## Facts

- The American School of Magnetic Healing operated a mail-order business offering “magnetic healing” services and instruction from Nevada, Missouri.
- The school received large volumes of mail, including payments from customers.
- The Postmaster General concluded the school was conducting a fraudulent scheme through the mails under federal postal fraud statutes and issued a “fraud order.”
- The order directed the local postmaster, McAnnulty, to withhold the school’s incoming mail, mark it as “fraudulent,” and return it to senders.
- The school alleged the order would destroy or severely harm its business and exceeded the Postmaster General’s statutory authority because the claimed “fraud” rested on disputed medical and scientific opinions rather than provable misrepresentations.

## Issues

1. Whether the postal fraud statutes authorized the Postmaster General to refuse delivery of mail based on an administrative view that the school’s healing claims were false or unscientific, absent allegations amounting to “actual fraud.”
2. Whether a federal court may grant equitable relief to review and enjoin a Postmaster General order alleged to be beyond statutory authority, notwithstanding the executive character of postal administration.

## Decision

- The Supreme Court reversed the dismissal of the bill and permitted the injunction suit to proceed.
- On demurrer, the Court treated the complaint’s detailed description of the business as factual allegations admitted for purposes of testing legal sufficiency.
- The Court held that, on the pleadings, the business could not be deemed a “fraud within the statutes” merely because officials regarded its theory of healing as false or erroneous.
- The Court held that courts may review and restrain postal officials when they act in a case not covered by the governing statutes (ultra vires action).
- The Court emphasized that its ruling did not bar the government from attempting to prove at trial that the business, as actually conducted, constituted statutory fraud.

## Legal Principles

- Postal fraud statutes reach “actual fraud” and do not authorize exclusion of mail solely because an official believes the underlying claims are false opinions.
- When an executive officer asserts statutory authority but acts outside the statute’s scope, the action is subject to judicial review and equitable relief may be available.
- On demurrer, material factual allegations in the complaint are accepted as true; dismissal is improper where those allegations do not establish statutory fraud as a matter of law.

## Conclusion

The Court held that postal fraud orders cannot rest on an administrator’s view that contested healing claims are false opinions rather than provable fraud, and that courts may enjoin Postmaster General actions that exceed statutory authority, allowing the challengers to proceed past the pleading stage.


Am. Sch. of Magnetic Healing v. McAnnulty, 187 U.S. 94 (1902)