Petition for Writ of Certiorari — United States v. Ballard

ae

Statement. ~---2-

Specifications of error to be urged -

Réasons for granting the writ. — one

Page

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Statute involved____ - - .§

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\ CITATIONS

Cases: pew A

Baker v. United States, 115 F. (2a) 583, certiorari denjed,

- Cantwell v. Connecticut, 310 U. S. 296

eer: v. eneemeaser, B00. TF. G: Ben cncecccnececantion

_ Fournier. v. United States, 58 F. (38) 3, certiorari denied,

Glover v. United States, 125 F. (2d) 291, certiorari de-

Seen

John Hancock Ins. Co. v. Bartels, 308 U. 8. ee

Johnaon v. United States, 318 U. S. 189_.--._--_---.____-

Knickerbocker Merchandising Co. v. United States, 13 F-.

(2d) 544, certiorari denied, 273 U. 8. T29_-._.-.--------

Landay v. United States, 108 F. (24) 698, certiorari de-

'. Landie y. North American ‘Co,, ‘299 ee a

_ Leche v. United Statés, 118 F. (2d) 246, certioriari denied,

Levine v. United States, 79 F. (2d) 364__._-___ indnaiscvasinhedbion

Lewis v. United States, 38 F. (2d) 406_...2.....------_.

Palmer v. Hoffman, 318 U. 8. 109_.-.-.-.-2------------ -

Pierce v. United. States, 252 U. S. 280_..------..__-...

School of Magnetic Healing v. McAnnuity, 187 U. S. 94----

Seven Cases v. United States, 239 U. 8. 510____-._-~.-----

Shreve v. United States, 103 F. (2d) 796, certiorari denied,

308 U. 8. 570 ; ininiciidaiccetinadeiedtimvetinhinbareetil

Shushan vy. United States, 117 F. (2d) 110, certiorari de-

ne so seeenedianedibeapinans

Simons v. United Statea, 119 F.. (2d) 589, certiorari de-

nied, 314 U. 8: 616_ a asnctenindnigepncgintitainl Es

558036—43——1 -. (1) a.

8

RSRSRBBE RS

‘KR B

8

oak. a

Gesliate 9. United States, 41 F. (2d) 440, certiorari de- -

nied sud nom. Spicer v. United States, 282 U. 8. 880....

United States v. Buckner, 108 F. (24) 921, certiorari de-

«nied, 308 U. 8. 669.

United States vy. Comyns, 248 U. 8. 349.:

. Dittiard, 101 F.(2ay 829, certiorari de-

nied, 286 U. S. 565

United States v. Groves, 122 F. (2d) 87, certiorari denied,

0 - $14 U. 8. 670

‘Watson v. Jones, 80 U. &: 679 - =,

Statute: ;

Mail Fraud Statute (Section 215 of the Criminal Code, -

18'U. 8. C.'388)- :

Grihe Supreme Court ofthe Bnited States

| ona TerM, 1943 | |

2 7.5 + Neat

THE UNITED SraTEs OF Ancentcs, PETITIONER

pan ene

eee

— “ie Epna W. BALLARD AND > Donat Batsaio

PECITION FOR A WRIT OF CERTIORARI TO THE UNITED TAREE

STATES CIRCUIT. COURT salon apart desis cma

. CIRCUIT

The Solicitor General on behalf of the United .

~. States prays that a writ of certiorari issue to re- —

view the judgment of the United States Circuit -

Court of Appeals for the Ninth Circuit: entered

Juné 21,.1943..(R. 1632) reversing the convictions ee

of Edna W. Ballard and Donald Ballard for using

the mails to defraud and for conspiring to so use

the mails. ;

OPINION BELOW ;

“The opinion of the circuit court of appeals

(R. 1625-1631 appears at 136 F. (2d) 829. The

opinion of Judge Denman concurring in the denial

of the petition for —iaatiaiieg (B. 1GRS-1G98), is N

not yet reported.

(1)

eT,

fa ;

The ‘Sdgueian of the Circuit ‘Gent sd Apps

© was entered on June 21, 1943 (R. 1632). Petition ” |

3 ' for rehearing was denied on September 29, 1943 ..-

‘~ BR. (1633). The jurisdiction of this Court is in-

+ woked ‘under. Section 240 (a) of the Judicial Code ~

: _- as amended by the Act of February 13, 1925. See

~~ also Rules XI and XIII of the Criminal Appeals

ae promulgated by this Court May 7, 1934.

* ouEsTIONS § PRESENTED:

"Rip aie Se eee a ead ecten Wy

the propagation of a purported religiots-move- _-

- ment, the trial judge stated to the jury-that the

truth or falsity of the representations or beliefs

was not in issue, and that:the defendants should -

be acquitted if they honestly and in good faith be-

_. lieved what they wrote and said, and convicted

_ if they. did not so believe but used the mails to

obtain money. The statement was given with the

approval of defense counsel, was relied. on by

them, and ‘quoted i in their summation, as a favor-

able view of their case.

1. May reversal of a convictioh be predicated —

. -on a statement of the trial judge given in the

circumstances described ?

2. In any event, may false eestor Se be

established under the mail-fraud statute by prov-

ing the ‘falsity -of defendants’ professions. of

belief ?

_ 3, Is it sufficient under the mail-fraud statute

to prove a scheme to defraud “by abuse of a posi-

- ‘tion of trust or confiderice f Alena

The mail fraud statute (Section 215. of the ~~

\., Criminal Code, 18 U. S. C. 338) provides: .. ~

ry Whoever, having devised or intending

to devise any scheme or artifice to defraud, .

or for obtaining money or property by:

means of false or fraudulent pretenses,

representations, or promises, edie ieee:

shall, for the purpose of executing such

scheme or artifice or attempting so todo, /

place, or cause to be placed, any letter, /

péstal card, package, ‘writing, circular,

pamphlet, or advertisement, whether ad-

dressed to any, person residing within or

outside. the United States, in any-post of- .

fice, or station thereof, or street or other

. *’ latter box of the United States, or ati-

thorized depository for mail matter, to be

.sent-or delivered by the post-office estab-

ae lishment of ‘the United States, or shall

take or receive any such therefrom, whether -

mailed within or without the United States, ©

‘or shall knowingly cause to be delivered —

by mail according to the direction thereon,

_ or at the place at which it is directed to be

-” delivered by the person to whom it is ad-_

dressed, any such letter, postal card, pack-

age, writing, circular, pamphlet, or ad--

vertisement, shall -be fined not more than

_-

ee be te eat me ee a RN te

wo NR Semen mo yA ae

4

$1,000,” or imprisoned not more than five,

years, or both. -

| STATEMENT

din indictment | in twelve ‘ial shciahia use

of the mails to defraud and conspiracy ‘to’ so use —

... the mails was returned in the United States Dis-

trict Court for the Southern District of Califor-

- nia against Edna W. Ballard, her son Donald

Ballard, and others... The scheme to défraud set

forth in the indictment charged that the defend- .

ants and Guy W. Ballard (who died before the

indictment was returned) organized a purported

religious organization known ‘as the “I Am”

movement, and. in: connection, ‘therewith formed

and dominated two corporations known as the St. .

Germain Foundation and the St. Germain Press,

established . branch offices and, meeting rooms. in

various cities, and arranged a number of radio -

: programs ; that as a meaps of inducing their |

_ followers to purchase books, charts, pamphlets, ~

etc., and to make donations to defendants and

the organizations controlled by them, defendants

made a number of false representations. . Among

_ the misrepresentations. listed in the indictment

were claims that Guy W. Ballard had attained

a supernatural state of immortality; that all the

Ballards had been selected as divine messengers

through whom / the teachings. of St. Germain and

other ‘ ‘ascended masters’’ would be communicated

to mankind; that the Ballards had ™ power to

| =.

conquer disease, death, old ‘age, poverty, and -

misery ; that they could cure and had cured per-

sons of physical ailments ; that they had the power |

to precipitate from the air money and other mate-

. Tial riches; that they had received divine visita-.

tions from St. Germain and other supernatural

entities who dictated the books published by de- —

' fendants; that ‘St. ‘Germain: had appeared in per-

son before Charles Sindelar, who had painted the

- saint’s. portrait ;’ that books, charts, and phono- .

graph records ‘issued by defendants had special

- salutary qualities which would be transmitted to

purchasers; that since a cataclysm was about to -

_. engulf the earth it was wiser to give money to

defendants than to invest it in bauike, homes,. in-

' surance, ete. (R. 2-22.) 3

- The evidence for the Government may be sum- -

i marized as follows:

In‘ 1930, at Mt. Shasta, California, Guy W.

ag wrote’a book ‘called ‘Unveiled Myster- ys

’ which purported to be: his true experiences

rm 257, 417, 507,. 614, | 157-758). It was

first published and~offéred for sale in 1934 (R.

242). For-approximately two years before that.

~ time, Guy W. Ballard and his wife, Edna Bal-

lard, had’ been conducting’ classés in Chicago at.’

f which they read portions of the manuscript of

“Unveiled Mysteries’’ and a secend book: called

“The Magic Presence’ (R. 242, 427-430, 475,

553). In ax’ fall of 1934 the Ballards engaged

’ 4 :

. liad Re ‘

it High : y

siitnscsian daw

and agreed to give him a percentage of: the:

y amount received from the sale of the books: (R. -

271, 274, 285-287, 291). | Arrangements ‘were

“uade to have the Ballards conduct classes in |

various cities.at which the disciples would under-

stand that ‘‘love gifts’’ to the ‘‘messengers’’ would

‘be acceptable, the proceeds of such gifts. to. be

- divided equally between the Ballards and Sieber |

"| (Re 273-274, 278-279, 291). The tour ‘was a .

- financial suecess, éach elass” resulting in gifts

totaling approximately $1,000 (R. 295-296). « -.

Thereafter, the “I Am” movement grew rap--

idly. . Disciples were appoirited “‘messengers’’:

and given authority to conduct classes and: read-

ing rooms in various cities, (R. 431-433, 435-437,

487-489, 755, 765-766). The local groups oper-

- ated independently but purchased hooks, charts,

records, et¢., fom the St. Germain Press (R. 436,

584, 615,-755-756; 762-766). The Ballards them- —

selves conducted aonumber of classes in various

‘cities at which autographed books were sold and

~ -gubstantial love offerings received (R. 561-562,

616, 632, 767). By 1940 the publications con- —

sisted of seven books and a magazine called “The

e Voice of the I Am’ (R. 234, 241-242, 553). Each

student was urged to buy his own set of books and

to refrain from lending his copies to others as the

', tadiation of another person would lessen the be-

. Neficent effect (R. 400, 510, 614-615). ‘The! radio

was’ used extensively, approximately $190,000 ;

} aves i.

ele aii for radio advertising (R. 253-254, |

645-646). Records for ‘radio transcriptions were:

: gold to the Jocal. gronps, whe assumed responsi.

bility. for the sponsoring ef broadcasts (R. 437,

.0.448-449, 646-647, 654-655, 666-668, 679, G84, 759). fe 4

Phonograph records,. advertised as having a

_ special- healing quality because of their blue color,

’. and a painting, represented ds the perfect likeness

of St. Germain as he appeared to the BaHards and

. to-the artist, ‘Sindelar, were offered for sale (R.

349, 352, 354, 590, 644, 647). The. Ballards en-

gaged in extensive correspondence with persons

‘throughout the country,. receiving between 25 and

50 letters a day (R. 538). About one-fourth of

the letters.enclosed money as love gifts (R. 538).

- Among the representations of the mov vement :

were the following: Vera

. Divine Visitations. —St. Germain and Jesus, had

_ appearetl ‘before the Ballards in tangible: form,

so that they ‘could shake hands with them (R. 243,

_ | 957, 262, 398-399, 596, 757-758). St. Germain and

eo other ‘“ascendéd masters” dictated the published

| discourses of the movement (R. 254-255, 507-508,

; 614). These masters would appear before group’

', meetings in thei tangible form (R. 398-399, 506,

— 570). .

Hdaling, —The invocation of the great “y Am ;

Presence” would cure diseases considered by med-

__ieal seience incurable (R, 249-250, 258, 260, 264, ;

394, ‘405-406, 443-444). Thousands of ids had

ee * Gee -

8

been cured in this manner 249-250, 258,..406,

444, 572). ;

Ascensions—Until 1938, the Ballards taught

that human beings would ascend in their physical

body; that this could be accomplished before

death; and that the ascended person could there-

after return to earth (R.. 433-435, 509-510, 569,

628-629, 713) ; that Ballard himself had made the 8g

ascension and had -been purified (R. 755). Late

in 1938 a new dispensation was announced by which

it was proclaimed that the physical ‘body would

remzin on earth but that the etherie body would

_ascend (R. 443; see R. 938, 978)."

- Precipitation—Persons who adhered to the.

teachings of the movement would be able to pre-

-cipitate' from the air gold, jewels, and other ma-

terial needs. The sparkles of light that one saw

in the sunlight were the elements from which the

. desired substances would he precipitated. (R. 397,

450, 476-477, 715, 761.)

Cataclysm.—A cataclysm was soon to engulf ‘the

earth but the followers of the ‘“‘I-Am’’ movement

would be saved (R. 401, 409, 445, 507, 854). _

fact, the presence of the Ballards had saved San.

Francisco from destruction = 401-402, 588,

854).

The books and - discourses purporting to be _

dictations fromthe ascended masters were elabo-

2 _ rated upon and revised (R. 475, 557-560). Fac-

*Guy W. wee died in December 1939 (R. 533, 743-744),

: 9 :

_tual-errors were called to the Ballards’ attention

and were corrected (R. 345-346, 359). ;

- Despite the curative powers allegedly possessed

by the Ballards, both Mr. and Mrs, Ballard and_

- their followers suffered from illnesses and ac-

cidents (R. 332, 395, 446, 489, 534-536, 512, 604,

743-744). While Guy W. Ballard was on his

death bed, Mrs. Ballard told the class that he was

with St. Germain doing special work (R. 715).

Mr. Ballard’s secretary, who was with him con-

stantly, never heard anyone say he had been cured

of cancer, although the Ballards represented that

_ they had cured the disease (R. 406, 572). Re-

quests for healing advice were answered by form ©

‘letters and subordinates were told to “say the

usual thing’’ in reply (R. 368-369, 420, 540, 548-

549).

The blue phonograph records alleged to have a

special -healing radiation as the, result of long

"preparation (R. 590) were prepared by the manu-

facturer without receiving a formula from the.

Ballards, and the final product was chosen from

among several samples submitted to the Ballards

(R. 645-647).

Before 1935, the Ballards used as the picture

of St. Germain a’ photograph of, a painting in

. which scrolls and an ancient script were employed

as decoration. The photograph appeared in early

editions of the book ‘‘Unveiled Mysteries” (Ex-

‘ hibit 3; see R. 1063). The picture had been

| 10

painted in about 1923 by Theresa de Carranza,

. and a photograph thereof was in Mr. Ballard’s

possession in 1930: (R. 836-837, 841, 1068-1070). |

The artist who painted the picture which was

subsequently advertised as the result of a’ rev-

elation by St. Germain (R. 349)? testified that

his: painting was the result of a mental impres-

_ sion, ’ that he had previously seen the. picture

appearing in ‘‘Unveiled Mystéries”’ and that the

scrolls and script were copied from the photo-

graph in thé book (R. 1061-1064): ~ |

On several occasions Donald Ballard-stated that

the movement was “bunk” and that, he would |

like to-expose the work as a “‘fake’’ (R. 335, 595,

613).

A commercial spirit per mented the activities.

According to letters introduced in.evidence, St. -

Germain was concerned with such financial de-

tails as a 334%4% limit on the discount for books

‘(R. 285-287, 305), the’ manner of selling: the pic-

‘ture (R..354), and the spensorship of radio pro- _

grams (R. 684, 689, 692-693). The Ballards

_ were careful to prevent the wholesale book busi-

ness from slipping | out of their hands (R. 306-307,

* Government’ s Exhibit 97 (R. 349), a circular adv ertising

the painting, read as follows:

“The picture which Mr. Sindelar hen painted of St. Ger:

main is an absolute perfect likeness of him as we have seen

him many times in the tangible body. .

“St. Germain revealed himself to Mr. Sindelar previous

to and while he was painting St. Germain’s nares and he

-has said that ic was splendid.”

"ee

330-331). If there was an svermipply of one

book its sale was stressed above the others ‘(R.

368, 709). The publication of a new book of .

songs was announced as an important message

from ‘‘the great harmony’’ (R. 587-589). Credit

was sparingly extended in the sale of books and

- radio transcriptions (R. 297, 654-655). The Bal-

_. lards were dissatisfied when receipts from love —

gifts at classes were not large (R. 368, 571, 723;

759) and reported to. the staff that St. Germain

- had directed the students not to go to places where

they could not make expenses (R. 563). : Mrs.

Ballard and Donald Ballard lad no source of in-

come other than the “I Am”’ activity (R. 875,

~ 879, 1080, 1140). Their scale of living was such

* that, when Donald was only 18, he was given

$11,000 in 5 months (R. 598). )

Early in the trial, while Mrs. Schall, a former °

devotee of the movement, was on the stand (R,

393), the Government, over defendants’ objection,

introduced in evidence a number of books and mag-

azines of the movement and read therefrom (R.

394-402). . ‘A conference of counsel was then held

outside the presence of the jury (see. R. 1346).

- The minutes,of that conference have not been

printed in the record; but summation by one of

the defense counsel, in which he refers td the

matter, shows, that the relation of religious liberty

to the trial of the ease was there discussed (R.

-1346). The trial judge - formulated his concept’

12

ofthe issues in the following statement to counsel .

which he thereafter repeated to the jury with the -

consent of counsel for both sides (R. 402-404;

see R. 1346). , :

Now, gentlemen, here is the issue inthis

case:

First, the defendants in this case made

certain representations of belief in a divin-

ity and in a supernatural power. Some of

the teachings of the defendants, representa-

tions, might seem extremely improbable toa

great many people. For instance, the ap-

_ pearance of Jesus to dictate some of the

works that .we have had introduced in

; evidence, as testified to here at the open-

ing transcription, or shaking hands with

Jesus, to some people that might seem

highly improbable.

I-point that out as one of the many

statements. .

‘Whether that is true or not is not the

concern of this Court and is not the con-

cern of the jury—and they are going to

be told so in their instructions. As far as

this Court sees the issue, itis immaterial

‘what these defendants preached or wrote ~

or taught in their classes. They are not

_ going tobe permitted to speculate on. the

- actuality of the happening: of those in-

cidents.. Now, I think I have made that

as clear as I can. Therefore, the religious

* The transcript of-the-minutes-of. the conference shows

that defense counsel made the suggestion that the judge

repeat his statement to the jury at that time.

13

~ beliefs of these defendants cannot * an

issue in this Court. .

The issue is: Did these defendants

honestly and in good faith believe those

things? If they did, they should be-ae-———-. ~~~

quitted. I cannot make it any clearer than (

that. aga

If these defendants did not believe those

things, they did‘not believe that Jesus eame

down and: dictated, or that Saint Ger-

main came down and dictated, did not be-

lieve the things that they wrote, the things

that they preached, but used the mail for

* the purpose of getting money, the jury .

should find them guilty.

"Therefore, gentlemen, religidn | cannot

come into this case. I want to assure Judge

_ Armstrong and the defendants and the Gov-

ernment that it will not be permitted to

* come in. ~ ;

, Now, we take up.the third point, so there’

is going to be no misunderstanding so: far

as the Court is concerned.

No attack -can be madeg*therefore, on

whé¢ther or not these things happened, but

when you have a pregram or you have

certain representations set out, you have

got to. show what they were. And the de-

‘fendants, I assume, from counsel and

counsel’s statements With reference to the

books and pamphlets, have not so far with-

drawn a single word of what they have

written or what they have preached. The.

defendants, so far as I can gather it from the.

ease, although they haven’t started to put

Docmmcencnamnneer? (meen 2S

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~

a a .

meg . ;

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b

s .

Me

it in, are identi: on 1 the piel pro- |

t the whole conception (I think

~ that is a better word)—the whole con-

ception of their relationship with the deity -

or, as it is used here, with the r Am —

Presence.

Now, gentlemen, that is going to be =

‘s0 clear to this’ jury that they are not go-

ing -to misunderstand: it. _ And that is. the.

_ whole case.

Now, of course, ae the depres

of proof, burden of proof beyond a reason-

‘able doubt and the: fact the defendants are

/ clothed with the presumption of innocence .

/ which stays with them during the trial and

~ all‘of those different principles of law will

a) _be covered more completely and thoroughly

in the Court’s instructions to you at the

.conclusion of the trial’ So that what I

have said now, if you will please bear it_in ©

mind .and carry it into the instructions, a

a »art-of which may be repeated, but. don’t

‘isolate this from the instructions.

That statement was -relied upon—by defense —

counsel during the trial (R. 502, 1125-1126). It

was repeated in substance in the summation by

_-one defense ‘attorney ,and verbatim by another

as representing the ‘‘fundamental basis of this.

lawsuit’’: (R. 1336, 1346-1349). In his charge |

-to the jury at the close of the case the judge

repeated his prior instruction that “The religious

beliefs of these defendants are not an. issue in

this court and not for your consideration” &

; | ie ee

1576). The admonition was reiterated during

the charge (R. 1571-1572; 1573,f 1574-1575; 1588-

1590). Bae te eens |

- Edna Ballard was found guilty on Counts 2,

3, 5, 7, 8, 11, and 12 and was sentenced to one

year on each count to run concurrently and to

pay fines totaling $8,000 (R. 170,°180); Donald

Ballard was found guilty on counts 8, 11, and 12

‘and was sentenced: to 30 days on each count. to.

run concurrently and‘to pay fines totaling $4.00

(R. 171, 182). Both prison ‘sentences were sus-

pended and defendants placed on probation for _

«At R. 1588-1590, the court charged: “With reference,

further, to this question of intent, you are instructed that if

defendants honestly believed in the doctrines which they an-

nounced, then no matter how visionary their views may have - —

been, no matter how ill-founded their conclusions may have

- been, no matter how much sheer incompetence in the exer-

cise of business judgment may have been their portion, un-

less, in the making ofthe statement and representations com-

plained of, they were actuated by an intent to defraud, they

are entitled to go free and your ‘verdict should so determine.

“The ultimate question, of. fact before you as a jury is as

to the good’ faith of the defendants, and that question in-

‘volves their belief in their representations and promises.

‘While their belief is not the subject of direct proof, it may

be ascertained from circumstances, and by proof of: their ~

actions.and «declarations. « If the defendants were practicing

_ their calling in good faith, the fact that they received com-

pensation for their advice and services is of no consequence, —

“If the representations intended to be made, ds alleged in —

the indictment, were false. and the defendant honestly be- _

lieved them to be true, then such representations would not

_ be fraudulent. ‘If, however, such representations .were false

‘and the defendant, knowing their falsity or not believing —

them to be-true, intended that they should be made to de-

558036—43——2 Legs .

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16.

one year. The four other defendants were found

not guilty on all counts (R. 172-176).

On appeal to the Circuit Court of Appeals, a

divided court reversed the convictions on the

~ ground that the above quoted statement by the

trial judge erroneously removed from the jury's

consideration the truth or falsity of the represen-

tations alleged in the indictment (R. 1631). ,The

circuit court of appeals found no other error in

the conduct of the trial and found that there

- ceive and induce certain persons to whom they were to. be-

_. + made, to part with value, then said scheme was one to. de-

fraud.

“You are instructed that even if you stiould find and be-

in the indictment, not only were made but were false, never-

theless, if the defendants so making them or responsible for

their making, in good faith believed them to be true, then

said representation within the meaning of the Federal

Statute in question, would not be fraudulent and you would

not be justified in inferring the existence of a fraudulent in-

tent on the part of the defendants because of their having

been made. It is, of course, true that a fraudulent intent is.

never presumed; to the contrary the law presumes that all .

men are honest—in their motives, their dealings, their rela-

tions with one another; that they are ever actuated by good

faith, and must not be adjudged to be in want thereof or to

be inspired by fraud or an evil intent except upon proof of

-the same beyond a reasonable doubt. So, too, in this same

‘ connection, where a given transaction or series of transac-

tions that may be ealled in question is reasonably susceptible

‘of two different constructions—one that is fair and honest

and in consonance with good faith, and the other dishonest

and in keeping only with a fraudulent intent—then the law

‘says that the jury must adopt the construction in favor of

honest, fair dealing and good faith and reject the other. ned

ing to ‘the contrary direction.”

te at cca apie clase cnn aacenin nO! Vas

te .

‘lieve that the representations intended tobe made as alleged

17

was substantial evidence to suppert the verdict if

the issues had been properly presented to the

jury (R. 1631). A petition for rehearing was

denied, again by a divided court (R.1632-1633). ~

Judge. Denman wrote an opinion concurring in the |

denial of the petition for rehearing, in which he

stated that the definition of ‘the issues by. the

_ trial judge prevented the defendants from offer-

. ing proof that the miraculous events had actually

occured, as evidence of their honest belief. (R.

: 1633-1634. ) ‘

SPECIFICATIONS OF ERROR TO BE URGED

a - The Cireuit Court of Appeals erred:

1. In reversing thé judgment of snttitiens. :

2. In. predicating reversal upon a statement

by the trial judge which had been approved by

defendants, given to the jury at the suggestion

of defendants, relied on by the defendants during

the trial, and repeated by«defendants in their .

summation to the jury as a favorable statement

of their case; |

3eIn holding that the statement by the trial

‘judge which in substance instructed the -jury

that the religious belief of defendants was not in

issue removed from the jury’s consideration the

truth or falsity ” all ss seiatens ‘ations alleged in

- . - the indictment ;

4. In holding that.in a ‘prosecution for. mail -

fraud it was incumbent on the Government to -

~—~prove that false representations had been made;

18 ©

5. In holding that the trial court erred in in-

structing’ the jury that the truth cr falsity of

defendants’ religious beliefs was not in issue but.

- that defendants would be guilty if the jury. found

that they had propagated a religious movement in

whicb they did net mareicdl and in good faith |

believe. ae

REASONS FOR GRANTING ‘Tas WRIT

1. The ‘instant decision presents the anomaly

5 the reversal of a conviction, found to have

been ‘supported by substantial evidence, on the

basis of a statement of the trial court favorable

to the defendants and welcomed as such by coun-

sel for the defense. The record plainly shows

,that throughout the trial defendants considered

the trial judge’s instriiction the most favorable

presentation of their ease and that they -relied

upon it heavily. Deferise counsel in his Closing

argument quoted in full the preliminary instruc-

tion now’ attacked (R. 1346-1349), and the quotd-

tion itself reveals that the instruction was given

- at “the request of counsel for both sides”? (R.

. 1346). Defendants’ motions to strike ‘out cer-’

tain of the Government’s evidence at the close of

the Government’s case’ “were in large part sup- _

ported by the claim that such evidence would en-

able the jury to speculate upon matters which the

court had held were not’ in issue (R.. 883-930).

Several of the objections were expressly predicated E

upon the statement (R. 884, 886). Questions pro-

19

pounded by the -prosecuting attorney in cross-

- examination of deferise witnesses were disallowed .

.” » because of that statement (R.- 502). and defense

counsel based ‘the presentation of their ‘case

thereon (R. 1125-1126). We have thus a case in

which five eminent and experienced counsel (see R.: |

" 1183-1184) not only did not object to the, statement

which the Cireuit Court of. Appeals deemed to be —

reversible error, but actually asked for it, approved .

_it, and-on repeated occasions relied heavily upon

it.

This Court has recently conten: the intiies

‘of pursuing one course at a trial and, when that

course has proved unprofitable, repudiating it”on

appeal... Johnson v. United States, 318 U. 8. 189,

201; see also Palmer v. Hoffman, 318 U. S. 109,

_ 119. ‘This is not a case where, through inadvert-

_ ence, counsel failed to object to.plain error. This

‘is a case where a position deliberately chosen as

' _ favorable by experienced counsel is being repudi-

ated, because it was unsuccessful. The decision of

the Circuit Court of Appeals, if unreviewed, would .

be a disservice to the cause of criminal procedure.

‘2. Furthermore, the trial judge’s formulation

of the issues was legally sound and his solution

\ of the problem raised is most consonant with the

guarantees - of religious :freedom. The Ciréuit |

Court of Appeals’ disapproval of the well-consid--

* Trial counsel: did not participate in the —— (Cf. R.

218). |

20

ered adinie preserits a serious: seins | in the ad-

ministration of the mail-fraud statute. . -

In School of Magnetic Healing v. McAnnulty, —

- 187 U. S. 94, 106, this Court held that matters of

medical opinion, such as the efficacy of mental.

healing, did not present issues of fact upon which |

a postal fraud ordér could be based. Much less

do claims of divine visitation ‘present an issue of

‘fact for a.jury. It is a fixed principle of our. law

that religious beliefs, as distinguished from the

' acts by which such beliefs are made manifest, are

not subject’ to the judgment of our courts. Cant-

well y. Connecticut, 310 U. 8. 296, 303-304; Wat-, -

son v. Jones, 80 U. S. 679,.728. If, however, in

conformity with ‘the majority opinion, a jury is |

required inescapably to pass upon the truth or ~

“ falsity of representations in the nature of reli-

. gious beliefs, then:in a mail-fraud case it must |

judge the beliefs before it can judge the acts. The

7 result would be that the: trial of any person using

religion as. a cloak would be transformed’ into a *

- heresy trial. In this instancé, appellants cl imed, |

among. other : ‘things, to “have received personal |

‘visitations from Jesus and St. Germain. We be-

‘lieve that the trial: judge was quite right in hold-

ing that such. issues, as distinguished from the

-honesty : of defendants’ representations, are not

to ‘be tried by a jury. # |

When the Government has shown that defend-

ants have used the mails to make representations -

and vernnae doctrines in which they do not be-

21

| lieve, for the purpose of obtaining Money, it has

shown enough to support a conviction. - ;

Z _ a, The decision of the Circuit C of Appeals

- * ov erlooks the ‘prineiple stated by this Court in

Seven Cases Vv. — Fans 239 U. 8. 510, 517, ,

that—

| state. of rnisid 5 itself a fact, and may be a

material. fact and false and fraudulent

representations may be made about it. * * *

This principle is reflected in a myriad of situa-

-. tions involving’ fraud. It is, for éxample, im-

plicit in the well-established doctrine that a prom- ° ;

ise, whether capable of. being performed, or-not,__

is fraudulent when made with intent not to per-

form,’ for a-person cannot intend/ to perform ‘that

which he does not believe he-can perform. The’ © “

principle that fraud may. consist of positive aver- 7

ments made in reckless disregard of their truth or

falsity ~ also embraces this -rule: “all. uncondi-

tional utteranges, intended to be taken ‘seriously, .

imply at least a belief, and, if the utterer does not _

believe them, they are false. 3 Knickérbocker

Merchandising Go. v. United’ States, 13: F. (2d) ¢

_. 544546 (C, C. A. 2), certiorari denied, 273 U. S. .

729. . The foundation of religion is faith: Ww Where

there is no faith, there is falsity.

Under the well-established rule that, ina mail-

fraud case, the Governnient need not prove all

* United States v: Comyns, 248 Ss. 349, 353 ; Barnard z,

_ United States, 16 F. (2d):451, 453 (C..C..A. 9), certiorari de- «©

| nied, 274 U. S. 736. . ae

cd oe -

?

22 LS.

representations alleged in-the indictment,’ a find--

ing that defendants did not believe in their own

_- doétrines supplies the material misrepresentation

of fact needed to support the verdict.* -

b. A* charge of fraud ‘is supported by prost

that statements were made with. reckless disre-

gard of their truth or falsity. Pierce v. United

States, 252 U. 8. 239, 251; Cooper v. Schilesinger,

111 U. S. 148, 155. It is to be noted thatthe

statute prohibits the use of the mails in a scheme

* Simona v. United States, 119 F. (2d) 539, 549 (C. C. A.

9), certiorari denied, 314 U. S. 616; Baker v. United Siates,

115 F. (2d) 533, 541 (C. C. A, 8), certiorari denied, 312 U. S.

- 692; Shreve vy. United States, 103 F. (2d) 796, 813 (C. C.-A.

9), certiorar? denied, 308 U..S:570; United States v. Dilliard,

' 101 F. ($d) 829,.833 (C. C. A. 2), certiorari denied, 306 U. S.

635; Levine v. United States 79 F. (2d) 364,369 (C. C. A.

9): Stephens v. United States, 41 F. (2d) 440, 446 (€. C.

A. 9). certiorari denied sud som. Spicer v. United States,

282 U. S. 880; Levis y. Jattes States, 38 F. (2d) 406, 410

(C.C. A. 9).

* The issue of defendants’ belief i in their own doctrines was

expressly tendered by the indictment herein. Each of the .

representations ehumerated in the indictment is followed by

the statement that defendants “well knew” the falsity thereof

and that the representations were false and fraudulent. Item

20 (R. 21) specifically alleges: ©

“At the time of making all of the afore-alleged representa-

tions by the defendants, and each of them, the defendants,

. and each of them, well knew that all of said aforementioned

representations ‘were false and untrue and were made with

the intention on the part of the defendants, and each of them,

to cheat, wrong, and defraud persons intended to be de-

frauded, and to obtain from persons intended to be defrauded |

by the defendants, money, property, and other things of

value and to convert the same to the use and the benefit of

the defendants, and each of them.”

23

for obtaining money by false or fraudulent pre-

tenses, representations, or promises. Clearly,

. therefore, it ig sufficient under the statute for the

jury to have found, as under the judge’s charge

they must have found, that the representations,

made by the defendants, irrespective of their ac-

~ euracy, were fraudulent in the sense that they were

made in utter disregard of truth or falsity or

without belief in their truth. |

¢e, Even apart from the foregoing principles,

the decision below adopts an erroneously narrow

construction of the mail-fraud statute, in: conflict

with decisions of. other circuit courts of appeals.

In holding that it was necessary for the Govern-

ment to prove that defendants schemed to make

_ some representations and that some of such rep-

resentations must be shown to be false (R. 1631), —

the court disregarded the fact that false represen-

tations. do not delimit the full scope of the fraud

condemned by the statute. Shushan v._ United’

States, 117 F. (2d) 110, 115 (C. ©. A. 5), ecertio-

rari denied, 313 U. S. 574. Cf. Fournier v.

United States, 58 F. (2d). 3,5 (C.C. A. 7), certio-

‘rari denied, 286 U. 8. 565; Landay v. United

States, 108 F. (2d) 698, 702 (C. C. A. 6), certio-

rari denied, 309 U. S. 681. ‘The statute provides .

for alternative offenses, the devising of a scheme

or artifice (1) to defraud or (2) for obtaining

money or property by means of false or fraudu-

lent pretenses, representations, or, promises.

24

Thus, it is. beiniadea that the use of the ‘mails

to further an intentional ‘breach of trust comes

- within the interdiction of the statute as a scheme

to defraud evén though no misrepresentations are

expressed. Glover -v. United States, 125 F. (2d) .

. 291, 293. (C. C. A. 5), certiorari denied, 316 U. S.

690; United States v. Groves, 122 F. (2a) 87, 90°

(C. C. A. 23, certiorari denied, 314 U. S. 670;

Leche v. U nited Stats, 118 F..(2d) 246, 247 (C. C.

“A. 5), certiorari denied, 314.U. S. 617; United —

States: v. Buckner, 108 F. (2d) 921, 926 (C. €. A.

2); certiorari denied, 309 U. S. 669. Hence, laying

aside the issue of the.truth or falsity of defend-

ants’ assertions, they were properly convicted, for

it is plain that the indictment alleged, the evidence’

showed, and the jury found, that defendants had —

devised a scheme or artifice to defraud and had

- used the mails in pursuance thereof. Professed

religious leaders solicit the utmost trust of their

following. -Where it is.shown, as it was here, that

they have played upon the religious instincts of ~~

others as a device for perpetrating a swindle, we

submit that their conduct even more clearly comes

within the prohibition of the statute than that of _

‘a publie official or director of a corporation whom

the courts have found guilty of devising a scheme.

to defraud upon proof of a breach of fiduciary

obligations, absent any express misrepresenta-

tions. ;

_ 3. The necessity of further review is accentu-

ated by the fact that the opinion and the con-

: , »

: aa | 25

eurring opinion of the majority below furnish

diverse guidance for the subsequent trial of this

and similar cases.. Cf. Landis v.. North Ameri-

can Co., 299 U. S. 248, 253-254; John Hancock .

Ins. Co. v. Bartels,-308 U. 8S. 180, 181. ©

Under the opinion of Judge Mathews, the Gov-

ernment must prove the falsity. of the representa-

- tions made (R.1631).° Under the opinion of Judge

Denman, the issue of truth or falsity of the repre:

sentations apparently is not a distinet element of |

the <«ffense but need come into the = ease |

only: if the defendants choose to rely on |

\

-evidence in that regard to establish their good

faith (R. 1633-1634). It may be observed,

passing, that this view does: not have -relevance

to the facts of this ease, since the defendants were.

not deprived of an opportunity to offer evidence.

To establish their good faith, 47 witnesses, includ-

ing defendants themselves, took the stand on their

behalf; that they failed was noi due to exclusion

‘of any proof." It is not clear, moreover, under

Judge Denman’s opinion, whether, if the defend-

ants may show good faith by evidence of the

occurrence of supernatural events, the Govern-

ment in its’ ease in chief has a corresponding priv-

ilege of showing bad faith by evidence of their

“ nonoecurrence. Thus the decision lexves ob-

* Presumably, the burden of producing evidence on this

issue, as well as the burden of persuasion, would be on the

Government, though the opinion does not sostate. . *

It is noteworthy that while two asaaeaciaaee were con-

victed, four were acquitted.

" 26

seure the important question whether matters of.

' this sort are not the subject of proof, under

_ School of Magnetic Healing v. McAnnulty, supra;

- whether: they are purt of the proof required of

the Government ; or whether they become relevant

e only if introduced on the issue of good faith.

Tf we are'right in the position that the con-

victions should have been affirmed, because the

case was submitted under instructions which. em-

bodied a sound eonstruction of the statute and.

were welcomed by defendants, there was no oc-

casion to agitate the questions thus raised by the

opinions of the majority below."

1 Compare J. B. Thayer, Legal Nidan pp. 327-328 ‘(Trial

by J ury of Things Supernatural) : '

“It isnot impossible that we may yet see eaten of this .

sort done about Spiritualism; that is to say, may see the

question passed upon whether it is or is not true. But so far,

in modern times, such things do not come up in this way. .

“When Spiritualists get into court nowadays, it is on the

charge of defrauding people and using undue influence, as

in the case of Home in England, twenty years ago, who

was compelled to return several hundred thousand dollars’

worth of property to a woman of seventy-five, a Mrs. Lyon.

who had given it to him on the faith of certain alleged

messages from her deceased mother; it was a mere question

~ of undue influence, of the abuse of a relation of confidence.

And_so of the case of a Mrs. Fletcher, who, a few years

ago, was found guilty, in. London, of obtaining property by

false pretenses and conspiracy. She has written a book

about it, and insists that her spirituai communications were

genuine, and so the pretenses were not false; and that the

court wro rejected an offer on her part to prove them

true, and so condemned her wrongly. But it appeared to

the tribunal like a pretty vulgar case of fratid. The court

left to the jury fairly the question of her own belief in the

manifestations, which was the main thing.”

..

27

3 c . CONCLUSION -

For the reasons stated it is respectfully sub-

mitted that this petition for a writ of certiorari

should be granted. - paw

‘Se eR ae _ Cares Fany,

: Solicitor General.

November 1943,

©. &, SOVERNMERT PRINTING OFFICE: 1943