Petition for a Writ of Certiorari — Baker v. United States

Supreme Court brief1946

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IN THE

Supreme Court of the Unite} Sree woe

Ocroser Term, 1946

No A484 |

Miuiarp C, Baker, [sapore Water Kaun, Bensamin L.

Levy, A. M. Sari, Wuu1am B. Biep, Gasaret Diaz

and EManvEt M. Burern,

Petitioners,

—against—

Unirep States or AMERICA.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE FIFTH CIRCUIT, AND BRIEF IN

SUPPORT THEREOF

ie \

===

{ Henry G. Since

Attorney for Petitioners

16 Court Street

Brooklyn 2, New York

Harry SI.ver,

of Brooklyn, New York

Txomas E. Furtow

G. Ray Gru.

Witutum C. OrcHarp

Hues M. Witxrson

Joun D. Lampert

Hvuex M. Wrxrnson, JR.

Samuget A. Tennant,

all of New Orleans, Louisiana,

With him on the Brief

wee va SOARES Te comers a

PORE AOD AO OE

or eon on

panama at a ea Dir cit

INDEX

Petition FoR Writ oF CERTIORARI:

Statement of Jurisdiction

Opinions Below

Statement of the Matter Involved

Questions Presented

Reasons for Allowance of the Writ

Certificate of Counsel

Brier in Support oF PETITION:

Statutes Involved

Statement of Facts

The Indictment

The Evidence

Counts 1 and 2

Count 4

Count 5 .

PAGE

se.

ooo

ARGUMENT:

I. The trial court deprived the defendants of a

Il.

IIi.

fair trial in accordance with constitutional con-

cepts by instructing the jury, “but this pre-

sumption of innocence will avail the defendants

no further, so soon as prima facie evidence of

the truth of the charges laid against them in the

indictment is presented to the jury. That prima

facie evidence, if it satisfies the jury beyond a

reasonable doubt of the guilt of the defendants,

bars the presumption of innocence, because thé

presumption is no evidence at all, and plays its

part only so long as there is absence of legal

evidence as to the particular fact to be es-

tablished” (1703)

The trial court committed reversible error in

instructing the jury that “it (the presumption

of innocence) is not intended, nor has it ever

been intended as extending to one who in fact

is guilty, so that he or she may escape just

punishment” (1703)

The trial court erred when it charged the jury

that in considering the credibility of witnesses,

the jury should “bear in mind that, under the

law, every witness is presumed to intend to

speak the truth” (1704). This was es) ecially

prejudicial since the only witnesses who testi-

fied were Government witnesses

PAGE

IV. The trial court erred when it emphatically re-

VI.

- sine qua non of the case is lacking

fused to charge, upon request, that the failure

of certain petitioners to testify in their own

behalf should not be used against them (1725-

6). It was likewise error to make this charge

belatedly, after the jury had deliberated for at

least six hours at which time charge was made

as to all defendants, including those who had

specifically rejected such charge

The critical issue—did defendants place or

cause to be placed the alleged matter in the

mails?—remains unanswered by the jury’s ver-

dict. The court instructed the jury that they

need not decide this question, that it was suf-

ficient if any mailing at all occurred. Thus, the

The evidence adduced at the trial was insuf-

ficient to warrant the submission on Counts 1

and 2 to the jury. It was thus error to sustain

the conviction of these counts eae

The testimony failed to disclose where the let-

ters were mailed or that in fact they were

mailed

There was no testimony offered to show what

accompanied the letters and whether the deeds

contained therein were “securities” under the

Securities and Exchange Act ..........-.----------------

PAGE

PRA ELL LAA LEAL EES

PAGE

C. The deeds referred to in Counts 1 and 2 were

not “securities” 41

D. The failure of the Circuit Court of Appeals to

make a determination as to whether these deeds

were “securities” deprived petitioners of an in-

termediate decision. The question—are cash

deeds “securities”—is important and novel and

ought to be decided 42

VII. The proof under Count 4 was insufficient as a

matter of law. It was error to sustain the con-

viction on this Count ia

A. The transmission through the mails of the

check after the transaction was completed was

not a violation of the statute (Kann v. United

tn Stee See. CU I chtensteeincehietnninicnniesiintepiimnin 43

B. There was no proof that the acts of Diaz or

Baker in the transactions preceding the mail-

ing involved in Count 4 were pursuant to and

in furtherance of the scheme to defraud ............ 44

C. Assuming that a scheme to defraud was es-

tablished, it still was the function of the jury

to determine whether the acts of Diaz and

Baker under Count 4 were part of that scheme.

The jury, however, was ordered to consider the

case on the theory of “one scheme” and that the

act of any defendant was the act of all. Thus,

reversible error was committed -................-.-..-....

PAGE

VIII. The proof under Count 5 is insufficient. It was

error to sustain the conviction on this Count 49

A. The return of a recorded deed through the

mails by a Recording Agent was not a viola-

tion of the Statute 49

B. There was no allegation in the indictment that

the return of a deed through the mails by a

Recording Officer was part of the scheme ........ 50

C. The transaction between Kiefer-Silverman and

Duling was not a part of the “single scheme” 50

IX. The Circuit Court erred in sustaining the con-

victions because the evidence sh«wed a number

of separate and independent schemes and not a

single general scheme charged in the indict-

ment 51

ConcLusion. The writ of certiorari should:be granted 52

a — ee

ee ee oY

PAGE

Table of Cases Cited:

Agnew v. United States, 165 U. S. 36, 51, 56 -....... 97

Baumgartner v. United States, 322 U. S. 665 ........ 40

Berger v. United States, 295 U. S. 78 -.................. 7

Bihn v. United States, U.S. , 90 Law Ed.

1208, 1211 37

Bollenbach v. United States, 327 U.S. , 90 Law

Bean: NODE sacadnlobitatasnichclahsbndieeanhahishiornbembbinaiphcaastiniemitun 3, 30, 34

Brady v. United States, 24 Fed. (2d) 399, 403 ........ 11, 39

Brasfield v. United States, 272 U. S. 448, 450... 97

Bruno v. United States, 308 U. 8. 287 ......0......... 11, 34, 35, 36

Cochran v. United States, 157 U. S. 286 -..0.0...... 11, 26

Coffin v. United States, 156 U. S. 432, 456-461 .... 3, 11, 26

27, 28, 30

Davis v. United States, 63 Fed. (2d) 545, 546 ...... 11, 39

Dodson v. United States, 23 Fed. (2d) 401, 402... 27,35

Freeman v. United States, 20 Fed. (2d) 748,

750 ... .... 6, 11, 36, 39

Gerdes v. Lustgarten, 266 U. S. 321, 327 000... 12, 43

Gomila v. United States, 146 Fed. (2d) 372, 378 .... 4, 31

Hurwitz v. United States, 299 F. 47 34

Kann v. United States, 323 U. S. 88 20000... 6, 12, 24

43, 44, 49

Kirby v. United States, 174 U. S. 47, 55 2000. 11, 26, 27

vii

Kotteakos v. United States, U. S. , 89

Law Ed. 1178 7, 12, 48, 52

Lutcher & M. Lumber Company v. Knight, 217 U.S.

257, 268 12, 43

McAdams v. United States, 74 Fed. (2d) 37, 40 .... 32

Mackett v. United States, 90 Fed. (2d) 462, 464 39

Mitchell v. United States, 126 Fed. (2d) 550, 554 50

Rosen v. United States, 245 U. S. 467 -.................. 34

Ross v. United States, 92 U.S. 291 es aa

Securities and Exchange Commission v. Bailey, 41

F. Supp. 647, 650 41, 42

Securities and Exchange Commission v. Joynor

Leasing Corp., 320 U. 8. 344 42

Shettel v. United States, 113 Fed. (2d) 34 -........... 34

Steiner v. United States, 134 Fed. (2d) 981 -........... 39

Tot v. United States, 319 U.S. 463 ; 34

United States v. Baker, 50 Fed. (2d) 123 —............. 39

United States v. Cohen, 145 Fed. (2d) 182, 190

Sr NE TIRE Ts Ta FO eiciectiintarrieccticicrencnccisin 6, 11, 36

United States v. Falcone, 311 U. S. 205 —....00...... 47

United States v. Lekacos, 151 Fed. (2d) 170,172 47,45

United States v. Peoni, 100 Fed. (2d) 401 ................ 47

Vernon v. United States (CCA 8) 146 F. 121, 126

iti

Vill

‘ PAGE

Other Authorities Cited:

Section 240 (a) Judicial Code, 28 U. S. C. Section

347 (a)

Sections 687, 688, Title 18, U. S. C., Section 723(a),

Title 28, U.S. C. A.

Rules of Criminal Procedure, Rule 37 {b) ............ 2

15 U. S. C. 77 (q) (Securities and Exchange Act) 2,9,11

15, 22

18 U. S. C. 338 (Mail Fraud Act) 2022... 2, 15, 43

Wills on Circumstantial Evidence —...020000000........ 28

2 Thompson on Trials, 2d Ed. sec. 2420, p. 1683 .... 33

IN THE

Supreme Court of the Anited States

Ocroser Term, 1946

No.

—>—

Muxarp C. Baker, [saporr Water Kaun, Bensamin L.

Levy, A. M. Sarr, Wituiam B. Birp, Gasrre, Diaz

and Emanvet M. Burern,

Petitioners,

—against—

Unirep States or AMERICA.

—~<>

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE FIFTH CIRCUIT, AND BRIEF IN

SUPPORT THEREOF

To the Honorable, the Chief Justice, and the Associate

Justices of the Supreme Court of the United States:

The petitioners, Mitarp C. Baker, IsaporE WatrTeEr

Kaun, Bensamin L. Levy, A. M. Sari, Wrtu1am B. Biro,

GasrieL Diaz and Emanvet M. Buren, respectfully pray

that a Writ of Certiorari issue to review the judgment of

the United States Circuit Court of Appeals for the Fifth

Cireuit entered on July 10, 1946 (2397), rehearings denied

August 12, 1946 (2440).

1 All numerical references, unless otherwise stated, are to pages of the

printed record.

—¥

The jurisdiction of this Court is invoked under Section

240(a) of the Judicial Code, 28 U. S. C., Section 347(a),

and under Sections 687, 688, Title 18, U. S. C., Section

723(a), Title 28, U. S. C., and the Rules of Criminal Pro-

cedure adopted thereunder, particularly Rule 37(b).

The Circuit Court of Appeals affirmed the judgments of

conviction of the petitioners on July 10, 1946 (2397). j

This petition is filed within thirty days from the date of

the denial of the petitions for rehearing (Rule 37(b) of

the Rules of Criminal Procedure).

Statement of Jurisdiction

Opinions Below

There was no opinion in the District Court. The opinion

of the Circuit Court of Appeals (Hutcheson, Waller and

Lee, Circuit Judges) has not yet been officially reported

and is printed at pages 2397 to 2410 of the Record. Denial

of rehearing was without opinion (2440).

Statement of the Matter Involved

The judgment of the United States Circuit Court of Ap-

peals sought to be reviewed affirmed judgments convicting

the petitioners on March 10, 1944, in the United States

District Court for the Eastern District of Louisiana for

the violation of 15 U. S. C. 77(q) (Securities and Exchange

Act) (Counts 1 and 2) and also for violation of 18 U.S. C.

338 (Mail Fraud Act) (Counts 4 and 5) (2-36).

The Court sentenced all of the petitioners to long terms

of imprisonment.’

2 Petitioners Baker and Diaz were each sentenced to a term of imprison-

ment of five years on Count 4 and one year on Count 5, to run consecutively,

and to five years on Counts 1 and 2, to run concurrently with the sentence under

Count 4—a total of six years each (171-2, 182-3). Petitioners Safir, Bird, Kahn

Tried together with petitioners upon the same indictment,

likewise convicted and sentenced to long terms of im-

prisonment were Nathan Silverman and Rubein V. Johnson,

both of whom are filing individual applications for cer-

tiorari.

Additional defendants, not tried, were Manzello who died,

and Kiefer who was in the Army, at the time of trial. Over-

gaard was named as a confederate but was not indicted

because he had died (2).

This judgment is the result of a series of errors of the

first magnitude. The trial court’s basic instructions to the

jury features not merely a single misdirection concerning

“the substance of the standard by which guilt is deter-

mined in our courts” (Bollenbach v. United States, 327

U.S. , 90 Law Ed. 318), but a repeated number of like

errors which should not be permitted to stand. Intensify-

ing the errors dealing with the general standards relating

to the petitioners’ guilt were a number of major prejudicial

errors in the charge dealing with propositions of pertinent

statutory and common law, as applied to the facts of this

case. The cumulative prejudicial effect of all this is of

overwhelming proportions. In addition, the Circuit Court

opinion sustaining the convictions is directly in conflict with

controlling authority on several scores, and against the

weight of authority on others.

In direct conflict with the holding of this Court in Coffin

v. United States, 156 U. S. 432, 456-461, the trial court

charged that the presumption of innocence is “no evidence

at all” (1703), and lest there be any doubt in the jury’s

and Levy were each sentenced to serve a term of four years on Count 4 and

one year and one day on Count 5, to run consecutively to the term imposed

on Count 4, and five years on Count 1 and Count 2, to run concurrently with

the terms imposed under Counts 4 and 5—a total of five years and one day

(176-7, 179-180, 180-1, 182-3). Petitioner Burgin was sentenced to a total

of 7 years.

ete ECO A EN

mind as to the sweep and significance of this statement, the

Court made it explicit that “this presumption of innocence

will avail the defendants no further, so soon as prims

facie evidence of the truth of the charges laid against them

in the indictment is presented to the jury * * *” and the

presumption “plays its part only so long as there is no

legal evidence as to the particular fact to be established”

(1703).

The Court further emasculated the presumption of inno-

cence by improperly charging that the presumption of

innocence was not intended “as extending aid to one who

in fact is guilty” (1703). It was apparent that the Court

completely misapprehended the essential significance of

this presumption which the Fifth Circuit said in another

case applies to all—gujilty or innocent. The holding in this

ease is directly contrary to the decision of the same Circuit

in Gomila v. United States, 146 Fed. (2d) 372, 373, on the

same subject where the same trial court was reversed and

the conviction set aside because this self-same charge had

been made. It is significant to note that reversal followed

in the Gomila case even though no exception appeared in

the record.

Adding to the foregoing basic errors was the Court’s

charge in this case, where no defendant took the witness

stand and where the jury considered it a close case, as evi-

denced by deliberation of more than six hours, that prima

facie evidence of the facts alleged in the indictment

“brushes aside the presumption of innocence” and jis suffi-

cient when it “is not met by the defendants opposing satis-

factory evidence” (1703). The charge continued to say that

the jury, in judging the credibility of witnesses, of whom

there were none but government witnesses, “will bear in

mind that, under the law, every witness is presumed to in-

tend to speak the truth” (1704). The damage caused by

the latter artificial presumption must be viewed in the set-

ting of the whole case in which almost all of the govern-

ment witnesses who bought land from or through any of

the defendants and petitioners had repented of their bar-

gain and many of them had been compelled to grudgingly

concede that in dealing with particular petitioners or de-

fendants, these government witnesses themselves be-

lieved that they were conspiring with these defendants to

take advantage of breaches of trust.

Thus, with the presumption of innocence rendered inoper-

ative, and the defendants called upon to produce “satisfac-

tory evidence”, this artificial presumption became crucial.

There was nothing left for the jury to consider except the

testimony of the government witnesses. The Court in its

charge further removed all possible doubt of the ultimate

result when it said that its submission of the case to the

jury meant thai there was substantial evidence under each

count so submitted (1705). The petitioners were thus de-

prived of a fair trial on any factual question, a verdict of

guilt was directed against them in no uncertain language,

and the only thing that might have been a factor to be con-

sidered by the jury—the presumption of innocence—was

forcibly taken from them. Under these circumstances, a

review of this conviction is required.

Althoagh the indictment charged, as the statute required

it to charge, that the defendants placed or caused to be

placed certain matter in the mails in furtherance of an

alleged scheme to defraud, the trial court took this issue

from the jury by charging that under the facts of this case

they need not find, in order to determine guilt, that the de-

fendants did so place or cause to be placed the matter in

question in the mails (1714). Thus, again, conviction was

assured because the basic issue in the case—the mailing

or causing to be mailed by the defendants of matter in fur-

therance of the scheme—was taken from the jury’s con-

ee Pte Gen OB

sideration. Hence, the petitioners have been convicted under

a charge which was directly contrary to the established

weight of authority. (See United States v. Cohen, 145 Fed.

(2d) 182, 190, cert. denied, 323 U. S. 793; Freeman v. United

States, 20 Fed. (2d) 748, 750).

It is significant to note that the only counts charged in the

indictment and the only counts on which the petitioners

were convicted were so-called mailing counts. The scheme

to defraud was not charged independently as a conspiracy

but was alleged directly in the first count and by reference

in the others.

The proof offered at the trial failed to support the verdict.

By that, we do not mean that it was against the weight of

evidence, but rather that all the evidence did not measure

up to the standard required for the submission of any

count to the jury.

As to Count 5, the proof showed that the mailing, if it

occurred, could not be in furtherance of the so-called scheme

to defraud, because it was the return to the grantee of a re-

corded deed by the recording officer. This was not even al-

leged as part of the scheme.

As to Count 4, the proof showed that the alleged use of

the mails was not in furtherance of the alleged scheme to

defraud and that the actions of the petitioners could not be

interpreted as furthering this scheme. Since this mailing

involved the transmission of a check for collection by a bank

in which the check was deposited after the transaction al-

legedly fraudulent was completed, the decision of the Cir-

cuit Court sustaining the conviction under this count is

directly contrary to the holding of this Court in Kann v.

United States, 323 U.S. 88.

As to Counts 1 and 2, it suffices to say that nothing was

offered to connect these mailings, if indeed they were such,

with the scheme.

Contrary to this Court’s holding (Ross v. United States,

92 U. S. 291), and indeed, contrary to uniform authority,

the Circuit Court sustained the conviction under the mailing

counts on the theory that inferences could be drawn from

inferences.

Even though the trial court submitted the case to the jury

as a single scheme, the Circuit Court seemed to have some

doubt on the subject (2408). It, however, brushed aside the

claim of variance upon the authority of Berger v. United

States, 295 U.S. 78. The Circuit Court did refer to Kottea-

kos v. United States, U.S. , 89 Law Ed. 1178, but

stated that it did not apply to the facts herein. With the

latter view, we respectfully disagree, and earnestly contend

that the proof ir. this case showed that at least eight, if not

more, separate and independent schemes existed. This we

will establish in our discussion of the evidence in the brief

accompanying the petition.

On this subject, however, it is essential to see that even if

a general scheme existed, there was substantial evidence on

the basis of which a jury, free to consider the subject, might

have, and we believe would have, decided that the transac-

tions connecting the petitioners under Counts 1, 2, 4 and 5

(for different reasons in each count) were not part of the

general scheme and that petitioners’ connection therewith

was not fraudulent. The jury, however, were not so free to

find because the Court emphatically submitted the case and

all the evidence on the theory of one scheme, and only one

scheme, and upon the further theory that guilt of one is

guilt of all (1209-10, 1702, 1706, 1708, 1710). That the jury

followed the Court’s erroneous charge and were misled by

this theory is an unrebuttable presumption of law.

A 91 SGI SLE OOLLE POLLO RE. j

(a)

(b)

(c)

(d)

Questions Presented

1. Did the Circuit Court err in sustaining these convic-

tions despite the cumulative effect of the following preju-

dicial errors in the basic instructions to the jury? *

“But this presumption of innocence will avail the

defendants no further, so soon as prima facie evi-

dence of the truth of the charges laid against them

in the indictment is presented to the jury. That

prima facie evidence, if it satisfies the jury, be-

yond a reasonable doubt, of the guilt of the defen-

dants bars the presumption of innocence, because

the presumption is no evidence at all, and plays its

part only so long as there is absence of legal evi-

dence as to the particular fact to be established. If

such prima facie evidence, which so brushes aside

the presumption of innocence when found worthy

of belief by the jury, is not met by the defendants’

opposing satisfactory evidence, then that simple

prima facie evidence, if it convinces you gentlemen

of the jury, as the final judges of the fact, that

guilt has been proved, beyond a reasonable doubt,

would justify you in rendering a verdict of guilty

as charged” (1703-4, Emphasis supplied).

“But, as forceful as that rule [presumption of

innocence] is in the protection of one who stands

charged with crime, it must not be forgotten that

it 1s not intended, nor has it ever been intended, as

extending aid to one who tm fact is guilty, so that

he or she may escape just punishment” (1703, Em-

phasis supplied).

That in considering the credibility of the testi-

mony, the jury should “bear in mind that, under

the law, every wituess is presumed to intend to

speak the truth” (1704).

The Court’s emphatic refusal to charge, upon re-

quest, that the failure of the defendants to testify

3 The prejudicial effect of these errors was magnified because not one

of the petitioners or defendants testified at the trial. The case was a very

close one and required jury deliberation of more than six hours.

in their own behalf should not be held against them

(1725-6), coupled with the belated giving of this

charge after six hours of deliberation and shortly

before the verdict, at which time it was improperly

given as to certain of the petitioners (1736-9).

2 Did the Circuit Court err in sustaining the convic-

tions under the Counts of this indictment (mailing counts)

in which it was alleged in each count that defendants placed

or caused to be placed certain matter in the mails, where

the trial court had directly and unequivocally charged the

jury that it was not necessary for them to find that any

defendant placed or caused to be placed the alleged mate-

rial in the mails in order to be found guilty of these very

counts (1714)?

3. Did the Circuit Court err in sustaining the convic-

tions under the Securities and Exchange Act (Counts 1 and

2) in (a) declining to make a finding as to whether or not

the cash deeds referred to in these counts were “securities”

under the provisions and purview of the Securities and Ex-

change Act; (b) where there was no evidence showing that

the mailings actually occurred; (c) where there was no

evidence showing that what was said to have been trans-

ported by the mails was actually used in connection with

the defrauding of any person or in furtherance of the al-

leged scheme to defraud; (d) where the indictment and the

proof failed to disclose what was contained in the alleged

mailings and where the matter was simply described as

“deeds”; and (e) where the only proof of mailing within

the jurisdictional limit of the Court was attempted to be

proved by piling inference upon inference?

4 Did the Circuit Court err in sustaining petitioners’

convictions under Count 4, (a) where the proof disclosed

that the transaction involved in this count, so far as peti-

tioners’ actions were concerned, was not in furtherance of

any scheme to defraud; (b) where, under the Court’s in-

structions, the jury was not at liberty to determine wheth-

er the acts proved under this count were not in furtherance

of the general scheme (1209-10, 1701-2, 1706, 1708, and

1710); and (c) where the only mailing involved was the

transmission, for payment, by a New Orleans bank of a

check deposited for collection by petitioner Diaz, to the

bank upon which it was drawn in Pensacola, Florida.

5. Did the Cireuit Court err in sustaining the convic-

tion under Count 5, where (a) the proof was vague and in-

definite; (b) where the matter allegedly mailed was a deed

sent to a grantee by the recording officer after it had been

recorded; (c) where the alleged mailing was not described

as being part of the scheme to defraud set forth in the in-

dictment; and (d) where such mailing was not in further-

ance of the scheme to defraud?

6. Did the Cireuit Court err in sustaining the convic-

tions under an indictment charging a single comprehen-

sive scheme or conspiracy, when the proof tended to indi-

cate that there existed more than eight separate and dis-

tinct conspiracies?

Reasons for Allowance of the Writ

1. The decision of the Cireuit Court sustains convictions

under a charge to the jury which denied due process of

law to the petitioners, or at least constituted such funda-

mental error that it must not be permitted to stand.

2. The doctrine of presumption of innocence enunciated

in the trial court’s instructions is in direct conflict with

Coffin v. United States, 156 U. S. 482, 456-461; Cochran v.

United States, 157 U. S. 286; Kirby v. United States, 174

U. S. 47, 55.

3. The first refusal of the trial court to give a properly

requested charge on the effect of the failure of the defen-

dants to testify in their own behalf was directly contrary

to this Court’s holding in Bruno v. United States, 308 U. S.

987. The belated effort to correct this error still failed to

give effect to this Court’s holding in the Bruno case.

4, The trial court’s charge that defendants may be guilty

of mailing counts without themselves mailing or causing

the mailing of the material in question, confuses an impor-

tant proposition of federal criminal law, and is in conflict

with the holding of the Second Circuit in United States v.

Cohen, et al., 145 Fed. (2d) 182, 190, cert. denied, 323 U. 8.

793; and the Third Circuit in ’'reeman y. United States, 20

Fed. (2d) 748, 750.

5. The decision of the Circuit Court is untenable and in

conflict with the decisions of this Court and uniform au-

thority when it sustains a conviction of using the mails to

defraud where the only proof of mailing depends upon

drawing inferences from inferences. Ross v. United States,

92 U. S. 281; Brady v. United States, 24 Fed. (2d) 399, 403;

Davis v. United States, 63 Fed. (2d) 545, 546; Freeman v.

United States, 20 Fed. (2d) 748, 750.

6. The refusal of the Circuit Court to determine wheth-

er “cash deeds” under the proof of this case are “securities”

under the Securities and Exchange Act (2399) deprives

petitioners of an intermediate decision on a most novel and

important question of criminal law. It was the duty of the

Cireuit Court to decide this question. The question itself

eT CORTE TR EL MIT ETO TNT MET IRY Hr

SBR EE INOS i PO

is important and ought to be decided by this Court, or,

in the alternative, should be remanded to the Circuit

Court with instructions to decide it. Gerdes v. Lustgarten,

266 U. S. 321, 327; Lutcher & M. Lumber Company v.

Knight, 217 U. S. 257, 268.

7. The decision of the Circuit Court sustains convic-

tions under a charge which rendered petitioners liable for

the acts of others when such acts were not within the scope

of general conspiracy allegedly proved.

8. The decision of the Circuit Court appears to conflict

with Kotteakos, et al. v. United States, U.S. , 90

Law Ed. 1178.

9, The rejection by the Cireuit Court of Appeals (with-

out discussion) of the claim that the alleged mailings un-

der Counts 4 and 5 were not a part of the execution of the

scheme to defraud is in conflict with the decision of this

Court in Kamn y. United States, 323 U.S. 88.

WueErerorE, petitioners respectfully pray that a Writ of

Certiorari be issued out of and under the seal of this Hon-

orable Court directed to the Circuit Court of Appeals for

the Fifth Circuit, commanding that Court to certify and

to send to this Court for its review and determination on

a day certain to be therein named, a full and complete

transcript of the proceedings of said Court herein, being

the case numbered 10,984 and entitled in its docket as “Mil-

lard C. Baker, Nathan Silverman, Isadore Walter Kahn,

Benjamin L. Levy, A. M. Safir, William B. Bird, Rubein

Johnson, Emannel M. Burgin and Gabriel Diaz, Appel-

lants, versus United States of America, Appellee,” and

that the judgment of said Court be reviewed by this Court,

and for such other relief as to this Court may seem proper.

aes

Dated, September 9th, 1946.

Miuiarp C. Baker

IsaporE WALTER Kann

Benzamin L. Levy

A. M. Sarr

At Wu B. Birp

GaprieL Diaz

EmaANnveEL M. Buren

By Henry G. Srycer

Attorney for Petitioners

7 16 Court Street

Brooklyn 2, New York

Harry SI.ver,

of Brooklyn, New York

Tomas EK. Furtow

G. Ray Gru

} Wii CO, OrcHarp

Hvexu M, Wi-Krs0on

Joun D, LampBrrt

Huon M. Witkrnson, Jr.

Samue. A, Tennant,

? all of New Orleans, Louisiana,

With him on the Petition.

I hereby certify that in my judgment the foregoing peti-

tion is well founded and that it is not interposed for delay.

Dated, September 9th, 1946.

Henry G. Srncer

Attorney for Petitioners

| and a

Member of the Bar of this Court

] 16 Court Street

Brooklyn 2, New York

Sect

Fit

IN THE

preme Court of the Anited States

Ocroper Term, 1946

No.

LarD C. Baker, [saporE WaLTER Kann, Bensamin L.

evy, A. M. Sarin, Wixi B. Birp, Gasriet Diaz

1d Emanvet M. Buren,

Petitioners,

—against—

Unrrep States or AMERICA.

BRIEF IN SUPPORT OF PETITION

Statutes Involved

Federal Statutes involved are Title 15 U. S. Code,

n 77(b and q), (Securities and Exchange Act), and

18, U. S. Code, Section 338 (Mail Fraud Statute).

Statement of Facts

The Indictment

indictment contains seven counts. Counts 1, 2 and

‘ge Securities and Exchange Act violations. Count 1

bes a scheme to defraud allegedly adopted by defen-

and then states that “the defendants * * * did know-

* * * in the sale of a security, to wit, a cash deed

2mploy said scheme and artifice by use of the United

States mails * * *” (19). The mailing is identified as a

letter “that the defendants, on or about March 10, 1941,

placed or caused to be placed in the United States Post

Office at New Orleans, Louisiana, * * * ”, written by peti-

tioner Baker to the Deposit Guaranty Bank at Jackson, Mis-

sissippi. The letter refers to an enclosure of a deed ex-

ecuted by the Plaquemines Land Co. in favor of defendant

Silverman, and directs the bank to deliver the deed to Sil-

verman upon his paying the consideration of $112.50 plus

handling charges (19-20).

Count 2 incorporates the alleged scheme to defraud de-

scribed in Count 1, by reference, and again alleges that in

the “sale of a security, to wit, a cash deed” by use of the

United States mails, the defendants employed said scheme

(20). The mailing identified in this count is another letter

from petitioner Baker to the same bank referring to an en-

closure of a deed executed by the land company to Silverman

and directing its delivery upon receipt from Silverman of

the consideration of $55. This second letter the defendants

are alleged to have deposited on or about March 12, 1941, in

the New Orleans Post Office (21).

Counts 4, 5, 6 and 7 are Mail Fraud counts.

Count 4 again refers to Count 1 for a description of the |

scheme to defraud, and proceeds to allege that “for the

purpose of executing same * * * on or about July 27, 1940”,

the defendants did “place or caused to be placed” in the

New Orleans post office, “a certain check enclosed in a post- |

paid envelope addressed to the Citizens Bank, Pensacola, |

Florida” (28). The check was mage by Mrs. M. E. Fowler,

payable to petitioner Diaz in the sum of $1395, and was

endorsed on the reverse side,

“Gabriel Diaz

Pay to the order of Any Bank, Banker, or Trust Co.

All prior endorsements guaranteed. June 27, 1940.

American Bank & Trust Co. 14-80 New Orleans La.

14-60” (29).

Count 5 again refers to Count 1, for a description of the

scheme to defraud, and goes on to state that “for the pur-

pose of executing same, * * * on or about April 15, 1941,” the

defendants placed or caused to be placed in the Post Office

at Pointe-a-la-Hache, Louisiana, a certain cash deed, en-

closed in a postpaid envelope, addressed to Miss Lorena

Duling, in Jackson, Mississippi (29-33).*

Counts 6 and 7 were dismissed upon motion of the Gov-

ernment (1678). The Court directed a verdict on Count 3

(1685).

The Evidence

In order to properly evaluate testimony which can be

specifically allocated to Counts 1, 2, 4 and 5, it will be neces-

sary to discuss the general pattern of the evidence.

At the outset, we press the contention that all of this gen-

eral testimony should not have been admitted as against all

the defendants under the “one scheme theory” and that it

was error to overrule the many objections raised on this

subject. So, too, do we maintain that there was no relation-

ship between the so-called general pattern of the case and

the acts relating to the specific counts sufficient to form a

basis for the government’s claim that the act of one was the

act of all. We believe that the evidence establishes, not the

existence of one single comprehensive scheme, but, on the

contrary, a number of unconnected dealings with many

people. True, in each instance, the basic idea was to sell

1 Comparison of the text of the cash deed as given in this count, with

the description of property said to be conveyed through the cash deeds referred

to in the letters in Count 1 and 2 shows that the deed in Count 5 refers to

property different from that in Counts 1 and 2.

IIL LEC LLOE LIOTTA ABE

—s

land, but the approach, the representations and the manner

of sale was different. The financial interests of all of the

defendants were diverse and no testimony was offered from

which even an inference could be drawn of a direct or con-

spiratorial connection.

Many years ago, in 1911, M. C. Baker, one of the peti-

tioners, organized a corporation for the purpose of buying

and selling land. Baker owned the corporation, and no one

else involved in the case had anything to do with it. He

sold land to some of the petitioners and defendants, but in

each instance, as the record clearly shows, they paid for

the land. In the event a salesman sold land for Baker, that

particular salesman received commission on that sale. (See

G-400,? 2263, G-401b, 2265, G-40le, 2266, G-402b, 2267,

G-402d, e and f, 2268).

When the investigation in this case began, Baker volun-

tarily surrendered his books and other documents, and it is

obvious from the record that most of the evidence obtained

by the government came from these voluntarily surrendered

papers. The land so owned by Baker was in St. Bernard

Parish and Plaquemines Perish. Sometime in 1935, and an-

nually thereafter for several years, Baker, through his com-

pany, the Plaquemines Land Co., gave a series of leases to

the Gulf Refining Company. In each instance, the lease was

for five years and required the payment of annual rent, plus

taxes. Thus, the land the Plaquemines Land Co. owned had -

prospective value as oil land and was so recognized by one

of the largest oil producing companies. In addition, the

land had trapping possibilities for fur-bearing animals, and ,

the Gulf Refining Company itself made leases to fur trap-

pers.

2 All Government exhibits are identified by the letter “G” before the '

numbers.

Baker sold iand to Diaz, Burgin, Kahn and Safir, and

they in turn sold it to others, with Baker having no financial

or other interest in the proceeds of any of these sales.

Baker’s only interest was to sell the land to anyone who

would buy it.

Many years after Baker had organized this land company,

defendant Kiefer (not tried) and defendant Silverman

(tried and convicted) began to operate a brokerage office

in New Orleans. They were registered under the Securities

and Exchange Act and dealt in the main in oil stocks and

royalties. There was no connection between the Kiefer-

Silverman firm and Baker’s land company, except that the

officers may have known each other. Kiefer-Silverman pur-

chased certain specifically designated parcels of land from

Baker and, using a technique all of their own, sold this land

to a number of persons who testified at the trial. Baker

sold the land to Silverman at a specific price. Silverman

sold it for anything he could get. Baker was in no way re-

sponsible for any sale by Silverman. As a matter of fact,

when we discuss the evidence under Counts 1 and 2, it shall

be definitely established that Baker dealt with Silverman-

Kiefer at arms length, even to the extent of refusing to de-

liver a deed until the money had been paid into a neutral

bank on sight draft.

How Bird’s activities were brought into this case is hard

to determine. If anything, Bird’s relationship was with

Silverman-Kiefer, and had nothing to do with Baker, Kahn,

Diaz, Safir, Levy or Burgin. Here again, if there was any

scheme to defraud, in which Bird was involved, and this we

seriously doubt, it could only have existed between Kiefer,

Silverman and Bird, and could in no way be traced directly

or indirectly to the actions of any other petitioner or de-

defendant. So, we have these eight or more independent

groups of persons,’ all pursuing the same course, and that

is of selling certain designated land. The indictment

charged a single general comprehensive scheme to defraud,

and hundreds of pages of testimony were admitted concern-

ing independent acts of petitioners and defendants, just

because the indictment was framed in this fashion. This

indiscriminate admission of testimony went to the extent of

permitting in evidence dealings of Kiefer and Silverman in

1937, dealings of Kahn in 1937 and 1938, and dealings of

other defendants during the years between 1936 and 1940,

This, in spite of the fact that the four specific mailing counts

submitted to the jury concerned incidents which occurred

on March 10 and 12, 1941 (Counts 1 and 2), June 27, 1940

(Count 4), and April 15, 1941 (Count 5).

Nevertheless, on the theory of the all-comprehensive

scheme, all the testimony was lumped together, and every

defendant on trial was charged with responsibility for the

acts of the others. They were even charged with responsi-

bility for the acts of defendants not tried and when they

attempted to defend such acts, the Court refused to permit

such defense, stating, “It does not lie in the mouth of either

defendant to champion the cause of Mr. Kiefer, who is not

on trial here today” (1210).

Counts 1 and 2

The indictment charged the mailings on March 10 and 12,

1941. These mailings, which we insist were not proven,

consisted of two letters by Baker to a Bank at Jackson,

Mississippi. The envelopes with the physical indicia of mail-

3 (1) Baker and Diaz; (2) Baker and Kahn; (3) Baker and Safir; (4)

Kahn and Levy; (5) Silverman and Kiefer; (6) Silverman, Kiefer and Bird;

(7) Baker, Silverman and Kiefer; (8) Baker and Burgin; (9) Johnson,

Kiefer and Silverman. Silverman in his application for Certiorari (p. 4)

grouping the subject matter by land sales argues that “twenty five” schemes

were proven.

ing were not offered in evidence. The place of mailing was

not established. The court took it upon itself to say that be-

cause both these letters were ou stationery which bore the

heading of M. C. Baker, New Orleans, Louisiana, this fact

alone was sufficient upon which the jury could draw the in-

ference that the letters were mailed from New Orleans—

where the Court and Grand Jury had jurisdiction (463).

The officer of the bank in Jackson, Mississippi, who testified

concerning these letters, based his testimony on general

business custom of his bank (457). Both letters were almost

identical. Each letter stated that it accompanied a deed

(never offered in evidence and described only as a “cash

deed”) which the payment of a sight draft for a specific

amount in each case. The officer of the bank did not identify

Silverman as being the person to whom a deed was delivered

or who paid a draft. He simply said that a deed was de-

livered and the draft paid. As to the second letter, the deed

and the draft were returned (451, G-144A).

The attempted connection between the petitioners and

this count arose from testimony to the effect that Silver-

man had sold certain land to a Miss Duling who lived in

Jackson, Mississippi. There was no proof that the land

mentioned and described in the deed from Baker to Silver-

man was the same land that Silverman sold to Miss Duling.

In fact, Miss Duling’s testimony was clearly to the effect

that she had never heard of Baker, knew nothing about

him or any of the other petitioners at this time, and that

all of her dealings were only with Silverman and perhaps

Kiefer. The indictment under these two counts charged

4 We believe that the Circuit Court was inadvertently misled by the

government’s brief where at page 75, the United States attorney makes what

we believe to be an erroneous claim that Silverman “actually sold the par-

ticular land which was contained in the deeds enclosed in the letters to Miss

Lorena Duling of Jackson, Mississippi (R. 923; G-75, R. 1861-1863; G-76,

R. 1864)”. However, an examination of G-75 discloses that the property con-

a violation of the Securities and Exchange Act and de-

scribed the two deeds as “securities” under said Act.

Without the deeds in evidence, it is obvious that there was

no proof that what accompanied these two letters were in

fact “securities.” We make this statement without waiver

of our subsequent argument that “cash” deeds were not

and could not have been securities within the meaning and

purview of the Securities and Exchange Act. It follows

therefore that guilt under Counts 1 and 2 was not estab-

lished, because: (a) there was no proof of mailing, (b) there

was no proof where mailing occurred, (c) the “securities”

were not identified or proper secondary evidence offered,

and (d) “cash” deeds are not “securities” under the Securi-

ties and Exchange Act.

Count 4

This count charged a mailing on June 27, 1940. The

testimony offered to support the count came from three

sources. A bank officer of the American Bank & Trust

Company, at New Orleans, Louisiana, who testified that

around June 27, 1940, petitioner Diaz deposited a check

in the sum of $1395 for collection in his bank, made by

Mrs. M. E. Fowler on the Citizens Bank, of Pensacola, Flor-

ida (28-9, 1027, G-323, 2155). This check was forwarded to

the Pensacola bank for payment, and the officer of the

Pensacola bank testified that the check was received and

paid. Here again, the envelope with the physical indicia

of the use of the mails was not offered in evidence, and

proof of mailing could only be found from vague inferences

veyed to Miss Duling was that which was acquired by the vendor (Silverman)

under deed “with even date herewith” (1862). The date of the deed G-75 is

April 15, 1941, while the letters which accompanied the deed and referred to

in Counts 1 and 2 were dated March 10 and 12, 1941, respectively. The deeds

mentioned in these letters were never offered in evidence and were never identi-

fied by any witness.

—

drawn from custom and usage. Mrs. Fowler, the maker

of the check, was never called as a witness. Her husband

did testify concerning many dealings with Diaz and other

petitioners and defendants.

At this point, it becomes essential to refer to the general

pattern of the case to see the damage done Diaz and the

other petitioners by the admission in evidence against them

of Fowler’s recitals of his dealings with Silverman. Ap-

parently, after Silverman had given Fowler a forged deed,

(1213-1216, 1218-1221), Baker attempted to save Fowler

from the consequences of this act. Diaz, who had long be-

fore bought some land from Baker, also met Fowler. Diaz,

on his own account and not in connection with anyone else,

and without the use of a single false representation, sold

some land to Mrs. Fowler on account of which the check

involved in Count 4 was given. After the deed had been

delivered, and after the land was recorded in Fowler’s

name, and after the transaction was completed, Diaz de-

posited the check to his account in the bank in New Orleans.

Certainly, a scheme to defraud Fowler, if one existed, was

far beyond the completed stage at that point. The rep-

resentations, if any had been made, and the article intended

to be sold, had not only been sold but actually delivered.

Yet, the District Court permitted the jury, nay, compelled

the jury to say that the act of Diaz in depositing this check

to his own credit in a New Orleans bank was the act of

every defendant and petitioner in furtherance of the gen-

eral scheme. All this, without the slightest indication from

the record by inference or otherwise that any petitioner

or other defendant had any interest, financial or otherwise,

in this transaction between Diaz and the Fowlers. Thus,

the proof fell far short of that required for submission to

a jury, because: (a) there was no definite proof of mailing,

(b) there was no connection between this mailing and any

general scheme to defraud, (c) the mailing came long after

the completion of the transaction (Kann v. United States,

323 U.S. 88), (d) there was no proof that the alleged mat-

ter was mailed by the defendants or caused by them to be

mailed, and (e) no false representations were made by

Diaz. In fact, Fowler, at the very time of the trial, believed

that Baker had been absolutely fair with him (1334).

Count 5

The mailing in Count 5 was said to have taken place on

April 15, 1941. A deed was recorded in the office of the

recording agent at Point-a-la~-Hache, Louisiana, with Miss

Duling of Jackson, Mississippi, as grantee. After record-

ing, the deed was returned through the mails to Miss Duling

(G.-74, 1861). The claim of these petitioners with respect

to Count 5 transcends any question of lack of proof of

mailing. First, the general scheme to defraud set forth

in the indictment fails to allege that the return of a deed

by a recording officer was part of the so-called scheme.

Second, the transaction which resulted in the giving of

this deed and its recording was one between Silverman,

Kiefer and Miss Duling, in which none of the other peti-

tioners had the slightest interest, financial or otherwise.

Third, the deed itself is entirely different from any deed

given to any other purchaser by any petitioner or defendant,

Silverman describes himself as the grantor and the deed

is executed by him and not by the land company. It cannot

be overlooked that Miss Duling said that her transaction

with Safir was long before and was “a fair and square sale”

(936). She went on to say, further, that she had never met

or had any dealings with Kahn, Levy, Bird, or the defendant

Burgin (943-5). Where the defendant Johnson was con-

cerned, Miss Duling was entirely satisfied with her dealings

with him; they involved the drilling of a well in Texas,

which had actually taken place (945-946).

Miss Duling’s memory was very bad. In fact, she ad-

mitted that she had been in an accident long after the

occurrences and before the trial, and that she had “knocked

my brains out, almost * * * and there are some little things

that sometimes I just don’t remember” (940). It is clear

that there was not sufficient evidence as a matter of law

to warrant the submission of this case to the jury or to

sustain the conviction once had, because: (a) the transaction

involved was completely separate and apart from the

general scheme set forth in the indictment, (b) the mailing

itself was not within the scope of the scheme alleged in

the indictment, (c) the return of the deed by the recorder

could in no way tend to further a general scheme to de-

fraud, and (d) the return of the deed was long after the

transaction between Silverman and Duling had been com-

pleted, and was not an integral part of the alleged scheme

to defraud.

ARGUMENT

The trial court deprived the defendants of a fair

trial in accordance with constitutional concepts by

instructing the jury, “but this presumption of inno-

cence will avail the defendants no further, so soon as

brima facie evidence of the truth of the charges laid

against them in the indictment is presented to the jury.

That prima facie evidence, if it satisfies the jury be-

yond a reasonable doubt of the guilt of the defendants,

bars the presumption of innocence, because the pre-

sumption is no evidence at all, and plays its part only

so long as there is absence of legal evidence as to the

particular fact to be established” (1703).

Coffin v. United States, 156 U. S. 482, 456-461;

Cochran v. United States, 157 U. S. 286 ;

Kirby v. United States, 174 U.S. 47, 55.

The trial court’s admonition to the jury that the “pre-

sumption of innocence is no evidence at all” is in direct con-

tradiction to this Court’s determination in Coffin v. United

States, 156 U.S. 432, 458, 461, and Cochran v. United States,

157 U. S. 286, 299, 300, a conclusion from which this Court

has never receded.

The trial court’s concomitant charge that “ * * * this pre-

sumption will avail the defendants no further so soon as

prima facie evidence of the truth of the charges laid against

them * * * is presented to the jury * * * and plays its part

only so long as there is absence of legal evidence as to the

particular fact to be established”, is indeed an enormity

—

which achieves the confiscation of defendants’ constitutional

rights to a fair trial. It cannot be effaced. Transcending

the merely procedural, this constitutional heresay requires

no objection of counsel for review by this Court (Bras field

v. United States, 272 U. S. 448, 450). The verdict of a jury

reached under the auspices of such a charge, necessarily,

loses its sanction, since the wellspring of the jury’s judg-

ment has been polluted.

When the trial court stated that the presumption of inno-

cence is not evidence, it was not acting the precisionist, re-

jecting the word “evidence” in favor of alternative expres-

sions such as “instrument of proof” (Coffin v. United

States, 156 U. S. 482, 459; Kirby v. United States, 174 U.S.

47, 55), or “nature of evidence” (Dodson v. Umited States,

23 Fed. (2d) 401, 402). The narrow area of controversy that

has arisen as to whether the presumption of innocence is

evidence, or, more accurately, “in the nature of evidence”,

or an “instrument of proof”, abates the gravamen of the

court’s prejudicial error not in the slightest.

The trial court, instead of either instructing the court

that the presumption of innocence is evidence, or of sub-

stantially embodying the preposition in other language,

such as “that the presumption of innocence remains with

the defendant until the jury are ‘satisfied of the guilt be-

yond a reasonable doubt’” (Agnew v. United States, 165

U. S. 36, 51, 56; see also Coffin v. United States, 156 U.S.

432, 459),° rejects this Court’s concept of the presumption

of innocence in its entirety and foists upon the jury the

absurd nullificatory doctrine that the presumption of inno-

cence plays its part only so long as there is absence of legal

evidence as to the particular fact to be determined, and will

5 The Court, in the Coffin case, states, “The usual formula in which

this doctrine is expressed is that every man is presumed to be innocent until

his guilt is proven beyord a reasonable doubt.”

——

avail the defendants no further so soon as prima facie evi-

dence of the truth of the charges laid against them, is pre-

sented to the jury.

This Court, adopting the language of Wills on Cireum-

stantial Evidence, stated in Coffin v. United States (156

U. S. at p. 459), that the “presumption must prevail until

it is destroyed by such an overpowering amount of legal

evidence of guilt as is calculated to produce the opposite

belief.”

Adopting an extreme opposite view, the trial court ef-

fectively instructed the jury that as far as they were con-

cerned, the presumption of innocence did not exist at all;

that it was something that ceased to operate as soon as

they began to function in the jury room. The very fact

that they were given the case to consider, the jury was ad-

vised, established as law, that legal evidence had been

produced which was “sufficiently substantial” (1705). This

selfsame fact withdrew the presumption of innocence from

their deliberations and rendered it inoperative. It could

not be taken into the jury room!

Aggravating immeasurably the damages to defendants

wrought by the trial court’s exclusion of the beneficient pre-

sumption of innocence from the jury’s deliberations was

the ironical fact that the trial court took pains to inject a

“presumption” most malignant to defendants’ cause into

their deliberations. In this case in which the only witnesses

were government witnesses, the trial court saw fit to in-

struct the jury, “However, you will bear in mind that, un-

der the law, every witness is presumed to speak the truth”

(1704).

Thus, while the jury was admonished that the presump-

tion of innocence “will avail the defendants no further

so soon as prima facie evidence of the truth of the charges

is laid against them,” the presumption that every govern-

ment witness intends to speak the truth was not of like

evanescent character. The latter “presumption” was indeed

evidentiary in nature, since the weighing of evidence, the

evaluation of discrediting circumstances of bias and pre)-

udice, was to be undertaken and pursued, under sway of the

“presumption” that every government witness intends to

tell the truth!

That it was grievous error, in any event, to instruct the

jury that their deliberations respecting credibility and bias

were to be influenced by this “presumption” that the wit-

ness is truthful, we discuss below (under III, infra).

At this juncture, however, we desire to emphasize (1)

that the giving of the instruction that every witness is

presumed to intend to spea* the truth, meaning every gov-

ernment witness, and (2) the handicapping of the jury’s

right to judge credibility and bias for themselves on scales

free to record their findings, by assigning ubiquitous in-

fluence to the “presumption”, all this, rendered it all the

more urgent that the court refrain from emasculating the

presumption of innocence, and concomitantly multiplied

the resultant harm, when the court did nullify the presump-

tion of innocence.

The Court’s instruction that the presumption of inno-

cence was not evidence registered damage to the defen-

dant’s every time the court instructed the jury that it was

the evidence that they were to consider (1704) and solely

the evidence (1717). This pervasive and consequential ele-

—

~—

—

ment of damages resulting from a charge that the presump-

tion of innocence is not evidence is duly noted by this Court

in Coffin v. United States (156 U. S. 432, 4) which stated,

“<The proofs and the proofs only’ confined them to

those matters which were admitted to their considera-

tion by the Court, and among these elements of proof,

the court expressly refused to include the presumption

of innocence to which the accused were entitled, and

the benefit whereof both the court and the jury were

bound to extend him.”

Assuming even that a correct charge on the subject of

reasonable doubt is given to the jury, the error on the

subject of presumption of innocence is not abated. This

Court so held emphatically and forthrightly in Coffin y.

United States, 156 U. 8. 482, 4), stating:

“Concluding then, that the presumption of innocence is

evidence in favor of the accused introduced by law in

his behalf, let us consider what is ‘reasonable doubt.’

It is of necessity the condition of mind produced by

the proof resulting from the evidence in the cause. It

is a result of proof, not the proof itself; whereas the

presumption of innocence is one of the instruments of

proof, going to bring about the proof, from which rea-

sonable doubt arises; thus one is a cause; the other an

effect. To say that one is the equivalent of the other

is therefore to say that legal evidence can be excluded

from the jury, and that such exclusion may be cured

by instructing them correctly in regard to the method

by which they are required to reach their conclusions

upon the proof actually before them.” |

It can hardly be denied that the trial court’s error repre-

sents a misdirection concerning “the substance of the stand-

ards by which guilt is determined in our Courts”. As such

it is reversible error. (Bollenbach v. United States, Vol. 90

Law Ed. 318, 327 U.S. )

The trial court committed reversible error in in-

structing the jury that “it (the presumption of inno-

cence) is not intended, nor has it ever been intended

as extending to one who in fact is guilty, so that he

or she may escape just punishment” (1703).

The best refutation of this charge comes from the opin-

ion of the Cireuit Court of Appeals of the Fifth Circuit in

a prior appeal in a case in which the same language had

been used by the same district judge. We refer to Gomila

vy. United States, 146 Fed. (2d) 372, 373.

“The statement that the ‘presumption of innocence’ was

not intended, nor has it ever been intended, as extend-

ing an aid to one, who in fact is guilty, so that he may

escape just punishment is not a correct statement of

the law. The presumption of innocence applies alike

to the guilty and to the innocent, and the burden rests

upon the Government throughout the trial to establish,

by proof beyond a reasonable doubt the guilt of the ac-

cused. Until guilt is established by such proof, the de-

fendant is shielded by the presumption of innocence.

The fact of guilt does not enter into the application of

the rule, the intent and purpose of which is to protect

all persons coming before the courts charged with

crime until the presumption of innocence is overthrown

by evidence establishing guilt beyond a reasonable

doubt.”

The Circuit Court, in our case, did not reject its previous

holding, but refused to apply the rule of the Gomila case

on the ground that the charge had been corrected.

The record shows clearly, that this charge was not cor-

rected, that the purported correction, on page 1724, related

only to the objection of a defendants’ counsel to that part

of the court’s charge wherein the court indicated that

——s

“prima facie” * evidence if not met by the defendants is

sufficient to prove the defendants guilty. This the court

attempted to correct by a charge dealing with “reasonable

doubt”, and including the statement, “there is no require-

ment under the law that any defendant offer any testi-

mony” (1724).

It will be noted that the purported correction dealt not at

all with the presumption of innocence, and corrected nei-

ther the error on that score cited under I infra nor the pres-

ent argument (II). Indeed, the government’s brief in the

Circuit Court does not contend that any correction of the

presumption of innocence charge was effectuated. We have

already seén ‘that a correct charge concerning reasonable

doubt does ndt take the place of a correct charge as to pre-

sumption of innocence.

Ill

The trial court erred when it charged the jury that

in considering the credibility of witnesses, the jury

should “bear in mind that, under the law, every wit-

ness is presumed to intend to speak the truth” (1704).

This was especially prejudicial since the only witnesses

who testified were Government witnesses.

The Court “should not undertake to control the freedom

of their [the jury’s] judgment in dealing with the probabil-

6 The constant and repeated use of a legal term “prima facie” without

explanation or translation certainly could not assist this jury in arriving

at a verdict. The words “prima facie” should be “avoided in a charge to a

jury, since they are not in common use among laymen and are likely to cause

confusion of thought and misunderstanding” (McAdams v. United States, 74

Fed. (2d) 37, 40).

ities of their testimony, by laying down artificial presump-

tions to control them in arriving at a verdict. Thus, he

should not tell them that in passing on the credibility of a

witness, they should consider that it is a rule of law—a

presumption—that men testify truly and not falsely.” 2

Thomspon on Trials, 2d Ed. see. 2420, p. 1683.

Coming now to our own case, we find that some of the

witnesses who testified against petitioners admitted their

own lack of good morals in the very transactions (eg. 499,

466-7, 553-4). When the Court instructed the jury that the

testimony of the government witnesses made out a “suffi-

ciently substantial” (1705) case against the petitioners,

and that only a “prima facie” case was required to justify

conviction (1703-4), these instructions, coupled with the

fact that the defendants called no witnesses, irrevocably

spells out a situation where the arbitrary presumption was

tantamount to a directed verdict of guilt. If witnesses are

presumed to speak the truth, and if what they say makes

out a “sufficiently substantial” (1705) case of guilt against

the defendants then the trial has been reduced to mockery.

We thus have not even the semblance of a fair trial guar-

anteed by the Constitution. Reasoning from this false

premise, it necessarily follows that, if witnesses merely tes-

tify to a prima facie case, and since they are presumed to

speak the truth, no question of fact is left for the jury’s

determination. The Court instructed the jury to take this

presumption (that witnesses intend to speak the truth) into

the jury room and use it in their deliberations, instructing

them at the same time that as soon as their deliberations

began, the presumption of innocence was not to be consid-

ered.

7 “7

Any presumption that all witnesses intend to speak the

truth is indeed artificial.’ Artificial presumptions have

been rejected by this Court in Tot v. United States, 319

U. S. 463; and in Bollenbach v. United States, 327, U. §S.

, 90 Law Ed. 318. The jury’s freedom to entertain rea-

sonable doubt of any and every witness, and, hence, reject

it (Hurwitz v. United States, 299 F. 47), was impaired by

the court’s charge that in weighing the evidence and the

witnesses’ bias, they must bear this false presumption in

mind.

The trial court erred when it emphatically refused

to charge, upon request, that the failure of certain

petitioners to testify in their own behalf should not

be used against them (1725-6). It was likewise error

to make this charge belatedly, after the jury had de-

liberated for at least six hours at which time charge

was made as to all defenaants, including those who

had specifically rejected such charge.

At the close of the charge to the jury, counsel for peti-

tioners, Bird, Diaz and defendant Silverman, requested the

charge to the effect that their failure to take the stand

should not give rise to any presumption against them.

(Bruno v. United States, 308 U. S. 287.) The Court then

felt that this request was untenable (1738) and accompan-

7 If this presumption be true, then can it fairly be argued that felons

called as witnesses are presumed to tell the truth? (Rosen v. United States,

246 U. 8. 467); or that accomplices must be believed? Is it likewise true

that testimony of a private detective must be believed? (Shettel v. United

States, 113 Fed. (2d) 34); And what about the self interest of defendants

when they testify? Are all these to bow before this artificial presumption that

witnesses intend to speak the truth?

_—

ied the refusal by a comment that the question was “ele-

mentary” (1726). Shortly before the verdict, and after

the jury had been out for six hours, the court took occasion,

upon the jury’s presence in the courtroom, to make the re-

quested charge (1738, 1739).

The failure of the Court to charge when the case was

first given to the jury was manifestly error (Bruno v.

United States, 308 U. S. 287).

It may be that when the charge was first denied, only

those petitioners who had requested it had ground for com-

plaint. But when the charge finally was given, all had been

aggrieved, for the grievance of those who requested the

charge had not been removed, and those who did not re-

quest the charge now had reason to complain. The peti-

tioners who did not request the charge did so out of desire

not to have the matter of their failure to testify referred

to at all. However, if the charge is to be given, and the

matter of the defendant’s failure to testify called to the

jury’s attention, despite the non-assenting defendants, the

time to do it was when the case was given to the jury.

If the failure of defendants to testify did enter into the

jury’s deliberations for six hours in consequence of the

omitted charge, the damage was done, and could never be

cured. The belated giving of the charge could not have

benefitted them and very probably harmed them. (See Dod-

son v. United States, 24 Fed. (2d) 401, 403, to the effect

that instruction beneficient to defendants should be given

at same time other instruction are given.)

Merely because there were a number of persons being

tried together, no reason existed for depriving any one of

the defendants of his own basic right to a fair and impartial

trial. Every defendant was entitled to constitutional pro-

tection as if he were tried alone, and if one defendant de-

sired to waive a constitutional or statutory right, and the

sania —

other insisted upon the same right, each was entitled to have

his own request granted. When the Court ultimately

charged, in the language of Bruno v. United States, supra,

it made its charge for all defendants, including those who

had not asked for it, and who had deliberately chosen to re-

fuse iit. The net result was that as to Bird, Diaz and Silver-

man, the charge that they received was too late. As to the

other petitioners, the charge they did receive was an unfair

and improper comment on their failure to testify.

The critical issue—did defendants place or cause to

be placed the alleged matter in the mails?—remains

unanswered by the jury’s verdict. The court in-

structed the jury that they need not decide this ques-

tion, that it was sufficient if any mailing at all oc-

curred. Thus, the sine qua non of the case is lacking.

The trial court instructed the jury (supra, 1714): “Un-

der such facts, it is not necessary for the jury to find that

it was any defendant on trial who has been proved to have

‘placed’ or ‘caused to be placed’ * * * any mailable matter

in the United States mail * * * if, as a matter of fact, the

use of the mails has actually been proved beyond a reason-

able doubt.”

This is the most fundamental conceivable error in a case

consisting entirely of mailing counts. The indictment specif-

ically alleges in each count that the defendants did place

or cause to be placed the mailable matter in question in

the mail. This is indeed an essential element (United States

v. Cohen, 145 Fed. (2d) 182, 190, cert. denied, 323 U. S. 793;

Freeman v. United States, 20 Fed. (2d) 748, 750).

— '

It follows that the sine qua non of the case—a jury’s de-

termination that the defendants placed or caused to be

placed in the mails the things alleged in the indictment, is

lacking. The charge of the Court was wrong in so vital a

regard that the guilt or innocence of the defendants ac-

tually remains undecided. No matter what the trial court

may have said on the subject elsewhere in the charge, what

was said here was wrong and requires reversal.

The crucial issue of this trial was whether defendants

had placed or caused to be placed certain matter in the

United States mail. As above indicated, the Court took

this issue from the jury. The language of this Court, in

Bihn v. United States, U.S. , 90 Law Ed. 1208,

1211, is quite appropriate: “Instructions to acquit, if there

was reasonable doubt as to petitioner’s guilt, were given in

other parts of the charge. Those were general instructions.

They would be adequate, standing alone. But on the crucial

issue of the trial—whether petitioner or one of four other

persons stole the coupons from the bank—no such qualifica-

tion was made; and the question was so put as to suggest

a different standard of guilt. * * * And in any event the

probabilities of confusion in the minds of the jurors seem

so great, and the charge was so important to the vital issue

in the case, that we conclude that prejudicial error was

committed. We certainly cannot say from a review of the

whole record that lack of prejudice affirmatively appears.”

The evidence adduced at the trial was insufficient

to warrant the submission on Counts 1 and 2 to the

jury. It was thus error to sustain the conviction of

these counts.

The testimony failed to disclose where the letters

were mailed or that in fact they were mailed.

To avoid repetition, we respectfully refer to our discus-

sion under “The Evidence”, “Counts 1 and 2”. It is clear

that the envelope was not offered in evidence, and that the

only testimony concerning the use of the mails is based upon

a statement by a bank officer that under ordinary usage

the letters involved in Counts 1 and 2 came to his bank

through the mails. The source of the mailing was abor-

tively presented upon the theory that each letter was on

stationery which bore the heading, “M. C. Baker, New

Orleans, Louisiana.” From this latter fact, the Court in-

structed the jury that they could draw the inference that

both letters were mailed from New Orleans (463). This

statement was made after the United States attorney

stated that he had no other proof on this subject (463).

Thus, it appears that from a statement on a letter, the

Court authorized the following presumptions: first, that

the letter was enclosed in an envelope addressed at New

Orleans to the bank in Jackson, Mississippi; second, that

defendant, Baker, whose name was purportedly signed to

the letter (there was no identification of the signature) had

caused the letter to be duly stamped and mailed; and third,

that the post office at New Orleans had received the letter

and delivered it to the bank at Jackson, Mississippi. We

paraphrase the language of Brady v. U nited States, 24 Fed.

(2d) 399, 403: “To do this, we would have to permit pre-

sumption to be built upon presumption. From the fact

that the letters contained in themselves the address of

[M. C. Baker, New Orleans, Louisiana], the presumption

would have to be drawn that they were enveloped, properly

stamped and addressed to [the bank at Jackson, Missis-

sippi]. From this presumption, the presumption would

have to be raised that the defendant [Baker] caused them

to be mailed, so addressed, and from the last presumption,

the presumption would have to be drawn that the post

office establishment delivered them at [Jackson, Missis-

sippi]. It is well settled that presumptions cannot be based

on presumptions. Vernon v. United States (CCA 8) 146

F. 121, 126. We conclude that the evidence was insufficient

to support the verdicts of guilty. See Freeman v. Uniied

States (CCA 3), 20 Fed. (2d) 748.”

On the same subject, see also Davis v. United States,

63 Fed. (2d) 545, 546; Mackett v. United States, 90 Fed.

(2d) 462, 464; United States v. Baker, 50 Fed. (2d) 123.

The government attempted to sustain this type of proof

by reference to Steiner v. United States (Fifth Circuit),

134 Fed. (2d) 931, but failed to point out that in addition

to the markings on the letterhead, an envelope was offered

into evidence, and a witness testified that the defendant

had admitted the use of the mails with regard to the par-

ticular letters. It thus affirmatively appears that there

was no proof where the letters were mailed or that in fact

the mails were actually used to transmit them.

Re sts—

There was no testimony offered to show what ac-

companied the letters and whether the deeds contained

therein were “securities” under the Securities and

Exchange Act.

It is conceded that the two deeds accompanying the let-

ters in Counts 1 and 2 were never offered in evidence. Thus,

no proof existed concerning the very terms and context of

those deeds. In fact, it was never established that the

land sold by the defendant, Silverman, to Miss Duling was

the same which was said to have been conveyed to him

through these deeds. The testimony failed to disclose to

whom the deed in the letter referred to in Count 1 was

delivered and as to Count 2, it appears that the deed was

returned to Baker. It thus appears that it was not proven,

and that no inference could be drawn, that these deeds

were an instrument of fraud, or were used in connection

or in furtherance of a scheme to defraud, alleged in the

indictment. Merely because two lower courts have made

concurrent findings on this subject does not relieve the

Supreme Court of the task of examining the foundation for

findings in this case (Baumgartner v. United States, 322

U. S. 665).

Where clear error such as this is shown, no rule of re-

liance applies. Moreover, it is significant to note that in the

opinion of the Circuit Court, petitioners’ arguments on

this phase—the lack of proof as to Counts 1 and 2—was

completely ignored and the Circuit Court made no explicit

finding on the connection of the deeds in Counts 1 and 2 with

the scheme to defraud.

The deeds referred to in Counts 1 and 2 were not

securities”.

“It [the Securities Act] affects not ordinary land sale

contracts, but ‘investment contracts’ which evidence pri-

marily a right to participate in the proceeds of an income-

producing venture, membership in which is secured through

entrusting an investor’s capital to the management of

others.” (Securities and Exchange Commission v. Bailey,

41 F. Supp. 647, 650.)

In none of the other deeds in evidence (none were offered

to support Counts 1 and 2) does the Plaquemines Land

Company, grantor, undertake any commitments to exploit

the land sold, nor is their testimony even of any collateral

undertaking of this nature. True, the deeds are made sub-

ject to the rights of a lessee to drill for oil, and con-

comitantly, the conveyance carries with it the right to share

in the proceeds of successful exploitation by the lessee but

such provisions are analogous to those contained in any

deed of property where a business tenancy exists and

hence requires that the transfer of ownership carry with

it both the benefits and the burdens of the tenancy. Such

benefits may well be contingent in accordance with some

criterion of successful exploitation of the premises by the

tenant, such as gross receipts, or profits, but it has never

been suggested that such factor renders a deed of property

so characterized as a “security.”

Nor do we have an “investment contract” here. More-

over, the evidence shows that the land was purchased in

quantities allegedly represented by the particular defen-

dants making the sale as sufficient for drilling sites, hence

the sales in our case was essentially that of land not of

“fractional undivided interests in oil and gas rights.”

In the absence of contractual undertaking for exploita-

tion of the property by the grantor itself, the Security and

Exchange Act does not apply.

Securities and Exchange Commission v. Joynor

Leasing Corp., 320 U. 8S. 344;

Securities and Exchange Commission v. Bailey,

41 F. Supp. 647, 650.

The failure of the Circuit Court of Appeals to

make a determination as to whether these deeds were

“securities” deprived petitioners of an intermediate

decision. The question—are cash deeds “securities” —

is important and novel and ought to be decided.

The Cireuit Court reasoned that since the sentences im-

posed on defendants, on Counts 1 and 2, were concurrent

with the sentences imposed on Counts 4 and 5, it was un-

necessary to determine whether the deeds in Counts 1 and

2 actually were securities (2399). This was error on two

scores. First, conviction of Counts 4 and 5, as will be shown

unde: VII and VIII infra, is not to be sustained on grounds

intrinsic to those counts. Secondly, if the Securities And

Exchange counts are erroneous, the situation as it now

stands is that the evidence under those counts presump-

tively contributed to the verdict of guilty on the other counts

that were submitted to the jury, in view of the fact that the

case was given to the jury as a single comprehensive scheme.

Hence, the question is not one of erroneous sentence, but of

conviction upon evidence not properly admissable if the

Securities And Exchange counts are indeed invalid.

ARE GRAMEEN DT DPM RA I MDS RMR REIN 3 APR, SNE I ———

—_

We respectfully urge that this Court remand this case to

the Cireuit Court to make the requisite finding, if this Court

fails to agree with us that conviction under Counts 1 and 2

must in any event be reversed upon the other grounds set

forth in this Argument. (Gerdes v. Lustgarten, 266 U. S.

321, 327; Lutcher & M. Lumber Co. v. Knight, 217 U.S. 257,

268.)

VII

The proof under Count 4 was insufficient as a mat-

ter of law. It was error to sustain the conviction on

this Count.

The transmission through the mails of the check

after the transaction was completed was not a viola-

tion of the statute. (Kann v. United States, 323 U. S.

88.)

We respectfully refer this Court to our discussion under

“The Evidence”—“Count 4”. The sale of the land to Fowler

by Diaz had been completed. The deed had been delivered

and the transaction completely closed. Some time later,

Diaz deposited check for the balance of the paymy +t for the

land in his account in New Orleans. The check was for-

) warded by the New Orleans bank for payment to the bank

upon which it was drawn in Pensacola, Florida. This is the

very situation under which this Court, in the Kann case

supra, reversed the judgment of conviction. Any mailing

alter the completion of a particular transaction cannot be

said to have any relevancy to the transaction itself. Under

the Statute, the mails must be used “for the purpose of

executing” (Title 18, U. S. C. 338) the scheme, and subse-

quent use is not penal. Just like the defendant Willis in the

Kann case, Diaz had deposited the check to his account.

“The scheme had reached fruition. The persons intended

to receive the money had received it irrevocably. It was

immaterial to them, or to any consummation of the scheme,

how the bank which paid or credited the check would collect

from the drawee bank. It cannot be said that the mailings

in question were for the purpose of executing the scheme, as

the statute requires.” Aann v. United States supra, at page

94.

There was no proof that the acts of Diaz or Baker

in the transactions preceding the mailing involved

in Count 4 were pursuant to and in furtherance of

the scheme to defraud.

Assuming even that a conspiracy or scheme linking Kiefer

and Silverman with the petitioners has been shown to have

existed, the fact remains that there is no evidence that it

was part of the conspiratorial arrangement that forgery and

fraudulent sales of the same property to different grantees

be effected. Testimony by some grantees of the land com-

pany concerning individual transactions clearly outlines

the pattern of representation and modus operandi of the

salesman of the land company. No grantee other than

Fowler claimed that he had been sold land already conveyed

by the grantor to another. Thus, it is clear that when

Kiefer and Silverman erased the name from a deed and con-

veyed land to Fowler they had no right to sell, Kiefer and

Silveman had embarked upon a private criminal venture

far beyound the breath and scope of any scheme with which

the petitioners might have been linked.

Moreover, the testimony shows that petitioners, Baker

and Diaz, on discovering the acts of Kiefer and Silverman,

exposed them to Fowler, and repudiated the entire venture.

Baker and Diaz sought to help Fowler recoup his loss by

selling him other land at cost. Whether or not Baker and

Diaz actually benefited Fowler is besides the point, except

that it may be noted that the government is bound by the

testimony of its witness, Fowler, that he still considers that

Baker and Diaz did him a favor (1334). The fact remains

that there is no evidence that the acts of Kiefer and Silver-

man were performed pursuant to or in furtherance of the

conspiracy alleged or proved, and that, on the contrary,

there is evidence that Kiefer and Silverman acted, unilate-

rally, and independently, and independently and beyond the

scope of any arrangement that might have subsisted be-

tween them and the petitioners.

Assuming that a scheme to defraud was established,

it still was the function of the jury to determine

whether the acts of Diaz and Baker under Count 4

were part of that scheme. The jury, however, was

ordered to consider the case on the theory of “one

scheme” and that the act of any defendant was the

act of all. Thus, reversible error was committed.

There is every indication that the testimony of fraud on

the part of petitioners BAKER and D1AZ in the transac-

tions involved in Count 4, if not entirely non-existent is so

weak and equivocal, that the jury conviction of them on this

count represents an attribution to them of the guilt of

Kiefer and Silverman, under the counts’ authorization, to

charge each defendant with the acts of all, rather than any

finding that their own acts were intrinsically fraudulent.

Certainly, it cannot be assumed that the jury did in fact

predicate conviction of petitioners upon their own acts.

—y

The case was submitted to the jury by the Trial judge

in terms of the indictment as a single scheme and plan.

Throughout the trial we find the trial judge insisting that

“it was a common design between the defendants” (1209),

Thus, the court overrules the objection by petitioner Baker’s

counsel that the evidence as to Kiefer’s acts in his trans-

actions with Fowler relate to a private matter (1209) and

going beyond this error, the trial Court affirmatively and

solemnly informs the jury that, “The charge is that it was

a common design, and any act that the jury finds, after a ’

review of the evidence * * * to have been proved by either

definite testimony or circumstantial evidence, or by legal

inference, they feel justified from the evidence before them

in finding was done by any one of the defendants, is compe-

tent as against every other defendant, if the jury does find

that they acted in collaboration one with the other (1209,

1210).°

Conspicuous by its absence is the essential qualification

and condition that the thing done by one defendant to be

binding upon the others must have been done in furtherance

of the conspiracy.

The case was submitted to the jury as one scheme and

the jury was thus effectively directed that as a matter of

law every fraudulent act testified to was thus necessarily

within the scope of this scheme (1702, 1706, 1708, 1710).

The trial court, as already noted, refused to consider any

objection that a fraudulent act on the part of one defendant

might not be within the scope of the conspiracy.

The crux of the reversible error presents itself, in the

demonstration thus made, that the jury was not at liberty |

8 See also the Court’s somewhat remarkable statements about the jury

right to decide whether the defendants were “operating in this or any other

case” (982).

to refuse to attribute to petitioners the alleged fraudulent

acts of Kiefer and Silverman in the transactions proved

under Count 4. If the jury found that Kiefer and Silverman

were guilty of fraud in their transaction with Fowler, then

ipso facto, so were petitioners, for the Court tied peti-

tioners irrevocably and beyond redemption to Kiefer and

Silverman by ordering the jury to accept from the Court

the law that there was a single conspiracy. The Court’s

error was aggravated by the explicit instruction, a co-con-

spirator “is held to have adopted as his own the past and

future acts of the other conspirators, even though subse-

quent activities in pursuance of the conspiracy are extended

beyond his own original intent in so attaching himself to

the conspiracy” (1709). This charge was wrong because

if activities of a co-conspirator go beyond original intent,

such activities become his own private venture.

“The acts and declarations of confederates, past or fu-

ture, are never competent against a party except insofar

as they are steps in furtherance of a purpose common to

him and them.” (United States v. Lekacos, 151 Fed. (2d)

170, 172; United States v. Peon, 100 Fed. (2d) 401; United

States v. Falcone, 311 U. 8S. 205.)

The Cireuit Court in its opinion overlooks the vital point

that the jury was forestalled from determining that the

fraudulent acts of Kiefer and Silverman in the Fowler

transaction represented a private transaction. Once the

jury decided that Kiefer and Silverman acted fraudulently,

they were compelled to hold petitioners responsible for it,

as part of the common plan and design.

The Cireuit Court conceded that there was evidence that

Silverman and petitioner Baker had been “dealing with

each other at arms’ length” (2408), but mistakenly reasoned

that the jury had determined the facts to the contrary,

whereas, the crucial consideration at this juncture is the

point that the jury were denied the right to determine

whether specific acts by defendants represented criminal

schemes or individual crimes outside of the single scheme

submitted to them. The jury was thus compelled to attri-

bute guilt to everyone rather than limiting responsibility

according to the evidence. Kotteakos v. United States, 90

Law Ed. 1178, is eloquent authority for the proposition

that reversible error permeates the case.

Another phase of the Circuit Court’s error is the reason-

ing that “the conspiracy in which Silverman was engaged,

if it was a separate conspiracy, was so closely connected

with the main, the general conspiracy, as that variance

could not affect, and has not affected, his substantial

rights * * *” (2409-10). Here the court overlooks the

point that if there be not one but two conspiracies, and if

the two be closely connected, as the Court states, the con-

sequence is that the testimony relevant to one of the crimes

so deeply stains and generally impugns the accused as tu

give genuine plausibility to the chance for prejudice. In

United States v. Lekacos, the Circuit Court of Appeals for

the Second Circuit (151 F. 2nd 170) in affirming the judg-

ments of conviction, which were reversed by this Court in

Kotteakos v. United States, 90 Law Ed. 1178, nevertheless

recognized that where testimony does so stain and impugn

co-defendants who are actually not in the same conspiracy

that prejudice must result. Had the Second Circuit found

the same close connection that the Fifth Circuit finds in

our ease, it, according to the opinion of Circuit Judge

Learned Hand, would have reversed the conviction first-

hand. Thus, the very argument that the Fifth Circuit gives

for sustaining the conviction is the outstanding reason that

it should be reversed.

Vill

The proof under Count 5 is insufficient. It was

error to sustain the conviction on this Count.

The return of a recorded deed through the mails

by a Recording Agent was not a violation of the

Statute.

Our discussion under “The Evidence”—“Count 5”, makes

it clear that the mailing of a deed by the recording officer

to Miss Duling was even further removed from the execu-

tion of the scheme to defraud than the mailing of the check

under Count 4. The proof definitely establishes that Miss

Duling acquired title upon delivery of the deed. She parted

with her money and the transaction was definitely com-

pleted. While the mailing of the check in the Aann case

(supra) was described as “merely incidental and collateral

to the scheme and not a part of it” (at page 95), the mail-

ing of the deed after recording does not qualify as even

being incidental or collateral to the sale of the land. It

is entirely independent of it.

Even the trial court recognized the fact that the transac-

tion had been completed, but attempted to justify its posi-

tion upon the theory that the genera) scheme had not been

shown to have terminated (902-903). The trial court erred

on this subject in view of the law as this Court set forth

in the Kann case. There too, the general scheme continued

after the mailing. However, it was held that the point in-

volved was the fact “that the scheme was completely ex-

ecuted as respects the transactions in question” (323 U.S.

at page 95).

~——

There was no allegation in the indictment that the

return of a deed through the mails by a Recording

Officer was part of the scheme.

It is noteworthy that the indictment herein, which goes

to great particulars in describing the scope of the so-called

“single scheme” to defraud, and alleges many acts as being

“in furtherance of” the said scheme, fails completely to

allege that the recording of the deed was an essential ele-

ment of the scheme and that the return through the mails by

a recording officer had anything to do with furthering the

scheme. Thus, there was no support whatever for the sub-

mission of Count 5 to the jury (Mitchell v. United States,

126 Fed. (2d) 550, 554).

The transaction between Kiefer-Silverman and

Duling was not a part of the “single scheme’’.

As demonstrated in our discussion of the evidence under

this count, the transaction which resulted in the giving

of this deed and its subsequent recording was between

Silverman-Kiefer and Duling. It was clearly established

that none of the other petitioners had the slightest interest,

financial or otherwise, in this venture. It was completely

apart from anything the petitioners had done. Our argu-

ment under “VII” “C” infra is pertinent and the Court is

respectfully referred thereto.

The Circuit Court erred in sustaining the convic-

tions because the evidence showed a number of separ-

ate and independent schemes and not a single general

scheme charged in the indictment.

We have already shown that even if a general scheme

existed, the transactions constituting the proof under

Counts 1, 2, 4 and 5 were not part of that general scheme

and that the jury was not so free to determine. We now

urge that no general conspiracy had been shown to exist.

We have under “The Evidence” shown the existence of

several separate groupings or schemes to which we respect-

fully refer the Court to avoid duplication at this point.

Under our footnote “3”, it was shown that there were at

least nine, if not more, independent groups of persons who

were pursuing the same purpose—selling certain land. The

error of permitting testimony of the acts of Kiefer and Sil-

verman to be held against petitioners, as well as the error

of permitting evidence concerning independent acts of in-

dividual defendants to be held against all the defendants

indiscriminately “permeated the entire charge, indeed the

entire trial. Not only did it permit the jury to find

each defendant guilty of conspiring with * * *” all the

others, it prevented the jury from considering “the evi-

dence relating to each conspiracy separately from that

relating to each other conspiracy charged”. Merely he-

cause persons conspire to commit a crime, they nevertheless

are not deprived of the constitutional safeguard “to indi-

vidualize each defendant in his relation to the mass. Wholly

different is it where those who join together with only a few,

though many others may be doing the same, and though

some of them may line up more than one group * * *”. The

petitioners did not receive a fair trial. The “transference of

- guilt from one to another across the line separating con-

spiracies subconsciously or otherwise” was “so great that

no one can really say a prejudice to substantial right has not

taken place” (Kotteakos v. United States, Law Ed. 1189,

1191). Upon the reasoning and the authority of the Kottea-

kos case, the denial of the motion for a directed verdict with

respect to all of the counts was error, and the Circuit Court’s

determination to sustain the conviction was likewise error.

CONCLUSION

The writ of certiorari should be granted.

Henry G. Sincer

Attorney for Petitioners

16 Court Street

Brooklyn 2, New York

Harry SILver,

of Brooklyn, New York

Tuomas EK. Furtow

G. Ray Gi

Wituua C. OrcHarp

Huexu M. Witkinson

Joun D, LamMBert

Hvueu M. Witkrnson, Jr.

Samuet A. TENNANT,

all of New Orleans, Louisiana,

With him on the Brief

— tT) , om, yo = : ™e Vout

; 2 j f a acta

t wee too . tw ¥v - a

oy 19 1945

CNATLIS S: cons “TI ey

IN THE 4

Supreme Court of the United States

OctoBer TERM, 1946

No. 484 (hgSO Be

Mutuarp C. Baker, IsaporE Water ie BeNJamin L.

Levy, A. M. Sarin, Witiiam B. Birp, Gasriet Diaz

and Emanvet M. Burern,

Petitwoners,

—against—

Unitep States or AMERICA.

PETITION AND BRIEF

ON APPLICATION FOR REHEARING

Henry G. SINGER

Hvueu M. WILkinson

Joun D. LAMBERT

Hucx M. WiLkrinson, Jr.

Samve.L A. TENNANT,

all of New Orleans, Louisiana,

Attorney for Petitioners H

16 Court Street e

Brooklyn 2, New York M3

Harry Si.ver, i

of Brooklyn, NewYork £

Tuomas KE. Furtow ;

G. Ray Gri :

WituiaM C. OrcHARD .

With him on the Brief

INDEX

PAGE

Table of Cases Cited:

Bolienbach v. United States, 327 U.S. , 90 L.

ee ee oc cck ccveckceuasehucks bawkeeekesadeanes 6

Brasfield v. United States, 272 U. S. 448 ........-- 6

Campbell River Mills Co. v. Chicago, ete., Co., 42 F.

). &, Seereererrrerrrerre crate tr tr 2

Cochran v. United States, 157 U.S. 286 ............ 2

Coffin v. United States, 156 U. S. 423, 496-461 ...... 2, 3,6

Dodson v. United States, C. C. A. 23 F. 2d 401, 402 .. 4

Kotteakos v. United States, U.S. , 90 L.

ee ME ity eas Genuduekchecasuuneeeesas 66s 6

Miklencie v. United States, 62 F. 2d 1044 .......... 3

Other Authorities:

Petition and Brief on Application for Rehearing .. 1

Mail Fraud Act (18 U. S. C. 388) ............008. 1

Securities Exchange Act (15 U.S. C. 77q) ......... 1

Rule 38, Subdivision 5 of the Revised Rules of the

Bapreme Court ......cccccccccenscccctccnscens 2

IN THE

Supreme Court of the United States

Ocroser TERM, 1946

No. 484

Miuttarp C. Baker, Isapork Watter Kaun, Bensamin L.

Levy, A. M. Sarin, Wiitiam B. Binp, Gasriet Diaz

and EmanvusEL M. Burern,

Petitioners,

—against—

Unritrep States oF AMERICA.

—

PETITION AND BRIEF

ON APPLICATION FOR REHEARING

To tHe HonoraBLe, THE CHIEF JUSTICE AND THE ASSOCIATE

JusticEs oF THE SUPREME Court OF THE UNITED StaTEs:

Your petitioners respectfully pray this Court to recon-

sider its determination made on October 28th, 1946, which

denied their petition for writs of certiorari to the United

States Cireuit Court of Appeals for the Fifth Circuit to

review judgments of conviction under the Mail Fraud Act

(18 U. S. C. 338) and mail counts under the Securities and

Exchange Act (15 U. S. C. 77q).

Your petitioners respectfully submit that special and

important reasons for the granting of the writ of certiorari

subsist in this cause, and that the denial of certiorari here-

in, in the face of these considerations, unsettles federal

criminal law at its very monuments and leaves not only

your petitioners bereft of the bare essentials of a fair trial

but foreshadows a like fate for all accused and brought to

trial in our courts.

Where special and important reasons call for this Court’s

exertion of its power of supervision within the scope of

Rule 38, Subdivision 5, of the Revised Rules of the Supreme

Court, and this Court nevertheless denies certiorari, the

courts are prone to invest such denial with the significance

of this Court’s sanction of the procedure, practices and

determinations which are questioned by the petitioners

(Campbell River Mills Co. v. Chicago, etc., Co., 42 F. 2d

775, 778).

The following questions therefore thrust themselves upon

our attention:

1. Does this Court intend to overrule Coffin v. United

States, 156 U. S. 432, 456-461; and Cochran v. United States,

157 U. S. 286, in their holding that the jury may consider

the presumption of innocence along with the evidence in

the case in determining guilt or innocence? )

2. Does this Court itself declare “that, under the law,

every witness is presumed to intend to speak the truth”

and that such instruction to the jury may be given by a

trial judge in a case in which the only witnesses are the )

government’s witnesses?

3. Does this Court acquiesce in and give sanction to the

instruction that the jury need not determine that defen-

dants either mailed or caused to be mailed any mailable

matter in order to be guilty of crime under mailing counts

in an indictment?

4. Where such matters involving the fairness and in-

tegrity of judicial proceedings, and the standards whereby |

guilt and innocence are to be determined are in issue, does

this Court intend to hold that either the inadvertence of

counsel in particularizing objection, or this Court’s own

view of the defendant’s lack of innocence can serve to allay

the affront to the integrity of the judicial process itself?

The trial court did assume a position diametrically op-

posed to that of this Court in Coffin v. United States, 156

U. 8. 432, 456-461. What could be clearer rejection of the

doctrine of the Coffin case than this language of the trial

court:

“But this presumption of innocence will avail the de-

fendants no further so soon as prima facie evidence of

the charges laid against them in the indictment is

presented to the jury * * * because the presumption

is no evidence at all, and plays its part only so long

as there is absence of legal evidence as to the particular

fact to be established” (1703).

This Court has never overruled its condemnation of such

an instruction. In Miklencic v. United States, 62 F. 2d 1044,

the Cireuit Court of Appeals for the Third Circuit reads

this Court’s sequence of decisions on this subject thus: “In

order properly to bring about the procedural consequences

of such a presumption (Wigmore on Evidence (2d Ed.)

Sec. 2491) the jury must be told about it, and how to handle

it, namely, they should begin with the presumption that

the defendant, although accused, is innocent, Holt v. United

States, 218 U. S. 245, 253; then consider the presumption

along with the evidence in the case, Allen v. United States,

164 U. S. 492, 501; and finally that it stands in favor of

the accused until such time as they shall find beyond a rea-

sonable doubt it has been overcome by evidence to the

contrary. Coffin v. United States, 156 U. S. 432, 459, 460;

Agnew v. United States, 165 U. S. 36, 51; Holt v. United

States, supra; Dodson v. United States (C. C. A. 23 F. 2d

401, 402).” (Emphasis supplied.)

This Court’s views are emphatically and explicitly sum-

marized in Dodson v. United States, 23 F. 2d 401, 402, by

the Circuit Court of Appeals for the Fourth Circuit:

“(1) The presumption of innocence, which from time

immemorial the law has thrown around a person ac-

cused of crime, means more than merely that the jury

shall go into the trial with a belief that the accused is

probably innocent. It is a presumption of law which

must be weighed by the jury along with the evidence

in the case in arriving at their verdict. Coffin v. U.S.,

156 U. S. 432, 15 S. Ct. 394, L. Ed. 481; Wolf v. U.S.

(C. C. A. 4th) 238 F. 902; Hyde v. U.S. (C. C. A. 4th)

15 F. (2d) 816; Wharton’s Crim. Evidence (10th Ed.)

p. 627; Greenleaf on Evidence (Lewis’ Ed.) par. 34,

p. 49; 16 C. J. 535, 983. It is true, as said in Allen v.

U. S., 164 U. S. 492, 501, 17 S. Ct. 154, 157 (41 L. Ed.

528), that it is ‘driven out of the case’ when the guilt of

the accused is established beyond a reasonable doubt;

but this does not mean that jurors may ignore it when

coming to consider their verdict at the conclusion of

the case.” (Emphasis supplied.)

The trial court herein, however, admonished the jury

that they must indeed ignore the presumption of innocence

when coming to consider their verdict. (See our main argu-

ment, pages 26 to 30 of Petition and Brief for Certiorari.)

The Solicitor General confesses that it was error for

the Court to instruct the jury “you will bear in mind that

under the law, every witness is presumed to speak the

truth” in this ease in which the only witnesses are govern-

ment witnesses (p. 23 of Solicitor General’s brief).

The Solicitor General, however, argues that the error

was tempered by the fact that the Court had left to the

jury the function of judging the credibility of the witnesses.

However, the very gravamen of our complaint is that the

jury was not left free to judge such credibility, but were

expressly required to do their judging upon scales weighted

with this arbitrary presumption. In effect, the Court gave

only lip service to the rule that it was for the jury to weigh

credibility. Actually, he was directing a verdict against

the petitioners, via this “presumption.” (See Petition and

Brief for Certiorari, pages 32 to 34.)

The Solicitor General confesses error in the charge that

“it was not necessary for the jury to find that tt was any

defendant on trial who has been proved to have ‘placed’

or ‘caused to be placed’ the matter in the mails.” The

Solicitor General, indeed, concedes that there might be some

merit in petitioner’s position “that the judge committed a

very fundamental error in giving this instruction” (p. 27

of Solicitor General’s brief).

He contends, however, that the Court’s preceding defini-

tion of the phrase “caused to be placed” cured the error.

On the contrary, the error is aggravated by the Court’s

discussion of the meaning of “caused to be placed” for

the Court explored the relatively broad meaning of the

language, and thereby accorded an equally broad meaning

to the effect of the erroneous charge. The error is squarely

presented for review by this Court. (See Petition and Brief

for Certiorari, pages 36-37.)

Petitioners’ counsel at the trial never affirmatively

waived any rights. Their actions never qualified for char-

acterization as anything more than simple inadvertence.

At page 1724 of the Record, the Court was correcting a

phase of its charge which had left the impression that

defendants must offer evidence upon their own behalf. It

was this correction which counsel for one of the petitioners

accepted (1724).

The purported correction deals not at all with the pre-

sumption of innocence (see Coffin v. United States, 156

U. S. 432, 460) and hence no affirmative waiver appears

in the ease. There remains only the fact that this Court,

out of regard for the integrity of the administration of

criminal justice, should not refuse to grant certiorari either

in consequence of petitioners’ counsel’s inadvertence in

noting objections (Brasfield v. United States, 272 U.S. 448)

or this Court’s own views as to the guilt of the petitioners.

The length of time spent by the jury in deliberating the

case indicates that the triers of the facts were assigning

weight and substance to the elements of defense of at least

certain of the defendants. Under such circumstances, this

Court is not warranted in denying certiorari. (Bollenbach

v. United States, 327 U.S. , 90 L. Ed. 318, and Kotteakos

v. United States, U.S. , 90 L. Ed. 1178.)

CONCLUSION

Petitioners respectfully urge this Court to rescind the

determination made on October 28, 1946, denying their

petition for a writ of certiorari and that it grant such

writ to the United States Circuit Court of Appeals for

the Fifth Cireuit to review the convictions herein.

Respectfully submitted,

Henry G. Sincer

Attorney for Petitioners

16 Court Street

Brooklyn 2, New York

Harry SILveEs,

of Brooklyn, NewYork

Tuomas E. FurnLow

G. Ray Gui

Wu C. OrcHaRD

Hues M. WiLkKrnson

Joun D. LaMBEBT

Huan M. Wrixrxson, JB.

Samue. A. TENNANT,

all of New Orleans, Louisiana,

With him on the Brief

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.