18. CRIMINAL LAW (§ 1038*)-REQUESTS TO CHARGE-NECESSITY.

Defendant cannot object on appeal that the charge was not sufficiently specific as to any given matter, in the absence of a request for a more specific instruction at the trial.

[Ed. Note. For other cases, see Criminal Law, Cent. Dig. § 2646; Dec. Dig. § 1038.*]

Sanborn, Circuit Judge, dissenting.

In Error to the District Court of the United States for the Western District of Missouri.

Frank H. Horn and others were convicted of devising a scheme to defraud, to be effected by means of the post office establishment, and they bring error. Affirmed.

Chester H. Krum and Frank Hagerman (James S. Botsford, Chas. A. Loomis, Wash Adams, and Francis G. Hanchett, on the briefs), for plaintiffs in error.

A. S. Van Valkenburgh, U. S. Atty.

Before SANBORN and ADAMS, Circuit Judges, and REED, District Judge.

REED, District Judge. The plaintiffs in error, Frank H. Horn, Elisha S. Horn, Raymond P. May, and S. H. Snider, who will be called the "defendants," were convicted upon an indictment which charges them jointly with John E. Horn with having violated section 5480, as amended, of the Revised Statutes of the United States (U. S. Comp. St. 1901, p. 3696), and they prosecute this writ of error to reverse such judgment. John E. Horn does not complain of the judgment against him and does not join in the prosecution of the writ of error. Upon being arraigned the defendants demurred to the indictment, which was overruled, and this ruling is the first of the many errors assigned.

The indictment is in three counts. Count 1 is fairly representative of all, and that charges that the defendants, on or about September 15, 1906, devised a certain scheme and artifice to defraud H. E Deaner, Fred E. Hess, and John J. McKelvey, and others, whose names are to the grand jurors unknown, and the public generally, to be effected by means of the post office establishment of the United States, which scheme is alleged to be substantially as follows: That the defendants and others had theretofore organized a corporation under the laws of the territory of Arizona, known as the Central Mining & Development Company of Arizona, with a capital stock of 10,000,000 shares of the par value of $1 each, which said corporation was to acquire certain. mining properties in Pinal county, Ariz., known as the "Two Queens" group. That of said 10,000,000 shares of stock 5,200,000 shares were to be delivered to one Gardom as the purchase price of said property, 4,000,000 shares were to be set aside as treasury stock of said company, and the remaining 800,000 shares were to be allotted to defendants and others (in stated amounts) as remuneration for services in the promotion of said company and the sale of its stock. That the defendants were thereupon, by means of circulars and written and printed

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

matter to be sent through the post office establishment of the United States to the persons named and to the public generally, to present stock in said company for sale at prices ranging from 10 to 25 cents per share and solicit subscriptions to said stock at said prices; that the defendant Elisha S. Horn was to conduct the advertising of said mining company and its property through the public press and by means of letters, circulars, and printed matter, and receive as remuneration therefor 50 per cent. of all moneys received from the sale of stock, and in addition thereto 100,000 shares of said promotion stock. That Frank H. Horn was to act as the fiscal agent of said company and receive for his services 500,000 shares of said promotion stock. That it was further a part of said scheme that defendants were to represent to said persons named and to the public generally that the mining property of said company had produced ore assaying $200,000 to the ton; that said ore was a sample of a mineral ledge of great size running through said "Two Queens" group of properties; that said company had the ore and lots of it to show such assay; that said mines had been so far developed that the ores therein were no longer mere guesswork but were known to exist in paying quantities; that various development shafts had been sunk; that the two main shafts had reached ore of rich value; that the same was being sacked and saved until it could be handled in the plants of the company; that the officers in charge of said enterprise were mining men of great capacity and long experience; that such properties had been thoroughly examined and investigated by them; that the value of said property had been shown conclusively and had stood the most rigid tests known to the mining world. It is then alleged that in truth and in fact there were no ledges in said "Two Queens" group of which ore assaying a value of $200,000 to the ton was a fair sample; that said company had no ore in large quantities to show such assay; that no ores had been produced from said mines in sufficient quantity for shipment; that no shafts had been sunk or tunnels driven which had reached ore in paying quantities; that in truth and in fact at all times herein mentioned said mines were only at the prospecting stage; that no quantity of ore in said properties had been disclosed that would make certain or even probable any ore body in such quantity and of such value as to insure any practical value to said mining properties, as they, the defendants, then and there well knew; that no experienced or competent mining authorities had examined or tested said mining properties; that the work of development had not proceeded sufficiently to permit the same to be done, nor has it yet proceeded sufficiently to warrant any definite statement as to the value of said properties; that the officers in charge of said enterprise had no practical knowledge of mines and mining as they, the defendants, well knew. It is also alleged:

That in truth and in fact it was never at any time the purpose of the defendants to develop said property, or any part thereof, as a real bona fide mining property so that the same might become a producing and paying mine; but, on the contrary, that it was the unlawful purpose of them, the defendants, to sell and dispose of said treasury stock for the purpose of getting possession of 50 per cent. of the purchase price thereof as aforesaid, and also for their own personal use and benefit to sell and dispose of said so-called promotion stock so to be given to them as aforesaid, and in general that it was

the purpose and intent of said defendants, by means of the false and fraudulent representations aforesaid, to induce the said H. E. Deaner, Fred E. Hess, and John J. McKelvey and others, and the public generally, to purchase the stock of said Central Mining & Development Company, and to pay the money for such purchase over to them, the said defendants, and that they, the said defendants, should convert the same to their own personal use and benefit, without rendering to the said purchasers a good and valuable equivalent therefor."

It is then alleged that the defendants having so devised said scheme and artifice to defraud and for executing the same and attempting so to do, on or about the 30th day of October, 1906, at Kansas City, Mo., did unlawfully place, and caused to be deposited, in the post office of the United States there, a certain letter to be sent and delivered by the said post office establishment of the United States addressed to H. E. Deaner, Saginaw, Mich., which letter is set out in full as a part of count 1.

In count 2 the letter set out is dated October 27, 1906, and addressed and mailed to Fred E. Hess, St. Louis, Mo.

In count 3 the letter is dated January 15, 1907, and addressed and mailed to John J. McKelvey, Pawtucket, R. I. The allegations of the indictment are thus stated at some length in view of the objections urged against it, and the other errors assigned in support of the writ of error.

The objections urged against the indictment are: (1) That it fails to allege that the stock of the Central Mining & Development Company (hereinafter called the "mining company") was not of the value for which it was to be sold by the defendants; (2) that it is not alleged that the defendants did not believe, or have any reasonable grounds to believe, that it was of such value, or that the other representations to be made by them were true; (3) that the alleged representations so to be made as to the stock, or the mining properties, are mere matters of opinion only; and (4) that there is no sufficient denial of the truth of the alleged representations that were to be made by the defendants.

Section 5480 of the Revised Statutes of the United States as amended (U. S. Comp. St. 1901, p. 3696) denounces as a crime the use of the United States mails in an intentional effort to defraud. The essentials of an indictment under the section necessary to be now stated are: (1) That the person charged must have devised some scheme or artifice to defraud; (2) that he intended to consummate the same by opening or intending to open correspondence or communication with some other person or persons through the post office establishment, or by inciting such other person to so open communication with him; and (3) that in and for executing such scheme, or in attempting to so do, he shall either place or cause to be placed in a post office of the United States, intending it to be carried and delivered by the United States mail service to some other person, a letter, circular, or advertisement, or shall receive one from another through such mails. Stokes v. United States, 157 U. S. 187, 188, 189, 15 Sup. Ct. 617, 39 L. Ed. 667; Miller v. United States, 66 C. C. A. 399, 133 Fed. 337-345; Brown v. United States, 74 C. C. A. 214, 143 Fed. 60; Brooks v. United States, 76

C. C. A. 581, 146 Fed. 223-227; Lemon v. United States, 90 C. C. A. 617, 164 Fed. 953-957; Erbaugh v. United States, 97 C. C. A. 663, 173 Fed. 433.

While the formation of some scheme or artifice to defraud is an essential element of the offense, the gist of the offense is the use or attempted use of the United States mails for the forbidden purpose. It is only necessary, therefore, to charge the scheme with such particularity as will enable the accused to know what is intended, and to apprise him of what he will be required to meet upon the trial; and if it is distinctly alleged that the United States mails are to be used, or are intended to be used, in consummating such scheme, that is sufficient. Durland v. United States, 161 U. S. 306-315, 16 Sup. Ct. 508, 40 L. Ed. 709; Brooks v. United States, 76 C. C. A. 581, 146 Fed. 223-227; Lemon v. United States, 90 C. C. A. 617, 164 Fed. 953-957; Ewing v. United States, 69 C. C. A. 61, 136 Fed. 53–56.

It is not directly alleged in the indictment that the stock of the runing company was not of the value for which it was to be sold by the defendants, or that the defendants did not believe, or have reasonable cause to believe, that it was of such value, or that the other representations to be made by them were in fact true. But the value of the stock of the mining company would depend either upon the producing capacity of the mine or its value as an undeveloped mining property. It is plainly alleged that it was not a producing mine and that it was only at the prospecting stage. When, therefore, it is further alleged, as it is, that the mine did not have ore in the quantity or of the quality, and that the shafts had not been sunk in it, both of which it is alleged was a part of the scheme of the defendants to falsely represent to prospective purchasers of the stock, it is sufficiently alleged that the stock of the mining company was not of the value that the defendants were to falsely represent it to be. These statements or representations so to be made were not mere matters of opinion, but were' statements of fact, as to the quantity and quality of the ore in, and of the work that had been done upon, the mine upon which a reasonable estimate might be based as to the value of such stock or of the mining property which it represented.

Whether or not the defendants in good faith believed, or had reasonable grounds to believe, that the alleged statements or representations to be made by them were true, is matter of defense and not necessary to be negatived in the indictment. Lemon v. United States, 164 Fed. 953, 90 C. C. A. 617; Ewing v. United States, 136 Fed. 53, 69 C. C. A. 61; State v. Williams, 70 Iowa, 52, 29 N. W. 801; 1 Bishop's New Cr. Pro. §§ 326-513.

However, the indictment alleges that such representations so to be made were in fact false and untrue and known by the defendants to be so. This leaves no room for saying that they might honestly have believed that they were true, or that they might have had reasonable grounds for so believing. Such averment is a sufficient allegation, if it is necessary to be made, that the defendants did not in good faith believe, or have reasonable grounds to believe, that the representations to be made by them were true.

Finally it is urged that the denial of the truth of the alleged false representations consists at best of mere "negative pregnants," which are wholly insufficient to constitute a denial of such representations. This, if a defect at all, is one of form only or of the manner in which the denial is alleged. A negative, or affirmative, pregnant is a form of issue presented by a pleading in civil actions at common law in which a negative or affirmative allegation admits by implication of something favorable to the adverse party. Under the strict rules of common law pleading, such denials or affirmations were frequently held to be insufficient because they left it uncertain as to which of two or more matters the pleader intended to contest. The rule as such was inapplicable in criminal cases; but in those cases it was of course required that the indictment be direct and certain in charging the offense alleged to have been committed; and this is still the rule as to statutory offenses. To say, therefore, that an allegation in an indictment is but a "negative pregnant," is only to say that the allegation is indefinite or uncertain, which may or may not be a defect, depending upon the nature of the allegation and its relation to, or connection with, other allegations. While some of the negative allegations of this indictment, standing alone, may impliedly admit an affirmative of some matters, the allegations as a whole are a full and complete denial of the truth of all of the representations that defendants were to make respecting the stock and property of this mining company and sufficiently show the purpose of the defendants in offering such stock to the public for sale., There is no uncertainty as to the meaning of these allegations, and they sufficiently apprise the defendants of what they are required to meet and are sufficiently explicit to enable them to plead the judgment thereon, whatever it might have been or may be, in bar of a future prosecution for the same offense.

Section 1025 of the Revised Statutes of the United States (U S. Comp. St. 1901, p. 720) provides that:

"No indictment found or presented by a grand jury in

any court of the United States, shall be deemed insufficient, nor shall the trial, judgment, or other proceeding thereon be affected by reason of any defect or imperfection in matter of form only, which shall not tend to the prejudice of the defendant."

This of course is not to be construed as permitting the omission from the indictment of any matter of substance; but it is applicable where the only defect complained of is that some element of the offense is stated loosely and without technical accuracy. Dunbar v. United States, 156 U. S. 185-192, 15 Sup. Ct. 325, 39 L. Ed. 390.

The true test therefore is, not whether the indictment might possibly have been made more certain, but whether it contains every element of the offense intended to be charged and sufficiently apprises the accused of what they must be prepared to meet, and, in case any other proceedings are taken against them for a similar offense, whether the record shows with accuracy to what extent they may plead a former acquittal or conviction. Cochran v. United States, 157 U. S. 286– 290, 15 Sup. Ct. 628, 39 L. Ed. 704; Miller v. United States, 133 Fed.