United States v. Thomas

• Decision Date: 19 April 1906
• Docket Number: 2,539.,2,533
• Citation: 145 F. 74
• Parties: UNITED STATES v. THOMAS et al. SAME v. CROSBY et al.
• Court: U.S. District Court — Western District of Missouri

145 F. 74

UNITED STATES v. THOMAS et al.

SAME v. CROSBY et al.

Nos. 2,533, 2,539.

United States District Court, W.D. Missouri.

April 19, 1906

A. S Van valkenburg, U.S. Atty. and Leslie J. Lyon, Asst. U.S Atty.

O. M Spencer, Hale Holden, W. D. McLeod, and H. C. Timmonds, for defendants.

McPHERSON District Judge.

These two cases were recently submitted on the same arguments, and being alike, will be ruled on at the same time.

1. The indictments are under section 5440 of the Revised Statutes as amended (U.S. Comp. St. 1901, p. 3676). Each of defendants, in each case, moves to quash the indictment. One ground is that there was not sufficient evidence to warrant the return of the indictments. In many jurisdictions, a motion like these would not be entertained. And in those jurisdictions where allowed, it is wholly discretionary. Of course that does not relieve the court from deciding the matter according to the very right. But under the showing made, by oral testimony, assuming, that such evidence is competent, it appears that the grand jury had some evidence on which to base the indictment. I express no opinion as to how much evidence there was; but much or little, there was evidence. And evidence having been presented, the question is at an end. If this were not so, then the court would be reviewing the action of the grand jury, and this cannot be done.

2. The question calling for more consideration is as to the construction to be given to section 5440 of the Revised Statutes, as amended (U.S. Comp. St. 1901, p. 3676), under which the indictments were returned, and what kind of conspiracies the statute denounces. The conspiracy charged is that the defendants Thomas and Taggart, were allowed large commissions from the Chicago, Burlington & Quincy Railway Company, operating a line of railway from Kansas City to Chicago, for all freight from certain Atlantic seaboard cities, to Kansas City, routed over that railway, and that defendant Crosby was general freight agent of the road, and it is charged that the three, with certain merchants of Kansas City, conspired to defeat the provisions of the statute of February 4, 1887, c. 104, 24 Stat. 379 (U.S. Comp. St. 1901, p. 3154) commonly called the 'Interstate Commerce Act,' and the statute of February 19, 1903, c. 108, 32 Stat. 847 (U.S. Comp. St. Supp. 1905, p. 599), commonly called the 'Elkins Act.' These statutes were to be circumvented, by routing the freight over said line of road, and the Kansas City merchants were to pay the regular and tariff rates. Then out of the large commissions allowed Thomas and Taggart for thus routing the freight, they were to pay back to certain Kansas City merchants, a part of said commissions, which, in effect and in fact, were rebates, and crimes under the two statutes referred to. The conspiracy charged is followed by allegations of certain overt acts in which rebates were paid out of the commissions received by Thomas and Taggart. And the argument of defendant's counsel is that as such acts, if true, were completed offenses under those statutes, that prosecutions therefor must be under those statutes. And it is earnestly contended that section 5440, as amended does not cover a conspiracy for the violation of the Interstate Commerce and the Elkins Acts. That is to say, it is contended by counsel for defendants, that if the things complained of in the indictments were done, then under the statutes of 1887 and 1903, indictments could be sustained, followed by the imposition of fines. And that being so, it is contended that section 5440 cannot be resorted to, to be followed, if convictions are obtained by judgments of either a fine or imprisonment simply because of concerted actions from unlawful agreements to violate the statutes of 1887 and 1903.

The history of 5440, as I understand it, is as follows: The act of March 2, 1867, entitled 'An act to amend existing laws relating to internal revenue and for other purposes' is one of 34 sections, and covers many phases of the Internal Revenue Laws. Section 30 thereof provides:

'That if two or more persons conspire either to commit any offense against the laws of the United States, or to defraud the United States in any manner whatever * * * the parties to said conspiracy shall be deemed guilty of a misdemeanor'--

The punishment for which was fixed at both fine and imprisonment. 14 Stat. 471-484, c. 167 (U.S. Comp. St. 1901, p. 3676).

That section was the basis of 5440 of the Revised Statutes (U.S. Comp. St. 1901, p. 3676). But by the same Congress (Thirty-Ninth for the years of 1866 and 1867) by an act approved June 27, 1866, it was provided for a commissioner to be appointed by the President, to codify all laws which should be in force at the date of completion of the codification. Two things were requisite for the codification: (1) It was to be more than the usual codification. All obsolete and redundant statutes and parts thereof were to be omitted, and such omissions were to be supplied with additions and corrections, changes of sections, chapters, and classifications, as would make it a harmonious whole; (2) when such codification and such changes were made, and printed, it hen had to receive the approval by an enactment by Congress. 14 Stat. 74, c. 140 (U.S. Comp. St. 1901, p. 3755). So that by section 30 of the act of March 2, 1867, above noticed, and the work of the commission under the statute of June 27, 1866, and possibly changes by Congress, we have section 5440 of the Revised Statutes of 1873, pursuant to an act of December 1, 1873. Congress in adopting the Revised Statutes placed all the Criminal Statutes under title 70, entitled 'Crimes,' and in 9 chapters (U.S.Comp. St. 1901, p. 3619). Section 5440 was placed in chapter 5, entitled 'Crimes against the operation of the government,' a chapter of more than 60 sections, covering a great variety of crimes, the subject of internal revenue being but a small part. And thus the section (5440) has remained until the present time as a law, except by an act of May 17, 1879, the minimum fine was stricken out, and giving the court the power to inflict either a fine or imprisonment, or both. 21 Stat. 4, c. 8 (U.S. Comp. St. 1901, p. 3676).

It is conceded by defendant's counsel that the statute is not alone directed against offenses concerning the internal revenue, because of the case of Clune v. United States, 159 U.S. 590, 16 Sup.Ct. 125, 40 L.Ed. 269. In that case the indictment was under 5440 for a conspiracy to do an act which was a crime by interfering with the mails. And in view of that decision, the contention is narrowed to the claim that the unlawful act or crime must be one against the operation of the government, or some department thereof. And it is true that chapter 5 of title 70 (U.S. Comp. St. 1901, p. 3660), in defining special acts as crimes, is largely, if not entirely, devoted to acts against the operation of the government, such as counterfeiting the currency, forgeries of public documents, interfering with the public lands, the postal system, and so on. No one denies but that it is within the power of Congress to denounce as a crime, an act which effects but a single individual, save as all immoralties effect good government and society. Therefore we have federal statutes against assaults, robberies, larcenies, and so on. And such a crime is an 'offense against the United States,' adopting 'if two or more persons conspire either to commit any offense against the United States' shall be punished as for conspiracy, as well as those who conspire 'to defraud the United States.' In other words, the statute covers cases against two classes of conspirators: (1) Those who conspire to commit any offense against the United States, (2) Those who conspire to defraud the United States, whether such frauds are of themselves indictable or not.

It must be kept in mind that a crime covered by section 5440 is a misdemeanor, and that a violation of the act of 1887, and the amendments thereto, is but a misdemeanor, and the argument that the one is merged in the other is without force. Whether the conviction or acquittal of the one could be pleaded in bar as to the other is a question not before the court. But the violation of the commerce statutes being an offense, it can only be an offense against the United States. And being an offense, why it is not covered by section 5440, I am unable to see. It follows that the only remaining question is, what have the courts held as to the proper construction of the statute? The holdings are not uniform. As against the foregoing are the following cases: United States v. Clark (D.C.) 121 F. 190, by ARCHIBALD, District Judge; United States v. Fehrenback, 2 Woods, 175, Fed. Cas. No. 15,083, by Judge WOODS; United States v. Dennee, 3 Woods, 52 F. Cas. No. 14,948 by Judge WOODS; Curley v. United States, 130 F. 1, 64 C.C.A. 369, by the Circuit Court of Appeals of the First Circuit, by in dictum only. But the weight of the authorities is to the contrary.

In the case of In re Coy (C.C.) 31 F. 794, was decided by Mr. Justice Harlan on the circuit, and was an application for a writ of habeas corpus. The prisoner, with others, was under indictment under section 5440, the alleged conspiracy being to violate certain state statutes, and section 5511 of the Revised Statutes with reference to the election of representative in Congress. The writ was denied. And the judgment of Mr. Justice Harlan was affirmed in 127 U.S. 731, 8 Sup.Ct. 1263, 32 L.Ed. 274.

The case of United States v. Owens (D.C.) 32 F. 534 decided by DEADY, District Judge, was an indictment under the second clause of section 5440, for a conspiracy to defraud the government of part of the public lands. While the the question before this...