United States, Cobb v. (C. C. A.).. United States, Davies, Turner & Co. v. (C. C.).... 641 298 169 United States v. Winter & Smillie (C. C.) 169 United States v. W. T. Mason Lumber Co. (C. C.)..... United States, Deutsch v. (C. C.)... 290 United States, Downing & Co. v. (C. C.).. 447 United States v. Erie R. Co. (C. C. A.).. 50 United States v. Foo Duck (C. C. A.)... 856 United States, Grey v. (C. C. A.). 101 United States, G. Cuccio Di G. & Co. v. (C. C.).... 304 United States, Harper & Bros. v. (C. C.) 289 United States, Hensel, Bruckmann & Lorbacher v. (C. C.).. 170 United States, Hibbard v. (C. C. A.). 66 United States, Jaeckel & Sons v. (C. C.) 292 United States v. Johnston (C. C.)..... 635 United States. Julius Wile & Co. v., two cases (C. C.).. United States v. La Fetra, two cases (C. ............. 714 United States, Yamanaka & Co. v. (C. C.) 249 United States Fidelity & Guaranty Co., United States v. (C. C.)... 268 United States Gypsum Co. v. Hoxie (C. C.) 504 Van Deventer v. Lott (C. C.). . . . . ... .. . 574 Wabash R. Co. v. Compton (C. C. A.).. 17 Wabash R. Co. v. United States (C. C. A.) 864 Wadleigh, United States v. (C. C.)....... 169 Walker, Canadian Northern R. Co. v. (C. C. A.). 346 Wallach Bros., Holeproof Hosiery Co. v. (C. C. A.). 164 297 859 Warren Bros. Co. v. Montgomery (C. C.).. 414 Waterbury Buckle Co. v. Aston (C. C.).. 672 Waters-Pierce Oil Co., Dempster v. (C. C. A.).. Wells, The Marshall O. (D. C.). Werner Co., Encyclopedia Britannica Co. v. (C. C.). 353 984 .1012 676 206 524 168 United States v. Lehn & Fink (C. C.)... 171 .... Westen Mfg. Co., Hartford v. (C. C.). 164 466 922 CASES ON REHEARING. CASES IN THE UNITED STATES CIRCUIT COURTS OF APPEALS IN WHICH REHEARINGS HAVE BEEN GRANTED OR DENIED. Atchison, T. & S. F. R. Co. v. United States.. Rehearing denied, Oct. 4, 1909. Erkel v. United States.... Rehearing denied, Oct. 4, 1909. Price v. United States. Rehearing denied, Oct. 4, 1909. Richmond Coal Co. v. Commercial Union Assur. Co...... 170 Fed. 250 .169 Fed. 623 169 Fed. 791 .169 Fed. 746 169 Fed. 778 171 Fed. 1 .171 Fed. 360-364 .171 Fed. 825 ..170 Fed. 129 CASES ARGUED AND DETERMINED IN THE UNITED STATES CIRCUIT COURTS OF APPEALS AND THE CIRCUIT AND DISTRICT COURTS. UNITED STATES v. CARTER et al. (Circuit Court of Appeals, Seventh Circuit. March 18, 1909.) OF 1. TRUSTS (§ 110*)-CONSTRUCTIVE TRUSTS-FRAUDULENT ACQUISITION PROPERTY-EVIDENCE TO ESTABLISH-COLLUSION BETWEEN UNITED STATES OFFICER AND CONTRACTORS. One of the defendants, as local engineer officer of the United States in charge of river and harbor improvements at and near Savannah, Ga., prepared the specifications on which a contract was let for work involv ing an estimated expenditure of $3,000,000. The contract provided for alternative methods of construction of certain of the work, to be designated by the engineer in charge, each kind of work to be paid for at prices fixed by the contract. One method of construction, which proved extremely profitable to the contractors, was adopted by the engineer to a far greater extent than was contemplated by the contract, and afterwards he let other contracts to the same contractors on similar terms and designated thereunder the same method of construction; the result being that the government paid, far in excess of a legitimate price for such work, and was defrauded in a sum approximating $2,000,000. It was also shown that during the five years the work was in progress such profits were from time to time, as payments were made, divided in New York City; one-third being paid to the engineer's father-in-law, by whom they were subsequently practically all transferred to him. Held, that the circumstantial evidence was sufficient to establish his connection with the fraud, if not in the original letting of the first contract, in making others after his experience and ability as an engineer must have given him knowledge of the excessive prices being paid, and that the United States was entitled in equity to follow and recover the proceeds of such fraud which passed into his hands, into whatever investments they could be traced, as a trust fund held for its benefit. [Ed. Note. For other cases, see Trusts, Cent. Dig. § 160; Dec. Dig. § 110.*] 2. TRUSTS ( 374*)-CONSTRUCTIVE TRUSTS-ENFORCEMENT TRUST PROPERTY MINGLED WITH PROPERTY OF TRUSTEE. It appearing that such defendant had mingled property and securities purchased with money so fraudulently obtained with property and se *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 172 F.-1 curities purchased with other money, and secreted and claimed title to the whole as an entirety, personal expenditures made by him from the mass should be charged against the portion which was his own, and all remaining held subject to the trust, and for any deficiency the United States is entitled to a personal judgment. [Ed. Note.-For other cases, see Trusts, Cent. Dig. § 607; Dec. Dig. § 374.*] 3. TRUSTS (§ 356*)-CONSTRUCTIVE TRUSTS TRUST PROPERTY TRANSFERRED TO THIRD PERSONS-RIGHT TO FOLLOW AND ACCOUNTING. Where a defendant, who had obtained large sums of money from the United States by fraud, invested the same in securities which he subse quently transferred to his codefendants, who, with knowledge of the source from which they were derived and the charges of fraud by the United States, received and concealed the same until compelled to surrender them to the court at suit of the government, such codefendants are accountable for the value of any of the securities so received and not produced, and are not entitled to a deduction therefrom on account of salaries agreed to be paid them for their services in caring for the property. Ed. Note,For other cases, see Trusts, Cent. Dig. § 537; Dec. Dig. § 856*1* Appeal and Cross-Appeal from the Circuit Court of the United States for the Eastern Division of the Northern District of Illinois. The appellant, United States, is complainant in a bill filed in the trial court against Oberlin M. Carter, as principal defendant, with Lorenzo D. Carter, I. Stanton Carter, and another impleaded as defendants for subsidiary relief, charging (in effect) fraudulent conduct and conspiracy with persons named as contractors, on the part of Oberlin M. Carter, while serving as engineer officer of the army in local charge of harbor improvements and disbursements therefor in the Savannah district of Georgia, whereby the United States was defrauded in the letting of contracts and payments from the public funds of exorbitant rates and amounts, aggregating $2,000,000 in excess of the fair value of work performed; that the illicit proceeds and profits of such transactions were divided between the contractors and such defendant, or for his benefit; that such shares therein of the defendant were largely invested by him or for his benefit in real estate and securities, which came to his possession; that portions thereof have been traced and are impounded in other courts under like bills, and other portions are believed to be secreted; and that the other defendants named are secreting and holding in trust for him portions of such investments. This bill was filed as ancillary to other bills therein referred to, but was ultimately adopted under stipulation as the primary case for trial. Upon final hearing of the issues joined (after various proceedings impounding property in controversy as proceeds of the alleged transactions), the decree of the trial court was entered in two parts-one entered March 21, and the other April 14, 1908—and the United States appeals from both decrees. The main decree is that of March 21st, which adjudges in substance: (a) That all moneys arising from profits made by the contractors, "described in the bill and auxiliary bills," constitute a trust fund in favor of the United States, together with the investments and income thereof, and belong to the United States, and not to the defendant Oberlin M. Carter; (b) that certain securities impounded in the hands of receivers were not purchased with such trust fund, and belong to such defendant; (c) that the other securities and property described "are traced from and held to be investments" arising from such trust fund (aggregating, "at cost or proceeds," $367,822.71), and adjudged to be the property of the United States; (d) that deficiency decree against L. D. Carter is denied; (e) that deficiency decree is denied against O. M. Carter for proceeds of such trust fund dissipated prior to November 6, 1901, the date of a stipulation entered into between the parties to this suit; (f) that the For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes |