Nix v. United States

HUNT, Circuit Judge

(after stating the facts as above). The main assignments of error present the question of the sufficiency of the evidence and of rulings upon the admission or rejection of' testimony.

It is unnecessary to detail at length the testimony that was introduced in support of the material allegations of the indictment. There was evidence to show that Nix, by himself and with others, formed the syndicate and acquired the 30-aere oil and 'gas lease, with the purpose of obtaining money from innocent purchasers of stock by means of willfully false and fraudulent representations, and to execute the scheme that he, or through others acting at his instigation and direction, mailed letters to various persons. By an assignment dated January 5, 1921, Nix' transferred a twelve-sixteenths interest in the lease to secure a loan of $2,500. This fact he failed to disclose to shareholders, and after the assignment, and before May, 1922, he made sales of units of the syndicate upon the representation that he owned the lease, which in fact, with .the tools (the only assets of the syndicate), were also pledged. Witnesses testified that Nix failed to show-the permit he had obtained from the corporation commissioner of California in June, 1921, and which in express terms required that he exhibit and deliver a copy of such permit to each prospective purchaser of shares. Had he shown the'permit, the prospective purchaser would have seen that Nix’s promotion interest was to be large, and they would have read what limits'-were placed upon sales of units. The only well drilled was completed in November, 1922. Bills for work and materials aggregating $27,000 were not paid, and eventually the lease was sold at a bankrupt sale to King, a codefendant herein, who pleaded guilty.

The evidence is that representations by Nix and his, associates, made prior to, May 1, 1922, that a well had been drilled 1,500 feet, were untrue. Only one dividend was paid, although between November, 1922, and April 15, 1923, Nix was paid about $29,000. It does' not appear what became of this money. There was some oil production from the well, and Nix sold a quantity of oil for cash. Cash received from the sale of units amounted to $88,000, which with the $29,000 paid to Nix for oil, made a total of $117,000 which belonged to the syndicate. In a written statement dated November, 1922, Nix showed that $59,000 had been paid out for the syndicate and that $7,0Q0 remained on hand, but there is no other statement of what money Nix may have paid for the benefit of the unit holders. The person who was hired as bookkeeper testified that there were no records in the office upon which to open books; that she asked Nix for the records, and, after saying he would produce accounts of disbursements, Nix failed to do so. Representations as to the depth of the well were false. For example, in April, 1922, Nix told a purchaser that the well was then 2,700 feet deep, whereas at that time the well was between 400 and 500 feet in depth.

In respect to the use of the mails in executing the scheme, the evidence was ample to go to the jury. Some of the letters bore the signature of Nix as trustee. One was signed by Chambers, who was office manager of the syndicate in the absence of Nix. Another of the letters mailed was signed by the sales manager, who was working for Nix, selling units and raising -money for the syndicate) As there is evidence tending to show that the last referred to letter was written and mailed at the instance of Nix, the fact -that the employé who wrote the letter was found not guilty does not affect the question of the guilt of Nix.

King, a codefendant, who testified for the government, stated that by request of Nix he sent two kinds of telegrams, one advising Nix of actual facts, and the other containing misstatement of facts; the latter telegrams being sent with a view to inducing persons to buy shares. King also testified that Nix told him to send him telegrams to keep him “pepped up,” the kind that he could “use in selling stock,” and not to “wire any grief”; that upon one occasion Nix showed him $6,000 in cash and said he would give it to King to meet debts of the syndicate if King would make a false affidavit that the syndicate owed no debts; that Nix wanted the affidavit to file with the corporation commissioner of California. King also testified that he and Nix discussed “the advisability of using the Western Union, instead of using the mails, on account of sending such information through the mails.” Defendants introduced no testimony.

It is urged that some of the letters described in the indictment and signed by persons other than Nix were erroneously admitted as evidence against Nix. But before the trial ended counsel for the government offered them against all of the defend-ants, “subject, of course, to connection and proof of a common scheme and concerted action in that scheme.” The court ruled that they were admissible as against the particular defendants who signed them, and that if, at a later time, there was proof of a conspiracy, then they wore admissible as against all. As the evidence tended strongly to show an unlawful combination to defraud, there was no error in the admission of the letters against Nix and such others as were found to be members of the combination. Furthermore, although the instructions were in no way excepted to, we have examined them and find that they carefully guarded the rights of the defendant Nix with respect to what his responsibility might bo for the writing and mailing of the letters not signed or mailed by him.

There are many exceptions to the rulings of the trial court in admission of testimony, which in the development of the government’s case at first may have seemed irrelevant, but which, as the case proceeded, became relevant and established the several elements of the offense charged.

We find no ground for reversal, and affirm the judgment.

Affirmed.