United States v. Buckner

108 F.2d 921, 1940 U.S. App. LEXIS 4158
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 8, 1940
Docket166
StatusPublished
Cited by72 cases

This text of 108 F.2d 921 (United States v. Buckner) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Buckner, 108 F.2d 921, 1940 U.S. App. LEXIS 4158 (2d Cir. 1940).

Opinion

CLARK, Circuit Judge.

William P. Buckner, Jr., and William J. Gillespie were convicted of using the mails to defraud. 18 U.S.C.A. § 338. They, together with Felipe Buencamino, were also convicted of conspiring to use the mails to defraud. 18 U.S.C.A. § 88. On their appeals from these judgments they have assigned the usual errors: they attack the sufficiency of the indictment and of the proof, the rulings on evidence, the charge, and the trial conduct of the prosecuting attorney. And they assert further that no indictable offense was either charged or proved against them.

The charges grow out of the activities of a bondholders’ protective committee, headed by Buckner and Gillespie, for bonds of the Philippine Railway Company. They attempted to secure payment or redemption of the issue from the government of the Philippine Islands, where Buencamino was a member of the Assembly and a political leader. The general background, and, indeed, much of the testimony, at least as to acts and events, was undisputed; at any rate, there was evidence from which the jury might infer the following facts:

Bonds of the Philippine Railway Company in the amount of $8,549,000 had been marketed in this country and abroad thirty years ago with the active assistance of the United States and Philippine governments. The insular government guaranteed the payment of interest until maturity, July 1, 1937. Success never attended the enterprise, and as the date of maturity approached it became apparent that payment of the principal would be defaulted. Bankers’ Trust Company, trustee under the mortgage indenture, called a meeting of bondholders for February 26, 1937. The meeting was of a familiar type: after acrimonious discussion a committee was at length elected. The defendants Buckner and Gillespie had attended the meeting on behalf of investment houses with which they were associated; together they represented just over 250 bonds of the 8,500 outstanding, and of which over 1,800 were participating. Nevertheless, Buckner and Gillespie were both elected members of the committee. Subsequently the committee designated Buckner its chairman, and Gillespie its vice-chairman, by a vote of three to two, after Buckner and Gillespie had met and persuaded the committee member Walden so to cast his decisive vote.

The public character of the original flotation of the bonds and the active encouragement lent to the enterprise by the Washington and Manila governments made the prospects favorable for some sort of legislation by which the public treasuries might come to the assistance of the bondholders. It was to this end that the committee directed its efforts. A law firm of high standing was retained as counsel, and ways and means were discussed for financing committee expenses, bound to be heavier than usual because of the contemplated lobbying activities. Members of the committee could not agree as to the restrictions under which a bank account was *924 to be opened, and at least one member of the committee, Winkler, was persuaded by Buckner and Gillespie to sign a resolution opening an account only after insertion of a condition that all drafts be countersigned by counsel. This condition was then blotted out of the resolution without Winkler’s knowledge, and the account was opened with Bank of The Manhattan Company by Buckner and Gillespie in the name of the committee, their joint signatures to be sufficient for all payments from it. Letters signed by Buckner were then mailed to the bondholders holding $10,000 or more of bonds, requesting donations for expenses. Though the solicitations were written on the committee letterhead, no committee meeting had ever approved their emission. The two members of the committee who had originally opposed the selection of Buckner and Gillespie as its officers, together with the counsel, resigned at early stages of this history — one member within a month of its organization, because of his dislike of what was going on, and the other, Winkler, and the counsel, soon after the solicitations and immediately as a consequence of the ignoring of their objections thereto.

The first letter of solicitation was dated July 2, 1937. During July and August some $7,000 was received from bondholders. Buckner and Gillespie made frequent trips to Washington, and in the normal way secured the attentions of a few members of Congress. Occasionally acquaintances of the Broadway night club area were brought to the Capitol, presumably to assist in entertaining the political luminaries upon whom the committee was working. These efforts were crowned with some success, for a senator introduced a resolution providing for an investigation by the Attorney General into the Government’s moral obligation to alleviate the plight of the bondholders. Committee funds were used not only to finance these legislative expeditions, but also to pay for local entertainment enjoyed by Buckner and Gillespie alone. Numerous committee checks were introduced in evidence, endorsed by hotels and night club proprietors; several of those present at the frequent summer evening gatherings testified that none of the events which there transpired had anything to do with Philippine Railway Bonds.

By October, Buckner had planned to fly to the Philippines with $5,000 borrowed on the credit of the committee. Before he left he agreed to furnish a speculator, Breen, with inside information as soon as a favorable redemption agreement was reached in Manila. He and the speculator were to divide whatever profits could be made by trading in the bonds. Gillespie remained in New York, ready to receive messages from Buckner and offer information to other traders, again in exchange for a share of the profits.

In Manila, Buckner met the defendant Senator Buencamino, a powerful figure’in island politics. Buencamino agreed to lend his assistance to • redemption legislation, in return for a promise of $50,000, which the prosecution insists was a bribe, but which is defended as legitimate counsel fees and expenses. The prosecution also attempted to prove that Buencamino knew of Buckner’s prospective market operations, and was to share in the profits which Buckner would receive for furnishing tips as to the possibilities for redemption of the bonds.

When Buckner returned to New York he found that his trading arrangements had never come to fruition. There was no money left, and Buencamino demanded payment before proceeding. Together with Gillespie and a man named Turner, Buckner peddled his proposition around the financial district, offering inside information in return for temporary financing and a share of the speculation profits. Almost immediately the market in the bonds jumped from 11% to 30%, but collapsed again when the president of the Philippine National Bank gave a newspaper interview denying the rumored redemption. The other members of the committee, including new members as well as new counsel, were exceedingly disturbed by this flurry and a subsequent investigation by the Securities and Exchange Commission. After several meetings they compelled Buckner to send out a report, dated April 5, 1938, to all bondholders on their progress to that time, and then, over the opposition of Buckner and Gillespie, voted to dissolve, so that a new committee might be selected by the bondholders. No new committee was ever formed, and Buckner and Gillespie continued to hold themselves forth as chairman and vice-chairman respectively.

Rebuffed in local financial quarters, Buckner and Gillespie sought backing in Hollywood and London.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Skeddle
989 F. Supp. 873 (N.D. Ohio, 1997)
United States v. Joseph R. Pisani
773 F.2d 397 (Second Circuit, 1985)
United States v. Joseph M. Margiotta
688 F.2d 108 (Second Circuit, 1982)
United States v. James Mitchell Newman
664 F.2d 12 (Second Circuit, 1981)
United States v. Jack E. Bronston
658 F.2d 920 (Second Circuit, 1981)
United States v. John Von Barta
635 F.2d 999 (Second Circuit, 1980)
United States v. Mandel
591 F.2d 1347 (Fourth Circuit, 1979)
United States v. Mandel
415 F. Supp. 997 (D. Maryland, 1976)
United States v. Thomas E. Keane
522 F.2d 534 (Seventh Circuit, 1975)
State v. Schroeder
443 P.2d 284 (Supreme Court of Kansas, 1968)
United States v. Brandom
273 F. Supp. 253 (E.D. Wisconsin, 1967)
United States v. Edward Earl Hopkins
357 F.2d 14 (Sixth Circuit, 1966)
Waldron v. British Petroleum Co.
231 F. Supp. 72 (S.D. New York, 1964)
State v. Mitchell
130 N.W.2d 128 (Supreme Court of Minnesota, 1964)

Cite This Page — Counsel Stack

Bluebook (online)
108 F.2d 921, 1940 U.S. App. LEXIS 4158, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-buckner-ca2-1940.