SMITH v. UNITED STATES.
No. 10541.
Circuit Court of Appeals, Eighth Circuit.
May 4, 1936.
83 F.2d 631
There is urged upon us the existence of a presumption that at foreclosure sales the bid price is the fair market value of the property. Whether so or not, and this we do not decide, certainly the presumption by all familiar rules must disappear in the face of unchallenged and uncontroverted evidence that the fair value of the property is less. We know neither reason nor authority for such presumption being given conclusive effect. If so, foreclosure sales could never be set aside for inadequacy of price, however gross or shocking to the conscience such inadequacy might be.
The court in Helvering v. Missouri State Life Insurance Co., supra, made a distinction between surrender of mortgaged real estate by the mortgagor to the mortgagee and the purchase of the property by the mortgagee under foreclosure. It concluded that a transaction of the first kind produces no income by way of interest to the mortgagee, while one of the latter does. We are unable to grasp the principle which distinguishes them, and we think the differentiation will not withstand analysis. Where the defaulting mortgagor surrenders the mortgaged property in extinguishment of the debt, the mortgagee acquires as against him a clear title. Where the mortgagee buys the property at foreclosure, he does not get clear title, but one still encumbered by the mortgagor‘s right to redeem. It seems to us anomalous to hold that one who receives less derives income, while one who receives more derives none. Demonstrating its conclusion that the recipient of the surrendered mortgage derives no income from accrued interest, the court says: “If the rule were otherwise, a life insurance company, all of the loans of which were in default and which was obliged to take over from its mortgagors mortgaged lands of little value in order to save the expense and delay of foreclosure, would be in the same situation with respect to interest received as though all of its loans were good and the interest had been paid in cash.” We fail to see in what better situation is a life insurance company which not only is obliged to take over from its mortgagors lands of little value, but is in addition subjected to the expense and delay of foreclosure. If the illustration is persuasive in the one case, we are unable to see how it can be any less so in the other.
The theory of constructive receipt of income is not here applicable.
The decision of the Board is reversed. Conceiving it to be immaterial, the Board made no finding of fair value in respect to the foreclosed properties. Proper disposition therefore requires that the cause be remanded for further proceedings consistent herewith.
J. A. Tellier, of Little Rock, Ark. (H. R. Partlow and L. V. Rhine, both of Paragould, Ark., on the brief), for appellant.
M. D. Bowers, Asst. U. S. Atty., of Little Rock, Ark. (Fred A. Isgrig, U. S. Atty., of Little Rock, Ark., on the brief), for the United States.
Before SANBORN, VAN VALKENBURGH, and FARIS, Circuit Judges.
VAN VALKENBURGH, Circuit Judge.
In September, 1933, one Arthur E. York, of Corning, Ark., had on file with the Administrator of Veterans’ Affairs claims for accrued compensation because of injuries sustained by him in the military service of the United States in the World War. September 9, 1933, appellant received a letter from one E. L. Holloway, attorney for said soldier, requesting his aid in securing payment of the claim. September 25, 1933, appellant wrote Holloway that he thought it would be ad-
“Fee Agreement.
“For his/their professional services in the preparation and prosecution of my claim for accrued permanent and total disability compensation by proceeding in the Supreme Court of the District of Columbia, Court of Claims, or otherwise at his discretion I/we promise to pay William Wolff Smith, of Washington, D. C., and ———, of ———, ——— No. ———, cash, and ———, $———, forty (40%) per centum of the amount of such compensation received by me less the cash payment above mentioned, and I/we promise to advance to or reimburse him/them for any expenses incurred by him/them in the securing of evidence, filing fees, taking of testimony, printing of briefs, etc., in the prosecution of this claim, from the amount paid on said claim, or otherwise.
“Name: Arthur E. York.
“Witness
“E. L. Holloway,
“Date Dec. 1, 1933.”
December 7, 1933, appellant states that he contacted General Hines, Administrator of Veterans’ Affairs, and told him that he (Smith) had been retained to file a petition for a writ of mandamus in behalf of York, but thought the right to allowance was so clear that, if the Administrator would look into the matter personally, he would order the claim paid without a suit. The next day he wrote General Hines, inclosing the power of attorney and reviewing the reasons why he thought the claim should be paid. December 22, 1933, the Administrator wrote appellant returning the power of attorney unrecognized because appellant had not been admitted to practice before the Veterans’ Administration. In the same letter York‘s case was reviewed and his claim denied. As stated further by appellant, and as shown by certified copies of court files admitted in evidence, on January 24, 1934, appellant, as attorney for York, filed in the Supreme Court of the District of Columbia a petition praying that a writ of mandamus be issued and directed to Frank T. Hines, Administrator of Veterans’ Affairs
“On this day all the parties to this suit in person and by attorneys; all parties agree to waive trial by jury, and submit the cause to the court sitting as a jury. The court, after hearing the evidence upon the pleadings herein and exhibits thereto, finds for the plaintiff in the sum of $569.20, and that the plaintiff herein should pay all costs of this action.
“It is therefore by the court considered, ordered and adjudged that the Corning Bank and Trust Co. garnishee herein, shall be fully discharged from all liability upon the payment to the plaintiff William Wolff Smith of the sum of $569.20, that the plaintiff William Wolff Smith shall pay all costs of this action, and the remainder of the deposit of the defendant Arthur E. York, garnished, herein, shall be paid to the said Arthur E. York by the said Corning Bank and Trust Company and this judgment is fully satisfied.
“Neil Killough, Judge.
“O. K.
“Partlow and Rhine,
“Atty. for Plaintiff.
“C. T. Bloodworth,
“For Defendant.”
This judgment was satisfied by payment in full to appellant October 10, 1934. It is in evidence that York has received considerably more than $10,000 in cash and is now receiving $182.50 per month, and will do so for the remainder of his life.
January 24, 1935, an indictment was filed in the District Court of the United States for the Eastern District of Arkansas charging: “That on and prior to January 24, 1934, William Wolff Smith and Ernest L. Holloway assisted and rendered assistance to Arthur E. York, who was a veteran of the World War, in the preparation and execution of the necessary papers in the presentation to the United States Veterans Administration of a claim of the said Arthur E. York for certain moneys claimed to be due him as accrued permanent and total disability compensation under the pro-
This indictment was attacked by a motion to quash, which was overruled, as was also a motion for a bill of particulars. A jury was waived by written stipulation. The court found against appellant and assessed a fine of $400.
Appellant urges seven points in support of his appeal for reversal of the judgment against him: (1) Error in overruling the motion to quash the indictment; (2) error in overruling the motion for a bill of particulars; (3) error in admitting the written statement of defendant; (4) refusal to grant motions for a directed verdict; (5) refusal to grant defendant‘s requested declarations of law; (6) defendant‘s collection of a fee under the judgment of the state court was not a violation of any criminal statute of the United States nor of the statute under which he was indicted; (7) error in overruling the motion in arrest of judgment.
The statute under which this prosecution is brought appears as section 551,
Section 445 referred to (
The Supreme Court, in Lynch v. United States, 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434, held that this provision of the Economy Act was unconstitutional in so far as it affected policies of yearly renewable term insurance issued under the War Risk Insurance Act (40 Stat. 409), for the reason that such are valid contracts of the United States, are property, and that the rights of private individuals arising out of them are protected by the Fifth Amendment. The court further held that the dominant intention of Congress in enacting this repealing act was to abolish rights, not remedies. It is nevertheless the contention of appellant that, since pensions, compensation, and allowances are mere gratuities, which may be withdrawn at any time in the discretion of Congress, the repeal of such by section 17 of title 1 of the Economy Act (
Section 17 of title 1 of the Economy Act made provision for pension to certain classes of persons who served in the active military or naval service during the World War, and who are permanently disabled as a result of disease or injury incurred in line of duty in such service.
In our judgment the subject-matter here under consideration was not removed from the application of this statute. York‘s claim for compensation was filed and pending long prior to the passage and approval of the Act of March 20, 1933. The right to compensation of veterans disabled as the result of disease or injury directly connected with active military or naval service pursuant to the provisions of the laws in effect on March 20, 1933, is recognized in the Economy Act.
It is next urged that the indictment is defective in substance because it failed to set out what constituted “necessary papers“; that defendant charged and received a fee in excess of $10, and acted as attorney or agent of the veteran. With respect to the last of these specifications, it is to be noted that the statute in terms applies to “any person” as well as an attorney or agent who does the things prohibited. Appellant acted as an agent and attorney for York in whatever he did, and a joint fee in excess of $10 is stated. In general, an indictment for a statutory offense need only charge a defendant with acts in the substantial words of the statute sufficient to apprise him of the nature of the accusation; and, if it charges all the essential elements and ingredients of the offense, it is good as against a general demurrer. In our judgment, this indictment meets these demands of pleading. But, if an indictment fails to contain details sufficient to enable a defendant to prepare his defense and to protect him against a second prosecution, it may be challenged by special demurrer or other pleading tantamount thereto. In the instant case this was done by the motion to quash, which was overruled. A bill of particulars was requested to cure the alleged omission of details, and was likewise denied. In our opinion both motions might well have been granted.
“But even though the particularity prayed be denied, though a special demurrer be interposed and overruled, or, it would seem, a bill of particulars be requested and refused, nevertheless the judgment of conviction will not on this account be reversed if from the whole record it appears that no substantial prejudice to the defendant has resulted.” Myers v. United States (C.C.A.) 15 F.(2d) 977, and cases cited; Wong Tai v. United States, 273 U.S. 77, 82, 47 S.Ct. 300, 71 L.Ed. 545.
The overruling of demurrer or motion will not avail on error unless it appears “that the substantial rights of the accused were prejudiced by the refusal of the court to require a more restricted or specific statement of the particular made in which the offense charged was committed. Rev.St. § 1025 [
In the instant case defendants’ motion that appellee be required to produce for inspection all original papers and documents on which the government relied to prove the charges against them as alleged in the indictment was granted. There is nothing in the record indicating that appellant was taken by surprise at the trial or that his substantial rights were prejudiced in any way by the court‘s refusal to sustain the motion to quash or to require a bill of particulars. There was therefore no error in overruling the motion in arrest of judgment upon this ground.
Because of the circumstances attending the admission of appellant‘s voluntary statement made January 24, 1935, to a special agent of the United States Department of Justice, if for no other reason, the ob-
“The Court: So far as Smith is concerned, do you think there is any issue of fact that can be raised?
“Mr. Smith (the defendant): Are you going to introduce the statement I made?
“Mr. Bowers: Yes, sir.
“Mr. Smith: I think that amply covers the ground.”
Later, counsel for appellant said: “I think our affirmative defense is set out in the statement signed by the defendant Smith, there.” When the statement was offered, counsel for defense objected, as he said, merely for the sake of preservation of the record; the only announced basis of the objection being that the statement “would be admissible only for the purpose of impeaching the defendant.” The hearing was held in a somewhat informal manner by consent of both parties, and this technical objection is therefore entitled to little consideration.
Appellant requested four declarations of law, the refusal of which by the trial court is assigned as error. The first asked the court to declare that the Economy Act repealed all public laws granting compensation to World War veterans. The second asked a declaration to the effect that section 500 of the Act of June 7, 1924, as amended (
The proceeding brought by appellant as attorney for York presents something of an anomaly in pleading and practice. Under the World War Veterans’ Act of June 7, 1924, § 1, and § 5 et seq. (43 Stat. 607,
The Supreme Court in Lynch v. United States, 292 U.S. 571, 587, 54 S.Ct. 840, 847, 78 L.Ed. 1434, holding that this section concerns pensions, compensation allowances, and special privileges, to wit, gratuities, said: “The purpose of the section appears to have been to remove the possibility of judicial relief in that class of cases even under the special circumstances suggested in Crouch v. United States, 266 U.S. 180, 45 S.Ct. 71, 69 L.Ed. 233; Silberschein v. United States, 266 U.S. 221, 45 S.Ct. 69, 69 L.Ed. 256; United States v. Williams, 278 U.S. 255, 49 S.Ct. 97, 73 L.Ed. 314; Smith v. United States (C.C.A.) 57 F.(2d) 998. Compare Meadows v. United States, 281 U.S. 271, 274, 50 S.Ct. 279, 74 L.Ed. 852, 73 A.L.R. 310.”
Inasmuch as the granting of pensions and compensation allowances are mere gratuities, which may be withdrawn at will, it would seem clear that “Congress can impose such limitations in this connection as it may deem desirable.” Purvis v. United States (C.C.A. 8) 61 F.(2d) 992, 996, 998; Margolin v. United States (C.C.A. 2) 3 F.(2d) 602. If, by his allegations in the petition for a writ of mandamus, appellant sought to review the decision of the Administrator under the special circumstances suggested in the opinions of the Supreme Court above cited, he at least adopted the wrong remedy for that purpose. Mandamus seeks, not to control the exercise of discretion, but only to compel ministerial action unlawfully or arbitrarily withheld. “Courts cannot control exercise of discretion vested in Veterans’ Bureau respecting adjudication of claims for disability compensation.” Smith v. United States, supra. In his opinion in that case Judge Parker makes a very clear analysis of the law upon this subject, which was the same in this respect both before and after the enactment of the Economy Act of March 20, 1933. We must conclude that the filing of this petition for mandamus was not, and could not be, seriously considered as designed to do more than to bring pressure to bear upon the Administrator to make the award applied for, a quasi judicial act involving the exercise of his discretion.
This brings us to a consideration of the most serious question raised by the error assigned to the action of the court in overruling appellant‘s motion for a verdict and judgment upon the record as made up, “on the ground there is no evidence that he has committed the crime as set out in the indictment on which he is required to stand trial.”
Referring again to the indictment, the offense specifically charged is that defendants assisted and rendered assistance to the veteran “in the preparation and execution of the necessary papers in the presentation to the United States Veterans’ Administration of a claim of the said Arthur E. York for certain moneys claimed to be due him as accrued permanent and total disability compensation“; that defendants did unlawfully charge and receive from the said Arthur E. York the sum of $569.19 as a fee and compensation “for furnishing such assistance to the said Arthur E. York in the preparation and execution of said papers in the presentation of said claim“; that said sum is in excess of the sum which said defendants were entitled to charge and receive “for such assistance so rendered by them.” (The italics are ours.) The pleader has thus set out a description of the specific means by which the offense was consummated. What are the necessary papers contemplated by the Congress in the enactment of this statute? The word “necessary” must be accorded some substantial meaning. The regulations of the Veterans’ Bureau undoubtedly require certain essential papers to be submitted, an application for relief, proof of the veteran‘s service, his honorable discharge, and his permanent and total disability, service connected, etc.
In Negron v. United States (C.C.A. 1) 30 F.(2d) 584, 585, the following instruction was considered and approved: “The law reads: ‘Assistance * * * in the preparation and execution of the necessary papers.’ That does not mean that the defendant prepared all of the papers, or that he necessarily prepared any of the papers. If he gave his assistance in such preparation and execution, that is all that is required.‘”
The court said: “It is not clear from the record what papers are referred to in the requested instruction, but they
“As a general rule the means, or the manner of accomplishing the criminal intent and purpose, are matters of evidence for the jury, and not necessary to be set forth in the indictment. Where, however, it is necessary or where the pleader elects to set forth by averments in the indictment or information, a description of the instrument or the means by which the offense was consummated, then the evidence must correspond with the averments in general character and operation.” 1 Wharton‘s Criminal Evidence (10th Ed.) par. 91, p. 277.
“If an offence may be committed in either of various modes, the party charged is entitled to have that mode stated in the indictment which is proved at the trial; and when one mode is stated and proof of the commission of the offence by a different mode is offered, such evidence is incompetent by reason of variance.” Commonwealth v. Richardson, 126 Mass. 34, 40, 30 Am.Rep. 647.
The same rule is announced by this court in Naftzger v. United States, 200 F. 494, citing Wharton‘s Criminal Law, and State v. Crogan, 8 Iowa, 523.
While we by no means approve the methods employed in the exaction of this fee, which was clearly unauthorized by any provision of section 551, and while it is apparent that the claim should have been, and probably would have been, defeated in the state court if the case had proceeded to trial without agreement between the parties, nevertheless we are constrained to hold that the undisputed evidence fails to establish the specific offense charged, and that the judgment below must be reversed and the case remanded for further proceedings not inconsistent herewith. It is so ordered.
FARIS, Circuit Judge (concurring).
I concur in the reversal of this case, for the reason that the charge set out in the indictment was not borne out by the facts as disclosed by the evidence in the case, which facts were not at all in dispute.
Defendant was charged by the indictment with having exacted and received more than $10 for his services in assisting and rendering assistance to one Arthur E. York, a veteran of the World War, “in preparation and execution of the necessary papers in the presentation to the United States Veterans Administration of a claim of the said Arthur E. York for certain moneys claimed to be due him as accrued permanent and total disability compensation.”
The undisputed evidence was that the thing, and the only thing, done by defendant, was to prepare and file an action in mandamus in the Supreme Court of the District of Columbia against the Veterans’ Administrator. So far as the record discloses, defendant never prepared or filed, nor has he ever assisted or rendered assistance in the preparation or filing of any paper or papers, in the Veterans’ Administration. What he was employed to do and what he did was wholly different. He filed an action in mandamus in a court, in an effort to compel an administrative officer to perform a mere final action or administrative duty which the law, as defendant may well have deemed, made it obligatory on such officer to perform, as soon as that officer had found all of the facts to warrant performance and final action.
It is not at all denied, but categorically admitted in the answer filed in this mandamus suit, that on October 12, 1931,
I am of the view that section 5 of title 1 of the Act of March 20, 1933 (
I think it is settled that the Supreme Court of the District of Columbia has the right to exercise practically the same broad power in the matter of actions for mandamus as is exercised by the state courts of general and original jurisdiction. 18 R.C.L. 953; Smith v. United States (C.C.A.) 57 F.(2d) 998. That a federal District Court, except in aid of its jurisdiction, has no such power, is of course settled.
Before the passage of section 5, I should have held the opinion that, when all of the facts and the law to entitle a soldier to compensation had been found in favor of the soldier, and yet, notwithstanding the Administrator capriciously, arbitrarily, and recalcitrantly refused to grant the compensation, he could have been compelled by mandamus to act and to cause such compensation to be paid. Silberschein v. United States, 266 U.S. 221, 45 S.Ct. 69, 69 L.Ed. 256; Smith v. United States, supra. Here, however, as already indicated, the Administrator was of the view that total and permanent disability for the purposes of warranting recovery on a war risk insurance policy was a different thing from such disability for the purpose of awarding compensation to the soldier. Defendant, not having the benefit of the Lynch Case, supra, took the view that in so assuming the administrator was in error. In a state court in a situation similar in principle, mandamus would have lain, and but for section 5 I think it would have lain here. The answer on the merits in the mandamus suit, after a merely formal and perfunctory objection to jurisdiction, rather clearly shows that counsel for the Administrator must have been of the opinion that mandamus would lie. So I think defendant may not be charged with an attempt to obtain an unlawful fee by resorting to evasion of the statute and subterfuge. Even a charge of ignorance is subject to some doubt, and much more a charge of bad faith, and ordinarily ignorance is not a crime.
I am not saying that the matter of bad faith has any compelling legal weight in the case; because, after all, the single question is whether the statute on which the prosecution of defendant was based applies to what was done by him. I cannot be brought to believe that it does; hence I think the motion for a finding that defendant was not guilty should have been sustained by the trial court.
No criminal statute should be so distorted by the construction put upon it by prosecuting attorneys as to be made to apply to acts not within its plain terms. This, as to a criminal statute, has been said so often by the courts as to render reiteration trite. No citizen will be protected against trouble and dishonor, if it shall become
It was for a time somewhat in doubt whether a statute fixing a fee for legal services was not constitutionally invalid, for that it was an interference with what had long been deemed the free right to make a contract. Calhoun v. Massie, 253 U.S. 170, 40 S.Ct. 474, 64 L.Ed. 843. This is another reason, in addition to the fact that the statute is highly penal, for construing the statute narrowly and for not extending it by construction beyond its rather plain terms.
So I concur in reversing this case on the single simple ground that what the defendant did was not covered by the statute on which he was prosecuted and convicted.