Durland v. United States

Indictment against John H. Durland for using the mails to promote a scheme to defraud. Defendant was convicted in each case, and brings error. Affirmed.

These cases have so much in common that they may be considered together. Each is the record of the conviction of the plaintiff in error in the district court of the United States for the Eastern district of Pennsylvania of a violation of section 5480, Rev. St., as amended by the act of March 2, 1889 (25 Stat. 873). In neither record is preserved the testimony given on the trial, or the charge to the jury. The only questions for consideration are those which arise on the indictments. In the first, the indictment charged that defendant 'did knowingly, willfully, and falsely devise a scheme and artifice to defraud; that is to say, by divers false pretenses and subtle means and devices, to obtain and acquire for himself, of and from divers persons to this grand inquest unknown, a large sum of money, to wit, the sum of fifty dollars each, and to cheat and defraud each of the said divers persons thereof by then and there representing, among other things, that the Provident Bond and Investment Company would upon the payment of a certain sum of money, to wit, the sum of ten dollars, and a further sum of five dollars monthly thereafter, by each of the said divers persons, issue to each of the said divers persons a bond in the words and manner following, to wit.'

Giving a copy of the bond, the indictment proceeded:

'And that the said bonds would mature in accordance with paragraphs third, fourth, fifth, sixth, seventh, and eighth of said bond hereinbofore set out, and that the redemption value of the said bond when called and the sum of money payable therefor to the said divers persons by the said Provident Bond and Investment Company would be the sum specified and at the time named, and upon the payments of the sums of money named in the circular issued by the said Provident Bond and Investment Company, which is in the words and matter following, to wit:

'A Nut for Lottery Cranks to Crack.

'We give below our graduatory scale of redemption values, which is a complete refutation of the charge that a 'lottery' element enters into the methods of the Provident Bond and Investment Company. It will be observed that a steadily increasing cash value applies to every bond in force from its issue to redemption; that every bond of equal age has the same cash value.

'It is a further fact that every bond is nonforfeitable and interest bearing, having both 'cash surrender' and loan values. Where does the lottery element come in?

'Redemption Scale.

'Scale of current redemption values under the current system of tontine investment, showing profit over total cost upon each $1,000 bond from date of issue to face value; $500 bonds, one-half of said amounts, both cost and profit.'

After this followed the scale referred to in the last clause, which commencing:

No. of Months Cost to Holder,  Cash Paid by  Profits over     Per Cent. of

in Force. Including Co. for  Cost. Profit.

Premium. Redemption.

1........... $15 00

2........... 20 00

3........... 25 00. $30 00  $ 5 00  20

4........... 30 00.  40 00   10 00  33

5........... 35 00.  50 00   15 00  42.8

6........... 40 00.  60 00   20 00  50 -ran up to and included 91 months. After* the scale appears the balance of the circular, as follows:

'Such is the legitimate operation of 'the current system of tontine investment,' of which the Provident Bond and Investment Company is the exponent, and its president is the author.

'N. B. The basic principle of the above table is copyrighted. Infringements without due authority of the author will be prosecuted.'

And then the indictment, in its first count, closed with these words:

'Whereas, in truth and in fact, the said John H. Durland, being then and there the president of the said Provident Bond and Investment Company, did not intend that the said bonds would mature in accordance with paragraphs third, fourth, fifth, sixth, seventh and eighth of the said bond, and that the redemption value of the said bond when called, and the sum of money payable therefor to the said divers persons by the said Provident Bond and Investment Company, would be the sum specified, and at the time named, and upon the payments of the sums of money named in the circular issued by the said Provident Bond and Investment Company, as he, the said John H. Durland, then and there well knew; and the said John H. Durland intended then and there, by said false representations, to obtain for his own use the sum of money paid by each of the divers persons for said bond, to wit, the sum of fifty dollars each, which said scheme and artifice to defraud was to be effected by him, the said John H. Durland, opening a correspondence and communication with each of the said divers persons by means of the postoffice establishment of the United States, and by inciting such divers persons to open communication with him, the said John H. Duriand, so devising and intending; and he, the said John H. Durland, did heretofore, to wit, upon the day and year aforesaid, so devising and intending in and for executing such scheme and artifice to defraud, and attempting so to do, place and cause to be placed in a post office of the United States, at Philadelphia, to be sent and delivered by the said post-office establishment divers letters and packets, to wit, twenty letters and circulars, directed respectively to the said divers persons, the names and addresses of whom are to this grand inquest unknown, contrary to the form of the act of congress in such case made and provided, and against the peace and dignity of the United States of America.'

In the second case the indictment charged substantially the same scheme to defraud, but specified that the purpose of the defendant was 'to obtain and acquire for himself, of and from another person, to wit, one W. S. Burk, at Chester, Pennsylvania, a large sum of money, to wit, the sum of sixty dollars, and to cheat and defraud the said W. S. Burk thereof.' And then that 'said scheme and artifice to defraud was to be effected by him, the said John H. Durland, opening a correspondence and communication with another person, to wit, the said W. S. Burk, residing within the United States, to wit, at Chester, Pennsylvania, by means of the postoffice establishment of the United States, and by inciting the said W. S. Burk to open communication with him, the said John H. Durland, so devising and intending; and he, the said John H. Durland, did heretofore, to wit, upon the day and year aforesaid, so devising and intending, in and for executing such scheme and artifice, to defraud, and attempting so to do, place and cause to be placed a letter in the post-office establishment of the United States, to wit, the post office at Philadelphia, Pennsylvania, within the above district, which said letter was then and there addressed and directed as follows, to wit, 'Mr. W. S. Burk, Chester, Pa.,' profert whereof is now made, contrary to the form of the act of congress in such case made and provided, and against the peace and dignity of the United States of America.'

The bond, a copy of which was in each indictment, is entitled a 'Current-Tontine Investment Option Bond,' purported to be issued by the Provident Bond & Investment Company, whose capital was named as $100,000, and was a promise on the part of the company to pay $1,000 upon nine conditions; the first being a monthly payment of $5, failure to make any such monthly payment working a forfeiture; second, that the company would retain 50 cents for expenses. Of the net remainder, 25 per cent. was to be carried to a reserve, and 75 per cent. was to constitute a redemption fund. The third and fourth conditions were as follows:

'Third. (a) This bond will mature when the net monthly installment (exclusive of expense fund), together with its apportionment of reserve credits, equal its face value. (b) It may be redeemed by the company at any time before its maturity, at any time after three regular monthly payments have been made herefor, the holder hereby agreeing to surrender the same whenever called, upon receipt of its then redemption value.'

'Fourth. The redemption value of this bond when called will be the sum specified under the 'Table of Current Redemption Values' printed on the back hereof, according with the number of months it has been in force at time of call.'

The table mentioned in this fourth specification is the redemption scale which appeared in the circular heretofore referred to. The remaining stipulations were in reference to call, special redemptions, conversion into certificates, return in case of death of all payments made to the redemption and reserve fund, and assignments. Section 5480, as amended by the act of March 2, 1889, so far as material to this case, reads as follows:

'If any person having devised or intending to devise any scheme or artifice to defraud * * * to be effected by either opening or intending to open correspondence or communication with any person, whether resident within or outside the United States, by means of the post office establishment of the United States, or by inciting such other person or any person to open communication with the person so devising or intending, shall, in and for executing such scheme or artifice or attempting so to do, place or cause to be placed, any letter, packet, writing, circular, pamphlet or advertisement, in any post office, branch post office, or street or hotel letter-box of the United States, to be sent or delivered by the said post office establishment, or shall take or receive any such therefrom, such person so misusing the post office establishment shall, upon conviction, be punishable,' etc.

Hampton L. Carson and James M. Back, for plaintiff in error.

Asst. Atty. Gen. Whitney and Asst. Atty. Gen. Thomas, for defendant in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.