Stearn v. United States

• Decision Date: 12 April 1927
• Docket Number: No. 2560.,2560.
• Citation: 18 F.2d 465
• Parties: STEARN et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

18 F.2d 465 (1927)

STEARN et al. v. UNITED STATES.

No. 2560.

Circuit Court of Appeals, Fourth Circuit.

April 12, 1927.

Before WADDILL, ROSE and PARKER, Circuit Judges.

W. M. Justis, Jr., of Richmond, Va., and T. F. Railsback, of Kansas City, Kan. (Samuel L. Adams, of South Boston, Va., and Charles B. De Shazo and Theodore B. Benson, both of Washington, D. C., on the brief), for plaintiffs in error.

Alvah H. Martin, of Norfolk, Va., and Callom B. Jones, of Richmond, Va., Asst. U. S. Attys. (Paul W. Kear, of Norfolk, Va., U. S. Atty., on the brief), for the United States.

WADDILL, Circuit Judge.

The indictment in this case contains four counts, charging that the defendants unlawfully, in violation of section 215 of the Penal Code (Comp. St. § 10385), did use the mails of the United States in furtherance of a scheme to defraud; the specific offense charged being that the defendants, having devised or intending to devise a certain scheme or artifice to defraud or obtain money or property by means of false or fraudulent pretenses, representations, or promises for the purpose of executing such scheme or artifice so to do, placed or caused to be placed certain letters in the mail of the United States, enumerated and set forth in the several counts of the indictment, addressed to the persons therein named, for mailing through the post office establishment of the United States.

The scheme was predicated upon the theory that one Charles Durkee, a former Governor of the territory of Utah, had to his credit in the treasury of the United States a large sum of money alleged to be due to his estate, arising from transactions in connection with the promotion and building of the Union Pacific Railway system, which extended westward from the state of Iowa to California, and covered the period from about the commencement of the Civil War, and thereafter to the completion of the system, in the late '80's. The scheme was to raise money to aid the heirs of Durkee in the establishment of their claim against the government, which, starting with the sum of $64,000,000 more than 50 years ago, would amount to several hundred millions at the present time; the alluring promise held out being that there would be made a 50 to 1 return for any money paid in, and probably as much as 100 to 1.

The government's contention is that the scheme was in its entirety fraudulent, its purpose being to procure money from the over-credulous wherever found, and to use the same, not for the purpose of collecting data to justify the assertion of the wholly unfounded claim against the United States, in which they were supposed to have acquired an interest, but wholly for the benefit of the defendants; that the plan chosen was a mere method of enticing gullible persons to give up their money for a supposed valuable interest in a nonexisting property right; that in the prosecution of this design and scheme, and the securing of subscriptions of money from different persons named in the indictment and others, the defendants mailed the letters mentioned in the indictment, as well as others, all to the grand jurors unknown.

The defendants insist that this claim against the government for $64,000,000, with interest, is a just and valid one; that it is still due to the Durkee heirs, assigns, and legal representatives; that the government of the United States was improperly retaining the same; that the prosecution of their effort to collect the amount and obtain the necessary data to that end would result in great profits to those entitled thereto and having an interest therein; and that they would be enabled to realize on the expectations arising out of the claim; and that they had properly expended all sums raised by them on that account.

The indictment was duly returned on the 5th of October, 1925, and on the 8th of April, 1926, the defendants appeared and demurred generally, for reasons stated in writing, to the indictment and each count thereof, which demurrer the court overruled. Whereupon they pleaded not guilty, and a jury was impaneled and sworn. At the commencement of the trial, the defendants filed their petition asking that certain evidence, consisting of letters, papers, and other documents, alleged to have been taken from R. W. Warren, one of their number, at the time of his arrest, be returned to him, which motion the court denied, and thereupon the trial was proceeded with and testimony adduced; and on the 10th of April, at the conclusion of all the evidence, the court having declined to instruct a verdict for the defendants as requested, a verdict of guilty was found against each of them for the offenses charged against them. They thereupon moved to set aside the verdict and grant a new trial, which motion being overruled, the court entered judgment that Stearn be confined in the penitentiary at Atlanta, Ga., for the period of two years, Warren in the same prison for the period of one year, and Oliver in the jail at Richmond for the period of six months.

The defendants duly excepted to the action and rulings of the court in refusing to surrender the evidence taken from Warren, in the giving and exclusion of testimony, for its refusal to instruct a verdict in their behalf, and in entering judgment on the verdict as aforesaid. From this action the writ of error herein was sued out, 21 grounds of error being assigned why the judgment of the court should be reversed. These assignments will be considered, not in the order of their numbers, but according to the subject-matters covered thereby.

1. The first assignment relates to the action of the court in overruling the demurrer. Six specifications of objections are made to the indictment, viz.: That it did not state and present a violation of any of the penal laws of the...