fact. While the testimony of the lot purchasers as to representations made to them by various salesmen not indicted were not conclusive, this evidence could be considered by the jury. Neither the admission of this testimony nor the refusal of the court to strike it was error.

Some of the written representations indicated that a transcontinental highway was "under construction" and that it passed along the edge of "Rocket Town." There was evidence that in 1947 the California State Legislature brought Route 212 into the state road system. This road ran from Freeman Junction to Pahrump Valley. California Streets and Highways Code, § 512. But the question raised by the representations is whether defendants believed it to be under construction and really believed that it would run through or near Rocket Town. A great deal of evidence was introduced by both sides. It will not be reviewed. Suffice it to say, the question of what defendants represented and what they believed was for the jury. It was not, however, error for the court to allow the jury to be driven over the supposed route in the year of the trial. It was not error for the jury to see a photograph of a sign warning travelers of dangers to be encountered along the proposed route or for the jury to hear testimony as to these. The road had not been constructed at time of trial, and the jury had the right to consider these matters in determining the good faith of defendants in any representation the jury found they made. Likewise, there was no error in allowing a view of the area and the Naval Station. The jury had a right to see the situation.

The court refused to permit the introduction in evidence of findings of fact in a civil case between other parties and on other issues where the written representations were held to be true. These findings were not res judicata as to any defendant. The issue in a criminal case is entirely different in any event. The court permitted the complete exploration of this civil case so far as it related to the good faith of Bandurraga, a defendant not before this Court. The exhibit was properly excluded.

Defendants assign as error the fact that the trial court permitted the jury to take notes during the trial and to use such notes during deliberations. Many trial judges strongly disapprove of the practice in question, believing it to be of doubtful, if any, value. Ordinarily it is within the sound discretion of the trial judge and does not constitute error. This Court finds none here. In this case the court carefully instructed the jury in the first instance and in the final charge of the limitations on the use of notes. A similar point is made as to the furnishing to the jury during trial of copies of certain counts of the indictment. The summary count 1 and the conspiracy count 68 were never furnished to that body. The jury were trying these charges. The court had a right to place before them the particular count while the witness was testifying thereto. In this there is no error.

This Court accepts the principle that, in a prosecution for making use of the United States mail in carrying out an alleged scheme to defraud the good faith of a defendant, if established to the satisfaction of the jury, is a complete defense. The matter of the exclusion of findings of fact in a collateral civil case has already been dealt with. Defendants complain that the trial court refused to allow defendants to...