Case Name: HOUSTON et al. v. UNITED STATES
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1914-10-13
Citations: 217 F. 852
Docket Number: No. 2288
Parties: HOUSTON et al. v. UNITED STATES,
Judges: Before GILBERT and ROSS, Circuit Judges, and WOLVERTON, District Judge.
Reporter: Federal Reporter
Volume: 217
Pages: 852–865

Head Matter:
HOUSTON et al. v. UNITED STATES,
(Circuit Court of Appeals, Ninth Circuit.
October 13, 1914.)
No. 2288.
1. Conspiracy (§ 43*) — Indictment—Averment of Overt Act.
An indictment under Rev. St. § 5440 (Comp. St. 1913, § 10201), for conspiracy to defraud the United States, is sufficient if it alleges tbe unlawful scheme and an act done by one of the conspirators which had for its purpose the furtherance of such scheme without alleging the manner in which it tended to effect that purpose. Nor is such an indictment . defective because it fails to describe in. detail the means by which the object of the conspiracy was to be attained.
[Ed. Note. — For other cases, see Conspiracy, Cent Dig. §§ 79, 80, 84-99; Dec. Dig. § 43.*]
2. Conspiracy (§ 43*) — Criminal Prosecution — Evidence.
Under an indictment charging defendants as individuals with conspiracy to defraud the United States by means of fraudulent and collusive bids for the furnishing of coal, evidence was competent which showed that the bids were made in the name of corporations of which defendants were officers and were signed by defendants as such officers.
[Ed. Noté. — For other cases, see Conspiracy, Cent. Dig. §§ 79, 80, 84-99; . Dec. Dig. § 43.*]
3. Conspiracy (§ 45*) — Criminal Prosecution — Evidence.
On the trial of a defendant charged with conspiracy to defraud the United States, a letter written by defendant, who was secretary of a corporation, to a bank authorizing an employé to sign checks on behalf of the corporation, held admissible as tending to corroborate other evidence that the employé was also authorized to indorse checks made payable to the corporation.
[Ed. Note. — For other cases, see Conspiracy, Cent. Dig. §§ 100-104; Dec, Dig. § 45.*]
4. Conspiracy (g 43 ) — Criminal Prosecution — Evidence.
' Under an indictment under Rev. St. § 5440 (Comp. St. 1913, § 10201), .charging a conspiracy to defraud the Únited States, it was not error to admit evidence of other overt acts than those specifically named in the indictment.
[Ed. Note. — For other cases, see Conspiracy, Cent. Dig. §§ 79, 80, 84r-99; Dec. Dig. § 43. ]
5. Criminal Law (g 150*) — Limitation of Prosecution — Conspiracy to Defraud the United States.
Where a conspiracy to defraud the United States was formed more than three years prior to the indictment, and acts in pursuance thereof were done both prior to and within the three years’ prosecution therefor under Rev. St. § 5440 (Comp. St. 1913, § 10201), it is not barred by the limitation imposed by Rev. St. § 1044, as amended in 1876 (Comp. St. 1913, § 1708).
[Ed. Note. — For other cases, see Criminal Law, Cent. Dig. §§ 274, 275; Dec. Dig. § 150.*]
3. Conspiracy (§ 33*) — What Constitutes.
Under Rev. St. § 5440 (Comp. St. 1913, § 10201), relating to conspiracy to defraud the United States, the offense consists of the unlawful scheme upon which the minds of conspirators have met, together with any act to effect the object of the conspiracy.
[Ed. Note. — For other cases, see Conspiracy, Cent. Dig. § GO; Dec. Dig. ‘ § 33.
For other definitions, see Words and Phrases, First and Second Series, Conspiracy.]
Boss, Circuit Judge, dissenting.
In Error to the District Court of the United States for the Southern Division of the Western District of Washington; Edward E. Cushman, Judge.
Criminal prosecution by the United States against Charles E. Houston and John H. Bullock. Judgment of conviction, and defendants bring error.
Affirmed.
The plaintiffs in error were convicted of conspiracy under section 5440 of the Bevised Statutes. The indictment alleged, in substance, that on or about April 1, 1908, at Seattle, in the state of Washington, the defendants did willfully, knowingly, and unlawfully and feloniously conspire, combine, confederate and agree together to defraud the United States of divers large sums of money, and to bar the United States of its legal remedies to recover the moneys of which it was to be defrauded, and further to defraud and deceive the officers of the United States, and to defraud the United States of the benefits which would have resulted from honest and competitive bids and proposals to contract for the furnishing and sale to the United States of coal. The subject-matter of said conspiracy and the objects thereof, and the means by which the same were to bo effected, were as follows: On or about March 10, 1908, the United States, acting through the Quartermaster for the Department of the Columbia of the United States Army, published and circulated an advertisement inviting bids and proposals to contract for the furnishing and sale to said United States of certain large quantities of coal which the United States desired to purchase for governmental use during the fiscal year commencing July 1, 1908, and ending June 30, 1909, at those certain military posts known as Ft. Davis, Ft. St. Michael, and Ft. Liseomb, all situated in the District of Alaska, which bids and proposals to contract were to be submitted to the said Chief Quartermaster on April 10, 1908; that the principal object of said conspiracy was to induce the United States to award and let contracts for the purchase of coal and to purchase and pay for said coal at grossly exorbitant and fraudulent prices, whereby the United Slates should he defrauded of large sums of money for the use and benefit of said conspirators, which object was to be effected and consummated by means of collusive, dishonest, and fraudulent bids and proposals to contract for the furnishing of coal, which bids and proposals to contract should be ostensibly competitive but in fact collusive, dishonest, and noncompetitive, and for grossly exorbitant prices to be secretly agreed upon by said conspirators; that it was also one of the objects of said unlawful conspiracy that, after the United States should have been thus defrauded, the true facts iffthe premises should he concealed from the United States, whereby the United States should be defrauded of its legal remedies to recover the moneys of which it should have been defrauded, which object was to be effected and consummated by means of false, fraudulent, and fictitious vouchers and entries, and books of account relating to the disbursement and use by said conspirators of the moneys of which the United States was to be defrauded as aforesaid. And the indictment charges that said unlawful conspiracy has, at all times since April 1, 1908, been furthered and continued in force by each of said conspirators.
The indictment alleges as overt acts: (1) That after the formation of said conspiracy and during the continuance thereof, and to effect the object thereof, said John H. Bullock on August 13, 1908, at Vancouver, Wash., did knowingly, unlawfully, and corruptly induce, persuade, and cause one John E. Baxter as Quartermaster of the United States Army to issue, and the said John E. Baxter did issue, a certain check or warrant drawn upon the First National Bank of Portland, bearing date August 13, 1908, in favor of John J. Sesnon Company, for the sum of $39,163.50, which cheek was subscribed by said Quartermaster and was for funds and money of the United States, then and there on deposit in the First National Bank of Portland, Or.; (2) that on September 1, 1908, at Seattle, Wash., the said Bullock did knowingly, unlawfully, .and corruptly induce, persuade, and cause one Frank A. Kane as agent of said John J. Sesnon Company, to indorse and negotiate said check, which said Kane then and there did, and which check was thereafter, on September 2, 1908, duly paid by said First National Bank of Portland, Or., out of the aforesaid funds of the United States'; (3) that on August 13, 1908, at Vancouver, Wash., said Bullock corruptly induced and persuaded and caused one John E. Baxter, Quartermaster of the United States Army, and the said Baxter did issue a certain check or warrant drawn upon the First National Bank of Portland, bearing date August 13, 1908, in favor of John J. Sesnon Company for the sum of $53,878.50, which warrant was subscribed by said Baxter as Quartermaster and was for funds and moneys of the United States then and there deposited and in the said First National Bank; (4) that 'on September 1, 190S, at Seattle, Wash., said Bullock knowingly, unlawfully, and corruptly induced, persuaded, and caused Frank A. Kane as agent of said John J. Sesnon Company to, and the. said Frank A. Kane then and there did, indorse and negotiate said check or warrant, which cheek or warrant was thereafter, and on September 2, 1908, duly paid by the First National Bank of Portland, Or., out of the aforesaid funds of the United States.
Samuel H. Piles, James B. Howe, Charles H. Farrell, James H. Kane, and Wickliffe B. Stratton, all of Seattle, Wash., for plaintiff in error Houston.
O. L. Willett and Frank Oleson, both of Seattle, Wash., for plaintiff in error Bullock.
B. D. Townsend, of Washington, .D. C., and Glenn E. Husted, and F. C. Rabb, both of Portland, Or., Special Asst. Atty. Gen., for the United States.
Before GILBERT and ROSS, Circuit Judges, and WOLVERTON, District Judge.
For other oases see same topic & 1 number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes
Rehearing denied November 17, 1914.
Por other cáses sée same topic & § numbek in Dec. & Am. Digs.1307 to date.'&Rep’r Indexes

Opinion:
GILBERT, Circuit Judge
(after stating the facts as above). The indictment charges that the conspiracy was entered into on April 1, 1908, and that it has at all times since that date been "furthered and continued in force" by each of said conspirators. Four overt acts are alleged to have been done in August and September, 1908. The substance of the objections to the indictment is that it contains no allegation that bids were ever actually interposed by the conspirators, or what such bids were, that the crime could not be completed without the initial overt act of interposing bids by the cooperation of the conspirators, and that all overt acts must be alleged. We find no merit in these objections.
Under section 5440, the offense consists of the unlawful scheme upon which the minds of the conspirators have met, together with an act to effect the object of the conspiracy. The allegation that a single act was done by one of the conspirators, which had for its purpose the furtherance of the unlawful scheme, completes the allegation of the offense, and the rule is well settled that it need not appear upon the face of the indictment that the overt act was such that it could be seen to have a necessary or logical relation to the conspiracy charged. It is enough if the indictment allege that it has that effect. In brief, it is sufficient to state the overt act without alleging the manner in which it tended to effect the purposes contemplated. We so held in United States v. Benson, 70 Fed. 591, 17 C. C. A. 293, following United States v. Sanche (C. C.) 7 Fed. 715, United States v. Donau, 11 Blatchf. 168, Fed. Cas. No. 14,983, and the same has been held in Gantt v. United States, 108 Fed. 61, 47 C. C. A. 210, and United States v. Shevlin (D. C.) 212 Fed. 343, and we find no decision to the contrary.
But it is said that by the decision of the Supreme Court in Hyde v. United States, 225 U. S. 347, 32 Sup. Ct. 793, 56 L. Ed. 1114, Ann. Cas. 1914A, 614, a new rule of pleading has been educed, that, inasmuch as it was held in that case that the offense defined in section 5440 is not complete until an overt act is done to carry out the purpose of the conspiracy, the averments by which the overt act is pleaded must upon their face show that the act was so related to the conspiracy as necessarily to be a portion thereof. We do not so understand that decision. The court was there dealing with the question whether an overt act performed in one district by one of the parties who had conspired in another district would give jurisdiction to the court in the district where the overt act was performed as to all the conspirators. It was held that, under section 5440, an overt act was necessary to complete the offense. No new rule of pleading was announced, and it does not follow from any principle there affirmed that an indictment in a conspiracy case which would be good and valid before that decision should now be held defective. Under a rule of pleading such as is now contended to have been established by that case, the very indictment which in that case the court sustained would have been subject to objection on the very ground that is here urged. For that indictment contained no allegation which showed that -the overt acts pleaded therein would tend to effect the object of the conspiracy. In the opinion the court said:
"The powers of the Hand Office wore necessarily to be invoked and proceedings therein instituted and prosecuted by acts innocent indeed of themselves, taking only criminal taint from the purpose for which they were done."
In that case the indictment charged conspiracy to defraud the United States of public lands in lieu of lands within forest reserves established in Oregon and California, by means of false and fraudulent proofs, whereby the conspirators were to obtain fraudulently from those states title to and possession of school lands within the limits of such reserves-, which were open to purchase from those states by residents thereof upon appropriate "applications supported by affidavit showing the resident's qualifications to make such purchase, and his intention to purchase in good faith for his own benefit, and that he had made no contract to sell the claim, the applications to be made in the names of fictitious persons and in the names of persons not really desiring or qualified to purchase said lands, the names of the latter class to be procured by paying or causing to be paid to them small sums of money and by falsely representing or causing to be represented to some of them that they were merely disposing of their rights to purchase such school lands. In the opinion it is said:
"Most of the overt acts charged consisted in the filing in the General Land Office by Dimond, as attorney for Hyde, his appearance in different selection cases, in some of which he urges and sets forth the reasons for favoring a speedy action. In counts 35 to 40, both inclusive, the overt act charged is the payment of money by Benson to either Valk or Harlan, alleged in the indictment to be salaried officials of the General Land Office and charged with duties pertaining to the exchange of lands of private claim or ownership included in a forest reserve or other public land. Two overt acts are charged against ETyde, one of which was committed on July 29, 1903, by causing to be transmitted by mail from the United States Land Office at Vancouver to the Commissioner of the General Land Office at Washington a written notification to the Commissioner, signed by Hyde for C. W. Clarke, that the latter appealed to the Secretary of the Interior from a certain decision of the .Commissioner, with an assignment of errors, and the second of which was' that Hyde, on March 31, 1902, caused to be presented by the hand of Dimond a paper signed by him, Hyde, notifying the Commissioner that one S. E. Kieffer was authorized and appointed as Hyde's agent to post notices in the ground described in a certain application and to make affidavit of posting."
Nor is the indictment defective for its failure to describe in detail the means by which the object of the conspiracy was to be attained. It was. not necessary to allege what the bids were, or that they were actually made. The bids were but a portion of the means whereby the unlawful purpose was to be accomplished. The indictment charges, not that the object of the conspiracy was to interpose collusive and fraudulent bids, but that it was to defraud the United States of the money that should be paid as the purchase price of coal. It is enough if such an indictment contain a general description of the means. Crawford v. United States, 212 U. S. 183, 192, 29 Sup. Ct. 260, 53 L. Ed. 465, 15 Ann. Cas. 392; Dealy v. United States, 152 U. S. 539, 543, 14 Sup. Ct. 680, 38 L. Ed. 545. And a general allegation of the continuance of the conspiracy is an averment of a substantive fact and is sufficient. Dealy v. United States, supra; United States v. Barber, 219 U. S. 72, 78, 31 Sup. Ct. 209, 55 L. Ed. 99.
We think that the averments of the indictment were sufficient to advise the defendants of the nature of the offense with which they were charged, and as to which they were required to prepare their defense, and sufficient to sustain a plea of former conviction or acquittal in a case of a second indictment .for the same offense. Said the court in Cochran & Sayre v. United States, 157 U. S. 286, 290, 15 Sup. Ct. 628, 630 (39 L. Ed. 704):
"But the true test is, not whether it might possibly have been made more certain, but whether it contains every element of the offense intended to be charged, and sufficiently apprises the defendant of what he must be prepared to meet, and, in-case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to whát extent he may plead a former acquittal or conviction."
In Williamson v. United States, 207 U. S. 425, 28 Sup. Ct. 163, 52 L. Ed. 278, it was held that an indictment charging the' accused with a conspiracy to commit the crime of subornation of pprjury in proceedings for the purchase of public lands was sufficient, although the precise persons to be suborned and the elements essential to the commission of the crimes were not particularized.
Error is assigned to the admission in evidence of the statement made by Jarvis to Douglas, in March or April, 1909, that the $6,892 payment made to him by Houston was "the rake-off on the government coal contract." It is said that this evidence was inadmissible, because the statement was made after the object of the conspiracy had been completely consummated. To this it is to be said that it does not appear that'the conspiracy had been consummated at that date. There was evidence of acts done in carrying it out as late as May 8, 1909. Again, the statement was made during the time the second object of the conspiracy was being effected. It was admissable to show that Jarvis was a member of the conspiracy, and it was for that purpose that it was admitted. As to that evidence, the court charged the jury that, before they could consider the statement of Jarvis as being the statement or act of the other defendants', it must have been made or done during the life of the conspiracy, and it must have been a statement or act in furtherance of, and to effect the object of, the conspiracy, and that, if the conspiracy was consummated and completed before that date, nothing that Jarvis said could affect either of the defendants.
We find no error in the admission of evidence of the acts of the corporations of which the defendants were officers, under an indictment which charged the defendants as individuals. The evidence so admitted was that the conspirators interposed bids in the name of their respective corporations, and signed them as officers of the corporation. The indictment did not charge that the bids were to be signed by the individuals. It charged that the scheme of the conspiracy was to be carried out by fraudulent and collusive bids without stating what names were to be subscribed thereto, and it charged that the fruits of the conspiracy were to accrue to the defendants "or to the corporations represented by them." When Bullock signed the bids in the name of Sesnon Company, by himself as secretary, he committed an act within the allegations of the indictment, and proof thereof was properly admitted.
It is contended that it was error to admit in evidence a letter addressed by Bullock to the Dexter Horton National Bank, authorizing Frank A. Kane tó sign checks on behalf of the John J. Sesnon Company. The objection made to the letter was that it was immaterial and not included in the indictment. It is now urged that the letter was subject to objection because it did not authorize Kane to indorse checks payable to the Sesnon Company, but only to sign checks issued by that company. The'testimony'of the teller of the bank was that the letter was authority to Kane to indorse or sign checks or other negotiable papers for the Sesnon Company. Kane, who was called as a witness did not in fact deny that he had authority to indorse such checks. He said that during June, July, August, September, and October of 1907 and 1908, he indorsed the checks payable to the Sesnon Company, that arrived at the Seattle office. When asked under whose authority he did so, he answered that he could not say that he ever had any authority for doing it. "It was just a custom," and he testified that in the winter months he did it under Bullock's supervision, and that in the summer months, in Bullock's absence, he continued to indorse them as before. We think the letter was properly admitted as tending to corroborate the evidence that Bullock authorized Kane to indorse the checks. The checks in question were drawn in favor of the John J. Sesnon Company, and were indorsed "John J. Sesnon Company by Frank A. Kane, Agt."
We find no error in the assignment that evidence was admitted of overt acts other than those which were pleaded in the indictment. No decision of a federal court is cited in which it has been held that in such a case the prosecution is limited to proof of the overt acts which are specifically charged. The contrary has been held in United States v. Howell (D. C.) 56 Fed. 21; United States v. Burkett (D. C.) 150 Fed. 208; and United States v. Eccles (C. C.) 181 Fed. 906. In Bannon & Mulkey v. United States, 156 U. S. 464, 469, 15 Sup. Ct. 467, 469 (39 L. Ed. 494), the court said:
"To require an overt act to be proven against every member of tbe conspiracy, or a distinct act connecting bim with the combination to be alleged, would not only be an innovation upon established principles, but would render most prosecutions for the offense nugatory. It is never necessary to set forth matters of evidence in an indictment."
In Heike v. United States, 227 U. S. 131, 145, 33 Sup. Ct. 226, 229 (57 L. Ed. 450) the court said:
"Another objection to evidence concerned the admission of testimony that the same course of conduct was going on long before the date in the indictment when it is alleged that the defendants conspired. The indictment, of course, charged a conspiracy not barred by the statute of limitations, but it was permissible to prove that the course of fraud was entered on long before and kept up."
At common law and in the absence of statutory changes thereof, it is not necessary to plead any overt act, but all overt acts may be shown in evidence as tending to prove the conspiracy, arid its object. State v. Stockford, 77 Conn. 227, 58 Atl. 769, 107 Am. St. Rep. 28; State v. Mayberry, 48 Me. 218; Ochs et al. v. People, 124 Ill. 399, 16 N. E. 662; People v. Brickner, 15 N. Y. Supp. 528. The language of section 5440 indicates that Congress did not intend to change the common-law rule further than to make it essential to the offense described therein'that there should have' been at least one overt act to effect the object of the conspiracy.
There are other assignments of error as to the admission of evidence. We do not deem it necessary to discuss them. We find no error in any of them.
Error is assigned to the refusal of the court to direct a verdict for the defendants at the close of the testimony. One of the grounds of the motion was the insufficiency of the evidence to sustain a verdict against the defendants. We have carefully considered the evidence, and we think the court was fully justified in submitting the case to the jury.
Another ground of the motion was that the prosecution of the offeuse charged was barred by the statute of limitations. It is urged that the statute commenced to run on April 21, 1908, the date when the contracts were let for furnishing the coal for Forts Davis and St. Michaels, or that, at the latest, the statute began to run on July 13, 1908, the date when Bullock certified to the vouchers. The object of the conspiracy was alleged to be to defraud the United States, and there was proof of acts done by the defendants, which showed that the purpose of the conspiracy was not fully consummated when the vouchers were certified to. That act was followed by others. On August 13, 1908, at the instance of Bullock, Baxter issued the checks; on September 1st, Kane, under authority from Bullock, indorsed the checks on behalf of John J. Scsnon Company; and on September 2d, the bank paid the checks. The indictment was found on August 12, 1911. Where the conspiracy was formed more than three years prior to the indictment, and acts in pursuance thereof have been done, both prior to and within the three years, prosecution is not barred, for the conspiracy may be a continuing offense, and it may be alleged and proven that it was continued in force and operation to a time within the statutory period of limitation. It was so held by this court in Hedderly v. United States, 193 Fed. 561, 569, 114 C. C. A. 227, in accordance with the very decided weight of authority, and that rule has been finally approved and settled by the decision in United States v. Kissel, 218 U. S. 601, 31 Sup. Ct. 124, 54 L. Ed. 1168.
We find no error for which the judgment should be reversed. It is, accordingly, affirmed.