LEE v. UNITED STATES.
No. 8170.
Circuit Court of Appeals, Fifth Circuit.
June 30, 1937.
Rehearing Denied Aug. 3, 1937.
91 F.2d 326
Taking up the remaining question, no express assumption of the obligation was shown, but that fact has very little significance in view of the relationship existing between Cromwell and York. York was a family corporation and Cromwell was its alter ego. The entire transaction was entered upon the books of the corporation in July, but the entries were made as of the date of the transaction. Every detail was entered as an asset or liability. Some of the payments were made from the special fund and some with money of the corporation. York paid half of the note due the Exchange National Bank. It signed the first renewal at the First National Bank, and when the note was subsequently divided it signed one note as principal and indorsed the other. It made two financial statements to the bank in which it represented itself as owning the benefits and subject to the obligations of the contract with claimant, Cromwell signing such statements on behalf of the corporation; and it conveyed certain real estate to Cromwell in order that he could execute a mortgage upon it to secure Gant. Cromwell delivered to Gant 400 shares of stock in the First National Bank of Tulsa at an agreed value and a note of $50,000 signed by Wirt Franklin and payable to York. Both stock and note belonged to York and they were delivered for credit on the note which Cromwell gave Gant in the purchase of his stock. The secretary of Wirt Franklin Petroleum Corporation testified that Cromwell told him he had made a mistake in having the stock issued to himself instead of York; that the transfer would require new revenue stamps; and the two discussed the surrender of the certificates to be marked “issued in error” and the issuance of new certificates. Cromwell testified that he had not negotiated with York concerning the transaction prior to the execution of the notes to the banks or the contract with claimant; that it looked as though the merger would be consummated with considerable profit; that the entries were made in the books of the corporation in order to pay less income taxes; and that the original entries were made after the first of July because the state corporation tax reports ran from July to July. He did not expressly deny that York assumed the obligation.
We think the evidence considered as a whole clearly shows an implied understanding and agreement on the part of York to assume the obligation due claimant. Upon the obligation being assumed in that manner, the law created the promise to pay and established the relation of debtor and creditor between York and claimant which is enforceable in the bankruptcy proceeding. Trinidad Nat. Bank v. Floyd (C.C.A.) 66 F.(2d) 359.
It is suggested that if the evidence establishes assumption, it was subsequently rescinded. The only evidence tending remotely to show rescission is the failure of York to list the obligation as a liability. That is wholly insufficient, especially in view of the fact that the stock purchased and paid for was listed as an asset.
That part of the order denying the claim is reversed and the cause is remanded with direction to allow the claim.
See, also, In re Lee (C.C.A.) 87 F.(2d) 142.
James Hartnett, E. Sydney Feinstein, and Ray E. Lane, all of Chicago, Ill., and James R. Venable, of Atlanta, Ga., for appellant.
Henry A. Schweinhaut, Sp. Asst. to Atty. Gen., and Lawrence S. Camp, U. S. Atty., and M. Neil Andrews, Asst. U. S. Atty., both of Atlanta, Ga., for the United States.
Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.
FOSTER, Circuit Judge.
Appellant, Robert Lee, was convicted on thirty-five counts of an indictment charging him, B. R. Bradley, and Wm. A. Smith with violations of the postal laws of the United States, by the mailing of letters in furtherance of a scheme to defraud; and on one count charging the same defendants with conspiracy to commit the same offense. He was sentenced to serve three years’ imprisonment on each of the counts charging substantive offenses and two years on the conspiracy count, the sentences to be served concurrently.
There are twenty-eight assignments of error. Error is assigned to the overruling of a motion to quash the indictment, based
The indictment is lengthy, occupying 130 pages of the record. However, it will be sufficient to briefly state its salient points. In substance, the first count alleges that Robert Lee, B. R. Bradley, and Wm. A. Smith devised a scheme to defraud twenty-three named persons and the general public, by obtaining money and property by false and fraudulent pretense, representations, and promises, with intent to convert the same to their own use. The scheme is set out with great particularity. The count alleges false representations, by means of letters, circulars and newspaper advertisements, to the effect that Bradley was an experienced and successful operator on the New York Stock Exchange who had never failed to secure dividends for investors intrusting their money to him. It alleges the formation of seven corporations, through which operations were ostensibly to be conducted, and that Bradley, by means of contracts with said corporations, in fact conducted the business; that large losses were made but investors were paid dividends not earned, out of money invested by new subscribers, for the purpose of inducing named persons and others to continue business with defendants and make further investments. Representations, appropriately alleged to be false and fraudulent, are set out with great particularity. The count further alleges that fraudulent representations were to be sent through the mail and “by means and instruments of communication in interstate commerce.” The first count alleges that defendants knowingly placed and caused to be placed a letter in the mail at Atlanta, Ga., within the jurisdiction of the court, addressed to John A. Thurston, Thomaston, Ga. The letter, set out in full is a lengthy document on the letterhead of American Bond & Share Corporation, one of the corporations alleged to have been made use of in the scheme. It was dated at Atlanta, Ga., July 10, 1934, and was signed “American Bond & Share Corporation, Robert Lee.” Without further stating it, it is sufficient to say it was plainly intended to induce the person to whom addressed to entrust his money to defendants for investment and was in furtherance of the scheme. The other counts charging substantive offenses allege the mailing of various other letters and refer to the first count for a description of the scheme. The conspiracy count is sufficient in form.
There is no doubt the indictment charges all the elements of a crime in violation of the postal laws (
On the other ground urged for quashing the indictment, the following appears: The motion to quash is lengthy and in great detail alleges acts of the agents of the Securities Commission in the seizure of books and papers of some of the corporations named in the indictment and the invasion of appellant‘s office and the seizure of documents of said corporations in his custody. However, neither by allegation nor proof is it shown with sufficient certainty that any evidence thus obtained was actually before the grand jury. It was not error to overrule the motion to quash.
A number of assignments run to the refusal of the court to direct a verdict of acquittal. The evidence shown by the bill of exceptions is voluminous but it is unnecessary to review it extensively. One good count supported by evidence is sufficient to sustain the judgment. Evans v. U. S., 153 U.S. 584, 14 S.Ct. 934, 38 L.Ed. 830.
The theory of appellant is that he was acting simply as an attorney at law, giving legal advice and attending to legal matters in court. There was ample evidence to sustain the allegations of fraud and to prove the mailing of various letters; and that though Bradley was the moving spirit of the fraudulent scheme Lee was
Error is alleged to the refusal of the court to suspend the trial and order a mistrial, and to order the United States attorney to file a bill of particulars. These were matters within the sound discretion of the trial judge. U. S. v. Hirsch (C.C.A.) 74 F.(2d) 215, cert. denied 295 U.S. 739, 55 S.Ct. 653, 79 L.Ed. 1686; Wong Tai v. U. S., 273 U.S. 77, 47 S.Ct. 300, 71 L.Ed. 545. We find no abuse of discretion in this respect.
A number of errors are assigned in general terms to the admission of evidence and remarks of the judge considered prejudicial. The assignments fail to set out the substance of the evidence and the remarks of the judge objected to, in violation of our rule 11. We are unable to determine from the bill of exceptions whether these assignments are well taken and cannot consider them.
After verdict and the overruling of a motion for a new trial, appellant, through his counsel, verbally moved in arrest of judgment, upon the following ground, among others: That it was made to appear from an army record introduced by the Government that appellant was non compos mentis and not possessed of the necessary criminal mind to render him responsible for anything wrong charged against him in the indictment. Error is assigned to the overruling of this motion. In this connection the following appears from the record.
In the course of the trial, for the purpose of proving that appellant had previously been guilty of a similar offense, to show intent, the United States offered the record of proceedings before a court-martial, charging Lee with violation of the postal statute, while he was a private in the United States Army, in July, 1918. Part of the record offered related to a mental examination of Lee in September, 1918. From this it appears that a board of three medical officers found that Lee did not have sufficient mental capacity to justify his being brought to trial and at the time of the alleged offense did not have the necessary criminal mind to commit the offense charged; that he was suffering with dementia praecox of the paranoid type, which had existed prior to his induction into the service; that dementia praecox is an incurable disease and grows progressively worse. The board recommended that Lee be discharged from the service and turned over to the civil authorities as he was a menace to public safety. Defendant objected to the introduction of this record and after colloquy between court, appellant and counsel, which was not disclosed to the jury, the objection was sustained.
It is apparent from the record offered that the court-martial proceedings did not result in a judgment either of guilt or acquittal and the issue of insanity was not decided. The certificate of the medical board had no more probative value than would have had any other unsworn written opinion as to the mental capacity of appellant. The army record was not admissible either to prove intent or insanity and was properly excluded by the court.
“Dementia praecox,” as its derivation indicates, is precocious insanity, usually beginning at puberty. Century Dictionary, “Dementia.” “Paranoia” is defined in medical jurisprudence as a form of insanity which is characterized by systematized delusions or by the tendency to form such delusions. These are usually delusions of persecution or grandeur. Wharton & Stillé‘s Med.Jur. (3d Ed.) c. 48. Every one charged with crime is presumed to be sane. To be available as a defense the insanity of the accused must be such as to deprive him of mental capacity to distinguish between right and wrong. Necessarily this depends largely upon the particular crime charged. For instance, one laboring under a delusion of persecution might commit a murder believing it to be right, yet be scrupulously honest and able to distinguish between right and wrong in financial transactions. This applies with equal force to a delusion of grandeur.
While an accused is presumed to be sane, the presumption is rebuttable and only slight evidence to the contrary, admitted in the course of the trial, is sufficient to raise the issue, to be submitted to the jury, with all the other evidence, with
The trial before the jury lasted some eighteen days. Appellant, although assisted by counsel, had conducted his own defense very skillfully, objecting in proper form to the admission of evidence and raising every possible technical defense both at the trial and by preliminary pleas and motions. He was an attorney admitted to practice in federal and state courts and maintained an office for the transaction of legal business in Atlanta. There was evidence tending to show that he knew the difference between right and wrong, but nevertheless persisted in engaging in the fraudulent transactions, some of which he initiated and carried through by his ability as a lawyer. The court-martial record informally brought to the attention of the court was not enough to require the judgment to be arrested. We find no abuse of discretion in overruling the motion in arrest of judgment.
Other assignments are without merit and require no discussion.
After the appeal was filed appellant presented a motion in this court for a new trial, which, although inartificially drawn, we may treat as a motion to remand the case to the District Court for the purpose of permitting the court to consider the motion under the provision of rule 2 of the Criminal Appeals Rules. (
Reversible error not appearing, the judgment is affirmed. The motion to remand for consideration of the application for a new trial is denied.
On Motion for Rehearing.
The application for rehearing in this case is lengthy but raises only one point that requires consideration. It is alleged that the court was illegally organized for the purpose of hearing the appeal because Judge SIBLEY, who sat on the hearing of the appeal, had rendered judgment in the District Court denying an application by Lee for a writ of habeas corpus. It is contended Judge SIBLEY was ineligible under
Construing the statute, which alone governs, in Rexford v. Brunswick, 228 U.S. 339, 33 S.Ct. 515, 57 L.Ed. 864, the Supreme Court said: “The terms of the statute, before quoted, are both direct and comprehensive. Its manifest purpose is to require that the circuit court of appeals be composed in every hearing of judges none of whom will be in the attitude of passing upon the propriety, scope, or effect of any ruling of his own made in the progress of the cause in the court of first instance.”
From an unpublished opinion by Judge SIBLEY in the habeas corpus case it appears that the grounds on which habeas corpus was sought were that the trial was a nullity because defendant was insane at
The appeal in this case was from the judgment of conviction. One of the assignments of error pressed was the denial of a motion in arrest of judgment on the ground that appellant was insane. Conceding that Judge SIBLEY passed upon a similar question affecting appellant in the habeas corpus case, that is immaterial. In order to invoke the statute it must be shown that the question decided in the District Court was in the same case and is also presented for decision on appeal. The question considered and decided by Judge SIBLEY in the District Court was that the petitioner was not entitled to be released on habeas corpus and was in a separate and distinct case. That question was not presented on this appeal at all.
Appellant was represented by counsel on the hearing of this appeal. The case was elaborately argued and a voluminous brief was filed. Objection was not made to Judge SIBLEY‘S sitting on the appeal and the impropriety of his having done so is raised for the first time on the motion for rehearing. No doubt, had the slightest suggestion been made at the hearing on the appeal as to the impropriety, or even indelicacy, of Judge SIBLEY‘S sitting, he would have stepped aside, although not required to do so. It is too late to raise that question now after the case has finally been decided on appeal. Manifestly it was intended only to delay the ultimate decision of the case.
We consider that no question presented on the appeal was tried or heard by Judge SIBLEY in the District Court, within the letter or intent of the statute, and he was not ineligible to sit on the hearing of the appeal in this case. Delaney v. U. S., 263 U.S. 586, 44 S.Ct. 206, 68 L.Ed. 462; Tinkoff v. U. S. (C.C.A.) 86 F.(2d) 868-883.
The petition for rehearing is denied.
SIBLEY, Circuit Judge, took no part in the decision on the motion for rehearing.