Riddle v. United States

• Decision Date: 15 February 1922
• Docket Number: 3773.
• Citation: 279 F. 216
• Parties: RIDDLE et al. v. UNITED STATES. [1]
• Court: U.S. Court of Appeals — Fifth Circuit

279 F. 216

RIDDLE et al. v. UNITED STATES. ^[1]

No. 3773.

United States Court of Appeals, Fifth Circuit.

February 15, 1922

Hugo L Black, of Birmingham, Ala., W. M. Lackey, of Ashland, Ala and L. H. Ellis, of Columbiana, Ala., for plaintiff in error Riddle.

E. M Smith, of McDonough, Ga., and Gordon, Morrill & Ginter, for plaintiff in error Wooten.

George Pegram, of Faunsdale, Ala., for plaintiff in error Graham.

E. M Smith, of McDonough, Ga., and S.W. Tate, of Anniston, Ala., for plaintiff in error St. John.

Erle Pettus, U.S. Atty., of Birmingham, Ala.

Before WALKER, BRYAN, and KING, Circuit Judges.

KING Circuit Judge.

The plaintiffs in error were indicted, with three other persons, for sending letters through the United States mails to defraud and for a conspiracy to so use the mails. The indictment originally contained seven counts. Counts 1 and 3 were stricken on demurrer. Counts 6 and 7 were withdrawn from the consideration of the jury, and the case was submitted on counts 2, 4, and 5. All of the defendants were convicted. A motion for a new trial was overruled by the court. Three of the defendants acquiesced in the judgment of conviction. The plaintiffs in error prosecute this writ of error to reverse said judgment.

The second count of the indictment charged said defendants, with others unknown, with devising a scheme to defraud the Buffalo Manufacturing Company, at Shelby, N.C., and to obtain money from it by selling to it 100 bales of cotton, represented to be strict middling, 1 to 1 1/16 inch staple, weighing 49,592 pounds, each of which representations were knowingly untrue and false; said weights of said cotton were represented to be far in excess of, and its grades and quality superior to, the actual weights, grades, and quality; that to carry said scheme into effect defendants mailed from Talladega, Ala., to H. T. Lampkin & Co., of Charlotte, N.C., a letter inclosing an invoice, bill of lading, and detailed weight sheet for said 100 bales of cotton, which was delivered by the United States mail to said Lampkin & Co.

Count 4 alleged a like scheme to defraud the Entwistle Manufacturing Corporation, at Rockingham, N.C., by the sale to it of 100 bales of cotton, which defendants fraudulently represented and pretended to be good middling, light tinges, 1 to 1 1/16 inch staple, and to weigh 49,239 pounds, said representation as to grade and weight being known at the time by defendants to be false and untrue, and said grades and quality being represented as far superior and the weights in excess of the actual weights, grades, and quality of said cotton, and were made in order to defraud and obtain money from said Entwistle Manufacturing Corporation; that to execute said scheme said defendants mailed from Talladega, Ala., on March 23, 1918, a letter addressed to H. T. Lampkin & Co., at Charlotte, N.C., signed 'Savage Cotton Company, Inc., per W. A. Savage, General Manager,' which letter inclosed copies of the invoices and weight sheets on said 100 bales of cotton, which letter was delivered by the post office establishment of the United States to said Lampkin & Co.

Count 5 of said indictment charged said defendants with unlawfully conspiring, in violation of section 37 of the Penal Code (Comp. St. Sec. 9558), to commit an offense against the United States, in violation of secton 215 of the Penal Code (Comp. St. Sec. 10385), to use the mails to defraud, and as overt acts to effect said conspiracy charged:

(1) The drawing of a three-day sight draft by W. A. Savage, A. M. Savage, and W. O. Wooten, on March 19, 1918, for $32,790.88, on the Icemorlee Cotton Mills, of Monroe county, N.C. (2) That W. A. Savage, on April 1, 1918, caused to be mailed in the post office at Talladega, Ala., a certain letter addressed to H. T. Lampkin & Co., Charlotte, N.C., signed 'Savage Cotton Company, Inc., per W. A. Savage, General Manager,' reciting that it enclosed detailed weight sheets and invoices on 100 bales of cotton shipped to Monroe, N.C., and also 200 bales of cotton shipped to Greensboro, N.C. (3) That W. A. Savage, on March 7, 1918, caused to be mailed at Talladega, Ala., a letter addressed to J. S. Westerfelt & Co., Greenville, S.C., signed 'Savage Cotton Company, Inc., per W. A. Savage, Manager,' which letter recited that it inclosed copies of bill of lading, invoice, and weight sheet on the 100 bales of cotton shipped to Woodside Cotton Mills, Greenville, S.C. (4) That W. A. Savage, on March 19, 1918, drew a three-day sight draft for $33,503.94 on the Icemorlee Cotton Mills, Monroe, N.C., for 200 bales of cotton of the weights therein stated. (5) That W. A. Savage caused to be mailed at Talladega, Ala., on March 9, 1918, a letter addressed to Icemorlee Cotton Mills, Monroe, N.C., signed 'Savage Cotton Company, Inc., per W. A. Savage, General Manager,' which recited that he therein inclosed invoices, detailed weight sheets, bills of lading, on 100 B/C marked 'FMBC,' 100 B/C marked 'JCMT,' 100 B/C marked 'PAWT,' and 100 B/C marked 'RMFX,' all of which were shipped to said mills at Monroe, N.C.

It appears that the Savage Cotton Company, Inc., was a corporation formed on November 9, 1917, to do business at Talladega, Ala., engaged in the business of buying and selling cotton. The original shareholders were H. W. Savage, the wife of W. A. Savage, A. M. Savage, W. M. George, T. M. Stanford, and D. H. Riddle. Each of these persons became directors of said corporation-- A. M. Savage its president and treasurer, W. M. George its secretary, D. H. Riddle its vice president and general counsel, and W. A. Savage its general manager. The chief executive officer of the corporation seems to have been W. A. Savage. The money originally put into the company was borrowed from the Isbell National Bank, which loan was procured by D. H. Riddle upon a note signed by the subscribers to the stock of the company and indorsed by said Riddle. It was testified without contradiction that this money was put to the credit of the company, but by agreement with the bank was payable only on checks given for cotton purchased, which checks were to be countersigned by D. H. Riddle, vice president, so long as the note remained unpaid. The note was paid on December 19, 1917. On January 2, 1918, a resolution was adopted requiring that all checks and drafts drawn by the corporation on any bank or funds should be signed 'Savage Cotton Company, Inc.,' by its treasurer, and countersigned by W. A. Savage, general manager.

Until some time in February business appears to have proceeded without any irregularity, but commencing about the 1st of March shipments would be made of cotton sold as strict middling, or good middling, 1 to 1 1/16 inch staple, drafts would be drawn for the price of this cotton thus described, for the weights stated in the draft, and the purchaser notified through the mails, with a copy of the bill of lading, copy weight sheets, and invoices, containing these false statements as to weights, grades, and quality, and when the cotton arrived the bales were found to be very small, great shortage existed in the weights, and the grade of the cotton was very low.

A great deal of the weighing was done by T. A. St. John, who was in the employ of the Savage Cotton Company, Inc., and there was evidence that many of the weight sheets were made by him or from data furnished by him. The manager of the compress where all of this cotton was compressed, and from which it was shipped, was W. O. Wooten, as to whom there was evidence to the effect that he was closely associated with the business of the Savage Cotton Company, Inc., that his name was used in making loans from the Isbell National Bank, where the Savage Cotton Company, Inc., exceeded its borrowing limit with said bank under the National Bank Act, and that he took part in the negotiations with purchasers arising out of the failure of the cotton shipped to come up to representations as to grade, quality, and weight. Much of the cotton was shipped over the Atlanta, Birmingham & Atlantic Railway Company, of which A. S. Hardy was the agent; S. E. Graham being cashier in his office.

There was irregularity about the issuance of bills of lading; it being charged that they were issued before the cotton was in the hands of the railroad company, and that, when it became necessary to furnish to the railroad company bales of cotton to the number for which bills of lading were issued, the bales were split by the compress, and very light bales were furnished, of a very poor quality, entirely different from the weights and grades stated in the invoices and weight sheets of the Savage Cotton Company, Inc. All of the bills mentioned in the indictment or issued in any transaction therein stated were issued by the defendant Hardy.

The evidence in the case shows that as a result of these transactions the customers of the Savage Cotton Company, Inc., were defrauded of something like $200,000 or more, and the principal question in this case is whether the evidence adduced is sufficient to connect each defendant with the fraudulent use of the mails and the conspiracy to use the same, charged in the indictment. The assignments of error are many, but reduce themselves to comparatively few questions:

1. We do not think that the court erred in overruling the demurrers filed to the counts of the indictment upon which this case was tried. The demurrers principally insisted on are to the sufficiency of the fifth count. A conspiracy may be a completed offense, even if the intended crime be not consummated (Williamson v. United States, 207 U.S 425, 447, 28 Sup.Ct. 163, 52 L.Ed. 278), and is a separate offense when such crime has been accomplished (Heike v. United States, 227 U.S. 131, 33 Sup.Ct. 226, 57 L.Ed....