Norcott v. United States

• Decision Date: 08 July 1933
• Docket Number: No. 4913-4917.,4913-4917.
• Citation: 65 F.2d 913
• Parties: NORCOTT v. UNITED STATES, and four other cases.
• Court: U.S. Court of Appeals — Seventh Circuit

65 F.2d 913 (1933)

NORCOTT v. UNITED STATES, and four other cases.

Nos. 4913-4917.

Circuit Court of Appeals, Seventh Circuit.

July 8, 1933.

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George I. Haight, Warren Nichols, Alvin G. Hubbard, Ward Ross, Alvin D. Blieden, and Harry Olson, all of Chicago, Ill., for appellants.

Dwight H. Green, U. S. Atty., Joseph A. Struett, Asst. U. S. Atty., and Thomas Dodd Healy, Sp. Asst. to Atty. Gen., all of Chicago, Ill., for the United States.

Before ALSCHULER and SPARKS, Circuit Judges, and WILKERSON, District Judge.

SPARKS, Circuit Judge.

The validity of this indictment was challenged by demurrer and by motion in arrest of judgment. It is contended by appellants that each count fails to aver the name or names of any person or persons to whom appellants are charged to have made any of the false representations, or who, relying thereon, parted with any money or property. It will be observed that each count named the person to whom representations and promises were made, but appellants insist that both allegations are necessary for the reason that each count is based on the second clause of section 215 of the act (18 USCA § 338) and charges the use of the mails in carrying out and executing a scheme to obtain money and property as distinguished from the use of the mails to carry out a contemplated scheme to that effect; and that inasmuch as the fraudulent design is charged to have been accomplished, it is necessary to describe that design and its results as specifically as if the injured party were seeking damages for the fraud. We do not conceive this to be the law. The crime defined under section 215 is that of using the mails for the purpose of executing certain schemes or artifices. The first clause deals with those who have devised or intend to devise any scheme or artifice to defraud; the second clause deals with those who have devised or intend to devise any scheme or artifice for obtaining money or property by means of false or fraudulent pretenses, representations or promises. Under the first clause, which was in the Act of 1889 (25 Stat. 873), it has been held that it is unnecessary to allege the names of the victims if they be unknown. Durland v. United States, 161 U. S. 306, 16 S. Ct. 508, 40 L. Ed. 709. See Ader v. United States (C. C. A.) 284 F. 13. The second clause of the Act was an amendment enacted in 1909, and an indictment under that clause which referred to the victims as a class without naming them or alleging that they were unknown was held sufficient by this court in Grossman v. United States (C. C. A.) 282 F. 790. See Preeman v. United States (C. C. A.) 244 F. 1. It is true that the cases referred to do not allege that the fraud was accomplished, but we are unable to see why that should make any difference. The use of the mails for fraudulent purposes is the gist of the action, and other relevant facts need not be alleged with strict particularity. Fournier v. United States (C. C. A.) 58 F. (2d) 3; Butler v. United States (C. C. A.) 53 F.(2d) 800; Busch v. United States (C. C. A.) 52 F.(2d) 79; Scheib v. United States (C. C. A.) 14 F.(2d) 75. See, also, United States v. Behrman, 258 U. S. 280, 42 S. Ct. 303, 66 L. Ed. 619. Aside from the allegations relative to the accomplishment of the fraud, each count alleges that appellants devised the scheme to obtain the property and money, and each count is sufficient on that theory. If we therefore concede that appellants are right in their contention regarding the lack of allegations to support the charges as to completed transactions, then whatever may be alleged in the indictment on that subject, will be considered as surplusage, and, as appellants admit, proof of the completed act is sufficient to sustain the charge of design.

Appellants further contend that the negations pleaded are not sufficiently specific, but we think that contention is without merit, and we are also of the opinion that the indictment is not duplicitous. Cochran v. United States (C. C. A.) 41 F.(2d) 193; Scheib v. United States (C. C. A.) 14 F.(2d) 75; Silkworth v. United States (C. C. A.) 10 F.(2d) 711; Gourdain v. United States (C. C. A.) 154 F. 453.

We think there was no error in overruling appellants' motion for a bill of particulars. The representations relied upon were sufficiently specific. The articles mailed were enclosed in envelopes which were addressed respectively to certain individuals named in the several counts, and the evidence supported those charges. The record does not disclose that appellants were either surprised or prejudiced by the court's refusal to grant a bill of particulars. The matter of granting or refusing such motion, if properly exercised, was within the trial court's discretion, and is not reviewable here. Horowitz v. United States (C. C. A.) 262 F. 48; Savage v. United States (C. C. A.) 270 F. 14; Hyney v. United States (C. C. A.) 44 F.(2d) 134.

There was evidence admitted as to appellants' representations relative to the Calhoun Beach and Chestnut Street bonds which were not mentioned in the indictment, and upon this ruling appellants predicate error. This evidence was properly received on the question of appellants' intent, and not primarily in support of any specific crime charged in the indictment. Moore v. United States, 150 U. S. 57, 14 S. Ct. 26, 37 L. Ed. 996; Painter v. People, 147 Ill. 444, 35 N. E. 64; People v. Molineux, 168 N. Y. 264, 61 N. E. 286, 62 L. R. A. 193; People v. Harris, 136 N. Y. 423, 33 N. E. 65; State v. Tettaton, 159 Mo. 354, 60 S. W. 743; Wigmore on Evidence, § 302.

Appellants contend that the court, by excluding material issues of ultimate fact from the consideration of the jury, denied them their constitutional right of trial by jury. This contention is based on the following instruction given by the court:

"In fact, I think I may say, and fairly say, that the mailing is conceded. The defendants deny, however, that the mail matter was sent through the United States Post Office in connection with any scheme or device to obtain money or property by means of false representations, pretenses or promises. If the defendants, or some of them, devised the scheme, as charged in the indictment, then such of the defendants as devised the scheme are guilty on all counts."

The specific point made is that the acts of mailing were material facts which should have been submitted to the jury for determination. Of course, mailing was a material fact and raised a material issue, and the court told the jury in its second instruction that the burden was upon the Government to establish guilt beyond a reasonable doubt and that that statement applied to every material issue. He further stated that it was within the court's province to express its conclusions and inferences from the facts, but that it was not the court's intention to do so, and if he had done so or should do so, the jury were not bound by such opinion. The facts are that the mailing in respect to each count was proven, and not only was never denied by appellants, but was even admitted in argument to the jury. Furthermore, no objection was interposed to the instructions by any appellant. There is no merit in this contention.

It is further contended by appellants that the court erred in excluding an audit of the books and appraisal of the assets of H. O. Stone and Company made by an auditor and an appraiser of the Securities Commission of the State of Illinois. These documents were not identified by their respective authors, and so far as the record discloses, the authors were not available for cross-examination, and no one testified as to the accuracy of the documents. Under those circumstances the audit and appraisal were properly excluded as hearsay evidence. United Surety Co. v. Summers, 110 Md. 95, 72 A. 775; Underwood Typewriter Co. v. City of Hartford, 99 Conn. 329, 122 A. 91; Coal Creek Drain. & Levee Dist. v. Sanitary Dist., 336 Ill. 11, 167 N. E. 807.

Appellants predicate error on the court's ruling in admitting in evidence appellant Norcott's petition on behalf of H. O. Stone and Company for a refund of income tax for the year 1928. This petition was prepared and filed November 17, 1930, after appellants Needham, Bennett, and Packer had retired from the company. The company's return for that year which was admitted in evidence was made upon a cash receipts and disbursement basis, showing a taxable income of $595,649.98 and a tax of $71,478 which was paid. Norcott's petition was for a refund of that tax, and was made upon an accrual basis and showed a loss for that year of $207,575.34. We think this petition was properly submitted to the jury as bearing upon the financial condition of the company for that year. That fact was in issue as to all appellants, for all were connected with the company during a part or all of that year. The fact that Needham, Bennett and Packer retired before the petition was filed in 1930 would render it no less competent against them. It was the company's statement, verified by Norcott, of its actual financial condition, taken from the books and covering a time when all appellants were members. It was not only competent as an admission against Norcott, but it was admissible in proof of the actual financial condition of the company in 1928. Norcott who made and verified it was in court and was subject to examination as to its correctness by the other appellants if they so desired. This fact is sufficient to distinguish this question from the one raised by the offer in evidence of the audit and appraisal of the Securities Commission of Illinois. The court's ruling in this respect was proper.

With respect to this income tax exhibit appellants also assign error in that the court, over their objection, sent the exhibit to the jury room after the jury had retired, notwithstanding the fact that it had not been read nor physically exhibited to the jury prior to that time. The exhibit was admitted...