2 C.R. 153, [1946] Que. K.B. 565, 1946 CarswellQue 13

Shulman v. R.

Shulman v. The King

Quebec Court of King’s Bench [Appeal Side]

Walsh, Bissonnette, Errol M. McDougall, Gagne and Laliberté (ad hoc.) JJ.

Judgment: June 26, 1946

Counsel: J. Cohen, K.C., for accused, appellant.

J. Long, K.C., for the Crown.

Subject: Criminal; Corporate and Commercial; Contracts

Criminal Law — General principles involving criminal law — Criminal jurisdiction — Territorial limitations — Determination of situs of offence — Out of Canada.

Criminal Law — Fraudulent transactions relating to contracts and trade — Fraud — Charging offence.

Criminal Law — Conspiracy offences — Conspiracy — Nature and elements of offence — Place where offence committed.

Criminal Law — Conspiracy offences — Conspiracy — Charging offence — Sufficiency of charge — Means of execution.

Conspiracy to defraud — Form of indictment — Failure to state method of fraud — Special provisions of Code s. 863 — Exception to general rule — Averment unessential.

The accused was charged with conspiring with V. and others to defraud the public. The conspiracy was in connection with certain mining frauds in which the accused acted as solicitor for the companies. The mode or method of fraud was not set out in the indictment; and the accused made a motion to quash the indictment as being bad for omitting to aver an essential element. The motion was dismissed, and the case proceeded to trial on the indictment without amendment. The accused was convicted, but V., who was charged with him, was acquitted.

Held,

1. In respect to the complaint that the indictment did not state the mode or method of the fraud, such fact was not necessary in view of the provisions of s. 863 of The Criminal Code;

2. In respect to the complaint that the conspiracy did not originate within the jurisdiction, this was met by the evidence in the case which proved conclusively that the major incidents and overt acts of the conspirators had originated within the jurisdiction, although the monetary results were produced elsewhere;

3. The accused, while acting as a solicitor, had become illegally associated with the conspirators, knowingly participating in the conspiracy, and giving advice and assistance to facilitate the modus operandi of confederates and conspirators; and he was rightly convicted.

Conspiracy to Defraud:

Every one is guilty of an indictable offence and liable to seven years’ imprisonment who conspires with any other person, by deceit or falsehood or other fraudulent means to defraud the public or any person, ascertained or unascertained, or to affect the public market price of stocks, shares, merchandise, or anything else publicly sold, whether such deceit or falsehood or other fraudulent means would or would not amount to a false pretence as hereinbefore defined: Code, s. 444. No count which charges any false pretence, or any fraud, or any attempt or conspiracy by fraudulent means, shall be deemed insufficient because it does not set out in detail in what the false pretences or fraud or fraudulent means consisted: Code, s. 863. See Crankshaw’s Code, 6th ed. 1935, pp. 518, 1028; Tremeear’s Code, 5th ed. 1944, pp. 498, 1077; Snow’s Supp. 1945, p. 32; Snow’s Code, 5th ed., pp. 207, 434; 13 Can. Abr. 565, 1195.

Appeal by Accused from his conviction for conspiracy to defraud the public under Code s. 444. The accused was a solicitor acting for company promoters dealing in mining stocks. The accused took the position that he was acting for clients without appreciating the nefariousness of the transactions in which, with them, he became entangled. The facts of the case established conscious knowledge on the part of the accused as to what was going on, and indicated active participation in the furtherance of the ends of the conspirators. In support of his innocent intent the accused was allowed to produce further documents at the hearing before the Court of Appeal, but to no avail. The Court came to the conclusion that the case was purely one of fact for the trial judge who was sitting without a jury. He had not erred in his evaluation of the evidence, as there were ample facts to support the conviction. Appeal dismissed.

Walsh J. (Bissonnette, Errol M. McDougall, Gagne and Laliberté (ad hoc.), JJ., concurring):

1 The appellant, Maurice Shulman, was accused of conspiring, at Montreal, between September 1935 and October 1937, with Paul Valentine, and with others, to wit: Hayman, Eastman, Cairns, Martin, Pitts et al., by deceit, falsehood and other fraudulent means, to defraud the public, against the statute.

2 Shulman and Valentine alone were tried. Valentine was acquitted. Shulman was convicted.

3 At the inception of the trial, counsel for Shulman made a motion to quash the indictment, because it did not mention the mode or method of the fraud. This motion was rejected.

4 The trial proceeded in the Court of Sessions.

5 An appeal against the conviction was lodged by Shulman.

6 The following are the grounds of law:

1. The indictment discloses no offence, because of lack of averments of substance;

2. There was lack of jurisdiction in the Courts of this Province;

3. Illegal evidence was admitted;

4. Illegal exhibits were produced;

5. The testimony of accomplices was accepted without corroboration, and without noting the danger of convicting on such evidence;

6. There was total absence of proof;

7 The following are the questions of fact, and of mixed facts and law:

1. The conspiracy did not have for its object the defrauding of any one in the Province;

2. The conspiracy was evolved outside this jurisdiction;

3. The weight of evidence was in favour of the appellant;

4. The evidence of accomplices was taken without corroboration, and without heeding the danger of such evidence;

5. The conviction is unreasonable;

6. The judge erred in rejecting the evidence of the defence which established innocence.

8 In respect to the complaint that the indictment discloses no essential averments of the offence, it must be stated that this in some cases might constitute a serious ground of appeal, as decided by the Supreme Court of Canada. The omission here is covered by s. 863 of The Criminal Code:

No count which charges any false pretense, or any fraud, or any attempt or conspiracy by fraudulent means, shall be deemed insufficient because it does not set out in detail in what the false pretenses or the fraud or fraudulent means consisted.

9 In this instance the indictment made use of words of s. 444 of the Code, concerning conspiracy.

10 In respect to the second ground in law (that the conspiracy did not originate in this district), it must be stated to be unfounded, because the proof shows that the major incidents of the case had originated here, though the monetary results were produced in England, where $80,000 was obtained. In the eyes of some people only financial gains matter; but there is more to conspiracy than its successful culmination. Its preparation and evolution, even in the case of failure, is reprehensible.

11 Perusal of the evidence discloses that the operations of certain personages, mentioned in the indictment, constituted a swindle. Of this there can be no doubt whatever. Even the appellant did not see fit to justify the operations of an unholy alliance of swindlers organized in modern trappings. Indeed, he was not obliged to do so. The appellant took the position of one not illegally associated with these conspirators and professional thieves. Such a position could be a strong one, if the Crown had failed to establish, by overt acts, a connection between him and the others charged.

12 Obviously, the appellant, in defence took advantage of his gown, as solicitor for clients, who were only proved later to be “crooks”; and as promoter of companies, only afterwards shown to have been created and originated for nefarious schemes and practices. Certainly Shulman cannot be blamed if, as a lawyer, he acted for clients; if as a lawyer, he organized companies; if, as a citizen, he saw fit to embark on mining enterprises; if, as a promoter, he sought to enhance the values of stocks. The fact that he had acted for swindlers, crooks and thieves would not of itself militate against him. Mere knowledge, acquired by him, of criminal operations and manipulations, would not alone be sufficient to establish his guilt, unless there had been, on his part, participation by advice, by assistance in some form to facilitate the modus operandi of confederates and conspirators.

13 The swindle in question was not undertaken in a modest form. It had in a short time developed, so that it could finance itself, so that it could return a handsome yield for only an insignificant outlay — if any. It had developed so well, that it promised enhanced earnings (over the $80,000 netted), had there not been bungling by some of the conspirators, as one of them (Cairns) declared in messages to this country. It developed so well, and evidently so easily, that some one became careless.

14 The scheme had its origin in certain mining claims owned by one Paul Valentine (the co-accused, tried with Shulman). Valentine had acquired these claims (A57555-A57569) by pur chase with his own money; the appellant declared however, that he had lent Valentine money on the security of these claims.

15 The appellant (Sept. 1936) incorporated Twin Mac Gold Mines Ltd., of which he became a provisional director; later, with his provisional co-directors he transferred his share or shares to others (Quesnel, president; Gervais, secretary, et al.).

16 Quesnel, as president of Twin Mac Gold Mines, announced that he had acquired from a company (Gold Underwriters Ltd.) the mining claims (A57555- A57569), payment for which was made by 5,000 shares of Twin Mac Co.

17 The appellant had incorporated Gold Underwriters, of which he was chairman (later replaced by Martin, president and L. Pitts as secretary — both co-accused). Appellant wrote to Twin Mac Mines (Oct. 1936), declaring that Gold Underwriters held the mining claims (A57555-A57569) in trust for Valentine.

18 The appellant, chairman of Gold Underwriters, advised the latter (March 1936) that he had arranged with Canadian Industrial Mining and Industrial Securities to accept from them a transfer of claims (A57555-A57569).

19 Canadian Industrial and Mining Securities (whose minute book was seized in appellant’s office) had been incorporated by appellant. The same claims (A57555-A57569) had been registered in the name of Canadian Industrial and Mining. (In his defence, appellant claimed that this was a mistake, made by his office staff).

20 Martin and Pitts had purchased from appellant the charter of Gold Underwriters for $500 (so appellant said). The latter company had been inactive from 1933 until March 1936, when the same claims (A57555-A57569) were registered in its name (on payment of the registration fee by the appellant).

21 Twin Mac Mines decided to apply for supplementary letters patent to change its name to Twin Mac Gold Syndicate, on appellant’s suggestion — so says Valentine (Dec. 1936).

22 The appellant was active also in the affairs of Quebec Barlow Company, which had purchased (Oct. 1937) the shares of the Twin Mac Co. for 525400 of its own shares, in exchange for those of Twin Mac (100 shares for one of Twin Mac). Quebec Barlow was informed that it had concluded the purchase of 15 mining claims (the same A57555-A57569), though the same claims had been registered in the name of Gold Underwriters, erroneously, however, by his office staff (according to appel lant’s ipse dixit) in the name of Canadian Industrial and Mining Co. (Martin president).

23 What were these mining claims (A57555-A57569), which changed hands so often, which companies sought to acquire, which shareholders in England bought with such avidity? They were worthless parcels of land in Canada’s rich mining territory; they had no intrinsic value; they existed only, to appellant’s knowledge, as “prospects”, which had not been even submitted to preliminary development. It is true that engineers were sent to make a report, and an assay by Milton Hersey Co. was made, but all this work was of a perfunctory character and absolutely futile as to results, costing only $500 for the work of four or five engineers already on the spot, though $700 had been given to Shulman to pay these engineers. This shady transaction by Shulman was denied by him; he asserted he had the right to retain $200 for services rendered to one of the engineers. (This incident cannot, however, be called an overt act of this conspiracy. If anything, it was a private matter between the company, the engineers and Shulman). But, the explanation, costing $500, cannot be so easily dismissed, on a discussion re the retention of money. It serves to show that Shulman was active to learn something of the property. This may be natural. Do his subsequent acts show that he considered it as an asset, and sought to render it useful (though worthless) by giving others a title thereto — for a consideration? I do not intend to waste time in displaying the proof of the worthlessness of these parcels of land, worthless also in appellant’s mind. If worth anything, would these claims have been sold in England only? If worth anything, would it have been necessary to peddle them around from company to company; would it have been necessary to forward abroad papers concerning them and to dub these “Whiskey Receipts”? Would these capitalists with $100,000, who were seeking to finance a mine, have sought to act in the devious and intricate fashion in which they acted? They were financiers, according to appellant, at the head of houses, dealing in large matters, presumably of international repute, since they traded in London, Brussels, New York, Paris, Chicago and elsewhere. The sequel shows that they were international “crooks”.

24 They were Pitts, Martin, Eastman, Hayman et al. There were also perhaps innocent abetters of these. So might be styled Valentine, who was acquitted, and properly so, in my opinion. Cairns must have known, and did know, and did assist. Did the appellant know, and did he assist? The learned judge a quo believed the evidence, accepted it, and convicted him.

25 I might stop here, since it is not for a court of appeal to review evidence that a judge has the right to appreciate. I have no right to substitute my opinion for his in respect to facts; he is as well able as I to judge. If the learned judge a quo committed no error in law, I could dismiss the appeal.

26 However, we shall continue the study of the case. This will help to decide other matters of law which are in issue.

27 Documents were seized in appellant’s office, as officer Dunn declared. A typewriter was there also found; it served to identify exhibits — all studied by Dr. Fontaine, an expert, who found that certain writings had emanated from appellant’s quarters; others were in his writing.

28 A valise was also seized in the Westmount Moving Company’s premises, (belonging to Pitts); another at the Customs Office (belonging to Cairns). Keys to fit these bags were found in appellant’s office.

29 Eugene St-Pierre, of the Attorney General’s Department, produced the documents seized by officer Dunn. He marshalled the evidence. He had no right to give his view of that evidence. Such had to be appreciated by the learned judge alone. The Crown frequently referred to parts of the deposition of St. Pierre as evidence in support of its allegations. St-Pierre had no personal knowledge; his declarations as proof are to be ignored, though he was of assistance to the Crown to establish order in a superabundance of evidence. It must be noted, however, that the Crown’s references to St-Pierre’s remarks can be checked by reference to the proof itself and to exhibits.

30 The evidence produced from Scotland Yard was rejected by the learned judge, though similar documents were found in appellant’s office. In any event, no use was made of such evidence. It served in no way, as submitted, to cause certain witnesses to be affected thereby.

31 I remarked that mere suspicion or knowledge of illicit actions by conspirators do not always indicate guilt on the part of a co-conspirator. If after acquiring knowledge, the co-conspirator should in any way assist or participate, he could be convicted. Shulman seemed to believe that he could escape by declaring that he had only assisted clients, acting as their lawyer. Such standing did not allow him to act with impunity and to become a member of an international gang of swindlers.

32 In this instance there is no room for doubt that Shulman was in possession of every detail of the machinations of the other accused. There is even more than knowledge herein, for Valentine told us that Shulman intended to operate in England, where he had useful relatives. Gervais also stated something to the same effect, that he would sell certificates in England. We shall endeavour to discover whether Shulman further used his office as a clearing house for mail, letters and cables of the conspirators; whether that office was the chief and only repository for their documents.

33 Among the papers seized in the possession of Westmount Warehouse were notes of Pitts showing that he had received sums of money from Shulman for various purposes, among which were sums to purchase stamps:

(a) $900 from Shulman to purchase 30,000 stamps (31 Jan. 1937);

(b) $600: M.S. 20,000 stamps (22 Jan.).

In Shulman’s Diary are corresponding figures. His handwriting was proved by Dr. Fontaine.

34 Receipts were found in appellant’s office in Pitts’ file (case p. 293). These receipts are an accounting for $41,115.30 received by Shulman from Dec. 1936 to February 1937; these were moneys received from the same group. This was left unexplained (case p. 294). All money received was to be used in accordance with instructions from Pitts. Amongst the receipts is one indicating $8,100 (stamp account) from money received by Hayman and given to Pitts (in accordance with an agreement with Valentine).

35 There is proof that these two parties are rogues who developed the overt acts of the conspiracy; Shulman was handling their money.

36 Another item is “Cables”, addressed (case p. 295) to my address “Shulmar”, though appellant does not tell us why he had to have a cable address, unless it was in connection with doubtful “Whiskey Receipts”. The cable read: “Everything ready. When is film (firm) representative leaving?” This was unsigned (of date May 1937), but Shulman admitted its reception (p. 295); it was unsigned because a signature costs money.

37 Nobody would send him a cable (he said) except a group operating through C. Rankin Nevine for Pitts, so he called Pitts, who told him to cable “Geen” (address of Rankin Nevine) and sign the answer with the name of “Hayneeg” (a signature that must have cost money). The cable answer of 23rd May 1937 reads: “Advise Dave party leaving Duchess of Atholl Friday next”. Immediately Shulman made an entry in his diary to that effect: he wanted to send papers with the emissary in connection with “Whiskey Receipts”. He never did explain what this Whiskey transaction happened to be, except to declare that what he sent was a brochure or pamphlet of four pages — and an opinion by a lawyer. He did not know that it was Cairns who was leaving, but he did know that some person was to leave on Pitts’ errand or mission, which latter, as Shulman knew full well, was connected with a mine, and stocks, because he paid out thousands of dollars for the printing of circulars, envelopes, and a prospectus (corrected by himself) and he also paid thousands of dollars for stamps to send these circulars abroad, — where else? — as he intended to do. Whether he paid with his own money or that of “Hayman” is immaterial. In the latter case, he would have consented to be the go-between for swindlers. If we can infer, and we can, that the whole enterprise was malodorous, his participation was an abetting. In was in January 1937 that the printing was begun, as the stamp account discloses; it was in February 1937, as the printing invoice also discloses that operations concerning circulars had taken place; it was in May 1937 that the “Duchess” was sailing with “Whiskey Receipts”.

38 The next cable addressed to me (Shulman p. 299) is of 8th June 1937 from London and reads: “Cheque for 1000 in. Remit immediately to meet Cairns, White House, Albany Street”. What a surprise for Shulman to see the name of Cairns, whom he did not know on 28th May. Again he had to see Pitts. Why had he always to see Pitts? He clearly knew more than Pitts though he always contended that such knowledge was innocent. Evidently he would have us believe that this cable reminded him of a London draft in London (re Golding) that he had to meet for 1000 (pounds or dollars), and funds had to be wired. So he wired “Hayman”: “Money cabled to you”. But obviously “Hayman” did not cable re Golding, but re Cairns.

39 Shulman was here by his own ipse dixit shown to be conniving with Pitts and Hayman, taking instructions from them, and meddling in money matters. Why should Hayman have wired for 1000 pounds to cover Shulman’s draft, which he had just made? What was it all about, if not something relevant to the conspiracy? Yet the cable spoke of money “to meet Cairns”, not to meet a draft. I fear that Shulman will have to tell that to the fairies. His ways and his explanations are as multiple and devious as his manipulations of shares and his promotions of companies.

40 The next “Cable” (8th July 1937) is one from London “addressed to me”, (case p. 300):

Re Cairns for business registration, full names, addresses, occupations, nationality. Cable that you have already mailed memorandum and articles of Company. Important. Action necessary. Important. Mail memorandum of company, and all literature and maps.

41 Shulman again got in touch with Pitts, who explained only then that Cairns represented Twin Mac in London. It is strange that Shulman did not already know all this.

42 Although Shulman had already received a cable a month before (8th June), it was only on 8th July that he actually learned who Cairns was, yet he knew that some one was importuning him over there with cables. Of course when he was asked to send 1000 dollars (or pounds) to meet Cairns on 8th June, he never inquired who the beggar happened to be. Shulman at last learned that some one represented “something or other” in London — not Twin Mac which had no representative; not Valentine, who was in the outer darkness; it must have been Pitts and his friends. Pitts told him to see Gervais (secretary of Twin Mac); he did so, and he obtained the information — which he already had in his files in his office.

43 Whereupon the appellant cabled to London: “Memorandum and articles to go Monday”. If it was Pitts’ business, why not have left it to Pitts? Shulman had knowledge of everything — and it certainly seemed unsavoury. Why continue to abet? If it was not Pitts’ business, he could have left it to Gervais, who had to attend to affairs of the real company, Twin Mac. It certainly was not Shulman’s business — unless he wanted to make it his business. In that, he might have also made it the business of swindlers. Such generous assistance in law is known as abetting.

44 Still another cable was “received by me” (Shulman p. 304) from London: “Be careful to have memorandum and articles certified. Also such certified prospectus and my authority as fiscal agent. Very urgent.”

45 This must have come from Cairns, whom Shulman at that time at least knew as the fiscal agent of Twin Mac. The cable was communicated to Gervais (said appellant), but Gervais denied it, and declared that he was not then in office, having resigned about that time; Gervais had never heard of Cairns (so he said); had never heard of a fiscal agent in England or elsewhere; he knew nothing of the find of gold, he knew nothing of circulars or a prospectus; he had never heard of Quebec Barlow though he had signed in its connection minutes (not prepared by him).

46 Among the documents found in Shulman’s office are the following, in connection with shareholders’ communications (62B. of C.1); C/Exhibit Book p. 128; C/Dr. Fontaine p. 249). These were written on Shulman’s typewriter: they are:

(1) Forty (40) customers cabled giving details of payments, in all 12680 pounds;

(2) Eight (8) more, giving details of payments, in all 1010 pounds;

(3) Nine (9) more; 2870 pounds:

(4) Ten (10): 870 pounds.

47 Shulman received money from England, no matter from whom; it came from operations of conspirators, acting there according to plans and specifications; he had no right to accept 700 pounds (for fees); this was money belonging to Twin Mac; he knew that it must have come from sales of that company’s stock, and should have been given to it. He knew full well however that it was “Geen”, “Hayman” or “Cairns” who had sent it; he knew, as a lawyer, having seen all documents, how these persons had been manoeuvred into positions in which they had control of stock, representing a bogus mine, which shareholders had been induced to believe a producer. Mention of the receipt of this money is made to show his connection with the coconspirators.

48 Shulman, moreover, had in his office letters to shareholders to the effect that in a short time they could avail themselves of their options; there was also a letter from Gervais (in the same office) to the same effect, which Gervais repudiated, p. 263 of Ex. Book; there was also found in appellant’s office a copy of a letter to be sent announcing the forthcoming report of engineers.

49 In the handwriting of the appellant was a document, (Ex. Book, p. 67); (15 of C.1) which reads: To Cable Co. $265.00.

50 More could be extracted from appellant’s little busy bee-hive.

51 Shulman complained that minutes were missing at the time of Gervais’ resignation; that these would have solved the mystery surrounding his case. Yet sheets of minutes were found in his office; he declared they were not written on the same paper as the other sheets. What were they doing in his office? If “Whiskey Receipts” were not used to cover something, why were no cables, or letters found among the exhibits concerning them; no proof was made to show any legitimate “whiskey” transaction.

52 Cairns was brought in to the picture as a stock salesman. He never heard of “Whiskey receipts”. He was used as a coverman at $50 per week to screen others. He acquired knowledge, but continued to act; so he became an abettor of this conspiracy, an accomplice. His messages or cables were always addressed to “Shulmar”. Cairns was removed as fiscal agent, because the shareholders were clamouring in England. It was evidently hoped that by imputing blame to him apprehensions would be allayed. For the same end, it may be presumed that a change of name would be beneficial. So the worthless mine was transferred from company to company. This mutation also permitted better control of operations by the conspirators.

53 The real officers of Twin Mac had proved troublesome. Quesnel wanted shareholders to heed only progress reports of the company and to remit to the latter. So Cairns, who noted the consternation of shareholders, sought to obtain confirmation of his standing.

54 To smother the clamours of shareholders they were to be given an option to purchase mine shares of a new company, when gold would be found on the property. It also served to arouse cupidity. This was a false and deceitful manoeuvre. There was no gold to the knowledge of all (Shulman especially). Gold was found later, but only in a cable (signed Twin Mac), not sent by legitimate officials of the company. This cable went also to White House, Regent Park, London, (the address of Geen and Cairns), an address unknown to Gervais, Quesnel and Valentine. It was an address, however, well known to Shulman, and often used by him.

55 Cairns opened an account (among others) in the Midland Bank. Transactions in various banks in Montreal indicate that sums aggregating $50,000 were transmitted from the Midland Bank.

56 Cairns received a cable in London, addressed to White House, signed Twin Mac. This cable read: “Our engineers have just reported that a gold vein three feet wide has been discovered on our property. Notify all shareholders immediately”.

57 This was a dastardly falsehood.

58 The appellant, as Valentine disclosed, had written a letter to the same White House (from Valentine to “Hayman”). Valentine did not give him that address; Valentine had never heard of it. All appellant’s cables, as noted, bore the same address.

59 This would not prove that Shulman had actually sent this cable, but its sending is one of the overt acts of the conspiracy; it must affect him as one of the conspirators. He received nearly $3000 from England, which, he declared, had not been to his benefit. That is immaterial; it shows that he received money from swindlers and rogues.

60 Valentine was to give Hayman (May 1937) 1750 shares of Twin Mac Syndicate, Hayman to defray all expenses; yet the campaign was initiated by printing circulars etc., and began in February 1937, according to the invoice for printing, which was a heavy bill. Hayman and Valentine had never met; had never known each other. Shulman acted as middle-man. Hayman undertook to make also a heavy outlay for stamps, as shown. Yet he received only 1750 worthless shares of worthless stock (not negotiable), with the hope of acquiring an underwriting agreement (so said appellant). Is it likely that Shulman deceived him? Did Hayman in England not know this was a swindling enterprise, which he had left in appellant’s hands?

61 This is by no means a complete résumé of the evidence, but it allows me to dispose of the other grounds of appeal.

62 I could not notice that exhibits had been filed illegally. Those obtained from Scotland Yard, were rejected; some of them were the same as those found in appellant’s office.

63 The learned trial judge heard only one accomplice, Cairns. It was unnecessary to corroborate him, as there exists an abundance of evidence implicating the appellant, independently of the evidence of Cairns. The learned trial judge obviously noted the proof made by Cairns; he knew him to be an accomplice and was on his guard.

64 The learned trial judge had ample proof to convict. In my opinion, his verdict or judgment was the only one that could have been rendered.

65 As to the ground that the conspiracy had not for object the defrauding of any person in the district, it may be stated that such ground is untenable. The overt acts of the conspiracy originated here. Moreover was it nothing to conspire to injure an industry, such as mining, and give a bad name to all enterprises of a mining nature? (These last few remarks cover all the grounds of appeal if summed up together.)

66 The judgment a quo was quite proper. I could see throughout this case the finger of the appellant.

67 I would dismiss the appeal.

68 The foregoing notes were written when the appellant presented a motion to the Court of Appeal, asking that he be allowed to produce documents. The motion was granted; documents were filed. It now behooves this Court to consider this additional evidence, which might or not lead to a modification of conclusions that had been reached.

69 The appellant produced many writings solely to show that he had told the truth when he testified. No doubt, if interpreted as he wishes, these might show agreement between their contents and his statements under oath. These cheques, statements etc., have to be considered in relation to all the circumstances of the case, because we are dealing with a charge of conspiracy. The production of writings appears as an aim to becloud the issues by increasing the volume of evidence solely. If his sworn statement, denying certain other proved facts, cannot be accepted, the documents, which he produces to corroborate mere details of his evidence, cannot improve his case. No doubt payments were made to fellow conspirators; money was received from them; transactions went through banks, apparently in legitimate form, obviously to cover illegitimate and fraudulent operations. Shulman denied his participation in these operations, though he certainly did not, and could not, deny that the transactions of Pitts, Eastman, Cairns et al. were fraudulent and criminal. He would have us accept his statement that he acted only as solicitor for these gentry, and he filed additional cheques etc. to show his connection with them only as a solicitor.

70 If he was conniving and conspiring he may have used certain legitimate means for his fraudulent ends. Conspiracy is also a crime when legitimate acts are performed for an illegal purpose. The purport of the additional filed writings show Shulman was acting throughout for persons, who were in a conspiracy to defraud the English people overseas. These documents do not establish that Shulman was ignorant of such conspiracy; that he was not lending his advice and help to facilitate their operations. These documents are interpreted by Shulman to show that he acted innocently as a solicitor. The other facts show the contrary, as already disclosed above. There is a limit to what a solicitor may do. This proof, in my opinion, was not rebutted by Shulman’s statement or documents; it discloses that he was a principal party in the conspiracy — and the trial judge so interpreted the facts, which are abundant; that judgment cannot be lightly set aside.

71 Obviously banking operations, cheques, transfers etc., assumed a legitimate guise, in order not to awaken suspicion, a purpose that did not succeed when bankers began to scrutinize these accounts, and furnished data for the Court a quo. What the appellant received; what he did with the money after its reception; where he placed it; the channels through which it passed — are all immaterial and irrelevant. The main point is that he participated in a proved fraudulent operation, and cannot provide a proper legal justification.

72 He claims in one part of his evidence that he derived no benefit from operations, yet elsewhere he admitted that he was well paid. This also is irrelevant. Granted even that he had dispensed and dispersed his receipts in works of charity and mercy, that would be interesting (if believed) but irrelevant. He had no right to receive it from the source from which it emanated, even to pay his fees, which he knew were from the profits of crime that he had rendered possible.

73 These supplementary documents are similar in effect to a special document filed by the appellant. It is a brochure or pamphlet (written by a solicitor, Mr. Roland Burrows, K.C. of the Temple, England) in connection with “Whiskey Receipts”. Shulman would have us believe that the object of Cairns, Hayman, Pitts et al. was in connection with whiskey transactions in England, when the facts of the case inform us ad nauseam and conclusively that it was gold mining in an empty mine, which produced only empty shares, that occupied their attention exclusively.

74 If the pamphlet was produced for any other purpose, I cannot see it; though it may be conceded that it was done to show that Shulman spoke truthfully when he swore that he had shipped this brochure to England with or for Cairns, whom (he says) he did not know then. This also is irrelevant.

75 The pamphlet is illuminating for any one who intended to embark in whiskey operation, an enterprise which did not appear to interest Shulman, except as a matter for light (or heavy) reading.

76 Shulman may have intended to start a whiskey enterprise. His evidence disclosed no such purpose. But he produced this brochure obviously to show the credulous that he was contemplating such matter, though he did not say so, though his deeds proclaim that gold occupied all his activities at that time. No one even referred to a whiskey enterprise (either in actu or passe). It is merely thrown in to cover the multitude of sins of the gang in Europe, to indicate an imaginary operation which I am asked to accept as existing de facto. If Shulman intended whiskey operations, his intentions went by the board before the ship bearing Cairns had reached England. Already plans were laid for the adventure of the golden fleece.

77 The brochure consisted in a legal statement that a “Whiskey Warehouse Receipt” is a symbol of property, that the dealer in such receipt deals in the commodity itself. The author then gives a plan whereby the statutory requirement of a licence may be avoided. It is very interesting, perhaps.

78 If Shulman intended to launch this undertaking, he could have told us so. Perhaps he thought he would not be believed. Was it a precedent, concomitant or subsequent enterprise, dependent on the successful gold mining promotion scheme.

79 To me the imaginary whiskey transaction was a second thought, the only convenient (if weak) way to guarantee credibility. The document existed, that is true. That it existed to prove another enterprise was not then in operation, — is not true; the facts establish the contrary, and give a significance to the production of the pamphlet other than that intended.

80 The appellant complained again of the reception of illegal evidence by the trial judge, though the latter declared that he did not consider it in order to render judgment. Yet Shulman admitted he had signed a document in Scotland Yard, to the effect that he had been asked by some one in Canada to take care of business in England, relating to the reception by Canadian salesmen of certificates of Barlow shares for distribution to Twin Mac shareholders. Shulman hedged; but he admitted that he had signed the document, implying however that it was not true (case p. 464). “If inadmissible evidence has been received ... it is the duty of the judge to reject it when rendering judgment” (Phipson, 4 Ed. p. 637). Shulman also complained that the judge had taken communication of illegal documents. Surely a Court must read a document first before pronouncing upon its admissibility. (Phipson p. 181.) I would dismiss the appeal.

Errol M. McDougall J.:

81 The facts relating to the present appeal have been stated in the notes of Mr. Justice walsh.

82 Throughout the maze of documentary and oral evidence submitted to the Court there runs the undoubted proof of fraudulent conspiracy to foist upon the public the shares of a worthless mining property. The accused does not deny this feature of the case or seek to justify the impugned transactions. He merely takes the attitude of an innocent dupe — a member of the Bar who acted for clients without appreciating the nefariousness of the transactions in which, with them, he became entangled. His pretended innocence and naiveté does not, however, stand the test of close scrutiny, — there are too many circumstances of conscious knowledge of what was going on, and indications of active participation in the furtherance of the ends of the conspirators to allow him to escape scathless. The instances of guilty knowledge detailed in the notes of Mr. Justice Walsh, build up too formidable a case for the appellant to rebut upon his mere denial of guilt. The series of documents which appellant was permitted by the Court to file, after the hearing, as being but recently discovered, advanced to support the appellant’s protestation of innocence, fail of the purpose they were vouched to attain.

83 I can find no such manifest error in the conviction of the accused by the learned magistrate as would justify interference by this Court. The matter is one of fact as to which the trial judge was in the better position to reach a conclusion.

84 For the reasons more fully given by Mr. Justice Walsh, I would dismiss the appeal.

Gagne J.:

85 La lecture de ce volumineux dossler m’a convaincu que le savant juge de première instance n’a pas fait erreur dans l’appréciation de la preuve et des nombreux exhibits produits par l’une et l’autre parties.

86 La convention préparée et organisée par l’accusé, par laquelle Hayman, en considération de 1750 parts qu’il recevait de Valentine, s’engageait à faire toute la publicité requise pour la vente des actions, et cette organisation formidable de l’envoi en Europe de 350,000 circulaires à des adresses que l’on avait déjà, organisation que l’accuse connaissait bien puisqu’une partie des déboursés considérables que cela demandait a passé par ses mains, sont des faits que l’accusé est obligé d’admettre.

87 Or, Pitts, Hayman, Geen, etc., constituaient une bande d’escrocs internationaux qui ne le sont pas devenus du jour au lendemain. L’accusé avait avec eux, depuis plusieurs années, des relations qui étaient bien loin d’être celles d’un avocat avec ses clients, malgré sa prétention en ce sens. Grâce à son expérience des affaires, et spécialement de tout ce qui se rapportait à le vente d’actions de compagnies minières, il devait nécessairement prévoir que ces gens n’agissaient pas dans l’intérêt de la compagnie mais dans leur seul intérêt particulier qui était d’accaparer les fonds perçus. Pour cette raison et pour les autres motifs invoqués par monsieur le juge Walsh, dont j’ai eu l’avantage de lire les notes, je suis d’opinion de rejeter l’appel.

[Translation]:

88 The reading of this voluminous record has convinced me that the learned judge of first instance has not erred in his evaluation of the evidence and the numerous exhibits adduced by both parties.

89 The agreement prepared and worked out by accused, by which Hayman, in consideration of 1750 shares that he received from Valentine, undertook to do all the publicity required for the sale of the shares, and this formidable organization for sending to Europe 350,000 circulars to addresses that they already had, organization with which accused was well acquainted, since part of the considerable disbursements thereby required passed through his hands, are facts that accused is obliged to admit.

90 Now, pitts, Hayman, Geen, etc. constituted a band of international crooks who did not so become overnight. Accused had had with them, for several years, relations that were very far from being those of a lawyer with his clients, in spite of his claim to that effect. Thanks to his experience in business, and especially in everything that pertained to the sale of shares of mining companies, he could not fail to foresee that these people were not acting in the interest of the company but solely in their own interest, which was to get possession of the funds collected.

91 For this reason and on the other grounds invoked by Mr. Justice Walsh, whose notes I have had the advantage of reading, I am of the opinion that the appeal should be dismissed.

Appeal dismissed.