Moore v. United States
| Decision Date | 06 November 1924 |
| Docket Number | No. 3173,3204,3205,3206.,3173 |
| Citation | 2 F.2d 839 |
| Parties | MOORE et al. v. UNITED STATES. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Bryan H. Tivnen, of Mattoon, Ill., for plaintiffs in error Patt and others.
Bryan H. Tivnen, of Mattoon, Ill., and W. J. Ford, of Los Angeles, Cal., for plaintiffs in error Moore, Gallagher, and Leonard.
James G. Burnside, of Vandalia, Ill., for the United States.
Before ALSCHULER, EVANS, and PAGE, Circuit Judges.
Plaintiffs in error were convicted and sentenced under an indictment charging violation of section 215 of the Penal Code (Comp. St. § 10385). In general, they were charged with devising a scheme for obtaining money or property by means of false and fraudulent pretenses, representations, and promises in the sale or attempted sale of certain corporate stocks, and using the mails for the purpose of executing the scheme. The indictment has 11 counts. The first sets forth the alleged scheme, which is by reference charged as the scheme in the next 9, and in each of these counts mailing of letters in execution of the scheme as charged. The eleventh, charging conspiracy, was nollied.
Defendants Moore and Gallagher were each convicted and sentenced on counts 1, 3, 4, 5, 6, 7, 8, 9, and 10, Patt on 5, 6, 7, 8, and 9, and Leonard on 1, 3, 4, 8, and 9. The record and briefs for plaintiffs in error are voluminous, and assignments of error are many, of which we will here discuss such only as we deem of some gravity.
1. It is contended that the first count, which charges use of the mails through depositing in the post office for mailing a circular set forth in the count, fails to charge that the defendants, or any of them, deposited the circular or caused it to be done. In this the count is fatally defective, and conviction thereunder cannot stand. This applies to defendants Moore, Gallagher, and Leonard, who were each convicted under this as well as other counts.
2. It is urged that in the scheme stated in the first count the charge of knowledge of the falsity of the representations and promises set forth fails to charge the knowledge in the "defendants," but employs the singular "defendant," leaving it uncertain which of the six defendants charged is the one who possessed the knowledge of the falsity of the representations and promises. This is so, and, if this is an insufficient statement of the scheme, the objection affects all the counts in issue, since it is the scheme stated in them all. Upon this proposition, and the previous one considered, we have not the benefit of the views of counsel for the government, nor indeed upon some of the others.
In stating the scheme, the representations and promises are charged as made by the defendants to obtain money from persons who should be induced to send their names to the defendants, and that the defendants planned and schemed to obtain the money from these persons through their purchasing from the defendants and the corporation shares of stock on pretenses, representations, and promises made by the defendants to them, and that the defendants intended by said pretenses, representations, and promises to have the purchasers understand the things represented, which pretenses and promises said defendant, when so devising said scheme, well knew to be false and fraudulent pretenses, etc. The expression "said defendant" indicates a previous reference, but these previous references are to the whole body of defendants, and there is nothing in the indictment itself to indicate any intention of singling out any one or more from the whole body of the defendants named. Such allegation of knowledge would be meaningless in this connection, unless it be assumed that the singular form was a clerical omission, a conclusion which the context makes absolutely necessary. The word must, in our judgment, be read as if it were plural, as it was manifestly intended to be.
The situation is quite different from that in People v. Hallberg, 259 Ill. 502, 102 N. E. 1005, which is with apparent confidence cited for plaintiff in error. The indictment there charged two defendants with committing an offense at a time so remote as to raise the bar of the statutory limitation. This, appearing on the face of the indictment, made it bad, unless there further appeared allegations which would toll the statute. Evidently for this purpose the indictment recited "the said defendants (naming them) not being a resident within the state of Illinois." It was held that the expression "a resident" could not be construed as being residents, and that the indictment, not referring to both of the defendants in this essential respect, was bad. If it be assumed that this conclusion is correct, nevertheless such particularity is not required in the setting forth of the scheme under section 215, which in the indictment here should be read in accordance with its unquestionably manifest intent and purpose. Colburn v. United States, 223 F. 590, 139 C. C. A. 136.
3. It is urged that nowhere in the statement of the scheme is it set forth that the stock would be valueless, or of substantially less value than would be represented, and that, for anything appearing in the indictment to the contrary, the victims of the alleged scheme would receive value equal to that with which they were to part. The scheme charged was to obtain money from a class of persons by means of false and fraudulent pretenses, representations, and promises whereby stock of the company was to be sold to the intended victims, and that all the moneys paid for the stock should go into the treasury of the company; that the company was doing its own financing, and that no underwriters or brokers were interested; that the company was able at that time to produce 50 to 75 automobiles per week, and make a profit as it went along, and was able to go ahead financially without fear of interruption; that the company had a surplus of $597,744.20, and had an advisory board of directors of high type included in the organization, which advisory board assisted in the management of the company, and in formulating and directing its policies; that the company had contracts for 23,711 automobiles, involving over $13,000,000; that the business had been carried to its third successful year, and had no expensive experimental stage to go through; that the estimated profits of the company would be $2,425,000 per annum, and that on November 1, 1919, the company was producing 50 cars a week, and by January, 1920, would be producing 75 cars a week, and would pay large dividends on common stock during 1920; and that the stock was worth more than the price to be paid for it, and will pay large dividends annually, and be a profitable investment for the investors — all of which representations were charged to be false, and so known to be by the defendants when they would be made.
Certain it is that, if the representations and promises set forth in the scheme had been true, the stock to be sold would have been worth very materially more than if wholly false and unfounded. While the indictment is not artfully nor carefully drafted, we think there is sufficient in the statement of the scheme to make it apparent that the value of the stock to be sold would be substantially less than the price at which it was to be purchased. Of the holding by this court in Miller v. United States, 174 F. 35, 98 C. C. A. 21, to the effect that counts of the indictment there under consideration contained "no averment whatever respecting the value of such stock so to be exchanged for the $5,000," it may be said that the case arose under the law as it was before the amendment of March 4, 1899, by which there was added, after the then existing clause, "whoever, having devised or intending to devise any scheme or artifice to defraud," the words, "or for obtaining money or property by means of false or fraudulent pretenses, representations or promises." The added words were evidently intended to enlarge the scope of the act, and...
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