Havener v. United States, 239.

• Decision Date: 06 April 1931
• Docket Number: No. 239.,239.
• Parties: HAVENER v. UNITED STATES.
• Court: U.S. Court of Appeals — Tenth Circuit

49 F.2d 196 (1931)

HAVENER v. UNITED STATES.^*

No. 239.

Circuit Court of Appeals, Tenth Circuit.

April 6, 1931.

James M. Johnson and Donald W. Johnson, both of Kansas City, Mo., for appellant.

S. M. Brewster, U. S. Atty., and L. E. Wyman and Donald C. Little, Asst. U. S. Attys., all of Topeka, Kan.

Before COTTERAL and PHILLIPS, Circuit Judges, and KENNEDY, District Judge.

PHILLIPS, Circuit Judge.

Charles E. Havener was indicted, tried, convicted and sentenced for a violation of section 215 of the Criminal Code (section 338, title 18, USCA).

The indictment charged that defendant devised a scheme to defraud R. G. Biles and to obtain certain money from Biles by means of false and fraudulent representations and promises, as follows:

"That he * * * would and did represent * * * that he had in his possession for sale certain valid * * * obligations of the Hunter Steel Company, a corporation, * * * which corporation the said * * * Havener represented to be conducted in a businesslike manner, and having good and well established business, and having assets of some $14,000,000.00, and by means of such representations the said * * * Havener would and did induce the said R. G. Biles * * * to pay to him * * * the sum of $2500.00 as consideration for two notes of the Hunter Steel Company, made payable to Arthur H. Hunter and endorsed on the back by said * * * Havener, and at the same time delivered to the said R. G. Biles * * * a note * * * purporting on its face to have been executed by the Colorado Utah Mines Holding Company by Charles E. Havener, president, and M. C. Havener, secretary, and being endorsed on the back by Charles E. Havener, J. W. Phares, and G. A. Swallow as trustees of the Colorado Utah Mines Holding Company, a trust estate. * * *

"Said * * * Havener * * * further alleged that said note of the Colorado Utah Mines Holding Company was * * * valid * * * and that the same would be paid when due; and said * * * Havener further alleged that said Hunter Steel Company notes * * * would be paid on their due date. * * *

"That after said * * * Havener should procure, as he did procure, the $2500.00 of the monies of the said R. G. Biles * * * that he would, and did, represent to the said R. G. Biles * * * that said Hunter Steel Company had directed him to turn back to the Hunter Steel Company their notes and that the said Hunter Steel Company would return all contracts and notes calling delivery off which they desired to do without proceedings in court and for the reason that they could not handle Willard Iron property; the said * * * Havener having also represented * * * to * * * R. G. Biles * * * that said notes of the Hunter Steel Company had been received by the said * * * Havener as president of the Colorado Utah Mines Holding Company as a part of the consideration and assets which * * * Havener claimed belonged to the Colorado Utah Mines Holding Company.

"That * * * Havener as a further part of said scheme and artifice to defraud also alleged that as consideration for said R. G. Biles * * * returning to him the said notes of the Hunter Steel Company for $5000.00 each, and the said note of the Colorado Utah Mines Holding Company for $10,000.00 he would, and did, give to the said R. G. Biles * * * his personal note in the amount of $10,000.00 on its face due August 12th, 1925, which he * * * represented was better * * * than the Hunter Steel Company notes * * * thereby representing and intending the said R. G. Biles * * * to understand and believe that said note of said * * * Havener would be paid when due on August 12th, 1925."

The indictment further charged that defendant knew at the time he made such representations that they were false and fraudulent in the following particulars: (1) That the Hunter Company notes were not given to defendant in consideration of the purchase-price of the Holding Company property, but had been delivered to defendant on a contract to sell for eighty per cent. of their face value. (2) That the Holding Company note had been canceled and recalled on or about January 9, 1924. (3) That the Hunter Company, on January 15, 1925, had not terminated its contract with defendant to sell such Hunter Company notes. (4) That the defendant did not intend to pay his personal note for $10,000, on August 12, 1925, or at any other time.

The indictment further charged that the defendant, for the purpose of executing such scheme and artifice, caused a certain letter, contained in an envelope addressed to R. G. Biles, to be delivered to Biles through the post office at Hill City, Kansas; and set such letter out in full.

Such letter in part reads as follows:

"Hotel Angelus, Los Angeles, California "January 15, 1925.

"* * * My personal note is enclosed in amount $10,000.00 due August 12, 1925, the same due date as Hunter Steel Company notes, which must be returned to Hunter Company in full cancellation of their purchase of our Willard Iron property, the final settlement reached in New York yesterday between Hunter Steel Company attorneys and our attorneys, and therefore, I have sent you and enclosed my own note for the $10,000 which is better anyway than Hunter Steel Company's note with our Holding Company's judgment note as security back of it.

"The telegram I received yesterday from the New York attorneys reads as follows:

"`Hunter Steel Company ask you return back their notes and they will return all contracts and notes calling deal off which they desire to do without proceedings in court,' and their reason is They Cannot Handle Willard Iron Property — as there is only one thing for us to do, namely, take back our property and undo all that has been done between the Hunter Steel Company and Colorado Utah Mines Holding Company — regardless of the fact that we are heavy losers in the whole transactions through loss of time as well as capital.

"Please return the two $5,000 Hunter Steel notes to me immediately — registered mail — in the enclosed stamped envelope which I have addressed for your use. * * *

"Charles E. Havener."

After a verdict of guilty, counsel for defendant interposed a motion in arrest of judgment on the ground that the indictment failed to state facts sufficient to constitute an offense under the laws of the United States.

Counsel for defendant contend that the court erred in overruling the motion in arrest of judgment.

While the formation of a scheme or artifice to defraud is an essential element of the offense defined in section 215 of the Criminal Code, the gist of the offense is the use of the mails for the purpose of executing or attempting to execute such scheme, and it is, therefore, sufficient to charge the scheme with such particularity as will enable the accused to know what is intended and to apprise him of what he will be required to meet on the trial. Brady v. United States (C. C. A. 8) 24 F.(2d) 397-398; Horn v. United States (C. C. A. 8) 182 F. 721, 727; Brooks v. United States (C. C. A. 8) 146 F. 223, 227; Cochran v. United States (C. C. A. 8) 41 F. (2d) 193, 197.

The scheme need not be pleaded with all the certainty as to time, place and circumstances required in charging the gist of the offense. Brady v. United States, supra; Cochran v. United States, supra; Savage v. United States (C. C. A. 8) 270 F. 14, 18; Gardner v. United States (C. C. A. 8) 230 F. 575; McClendon v. United States (C. C. A. 8) 229 F. 523, 525; Brooks v. United States, supra; Chew v. United States (C. C. A. 8) 9 F.(2d) 348, 351; Mathews v. United States (C. C. A. 8) 15 F.(2d) 139, 143.

The substance of the charge with respect to the scheme is that the defendant, actuated with a fraudulent intent, devised a scheme to induce Biles to pay him $2,500 in exchange for the two notes of the Hunter Company and to thereafter induce Biles to exchange such Hunter Company notes for the worthless note of the defendant by means of the false and fraudulent representations alleged.

The indictment, while inartificially drawn, charged the scheme with sufficient certainty to enable the defendant to know what was intended and to apprise him of what he would be required to meet on the trial. The use of the mails for the purpose of executing a scheme was aptly and properly charged. The indictment was not open to attack, especially after a verdict, by motion in arrest of judgment.

At the close of the evidence, counsel for defendant moved the court to instruct the jury to return a verdict of not guilty.

Counsel for the defendant contend that the proof did not establish (1) the allegations of fraud set forth in the indictment, and (2) that the defendant caused the letter, alleged in the indictment, to be delivered by mail, according to the direction thereon, for the purpose of executing such scheme to defraud.

R. G. Biles testified that he became acquainted with the defendant in 1920; that in 1920 and 1922 he purchased from the defendant beneficial certificates in the Holding Company for $3500; that in December, 1924, he had a conversation with him at Logan, Kansas, concerning certain notes of the Hunter Company; that on December 18, 1924, at Biles' home in Hill City, Kansas, defendant showed Biles and his wife a prospectus and financial statement of the Hunter Company which stated it had total assets of twenty-six million dollars; that defendant exhibited two notes of the Hunter Company for five thousand dollars each, due August 12, 1925, and stated that they were good and would be paid when due; that they were of a total issue of two...