6 Pa. Super. 256 | Pa. Super. Ct. | 1898
Opinion by
The defendants in this case were indicted and convicted for conspiring to cheat and defraud George W. Koons & Co. of valuable personal property. The evidence consisting of about four hundred and fifty-three pages of printed testimony, and one hundred and twenty letters and other documentary exhibits, reveals the philosophy and methods of one of the dangerous forms of dishonesty peculiar to modern business life.
A. L. Spencer, living in Scranton, Pa., had been engaged, prior to 1895, in business dealings with one- E. T. Day, of New.
Before this letter was written, Spencer, Day and Milair had at least one conference in New York about organizing the new company, the real purpose whereof, as Milair, in effect admits,' being to buy materials, to wit: iron, nails, spikes, lumber, etc:, sell the same and divide the proceeds, Spencer to receive fifty per centum thereof. Whether he was to get more in the aggregate than would pay his debt, then alleged to be $8,500, is not quite clear, nor is it very material. The other fifty per cent was to go to the New York end of the concern. Aubrey was to get
On October 14, 1895, Spencer again writes Milair, saying-: “Viewing your situation in the back ground and from past experience, I realize fully how difficult it is to buy with the credit of S. W. P. Co., and each report through the agencies reflects stronger and stronger on you and that Co.; hence the necessity of forming a new one under a wholly new name that you can sit quietly back and manage. We are all discouraged at this end.” On October 22, 1895, he writes Milair concerning a note, and says : “ Your name and that of the S. W. P. Co. must not appear.” In a letter to Milair, dated December 2, 1895, he suggests that the title of the new company, the formation of which was then under consideration, shall be “New York Construction & Fire Proofing Co.” and adds, “As I am to use the material or dispose of it, it would seem that I should be. out of the list.....Get up the new companjr under this head, and Aubrey as secretary or treasurer as you wish. Will look for your letter and small notes to-morrow. I am worried as the time to take care of the old ones is short. Do not forget that now is the time I need your aid.” Aubrey was Spencer’s bookkeeper and business confidant.
Milair, recognizing the fitness of things, preferred the name, “ The Phoenix Contract Company,” and so wrote Spencer, and the latter name was chosen. When asked by the defendants’ counsel: “ I suppose you suggested that because it was rising out of the ashes of your former enterprise ? ” He replied, “ That was my idea, yes; that is the reason I thought it was an appropriate name.”
■ In a letter to Milair, dated December 13,1895, Spencer states: “ My attorney says I cannot be a director in any company without being liable for its debts, and I can’t afford to do that.” On. December 28, he says in another letter: “ A new company with Pelletreau and Hoffmire and several others with us, would make the thing go at once. This is the quickest way to get easy, and if they would authorize Aubrey to buy, we could begin now,” etc. It may be remarked here, that throughout the voluminous correspondence, only brief extracts from which can be’ presented, Spencer appears anxious to get every one, that •
In a letter of January 15, 1896, he complains to Milair that the latter is “ too slow about the new company ” and concludes as follows: “You cannot afford to neglect this new company for something less reliable. When you get IT. and P. to join, I will send $25.00 for charter. Now act quickly. Aubrey has become discouraged at your slow pace.” The next letter, dated February 8,1896, and referring to certain notes that he wanted Milair to send him for speculative purposes, contains the following : “ It would be as well that the notes should bear no indorsement that would suggest the South Western Pacific Company. This deal has progressed so satisfactorily so far that I would not on any account have it imperiled now.” Two days later, he writes Milair: “Both myself, and Aubrey are ready to take off-our coats to make the new company a success, -if we can only get it started, and I accordingly enclose a check as promised, payable to the secretary of state of New Jersey, amount $26.00, and shall be glad to know that the organization will be completed at an early date.” It seems that Milair did not have the small sum of money needed to pay the fees on the issuing of the charter. On February 26, Spencer says in another letter to-' Milair: “ I wired you this morning to send me the name of the-new company, and the position assigned to Aubrey in it, as I want to work some of the matters I have on band through the-, medium of the- new organization.” The telegram referred to is. as follows : “ Wire name new company, Aubrey’s position in it so can make purchases.” In a letter, dated March 2, 1896, he-says: “ I want Thomas Aubrey made secretary and treasurer of the Phoenix Contract Co., as he will do the buying and trading; at this end.” On March 7, 1896, he writes: “ I hope you will-now lay aside every other scheme until this is perfected, and' once in working order, I am sure it will be highly remunerative-, for you and me.” The charter for the Phoenix Contract Company was obtained under the laws of New Jersey, on March 7, 1896,.. and the capital stock was fixed at $100,000. Milair, Joseph P. Wiswall, and Charles R. Braine were the incorporators, all so far as we can see, being financially irresponsible, nor does it appear that James Kennedy, who was brought in later, concededly as a figure head, was in much better condition. The §26.00 check.
It is significant that the “ big nail deal ” referred to was the one consummated with Koons later, as Aubrey admits in his cross-examination. This matter has a most important bearing on the alleged particular conspiracy of Spencer and Aubrey to defraud Koons. Among the definitions of “nobble” a word little used here, but common in England, Aubrey’s native country, the Century Dictionary gives the following, “ Circumvent,” “get the better of,” “get hold of dishonestly,” anda nobbier is “ a thimblerigger’s confederate.”
In response to the call from Spencer and Aubrey, Milair went from New York to Scranton, and met them at the company’s office in the latter city. The three men, in order to get a good business rating through R. G. Dun & Co.’s agency, for the Phcenix Contract Company, prepared the following statement:
“ The authorized capital stock of the Company is $100,000, of which $50,000 has been subscribed and paid for. The assets of the company is:
Bills receivable . ...... 10,000.00
Merchandise, about..... 17,000.00
Stocks, Bonds, etc...... 20,000.00 '
• Total........$50,000.00
Liabilities.......None.
“ The banking of' the company 'is done with the Traders’ National Bank, Scranton', Pa.
“ The business of the company is that of general contractors for the construction of railroads, bridges, etc. etc., and has several large contracts pending.”
Not a dollar of the stock was at any time paid for, nor was it intended that it should be paid for, even in part. In what proportions it was held by the incorporators does not appear. Indeed, Aubrey, the secretary and treasurer, admits in his testimony that he did not know himself. But this was a matter of small moment, seeing that the division of the gross receipts in the manner agreed on, rather than of legitimate profits, was the chief aim and object of the confederacjr. The company was organized mainly to get goods on credit, or for securities of little or no value, that Milair might pick up in New York and elsewhere by the questionable methods revealed by the evidence. That there was no intention to expend more money than was absolutely necessary to bait the traps from time to time is very apparent. The company had nothing in the way of assets or capital save $3,000 temporarily deposited by Spencer in the Traders’ National Bank of Scranton to aid in making a false show and securing a fraudulent rating. This deposit, as is shown by the correspondence, had “ a string to it,” and was all withdrawn inside of thirty days. A statement more boldly and nakedly false was, perhaps, never before sought to be imposed on a mercantile agency.
It failed to accomplish its intended purpose with R. G. Dun & Co., but misled Bradstreet’s agency, which latter concern gave ■ tbe company the desired rating. Everything was-now ready for the “big nail deal’’with Koons, who lived in Audenreid, a town on the edge of Luzerne county, and was representing himself and his partner George John. To bring about this deal speedily was evidently the main reason for the anxiety of Spen- •
By June 10, 1895, goods to the value of $10,050.27 had been obtained from Koons and his partner. They were secured through about a dozen shipments, all save two made to points in Luzerne county. Of the total price, $1,000 was paid in cash and about $950 by turning over to Koons storage receipts for some goods in New York, the title to which he testified at the trial, was still in dispute. Beyond these amounts nothing was paid. On June 8, 1896, when only $15.00 stood to the credit of the company in the hank wherewith all its business was done, the other moneys collected from the sales of Koons’s goods having been divided between Spencer and Aubrey,, the latter negotiated with Koons for material to cost $12,000 more. In a letter of that date to Milair he says: “ It was the best policy to give Koons money, as I have now got his entire confidence, and yesterday closed a deal with him for $12,000 worth of material for prompt delivery.” Before Koons shipped the goods last ordered, he suspected that he was being cheated and refused to go any farther. In an earlier letter written Maj’ 28, 1896, to Milair, Aubrey says, speaking of Koons, “ I think you had better leave him to me, and if you reply to his letter give him to understand that you will not interfere between the Scranton office and his good self, inasmuch as his treatment of our orders has been so unbusinesslike and annoying to us. We can work him well enough from this end, and his zeal for prompt cash settlements will soon cool off. . . . Mr. Spencer has written a good letter to Lehigh Lumber Co.” Spencer’s letter to the Le-high Lumber Company was one recommending the Phoenix Contract Company-as entitled to credit, and falsely representing its business and assets.
After the material in New York had been disposed of, he went into Luzerne county, pursuant to his authority, and from time to time, during the spring and summer of 1896, there sold the goods shipped by Koons into that county, at figures (sometimes as much as fifteen per cent) below the ruling market prices. Most, perhaps all, of these goods were consigned by G.W. Koons & Co. to themselves, at Wilkes-Barre and Plymouth. The facts just recited are important in considering what overt acts were committed in Luzerne county by Spencer and Aubrey, or either of them, acting by authority express or implied of both, or by their agent Turner, in furtherance of the common design. The offenders may be indicted in any county where even a single overt act has been committed. Our Supreme Court, announcing the general rule on the subject, has said in Commonwealth v. Gillespie, 7 S. & R. 469, and the language is applicable to more than one branch of this case: “ It must be recollected that conspiracy is a matter of inference, deducible from the acts of the parties accused, done in pursu
Turner usually made the Luzerne county sales while the goods were yet in the carriers’ hands, consigned to G. W. Koons & Co., and therefore liable to stoppage in transitu: Hayes & Black v. Mouille & Co., 14 Pa. 48; Penna. R. Co. v. Amer. Oil Works, 126 Pa. 485; Tiffany on Sales, 216-217. In such cases he reported the sales to the Scranton office, and orders of G. W. Koons & Co. to deliver were sent from there to the carriers. Sometimes he had deliveries made directly to himself. It cannot be denied that these transactions constituted overt acts, in furtherance of the scheme to defraud. It is urged, however, for the defense, that while Spencer may have been in the conspiracy to defraud the public generally, there is no sufficient proof that he conspired against G. W. Koons & Co., or that he authorized any overt act in Luzerne county, and that therefore the defendant could not be brought within the jurisdiction of the court of quarter sessions of that county. But Turner testifies that he talked and communicated with both defendants regarding the business, that “ he,” Spencer, “ advised with me on the sale of material that was under; way. If I needed any instructions or advice I got it from either one of them, from either Mr. Spencer or Mr. Aubrey.” It must be remembered that practically the only victim, or at least the only one worth mentioning that came into the net, was Koons, and that about the only business done, so far as the evidence shows, was getting hold of the goods of Koons and his partner, promptly selling them at less than cost and market prices, and dividing the proceeds between Spencer and Aubrey, the former getting most of the money. Everything that was realized went substantially to these two men. Their confederates were completely ignored in the division of the spoils. Milair testifies, and his testimony in the main is borne out by other evidence, “ They got in I understand some eight or ten thousand dollars. They told me all the time they had not
Koons testifies that after he had made a shipment or two, he met Spencer, at Aubrey’s request, and that the former assured him that Aubrey and the Phoenix Contract Company were all right and that “ he would not hesitate to give them a line of credit himself.” It will be observed, from the evidence, that he did not do this, although the company was anxious to buy the very things he was manufacturing and selling.
On one occasion Aubrey went to Wilkes-Barre, and told Spencer that Turner needed money the next day, and that they must go together and collect some of the bills for the goods sold by Turner. This they did and Aubrey went back to Scranton with the funds. It would be easy to refer to other evidence, in the case, tending still further to show the intimate connection and understanding between Spencer and Aubrey in regard to the transactions with Koons, and that from beginning to end Spencer’s was the master mind.
A motion for a new trial was made in the court below, one of the main reasons relied on being an affidavit made by Turner after the trial, that he did not mean to say in his testimony that Spencer had directed him to sell the material furnished by the Koons’ firm. This was not in accordance with his story told the counsel for the commonwealth, or his testimony before the grand jury and the traverse jury, which was undenied by the defendants at the trial. His deposition was taken to be used at the argument of the motion, and it appears from it that, a month after the trial, Spencer had Turner go to Scranton, and, after talking to him, secured 'the affidavit. Unfortunately for the defense, Turner, on cross-examination, was compelled, in his deposition
It is urged by the defense that the commonwealth should not' have been permitted to go into the history of the formation and purposes of the Phoenix Contract Companjr, as by so doing a separate and indictable conspiracy to defraud the public at large was uncovered. For the same reason it might be objected, in behalf of one indicted for killing or wounding another with a deadly weapon, that the commonwealth should be debarred from proving that the prisoner, for weeks before the commission of the crime, had, contrary to our statute, carried the weapon, concealed on his person, with the deliberate intention of using it against any one whom he might select from a class of persons. In order to properly comprehend the nature and circumstances of the particular conspiracy charged in the indictment, and the motives and conduct of the two defendants, it was absolutely necessary to admit the evidence whereof complaint is made. Never in the history of English or American jurisprudence was there a time when an intelligent judge would have excluded it. The bogus company was part of the juggling machinery created by the defendants to delude their victims, and was deliberately, skillfully and successfully employed as a means or instrument in deceiving Koons. Had it not been so used, by both defendants, there would be reason in their objection. The case of Carroll v. Commonwealth, 84 Pa. 107, and kindred authorities fully sustain the admissibility of the evidence, but, even before these cases were decided, its relevancy could not have been fairly questioned.
Coming now to a direct consideration of the assignments of error, we find that the first fails to comply with Rule 17 of this
The peculiar character of the case has led us, as will be observed, to consider it more fully and broadly on its merits, than a strict adherence to our rules, relating to assignments of error, demands. In doing so Ave have reached the conclusion, that the defendants were treated with the greatest fairness during the trial, every doubtful question raised by their counsel having been resolved in their favor, that the verdict was the only one the evidence Avould warrant, that a new trial was. justly refused for the reasons set forth by the learned trial judge in his opinion, and that the sentences are very merciful.
All the specifications of error are overruled, the judgments are affirmed, and the record remitted to the court below, to the. end that the sentences imposed may be duly enforced. And it is ordered that the defendants surrender themselves forthwith tc the custody of the keeper of the jail of Luzerne county, and serve out so much of the periods of imprisonment, prescribed by the said sentences, as had not expired on June -30,1897, the day the supersedeas allowed on this appeal took effect.