Source: https://m.openjurist.org/333/us/178
Timestamp: 2019-07-19 04:00:29
Document Index: 673469078

Matched Legal Cases: ['§ 732', '§ 732', '§ 338', '§ 338', '§ 256', '§ 256', '§ 259', '§ 259', '§ 77', '§ 77', '§ 52', '§ 52', '§ 3929', '§ 259', '§ 259', '§ 259']

333 U.S. 178 - Donaldson v. Read Magazine
333 US 178 Donaldson v. Read Magazine
Nor does the modification subject respondents to any disadvantage in this case in reference to the impounded funds. Those funds are sums sent in as qualifying fees for the scheme found fraudulent. They are in court custody because of the court's restraining order; but for it they would have been returned to the senders as ordered by the Postmaster General. Now, as before the fraud order was modified, their disposition is dependent entirely upon the validity of the finding of fraud. Respondents could thus claim the funds only by asserting a right growing out of the scheme found fraudulent. The court having lawful command of such funds must allocate them to the remitters if the order is valid. See Inland Steel Co. v. United States, 306 U.S. 153, 156—158, 59 S.Ct. 45 , 417, 418, 83 L.Ed. 557; United States v. Morgan, 307 U.S. 183, 194, 195, 59 S.Ct. 795, 801, 802, 83 L.Ed. 1211.
Respondents' advertisements were long; their form letters to contestants discussing the contest, its terms, and its promises were even longer than the advertisements. Paradoxically, the advertisements constituted at the same time models of clarity and of obscurity—clarity in referring to prizes and to a 'puzzle contest,' obscurity in referring to a remote possibility of a letter-essay contest. In bold type, almost an inch high, their advertisements referred to '$10,000 First Prize Puzzle Contest.' Time after time they used the words 'puzzle' and 'puzzle contest.' Conspicuous pictures of sample 'puzzles' covered a large part of a page. Rebus 'puzzles' Nos. 1 to 4 of the contest were there. An explanation of what each represented appeared above it. The first, it was explained, represented 'the inventor of the phonograph and electric light,' the second 'a Republican President who became Chief Justice of the Supreme Court.' The last two contained equally helpful clues to the 'puzzles.' The advertisements left no doubt that the contest presented an opportunity to win large prizes in connection with solution of puzzles, which puzzles, to say the least, would not be too taxing on the imagination.
Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such way as to mislead. Wiser v. Lawler, 189 U.S. 260, 264, 23 S.Ct. 624, 626, 47 L.Ed. 802; Farley v. Simmons, 69 U.S.App.D.C. 110, 99 F.2d 343, 346; see also cases collected in 6 Eng.Rul.Cas. 129—131. That exceptionally acute and sophisticated readers might have been able by penetrating analysis to have deciphered the true nature of the contest's terms is not sufficient to bar findings of fraud by a factfinding tribunal. Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. Durland v. United States, 161 U.S. 306—313, 314, 16 S.Ct. 508—511, 512, 40 L.Ed. 709; Wiser v. Lawler, supra, 189 U.S. at page 264, 23 S.Ct. at page 626, 47 L.Ed. 802; Oesting v. United States, 9 Cir., 234 F. 304, 307. People have a right to assume that fraudulent advertising traps will not be laid to ensnare them. 'Laws are made to protect the trusting as well as the suspicious.' Federal Trade Comm. v. Standard Education Society, 302 U.S. 112, 116, 58 S.Ct. 113, 115, 82 L.Ed. 141.
In 1872 Congress first authorized the Postmaster General to forbid delivery of registered letters and payment of money orders to persons or companies found by the Postmaster General to be conducting an enterprise to obtain money by false pretenses through the use of the mails. 17 Stat. 322—323, 39 U.S.C. § 732, 39 U.S.C.A. § 732. In the same statute Congress made it a crime to place letters, circulars, advertisements, etc., in the mails for the purpose of carrying out such fraudulent artifices or schemes. 17 Stat. 323, 18 U.S.C. § 338, 18 U.S.C.A. § 338. In 1889 Congress declared 'non-mailable' letters and other matters sent to help perpetrate frauds. 25 Stat. 874, 39 U.S.C. § 256, 39 U.S.C.A. § 256. In 1895 the Postmaster General's fraud order powers were extended to cover all letters or other matters sent by mail. 28 Stat. 964, 39 U.S.C. § 259, 39 U.S.C.A. § 259. And Congress has passed many more statutes, such, for illustration, as the Securities Act of 1933, 48 Stat. 77, 906, 15 U.S.C. § 77e, 15 U.S.C.A. § 77e, and the Federal Trade Commission Act, as amended, 52 Stat. 114, 15 U.S.C. § 52, 15 U.S.C.A. § 52, to protect people against fraudulent use of the mails.
Recognizing that past decisions of this Court if adhered to preclude acceptance of their contentions, respondents urge that certain of our decisions since the Coyne case have partially undermined the philosophy on which it rested. Respondents refer particularly to comparatively recent decisions under the First and Fourteenth Amendments.2 None of the recent cases to which respondents refer, however, provide the slightest support for a contention that the constitutional guarantees of freedom of speech and freedom of the press include complete freedom, uncontrollable by Congress, to use the mails for perpetration of swinding schemes.
An additional argument urged by respondents is that the fraud order statutes as interpreted and applied by the Postmaster General in this case violate some of the constitutional provisions above mentioned. We consider this suggestion only in connection with the modified order. Its future effect is merely to enjoin the continuation of conduct found fraudulent. Carried no further than this, the order has not even a slight resemblance to punishment—it only keeps respondents from getting the money of others by false pretenses and deprives them of a right to speak or print only to the extent necessary to protect others from their fraudulent artifices. And so far as the impounding order is concerned, of course respondents can have no just or legal claim to money mailed to them as a result of their fraudulent practices. Nor does the modified order jeopardize respondents' magazine except to the extent, if any, that its circulation might be dependent on monies received from this contest scheme found fraudulent. A contention cannot be seriously considered which assumes that freedom of the press includes a right to raise money to promote circulation by deception of the public.
The two lower courts reviewed in detail the facts in this case. Both held that the predecessor of the present Postmaster General exceeded his authority in issuing his stringent order of October 1, 1945. The modification of that order on December 8, 1947, by the present Postmaster General, then serving as Acting Postmaster General, has restricted it to appropriate parties. It has not altered, however, the primary basis for the lower court's injunction of November 27, 1945, against the enforcement of the order. That injunction was granted because the record failed to show evidence sufficient to justify the drastic administrative action taken in reliance upon the lottery and fraud sections of the mail and money order statutes. R.S. §§ 3929 and 4041, as amended, 26 Stat. 466, 28 Stat. 964, 39 U.S.C. §§ 259 and 732, 39 U.S.C.A. §§ 259, 732. This dissent protests the overruling of the conclusions of the lower courts on this issue and seeks especially to discourage and increase, or even repetition, of the degree of censorship evidenced by this order.
'(a) Is the order within the Postmaster General's authority under 39 U.S.C. Secs. 259, 732 (39 U.S.C.A. §§ 259, 732)?
Grosjean v. American Press Co., 297 U.S. 233, 245—249, 56 S.Ct. 444, 447—449, 80 L.Ed. 660; Near v. State of Minnesota ex rel. Olson, 283 U.S. 697, 713, 51 S.Ct. 625, 630, 75 L.Ed. 1357, et seq.; Bridges v. State o California, 314 U.S. 252, 260—263, 62 S.Ct. 190, 192—194, 86 L.Ed. 192, 159 A.L.R. 1346; Craig v. Harney, 331 U.S. 367, 67 S.Ct. 1249; United States ex rel. Milwaukee Social Democratic Pub. Co. v. Burleson, 255 U.S. 407, 41 S.Ct. 352, 65 L.Ed. 704.