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declaration was claimed by defendant's counsel to have been made, and that it had no tendency to show that defendant continued doing the same things in December and January, when the letters were actually mailed. We think that objection does not give due consideration to all the evidence of the witness. There is certainly no definite statement that the declarations were made any more in November, 1902, than in February, March, or April, 1903. In fact, it appears that the witness had conversations with Brooks in each of the months mentioned, and we are not able to say from a careful scrutiny of the record, that the declarations under consideration were not made after the mailing of the letters in question. Therefore we cannot say that the court improperly permitted the same in evidence.
We cannot adopt the rule invoked by counsel for the government, that from the existence at one time of a certain condition of things the same state or condition of things is presumed to continue until the contrary is shown. That rule is limited in its application to the continuance of such conditions as are of a continuing nature. It is only things of that continuing nature that are presumed to continue. Wharton's Law of Evidence, vol. 2, § 1284. We certainly cannot say that the fact that Brooks had charge of the mailing of letters and literature for the securities company in November is in and of itself an employment of such a continuing nature as to justify us in holding that he continued indefinitely thereafter in the same employment. But the declarations of Brooks are not all the evidence bearing on his mailing, or causing to be mailed, the letters in question. Certain facts are either conceded or established by the proof. They are: (1) The defendant was the owner of the business of the securities company; (2) the letters on their face show that they relate to that business ; (3) they were addressed to persons residing outside of St. Louis, and obviously intended to be carried by mail; (4) the letters were actually mailed in the St. Louis post office, as shown by the conceded fact that the envelopes bore the mailing stamp of that office; (5) the defendant had charge of the correspondence. From these facts the jury, under well-recognized rules of evidence, were entitled to draw all reasonable and fair inferences, and it was not an unwarranted exercise of their privilege in that regard to infer from such evidence alone that the defendant mailed, or caused the letters in question to be mailed.
Mr. Justice Brown, in Stokes v. United States, supra, in discussing this subject, says:
“The letters that were contained in these envelopes were proven to be in the hand writing of the defendants, or to have emanated from them.
and if these letters were written by the defendants and found their way into the mail, the jury would be authorized to infer that they were deposited in the mail by the defendants."
How much more is that true in this case. The defendant here not only had charge of the correspondence, but was the owner and manager of the business. The letters related to the business and were to be carried to distant parts by the postal establishment of the United States. They found their way into the post office at St. Louis, as charged in the indictment, and were received by the persons to whom
they were addressed. We think there was ample evidence to sustain the finding that the defendant mailed, or caused the letters in question to be mailed in the St. Louis post office, as charged in the indictment.
The government sought to prove the guilt of the defendant by introducing in evidence certain advertising matter circulated under the name of the National Securities Company. Some of these documents are entitled thus: “Do you know of something, anything better?” “Our company strong, well financed, capital full paid." "Our plan infallible, has never lost a dollar. An assured success.” “Our management honest, conservative, intelligent, and experienced.”. “Our proposition very profitable, cannot be excelled. Our profits justify it.”
The contents of these documents consist of extravagant laudation of the honesty, experience, and past success of the company; seductive promises and assurances to all who will patronize it; bewildering figures and statistics showing how rich one can get by investing with the securities company; profound moral, business, and philosophical reflections all skillfully adapted to prey upon the credulity and cupidity of people of little experience in the ways of the world. The documents contain what purports to be copies of letters written to the company from residents of divers towns and cities throughout the United States, gratefully acknowledging the receipt of some advertising matter or of dividends on former investments, and in many instances announcing the inclosure of drafts for further investment. They refer to affidavits, copies of which are said to be inclosed, and assure readers that the company's line of references is superior to that of any other brokerage house in the United States. These documents, in themselves, contain most convincing evidence of the existence of the fraudulent scheme charged in the indictment. Among the papers offered in evidence by the government, over the objection and exception of defendant, were printed copies of an affidavit of a man by the name of Baker, and a letter written by one Russell. Baker pretended to be an important business man of Sedalia, Mo., a large investor with the securities company; to have investigated the plan of the company and its responsibility and to cordially recommend investing with it. Russell pretended to be the cashier of a bank known as the “Century Banking Company” with an authorized capital of $100,000, and as such cashier, to certify with pleasure that the securities company “has an open account with his bank, and that its deposits were good and its business satisfactory,” and, in addition, he says that he was personally acquainted with the officers of the company, and believes they will faithfully carry out their contract. The proof shows that Baker's affidavit was largely misleading and deceptive, and that Russell's pretenses to being a cashier of an independent bank were absolutely false. The testimony of both Baker and Russell directly connects Brooks with the negotiation for and securing their services in the capacities referred to, and in the execution and use of the documents in question as advertising matter, and these documents appear in and form a part of the stock advertisements to which reference has been made. The proof, therefore, of defendant's participation in securing the affidavit and letter in question and their subsequent appearance
in the stock advertisements is sufficient, if no other grounds existed, to justify the admission in evidence of such stock advertisements, and particularly the copies of the affidavit and letter in question.
It is next assigned for error that the trial court erred in admitting in evidence over defendant's objection, certain letters other than those counted on in the indictment, purporting to have been written by the securities company to different persons throughout the country, and relating to transactions of the company with them. These letters were written about the time the offenses laid in the indictment were charged to have been committed. The issue was raised concerning the character of defendant's business and the intent with which it was conducted. It was alleged to have been carried on with the intent to defraud. The letters in question were admissible as bearing on the intent with which the business was done and the existence of the scheme to defraud as charged. Castle v. Bullard, 23 How. 187, 16 L. Ed. 424; Lincoln v. Claflin, » Wall. 132, 19 L. Ed. 106; Butler v. Watkins, 13 Wall. 456, 464, 20 L Ed. 629; New York Mutual Life Ins. Co. v. Armstrong, 117 U. S. 591, 599, 6 Sup. Ct. 877, 29 L. Ed. 997; United States *. Flemming
Flemming (D. C.) 18 Fed. 907. They were also admissible to show that the scheme as devised contemplated the use of the United States mail service in its execution. But it is urged that they were not sufficiently authenticated as emanating from the defendant to warrant their introduction. The trial seems to have progressed below on the theory that no question was made concerning the parentage of these letters, but apart from this there is a satisfactory reason for holding that they were properly received in evidence. Without treating them individually or separately, it may be safely stated that either some of the stock advertising matter prepared and circulated by the securities company accompanied them or that a certificate of indebtedness was subsequently issued by the securities company to the addressees of the letters for money deposited with it by them, as the result of the correspondence. In most if not all instances, both of these coincidences occurred. From these facts it appears that the securities company, owned, controlled, and managed by the defendant Brooks, either directly sent the letters in question or subsequently adopted them as its work. There was no error in receiving them in evidence.
Some criticism is made of the charge of the court to the jury and of the refusal by the court to give a certain requested instruction; but after carefully considering both, we fail to discern anything prejudicial to the defendant. The charge as a whole fairly presented the issues to the jury for its determination, and the requested instruction contained a proposition of law which was not warranted by the facts of the case.
The judgment must be affirmed.
CLEVELAND-CLIFFS IRON CO. V. EAST ITASCA MINING CO.
(Circuit Court of Appeals, Eighth Circuit. May 9, 1906.)
1. MINES AND MINERALS-LEASES-ASSIGNMENT—CONTRACT—CONSTRUCTION.
A contract for the assignment of certain mining leases required plaintiff to pay defendant within 6 months from date 7 cents for each ton of ore averaging 56 per cent. of iron found as a result of exploration work conducted with reasonable diligence during a period of 6 months. The contract also required plaintiff to thoroughly explore the land, so as to fairly determine the character and extent of the deposit of iron ore therein. Held, that such clause only required the explorations to be reasonably and fairly conducted in the usual manner, so as to determine, with as much certainty as that kind of an exploration would permit, the
character and extent of the ore deposit. 2. SAME.
A provision of the contract requiring plaintiff to furnish defendant a true report, showing the "substance encountered," should be construed only to require plaintiff to disclose the substance encountered by the kind of exploration and development adopted by the parties to test the
same. 3. SAME.
A contract for the assignment of certain mining leases on iron land provided that plaintiff should pay defendant 7 cents per gross ton of 2,240 pounds for all iron ore discovered and shown to exist. The contract otherwise provided for customary explorations, which under the custom of the country were treated as showing the character of the earth for a distance of 100 feet on each side of the drill hole. Held, that the contract bound plaintiff to pay defendant 7 cents per gross ton for all iron ore discovered or shown to exist by the completed explorations reasonably and fairly made on the land within the time specified, and the contract did not contemplate the ascertainment of the actual quantity of ore
existing within the premises. 4. PAYMENT-QUASI CONTRACT—MISTAKE OF FACT.
Where a contract for the assignment of leases on iron land provided for payment of 7 cents per gross ton for all iron ore discovered or shown to exist by the completed explorations reasonably and fairly made, based on a customary assumption that a drill hole would properly disclose the condition of the earth within a radius of 100 feet, etc., but, notwithstanding accurate calculations and computations, it turned out that such assumption was erroneous, or that any other assumed fact on which the exploration was based was false, plaintiff was not entitled to recover a portion of the consideration paid as the result of such computations, on the theory that the payment was made by a mistake of fact.
In Error to the Circuit Court of the United States for the District of Minnesota.
William P. Belden and Horace Andrews (H. J. Grannis and Hoyt, , Dustin & Kelley, on the brief), for plaintiff in error.
Oscar Mitchell (J. L. Washburn and W. D. Bailey, on the brief), for defendant in error.
Before SANBORN, HOOK, and ADAMS, Circuit Judges.
ADAMS, Circuit Judge. The Cleveland-Cliffs Iron Company sued defendan; in error, the East Itasca Mining Company, to recover $92,
000, alleged to have been paid the latter by mistake as excessive consideration for an assignment of two mining leases. The leases were assigned pursuant to a preliminary contract between the parties. Defendant claims that the contract creates a conclusive criterion for settling the price to be paid by plaintiff for the leases, and that the price as paid conformed accurately to the criterion created; that if there was any mistake, it was a mistake in judgment in agreeing upon the criterion. Plaintiff claims that the contract did not create a criterion, and if it did that there was such a mistake in its subsequent application or operation as entitles it to recover. The true interpretation of the contract must therefore be determined.
The defendant was the owner of several leasehold terms of 30 years in properties located on the Mesaba Range, in Itasca county, Minn., upon which it had been conducting explorations for iron ore. On July 8, 1902, plaintiff and defendant entered into a written contract for the assignment of the leaseholds to plaintiff. Those numbered 2 and 3 are the subjects of this litigation. One of the preliminary recitations of the contract is as follows:
“Whereas, the said Cleveland-Cliffs Company is desirous of acquiring the said properties for the purpose of exploring the same for iron ore, and for the purpose of acquiring mining leases thereon, if iron ore in desirable quantities and of suitable quality shall be found to exist therein."
This recitation affords a key to what follows. The first clause of the contract provides that it is made in “consideration of the payments to be made by said Cleveland-Cliffs Company to the said Itasca Company, as hereinafter specified.” Then, after providing for the payment of certain royalties and costs of exploration work already done by defendant, the contract proceeds thus:
"And said Cleveland-Cliffs Company agrees to enter upon the said leased prenises, and with the said five drills (referring to certain churn and diamond drills which had been used on the premises by defendant company] and competent crews to operate the same, and such other drills and crews as it may see fit to put thereon, proceed with the work of exploring said premises for iron ore; and shall thoroughly explore the lands covered by said leases numbered two (2) and three (3) within six months from this date, so as fairly to determine the character and extent of the deposit of iron ore therein; such exploration to be conducted to the mutual satisfaction of the parties hereto. And in case a difference arises as to whether such lands have been fully and fairly explored for the purposes above set forth, in that event such difference shall be determined by E. J. Longyear, of Hibbing, Minnesota, who is hereby agreed upon as a referee for such purpose, and whose determination in that regard shall be final and binding upon the parties. And if upon the determination of said Longyear it shall be that such lands have not been fully and fairly determined as to quantity and quality, then the said ClevelandCliffs Company shall at once continue such explorations, and complete the same as fast as practicable, using not less than four drills in the conduct of such work. The said Cleveland Cliffs Company further agrees that upon the exploration being completed on or before six months from this date, it will pay to the said Itasca Company the sum of seven (7) cents per gross ton of 2,240 pounds, for all iron ore discovered and shown to exist on, in, or under said lands covered by said leases numbered two (2) and three (3), which will average 56 per (ent. or better in iron, all ore to be figured in the calculation of such average that is so situated as to be practically mined from said premises, the mines being operated in the usual workmanlike and minerlike fashion. *
The said Itasca Company, upon such payment being made