Petitioners Brief — Monjar v. United States

SUPPORTING BRIEF

OPINIONS

The District Court filed no opinion. Its judgment

and sentence is dated March 1, 1945. (The Record er-

roneously shows March 1, 1946). (R. 12-14). The Opinion

of the Circuit Court of Appeals was filed on March 15,

1946 (R. 495-502). It has not been officially reported. The

judgment upon said opinion is dated March 15, 1946 (R.

502-503). No petition for rehearing was filed. On March

21, 1946, the judgment of that Court affirming the con-

viction as to Counts One and Two of the indictment and

reversing the same as to Count Three thereof was stayed

(R. 503).

JURISDICTION

The jurisdiction of this Court is invoked under Sec-

tion 240 (a) of the Judicial Code, as amended by the Act

of February 13, 1925, 43 Stat. 938, 28 vu. & C. A, ee

347 (a). Rule 11 of the Rules of Criminal Procedure after

Plea of Guilty, Verdict or Finding of Guilt.

STATEMENT OF THE CASE

The indictment contains three counts and was re-

turned and filed on October 17, 1944 (R. 1-8). It is alleged

in this indictment that on or about March 7, 1944, the

petitioner entered into a plan and scheme with George

Harris or Ralph Howard, for the purpose of defrauding

the Mudge Oil Company, of Pittsburgh, Pennsylvania, out

of the sum of $25,000.00 by the purported sale to it of

worthless oil and gas leases, and the use of the mails in

furtherance of said plan and scheme, under Criminal Code,

Section 215 (18 U. S. C. A., Section 338). The petitioner

demurred separately to each count of the indictment. His

demurrer was overruled, and he entered a plea of not

guilty to each count. He was convicted upon each count,

and sentenced for a term of five years, consecutively, or

a total of fifteen years. The Circuit Court reversed the

conviction as to Count Three and affirmed the convic-

tion as to Counts One and Two.

The petitioner was engaged in the oil and gas business

at Blackwell, Oklahoma, when he was charged, and had

been for some time prior thereto. He did business both

individually and as the American Oil and Gas Company.

During March, April and May, 1942, Charles M. Day, of

Blackwell, Oklahoma, acquired a block of oil and gas

leases commercial upon their face covering 2240 acres of

land in Sections 23, 24, 25 and 26, Township 28 North,

Range 1 East, Kay County, Oklahoma, near the town of

Peckham therein, and hereinafter referred to as the “Peck-

ham Block.” A list of these leases appears on page 403 of

the Record. Each of these leases is a commercial one, but

there was an escrow agreement entered into between the

lessor and lessee simultaneously with the execution of the

lease and attached thereto, which agreement rendered each

lease non-commercial. These leases and the various escrow

agreements attached thereto were placed in escrow with

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the Security National Bank, Blackwell, Oklahoma, on or

about May 21, 1942.

On May 22, 1942, a written contract was made and

entered into by and between Day as first party and peti-

tioner as second party by which he acquired said leases

and agreed to comply with the terms and provisions thereof,

including said escrow agreement (R. 433-436). A dupli-

cate of this agreement was delivered to said bank and

became a part of its escrow files with reference to the Day

leases. Under this contract petitioner agreed to commence

the drilling of a well on some portion of the leased area

by July 10, 1942.

In addition to the leases listed on page 403 of the

Record three additional leases running to Day, which were

assigned by him to petitioner, were placed in said bank

on or about January 7, 1943 (R. 438). The escrow file

of the bank, being a large envelope kept by L. C. Wright

the President of said bank, was identified as Defendant’s

Exhibit “E,” and certain portions of said file were intro-

duced in evidence (R. 78-87).

On or about July 10, 1942, the petitioner commenced

drilling operations upon the Sarah Jane Carroll lease cov-

ering the Southwest Quarter (SW'4) of Section 24, Town-

ship 28 North, Range 1 East, being one of the leases

escrowed. After he commenced these drilling operations

he endeavored, without success, to induce the bank to

deliver him the escrowed leases. Later, however, he se-

cured a number of said leases including th Carroll lease.

He sold 640 acres of the escrowed oil and gas leases situ-

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ated in and around the Carroll lease to the Mudge Oil

Company through Ralph B. Howard as its agent, for $25,-

000.00 with the agreement to pay Howard back the sum

of $15,000.00.

On March 3, 1944, Ralph B. Howard, of Pittsburgh,

Pennsylvania, registered at the Larkin Hotel, Blackwell,

Oklahoma, Room No. 406. He checked out on Monday,

March 6, 1944 (R. 455). The petitioner, as he contends,

never knew or heard of Howard until he came to Blackwell

on the above date and introduced himself to the petitioner

as a representative of the Mudge Oil Company, in the Land

Department thereof. Howard examined the leases and

agreed to buy 640 acres in and around the Carroll lease

on behalf of his Company for $25,000.00 with the under-

standing that petitioner would pay him back $15,000.00.

The deal was closed on this basis on or about March 6,

1944, and on that date Howard delivered to petitioner the

Mudge Oil Company check, dated March 4, 1944, for $25,-

000.00, drawn on the Mellon National Bank, Pittsburgh,

Pennsylvania (R. 3). At the time petitioner received said

check he as the American Oil and Gas Company delivered

to Howard a letter acknowledging the receipt of said

check and giving a list of the leases sold aggregating 640

acres (R. 326).

On March 7, 1944, the petitioner endorsed and de-

posited said check in the First National Bank, Blackwell,

Oklahoma, in the name of the American Oil and Gas

Company, and received a deposit slip showing such deposit.

He gave no directions or instructions as to how the bank

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should handle the item, but the petitioner understood the

item would go through as a collection one and that the

deposit was not subject to check until said check cleared.

The Blackwell bank, in due course, by mail, sent said item

to the Guaranty Trust Company, New York, for collection,

and in due course the check was presented to the Mellon

National Bank, and paid. On March 20, 1944, the Black-

well bank drew a draft on the Liberty National Bank of

Oklahoma City, Oklahoma, for $25,000.00, payable to the

American Oil and Gas Company, and delivered the same

to the petitioner (R. 339). On March 21, 1941, the petitioner

met Howard in Oklahoma City and delivered to him

$15,000.00 of the proceeds of said draft, retaining the

balance for himself. The petitioner executed and delivered

to Howard an assignment in blank of each of said leases,

together with a certificate of title thereto. These assign-

ments were never filed for record. The indictment sets

out the respective alleged use of the mails as to each

count thereof.

The Mudge Oil Company had two offices, one at

Pittsburgh, Pennsylvania, and the other at Dallas, Texas.

The Dallas office was the active one, and most of the

Company’s business was transacted through it. The can-

celled checks drawn on the Company’s bank account in

Pittsburgh were sent to the Dallas office, and early in

April, 1944, the Dallas office, in examining the cancelled

checks for the month of March, found this $25,000.00 check

and observed that it was a forgery. In due course this

situation was made known to the Mellon Bank and it

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restored the $25,000.00, and as a matter of fact the Mudge

Oil Company sustained no loss. On or about April 20,

1944, petitioner learned that it was claimed that said check

was a forgery. He did not think so at that time, and

believed in good faith when the check was delivered that

it was a genuine one. The check, however, was a forgery,

but a clever one.

The Peckham leased area was valuable as a wildcat

development program and the leases sold to the Mudge

Oil Company had a substantial value, in the judgment

of petitioner. The 640 acres of oil and gas leases which

petitioner thought, as he contends, he sold to the Mudge

Oil Company were valuable at the time and had a con-

siderable potential value, in the judgment of the petitioner,

and his proof tended to support him in this regard. It was

the theory of the respondent that the Peckham leased area

was of but little value, and that the leases purportedly

sold to the Mudge Oil Company had but little value. The

question of the good or bad faith of the petitioner is pre-

sented by the record. There was a sharp conflict in the

evidence as to the value of the leases purportedly sold.

The petitioner made an honest effort, as he contends, to

develop the leasd area under the terms and provisions of

his contract with Day. He went to Pittsburgh, Pennsyl-

vania, two or three times to secure financial aid in carrying

on the development program but without success. He

claims he dealt with Howard in good faith, believing that

he represented the Mudge Oil Company, and had no knowl-

edge at the time he received the check that the same was

a forgery.

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SPECIFICATIONS OF ERROR

(1) Under the Instructions as a whole the District

Court committed prejudicial error in giving the follow-

ing Instruction:

“You are further instructed that the question of

intent is one that is hard to establish directly, because

grown persons do not always disclose the object they

have in view in any acts in which they may indulge,

and you have to gather the intent from the character

of the act, the circumstances surrounding it, and from

conduct of a like character which may appear as

tending to aid you in finding and discovering it. But

in connection with all this, unless the testimony satis.

fies you of something else, you are warranted in hold-

ing a party responsible for the natural and probable

and reasonable consequences of his act” (R. 315).

and the Circuit Court erred in not so holding.

(2) Under the Instructions as a whole the District

Court committed prejudicial error in giving the follow-

ing Instruction:

“You are instructed that the rule of law which

throws around a defendant the presumption of inno-

cence and requires the government to establish, be-

yond a reasonable doubt, every material fact averred

in the indictment, is not intended to shield those who

are actually guilty from just punishment, but it is

a humane provision of the law which is intended

for the protection of the innocent and to guard against

the conviction of those unjustly accused of crime”

(R. 313).

and the Circuit Court erred in not so holding.

(3) The District Court erred in overruling the mo-

5 WL aeP Ah RK LAAT TIE IA NS INAH SEA LUISE DG SEPA TE DS

tion of the petitioner for a directed verdict as to Count

Two of the indictment, for the reason that the evidence

was wholly insufficient to show the use of the mails as to

said Count, and the Circuit Court erred in not so holding

(R. 11).

SUMMARY OF THE ARGUMENT

POINT I.

Under the Instructions as a whole the District Court

committed prejudicial error in giving the following In-

struction:

“You are further instructed that the question of

intent is one that is hard to establish directly, because

grown persons do not always disclose the object they

have in view in any acts in which they may indulge,

and you have to gather the intent from the character

of the act, the circumstances surrounding it, and from

conduct of a like character which may appear as

tending to aid you in finding and discovering it. But

in connection with all this, unless the testimony satis-

fies you of something else, you are warranted in hold-

ing a party responsible for the natural and probable

and reasonable consequences of his act” (R. 315).

and the Circuit Court erred in not so holding.

POINT II.

Under the Instructions as a whole the District Court

committed prejudicial error in giving the following In-

struction:

“You are instructed that the rule of law which

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throws around a defendant the presumption of inno-

cense and requires the government to establish, be-

yond a reasonable doubt, every material fact averred

in the indictment, is not intended to shield those

who are actually guilty from just punishment, but

it is a humane provision of the law which is intended

for the protection of the innocent and to guard against

the conviction of those unjustly accused of crime”

(R. 313).

and the Circuit Court erred in not so holding.

POINT III.

The District Court erred in overruling the motion

of the petitioner for a directed verdict as to Count Two of

the indictment, for the reason that the evidence was

wholly insufficient to show the use of the mails as to said .

Count, and the Circuit Court erred in not so holding

(R. 11).

ARGUMENT

Point I.

We have heretofore set out this Point and will not

repeat it here.

In determining whether or not a given portion of

the Instructions is prejudicial, the Instructions as a whole

must be considered. The two essential elements of the

offenses charged are: (1) The formation and existence

of the scheme to defraud the Mudge Oil Company; and

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(2) The use of the mails in furtherance thereof. As to the

first essential, a criminal intent to defraud must be shown

beyond a reasonable doubt and this question is a factual

one for the Jury under appropriate Instructions. Rice v.

United States (10th Cir.), 149 Fed. (2d) 601; Estep v.

United States (10th Cir.), 140 Fed. (2d) 40.

Criminal intent being an essential element of the

alleged scheme to defraud, the presumption is that the

petitioner intended the natural and reasonable conse-

quences of his acts knowingly done. This presumption,

however, is a rebuttable one and the burden was upon

the respondent to establish his criminal intent beyond a

reasonable doubt, notwithstanding such presumption. The

District Court, in the use of the following language in the

above-challenged Instruction:

“But in connection with all this, unless the testi-

mony satisfies you of something else, you are war-

ranted in holding a party responsible for the natural

and probable and reasonable consequences of his act.”

in effect advised the Jury, as a matter of law, that the

criminal intent of the petitioner should be determined by

his acts and conduct, without regard to his intent, or the

lack of it, to defraud, or his good or bad faith, and the

giving of such Instruction was fundamental error which

was not cured by the other Instructions.

Laws v. United States (10th Cir.), 66 Fed.

(2d) 870;

Shaddy v. United States (8th Cir.), 30 Fed.

(2d) 340;

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McKnight v. United Staies (6th Cir.), 115

Fed. 972;

Hibbard v. United States (7th Cir.), 172

Fed. 66;

Cummins v. United States (8th Cir.), 232

Fed. 844;

McCallum v. United States (8th Cir.), 247

Fed. 27;

Chaffee v. United States, 85 U. S. 516, 21 L.

Ed. 908;

Coffin v. United States, 116 U. S. 432, 39 L.

Ed. 481;

Agnew v. United States, 165 U. S. 36, 41 L.

Ed. 624.

POINT IL.

Considering the Instructions as a whole, the challenged

Instruction under this Point lessened and weakened the

Instructions theretofore given as to the presumption of

innocence and reasonable doubt, and was fundamentally

wrong.

Comila v. United States, 146 Fed. (2d) 372;

Coffin v. United States, supra.

POINT Ill.

The proof of the use of the mails as to Count One

of the indictment was sufficient. United States v. Kenof-

skey, 243 U. S. 440, 61 L. Ed. 836. The alleged use of the

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mails as to Count Two of the indictment is what is termed

“Paid Advice” (R. 5-6). This advice was introduced in

evidence as Government’s Exhibit “8” (R. 50), and ap-

pears in the Record at page 337. The only oral testimony

as to the use of the mails with reference to this advice

is the testimony of W. W. Chambers, Cashier First National

Bank, Blackwell, Oklahoma. His testimony in full appears

in the Record at pages 48-57. The envelope containing

this alleged mailed communication was not presented and

no reference is made thereto. There is no proof that this

communication was mailed in New York or elsewhere,

and the only proof, if any, is the communication itself and

the receipt thereof by the Blackwell bank, through the

mails. This proof, in our judgment, was wholly insufficient

to show the use of the mails as applied to Count Two of

the indictment, and tae motion of the petitioner for a

directed verdict as to this count should have been sus-

tained, and the Circuit Court erred in not so holding.

Brady v. United States (8th Cir.), 24 Fed.

(2d) 399;

Freeman v. United States (3rd Cir.), 20 Fed.

(2d) 748;

Davis v. United States (3rd Cir.), 63 Fed.

(2d) 545;

Whealton v. United States (3rd Cir.), 113 Fed.

(2d) 710;

United States v. Baker (2nd Cir.), 50 Fed.

(2d) 122;

Mackett v. United States (7th Cir.), 90 Fed.

(2d) 462;

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Underwood v. United States (6th Cir.), 267

Fed. 412;

Rosenberg v. United States (10th Cir.), 120

Fed. (2d) 935.

Respectfully submitted,

JoHN B. DUDLEY,

1501 Apco Tower,

Oklahoma City 2, Oklahoma.

Attorney for Petitioner.

RosBert K. EVEREST,

Liberty Bank Building.

Oklahoma City 2, Oklahoma.

Dave TANT,

Fidelity Bank Building,

Oklahoma City 2, Oklahoma.

Of Counsel.

April, 1946.

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