United States v. Hardaway Young

• Decision Date: 26 January 1914
• Docket Number: No. 710,710
• Citation: 232 U.S. 155,34 S.Ct. 303,58 L.Ed. 548
• Parties: UNITED STATES, Plff. in Err., v. HARDAWAY YOUNG
• Court: U.S. Supreme Court

232 U.S. 155

34 S.Ct. 303

58 L.Ed. 548

UNITED STATES, Plff. in Err.,

v HARDAWAY YOUNG.

No. 710.

Submitted January 8, 1914.

Decided January 26, 1914.

Solicitor General Davis for plaintiff in error.

No appearance for defendant in error.

Mr. Justice McKenna delivered the opinion of the court:

Indictment under § 215 of the Criminal Code [35 Stat. at L. 1130, chap. 321, U. S. Comp. Stat. Supp. 1911, p. 1653], charging the use of the mails in furtherance of a scheme to defraud. It consists of two counts to which demurrer was filed, which, in specific objections, challenged the sufficiency of the indictment. The demurrer was sustained and judgment entered, quashing the indictment. The charges of the indictment, condensed, are as follows:

On the 5th of May, 1911, within the county of Mobile and the jurisdiction of the court, defendant devised a scheme and artifice to defraud various banks, persons, and corporations, particularly such as could be induced, through the firm of Hollingshead & Campbell, of New York city, to purchase or lend money upon the notes of the Southern Hardware & Supply Company, engaged in the mercantile business at Mobile, Alabama, and of which defendant was the president.

Hollingshead & Campbell were money brokers engaged in the business of inducing banks, persons, and corporations to purchase and lend money upon commercial paper, and it was the intention and purpose of defendant in his negotiations with said firm to induce and cause it to sell and dispose of the notes of the Hardware & Supply Company, and to obtain money and credit for its notes and other evidences of indebtedness. The defendant was authorized to sign such notes and other evidences of indebtedness, and to prepare statements of the financial and business condition of the company.

It was a part of the scheme for defendant to induce Hollingshead & Campbell to sell and dispose of the notes of the Hardware & Supply Company, and to persuade and influence the various banks, etc., to lend money upon the notes of that company, to prepare and cause to be prepared and sent through the United States mails to Hollingshead & Campbell false and fraudulent statements of the business affairs and financial condition of the Hardware & Supply Company, and which defendant was to, and did, represent to be statements showing the correct and true condition of the business affairs and financial condition of the Hardware & Supply Company. These statements did not show the true condition of the company's affairs, but were to show and did show its assets to be greatly in excess of those actually had and owned by it, and its liabilities to be much less than their true amount, and 'falsely and fraudulently showed the company to be in a much better financial condition than it was in fact at the time such statements were made and were to be made.'

Part of the scheme was to make Hollingshead & Campbell believe the statements were correct, and they did make that firm so believe, and to rely upon them; and, so relying upon their truth, to recommend the purchase of the Hardware & Supply Company's notes and the lending of money upon them, defendant knowing that that company 'was not then and there in a strong financial condition.'

Defendant caused the statements to be sent through the United States mails to Hollingshead and Campbell. Hollingshead & Campbell believed them, and, relying upon their truth, recommended barious banks, persons, and corporations to purchase the notes and lend money upon the notes of the Hardware & Supply Company. The names of certain banks and the amounts they loaned are given.

For the purpose of executing the scheme and artifice, defendant deposited in the United States postoffice at Mobile, Alabama, a letter, dated June 27, 1911, addressed to Hollingshead & Campbell at New York. The letter contained a statement of the financial condition of the company, showing the assets, liabilities, and profits of the Hardware & Supply Company. It also contained comments upon the business of the company and its relations with Hollingshead & Campbell. It was sent through the mails and delivered to the latter at New York. The letter and the statements are charged to have shown the assets of the Hardware & Supply Company to be greater and its liabilities to be less than they actually were. And it is charged that defendant, having devised a scheme and artifice to defraud, and for the purpose of their execution, placed and caused to be placed in the United States postoffice at Mobile, Alabama, the letter above stated, and that it was sent and delivered by the Postoffice Establishment of the United States.

The second count in the indictment charges defendant with having devised 'a scheme and artifice for obtaining moneys, goods, and chattels by means of false and fraudulent representations and promises from various banks, persons, firms, and corporations.' The manner and means are charged as in the first count.

The scheme, it will be ovserved, was to defraud certain banks and persons, and it was to be accomplished by deception practised on Hollingshead & Campbell, money brokers, through false statements sent to that company through the mails, whereby they would be induced to recommend the commercial value of the notes and other evidences of indebtedness of the Southern Hardware & Supply Company, of which defendant was the president. The first count charges a scheme to defraud various banks, etc., through the representations of Hollingshead & Campbell, 'out...