166 A. 45 | Md. | 1933
Lead Opinion
The appellant was indicted by a grand jury of Howard County, and tried and convicted in Allegany County, under article 11, section 58, of the Code, on a charge that, as president of a banking institution, the Central Trust Company of Maryland, he had accepted a deposit of money when the institution was, to his knowledge, insolvent. Before any pleading on his behalf the case was, upon his application, removed from Howard County to Allegany County; and all pleadings were filed in the latter jurisdiction. On the appeal, a number of questions have been presented for decision, the most important, as this court views them, being three: That of the effect on an indictment of the presence with the grand jury, during their inquiry prior to taking their vote, of an attorney who represented plaintiffs in civil litigation against the banking institution; that of the effect of membership on the grand jury of persons hostile to the defendant; and, a third, that of the meaning of acceptance of deposits under the statute. These are questions of general bearing, the first two involving the composition and methods of the state's machinery for enforcement of the criminal law, and, the third, the principles which under the statute law of the state must determine the criminal liability of any bank officer in the state whose institution passes into the control of the bank commissioner and fails to pay its depositors in full. Actions taken or methods followed in one bank cannot, of course, be allowed to settle the law for all in order to suit the case of that one bank, and, therefore, the court is first to ascertain the principles as they must be applied for any one who may come before the courts now or hereafter, and then to make application of them to rulings brought up for review in the one case.
The question of the effect of the admission of the attorney into the grand jury proceedings was raised by a plea in abatement to the indictment found, and a demurrer to the sufficiency of it on the grounds that the presence of the attorney under the circumstances described in the plea would not be sufficient to invalidate the indictment, and that the plea was *562
filed too late to present the question whether it would be. The demurrer was sustained. The second ground is considered first, because, if the plea was filed too late for consideration, there is no necessity of discussing the merits of the objection. That it was too late is a conclusion based on the decision in Hookerv. State,
This court is of opinion, however, that the beneficient purpose of the Constitution (article 4, section 8) to secure for persons accused of crime fair trials on charges against them so far as removal can accomplish it does not permit a construction that a defendant must file in the court, from which it seems fair to remove his case, any pleas that question the propriety of proceedings in the grand jury room. Such a construction would seem to be opposed to the purpose of the constitutional privilege, and it would be opposed to the practice, for pleas of that kind are commonly withheld until after removal. State v.Scarborough,
On the merits of the objection raised in the plea, this court is of opinion that the presence of an attorney as stated must have the consequence of invalidating the indictment upon a *564
plea seasonably filed. The plea alleged these facts. The Central Trust Company had purchased on June 30th, 1931, assets of the Washington Trust Company, situated in Ellicott City, and had assumed the liabilities to its depositors. On November 28th, 1931, after the Central Company had been taken in charge by the bank commissioner as receiver, a proceeding was filed by Jerome A. Loughran and others, as attorneys for the Washington Company and certain of its depositors and stockholders, seeking to have the transaction set aside and annulled upon a charge of fraud; that on March 2d 1932, a bill of complaint in equity was filed by Mr. Loughran and others, making charges substantially the same as those contained in the indictments returned on February 29th, 1932, two days earlier; that Mr. Loughran was private attorney of the Washington Company, and not a member of the grand jury, but was permitted to be with the grand jury, while it was conducting its inquiry and investigation, by an illegal order of court appointing him (Mr. Loughran) "special assistant counsel for the State of Maryland," to aid in the inquiry and examination into the subject-matter of the indictments; and, finally, that Mr. Loughran, privately employed as stated, did hear, see, and ascertain the proceedings of the grand jury in connection with the indictments, except at the time of the grand jury's vote, all to the prejudice and detriment of the defendant. The following statutory provisions determine the legality and effect of an order of court such as is outlined in the plea, for except under their authority no attorney other than the state's attorney or his regular official assistants could be permitted to attend in the grand jury room. Under section 27 of article 10 of the Code, a court may appoint an attorney to take the place of a state's attorney when necessary because of absence, sickness, resignation, or death of the state's attorney, the appointee to qualify and be compensated as a regular state's attorney; but this section cannot be involved in the present case, because there was no absence, death, or disability of the state's attorney regularly serving, and it does not fit the description of the order passed. State v. Heaton,
The section last quoted would make it legal for the court to appoint assistant counsel in a pending case to aid in the trial; but in our opinion appointment under its authority could give the appointee none of the power of a state's attorney to enter and be present in the room with the grand jury while they are investigating a case with a view to possible indictment. So it was held with respect to a federal statute empowering the Attorney General of the United States to appoint an attorney "to assist in the trial of any case in which the Government is interested." (Rev. St. sec. 363 and 34 Stat. 816 [5 U.S.C. Ann., secs. 310, 312]). The entry of an appointee under that statute into a grand jury room was unauthorized and unlawful. UnitedStates v. Rosenthal (C.C.), 121 Fed. 862; United States v.Virginia-Carolina Chemical Co. (C.C.), 163 Fed. 66; UnitedStates v. Heinze (C.C.), 177 Fed. 770; United States v. Rubin
(D.C.), 218 Fed. 245. See Act of Cong. June 30th, 1906, ch. 3935 (5 U.S.C. Ann., sec. 310); and United States v. Huston (D.C.),
The present plea does not set forth the relationship, if there was any, between the charge of fraud on which the attorney's civil proceeding was first based and the charge in the indictment, but it does allege that the second bill filed by him contained substantially the same charges as those in the indictment, which resulted two days before, from the grand jury investigation which he attended. There is alleged, therefore, a degree of identity between interests and grounds of action of private persons whom Mr. Loughran represented as attorney, and those involved in prosecution under the indictment found. It would, according to the allegations, be in furtherance of the interests of the clients to have these charges maintained. Actual effort on Mr. Loughran's part to influence action by the grand jury is not alleged, and there is no allegation of actual injury, except the general one that his presence in the grand jury room was to the prejudice and detriment of the defendant.
The grand jury is an accusing body, and not a judicial tribunal; and it acts upon knowledge possessed by its members from any source, whether from witnesses brought before it, or from information gained before its sessions. "In this state they have plenary inquisitorial powers, and may lawfully themselves, and upon their own motion, originate charges against offenders, though no preliminary proceedings have been had before a magistrate, and though neither the court nor the state's attorney has laid the matter before them." Blaney v. State,
An objection to an indictment on such grounds has been made in only one case in this court before the present one. *568 Cochran v. State,
But there are many decisions by courts of other states and of the United States on the same objection. Differences of opinion have been expressed, but the weight of authority now seems in accord with the view we have stated. "The right of the citizen to an investigation by a grand jury pursuant to the law of the land is invaded by the participation of an unauthorized person in such proceedings, be that participation great or small. It is not necessary that participation should be corrupt, or that unfair means were used. If the person participating was unauthorized, it was unlawful." Latham v. United States (C.C.A.), 226 Fed. 420, 424. "If the presence of an unauthorized person in the grand jury room may be excused, who will set bounds to the abuse to follow such a breach of the safeguards which surround the grand jury. * * * It is beyond question that no person, other than a witness undergoing examination, and the attorney for the government, can be present during the sessions of the grand jury. The rule is inherent in the grand jury system with all the force of a statutory enactment. The cases where bailiffs and stenographers have on occasions been temporarily present in the grand jury room are only apparent exceptions. The rule, in its spirit and purpose, admits of no exception." *569 United States v. Edgerton (D.C.), 80 Fed. 374, 375. In a case previously cited, United States v. Rosenthal (C.C.), 121 Fed. 862, the court held an indictment void because of the presence in the grand jury room of an attorney appointed by the Department of Justice under the supposed authority of a statute like that in this state for appointment of an assistant for the trial, and said, page 873 of 121 Fed.: "Every citizen is amenable to the secret inquisition of the grand jury, and he may demand justly that his essential rights be guarded by the wholesome preservation of settled systems and policies, that give greater certainty to legal proceedings, and fix on the designated prosecuting officer of the locality inevitable accountability for what is done or omitted. The inconvenience of resubmitting the matter to the grand jury is temporary; the injustice of denying the defendants investigation pursuant to the law of the land would be perpetual." And supporting the same conclusion are the cases of United States v. Virginia Carolina Chemical Co. (C.C.), 163 Fed. 66; United States v. Heinze (C.C.), 177 Fed. 770; Hartgraves v. State,
In some of the cases cited, there was a more clearly marked conflict of interest of an attorney in attendance than is alleged in this plea; in some of them attempts to influence the decision of the grand jury were made evident, and none is expressly pleaded here; but the same fact of unlawful presence in the room existed, and this case, too, involves the added feature of the conflict of interest, so that departure from the policy of the law was the same in its essentials. It was not necessary to plead and show actual injury from the conflict of interest. "The contention of the Commonwealth *570
that the burden is upon the defendant to show he was injured by action of the grand jury," said the Massachusetts court, "is unsound, because in the nature of things it would be impossible to prove the fact if true before the jury trial and because the wrong complained of is the violation of a substantial right guaranteed by the Declaration of Rights, and is not a mere failure of the grand jury to observe technical requirements and formalities." Comm. v. Harris,
A second objection advanced in the plea was that nine members of the grand jury were disqualified from serving in the investigation and from finding this particular indictment because they had been subject to losses as depositors in the Central Trust Company, or in other depositaries which had been merged with that company, and were embittered against the defendant; and because the foreman, one of those depositors, had publicly declared his hostility to the defendant and charged him with fraud. This objection we find insufficient to support the plea. The grand jury, as has been observed, is not a judicial body; it is an accusing body, permitted to act upon knowledge obtained by its members from any source. Under the requirements of the statute law of the state, Code, art. 51, secs. 7 to 10, they are chosen with judgment and discretion with reference to their intelligence, sobriety, and integrity; and they are sworn to present no person for envy, hatred, malice, or ill will. But there are no statutory provisions in Maryland, as there are in some other states, prescribing additional cautions or qualifications, and we find no ground for imposing a requirement that they must be unprejudiced, as the objection demands. On the contrary, such a requirement would seem inconsistent with their freedom to accuse upon their own knowledge, for persons who come with knowledge sufficient to serve as a basis of indictment are likely to come with the conclusion and prejudice to which that knowledge leads. They must act upon their own convictions, after conferring secretly and without any interference; but they are not required to come without any prejudice. It has sometimes been held that a *571
direct pecuniary interest in a prosecution might serve to disqualify a grand juror, but there is seldom such a direct private interest involved in criminal prosecution; and none is involved here. In State v. Brainerd,
After the demurrer to the plea in abatement had been sustained, the defendant filed a demurrer to the indictment on the ground that it failed to allege specifically that the defendant's banking institution was actually insolvent; but the indictment was framed in the language of the statute which the accused was charged with having violated, and in Maryland this has been held sufficient. Mincher v. State,
Refusal by the trial court to require from the state a bill of particulars of the charge is made another ground of error, *572
but in criminal cases the allowance of a bill of particulars is within the sound discretion of the trial court, and we find no reason to question the exercise of that discretion in this case.Lanasa v. State,
At the trial which followed the disposal of these preliminary questions, the court permitted, against the objection of the defendant's counsel, the introduction of evidence that the deposit specified in the indictment had been accepted by a teller at the banking office in Ellciott City when the defendant was not present; and the defendant contends that this would not be evidence of acceptance by the defendant as charged. Manual acceptance, it is contended, is the act prohibited, and acceptance by a teller, unknown to the defendant, is not proof of manual acceptance by the defendant. This raises a question of construction of the statute with which this court has not had to deal heretofore, and examination of decisions in other states shows a difference of opinion on the meaning of similar provisions. Michie, Banks and Banking, 407; State v.Mitchell,
It has been argued that guilt must be personal, and that there is no such thing as vicarious liability under the criminal law. This broad argument overlooks such liabilities as that of proprietors of saloons for sales of liquor to minors, even against the orders of the proprietors, that of a proprietor for a servant's sale of lottery tickets, and the old liability of steamboat owners for transportation of slaves even against express orders. Carroll v. State,
Evidence to support the judgment and good faith of the accused in respect to keeping the institution open was sought by a question to the deputy bank commissioner of the state which was excluded as immaterial; and the exclusion forms the subject of one of the exceptions. On the late afternoon and evening of September 1st, 1931, the day before the closing of the institution, and before the acceptance of the deposit mentioned in the indictment, a meeting was held in Baltimore, on the call of the governor of the state, to ascertain whether loans might be obtained to aid in keeping the institution open; and it was attended by the governor, the bank commissioner and his deputy, and by some leading Baltimore bankers. The meeting failed to accomplish anything to aid, and the bank commissioner directed the accused to return to Frederick, call a meeting of the directors of the institution, and place it in the hands of the commissioner as receiver. The directors were not convened until the next *575 day, and meanwhile the deposit specified in the indictment had been accepted at Ellicott City. The question asked was whether the deputy bank commissioner said, or heard any one else say, at that meeting, anything concerning the solvency of the bank. There had been evidence adduced that a year earlier, in September, 1930, Mr. Hospelhorn, the deputy, had made an examination of the institution and had not found any indication of insolvency; that another examination had been made by him in June, 1931; and that on August 21st, 1931, twelve days before the ultimate closing, he and the bank commissioner had a meeting with the banking committee of the institution, and still Mr. Hospelhorn expressed no opinion that the company was insolvent. The question excluded sought to bring this testimony down to the last conference on the bank's condition, and possibly to open an inquiry into the judgment of those present at the meeting, to show foundation and confirmation of the defendant's own judgment; and inasmuch as judgment is involved in fixing upon a time and condition when the officer is required to act, this is a question of the kind that should be permitted, and on a retrial the objection should not be sustained. The exclusion of the evidence would not, however, be alone sufficient to require a reversal of the present judgment.
Insolvency within the meaning of the statute, as this court construes it, is not always a fact to be ascertained by simple arithmetic, leaving no room for doubt or difference of opinion. "It is very rarely, indeed, that the financial situation of a corporation is so perfectly defined that it continues solvent up to a given instant, and is immediately thereafter insolvent. In almost all such cases there is a period of struggle, during which efforts are made to rescue the enterprise from threatened insolvency." Reed v. Helois Carbide Specialty Co.,
Exceptions were taken to a number of questions on behalf of the state for market and other values as of September 2d 1931, the date of the closing of the institution, but no reversible error is found in these respects. While evidence of values on a given date, and values of rentals and other items, may fall short of giving the full ground for decision on the question of insolvency under the statute, it does give facts relevant to that decision.
The overruling of a motion for a new trial is made the ground of an exception; but it is well settled that this court cannot review that action. Anderson v. State, 5 H. J. 174;Gallagher v. Kornblatt,
Finally, an exception was taken to the overruling of a motion in arrest of judgment. The motion was in part grounded upon objections raised during the trial and already considered, and also upon objections to the sufficiency and weight of evidence on which conviction had been based. No defects or errors apparent on the face of the record were suggested; and a motion in arrest of the judgment would lie only to correct errors of that description. It does not lie for review of the objections stated in this motion. Myers v. State,
Judgment reversed, and case remanded for further proceedings. *577
Addendum
I agree that the judgment must be reversed for the reasons clearly and forcefully stated in the court's opinion. But I think there is a more fundamental reason. In my opinion, the statute, codified as section 58 of article 11, under which the indictment was found, was not intended to apply to an officer who did not participate in, or have knowledge of, the acceptance of the deposit. The court has found that the statute does not include directors, and with that I entirely agree. In such of the cases cited in the opinion as hold non-participating executive officers and directors responsible, the reason given is that they are responsible for the management of the bank and for keeping it open. The reasoning is logical, because in all of them the statutes construed either expressly or by fair implication include directors. It is to me inconceivable that the Legislature meant to punish officers by reason of their managerial positions when it entirely omitted directors who are the managers. If it had meant to make keeping the bank open an offense it could easily have accomplished that by making criminally responsible any executive officer or director who, knowing a bank to be insolvent, should assent to its remaining open for business.
I cannot concur in the conclusion of the court that the Legislature must have meant to punish officers for participating in keeping banks open, knowing them to be insolvent, on the ground that "this is the only participation of which they would ordinarily be guilty." Of course the statute means to hold some officers liable for some act; but the act specified is the accepting of deposits in the conditions named, and the officer liable is the one who accepts them. The statement that "this (that is, keeping the bank open) is the only participation of which they (officers) would ordinarily be guilty" is based on the assumption that "the great majority of bank officers in the state have no connection with receipts of deposits except in keeping banks open for it." Clearly the court must be thinking only of executive officers. But it cannot, I think, properly be assumed that the Legislature *578 had such officers in mind. The statute does not in terms include all officers. In common parlance, and in the language understood by legislators, tellers and bookkeepers are "officers." "Teller" is so defined in Webster's dictionary, and in the Century he is described as a "functionary in a banking establishment," etc. Of course it is the business of tellers to receive deposits; and bookkeepers often perform that duty in the absence of the regular tellers. It seems to me an unwarranted assumption that the Legislature meant to include officers who do not receive deposits. Why should that be assumed when directors are excluded?
If it be urged that the construction of the statute worked out by the court is necessary for the protection of depositors, my answer is it is not the business of courts to legislate. As was said in State v. Page,
In Healy v. State, supra, it was said: "Penal statutes shall be strictly construed, by which is meant that courts will not extend the punishment to cases not plainly within the language used." See, also, Sea Gull Specialty Co. v. Snyder,
