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United States v. Thompson and another, 29 F. 86 (D. Or. 1886)

United States Circuit Court for the District of Oregon — November 22, 1886. Opinion by Judge Deady.

Factual and Procedural Background

The United States grand jury indicted W. F. Thompson and Thomas Ryan for conspiring to defraud the United States under section 5440 of the Revised Statutes. The indictment alleged two counts. The first count charged that, on August 25, 1886, the defendants conspired to defraud the United States of its title and dominion over the southwest quarter of section 10, township 1 N., range 20 E., Willamette meridian (a portion of the public domain located in The Dalles land-district). The second count set out a detailed scheme: Ryan would make a timber-culture application and the statutory affidavit in his own name, deliver a power of attorney to Thompson authorizing Thompson to execute a relinquishment of Ryan's rights, deliver receipts for fees paid while Thompson supplied the funds (including paying Ryan $1.50 for making the application), and, on August 26, 1886, Ryan allegedly delivered the power of attorney and receipts and received $14 from Thompson to pay fees and compensation.

Thompson demurred to the indictment, alleging it did not state facts sufficient to constitute an offense. The court considered whether the alleged conduct fell within the crime defined by section 5440 (conspiracy either to commit an offense against the United States or to defraud the United States), and whether the indictment sufficiently alleged the required elements of that crime.

Legal Issues Presented

Whether the alleged scheme — having one person make a timber-culture entry in his name with another's money and a power of attorney to relinquish — constitutes a conspiracy to "defraud the United States" of its title to or dominion over public land within the meaning of section 5440, Rev. Stat.
Whether the indictment sufficiently alleges that one or more parties did "any act to effect the object of the conspiracy," an element required by section 5440.
Whether, when the statute prescribes the words of an affidavit that an applicant must take, an indictment may properly refer to "the oath required by law" rather than setting out the full text of the affidavit.

Arguments of the Parties

Prosecution (as characterized in the opinion)

The indictment described a scheme in which Ryan would make a timber-culture application and statutory affidavit in his name while Thompson furnished the money and obtained a power of attorney enabling Thompson to execute a relinquishment in Ryan's name; this arrangement was alleged to be designed so Thompson (or his beneficiary) could sell or otherwise transfer the location to a purchaser, thereby turning a public-land privilege into a private advantage.
By alleging the facts of that scheme, the prosecution advanced that the defendants conspired to defraud the United States of its title to and dominion over the described tract of public land under section 5440.

Defendant Thompson (as represented by the demurrer)

Thompson demurred to the indictment on the ground that it did not state facts sufficient to constitute a cause of action under section 5440; implicitly, the defense argued that the conduct charged did not amount to a conspiracy to deprive the United States of its title or ownership of the land.
Counsel for the defense also contended (and the court noted) that while section 5440 requires that "one or more of such parties do any act to effect the object of the conspiracy," such an act need not be criminal in itself — an argument relevant to whether allegations of noncriminal acts in furtherance suffice.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court first set out the text of section 5440, Revised Statutes, and explained the statute's broad language: it covers conspiracies either to commit any offense against the United States or to defraud the United States "in any manner or for any purpose." Although the originating legislation aimed primarily at frauds on the revenue, the court held that the statute's language must be construed broadly to include "every conceivable case of conspiracy to defraud the United States," defined as depriving or divesting the United States of property, money, or things except as the law permits.

The court then described the timber-culture act (June 14, 1878) requirements for an entry: (1) application and affidavit declaring the filing is for the affiant's exclusive benefit and not for speculation; (2) payment of fees to the receiver; and (3) cultivation for eight years resulting in a specified number of living trees per acre with proof by two credible witnesses to obtain a patent. The court noted that if the applicant fails to comply, the land becomes subject to entry by others and that statutory provisions provide for notice and contest procedures.

Applying the statute to the indictment's allegations, the court accepted the factual picture advanced by counsel: Thompson (a person of means) induced Ryan to make a timber-culture entry using Thompson's funds, obtained from Ryan a power of attorney to relinquish the entry, and intended later to sell the location or secure for a purchaser the right to take the land under public-land statutes by executing a relinquishment in Ryan's name when a buyer appeared.

The court observed that, as alleged, Ryan committed perjury in making the required oath and Thompson suborned that perjury. However, the court concluded that the objective of the defendants was not to deprive the United States of its title or ownership of the land. Rather, their purpose was to obtain and control possession (or a de facto location) for an indefinite period and to profit by selling that location—conduct that, though fraudulent in motive and involving perjury, did not amount to divesting the United States of its legal title prior to compliance with the timber-culture statute.

The court emphasized the legal distinction that title and ownership of the public land remained with the United States until the statutory conditions (cultivation and proof) were completed; a claimant might abandon or transfer his possessory claim before final proof without violating the public-land statutes. Thus, the conduct charged, while wrongful (perjury and subornation), did not, on the facts alleged, constitute a conspiracy to defraud the United States of its title or ownership as required by section 5440.

The court further analyzed pleading requirements under section 5440: (1) it is an element of the statutory offense that one or more parties do some act to effect the conspiracy's object, and that fact must be alleged; (2) such an act need not itself be a crime; and (3) where the statute prescribes the exact text of an affidavit an applicant must take, it is sufficient in an indictment to aver that the defendant took "the oath required by law" rather than repeating the affidavit verbatim because the court and defendants are presumed to know the statutory form.

Holding and Implications

The demurrer to the indictment is sustained.

Consequences and immediate effects:

The court found that the facts alleged in the indictment, though showing perjury by Ryan and subornation of perjury by Thompson, did not state a conspiracy to defraud the United States of its title or ownership of the land within the meaning of section 5440. On that ground, the indictment as charged was insufficient and the demurrer was sustained.
The court held that the acts alleged might support prosecution for perjury and subornation of perjury; accordingly, the defendant Thompson was "held over" to await the action of the next grand jury with respect to subornation of perjury.
The court clarified pleading points: an allegation that a party took "the oath required by law" suffices when the statutory affidavit is prescribed, and an allegation that an act in furtherance was done must be pleadable even if the act alleged is not independently criminal.

Broader implications:

The opinion construes section 5440 broadly as covering conspiracies to deprive the United States of property or rights, but it distinguishes schemes that aim only to control or profit from possession or location without divesting the United States of title. The court suggested that Congress, not the courts, should supply further remedies if the statutory safeguards (including the applicant's oath) prove insufficient to prevent the kind of manipulative conduct alleged.
The opinion did not announce or rely upon new case law or invoke other judicial precedents; it resolved the case on statutory interpretation and the adequacy of the indictment's allegations. No new controlling precedent was created by this ruling beyond the court's interpretation applied to the facts at hand.

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UNITED STATES v. THOMPSON and another.

29 F. 86 (D.Or. 1886) UNITED STATES v. THOMPSON and another. United States Circuit Court, D. Oregon. November 22, 1886

Syllabus by the Court

The crime defined in section 5440, Rev. St. U.S., includes every conceivable case of conspiracy to defraud the United States by depriving or divesting it of any property, money, or thing otherwise than as the law requires or allows.

A conspiracy by two persons to enter a certain tract of land in the name of one of them, under the timber culture act, with the money of the other, for the purpose of selling and disposing of the location, for the benefit of the party furnishing the money, to any one who might desire to enter the same, is not a conspiracy to defraud the United States of its title to or dominion over said land; but it may be a conspiracy to defraud the United States of the possession thereof for an indefinite period.

It is an ingredient of the crime defined by section 5440, Rev. .st U.S., that some act must be done by one of the parties to the conspiracy in furtherance thereof; but such act need not be in itself a crime or of a criminal nature.

Where the words of the affidavit required to be taken by an applicant for public land are set forth in the statute under which the application is made, it is sufficient, in an indictment, to refer to or describe it as the affidavit required of such applicant by law.

Lewis L. McArthur, for the United States.

Julius C. Moreland, for defendant.

DEADY, J.

The defendants are accused by the grand jury of the district of committing the crime of conspiring to defraud the United States as defined by section 5440 of the Revised Statutes, which reads as follows:

'If two or more persons conspire either to commit any offense against the United States, or to defraud the United States in any manner or for any purpose, and one or more of such parties do any act to effect the object of the conspiracy, all the parties to such conspiracy shall be liable to a penalty of not less than $1,000, and not more than $10,000, and to imprisonment not more than two years.'

The indictment contains two counts. In the first one it is alleged that on August 25, 1886, within the jurisdiction of this court, the defendants, W. F. Thompson and Thomas Ryan, did conspire to defraud the United States of 'its title to and dominion over' the S.W. 1/4 of section 10, in township 1 N., range 20 E. of the Wallamet meridian, situate in The Dalles land-district, and being a portion of the public domain.

The second count contains the same allegations as the first one concerning the conspiracy to defraud the United States of 'its title to and dominion over' this quarter section of the public land, by the following means: The defendants agreed (1) that Ryan should make a timber-culture application in his own name for said land, and make the affidavit required by law, and, before making such application or affidavit, he would make and deliver to Thompson a power of attorney, authorizing and empowering him to execute a relinquishment in Ryan's name of all right acquired by him under such application; (2) that Ryan would deliver to Thompson the receipts for fees and compensation paid on the application, while the latter would give the former the money with which to pay the same, and $1.50 for making the application; (3) that afterwards, on August 26, 1886, in pursuance of said conspiracy, Ryan did deliver to Thompson such power of attorney, and the latter gave the former $14 wherewith to pay said fees and compensation; (4) that thereupon Ryan made such application for the tract of land aforesaid, and the affidavit required by law, and paid such fees and compensation, the receipt for which he delivered to Thompson, who then, in consideration of the premises, gave him $1.50. The defendant Thompson demurs to the indictment for that it does not state facts sufficient to constitute a cause of action.

This section, 5440, is compiled from section 30 of the act of March 2, 2867, (14 St. 484,) entitled 'An act to amend existing laws relating to internal revenue, and for other purposes. ' In the compilation the phrase, 'in any manner whatever,' is changed so as to read, 'in any manner or for any purpose. ' The manifest purpose of the act was to prevent and punish frauds on the revenue. But that is no reason why the universality of its language should be so restrained in its operation. It must therefore be construed to include every conceivable case of conspiracy to defraud the United States; that is, to deprive or divest it of any property, money, or thing otherwise than as the law requires or allows. 'To defraud' the government of any portion of the public lands necessarily implies that the government is thereby deprived of its title or ownership of the same.

An entry under the timber-culture act of June 14, 1878, (20 St. 113,) consists of the application, and affidavit to the qualification of the applicant, and the declaration that the filing and entry is made exclusively for the benefit of the affiant, and not for the purpose of speculation; the payment of the fees and compensation to the receiver; and the cultivation of the land in timber for eight years, so that at the end of that period there shall be growing thereon at least 675 'living and thrifty trees to each acre;' and, on proof of these facts by two credible witnesses,' a patent will issue to the claimant for the same. If, at any time after the application is made, the claimant fails to comply with the requirements of the act, the land becomes thereby subject to entry under the homestead law, or by some other person under the timber-culture act; and provision is made for notice of such entry to the original claimant, and a contest if he desires it.

It is understood from the argument of counsel that the conspiracy with which the defendants are charged may be worked out as follows: Thompson, who is supposed to be a person of some means and enterprise, desires to speculate in desirable locations for settlement on the public lands by getting control of them in advance of the general occupation of the vicinity. To this end he gets Ryan to make an application under the timber-culture act, and furnishes him with the means to do so, and also pays him something for his trouble, as well as the wear and tear of conscience. At the same time Ryan gives Thompson a power of attorney authorizing him at any time to execute a relinquishment of all his right under such application. Under this arrangement, Ryan, or his employer, make a show of complying with the act for six months or a year or even more, when a customer is found who is willing to pay Thompson something handsome, under the circumstances, for the privilege of taking the land under the homestead or timber-culture act, which is accomplished by Thompson's executing a relinquishment of Ryan's right in the latter's name.

Barring the perjury, and subornation of perjury, which appears to be involved in this transaction, the same thing, in effect, was done under the donation act in the early days of Oregon. Then the transient squatter, keeping ahead of the home-seeking settler, often camped on the choice locations in each valley or vicinity, and occupied them with his cabin and stock until the latter came along and bought him off,-- induced him to abandon his possess,-- and thus enable the purchaser to become a settler on the land under the donation law.

There is no doubt, on the case made in the indictment, that Ryan is guilty of perjury, and Thompson of subornation of perjury. But they did not conspire or intend to deprive or divest the United States of its title to the land in question, or of its ownership thereof. Their real purpose was to use and abuse the privilege given by the timber-culture act so as to get possession of the land in an apparently lawful manner, and thereby obtain money from any one who was willing to pay Thompson a sufficient premium for the opportunity of acquiring the land from the United States for himself. So long as Ryan complies with the law-- plows the land and plants it in timber-- the public have the benefit of his labor and expenditure; and, when he ceases to do so, the land is subject to entry to any other qualified person. But until it has been earned by cultivation in timber, as the act provides, for eight years, the title and ownership remain in the United States.

Page 89.

At most, the purpose of the defendants was to deprive the United States of the possession of this land for an indefinite time, or until a purchaser of the location was found. But the charge in the indictment is that the defendants conspired to defraud the United States of its title to the land, or the 'dominion' over it, which is the same thing; and, although Ryan had taken the land in good faith for his own exclusive use and benefit, he might, at any time before the expiration of the eight years and the making of his final proof, have abandoned it generally, or in favor of some particular person for a valuable consideration, without violating any law. I do not wish to paliate the acts of the defendants, or apologize for their conduct; but they are not, in my judgment, guilty of the crime charged in the indictment.

The oath of the applicant was thought by congress sufficient to prevent one man being used by another to appropriate the possession of the public land for any prupose, either temporary or permanent. If it is found insufficient for that purpose, congress must be appealed to for further legislation in the premises. The remedy already provided for this case is a prosecution for perjury and subornation of perjury; and the proof that would support the indictment in this case would support it in the other.

Other points were made on the argument, but it is unnecessary to consider them. I may add, however, that the doing of some act in pursuance of the conspiracy is an ingredient of the crime defined by section 5440 of the Revised Statutes, and that fact must be duly alleged. The first count does not contain any such allegation. But such act need not be in itself criminal, or amount to a crime, as contended by counsel for the demurrer. And where, as in this case, the statute prescribes the oath which the applicant must take, it is sufficient to aver in the indictment that the party took the oath required in such cases by law. The very words of the affidavit being prescribed by law, the court will take notice of them, and so must the defendants.

The demurrer to the indictment is sustained; but, as it appears, on the facts stated therein, that the defendant Thompson has committed the crime of subornation of perjury, he will be held over to await the action of the next grand jury in that respect.

United States v. Thompson