Newingham v. United States

• Decision Date: 11 April 1925
• Docket Number: No. 3279.,3279.
• Citation: 4 F.2d 490
• Parties: NEWINGHAM et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Third Circuit

4 F.2d 490 (1925)

NEWINGHAM et al. v. UNITED STATES.^*

No. 3279.

Circuit Court of Appeals, Third Circuit.

February 27, 1925.

Rehearing Denied April 11, 1925.

U. G. Vogan, John M. Henry, and W. A. Griffith, all of Pittsburgh, Pa., for plaintiffs in error.

Walter Lyon, U. S. Atty., and Warren H. Van Kirk, Asst. U. S. Atty., both of Pittsburgh, Pa.

Before WOOLLEY and DAVIS, Circuit Judges, and THOMPSON, District Judge.

WOOLLEY, Circuit Judge.

The plaintiffs in error, defendants below, were tried and convicted on an indictment containing 14 counts, of which 13 were for offenses violative of section 215 of the Criminal Code (Comp. St. § 10385). This section provides:

"Whoever, having devised * * * any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretences * * * shall, for the purpose of executing such scheme or artifice * * * place, or cause to be placed, any letter * * * in any post office * * * of the United States, * * *" shall be guilty of a crime.

The fourteenth count was for conspiracy under section 37 of the Criminal Code (Comp. St. § 10201) to commit the offense denounced by the quoted section.

The learned trial judge made it clear in his charge that, as applied to this case, there are two elements in the crime defined by section 215; one, devising a scheme to defraud, the other, mailing a letter "for the purpose of executing such scheme." Here there is no doubt of the existence of the scheme. The defendants admit it. The question is whether there was evidence for the jury to find that the letters were mailed "for the purpose of executing such scheme."

The defendants contend that the evidence shows the scheme was wholly executed before the letters were mailed and under Stewart v. United States, 119 F. 89, 55 C. C. A. 641, and United States v. Dale (D. C.) 230 F. 750, it follows that the letters could not have been mailed for the purpose of executing it. Of course if the evidence shows this, the defendants did not commit the crime, no matter how fraudulent the scheme, and their conviction cannot be sustained. But the answer to the question whether the letters were mailed for that purpose depends (in this case) upon the character of the scheme. Shortly stated, it was as follows:

McCoy was president and Newingham was secretary of the Safink Manufacturing Company, a corporation ostensibly organized for the lawful manufacture and sale of acid-proof ink known as "Safink," a corruption of the words "safe" and "ink." The defendants advertised for christian young men to become associated with them in the business. When a young man would respond (as many did) he would be told that the company would give him an exclusive right or license to sell its ink in a given territory for the sum of $2,500; that the company would supply him with a partner who would pay half of this sum and when the money was paid by the newly formed partnership it would ship them a quantity of ink with which to embark upon the enterprise. The partner supplied by the defendants was always a man involved in the scheme. The "victim," as he became known at the trial, would pay his $1,250 and the defendants would walk away with it. If this were the whole story, the defendants did not violate the statute providing against the fraudulent use of the mails. But after the transaction had been completed by the formal execution of a contract between the victim and his bogus partner on the one hand and the corporation on the other, and after the victim had parted with his money, the defendants in each instance mailed a letter to the victim telling him of the good business the corporation was doing and encouraging him in the sale of ink. If this were all that the evidence shows, then again we agree with the defendants that such a letter was not mailed in furtherance of the scheme to defraud and, in consequence, they committed no offense against the statute by mailing it. But this is not the whole story.

The contract shows two things with respect to money: First, that the victim should pay an initial sum; and, next, that he should make payments in the future. It says: "In addition thereto (that is in addition to the first purchase of ink), the agent (the partners) agrees to purchase from the company not less than 200 quart quantities (10 pounds) on the 15th day of each and every month thereafter, commencing on the 15th day of August, 1923, as long as this contract continues in force." The contract by its terms provides that it shall continue in force "as long as the agent shall continue to make specified monthly purchases." It is evident from these provisions of the contract, which is the very heart of the artifice, that the scheme contemplated fraudulently procuring an initial payment and thereafter fraudulently procuring monthly payments. In every instance, however, it was after the initial payment had been made and before monthly payments were to begin that the letter was mailed. Although the scheme collapsed before monthly payments were ever made, we think the trial judge construed the transaction correctly and properly charged the jury that they might find that these...