Court Opinion

ID: 8829560
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:58:18.241306+00
Date Added: 2024-06-11T17:04:52.958959
License: Public Domain

DENISON, Circuit Judge
(dissenting). I think the demurrer to the indictment should have been sustained, and in order that, if review is sought in the Supreme Court, the attention of that court may be directed more expressly to what I think the right view of the statute, I depart from our'usual custom of letting dissent go unnoted.
The Selective Service Act, so called (Act May 18, 1917, 40 Stat. 76), and the proclamations pursuant to it required registration on June 6, 1917, of all young men between 21 and 31. The law evidently ' contemplated a compulsory military service outside the United States. These respondents thought that such requirement was unconstitutional, and that their constitutional right of free speech permitted them to say so. Their ideas were unsound, but it had not then been expressly so decided; and their claims were, in the abstract, at least as plausible as those commonly made that courts may not adjudge any law invalid as unconstitutional, and that an injunction'obstructing what defendants think are their constitutional ■ rights need not be obeyed, and such claims are not punished; but the existing state of war made these respondents’ concrete conduct disloyal and intolerable. There was no law directly forbidding it (this was before the Espionage Act of June 15, 1917 [40 Stat. 217]), and so they were indicted under .section 37 of the Penal Code.
This covers two offenses, conspiracy to commit an offense against the United States, and conspiracy to defraud the United States. They are obviously separate offenses. Refusal to register was an offense under the Selective Service Act; but these respondents were not subject to registration, and were not planning to refuse, but only to get others to do so. Perhaps for this reason it was thought that a charge* of conspiracy to commit an offense would not lie;. but, whatever the reason, the indictment was solely for conspiracy to defraud the United States. Thus the question is:
“Does one who stands upon his supposed right to refuse to obey an unconstitutional law thereby ‘defraud’ the United States, if it turns out that the law was valid?
Eraud, in its ordinary and primary sense, involves the thought of artifice, overreaching, or deceit. To defraud another seems at first thought to be to induce his action or conclusion by some kind of direct or indirect misrepresentation. This .is Bouvier’s definition of fraud. This court led the way in an extension of this strict meaning to a case where the property of another was obtained through a scheme •of threats and intimidation. (The. blackmail and “black hand” cases *826under section 215 [Comp. St. § 10385], See Horman v. U. S., 116 Fed. 350, 53 C. C. A. 570.) We held that a .scheme to deprive another of his property wrongfully, though without using deception or trickery, is a “scheme to defraud.” This conclusion was reached largely through a liberality of construction based on the general purpose of that statute (section 215) to protect the mails. On page 354 of 116 Fed., 53 C. C. A. 574, the “lexical meaning” was discussed, to show that no violence was being done to that meaning. The quoted definitions all indicate, not only that one must be deprived of his property or property rights, but that it must be done dishonestly or by taking advantage. Does the burglar “defraud” his victim of the stolen property, or the recalcitrant employee “defraud” the employer of the promised service? The Horman Case does not so teach. Imprisonment is still permitted in civil actions for frauds in many states, but it could hardly be imposed upon the servant who merely ran away.
Another line of cases dissipates the “equally as good” defense, and holds that one who is misled by deception may predicate thereon a charge of fraud, even though he received actual value as great as he parted with or as he was promised, if he did not get what was deceptively held out. The reason is, as we said in Edwards v. U. S., 249 Fed. 686, 689, 161 C. C. A. 596, 599, that fraud lies in “an in-, tent to mislead the owner in any particular that affects his completely intelligent consent.”
In Curley v. U. S. (C. C. A. 1) 130 Fed. 1, 64 C. C. A. 369, the conspiracy involved both wrongfully getting á salary out of the United States, and doing so by trickery and deceit. It was not found that the indictment would be good except for its disclosure of one or the other of these elements; indeed Judge Bingham’s opinion indicates the necessity of showing one or the other, or both.
I find no authoritative or persuasive opinion (unless the one to 'be later considered) which permits the conclusion that there was a defrauding in the absence of (1) any deception or misleading or (2) any deprivation of a property right. Usually both are found, but it would seem that one there must be, else the accepted definition fails; but, however compelling these views might be, they must be yielded, if the contrary has been decided by the Supreme Court. This brings us to Haas v. Henkel, 216 U. S. 462, 479, 30 Sup. Ct. 249, 54 L. Ed. 569, 17 Ann. Cas. 1112. The phrase “impairing, obstructing, or defeating the lawful function of any department of government,” quoted from that case by the opinion of this court, is all-inclusive. The departments of government comprise the whole of it, and there is thus no crime or offense which does not impair or obstruct the lawful function of some department. If the phrase reaches what respondents did here, it would have reached as well agitation and persuasion against voluntary enlistment in this war, or against the prosecution of the Mexican or the Spanish War. I cannot think it was intended to have any such far-reaching effect, nor to go beyond what was reasonably pertinent to the issue in the Haas Case. In that case what Holmes and Haas had done was claimed not to have involved the United States in any financial or property loss, and not to have been a statutory offense, and hence *827it was argued by counsel (216 U. S. 466, 30 Sup. Ct. 249, 54 L. Ed. 569, 17 Ann. Cas. 1112) that there was no defrauding. The court overruled both of these contentions, and there was no other (here relevant) controversy in the case. It was not claimed in argument, or suggested in opinion (unless in the quoted phrase) that a conspiracy to defraud which lacked the element of financial loss, did not still necessarily imply some chicanery. The conduct of Holmes and Haas was thoroughly “crooked,” and this connotes fraud in the ordinary sense of that word. Holmes was corruptly to betray the confidence of his superiors, and he was to continue to get official information under the implied promise that he would keep it secret, while he was constantly intending not to do so. The moment the conspirators failed longer to deceive and mislead the department as to what was going on, the conspiracy failed. Artifice, concealment of the truth, corruption, were the foundations of the conspiracy. It seems to me that a definition of “to defraud,” given in such a case, and which definition (unnecessarily as to that case) omits a commonly accepted element of the offense, should not be taken as a deliberate and authoritative exclusion of that element.1
As confirmatory, it will be noted that all the cases cited on page 480 of 216 U. S. (30 Sup. Ct. 249, 54 L. Ed. 569, 17 Ann. Cas. 1112) are only to the point that property loss is not essential. Haas v. Henkel was cited, generally, in U. S. v. Foster, 233 U. S. 515, 526, 34 Sup. Ct. 666, 58 L. Ed. 1074, but the case was one of deception practiced by the postmaster in reporting as stamp sales of his office money which did not honestly belong there, and he thereby fraudulently increased his salary. In U. S. v. Barnow, 239 U. S. 74, 79, 36 Sup. Ct. 19, 60 L. Ed. 155, the entire phrase in question is quoted from Haas v. Henkel, but it is cited only to the point that financial loss is not essential. The offense was a false pretense of official authority. The defense was that the office was nonexistent, and hence there would he no fraudulent assumption thereof. The case does not hold that there can be fraud without deception. In Sacks and Janowitz v. U. S., 257 U. S. 37, 42, 42 Sup. Ct. 38, 40, 66 L. Ed. 118, 120, stamps had been torn from one certificate and put on another. The defense was that it was lawful to do so. When it was once decided that the regulation forbidding transfer was a valid basis for prosecution, it was apparent that to alter an obligation and procure unlawful payment thereof was to defraud the United States, under every definition of fraud.
These are the reasons indicating to me that to disobey the draft law should not be deemed “to defraud the United States.”

 Haas v. Henkel was expressly applied to a ease like this by tbe District Court of Massachusetts (U. S. v. Galleanni [D. C.] 245 Fed. 977), and Impliedly by the Fourth Circuit Court of Appeals in Firth v. U. S., 253 Fed. 36, 165 C. C. A. 56. In Sugar v. U. S., 252 Fed. 79, 82, 164 C. C. A. 191, this court seems to have thought that an indictment like this did not charge a conspiracy to defraud, but the point was not controlling, and Haas v. Henkel was not cited.