Palmer v. United States, 5113

• Decision Date: 26 March 1956
• Docket Number: No. 5113,5114.,5113
• Parties: James Robert PALMER, Appellant, v. UNITED STATES of America, Appellee. Lenore PALMER, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

229 F.2d 861 (1955)

James Robert PALMER, Appellant, v. UNITED STATES of America, Appellee.

Lenore PALMER, Appellant, v. UNITED STATES of America, Appellee.

Nos. 5113, 5114.

United States Court of Appeals Tenth Circuit.

December 14, 1955.

Writ of Certiorari Denied March 26, 1956.

Eugene H. Tepley, Denver, Colo. (Roy O. Goldin, Denver, Colo., was with him on the brief), for appellants.

Donald E. Kelley, U. S. Atty., Denver, Colo. (Robert Swanson, Asst. U. S. Atty., Denver, Colo., was with him on the brief), for appellee.

Before PHILLIPS, Chief Judge, HUXMAN, Circuit Judge, and SAVAGE, District Judge.

Writ of Certiorari Denied March 26, 1956. See 76 S.Ct. 546.

SAVAGE, District Judge.

Appellants, James Robert Palmer and Lenore Palmer, were convicted on Count 1 of a five-count information of using the mails in a scheme to defraud in violation of 18 U.S.C. § 1341. Palmer was convicted on Counts 2, 3 and 4 of using the mails to defraud in the sale of securities in violation of 15 U.S.C.A. § 77q(a) (1), and was also convicted on Count 5 of another violation of the mail fraud statute. Mrs. Palmer was placed on probation for a period of three years. Palmer was sentenced to a term of imprisonment of three years on each count, the sentence on Count 2 to run consecutively to the sentence imposed on Count 1 and the sentences on Counts 3 and 4 to run concurrently with the sentence imposed on Count 2 and the sentence on Count 5 to run concurrently with the sentence imposed on Count 1.

Appellants were charged in Count 1 with having devised a scheme and artifice to defraud purchasers of chattel mortgages executed in favor of James Robert Palmer and Lenore Palmer, doing business as Ace Motors, and to obtain money and property by false and fraudulent pretenses from such purchasers. It was alleged that, for the purpose of executing the fraudulent scheme, the appellants caused to be placed in the United States mail two certain notes and chattel mortgages which were false and fraudulent.

Appellants complain of their convictions on this count upon grounds that, (1) the evidence was insufficient, and (2) they were prejudiced by an amendment of the information permitted during the trial.

In the spring of 1951, Ace Motors, which was owned and operated by appellants at Pueblo, Colorado, entered into a floor plan mortgage agreement whereby Denver Motor Finance, Denver, Colorado, agreed to advance money for the purpose of financing Ace Motors' new car business. By the terms of the agreement Denver Motor Finance advanced money on the security of new cars purchased from the factory. When one of the cars on which money had been advanced was sold and a note and mortgage obtained from the purchaser, Denver Motor Finance would release the car and take an assignment of the note and mortgage from Ace Motors and apply the amount thereof to reduce its indebtedness. On August 22, 1951, Ace Motors caused an "Installment Sale Contract — Note and Mortgage" to be mailed to Denver Motor Finance at Denver, Colorado, which was purportedly executed by James K. Morris on August 1, 1951, covering a 1951 Hudson 4-door Sedan, Motor No. 4A95216, in the sum of $2,041.40, and assigned by Ace Motors to Denver Motor Finance on August 22, 1951. This instrument was fictitious and fraudulent and had been signed by Mrs. Palmer on behalf of Ace Motors and acknowledged by Palmer. The car described in the mortgage had been sold by Ace Motors to one Leandro Mestas on June 27, 1951, who paid the full purchase price. Mestas had not mortgaged the car and was the owner at the time the Morris instrument was fabricated. Payments to be applied on the Morris note were sent to Denver Motor Finance by Ace Motors.

On October 4, 1951, Ace Motors caused a second "Installment Sale Contract — Note and Mortgage" to be mailed to Denver Motor Finance at Denver, Colorado. This instrument was purportedly executed by Anita Watkins and delivered on October 4, 1951, covering a 1951 Hudson 4-door Sedan, Motor No. 8A106228, in the sum of $2,000, and assigned on the same date by Ace Motors to Denver Motor Finance. It was also false and fraudulent. The car described had been sold by Ace Motors to one Byron A. Wydman on July 10, 1951. Wydman was the owner of this car at the time the Watkins instrument was fabricated. Palmer personally sold this car to Wydman, who obtained a loan from A. W. Otterstein on July 10, 1951, secured by a chattel mortgage on the car, and used the proceeds to complete payment. This chattel mortgage to Otterstein was executed in Palmer's office at the time of the sale. Payments on the Anita Watkins note were made by Ace Motors. Anita Watkins was Lenore Palmer's name by a former marriage. To allay suspicions with respect to this transaction, Mrs. Palmer wrote a fictitious letter to herself signing it "Anita Watkins" and then forwarding it to Denver Motor Finance.

The elements of the offense charged in this count are the scheme to defraud or for obtaining money or property by means of false pretenses and the use of the mails for the purpose of executing such scheme. The evidence tended to establish that appellants devised a scheme to defraud Denver Motor Finance by delivery of fictitious notes and chattel mortgages in order to procure the release of new cars from the floor plan mortgage. Both of the spurious chattel mortgages were mailed at Pueblo, Colorado, and received by Denver Motor Finance at Denver. The James K. Morris mortgage was acknowledged by Palmer as a notary public, and the assignment was executed by Mrs. Palmer. The evidence of guilt of both appellants on Count One is overwhelming.

We find no merit in the contention that appellants were prejudiced by the amendment of the information during the trial to conform to the proof. It was alleged in the information as follows:

"* * * that a certain chattel mortgage executed by one James K. Morris, 205 Madison, Pueblo, Colorado, on or about the 1st day of October 1951, was a valid and subsisting chattel mortgage upon a 4-door sedan, Motor No. 4A 95216, Serial No. 4A 95216; that James K. Morris had agreed to pay $1730.00 to Ace Motors in eighteen consecutive monthly installments of $131.41 each beginning September 15, 1951, which said mortgage, on or about the 22nd day of August, 1951, was assigned to Denver Motor Finance * * *."

But the Morris mortgage received in evidence was to some extent at variance with the foregoing. The date of the purported execution was August 22, 1951, rather than October 1, 1951. The amount to be paid was $2,041.40 in 18 monthly installments of $113.41, instead of $1,730 in 18 monthly installments of $131.41. It was the order of the trial court permitting amendment of the information to accurately describe the Morris mortgage of which complaint is made.

Rule 7(e) of the Federal Rules of Criminal Procedure, 18 U.S.C.A., provides:

"The court may permit an information to be amended at any time before verdict or finding if no additional or different offense is charged and if substantial rights of the defendant are not prejudiced."

The appellants argue that no offense was charged in the original information because it was impossible to assign on August 22, 1951, a mortgage which was not executed until October 1, 1951. They assert that the amendment resulted in an offense being stated where none had been stated before. But this argument is based upon a misconception of the offense charged in Count One. As heretofore observed, the two essential elements of the offense are the scheme to defraud and the use of the mails for the purpose of executing the fraudulent scheme. Webb v. United States, 10 Cir., 191 F.2d 512.

An accurate description of the fictitious mortgages which were alleged to have been used in the scheme to defraud was not an essential ingredient of the offense charged. The amendment allowed by the court related only to the identity of the mortgage and not to the substance of the offense. The information as originally filed charged an offense, and the allowance of the amendment to conform to the proof did not effect any change in the offense charged. The case of United States v. Personal Finance Company of New York, D.C.S.D.N.Y., 13 F.R.D. 306, relied upon by the appellants is not in point. There the amendments to the information sought to be made, which the court would not permit, would have resulted in the charging of a different offense.

In addition, it is apparent that the appellants suffered no prejudice. The description of the Morris mortgage in the original information was sufficiently accurate to disclose its identity to appellants. The name and address of the purported mortgagor were correctly given; the car covered by the mortgage was properly described, including the motor and serial numbers, and the date of the assignment of the mortgage by appellants was correctly given. The appellants could not have been surprised, nor was any claim of surprise made. Under these circumstances we are...