Sunderland v. United States

• Decision Date: 08 April 1927
• Docket Number: 6725,No. 6723,6735.,6723
• Citation: 19 F.2d 202
• Parties: SUNDERLAND v. UNITED STATES. STICKEL v. SAME. MATTERS v. SAME.
• Court: U.S. Court of Appeals — Eighth Circuit

19 F.2d 202 (1927)

SUNDERLAND v. UNITED STATES.

STICKEL v. SAME.

MATTERS v. SAME.

Nos. 6723, 6725, 6735.

Circuit Court of Appeals, Eighth Circuit.

April 8, 1927.

COPYRIGHT MATERIAL OMITTED

James A. Reed, of Kansas City, Mo. (Gurley, Fitch & West, of Omaha, Neb., and Marcy K. Brown, Jr., of Kansas City, Mo., on the brief), for plaintiff in error Sunderland.

Norris Brown, of Omaha, Neb. (Albert W. Jefferis and George M. Tunison, both of Omaha, Neb., on the brief), for plaintiff in error Stickel.

Halleck F. Rose, of Omaha, Neb. (Abel V. Shotwell, of Omaha, Neb., on the brief), for plaintiff in error Matters.

James C. Kinsler, U. S. Atty., of Omaha, Neb., and Sylvester R. Rush, Sp. Asst. Atty., Gen., for the United States.

Before WALTER H. SANBORN, KENYON, and BOOTH, Circuit Judges.

BOOTH, Circuit Judge.

There are here three writs of error to a judgment of conviction of plaintiffs in error under an indictment charging them and a number of other defendants with violations of section 215 and 37 of the Criminal Code (Comp. St. §§ 10201, 10385). The three writs of error are based upon a common record, and the questions involved are largely the same in each case. They will therefore be considered together, except where separate treatment is necessary of questions relating to a particular case.

The indictment contained 11 counts. Each of the first 10 charged a scheme to defraud and a separate use of the United States mail for the purpose of executing the scheme. The eleventh count charged a conspiracy to commit the substantive offenses charged in the first 10 counts, and the doing of certain acts to effect the object of the conspiracy. The material parts of count 1 of the indictment are set out in the margin.¹ Plaintiffs in error were convicted on all counts except the first.

The trial of the case lasted more than six weeks. The record is voluminous, consisting of 2,500 printed pages. The assignments of error on behalf of defendant Sunderland are 357 in number; those on behalf of the other plaintiffs in error are to a considerable extent, but not wholly, covered by those in behalf of Sunderland. To discuss them all would be impractical and would serve no useful purpose. They may be grouped roughly as follows: Those challenging the rulings as to the sufficiency and validity of the indictment. Those relating to the conduct of the trial and the character of the proceedings during the same. Those relating to questions of evidence. Those relating to the charge to the jury.

Duplicity.

The first attack made on the indictment is that each of the counts is duplicitous. The attack was not made in the court below in the classic ways: by motion to quash or by demurrer; but instead, by motion to exclude any evidence, motion to require the government to elect at the close of the evidence, motion for a directed verdict, and motion in arrest of judgment.

The first method of attack is not recognized in the federal courts, at least in this circuit. Morris v. United States (C. C. A.) 161 F. 672, 678; McSpadden v. United States (C. C. A.) 224 F. 935; McKnight v. United States (C. C. A.) 252 F. 687; Boone v. United States (C. C. A.) 257 F. 963. And the last method of attack is equally unavailable. Connors v. United States, 158 U. S. 408, 411, 15 S. Ct. 951, 39 L. Ed. 1033; Morgan v. United States (C. C. A.) 148 F. 189; Lemon v. United States (C. C. A.) 164 F. 953, 958; Chew v. United States (C. C. A.) 9 F.(2d) 348, 353.

Assuming, but without deciding, that the other methods were sufficient to raise the question of duplicity, yet we think the charge cannot be sustained. Duplicity is the joining in one count of two or more distinct offenses. In the case at bar the contention of plaintiffs in error is that the indictment sets out two schemes to defraud; that it sets out two groups of defendants; each group being engaged in a separate scheme — one group being engaged in the sale of securities of the Guaranty Securities Company and its allied companies and banks, the other group being engaged in the sale of securities issued by the Colonial Timber & Coal Corporation.

This contention fails to grasp the full scope of the indictment. The offense charged in each count, except the conspiracy count, is the use of the mail in furtherance of a scheme for obtaining money by means of false and fraudulent representations. The indictment alleged that one group of defendants were in control of certain trust companies and banks; that they, in co-operation with a second group of defendants, devised a scheme in accordance with which they should form a new corporation, the Colonial Timber & Coal Corporation; that this new corporation, under the co-operative management of all the defendants, should issue its stock and bonds and sell a portion of the same to the financial institutions controlled by the first group of defendants; that another portion should be sold to the general public through the same financial institutions; that still a third portion should be allotted without consideration to the defendants themselves; and furthermore, that the same financial institutions, owning among their assets large amounts of bonds and stock of the Colonial Timber & Coal Corporation, should sell to the public, stock, bonds, and certificates of their own issue, based upon their own assets, which included said stock and bonds of the Colonial Timber & Coal Corporation.

Though the scheme thus alleged was complex in its nature, and manifold in its details, it was but a single scheme in which the ties of co-operation bound together the various defendants, though some controlled one corporation and some another.

The scheme to defraud and the means by which it was to be carried out are to be distinguished from each other. Setting out the various means did not render the count duplicitous. See Gourdain v. United States (C. C. A.) 154 F. 453, 457; Silkworth v. United States (C. C. A.) 10 F.(2d) 711, 714.

The charge of duplicity cannot be sustained.

Repugnancy.

The next contention is that the indictment is invalid for repugnancy in each count. Passing by similar infirmities in practice in raising the question, it is clear that the alleged repugnancy relied upon is to be found by a comparison of those allegations of the indictment which are set forth in italics. See count 1 in margin.

It is apparent that the indictment is open to criticism for loose and careless pleading. But the technical charge of repugnancy cannot be sustained. Repugnancy in a count consists in a contradiction between material allegations therein. There is no such contradiction here, even assuming that the exact legal ownership of the land was a material matter. Each of the allegations in question might be true. The first is that it was part of the scheme that the Colonial Timber & Coal Corporation should hold itself out as the owner of certain lands. The second is that in carrying out the scheme defendants represented that they themselves were the owners of the lands. The third is that in truth and fact the Colonial Timber & Coal Corporation was not the owner of the lands.

Since all three of the allegations might be true, there was consequently, no repugnancy. What might have been the result of this loose pleading in the way of restricting the introduction of evidence, if proper objection had been made, we are not called upon to decide; nor are we called upon to determine what might have been the result upon the validity of the count if the representation as to ownership of land had been the only alleged false representation relied upon. But such was not the case. All we decide is that the count was not void for repugnancy. See 31 C. J. p. 665; Lehman v. United States (C. C. A.) 127 F. 41; Colburn v. United States, 223 F. 590 (C. C. A. 8); Malvin v. United States (C. C. A.) 252 F. 449; Byron v. United States (C. C. A.) 259 F. 371.

Two other matters relating to the indictment — an alleged fatal variance between the allegation of the indictment and the proof, and an alleged amendment of the indictment by the court — have been discussed and disposed of in the Mathews Case (C. C. A.) 15 F.(2d) 139, which involved this same indictment. It is unnecessary to repeat what was there said.

Was There a Fair Trial?

A second group of assignments of error call attention to certain matters which occurred in the course of the trial, which, it is claimed, resulted in plaintiffs in error not having a fair trial. Some of these matters require mention.

1. Preliminary to the examination of jurors, the court made the following statement:

"Here is a case in which an indictment has been brought by the grand jury in which a number of parties are accused and charged. It is charged against them that they fixed up an old paper title to a lot of land, title that wasn't a title, a claim of title and a colorable claim of title or the like, and, using that claim as to having or owning a lot of land down in West Virginia, I believe it is, or somewhere remote from here, that they caused bonds to be issued against it, and perhaps other kinds of securities, and that they then proceeded to sell or dispose of securities to individuals and to the public by means of either actual false representations, or devices and methods that amounted to deceitful practices, holding the securities out to be good, sound securities, whereas the claim of the charge is that they were not, and that they had a plan to defraud individuals and the public and that having such a plan they used the mails of the United States to further the plans."

We agree with the contention of plaintiffs in error that this was not a fair statement of the charge in the indictment, and that its effect was to prejudice the jurors from the start.

2. In the course of his opening statement, counsel for the government made the following statement:

"* * * And they went down to West Virginia, and they employed an attorney there by the name of Ellison, a lawyer,...