*1
568
muсh
very
look
check
dealings with the
be a
ratification,
if that
hut
like a
total
is still a
jury,
for
of intent
repre
falsity of
prove the
failure
$200, or
accept the
her to
leading
sentation
nature
her of the
any misstatement
signed
she
paper which
contents
In
it read.
having
prevent her
trick
proof
sus
by her
respect
failed
she
suc
in order to
allegations, and
tain her
the release
nullifying
ceed at law
have sustained
fraud
must
she
willful
Co. v.
Life Ins.
Mutual
them. Pacific
155, 13 Ann. Cas.
(C. A.) 157 F.
Webb
752;
105,
Milam,
App.
Ga.
Hodge v.
870;
v.
&
Bateman
Small
E.
S.
573,
244, 100
E.
Tharpe, 24
App.
S.
Ga.
also,
See,
Eliopolo v.
and cases cited.
889,
823,
Eichholz,
131 S. E.
161 Ga.
presented
equity.
case
She
fa
jury to have made a
for the
sufficient
verdict,
the nonsuit moved
vorable
granted. But a verdict
should have been
above
under the authorities
cited should
Georgia
directed. The
not have been
grant of
practice touching the
nonsuit
directing
a verdict under such
instead
binding on the federal
circumstances is
Conformity Statute, 28
courts under
Transportation Co.
724. Central
USCA §
Co.,
139 U. S.
v. Pullman’s Palace-Car
Coughran v.
Ed.
11 Ct.
35 L.
117, 41
17 S.
Ct.
Bigelow,
U. S.
Co.,
Virginian R.
v.
L. Ed.
Barrett
MULLONEY 2974.
No. Appeals, First Circuit. Court of
Circuit July 13, 1935.
Rehearing Denied Nov.
*Writ certiorari denied 56 S. —. Ct. Ed. L.
5C9
*5
Taylor
R.
Marvin C.
and Franklin
Mass.,
Chesley,
Boston,
appel-
both of
for
Mulloney.
lant
Boston,
Manning,
P.
of
Mass..
John
Mass.,,
Callahan,
Boston,
(Timothy F.
of
Deery.
brief),
appellant
on the
Canavan,
Atty.,
A.
Asst. U.
of
John
Boston,
Ford,
(Francis
Mass.
W.
U. S.
J.
Atty.,
Boston, Mass.,
brief),
of
the United States.
WILSON,
Before BINGHAM and
Cir-
MORRIS,
Judges,
cuit
Judge.
and
District
BINGHAM,
Judge.
Circuit
judgments
appeal
is
29, 1934,
from
This
sentencing each
October
defendants to
the Blouse
imprisonment
Mass.,
Plymouth,
for a
of Correction at
year
being
day,
the defendant
and
principal,
and the de-
guilty
found
abettor, upon
Deery as aider and
fendant
under sec-
count of an indictment
the first
Statutes,
the Revised
5209 of
tion
(USCA
592), charging
title
§
amended
moneys, funds,
misapplication of
National Bank
of the Federal
credits
sec-
indictment contained a
Boston. The
charging
making of false
ond count
connection with the same trans-
entries in
this count the defendants
On
action.
concerned, with
guilty.
injure
are
intent then
found not
We
and there
re-
bank, unlawfully
therefore,
appeal with matters
defraud said
on this
member
feloniously
wilfully
mon
misapply
did
lating to the first count.
eys, funds and
member
credits
said
here
portion
the statute
material
hank in tlle
amount
of the value
involved
as follows:
reads
thirty-one
dollars
thousand
director,
or
Any officer,
agent,
“8
($131000.00),by
unlawfully
then and there
bank, or
any
employee of
Federal reserve
and feloniously wilfully converting said
any
of
221
stracts,
member
defined
sections
bank as
thirty-one
dollars
thousand
embezzles,
title,
ab-
to 225 of this
who
A AAA nA
($131,00000)
moneys,
funds
any
willfully misapplies
or
°f sald member bank
use
funds,
moneys,
or
of such Federal
credits
cre^s
and benefit of
Deery
said
A.
oth
*
* *
John
or
bank
reserve bank
member
y°ur
unknown,
ers to
* * *
Srand Jur°rs
injure
with
or defraud
intent
not to the use or benefit of
member
said
such
or member
Federal reserve bank
bank
hank
placing
taking
into
assets
* * *
who,
like
every person
member bank without
knowl
the3
director,
intent,
officer,
any
or
aids
abets
edge or consent of said member bank or
* * *
agent,
any
employee
violation
*s
directors
said
guilty
of
misdemeanor,
shall be deemed
section
h^rd
promissory
demand
note of
^
upon
conviction there-
^Helen L. Ganley, dated on said date
of in
district court of the United ?ne
tbe principal amount of one hundred
$5,000
States shall be fined not more than
.
thirty-one thousand dollars ($131,000.00),
imprisoned
shall be
for not more than
Payable
bank,
to said member
and which
both,
years,
five
in the discretion
sald sum one
thirty-one
hundred
thou
the court”
*6
($131,000.00)
sand dollars
there
soon
was
by
This indictmеnt
found
a
after withdrawn from the assets of said
.
jury of
for
the District Court
Massachu
bank,
September
memher
on
and that
said
term,
September
setts at
the
its
1933. In
Mulloney
as said
then
Daniel C.
first count of
the indictment
it was
W¿Uknew,
and
Ganley
there
Helen
said
L.
charged:
dummy
was a woman 0f
and
note
straw
a
Mulloney,
“That Daniel C.
late of said
Deery
maker for said
to
A.
and unable
John
District,
throughout
period
the
of time
pay
said note and that said
was'
note
January
from
to December
then
by
and there
wholly
secured
inade
president
and a
of the quate collateral and that said
A. Dee
director_
John
bederal
Boston,
National Bank of
in Bos- ry
in failing
was then and there
a
financial
ton, Massachusetts, which bank throughout
pay
just
condition and unable to
debts
period
said
of time
banking
was a national
obligations
any
and
not
and
entitled to
organized
association theretofore
and then
credit in said member bank or in
well
and
existing
operation
and in
and
bank, whereby
conducted
by
and
reason
doing
business under and
virtue of the
misapplication
moneys,
0f such
of
laws
na-
concerning
of the United States
funds and credits of
member
as
said
bank
banks,
throughout
tional
and which
said aforesaid, the said sum of one hundred
period of time was membеr
of
bank
thirty-one
($131,000.00)
thousand dollars
Boston,
the Federal
Bank of
ajmgst
was
kank_
wholly lost to said member
Reserve^
Massachusetts,
designated
as
Re-
The
Organization Committee,
serve Bank
to
aforesaid,
“And the Grand
1;
wit, in
Reserve District Number
Federal
Jurors^
aforesaid,
their oath
do
present
further
of
and that
said
such officer and director
as
September 29, 1931,
that on said
of
City
at the
bank,
Mulloney
said Daniel C.
member
Boston
said District of Massachu-
time,
period
throughout
of
had
said
such
setts with intent then and
injure
there to
power
control,
manage-
direction and
of
bank, one,
and
said member
defraud
ment over the business and affairs of said
John
district,
Deery,
unlawfully
late of
A.
said
moneys,
and
member bank
over its
funds
feloniously
and
did aid and abet
said
credits,
records,
and
and
and
as
books
Mulloney
wilfully rnisap-
Daniel
so to
enabled him commit the offense
C.
in this
charged;
moneys, funds,
indictment herein
and
ply
that said
said
credits of
Mulloney during
period
Daniel
time,
said
of
C.
bank in the
member
amount and of the
wit,
thirty-one
at said
one hundred
value of
thou-
Boston,
City
of
said District of
($131,000.00)
M'assa-
as
sand dollars
heretofore in
chusetts,
director,
such
officer and
of
and this count
this indictment set forth.”
lat-
it is the
dictory
duplicitous
motion
Mulloney filed
The defendant
—that
in one
chаrges
it
three offenses
part
ter because
granted
particulars
which
funds,
moneys,
of
(misapplication
count
of
action
part. The
denied
contradictory in that
credits)
motion
denied
as it
court
gives
so far
—and
of-
an
charges
himself with
of error.
assignment
rise to
first
commit-
charges that it was
fense and also
particulars
of
purpose of a bill
of
al-
exercise
through
ted
him
the defendant
apprise
is the
better
control, direction,
management
leged
properly
him
to enable
charged
crime
bank.
over
affairs
fur
It is not
prepare
his defense.
the indict-
carefully examined
We have
government's
nish him in advance with
grounds
demurrers
ment and
properly
and, if the indictment
opin-
quash,
motion
and are
crime,
char
motion of this
sets forth a
acter which would
committed
ion that the District Court
limit the evi
unduly
This
overruling
of them.
error in
each
should
government
dence of the
as-
Mulloney’s
third
disposes
second and
C.
(C.
granted. Rubio v.
States
United
assignment
signments
and the first
of error
v. United
F.(2d)
.Robinson
Deery.
of defendant
F.(2d)
(C. A.)
United
States
C.
having-
F.(2d) 659.
C.)
to the indictment
The demurrers
(D.
Brown
v.
pleaded
overruled,
elements
the defendants
the essential
In
all
this case
including
held
it has been
charged,
guilty. In such a situation
misapplication
was,
effect,,
bringing
legal
time,
means
that “the demurrer
place, and
(cid:127)
record,
nothing
indictment.
in the
about,
withdrawn from the
set forth
contained, to
exception could
upon
which it
remained
which
The information
gether
note,
Ganley
copy of the
United
Hillegass
be founded.”
Circuit).
required
199, 201, 202
A. 3d
183 F.
government
motion, suf
defendant’s
furnish
ficiently
under
plea in abatement
filed a
the nature
advised him
filed a
government
the indictment.
constituting the crime
the transaction
to strike the
a motion
demurrer
against a
adequate protection
furnished
demurrer
plea. A
had on the
hearing was
offense.
same
prosecution
further
de
thereafter,
and
cision,
and before
motion and
in so far
*7
requested,
particulars
The
leave to-
government
the
moved for
denied,
for
called
they were
In va
motion.
its demurrer and
withdraw
sup
might
in
use
government
which the
mention, this
ways,
to
too numerous
rious
indictment,
of the
port
allegations
of the
assignments
exceptions
by
and
defendant
of
in
sound discre
rested
the
and their denial
any,
the
to
rights, if
his
has saved
error
court,
clearly was not
tion of the
which
allowing
in
the
Court
of
District
action
Wong
instance.
Tai v.
abused in this
its demurrer
to
government
the
withdraw
States,
United
300,
273
S.
47
Ct.
U.
he
that
to
He asserts
and motion
strike.
545;
71 L. Ed.
Hartzell v. United
of
decision
right to a
entitled as of
575;
(C.
569,
F.(2d)
States
C.
Ru
the
by
to
the demurrer
the issues raised
plea;
bio
F.(2d)
v. United
22A.)
States
that,
proceeding,
the
stage
at that
767,
United
766,
Horowitz v.
by
right
deprived
a
not be
of that
he could
48,
disposes
F.
This
(C. A.)C.
49.
motion;
of the demurrer and
withdrawal
assignment
of error.’
the first
authority
that the court was without
and
to
or discretion
either as a matter
law
to the
Both defendants demurred
allow the withdrawal.
to
indictment.
quash.
filed motion
nothing
the
The motion adds
to
to with-
allowing
government
the
In
questions
by
Both
raised
the demurrers.
motion, the District
its demurrer and
draw
substantially the
The
demurrers are
same.
dis-
did so in the exercise of its
Court
the first
(1)
are
count
complaints
main
not
that it could with-
It did
rule
cretion.
against
offense
the laws
questions
not
right.
state
The
does
as a matter of
draw
(2)
and
that it is so
by assignments
arising
of the United
thus
are covered
17, inclusive,
by assign-
uncertain as not to inform
4 to
of error
ment 92. The defendant’s
indefinite
ap-
contention
of the nature of
ac
the
defendants
the
them,
by
against
government
that the
demur-
parently
because of its
is
cusation
plea in
be-
does not conform to the re
to the
abatement waived
ring
indefiniteness
ques-
right
its
to
trial of the
yond recall
of the Sixth Amendment of
quirements
and,
by
plea,
of fact raised
the
this
.Constitution;
tions
(3)
that it is contra-
so,
on
to a decision
the District
to
being
entitled
Court had discretion
allow
plea
to a
sufficiency
government
of the
withdraw its motion
legal
in case
abating
plea
strike and
in
judgment
its demurrer
to the
did;
overruled.
abatement at
demurrer was
the time it
de-
acquired
right
fendant had
have
that, if
position is
its
government’s
plea
the merits of his
determined.
It was
denied and its
motion to strike had been
People
O’Neill,
so ruled in
v.
107 Mich.
overruled,
been
it would
had
demurrer
556,
65 N.
W.
and Mullins
Com-
over
have been entitled
answer
monwealth,
See,
115 Va.
57á respect indict- each to “first two side had filed briefs related to one no having the matter that the ments,” objected to as and the court had held it was court privileged document was need not be questions before bearing on the produced. declined ruling court The of the court was for this reason answered, correct to and should heeded. question be have been permit the would indictment stating the first nothing The defendant takes to that reference jury; be before assignments The 25, 26, 27, of error and 30. they as avoided had better indictment were not questions all of there referred to are again. We try over going argumentative nature and for rea im- ruling was wherein fail to see They properly son alone were excluded. proper. were asked witness. of the defendant’s related assignment nineteenth The Counsel for defendant was not entitled wit following question, asked argumentative questions ask and to cross- you had obtained “If ness McCann: per examine his own witness without the subpoena, in the named stock certificates mission of the court. The defend them?” you'have used would Special The At “commission” of the assignment. The by this nothing takes ant torney assignments General referred to in produced in were stock certificates of error 28 do nothing had to with at time subpoenaor answer authority this case. was not the under witness, the use what it is immaterial which he acted the indictment when made have attorney, would prosecuting question procured September, them. or the investigation before the to a relates assignment The twentieth July properly was had on 1933. It was Mc- witness question also asked only excluded not for this reason but be important “Now, did it seem Cann: cause a confidential communication. seeking indict jury those in a grand show questions asked the position witness Mr. ments Johnson, in assignments referred to of er Trust the Inman control over to exercise ror properly 31 and excluded. Mr. Fenderson?” over Company or witness, They grand relate to what the to the no relation had question That juror, may have heard the members of the now be- indictment procurement of grand jury say among July themselves Mulloney as against 12395) (No. fore us nonproduc with reference to the abettor, Deery but principal and papers tion of the books and which Mul them in an against procurement of another loney produce failed Mulloney as principal and Fenderson subpoena. What, anything, swer if of transactions con- abettor, arising out jurors the grand then said аmong them Company of Inman Trust with the nected Mulloney’s selves with relation to failure treasurer; and Fenderson was Mr. which whether it produce papers the books had important to McCann seemed validity bearing of the indictment The defendant immaterial. or not was question by’ here in found different exception. nothing takes September term, at the 23 relate to the 22 and Assignments Bag- asked of witness defendant following question asked nulo, assignment referred to in No. had *9 “Have counsel of the same witness: to relation issue then on trial and you transcript for a Mr. asked properly question was excluded. The was The record shows of that examination?” improper highly and could have been asked motion, court, on its own excluded that the purpose for no other than preju- to create the de that that thereafter dice. up by asking, you “Did fendant followed against The found verdicts the to furnish them with the tran decline pleas defendant in abate- question the script?” court likewise ment, plea including in abatement to excluded; then for de and that counsel 12395) (No. the indictment here under con- “May pur stated: I not for the fendant At the sideration. close all the evidence record, say expeсted I poses of the that ‘yes’ questions.” the defendant moved for a directed answer each ver- dict, forty-five requests from later submitted appears It the defendant’s brief that and took a number ex- a formal motion instructions his counsel had filed with for charge. These asking transcript; ceptions for the to the are cov- that court 91, in- assignments ered of error 34 to (10) that grand jury the term of the sit- ting 1933, July, clusive. having expired, another grand jury district, September, for the plea support The supervision under the and direction certainly conflicting. not be was could McCann, of the said returned this indict- be said that no other conclusion could indictments, ment (12395) and four other sustaining from it than drawn a verdict October, 1933, and in others, five all for properly plea. The motion denied. was under offenses section 5209 of the Revised plea in abate- allegations The (12 592). Statutes USCA § were, (1) legal- That a in substance: The defendant alleged further that his ly grand jury the District on constituted testimony given thus was relevant and ma- sitting July of Massachusetts was terial to the matters under consideration McCann, pur- (2) Irving that G. and involved in the indictments returned porting to under a commission act by the grand jury Sep- second sitting in Attorney of the United States General tember, “proving tending prove a an- July 17, copy which was a * * * defendant, connection of nexed, present conducting was with the matters involved in indict- (3) that proceedings July on ments, which would not have been dis- July on States sub- “a United except closed for the unlawful and willful poena form,” duly issued in the usual was compulsion of this defendant and the de- Mulloney requiring him served ception practiced him,” upon and “that it July appear grand jury before testimony] [his was in connected with fact (annexing copy subpoena); indictments one more of the man- Mulloney, (4) in answer the sub- that forth, ners above set government and was used poena, grand jury on appeared before the * * * in obtaining said sworn, July gave testi- indictments, and in obtaining evidence mony; did not (5) the defendant used before juries in obtaining not rights, waive his constitutional said indictments.” prayer them, ignorant of warned as and was * ** “the indictment in this case there; purpose presence (6) of his quashed.” abated and willfully deceived the defendant McCann as government’s every answer denied purpose presence of his material fact alleged in the defendant’s de- proceeding; (7) that nature of the plea. mat- (a) fendant testified material as In- relating ters thе Federal National plea The defendant’s in abatement Trust, trustees, vestment its officers was in fact his declaration which he (b) as to certain named in Mc- individuals sought the annidment of the indictment commission, (c) Cann’s to their here in question and, government hav books, assets, affairs, (d) ing pleaded general denial, the burden the books and assets of whereabouts upon prove every defendant ma Trust, (e) Federal Investment National alleged terial fact plea. in his that the Federal National Investment Trust controlling owned a interest the Inman plea While it is alleged that Company and present Trust all the stock of the McCann was Realty Trust, Inman Trust and a sitting substan- at session of the District June tial in other July 25, 1933, interest banks named in Mc- Court on and that his com commission, one, except (f) Cann’s mission did not there,, authorize him to be that the said Federal National Investment it does grand allege not was before the intimately Trust was connected with the jury sitting at September term, 1933, say Federal Bank did (but National the District ; how) Court, (8) that the Federal National In- which returned this (No. trust, 12395). vestment was a But corpora- assuming Trust does, the' *10 tion, and the defendant president nothing by was its defendant takes his assignment trustees; (9) this, and one of its five of error as to in thаt said for the commission grand jury thereafter July returned two issued to McCann indict- appointing (numbered retaining ments this 12367and or 12368) Special in him as [not Assistant to against the Attorney defendant relating General, the he specifically case] was to transactions between the Federal “directed to in Na- conduct the District of and tional Bank the Inman any Trust of legal proceed Com- Massachusetts kind pany the Trust; and Inman Trust Realty ing, criminal, or including civil grand jury grand jury sitting which com- in before proceedings and proceedings —of United there was no evidence and as which which magistrates, mitting jury against authorized found the defendant. Attorneys are District a blanket not by was law conduct.” Mulloney, On whether commission, con- defendant roving as or having sworn, compelled was to tes “mat- limited tends, its by terms was but tify 25, 1933, grand jury July before the on mentioned,” nature hereafter ters testify, and did in instructed fact court the com- out in thereafter set were which jury that: jury grand mission, in presence his and “Compulsion opposite willing- is the indict- room, present, when was if he find, you ness. I think that from could was law- September, was obtained ment here, Mulloney evidence that Mr. was July on equally so ful, and -was sure, willing testify not until he was or sitting at jury grand before June assured, at least that hе not being was ask- We fail District Court. term of the to give ed evidence against himself. the latter presence before see how his * * * you If find that he deceived was degree, could, remotest in the by the words ‘at that time’ no indict- [that the indictment to with anything do have this case returned being sought against was him ‘at that September term. at the any in Mr. McCann’s or other words time’] answer, in their brief defendant Counsel or, you the whole if find from Mulloney, when the defendant contend jury grand preliminary in the conversation July jury grand he before his mere appeared Mulloney induced to room that Mr. was by an presence and by testify representation, or a mis- on false self-incriminating gave questions swers upon position, understanding of his based with directly connected testimony in fact any misrepresentation by made the Gov- and indirectly related directly or attorney, rights ernment and his this in involved upon the matters bore him, by then stands as if not waived he used was 12395), and that (No. dictment course, testifying compulsion. if under Of pres his Whether procurement. in its did, privilege under- he did waive his evidence, testimony gave he such ence testify, his standing rights, undertake to indirectly directly or pertained whether it privilege, his that the end of the case would be indictment, in this involved tо the matters right there.” procure in its used was and whether correct and This instruction which fact questions all ment, were court’s nothing the balance against jury, to the were submitted found them lead jury that could charge to the open to review defendant, and are anything dif- meant he to understand here. expressly had thus he from what ferent Later, the court speaking instruction them. Whether stated to presence mere testified to the jury as as to whether July jury on grand compulsion, the court willingly or under if, that, party appeared he said: 1933— witness, prejudice it would a col- that there was will recall “You ' indictment void— rights render his him loquy few minutes between of .some applied prior ato or not as correct prosecutor before the Government grand him a against found indictment testify. I haven’t al- willing he was need appeared, we jury before already ready have noted that. But I determine, prior not indictments your find that I wouldn’t fault said question. He here in are not all, that, probably considering after he was September grand before the appear did not testify.” compelled to way legal in a indictment, and brought in this jury which surely not harm the This instruction did ap his mere to see wherein unable we are defendant. рroduce the pearance failure to books rightly refused to rule as subpoena The court by the be called for papers forty-fourth forty- requested July could fore assignments of error. The fifth burden finding of this relation have indictment to establish the proof on the defendant grand jury in subsequent plea not shift appear alleged in and did evidence of his facts September, unless produce government desired the books failure to the books and whether ance and subpoena was, incriminating papers enumerated be if and material papers *11 indictment, they presented contained incriminat- the cause it believed before to this alleged ing private matter or not. The defendant fendant’s papers books and the but books, plea papers, and his property in his that the of the Federal National Invest- testimony Trust, were “in fact connected with organized under Massachu- * ** [pleaded indictments and setts law. This association so-called to] * * * ‘were’ used in trust practically Government had all the attributes of indictments, in ob- obtaining corporation. said shareholders; It had taining grand ju- transferable; evidence used before the shares were the trustees indictments,” obtaining riеs in said were personally; not liable and it could upon prove it was him this. encumbent make no contracts binding the sharehold- papers Whether books contained ers personally. entity was a distinct and, incriminating matter it re- and whether under Massachusetts, laws of lated to this indictment or not mere could be sued in its own name without conjecture. papers The books were joining the shareholders. G. L. Mass. c. not in jury passed evidence before the that 6.§ plea pro- abatement and were not In Grant v. United 227 U. S. duced used before the find- 33 S. Ct. 57 L. Ed. the sole stock- ing this indictment. holder of a corporation defunct was sum- produce moned to corporation’s books Requests 31, 40, 41, 42, 43, and it was held that he was privileged not properly were also They predi denied. are from producing them under the Fifth upon that, cated the idea without evidence Amendment. In United States v. Invader that papers books and contained in (D. Oil Co. C.) 5 F.(2d) the same rul- matter, criminating jury could find or ing was regard made in to a trust of the they find the assume that did and should nature of question. the one here in In that plea in abatement for defendant with question case the party was whether the regard out use such evidence summoned required prоduce should be procurement of this indictment. Coun the books in view of the Fifth Amendment. sel indulge for defendant seems to in the We have no such Although here. that papers privi idea leged, the books and were papers books and produced were not they produced, they that were that production their they sought. is not here Had matter, incriminating contained produced and used before the incriminating matter charge related grand jury finding indictment, this then indictment, and, finally, this that with they whether were privileged or not would out evidence of its before grand use See, also, be material. Hemphill v. Or- jury returning indictment, plea loff, U. S. 48 S. Ct. 72 L. Ed. in abatement should be found his favor for the reason is a conclusive The. defendant takes nothing by assign- presumption that it was used. This seems ments of error 54 and 55. pure flight imagination and needs no further comment. suggested assignments It is also pa error 48 and 49 that if the books Counsel further contends that if Mul pers nonprivileged loney presence his or testimony before might required produce have been them grand jury July 25, 1933, gave self- tecum, subpoena under the duces if in his incriminating evidence there is a conclu custody, compelled he could tes sive presumption government that the used tify they givе where could be found or to it in procuring this indictment found persons the names through whom grand jury sitting and they might be custody. located if not in his proof he was excused furnishing from Mulloney did not assert his constitutional it was in fact used. We think the right testify. ig refuse He was not proposition mere statement of the is suffi rights; norant of his he was trained as a cient for its refutation. lawyer and admitted to the bar and was a charged The court jury that the experience. man of wide He had consult government right subpoena had the attorney Mul ed regard his to this matter loney bring papers the books just going before grand before the jury. jury. The defendant contends He will, testified free own unless error; that this was that under the Fifth was testifying by prosecut tricked into Amendment papers the books and stood as ing attorney. found, prop under privileged matter which he was not re to, er instructions heretofore referred quired produce. They were not the de- he tricked or deceived but testified *12 578 immunity stated, question the books There is no of But, willingly. as before question No arise in either be- here. such can produced papers were not immunity to granting this indict- absence aof statute jury found grand fore the that person testimony the a an passing giving on of incrim jury mеnt or before inating abatement, he said is no statute under nature. There plea in and whatever papers immunity be claim can of the books about the location apparently discovery of he or cause said did before to their what not lead did grand jury July Kaplan on they contained. 1933. of what a disclosure F.(2d) in- United States 594 adequately 7 jury fully and The were (certiorari denied, de- 46 Ct. U. S. regard in to this matter. structed See, also, Sung L. assignments 423). Ziang 70 Ed. nothing his fendant takes 1, 15, 45 Wan v. United 266 U. S. 49. S. Ct. L. Ed. his alleged in Although the defendant plea testimony gave he before that the Although the times judge district at 25, 1933, in fact July on was expressed opinion his as to evidence discovery of to the incriminating or led he throughout give jury was careful facts, that it used before was they such to understand that sole were the here jury finding the grand judges facts, irrespective of what that, complains he now because question, in This was regard to them. thought he in jury in charge its to the sub court in dis he acted in exercise right its his testimony told them that unless stance creetly. jury Mulloney gave grand was 52, 53, disposes assignments This discovery to the incriminating or led 63, and 65. and, incriminating, in evidence that was no relation Assignment of 75 has error before the case, used in fact either was spe- By tо this its terms it indictment. indictment, the this grand jury returning plea cifically to the other indictments relates sustained. could not be in abatement pleaded to; subject-matter as- and the fail see. we was error this Wherein signment relates to the same indict- Mulloney or his testimony of Unless the ments. produce the books failing conduct and incriminating nature whether papers of an On the there was was discovery proceeding pending against of evidence of an criminal Mul led loney appeared he nature, grand used be before the incriminating which was when jury July this jury finding indict answer to fore the complain. subpoena, it ment, cannot whether was a violation the defendant rights his Fifth under the constitutional if charged jury that The court him Amendment swear as a witness they testified before found question, him inconsequen ask even an jury July that he was grand president one, charged jury tial court fol Federal National Bank lows : president he of the Federal or that was no- case—and was criminal “That this Trust, they were to Investment National quoted uses I have language that tice this in each instance he. said find what whether case,’ person shall ‘No ‘criminal the words point his incriminating; that from was be a criminal case to compelled be being Mulloney said about what view the mean- against himself’—within witness Bank president Federal National of the Constitution, of the section ing there not; he everybody knew
'was can, think, The grand no doubt. I bank; say that to president hearing possible jury was everybody was not to make what injurious knew of crime. activities of commission regard And disclosure. others connection defendant president testimony being investigated were certain banks Trust, Investment Federal National A crim- Government. the officers incriminating, that was seemed him July, progress last investigation inal it was a matter of at State instructed as House. The record time, rule, I feel constrained but at fully were ripened prose- into a criminal it had not ques all it was for them to decide that tions of any particular person. against fact; liberty cution they at were in- August, came later in when the opinion they thought if That disregard his pro- in. brought dictments Criminal wrong. This not error.
579
or
brought
charge
openly
accused,
to be
is
ceedings cannot be said
against
made
openly
,charge
by
is
either
until a formal
presented
instituted
indictment
or informa-
accused,
by
tion
court,
either
indict-
filed in
against
or,
least,
by
made
at the
com-
plaint
in
presented
filed
before
magistratе.
ment
or
information
a
Virginia v.
Paul,
court,
complaint
a
148
by
107, 119, 121,
or at least
before
U.
a
S.
13 S. Ct.
536
L.
magistrate.
important.
386];
is
Ed.
The distinction
Rex
Phillips,
v.
Russ.
[37
369;
Ry.&
Parker,
previously
Reg.
If
been
there had
criminal
v.
Leigh & C.
[a]
459, Cox,
court,
9
complaint
information
filed in
Cr. Cas. 475. The submission
of a bill of
magistrate,
a
by
before a
it would have been
attorney
the government
rights
grand
jury,
of his Constitutional
violation
examination
them,
any questions
him
whatever
witnesses
have asked
before
are
secret,
both in
jury,
grand
part
sworn before
are no
after he was
of the
tes- criminal
unless,
course,
willing
proceedings against
accused,
he was
but
merely
arc
privi-
tify.
always waive his
assist
grand
A man can
jury in
himself,
determining
de-
testify against
if he
lege whether
such proceedings
shall be
party
had been
If Mr.
a
commenced.
grand
sires.
jury
witness,
if, for may
bill,
when he was called
a
ignore
any
and decline to find
instance,
complaint
indictment;
had
a
warrant
and it cannot be known wheth-
against
any
been
him and he was
issued
under er
proceedings will be instituted
grand jury,
of the
against
bail to await
action
the accused until an indictment
after
had been called and sworn
presented
him
against
is
open
court.”
was, or how
lie
old
he had
asked how
The decision in the Post
re
Case we
inconsequential
weighed or
much he
any
gard as conclusive
question
whether
question
compelled to an-
he had been
prosecution
a criminal
was pending against
swer,
a violation
it
have been
would
Mulloney at the time he was called to tes
there,
any indict-
then
rights
his
tify
produce
books and papers before
void.
him
have been
against
would
the grand jury.
question
whether it
jury
To
a
call a defendant before
was in violation
rights
of his
under the
by
ap-
may jeopardize
rights,
his
even
his
Fifth Amendment
require
him to be
pearance,
suggested
as it was
counsel sworn was
precise
question involved
morning, although
this
in this
argument
in O’Connell v. United States (C.
case,
appear-
as that
so far
matter
denied,
F.(2d)
40
(certiorari
205
281
concerned,
might
be well
ance is
U.
50
1136).
S.
S. Ct.
74 L. Ed.
grand jury
brought
note that
It was there said:
these indictments
another
“The final contention of
appellant
altogether
sitting
July
than the one
that,
regardless
is
details of his
As mat-
when Mr.
testified.
a
examination,
it was a violation of his
fact,
ter of
these indictments were found
rights under the Fifth
re
Amendment to
grand jury sitting along
time
a
some
quire him to be
sworn
examined be
November,
on,
be-
August
or later
I
grand jury,
investiga
fore the
because its
here,
investigation
lieve. But
where an
o
tion, though
general,
ostensibly
re
was in
prose-
had not then resulted in
criminal
a
ality
attempt
to secure from
own
one,
questions
certain
any
against
cution
upon
mouth evidence
which to
him.
indict
infringing his Con-
without
be asked
could
may
support
be found
judicial
Some
upon
depending
whether
rights,
stitutional
Gillette,
People
126
v.
See
such a view.
injurious to
answers would
or not his
133;
665, 668, 111 N. Y.
App.
S.
Div.
him.”
Berrnel,
Misc.
128
People
71
v.
por-
contends that
The defendant
gen
prevailed
524. But it has
Y.N.
S.
incorrect;
that was
charge is
tion
Price,
904
erally. United
v.
163 F.
say
of fact for the
Y.);
v.
D. N.
United States
(C. C. S.
prosecu-
criminal
whether
the evidence
Kimball,
Y.);
of the Colonial on F. Ganley Miss Deery was made to United States assist States, supra. the Salem Flickinger Company, v. United Trust enable $70,000 to make a loan of to the Fed- doubt, by is, consent a true that eral Company. National defense to loan be a bank would How misapplication, great since crime of willful the stress was on the Salem Company if there Trust be no conversion of funds could at this time is shown that, or its fact was a consent the bank notwithstanding valid the contribu- tion $100,000 board of directors. over Sep- to its credit on tember possible made by Deery contends, government think and we putting up par bonds of $25,^ value of correctly, valid that there was no assent 000 to acquire the equity in the theatre properties and the second mortgage, in this case. The board consisted of ten eight directors and out of the directors less than month its account again who meeting attended the overdrawn to the amount $135,000. of over 24 and on October it is which dates The contribution to the Salem Trust Com- claimed respectively the loan was assented pany from the loan is denominated in the approved, to and the Deery was a director testimony profit from loan; but Realty Mulloney, Salem Company, and if the Salem Realty Company kept its Deery, Logan were the stock- sole covenants with lessee, guaran- its holders in Company, the Federal National ty to Miss Ganley, any profit actual and therefore interested in the transaction Deery or it from the loan disappear, together with the value of the wholly would disqualified voting from or mak- ing up quorum of the board. ac- While bonds turned over Realty Salem tion taken through interested members Company, Deery, part pur- corporation is a board of directors of a *17 price. chase void, and not and if later ratified voidable The effect of the stock market by proper by collapse acquiesced a the vote in the late fall of 1929 and of corporation, may begin the binding, be Pacific Union ning of the world-wide depression business Railroad Co. v. Crеdit Mobilier of Amer- already being was severely ica, 367, 376; by felt Kelley 135 Mass. New- these banks. In less than three buryport 499, R., & A. H. R. months the Mass. Salem Company Trust and 6 N. E. there was no action Federal National Bank by majority later taken a hands of of the board re ceivers, and the lessee of the act; theatre re the record show qualified nor does puted to have huge a net value in by acquiesced in the bank it was ever later went into the hands of a receiver. knowledge of all the facts. Nor with full Impending financial troubles, augmented bv indictment was found was until after this those of the banks, affiliated state by Ganley or must any arrangement made Miss apparent have been Deery to both Mulloney Company pay and Realty the note Salem " September, through arrangements new with the re- ceiver 'to the rate of interest as injure If an intent to or defraud the are, monthly payments. amount of the We shown, bank when the loan was made is therefore, opinion of the that there nowas it matters not whether the bank will lose error ruling in. court’s that the action loan, any part v. United of the Showalter of the directors of itself was no defense States, supra. other cases cited It is Mulloney Deery. The fact thаt injure intent to or defratid the unlawful arrangement the new with the receiver essence of this offense. that is the pay- Bank National of the Federal case, phase of considering this In not Ganley note was made un- out, pointed below court found, may indictment was after this til and a member of the a trained banker weight in the mind had some well have He knew that consent bank to Bar. of the court. loan could not be obtained a vote quorum of the of less than a board of di- may be unfortunate for the defense It he, explanation rectors, Deery, Logan that lating the transaction re- full $70,000 loan of disqualified to the Fed- to vote or assent were all the Company received, National granting eral of the loan. He knew as a kept mainly objection but it was out on the loan on pre- that a the collateral banker Mulloney. sented, Upon Ganley of counsel for the record since Miss was without court, responsibility, very before the we think' judge was a hazard- triql financial finding bank, warranted in finally that the loan risk for the to ous as he ad- obliga- no direct ver mitted that the bank had motions for a directed pay dict, trial, Company to new Realty judgment a tion of the an arrest of Salem must fail. all As to the note. whether the satisfied the able judge beyond trial reason a Ganley, she appears that Miss doubt was a fact bank, insisted that signed the note to the he determined in government. favor of the pay- guarantee given be her As the effect of a finding guilty met. It evi- ments on her note would be judge hearing a case without is the dently understanding that was also the same as the jury, verdict of a granting Inc., Theatres, Olympia lease to the of a trial discretion, new lies in his bank; assigned should but al- no there was error of law in the denial of
though the in the files of lease was found the motion unless there was a clear abuse bank, assignment written it was discretion, appear which does not here. found. judgment A motion arrest of is based upon We think the evidence that solely appearing on errors on the record that, court Was finding warranted in exceptions. on the bill of We find though Mulloney professed to secure the no such errors. approval bank, the loan made he guilty If offense consent of the loan without a valid in the charged ment, first count of indict- Deery and board of directors to assist can be no guilt doubt as to the Company already failing Salem Trust respondent Deery. A. John indirectly to National аid the Federal judgments of the District Court Company by large obtain enabling it to are affirmed. Company. That loan of the Trust Salem he and to aid these concerns in which On Petition for Rehearing. interested, Deery subjected were both PER CURIAM. the Federal National to a risk and Bank With reference to the defendant Mul- hazard which we think the court below loney’s petition for rehearing ground properly In held was not defensible. other that this court misunderstood ap- the facts words, there disregard was such a reckless pearing in the record with reference of the interests of his bank as to warrant Mulloney, interest of Deery, Logan finding that there *18 was an intent to in- stockholders in the Realty Salem Company, tendency it. The natural jure or defraud appears that this was This, part, error. inter- disregard such a reckless already has appears corrected as in the injure might be to of the bank well ests paragraph last page on opinion; 583 of the bank, presumed have and he must be opinion but the also disqualifica- based their of his consequences the natural intended tion to on vote the loan Ganley up- Miss acts. they on the fact that were the sole stock- holders in the Federal Company National in Galbreath v. As the court said and directors company; and the F. 656: (C. A.) 257 States United judge trial held made, that the loan was defraud, injure as con “An intent to or part, Company. the Federal to aid National statute, templated by not inconsist is paragraph page first full In the on success ent with a desire for the ultimate opinion, after stock- the words “as may, welfare of the bank. It within thereof, holders,” in the thirteenth line law, from meaning an un result otherwise,” may be added. words “or done, the natural voluntarily act lawful tendency injure may been to have urged of which also that the state- is [former] misapplication of wrongful opinion A page bank. 582 that the funds, hope or Company belief if made Federal even loans to the National ultimately in- welfare would banks were in default as to the bank’s from other supported by less a violation promoted, is none the terest the evidence. be the evidence tends to show necessary think statute, effect is We if the it, However, this sentence is not es- was. the bank. may injure or be to defraud or may the result be arrived at and sential to States is the United well-settled law. Such out. stricken Harper (C. C.) 33 F. United United States v. v. Kenney (C. C.) 90 F. urged judge also that the It is trial 922, 923.” (D. C.) [915], finding Breese disqualification F. as to the of of made no Also, see, Deery, Mulloney, Logan Breese et al. United States v. as directors (C. C.) 173 F. 408. National Bank the Federal to vote open loan, Ganley LINCOLN & GUARAN is not TITLE MORTGAGE judge trial not un- did in this court. et OF CO. al. v. TY COMMISSIONER special findings of all dertake to make INTERNAL REVENUE.* facts, obliged was he do so ultimate nor No. 5685. However, in his memorandum of decision. Appeals, Court Third Circuit. Circuit guilt also based his conclusions Sept. 24, ground defendants knowledge loan was made a full without security, the facts material to its were not communicated to the board Mulloney Deery. directors either We think it cannot be said that loan was made with the or its assent of the bank directors, board of nor ac- was it ever quiesced the board awith full knowl- edge of the facts. ground third rehearing is the finding judge of the trial loan —that Ganley to Miss a real transaction correctly entered on the books of bank —constituting discharg- reason for his ing count, under defendants the second finding general inconsistent guilt any finding necessarily included the general finding supported by evidence. may As to this said there was no finding by judge the trial in his mem orandum of Ganley decision that Miss dummy maker straw for John Deery, finding necessary and no such support general finding A guilt. her, financially loan irrеsponsi who was ble, security, without sufficient and indirect ly Company, through to aid the Trust Salem Deery, to Fed establish its credit with the eral National Bank and enable it to loan large sum to Federal National Com pany, might injury well result to the Fed *19 Bank, eral National Deery must have known. It would consti Bilder, Merritt Lane and Bilder & misapplication tute a funds of Kaufman, Newark; all of (Mer N. J. hank if done requisite without the consent Kaufman, ritt Lane and Samuel both of directors, of the board of as was case Newark, J., Spiegler, N. and Louis here; finding and such a would he included C., Washington, counsel; D. Morris in the general finding guilt. is the This Schuitzer, M. Newark, J.,N. manner in judge specifically which the trial brief), petitioners. for found misapplication brought about. Wideman, Gen., Frank Atty. Asst. J. There was sufficient support evidence to Key Rothschild, Sewall and Morton K. such a finding and it Vould be included Sp. Atty. Gen., Assts. respond- general finding guilt, if the first count ent. charged a misapplication BUFFINGTON, Before DAVIS, funds of bank after that manner form, THOMPSON, so that the Judges. defendants Circuit would informed thereof and enabled to defend against charge. count, fairly DAVIS, The first Circuit Judge. construed, such misapplication charges appeal This involves liability the"
the funds of the bank. taxpayer, Mortgage Lincoln & With the changes above opinion, Guaranty Title Company, for income taxes petition for rehearing years denied. 1926 and 1927.
*Writ certiorari denied 56 S. Ct. L. Ed. —.