McElree v. Darlington

187 Pa. 593 | Pa. | 1898

Opinion by

Mr. Justice McCollum,

The Chester County Guarantee, Trust; and Safe Deposit Company was incorporated July 28, 1885, under the corporation act approved April 29,1874, and the supplement thereto approved May 24, 1881. It was authorized among other things to receive money on deposit. It invited by advertisement in the newspapers the making of such deposits, and as an inducement to make them offered to pay five per cent interest thereon. Its published statements heralded its soundness and solvency, and the result of its efforts in this direction was that a large number and amount of deposits were made with it. Mary A. Burnett, one of the appellants in this ease, deposited on December 2, 1896, $1,300 with it and received a certificate therefor from its president. Within two months thereafter a bill in equity was filed in the court of common pleas of Chester county by Elias Blair et al. against said corporation, alleging insolvency, and praying, inter alia, for an injunction restraining it, its officers and directors, from disposing of its assets, for an investigation of its affairs and the appointment of a receiver. The plaintiffs in the hill were interested in the corporation as depositors, creditors, stockholders, etc., and the said Mary A. Burnett was one of them. The insolvency of the corporation was admitted in its answer filed February 12,1897, and receivers were appointed the saíne day. On March 22, 1897, a large number of depositors, including Mary A. Burnett, presented a petition to said court of common pleas for the appointment of A. R. Barrett, formerly of the United States Treasury Department, to examine the hooks, papers, accounts and securities of said corporation from 1891 to 1897 inclusive, at a salary of $10.00 per day for a time not exceeding thirty days, which petition was dismissed by the court on April 5, following. At the April sessions, 1897, of the court of quarter sessions of the peace of the county of Chester, the president of the Chester County Guarantee and Safe Deposit Company was duly indicted for taking and receiving from Mary A. Burnett upon deposit on December 22, 1896, $1,800, with knowledge that he and the corporation he represented were then insolvent, and with intent then and there wilfully and fraudulently to embezzle tbe same.

On June 8, 1897, the appellants petitioned the court of common pleas for leave to examine the books, papers and accounts of the corporation tlien in the hands of the receivers. The purpose of the examination was to ascertain the condition of the corporation when the deposit to which the indictment relates was made. Their- petition was dismissed by the learned court below on tbe ground that the examination proposed by them would constitute an infringement or denial of tbe rights of the party indicted as above stated. This ruling was obviously made on the assumption that tbe books and papers were tire property of said party, and that an examination of them by persons interested in tbe affairs of the corporation as shareholders, bondholders or depositors was not admissible, because it might result in the discovery of transactions having a tendency to criminate him. But tbe books and papers of the corporation are not tbe property of tbe officers or employees, nor are they intended to protect them against the consequences of the frauds they may have perpetrated in their respective spheres of labor or duty. An officer or employee of a corporation who is under indictment for embezzlement of its funds may not require of his employer a suppression or concealment of bis own entries in its books, although the entries may furnish the material clue to his crime and possibly afford satisfactory evidence of it. The appellees cite Logan v. Penna. Railroad Co., 132 Pa. 404, and Boyle v. Smithman, 146 Pa. 255, as authority for the ruling complained of. But they are manifestly inapplicable to tb e question before us. The books in each case were the property and in possession of the defendant. In Logan v. Railroad Co., the appeal was quashed on the ground that the order complained of was interlocutory, and in Boyle v. Smithman it was held that in an action for penalties under the Act of May 22, 1878, P. L. 104, “ the defendant can neither he compelled to testify against himself nor to produce his books to be used as evidence against him.”

In accordance with the views above stated we conclude that the learned judge of the court below should have authorized an examination by the appellants of the books and papers of tbe corporation, for the purpose of ascertaining its condition as to solvency or insolvency on December 2, 1896.

The order dismissing the petition is reversed and the petition is reinstated, with direction to the court below to enter an order in conformity with this opinion.