157 F. 419 | E.D. Wis. | 1907
This is a habeas corpus proceeding brought by the defendants, James M. Pereles, Thomas J. Pereles, Guy
Upon the hearing of the habeas corpus proceeding, the petitioning defendants raised the question of venue and of the jurisdiction of the District Court for the District of Colorado, on the ground that the alleged offense was found by the commissioner to have been committed and was actually committed in Milwaukee, Wis., and not in Colorado, and that the commission of overt acts in Colorado would not give the Colorado court any jurisdiction to try the defendants in that district. They also questioned the sufficiency of the indictment,. and urged that neither the indictment nor the testimony before commissioner shows any conscious participation of the petitioning defendants within three years next before the finding of the indictment.
In an examination by commissioner under section 1014, Rev. St., the indictment is presumptive evidence of probable cause as against, the defendants. Hyde v. Shine, 199 U. S. 62, 25 Sup. Ct. 760, 50 L.
The first question to be considered is the substantial sufficiency of the indictment, for if it states no offense the petitioners should be discharged. The indictment charges the conspiracy or agreement, the means to be employed, and the overt acts. In effect it states: Defendants unlawfully, corruptly, wickedly, and maliciously conspired, combined, confederated, and agreed together. They so conspired to obtain from the United States, for the Wisconsin Fuel & Mining
In this connection it may also be stated that the evidence taken by the commissioner clearly shows that the petitioners were innocent of any intention to commit any fraud or do any wrong. There is no indication of concealment. In December, 1902, shortly after the scheme of acquiring coal lands was launched, they published and distributed a prospectus in which it was stated that it was the purpose of the directors to avail themselves out of the proceeds of the first sales of the treasury stock for the purpose of completing the payments to the government for the entered lands. This circular, in the absence of any charge of fraud, concealment, or wrongful intent in the indictment, and of any evidence of scienter, or suspicion of any consciousness of wrongdoing in the evidence, must certainly acquit defendants of any intentional fraud. The commissioner found that no wrongful intent was shown, but held that this question was one for the trial court in Colorado. If, therefore, petitioners are to be held for trial, it is because the acts done by them operate as a fraud, so that a corrupt intent is part of and implied from the very acts themselves. The acts forbidden, as will be seen later, not being themselves criminal, and there being no charge of evil intent, or that the acts were knowingly, intentionally, or corruptly done, and it appearing from the evidence that -the defendants in fact acted innocently, the question is presented whether acting in ignorance of the alleged prohibition of the statute is cognizable as criminal conspiracy. See State v. Cutter, 36 N. J. Law, 125; People v. Powell, 63 N. Y. 88; People v. Flack, 125 N. Y. 324, 26 N. E. 267, 11 L. R. A. 807. In order to get the force of the indictment it is necessary to examine the coal land purchase statute, being sections 2347-2350, Rev. St., and the conspiracy statute, section 5440. The coal land act, passed March 3, 1873 (Act March 3, 1873, c. 279, 17 Stat. 607 [U. S. Comp. St. 1901, p. 1440]), in effect provides that every adult citizen, or one who hasi declared his intention to become such, or any association of
The indictment does not charge a conspiracy to commit an offense against the United States, because no statute has made criminal any of the acts charged, nor are there any common-law crimes or constructive crimes against the government. U. S. v. Eaton, 12 Sup. Ct. 764, 144 U. S. 677, 36 L. Ed. 591; U. S. v. Hudson, 7 Cranch, 32, 3 L. Ed. 259; U. S. v. Lacher, 134 U. S. 624, 10 Sup. Ct. 625, 33 L. Ed. 1080; Todd v. U. S., 158 U. S. 382, 15 Sup. Ct. 889, 39 L. Ed. 982. The first sentence of the conspiracy statute may therefore be dismissed as not material to the inquiry, leaving only for determination whether the obtaining of the land for the corporation in the manner charged was a fraud against the United States. What is it to defraud the United States, in any manner or for any purpose ? Judge Deady defined the word as follows: To defraud the United States is to deprive or divest it of any property, money, or thing otherwise than as the law requires and allows. U. S. v. Thompson (C. C.) 29 Fed. 86. The only basis for this indictment is that defendants conspired to vest in the corporation a greater amount of land than the coal land purchase act permits, and thus divest the government of its public lands in a manner not allowed by law. The vital question therefore is whether the plan was to enable the corporation to violate the law limiting its power to enter public coal lands, or whether it was to combine or consolidate the separate titles into one legal ownership in the corporation, the patentees taking back shareholders’ interests in the shape of capital stock.
It is plain that there is nothing in the coal land statute intended to prevent either individual or corporation from acquiring any amount of coal land which it may be possible to pay for or secure. All that is meant is that neither one shall, either by a direct entry, in the grantee’s own name, or indirectly by procuring an entry by an agent or servant, take from the United States more than the limited quantity. An individual having exercised his right of entry by securing 160 acres may buy of others by ordinary purchase as much more as he pleases; but he cannot acquire an acre from the government. If he does so, either by direct application in his own name, or, by
“Assignments of the right to purchase will be recognized when properly executed. Proof and payment must be made within the prescribed period, which dates from the first day of the possession of the assignor who initiated the claim.”
This practice is changed in the circular of 1907, which provides that the assignment of a preference right of entry will not thereafter be recognized. It was not until 1907 that any provision was made in the rules requiring in the declaratory statement a clause that the application was made for the exclusive benefit of the applicant, and not, directly or indirectly, in whole or in part, in behalf of any other per-son. It is easy to see how the practice of the office, down , to 1907, was calculated to create such an innocent though mistaken belief as existed in this case, that it was entirely proper and lawful for entry-men to sell their claims. To apply now, in 1907, the changed rules, in place of the former liberality, is somewhat harsh, savoring, to some extent, of an ex post facto proceeding. Indeed, it is difficult to conceive how Congress could have adopted any policy except that of free and unhampered alienation, without destroying the practical value of the coal lands. If the right to sell had been so restricted as to prohibit individuals to hold more than 160 acres, or corporations more than 320 acres, the field of transfer would be so restricted as to seriously impair the favored power of sale, and a great part of the value of the lands would be thus taken away. It is well settled that Congress has no power or authority over land after patent issued. Morgan v. Rogers, 79 Fed. 577, 25 C. C. A. 97, writ of error dismissed Rogers v. Morgan, 173 U. S. 702, 19 Sup. Ct. 879, 43 L. Ed. 1185; Johnson v. Drew, 171 U. S. 93, 100, 43 L. Ed. 88, 18 Sup. Ct. 800.
It does not appear in this case, either from the indictment or evidence taken by the commissioner, that the corporation made entries through agents or dummies. On the contrary, the proof is that certain of the defendants, nine in number, having made applications for coal lands, and having the right to enter them on payment of the government price, made a proposal to the corporation to sell their interests or preference rights in the lands for $350,000 stock for their claims, amounting to about 9,300 acres of coal land, oil land, and mineral land. This proposal was accepted by the corporation December 12, 1902, and the corporation proceeded to acquire the title to a considerable part of the lands covered by the proposition. As to the coal lands the method employed was for the company to furnish the money to complete the entries in the names of the respective claimants, by whom the money was paid at the land office, and upon patents issuing to them they conveyed to the corporation. Had any evil intent been present, any fraudulent purpose, any consciousness of wrongdoing, any concealment or false representation, it might not be difficult to find in these facts a fraudulent and corrupt intent to defraud the United States by fictitious, simulated, or dummy entries, in which the corporation was the real entryman, and the ’ defendants merely
In all the cases which have occurred under the coal land statute, there was actual fraud, and perjury, and dummy entrymen. In U. S. v. Trinidad Coal & Coking Co., 137 U. S. 160, 11 Sup. Ct. 57, 34 L. Ed. 640, which was a bill in equity to set aside patents, the corporation hired its own servants and officers, some of whom had had the benefit of the law, to take up and convey to it coal lands. There was fraud and perjury and indirect entry through dummy claimants. In U. S. v. Lonabaugh, U. S. District Court of Wyoming, July 19, 1907 (unreported), a conspiracy was charged to be carried out by defendants procuring entrymen to make false, fictitious, and fraudulent entries and convey to some one of defendants, or to a corporation, in collusion with defendants and for their use and benefit, thereby enabling defendants or said company to fraudulently acquire from the United States large tracts of coal lands in excess of the amount allowed by law. The second count of the indictment charged a fraudulent, fictitious, and dummy entry, under the homestead act, alleging that the entryman never made any settlement or improvement, nor had any residence on the land. The court charged the jury that the power of sale, and of purchase of coal lands is absolute and unrestricted, but that neither an individual nor corporation having once entered its quota could acquire additional lands by getting some one else to acquire the title for their benefit. The case is thus made to turn on the vital point of this case, whether the corporation here interested purchased the lands, or acquired them by indirect or dummy entries. •And in U. S. v. Robbins, U. S. District Court of Utah, Sept. 2, 1907 (unreported), the indictment charged a conspiracy to acquire lands by fictitious and dummy entries made by other persons, with money furnished by defendants and in secret trust for them, with intent to defraud the United States. The indictment was sustained on demurrer by Judge Marshall, who held that a conspiracy to defraud, in order to fall within the prohibition of section 5440, must contemplate active deception, and not merely a failure to disclose all the facts, provided nothing was done to mislead. But he further held that the gist of the conspiracy there charged was to give the entries a false appearance for the purpose of misleading, under the rule applied in Stewart v. Wyoming Ranche Co., 128 U. S. 383, 388, 9 Sup. Ct. 101, 32 L. Ed. 439, and Tyler v. Savage, 143 U. S. 79, 12 Sup. Ct. 340, 36 L. Ed. 82. ■It-will be observed that'in all of these cases ruled under the coal land statute* the entries were indirect and fictitious, and that active fraud was employed, ■ with intent to knowingly and willfully defraud the •United! States-, while, in this case all of - these odious ■ elements are entirely absent. ■
It is, however, urged in this- case, with much persistency and abili'ty, that the scheme disclosed in the .indictment and evidence before
The first plan of disposal was by cash entry after auction sale, which finally took permanent form in the act of April 24, 1820, and remained in force for 70 years. Its great purpose was to create small tenures — small estates in the possession of individual owners — rather than the creation of large estates in single ownership, involving leases and tenants, and possibly slave labor. The auction feature secured fair play by giving all an equal opportunity to. bid. Eldred v. Sexton, 19 Wall. 195, 22 L. Ed. 146. At the end of a short period the public sale was closed, and all unsold lands offered at cash entry. While any one might buy all he could pay for, yet as there was no incentive to acquire large estates, no transportation, little money and no agricultural machinery, the cash entry act operated to create in the northwestern territory free proprietors by the million, and thus hasten the civil war, and dominate the settlement of the stupendous questions of national sovereignty, state rights, and slavery. This happy policy of creating small tenures was worked out by natural economic forces, operating upon and in harmony with the cash entry act, rather than by anything written in the act itself. But by the pre-emption act of 1841, and the homestead act of 1862, the policy of encouraging small holdings is expressly adopted, and secured by rigid safeguards. The pre-emption law, passed after the flood tide of entries of 1836 had somewhat subsided, provided one pre-emption for one claimant, required an affidavit that he had not settled to sell on speculation, and that he had not made any contract or agreement by which the title he might acquire should inure to another’s benefit. It also contained a prohibition of sale before patent, which, as already seen, was restricted by the Supreme Court in Myers v. Croft to mean sales before certificate, or sales of the right of entry. The purpose of this act was thus to secure fair play by giving all an equal chance, to giye one person only 160 acres, to continue the important policy of creating small estates, and to relieve conditions which had grown up under the cash entry law in certain localities favored by nature as prospective centers of population, by preventing speculation. Although the pre-emption act contained sweeping provisions encouraging small tenures, which are entirety wanting in the coal land act, no case has ever decided and no one ever supposed that it was intended to prevent monopoly. Such an inference would have been utterly inconsistent with the existence of the free and favored power of unrestricted alienation, so greatly extended in Myers v. Croft. A monopoly, as generally defined or understood, is the exclusive control of supply and price, due either to a single ownership of a large part of the sources of supply, or unity of action among a large proportion of the owners of such sources. With monopoly in this sense neither
No criminal conspiracy appearing either in the indictment or evidence, and no probable cause for believing petitioners guilty, all of the petitioning defendants should be discharged from imprisonment.
Two other questions are presented, and have been fully argued: Venue or jurisdiction, and the statute of limitations. The commissioner decided that the alleged conspiracy was formed in Wisconsin, and this conclusion is fully approved. No other is possible from the evidence. But the commissioner further held that overt acts in Colorado transferred the locus of the conspiracy to Colorado, so that the allegation of the indictment that the conspiracy was formed in Colorado could thus be proved. He thus held that there was evidence upon which a jury might convict in that state, assuming, as he did, that a crime had been actually committed.
As to the statute of limitations the commissioner decided in conformity to the rule of Ware v. U. S. (C. C. A.) 154 Fed. 577, that overt acts occurred within three years before the finding of the indictment, and were done with the conscious participation of defendants; and his conclusion was that the prosecution is not barred by the statute of limitations.
An order will be entered discharging the defendants.
