Source: https://openjurist.org/233/us/515
Timestamp: 2019-04-22 10:11:10+00:00

Document:
HAROLD A. FOSTER, Frank E. Winchell, William S. Edwards, and Harry H. Platt.
Argued April 13 and 14, 1914.
Indictment in two counts for conspiracy to defraud the United States, and to violate certain provisions of the postal laws. The object of the conspiracy and the manner of its execution are in substance, as charged in the indictment in the first count, as follows: Harold A. Foster was postmaster of the United States postoffice at North Brookfield, Massachusetts, a second-class office. The salary of the office was fixed by the Postmaster General, pursuant to law and the regulations established by him, at $2,000 a year, the salary being based and ascertained upon the gross receipts of the office for the twelve months next preceding the 31st of March, 1911. The law required the salary to be adjusted annually, and the next adjustment was required to be made by the Postmaster General in accordance with the gross receipts of the office as shown by the quarterly returns of the postmaster to the Auditor of the Postoffice Department for the four quarters next preceding the 31st of March, 1912, the readjustment to take effect on the ensuing 1st of July, 1912. The Postmaster General was required by law and the established regulations in readjusting such salary not to include in the gross receipts of the office the moneys received by the postmaster for the sale of stamps to any person or persons in large quantities, to be used in other postoffices than the North Brookfield office for mailing purposes, or in that office if such matter in the ordinary course would not be deposited for mailing in the latter office.
Frank E. Winchell, of North Brookfield, was the president and general manager of the Oxford Linen Mills, a corporation having its usual place of business at North Brookfield, and William S. Edwards and Harry H. Platt, both of New York, were officers of the Sterling Debenture Company, a corporation having its place of business in New York, and they and Foster, well knowing the premises, conspired to defraud the United States of its money and property by Winchell purchasing from the United States in behalf of the Oxford Linen Mills, with the knowledge, consent, and connivance of Foster, quantities of United States postage stamps to be sent to the Sterling Debenture corporation at New York, and Edwards and Platt as its officers were to cause it to use them in the prepayment of postage upon matter to be deposited in the postoffice in New York or in some other office, with the view and intent, by means of the purchase of stamps as stated, of irregularly and improperly increasing the gross receipts of the North Brookfield postoffice for the twelve months beginning on the 1st of April, 1911, and ending on the 31st of March, 1912, and thereby enabling Foster, as such postmaster to make returns to the Auditor of the Postoffice Department as a basis for the adjustment of Foster's salary for the fiscal year beginning July 1, 1912, which returns should include the sale of stamps so made to Winchell in addition to the sale of stamps made by Foster to other persons in the regular business of the North Brookfield office, with the intent and view of violating the regulations of the Postoffice Department, and for the purpose of fraudulently increasing Foster's salary, and with the further intent that such sales should, in violation of the Postoffice regulations, be included and deemed a part of the gross receipts of the North Brookfield office for the period above mentioned, and be made in part the basis of the readjustment of Foster's salary. All the acts done by Foster, Winchell, Edwards, and Platt were done knowingly, wilfully, and fraudulently for such purpose; that is, for the purpose of increasing the salary of Foster by a sum of money in excess of that which he would be lawfully entitled to receive, and to cause such excessive sum to be paid to him, and thereby cheat and defraud the United States thereof.
In pursuance of the unlawful conspiracy, and to effect its object, on the 1st of July, 1911, Foster, as such postmaster, made a false return to the Postoffice Department of the gross receipts of the North Brookfield office for the quarter ending June 30, 1911.
In a second count the indictment charges that the defendants unlawfully conspired to commit an offense against the United States, specified to be an offense denounced by § 206 of the act of March 4, 1909, entitled, 'An Act to Codify, Revise, and Amend the Penal Laws of the United States' [35 Stat. at L. 1128, chap. 321, U. S. Comp. Stat. Supp. 1911, p. 1649], in that Foster, as such postmaster, should, in violation of the section, knowingly and fraudulently increase Foster's salary and compensation by knowingly and fraudulently failing to report, in the report or the gross receipts of his office required by law and the regulations of the Postoffice Department, large and irregular sales of stamps to be made by Foster to Winchell as president and general manager of the Oxford Linen Mills, not to be used by that corporation, or by Winchell, or by any other person for the mailing of matter at the North Brookfield office, but to be used for mailing matter at New York or in some other office other than the North Brookfield office, with the intent and for the purpose of increasing the compensation of Foster as such postmaster. That in pursuance of such conspiracy Winchell, on June 2, 1911, purchased stamps of the value of $200.
The case was brought here under the criminal appeals act, its provision being that this court has jurisdiction on writ of error taken by the United States in criminal cases 'from a decision sustaining a demurrer to any indictment where such decision is based upon the invalidity or construction of the statute upon which the indictment is founded.' It is, however, contended by defendants in error that this court has no jurisdiction because, it is further contended, the district court gave the same meaning to the statutes upon which the indictment was based as the government asserted was the correct one, and only decided that the regulation of the Postmaster General was beyond his power to enact under Revised Statutes, § 161 (U. S. Comp. Stat. 1901, p. 80), upon which section alone he claimed the power. Nor, it is further contended, were the words 'gross receipts' interpreted. 'The only question was,' counsel says, 'whether there was power in an administrative officer to make the regulation limiting its scope.' It is further urged that if those words were interpreted, the indictment was not founded upon the act of 1883, where they occur.
It is provided by the act of March 3, 1883, that the 'compensation of postmasters of the first, second and third classes shall be annual salaries, assigned in even hundreds, of dollars, and payable in quarterly payments, to be ascertained and fixed by the Postmaster General from their respective quarterly returns to the Auditor of the Treasury for the Postoffice Department . . . to be forwarded to the First Assistant Postmaster General, for four quarters immediately preceding the adjustment,' according to the gross receipts, the amount of which not only determines the classes, but the compensation of the offices within classes.
It is manifest from the quoted provisions that their purpose is to fix the salary of postmasters by the normal receipts of their respective offices, and thereby keep the officers in relation, and to secure such end quarterly returns are required to be made by each postmaster, and each is prohibited under criminal penalty from selling or disposing of stamps, stamped envelops or postal cards outside of the delivery of his office, or selling or disposing of stamps, etc., otherwise than as provided by law or the regulations of the Postoffice Department. In other words, the false returns and designated disposition of stamps are made crimes, and made crimes to secure the purpose of the law to keep the legal measure of the salaries unimpaired and the relation of the offices intact. It may, indeed, be that in one sense the United States would suffer no loss by the derangement of their relation; in another sense the United States would be defrauded. One of the postmasters would fraudulently obtain a greater salary than he was entitled to. But distinctly would the United States be defrauded under the facts charged in the indictment, the postmaster at New York having a fixed salary of eight thousand dollars. See in this connection Haas v. Henkel, 216 U. S. 462, 479, 54 L. ed. 569, 577, 30 Sup. Ct. Rep. 249, 17 Ann. Cas. 1112.
The sole theory of the act of 1883 is that every postmaster shall receive a salary dependent upon and regulated by the amount of business done at his office (United States v. Wilson, 144 U. S. 24, 28, 36 L. ed. 332, 333, 12 Sup. Ct. Rep. 539) under normal and natural sales of stamps, not unlawfully induced sales. This being the law, what does the indictment charge?
The second count charges a violation of § 206 of the Criminal Code, by conspiring in the manner we have already set out, and which need not be repeated.
It is clear from these provisions that it is the gross receipts from lawful sales which are to be the measure of the salary of the postmaster, and that unlawfully induced sales (§ 208), sales made 'outside of the delivery of the office' (id.), and sales 'otherwise than as provided by law or the regulations of the Postoffice Department' (id.), are unlawful sales and regarded as criminal.
It would, indeed, be strange if unlawful and criminal sales were intended to constitute a part of the gross receipts upon which the postmaster's salary should be adjusted, and it would seem clear that to prevent such result the Postmaster General could legally exercise by the regulation under review the power given him by § 161, Rev. Stat. (U. S. Comp. Stat. 1901, p. 80). The regulation is purely administrative of the law. (1.) It notifies the postmaster that, in the gross receipts of his office, stamps in large or unsual quantities sold to be used in mailing matter at other postoffices will not be included. This but executes the purpose of the law; adds nothing to it. United States v. Antikamnia Chemical Co. 231 U. S. 654, 58 L. ed.——, 34 Sup. Ct. Rep. 222; Lewis Pub. Co. v. Wyman, 104 C. C. A. 453, 182 Fed. 13. (2.) It requires the postmaster to ascertain and report the intention of the purchaser of stamps or stamped paper in large or unusual quantities. This is properly supplemental to the first requirement, and a reasonable supervision of the office, and a means of discovering unlawful and fraudulent sales. (3.) It provides that for a neglect to so ascertain and so report the postmaster will be required to refund the amount of the excess salary he may have received on account of such sales. This provision is of doubtful validity, but it is not of material consequence to the questions now involved.

References: § 206
 § 161
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