Salinger v. United States
| Decision Date | 12 December 1927 |
| Docket Number | No. 7712.,7712. |
| Citation | 23 F.2d 48 |
| Parties | SALINGER v. UNITED STATES. |
| Court | U.S. Court of Appeals — Eighth Circuit |
B. I. Salinger, of Carroll, Iowa (Robert Healy, of Ft. Dodge, Iowa, and Arthur F. Mullen, of Omaha, Neb., on the brief), for plaintiff in error.
E. D. Barron, Sp. Asst. U. S. Atty., of Sioux Falls, S. D. (Olaf Eidem, U. S. Atty., of Sioux Falls, S. D., on the brief), for the United States.
Before WALTER H. SANBORN and BOOTH, Circuit Judges, and MILLER, District Judge.
On May 20, 1922, an indictment was filed in the court below against Fred C. Sawyer, C. H. Burlingame, and B. I. Salinger, Jr., for devising about November, 1917, an alleged scheme to obtain money by alleged false and fraudulent promises from the Midland Packing Company, a corporation, and from the purchasers of its stock, and, for the purpose of executing such scheme or attempting so to do, for causing letters to be sent or delivered by the post office establishment of the United States, in violation of section 215 of the Criminal Code (18 USCA § 338). The indictment, after alleging this scheme, fills 12 printed pages of the record with averments of alleged acts of the defendants, which it declares they did in executing the scheme, and that these acts were a part of the scheme. Following the statements of these acts it contains 14 counts, in each of which it asserts that the defendants, for the purpose of executing the scheme or attempting so to do, did cause to be delivered by mail by the post office establishment of the United States according to the direction thereof a certain letter, a copy of which is set forth in the count. The defendants were arraigned, pleaded not guilty, were tried together, and the jury acquitted defendants Sawyer and Burlingame of each of the offenses charged in the 14 counts, and acquitted the defendant Salinger, Jr., of all the offenses charged in the 14 counts, except that charged in the seventh count, but found him guilty of that offense, so that the only question in this court is: Was there any serious error of law in the trial of the defendant Salinger, Jr., for the offense charged in the seventh count of the indictment.
During the alleged execution of the scheme the defendants organized a corporation, the Midland Packing Company, made defendant Sawyer its president, the defendant Burlingame its secretary and treasurer, and the defendant Salinger, Jr., its vice president and general counsel; they caused this corporation to be duly authorized to have a capital stock of from $8,000,000 to $10,000,000; they caused this corporation to purchase of Statter & Co., Packers, their packing plant and property at Sioux City, Iowa, for about $500,000, to construct and put in operation a large and expensive modern packing plant at an expense of millions of dollars, and to sell much of its stock to raise the money to pay for the construction and operation of this plant.
Counsel for the defendant challenge the sufficiency of the indictment on many grounds, and we have given their contentions thoughtful consideration; but the sufficiency of this indictment has been twice assailed in and sustained by the Supreme Court, and we are not convinced that it is fatally defective. Salinger v. Loisel, 265 U. S. 224, 235, 236, 237, 44 S. Ct. 519, 68 L. Ed. 989; Salinger v. U. S., 272 U. S. 542, 547, 47 S. Ct. 173, 71 L. Ed. 398.
After all the evidence had been introduced in this case, after the requests, motions, and arguments of counsel had been heard and considered, the trial court instructed the jury that the general complaint in the indictment was that the plan to buy, reconstruct, and operate the packing plant was a fraudulent scheme to obtain money by cheating and misrepresentation, and that the alleged fraudulent means of executing the plan were: (1) arranging to obtain the Statter & Co. packing plant and property by fraudulent means, so that the defendants should get something for themselves that they were not entitled to receive, but that the evidence was insufficient to sustain a verdict against them on that account; (2) intending to cause and causing purchasers of stock of the Midland Packing Company to buy it by means of false representations that the corporation would make money, that a large packing plant would be constructed and operated, that the stock of the Midland Company would pay 7 per cent. annually, and that this would pay the 6 per cent. interest on the promissory notes of the purchasers of the stock, but that the evidence in this case was insufficient to sustain a verdict of guilty against the defendants on this charge that they made or caused to be made fraudulent representations to sell the stock; (3) paying dividends on the stock of the Midland Packing Company out of its capital, when it had no net earnings, in order to induce subscribers to buy the stock of the corporation in the belief that the corporation was earning dividends, but the trial court instructed the jury that the evidence on this charge was such that they could not lawfully find the defendants or either of them guilty of planning or perpetrating a fraud on account of the payment of the dividends; and (4) payment of too large commissions to the salesmen of the stock for their services, but the court directly charged the jury that they were "not justified in finding that the amount or the percentage was such a one as to show fraud on the part of the defendants or any of them" under this charge.
After withdrawing from the jury all other charges in the indictment, the court charged them that "the only matter submitted to you upon which you may find a verdict of guilty against the defendants, or either of them, is this matter of the premium stock." The charge in the indictment with reference to this stock was that the defendants intended to and did make pretended agreements with pretended subscribers for the stock, who had no means or suitable means, and were unable to pay for the stock, called dummies, for large blocks of stock at par, in order to make it appear that such large blocks of the capital stock had been sold to such purchasers, and to pay themselves the defendants, through Baine & Taylor, sales agents of the corporation, large commissions out of its funds for the pretended sale of said stock, when the defendants had agreed with such dummies that they would not be called upon to pay the notes given therefor by them, and with the intent on the part of the defendants that such stock should be sold at $125 a share or more, and that all the proceeds of such sales above the par value of the stock should be divided among the defendants and appropriated to their own use.
Is the seventh count of the indictment and the evidence pertinent to it sufficient to sustain a finding of the jury that beyond a reasonable doubt the defendant Salinger committed the offense there charged? The charge in this count was that the defendants, in and for executing the alleged general fraudulent scheme set forth in the first part of the indictment, caused this letter to be delivered by the Post Office Department of the United States to Martin Christiansen at Viborg, S. D., on October 23, 1919:
At the proper time counsel for the defendant Salinger objected and excepted to the admission of this letter in evidence, and at the proper time requested the court to instruct the jury to return a verdict in his favor upon this count, and excepted to its refusal so to do.
The alleged scheme charged in the seventh count of the indictment, the evidence concerning which was submitted to the jury, was that the defendants sold stock to dummies at par, took their worthless notes to the corporation for it, agreed with the subscribers that they need not pay these notes, sold the stock again at a price above par, and divided among themselves that part of the proceeds of the second sale in excess of the par value of the stock, when the part the defendants received was the property of the corporation. The substance of the charge and the gist of the offense was the appropriation of this share of the second sale by the defendants to themselves, instead of delivering it to the corporation.
But no evidence has been called to our attention, nor have we found any, that Christiansen was a dummy, a man of no means or of small means. He testified that he had 1,000 acres of land in South Dakota, that he lived on it and had lived on it for three or four years, and was and had been engaged principally in farming, and that he paid $800 or $900 interest on his subscription notes. The direct proof regarding the Christiansen sale of October 22 referred to in the letter was that Spellings...
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